[Federal Register Volume 67, Number 52 (Monday, March 18, 2002)]
[Notices]
[Pages 12014-12017]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 02-6226]


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FEDERAL COMMUNICATIONS COMMISSION

[WT Docket No. 02-28; FCC 02-36]


Alee Cellular Communications

AGENCY: Federal Communications Commission.

ACTION: Notice; petition for reconsideration of application for block A 
cellular authorization.

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SUMMARY: In this document, the Federal Communications Commission (the 
Commission) grants, in part, a petition for reconsideration filed by 
Alee Cellular Communications (Alee) of an application for the block A 
cellular authorization in the Texas 21 RSA, Market 672; reinstates that 
same application; and designates the application for hearing, for the 
purpose of determining whether the applicant is currently qualified to 
hold the authorization in light of its disqualification for the New 
Mexico 3 RSA (NM 3) cellular authorization.

FOR FURTHER INFORMATION CONTACT: Kathy Harris, Wireless 
Telecommunications Bureau,

[[Page 12015]]

Commercial Wireless Division, at (202) 418-0609.

SUPPLEMENTARY INFORMATION: This is a summary of the Memorandum Opinion 
and Order, Hearing Designation Order and Notice of Opportunity for 
Hearing (MO&O and HDO) in WT Docket No. 02-28, FCC 02-36, adopted 
February 8, 2002 and released February 22, 2002. The complete text is 
available for inspection and copying during normal business hours in 
the FCC Reference Center, 445 12th Street, SW., Washington, DC and also 
may be purchased from the Commission's copy contractor, Qualex 
International, 445 12th Street, SW., Room CY-B402, Washington, DC 
20554. The document is also available via the Internet at 
http://www.fcc.gov/Bureaus/Wireless/Orders/2002/fcc02-36.pdf.

Paperwork Reduction Act

    1. This MO&O and HDO contains no proposed information collection.

Synopsis of the Memorandum Opinion and Order and Hearing 
Designation Order

I. Introduction

    2. On March 16, 2000, Alee Cellular Communications (Alee) filed a 
petition for reconsideration of the dismissal of an application for the 
block A cellular authorization in the Texas 21 RSA, Market 672.\1\ As 
discussed herein, there are substantial and material questions of fact 
as to whether Alee is qualified to hold the subject cellular 
authorization. The Commission previously held that Alee made false 
statements to the Commission, lacked the candor required of licensees, 
and accordingly was not qualified to hold a cellular license for the 
New Mexico 3 RSA (NM 3), block A, call sign KNKN271.\2\ For the reasons 
discussed, the Commission is granting the petition for reconsideration 
in part, reinstating the above-referenced application, and designating 
the application for hearing, for the limited purpose of determining 
whether the applicant is currently qualified to hold the Texas 21 
authorization in light of its disqualification for the NM 3 cellular 
authorization.
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    \1\ Alee Cellular Communications Petition for Reconsideration, 
File No. 11025-CL-P-672-A-89 (filed Mar. 16, 2000) (``Alee TX21 
Petition for Reconsideration''); see also In the Matter of 
Application of Alee Cellular Communications for Authorization to 
Construct Nonwireline Cellular System in Texas RSA 21 Market 672, 
Memorandum Opinion and Order, 15 FCC Rcd 2831 (2000) (``Texas 21 
Dismissal Order'').
    \2\ In re Applications of ALGREG Cellular Engineering, et al., 
Memorandum Opinion and Order, 12 FCC Rcd 8148, 8172-8181 (1997) 
(Algreg I), pet. for recon. denied, Memorandum Opinion and Order and 
Order on Reconsideration, 14 FCC Rcd 18524, 18533-18535 (1999) 
(Algreg II), aff'd, Alee Cellular Communications v. FCC, No. 99-1460 
(D.C. Cir. Jan. 30, 2001), pet. for rehearing denied (D.C. Cir. Apr. 
5, 2001), pet. for writ of cert. denied (S.Ct. Oct. 9, 2001).
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II. Background

