WPCuE 2HBXK Z3|X  (TT)Times New Roman (TT)Times New Roman (Bold) (TT)"i~'^09CSS999S]+9+/SSSSSSSSSS//]]]Ixnnxg]xx9?xgxx]xn]gxxxxg9/9MS9ISISI9SS//S/SSSS9?/SSxSSIP!PZ9+ZM999+99999999S/xIxIxIxIxIlnIgIgIgIgI9/9/9/9/xSxSxSxSxSxSxSxSxSxSxIxSxRxSxSxS]SxIxIxInInInZnIxigIgIgIgIxSxSxSxZxSxZxS9/9S999Su]ZZxSg/gCg9g9g/xSbxSxSxSxSxn9n9n9]?]?]?]ZgFg/gMxSxSxSxSxSxSxxZgIgIgIxSg9xS]?g9xSi+SS88WuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuuxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN8HH"&H>XHH8HB8>HH^HH>"".2",2,2,"222N2222"&22H22,006"6."""""""""""2H,H,H,H,H,XAB,>,>,>,>,""""H2H2H2H2H2H2H2H2H2H2H,H2H1H2H2H282H,H,H,B,B,B6B,H?>,>,>,>,H2H2H2H6H2H6H2""2"""2F866H2>>(>">">H2;H2H2H2H2XHB"B"B"8&8&8&86>*>>.H2H2H2H2H2H2^HH6>,>,>,H2>"H28&>"H2?22!!WFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFFxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxN$<<$.2",2222`2 LL2 LL2L"",,2d""dYzzzzCCCCqodYYYYYYYYYYY8888dddddddnddddddd"5@^2Coddȧ8CCdr2C28ddddddddddCCrrrdzNdzoȐC8CtdCdoYoYCdo8Co8odooYNCodddYO,Oh2CC!CCPRCdodddddȐYYYYYN8N8N8N8oddddooooddoddddzodddYYYYYYddddooPoNoNCNodo8RoodȐYYoNoNNF2ldCdddddd"5@^(1<d<d<CCoodCCddCoCddzzzzzzzzzzCCCCozdddddddYYYYY8888dddddddndddddYd2AE@BR#h"5@^*7FSS$77Sq*7*.SSSSSSSSSS77qqqSffoxffxx7Jo]oxfxfS]xff]]A.AFS7SSJSJ.SS..J.xSSSSAA.SJoJJAC.CZ*7777CE7SSfSfSfSfSfSooJfJfJfJfJ7.7.7.7.oSxSxSxSxSxSxSxSxS]JfSxSxSxS]JxSfSfSfSfSoJoJoJfJfJfJxSxSxxSxSxSxSCS7S777SJoJ].]EoSoSxSofAfESASAN:*WSASSSSSS.4}}S2S}277]]S77SS7]72t7[[[[qee*C`q.wRSSn[Cfx`xWlRx[][ceIfIs`Wx[rriwge*7FSS$77Sq*7*.SSSSSSSSSS77qqqSffoxffxx7Jo]oxfxfS]xff]]A.AFS7SSJSJ.SS..J.xSSSSAA.SJoJJAC.CZ7S]SS7S777]]:S7A7o]*ASSSS.S7.Sq7SC[227`W*724S}}}Sffffffoffff7777xoxxxxxqxxxxx]fSSSSSSSoJJJJJ....SSSSSSS[SSSSSJS2sE X-#Xj\  P6G;yoXP# X   ) X-w  #XP\  P6QyoXP#Federal Communications Commission`)(# DA 961107 ă  yxdddy )+2 Before the w Federal Communications Commission  X-Washington, D.C. 20554 ă  X-In the Matter of R#XP\  P6QyoXP#) R)  Xv-InFlight Phone Corp.R)hppFile No. CWD 966 R) Petition for Declaratory RulingR) Concerning Section 310(b)(4) of R) the Communications Act of 1934,R) as amended R) T  X -  DECLARATORY RULING AND ORDER TP  Xy-X` hp x (#%'0*,.8135@8:Commission also approved MCI's concurrent request for a ruling that 28 percent aggregate  X_- xzforeign ownership of MCI is consistent with the public interest under Section 310(b)(4)._Zw {Oj -Ѝ#C\  P6QɓP# MCI Communications Corp., Declaratory Ruling and Order, 9 FCC Rcd 3960, 3973 (1994). In  xFebruary 1995, InFlight sought authorization for MCIT's assumption of control of IFP. Because  xzMCI's foreign ownership is attributable to its subsidiaries, MCIT's control of IFP meant that  xMCI's 28 percent foreign ownership was attributable to IFP. This, combined with IFP's minority  x[shareholders' existing foreign ownership interests, caused IFP's attributable foreign ownership  xto equal 32.447 percent. As a result, InFlight petitioned for a declaratory ruling allowing it to increase its aggregate foreign ownership up to 35 percent.  X -  }4.xOn June 9, 1995, this Division and the Telecommunications Division, International  X- xBureau, jointly approved IFP's petition for a 35 percent foreign ownership interest.w {O-- xLԍ#C\  P6QɓP# InFlight Phone Corp., Declaratory Ruling and Order, 10 FCC Rcd 10448 (Telecom. Div., IB, Comm.  {O-Wireless Div, WTB 1995) (InFlight Order).  We held  xxthat InFlight's increase in foreign ownership did not raise the traditional issues present in Section  x310(b)(4) because, 1) of the proposed 35 percent foreign ownership interest the 28 percent  xiattributed by MCI had previously been approved by the Commission, and 2) the nonMCI foreign  x.ownership interest was a small percentage of IFP's equity which was dispersed among several  X-investors who would not have effective control over IFP.lHw {O-ԍ#C\  P6QɓP# Id. at 10449,  9.l  X-  5.xOn August 4, 1995, the International Bureau ruled that MCI's foreign ownership could  xincrease an additional 7 percent, for a total foreign investment of 35 percent. The International  xBureau held that this increase in foreign ownership was consistent with the public interest under  xSection 310(b)(4) because the increased foreign investment would be passive and no foreign  X-investor (other than BT at 20 percent) would own more than a one percent interest in MCI.w {O"-ԍ#C\  P6QɓP# MCI Order, 10 FCC Rcd 8698,  13.  