Foreign Ownership Petition May Slow LightSquared Application
The FCC could take two to three months to process LightSquared’s transfer of control application and petition for declaratory ruling for approval of its foreign owners, telecom lawyers said this week. LightSquared, to be known as New LightSquared, filed its application and petition last week (see 1504070071). The best-case scenario for the commission to process the application is five to six months, one telecom attorney said. The commission doesn’t have statutory constraints for a timeline, other than its 180-day clock, he said.
Sign up for a free preview to unlock the rest of this article
Timely, relevant coverage of court proceedings and agency rulings involving tariffs, classification, valuation, origin and antidumping and countervailing duties. Each day, Trade Law Daily subscribers receive a daily headline email, in-depth PDF edition and access to all relevant documents via our trade law source document library and website.
New LightSquared, which will be reconstituted as a Delaware limited liability company, will be controlled by a seven-member board, including Ivan Seidenberg, former chairman and CEO of Verizon, former FCC chairman Reed Hundt, and LightSquared CEO Doug Smith, the application said. Seidenberg is expected to be the board chair, it said. The reorganized company's foreign ownership is about 70 percent, it said. The current owners and new investors are Centerbridge, Fortress, Harbinger Capital and JPMorgan, the application said. LightSquared's emergence from bankruptcy will allow it to provide communication services to the transport and energy industries, first responders and government agencies, it said. Its spectrum can be used for new mobile broadband services, consistent with the National Broadband Plan, the application said.
LightSquared requested streamlined treatment of its transfer of control application, since the new licensee will have less than a 10 percent share of the market and the assignee isn't a foreign carrier, and its Canadian foreign carrier affiliates qualify for a presumption of nondominance under section 63.10 of the commission's rules, it said. The Canadian foreign carrier affiliates own mobile wireless and satellite earth station facilities in Canada, the application said. LightSquared declined to comment further on its application and petition.
The commission has started to streamline foreign ownership petitions to rule on them more quickly, said Akin Gump telecom lawyer Tom Davidson, who represents Mass Capital. “The FCC has revised rules and procedures governing petitions for declaratory ruling for foreign ownership approval, to try to employ a process that enables them to more quickly renew and review petitions,” he said. “It’s not clear whether these procedures apply to this transaction.” The applications and requests for declaratory ruling are routine, said Butzel Long satellite lawyer Stephen Goodman, who isn't involved in the bankruptcy. The commission doesn’t prohibit foreign ownership, but if it involves over 25 percent foreign ownership it has to be reviewed, he said.
It generally takes longer for the commission to process applications with a request for declaratory ruling, a communications lawyer said. Declaratory rulings involve the FCC and the Department of Justice, the FBI, the Department of Homeland Security and the Department of Defense, known as Team Telecom, so there's more coordination required, he said. If the foreign ownership involves countries that are U.S.-friendly it’s just a matter of process, he said.
The foreign ownership rules are similar for broadcasters, said Jay Meyers, CEO of Adelante Media Group, a radio and TV company focused on emerging Hispanic markets. “For the longest time, the FCC limited foreign ownership of broadcast stations, radio and TV to 24.99 percent,” he said. The rule dates from the 1930s, he said. “There was fear that foreign ownership could take control of American frequencies and broadcast propaganda,” Meyers said. “As time progressed, if you want to broadcast propaganda you’ve got the Internet. It became an archaic rule.” Last year, the commission issued a declaratory ruling in docket 13-50 to relax foreign ownership rules for broadcasters on a case-by-case basis. And Pandora’s petition could bring more relaxation of broadcast foreign ownership rules (see 1409030052).
GPS companies don’t seem likely to voice their concerns of interference issues with LightSquared’s transfer of control application, since there are other proceedings that deal with interference issues, industry officials said. One GPS company indicated on background that it didn’t intend to oppose the transfer application. The GPS Innovation Alliance/Coalition to Save Our GPS, Garmin and Trimble declined to comment.