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Warren C. Havens, Denial of Petition for Reconsideration

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Released: May 31, 2012

Federal Communications Commission

DA 12-851

Before the

Federal Communications Commission

Washington, D.C. 20554

In the matter of
)
)

Application for Transfer of Control of Progeny
)
ULS File No. 0003250058
LMS LLC to Progeny LMS Holdings LLC
)
)

and
)
)

Notification of the Consummation of the Transfer
)
ULS File No. 0003274382
of Control of Progeny LMS LLC to Progeny LMS )
Holdings LLC
)

ORDER

Adopted: May 31, 2012

Released: May 31, 2012

By the Chief, Mobility Division, Wireless Telecommunications Bureau:

I.

INTRODUCTION

1. For the reasons set forth below, the we hereby deny the Petition for Reconsideration and, in
the alternative, Petition to Deny or Informal Request for Action under Section 1.41,1 filed by Telesaurus
Holdings GB LLC, Intelligent Transportation & Monitoring Wireless LLC, AMTS Consortium LLC, and
Telesaurus-VPC LLC, along with Warren Havens (collectively, “Petitioners”),2 of the Wireless
Telecommunications Bureau’s (“Bureau”) grant of the above-captioned application (“Application”)3
seeking approval of the transfer of control of Progeny LMS, LLC (“Progeny LMS”) to Progeny LMS
Holdings LLC (“Progeny Holdings”)4 and the acceptance of the notification of consummation of this


1 Petition for Reconsideration and in the Alternative, Petition to Deny or Request under Section 1.41, filed by
Telesaurus Holdings GB LLC, Intelligent Transportation & Monitoring Wireless LLC, AMTS Consortium LLC,
and Telesaurus-VPC LLC, and Warren Havens (filed Jan. 11, 2008; amended Jan. 14, 2008) (“Petition”). The
Petitioners filed an “errata copy” of the Petition for Reconsideration and an amended certificate of service. For
convenience, when referring to the Petition for Reconsideration, we are referring to the amended copy that was filed
on January 14, 2008.
2 Warren Havens is the President of Telesaurus Holdings GB LLC, Intelligent Transportation & Monitoring
Wireless LLC, AMTS Consortium LLC, and Telesaurus-VPC LLC. As such, Progeny frequently refers to the
Petitioners as “Havens.” Where “Havens” appears in a quotation from Progeny, such references should generally be
read to include the Petitioners as a group and not solely Mr. Havens.
3 Application of Progeny LMS, LLC Transfer of Control Application from Progeny LMS, LLC to Progeny LMS
Holdings, LLC, Universal Licensing System (“ULS”) File No. 0003250058 (filed Dec. 7, 2007; consented Dec. 8,
2007).
4 The Progeny companies were referenced differently by the various parties in their filings. To avoid confusion, we
refer to the Progeny companies collectively as “Progeny” throughout this order except where reference to a specific
Progeny company is necessary or useful. References to “pre-transfer Progeny” and “post-transfer Progeny” are also
utilized where reference to the ownership and control of Progeny LMS and/or the Progeny Licenses before and after
the transfer of control are at issue.

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transaction (“Petition”).5 Furthermore, we deny Petitioners’ requests that the licenses held by Progeny
LMS be canceled and offered to the qualified high bidder in the Location and Monitoring Service
(“LMS”) Auction 21,6 or that the Federal Communications Commission (“FCC” or “Commission”) hold a
formal evidentiary hearing to consider the allegations raised in this proceeding to determine whether
Progeny’s licenses are valid.7

II.

