The FCC approved applications related to WorldCom’s reorganizatio...
The FCC approved applications related to WorldCom’s reorganization out of bankruptcy as the newly formed MCI, including assignment or transfer of Sec. 214 authorization, Sec. 310 licenses and submarine cable landing licenses. The Commission said its approval was required…
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for WorldCom’s debtor-in-possession reorganization and emergence from bankruptcy to move forward. Since petitioning for bankruptcy, MCI “has aggressively rid itself of the individuals who allegedly committed acts of corporate fraud and has substantially reformed the corporate structures and policies that enabled such alleged fraud to occur,” the agency said. “In the aftermath of public revelations concerning WorldCom’s accounting problems,” the Commission said it had reviewed the qualifications of WorldCom and MCI in the context of the license and authorization transfers to the newly formed MCI. “The Commission has an obligation to undertake its own independent assessment of whether an applicant has the basic qualifications to be a Commission licensee, but we see no reason here to second-guess the extensive corporate governance reforms made under the careful review and special expertise of expert agencies including the SEC and the federal courts that have been involved in proceedings related to WorldCom’s proposed reorganization.” On matters of corporate governance in the case, the FCC said it gave “due attention” to the extensive review of several other expert federal agencies and courts. “Although final decisions on liability for the acts committed under the prebankruptcy WorldCom continue to proceed in other fora, the applicants have established that granting their applications is in the public interest,” it said. As a threshold matter, the Commission said it had to determine whether the applicant was qualified to hold and transfer control of licenses under Sec. 310(d) of the Communications Act. It said the underlying public interest concerns in the broadcast arena, such as indecency regulation, didn’t apply with equal force to common carrier facilities, “where content is divorced from conduit.”