X|-T P  Xe-   6.xOn August 22, 1995, InFlight filed the instant petition requesting that the Commission  xdeclare that a corresponding 7 percent increase in IFP's foreign ownership, for a total of 42  x.percent, is consistent with the public interest under Section 310(b)(4). On September 29, 1995,"7l ,T'T'33"  xInFlight amended its petition to further request that the Commission find that an attributable  xforeign voting interest in IFP of up to 60 percent would be consistent with the public interest.  xInFlight states that its amendment reflects the Commission's recent revision of its policy on  X-foreign voting and ownership interests of common carrier and broadcast licensees.w {O4-Ѝ#C\  P6QɓP# See BBC License Subsidiary L.P., et.al., FCC 95364, 10 FCC Rcd 10968 (1995) (BBC License Subsidiary).  X-  n7.xThe Commission placed InFlight's petition and amendment on public notice. Zw {O- xЍ #C\  P6QɓP#Pleading Cycle Established for Comments on InFlight Phone Corp's Amended Petition for Declaratory  {Ob -Ruling, DA 952309 (Nov. 8, 1995). No comments were filed in response to the public notice.  XH- III. DISCUSSION Đ X1-TP  X -A. xForeign Ownership Interests  X -  X -  8.xInFlight recognizes that the increase in MCI's ownership approved in the MCI Order will  X - xMcause IFP's total foreign ownership to increase to 40.44 percent, | w yO>- x#C\  P6QɓP#э Specifically, MCI has 18.011 percent attributable foreign ownership (51.461 percent of equity contribution  x-multiplied by 35.000 percent of foreign ownership); Dearborn Investors has 14.492 percent attributable foreign  xownership, (15.613 percent of equity contribution multiplied by 92.824 percent of foreign ownership); MeesPierson  xInvestors has 7.314 percent attributable foreign ownership (7.903 percent of equity contribution multiplied by 92.546  xJpercent of foreign ownership) and John Hancock has 0.622 percent attributable foreign ownership (20.738 percent  {O&- xof equity contribution multiplied by 3.000 percent of foreign ownership) See IFP Amendment Summary Table B;  {O-see also BBC License Subsidiary 10 FCC Rcd at 10974,  25.   and thus exceed the level  X - xauthorized in the InFlight Order. InFlight argues, however, that the proposed increase in IFP's  X - xforeign ownership is consistent with the public interest because 1) the need for the proposed  X- xLincrease is primarily driven by a previously approved increase in MCI's foreign ownership and  X}- x2) the nonMCI foreign ownership interest in IFP remains relatively unchanged and these minority investors cannot control IFP.  X:-   9.xWe accept InFlight's arguments. In the InFlight Order we recognized that factors  xdemonstrating that increases in MCI's foreign ownership are consistent with the public interest  x0are likely to be equally applicable to the attendant increases in IFP's attributable foreign  X- xownership." $ w yO!- xԍ Because inFlight merely seeks a foreign ownership increase to correspond with the already authorized MCI  xwforeign ownership level, we conclude that the effective competitive opportunities public interest analysis adopted by  {O2#- xthe Commission under Section 310 (b)(4) in November 1995 in the Foreign Carrier Entry Order, need not be applied  {O#-in this case.  See Foreign Carrier Entry Order, 11 FCC Rcd 3873 (1995)." For example, additional passive investors incapable of asserting control over MCI  x0would find it even more difficult to assert control over an indirectly and partiallyowned  x]subsidiary. Thus, we find that a 7 percent increase in IFP's foreign ownership interest is" ,T'T'33q"  X- x<consistent with the public interest for the reasons stated in the MCI Order.[ w {Oy-ԍ See MCI Order, 10 FCC Rcd at 8698,  13.[ Moreover, the non x<MCI foreign ownership interest in IFP has not, under the circumstances of this case, significantly  xincreased and these minority investors do not control IFP. Finally, we note that both the Wireless  X- xTelecommunications Bureau and International Bureau have previously allowed 60 percent1 Zw {O- x#C\  P6QɓP#э See Teleport Transmission Holdings, Inc., 8 FCC Rcd 3063 (1993); GCI Liquidating Trust, 7 FCC Rcd 7641  {O-(1992); GRC Cablevision, Inc., 47 F.C.C.2d 467 (1974). 