BACKGROUND

2. In 1995, the Commission established the Location and Monitoring Service (“LMS”) as a
radio service to be licensed in the 902-928 MHz spectrum band.8 There are two types of LMS systems:
multilateration systems9 and non-multilateration systems.10 The M-LMS licenses were auctioned by the
Commission in 1999 and 2001 (Auctions 21 and 39).11 The licenses at issue here are M-LMS licenses
that were auctioned in Auction 21.12 Both Progeny LMS and Petitioners hold many M-LMS licenses and
both participated and were winning bidders in Auction 21.13
3. M-LMS Auction 21. Progeny LMS filed a short-form application (“Form 175”), on January
25, 1999, to participate in M-LMS Auction 21.14 In its Form 175, Progeny LMS disclosed that it was a
limited liability company, organized under the laws of Indiana, whose sole member was Progeny Post,
LLC (“Progeny Post”). Progeny Post was a limited liability company, organized under the laws of
Indiana, with eleven members. Curtis L. Johnson was reported as having a 60.79 percent ownership
interest in Progeny Post; whereas, the other ten members, including Otto N. Frenzel III (“Frenzel”), were
listed as holding less than a 10 percent interest in Progeny Post.15 In this auction, Progeny LMS applied
for a 35 percent bidding credit as a very small business.16 Progeny LMS reported it had no gross revenues
and Progeny Post had average gross revenues for the preceding three years that were less than $3
million.17 Progeny LMS reported that Progeny Post held interests in seven affiliates, all of which were


5 Required Notification of Transfer of Control, ULS File No. 0003274382 (filed Jan. 3, 2008) (“Notification of
Consummation”).
6 Petition at 1-2.
7 Id. at 2.
8 Amendment of Part 90 of the Commission’s Rules to Adopt Regulations for Automatic Vehicle Monitoring
Systems, Report and Order, 10 FCC Rcd 4695 (1995) (“LMS Report and Order”).
9 Multilateration systems track and locate objects over a wide geographic area by measuring the difference in time of
arrival, or difference in phase, of signals transmitted from a unit to a number of fixed points, or from a number of
fixed points to the unit that is to be located.
10 Non-multilateration systems transmit data to and from objects passing through particular locations (e.g.,
automated tolls, monitoring of railway cars) and are licensed on a non-exclusive basis using site-by-site licensing.
11 Location and Monitoring Service Auction Closes, Winning Bidders in the Auction of 528 Multilateration Licenses
in the Location and Monitoring Service, Public Notice, 14 FCC Rcd 3754 (WTB 1999) (“Winning Bidder Public
Notice”); Public Coast and Location and Monitoring Service Spectrum Auction Closes, Winning Bidders
Announced, Public Notice, 16 FCC Rcd 12509 (WTB 2001).
12 See Winning Bidder Public Notice.
13 Id. at Attachment A.
14 Progeny, LMS, LLC, Form 175, File No. 0211049154 (filed Jan. 25, 1999) (“Form 175”).
15 Form 175, Attachment A.
16 Id. at 2.
17 Id. at Exhibit C.
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inactive and had no reportable gross revenues.18
4. After the conclusion of Auction 21, the Commission released a public notice announcing the
winning bidders. Both Progeny LMS and Warren Havens were listed on this Closing Public Notice as
winning bidders for licenses.19 On March 18, 1999 and March 22, 1999, Progeny filed and amended,
respectively, a long-form application (“March 1999 Form 601”) to apply for the 228 licenses for which it
was the high bidder.20 The March 1999 Form 601 disclosed that Progeny LMS had two members –
Progeny Post, which held 79 percent of the ownership interests, and Lawrence R. Green, which held 21
percent of the ownership interests.21 Progeny reported that Curtis Johnson held a 65.5 percent interest in
Progeny Post and that the other twelve members, including Frenzel, did not hold a 10 percent or greater
interest.22
Progeny also provided information regarding LMS Spectrum Partners, LLC (“LMS
Spectrum”), a wholly-owned subsidiary of Progeny LMS, because it was considering having the LMS
licenses issued to this subsidiary.23 Progeny reported gross revenues for Progeny LMS, Progeny Post, and
LMS Spectrum.24
5. On June 15, 1999, Progeny LMS amended the Form 601 to add a request for waiver of the
Commission’s rules to permit the late filing of the Form 602 (“June 1999 Form 601”).25 The waiver
states that Progeny LMS and LMS Spectrum were not aware that a Form 602 was required.26 On
November 8, 1999, Progeny LMS filed amendments to the Form 601 (“November 1999 Form 601”) to
report that Frenzel, who was listed on the Form 175 and March 1999 Form 601 as a member of Progeny
Post holding less that a 10 percent interest, was the sole owner of Progeny LMS.27 Progeny amended the
gross revenue information to reflect that Frenzel was the sole owner of Progeny LMS. Progeny LMS
continued to report that it had no revenues for the previous three years and provided gross revenue
information for Frenzel. The application further states that Progeny LMS and Frenzel had no affiliates.28
It reported that Progeny LMS, as controlled by Frenzel, had gross revenues averaging less than 3 million
for the preceding 3 years.29