    3. The issue in this proceeding arises from the Commission's 
previous holding in the so-called Algreg proceeding. Specifically, 
Alee's NM 3 authorization was designated for hearing and possible 
revocation, along with additional RSA applications and licenses, in 
connection with participation in a risk-sharing arrangement at the time 
of filing of the applications.\3\ In addition, the NM 3 license was 
designated due to alien ownership concerns and for lack of candor.\4\ 
The Commission concluded that Alee's lack of candor in connection with 
the NM 3 authorization warranted revocation of the license.\5\
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    \3\ In re Applications of ALGREG Cellular Engineering, et al., 
Hearing Designation Order, 6 FCC Rcd 2921, 2928 (Com. Car. Bur. 
1991).
    \4\ Id.
    \5\ Algreg I, 12 FCC Rcd at 8172-8181. The Commission also 
concluded that participation in the risk-sharing arrangement was not 
a basis for the denial of pending applications or the revocation of 
licenses, including that held by Alee in NM 3. Id. at 8157-8169. The 
foreign ownership issue also was determined not to provide a basis 
for revoking Alee's authorization in light of changes made to 
Section 310(b) by the Telecommunications Act of 1996. Id. at 8170-
8171.
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    4. The Commission observed that Alee's NM 3 application was filed 
on August 12, 1988, and included a listing for Shafi M. Sharifan, a 
four percent general partner who was an alien. Under the policies then 
in effect, having a non-U.S. citizen or entity holding any general 
partnership interest was absolutely disqualifying.\6\ Less than two 
months later, on September 23, 1988, Sharifan's interest was 
transferred to Amir R. Riahi-Shiraz (a U.S. citizen). Alee won the NM 3 
lottery a few months later, and filed a section 1.65 amendment on 
January 9, 1989. That amendment, signed by Robert Bernstein (Alee's 
signing partner and largest equity holder at the time) and prepared by 
Alee's attorney, William Franklin, listed Sharifan (not Riahi-Shiraz) 
as a partner and inaccurately stated that all partners were U.S. 
citizens. More than a year later, on April 30, 1990, Alee filed a 
letter disclosing the errors in the application and a section 1.65 
amendment--stating that Sharifan was not a U.S. citizen and that his 
partnership interest had been sold to a U.S. citizen several months 
before the section 1.65 amendment was signed and filed. All of Alee's 
applications and the NM 3 amendment were signed by Bernstein. The 
Commission further concluded, based on its independent review of the 
record,\7\ that ``[a] preponderance of the evidence establishes that 
Alee, understanding that this was a matter that could adversely affect 
the grant of the construction permit, intentionally concealed the 
presence of the alien partner.'' \8\ The Commission further explained 
that ``[t]he record in this case * * * reflects that Alee, aware that 
it had an alien partner, filed an amendment representing that all of 
its partners were United States citizens. Whether it did so on the 
advice of counsel, or its own initiative, and whether it understood the 
precise legal consequences of reporting false information (i.e., that 
lack of candor is absolutely disqualifying), Alee did not need to 
consult an attorney, let alone communications counsel, in order to 
appreciate that information filed with a federal agency should be 
truthful.'' \9\ The Commission found that ``the record establishes a 
sufficient likelihood of intentional concealment of relevant 
information * * *.'' \10\
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    \6\ In addition, the Commission's rules at that time explicitly 
prohibited precisely the type of transaction undertaken by Alee to 
replace its non-U.S. partner. See id. at 8175.
    \7\ Id. at 8175.
    \8\ Id. at 8176; see id. at 8176-8181.
    \9\ Id. at 8176.
    \10\ Id. at 8175.
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    5. Finally, the Commission was ``unimpressed'' by ``Alee's 
``voluntary'' reporting of this matter to the Commission in its April 
30, 1990 letter to the FCC Secretary.'' \11\ While the Commission 
acknowledged that Alee's letter was the basis for the specification of 
lack of candor and alien ownership issues against it, the Commission 
concluded that Alee both delayed reporting the matter and failed to 
make a full disclosure of the facts related to Mr. Sharifan and his 
replacement in the partnership.\12\ The Commission found that ``[t]he 
failure to fully disclose the facts involving Sharifan's participation 
in a timely manner, together with Bernstein's dubious testimony on this 
matter, significantly undercuts the claim that the `voluntary' 
reporting of these matters belies any intent to deceive the 
Commission.'' \13\
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    \11\ Id. at 8180-8181.
    \12\ Id.
    \13\ Id.
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    6. The Commission rejected Alee's request for reconsideration 
regarding the finding of lack of candor and the revocation of Alee's NM 
3 cellular license.\14\ In addressing the request for reconsideration, 
the Commission found that Alee had presented no new

[[Page 12016]]

evidence that would warrant any reconsideration.\15\ The Commission 
also distinguished Alee's situation from those of NextWave and PCS 
2000, where the Commission did not revoke any licenses but allowed the 
applicant to undertake remedial action.\16\
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    \14\ See Algreg II, 14 FCC Rcd at 18533-18535.
    \15\ Id. at 18534.
    \16\ Id. at 18535. See also NextWave Personal Communications, 
Inc., Memorandum Opinion and Order, 12 FCC Rcd 2030 (1997); PCS 
2000, L.P., Memorandum Opinion and Order, 12 FCC Rcd 1681 (1997); 
PCS 2000, L.P., Notice of Apparent Liability for Forfeiture, 12 FCC 
Rcd 1703 (1997).
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    7. Alee appealed the Commission's action to the DC Circuit Court of 
Appeals. After briefing and oral argument, the Court affirmed the 
Commission's action, ``essentially for the reasons stated by the 
Commission.'' \17\ The Court stated:
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    \17\ Alee Cellular Communications v. FCC, No. 99-1460, slip op. 
at 1 (D.C. Cir. Jan. 31, 2001).