1 and  X- x92 percentw {O -#C\  P6QɓP#э See Cable and Wireless, Inc., 10 FCC Rcd 13177  16 (1995).Ĝ foreign interests in a parent corporation of a nonbroadcast radio licensee.mHw {O -#C\  P6QɓP#э Id. at 13179,  18.m As such,  x-we conclude that allowing up to 42 percent foreign ownership in IFP is consistent with the public interest.  XJ- B.xForeign Voting Interests  X -   10.xInFlight next requests that the Commission declare that a 60 percent foreign voting  x=interest in IFP is consistent with the public interest. InFlight argues that MCI's actual control  X - xyover IFP will cause its foreign voting interest of 35 percent to "flow down" to IFP.QH w yOy- xԍ In determining attributable foreign voting interests, an investor holding more than 50 percent of the vote in  xa parent company may not use a multiplier to dilute the percentage of its voting power. Instead, the investor's  xforeign voting interest flows, in whole, to the next tier entity. This "flow down" of attributable voting interests is  xYappropriate because a majority interest conveys actual control over the business which is unlikely to be significantly  {O- xKattenuated through intervening companies. BBC License Subsidiary, 10 FCC Rcd at 10973,  23, citing Wiley &  {Oc- xRein, 1 FCC Rcd 12, 13  12 n. 18 (1986) (Wiley & Rein). However, an investor may use a multiplier if the  {O-- xlicensee can demonstrate that the foreign is effectively insulated from active involvement in the company. Wilner  {O-& Scheiner I, 103 F.C.C.2d 511, 522,  20 (1985).Q When this  x=amount of voting interest is added to the minority voting interests in IFP, the total attributable  X - x\foreign voting interest in IFP equals 58.721. w yO[- x#C\  P6QɓP#э Dearborn Investors has an 18.653 percent of the foreign voting interest (20.095 percent of voting stock  xmultiplied by 92.824 percent of the foreign voting interest); John Hancock has a 0.738 percent of the foreign voting  yO- xinterest (24.595 percent of voting stock multiplied by 3.000 percent of the foreign voting interest) and MeesPierson  xxInvestors has a 4.330 percent of the foreign voting interest (4.679 percent of voting stock multiplied by 92.546  {O{ -percent of the foreign voting interest). See InFlight Amendment, Summary Table C. InFlight requests a 60 percent foreign voting  xKinterest level in order to provide a small cushion for minor changes in its ownership structure that could increase IFP's attributable voting interests.  Xd-   11.x We agree with InFlight that IFP's 60 percent foreign voting interest is consistent with  xthe public interest because the facts before us do not suggest that InFlight will be controlled by  x=foreign interests. MCI will control IFP's Board of Directors. Further, more than one half of the"6,T'T'33*"  xZ60 percent foreign voting interest attributable to IFP is simply the previously approved 35 percent  X- xforeign voting interest in MCI itself. Thus, 35 of the 60 percent foreign voting interest has  xalready been approved. Moreover, InFlight has shown that many of IFP's minority foreign  xivoting interests are unrelated and thus would be unlikely to act in concert. As such, we conclude that allowing up to 60 percent foreign voting interests in IFP is consistent with the public interest.  Xv-} IV. CONCLUSION TP  XH-   12.xA 42 percent foreign ownership interest and a 60 percent foreign voting interest in IFP  xare consistent with the public interest under Section 310(b)(4). Accordingly, we grant InFlight's petition for declaratory ruling and the amendment to the petition.  X -n V. ORDERING CLAUSE  X -TP  X -   13.xIT IS FURTHER ORDERED that pursuant to Sections 4(i), 5(c), 303(r), 310(b)(3), (4)  xof the Communications Act of 1934, as amended, 47 U.S.C.  154(i), 155(c), 303(r), 310(b)(3),  x(4) and Sections 0.261 and 0.331 of the Commission's rules, 47 C.F.R.  0.261 and 0.331 that  x[the Petition for Declaratory Ruling filed on August 22, 1995 and the Amendment to Petition for Declaratory Ruling filed on September 29, 1996 ARE GRANTED. x` `  hh@FEDERAL COMMUNICATIONS COMMISSION x` ` hh@David L. Furth x` `  hh@Chief, Commercial Wireless Division x` ` hh@Wireless Telecommunications Bureau  yO|-#C\  P6QɓP#