    Substantial evidence supported the Commission's determination 
that Alee Cellular Communications lacked candor in failing to reveal 
that it had an alien general partner and that there had been a 
change in its partnership structure. The Commission independently 
reviewed the record of the evidentiary hearing, examining both the 
testimony of the Alee witnesses and the significant documentary 
evidence. This evidence was sufficient to support the Commission's 
conclusion that Alee's partners knowingly and intentionally withheld 
relevant information from the Commission. Algreg Cellular Eng'g, 12 
F.C.C.R. 8148, 8172-80 (1997). The Commission thus had ample basis 
to sanction Alee for its misconduct. The Commission's decision to 
revoke Alee's license for its lack of candor lies well within the 
agency's broad discretion to apply an appropriate sanction to 
licensee misconduct. West Coast Media, Inc. v. FCC, 695 F.2d 617, 
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622 (D.C. Cir. 1982), cert. denied, 464 U.S. 816 (1983).\18\

    \18\ Id.
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    The DC Circuit denied Alee's petition for rehearing on April 5, 
2001, and the Supreme Court denied Alee's petition for writ of 
certiorari on October 9, 2001.\19\
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    \19\ Alee Cellular Communications, No. 01-15, pet. for writ of 
cert. denied (S.Ct. Oct. 9, 2001).
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III. Discussion

    8. Alee filed the application for the Texas 21 RSA on October 8, 
1988, and was chosen as the tentative selectee on April 8, 1992, during 
a re-lottery of the market applications.\20\ In the Texas 21 Dismissal 
Order, the Policy and Rules Branch of the Commercial Wireless Division 
of the Wireless Telecommunications Bureau denied Alee's application, 
finding that, ``[b]ecause the Commission determined in ALGREG that Alee 
lacks the character qualifications required of licensees, we deny 
Alee's instant application for the same reasons.'' \21\ The Branch also 
dismissed the petition to deny filed by Applicants Against Lottery 
Abuse as moot.\22\
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    \20\ See FCC Public Notice, Common Carrier Mobile Services 
Information, Results of Cellular Lottery, Rpt. No. CL-92-76 (rel. 
Apr. 9, 1992). The application, which was signed on August 6, 1988, 
identified Shafi M. Sharifan, who was not in 1988 a U.S. citizen, as 
a general partner in Alee. Alee's section 1.65 amendment, submitted 
following its selection as the tentative selectee in the 1992 re-
lottery, indicated that Sharifin's interest in Alee had been 
assigned to a U.S. citizen as of September 23, 1988, and thus he was 
not a partner in Alee when the subject application was filed. The 
amendment also advised the Commission of the pending show cause 
proceeding (ALGREG) concerning Alee's NM 3 authorization and made 
other corrections.
    \21\ Texas 21 Dismissal Order, 15 FCC Rcd at 2831-2832.
    \22\ Id. at 2831 n.3.
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    9. Alee then filed the pending petition for reconsideration of the 
February 15, 2000 Memorandum Opinion and Order. Alee argued that: (1) 
Denial of the Texas 21 application was premature, since the Algreg 
finding is still subject to the appellate review process; \23\ (2) the 
Algreg determination is limited to the NM3 license and should not be 
applied to the Texas 21 application; \24\ and (3) ``Alee is entitled to 
an opportunity to present any mitigating factors in support of the 
grant of the Texas 21 application before the Commission makes a final 
determination.'' \25\
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    \23\ Alee TX21 Petition for Reconsideration at 4.
    \24\ Id. at 4-7.
    \25\ Id. at 7.
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    10. Alee's first argument is moot, since the Algreg finding is no 
longer subject to appellate review and thus is a final order.\26\ 
Regarding its second claim, Alee is incorrect that the Algreg findings 
are not applicable to the Commission's consideration of the Texas 21 
application. The Commission has made clear that applicant and licensee 
candor is a fundamental character quality that goes to the overall 
qualifications of an entity to hold a license; it is not limited to the 
merits of a single application.\27\ In Algreg I and II, the Commission 
conclusively determined that Alee lacked candor with respect to its 
application and related filings for the NM 3 authorization,\28\ and the 
Commission is entitled to take that finding into account when assessing 
Alee's qualifications to hold another Commission license. Regarding 
Alee's third claim, however, the Commission grant Alee's TX21 Petition 
for Reconsideration in part and reinstates its application for the 
Texas 21 authorization, File No. 11025-CL-P-672-A-89, to pending 
status. Given that the Commission is unable to make the public interest 
determination required by Section 309(e) of the Act based on Alee's 
prior disqualification in a proceeding that did not involve Texas 21, 
the Commission designates Alee's application for an evidentiary 
hearing. This hearing will be limited to determining whether the 
finding of disqualifying lack of candor on the part of Alee in the 
Algreg proceeding also disqualifies Alee from being granted the Texas 
21 authorization, or whether there has been subsequent and sufficient 
rehabilitation on the part of Alee in the interim to support grant of 
its Texas 21 application. The Commission underscores that this hearing 
shall not be used by Alee to relitigate the Commission's findings in 
Algreg concerning Alee's lack of candor, since those findings are fully 
binding on Alee at this time.
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    \26\ See supra, para. 7.
    \27\ See, e.g., Pass Word, Inc., 76 FCC Rcd 465 (1980), aff'd 
per curiam Pass Word, Inc. v. FCC, 673 F.2d 1363 (D.C. Cir. 1982).
    \28\ Algreg I, 12 FCC Rcd at 8172-8181; Algreg II, 14 FCC Rcd at 
18533-18535.[29]: 12 FCC Rcd at 8172-8181.
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IV. Ordering Clauses

    11. Pursuant to Sec. 1.106 of the Commission's rules, 47 CFR 1.106, 
Alee's petition for reconsideration is GRANTED IN PART and OTHERWISE 
DENIED, to the extent explained above.
    12. Alee's application for the Texas 21 RSA cellular authorization, 
File No. 11025-CL-P-672-A-89, is RETURNED to pending status.
    13. Pursuant to Section 309(e) of the Communications Act of 1934, 
as amended, 47 U.S.C. 309(e), Alee's application for the Texas 21 RSA 
cellular authorization, File No. 11025-CL-P-672-A-89 is designated for 
hearing in a proceeding before an FCC Administrative Law Judge, at a 
time and place to be specified in a subsequent order, upon the 
following issues:
    a. To determine, based on previously adjudicated lack of candor on 
the part of Alee in Algreg I,\29\ whether Alee is qualified to be a 
Commission licensee in Texas RSA 21--Market 672A.
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    \29\ 12 FCC Rcd at 8172-8181.
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    b. To determine, in light of the foregoing, whether Alee's pending 
application for an authorization to construct a nonwireline cellular 
system in Texas RSA 21--Market 672A should be granted.
    14. To avail itself of the opportunity to be heard and to avail 
itself of the right to present evidence at a hearing in these 
proceedings, pursuant to Sec. 1.221(c) of the Commission's rules, 47 
CFR 1.221(c), Alee shall, in person or by its attorneys, file, within 
20 days of the mailing of this Hearing Designation Order, a written 
appearance stating that

[[Page 12017]]

it will appear at the hearing and present evidence on matters specified 
in this Order. If a written notice of appearance is not timely filed on 
behalf of Alee within 20 days of the mailing of this Hearing 
Designation Order, the captioned application will be dismissed with 
prejudice. See 47 CFR 1.221.
    15. The Enforcement Bureau is made a party to this proceeding.
    16. Pursuant to Section 309(e) of the Communications Act of 1934, 
as amended, 47 U.S.C. 309(e), and Sec. 1.254 of the Commission's rules, 
47 CFR 1.254, the burden of proceeding with the introduction of 
evidence and the burden of proof shall be upon Alee with respect to the 
issues designated under para. 13 above.
    17. The Chief, Wireless Telecommunications Bureau shall send a copy 
of this Order via certified mail, return receipt requested, to Alee and 
its counsel at the following addresses:

David L. Hill, Audrey P. Rasmussen, Hall, Estill, Hardwick, Gable, 
Golden & Nelson, P.C., Suite 700 North Building,1120 20th Street, NW, 
Washington, DC 20036-3406.
Philip J. Mause, Drinker Biddle & Reath LLP, 1500 K Street, NW, Suite 
1100, Washington, DC 20005-1209.
Alee Cellular Communcations, 602-7 College Avenue, Clemson, SC 29631.

    18. The Secretary of the Commission shall cause this Order or a 
summary thereof to be published in the Federal Register.

    Federal Communications Commission.
William F. Caton,
Acting Secretary.
[FR Doc. 02-6226 Filed 3-15-02; 8:45 am]
BILLING CODE 6712-01-P