18Id. at Exhibits A and C.
19 Winning Bidder Public Notice at Attachment A.
20 Progeny LMS, LLC, Form 601, ULS File No. 0000006894 (filed Mar. 18, 1999; amended Mar. 22, 1999). The
original Form 601 was filed on March 18, 1999, but does not contain any attachments. For convenience, when
discussing the originally-filed Form 601, we will refer to the amended Form 601 filed on March 22, 1999 Form 601
(“March 1999 Form 601”).
21 March 1999 Form 601, Exhibit A, at 1-2.
22 Id. at 2.
23 Id. at 1 n.1.
24 March 1999 Form 601, Exhibit C. Progeny LMS reported that it held an interest in one entity and that Progeny
Post held interests in five entities, but none of these entities had gross revenues. March 1999 Form 601, Exhibit A,
at 3.
25 June 1999 Form 601, Exhibit F.
26 Id.
27 November 1999 Form 601, Exhibit A. Progeny filed “proposed” amendments to its Form 601 on October 29,
2009. October 29, 1999 Form 601. The October 29, 1999 Form 601 states that the amendments reporting the
information regarding Frenzel were proposed amendments. These amendments were no longer proposed when the
November 1999 Form 601 was filed. For convenience, when referring to these amendments, we only cite to the
November 1999 Form 601.
28 November 1999 Form 601, Exhibit C.
29 Id.
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6. The application also included a “conditional waiver request” in which Progeny LMS
requested a “waiver of certain FCC application processing policies so that it [could] amend its application
to seek FCC recognition that [Frenzel was] the owner and controlling party of [Progeny LMS].”30
Progeny LMS explained that the “this Amendment is being tendered to effectuate a settlement, not to
improve the comparative position of the Applicant.”31 Progeny further states that “the FCC should, if
necessary, waive its rules and policies relating to real-party-in-interest, major changes to applications,
post-auction filing procedures, and any other rules or policies that would otherwise preclude the agency
from recognizing the Parties’ settlement and Progeny LMS, L.L.C., with the ownership as described
herein, as the Applicant.”32
Progeny LMS also filed an updated Form 602 reporting Frenzel as the sole
member of the limited liability company.33
7. On December 6, 1999, the Progeny LMS application was placed on public notice as accepted
for filing and a pleading cycle for comment was established.34 The December 1999 Public Notice
explained that Progeny LMS initially filed a Form 601 identifying Progeny Post and Lawrence Green as
sole members of Progeny LMS and Curtis Johnson as CEO of Progeny Post. It also disclosed that
Frenzel had an indirect interest in Progeny Post and that he loaned $1.35 million to Progeny Post and
executed another note for $1.9 million to a subsidy of Progeny LMS. The December 1999 Public Notice
further stated that Frenzel filed an emergency motion for preliminary injunction in Indiana State Court
and simultaneously filed a motion for declaratory and injunctive relief with the Commission requesting
that the Commission temporarily stay further processing of Progeny LMS’ Form 601. The December
1999 Public Notice also explained that Progeny LMS filed an amended Form 601 with Frenzel as the sole
member and noted that documents related to the Indiana court proceedings were available for public
inspection.35 No petitions were received.
8. On May 4, 2000, the Bureau announced that it was prepared to grant Progeny’s applications
upon full and timely payment of the remaining balance of each applicant’s winning bids.36 On July 19,
2000, the Bureau granted 228 M-LMS licenses to Progeny LMS.37
9. Transfer of Control Application. On December 7, 2007, Progeny LMS filed an application
seeking consent to the transfer of control of 228 M-LMS licenses from Progeny LMS to Progeny
Holdings.38 The Application states that Progeny LMS was “50.18 [percent] owned and controlled by Otto
N. Frenzel.”39 The remaining 49.82 percent interest in Progeny LMS was held by other members, which
each held less than a 10 percent interest.40 The applicants were seeking to create a holding company,


30 See November 1999 Form 601, Exhibit F.
31 November 1999 Form 601, Exhibit F, at 3.
32 Id. at 1-2.
33 Progeny LMS, LLC, Form 602 (Oct. 27, 1999).
34 Location and Monitoring Service Application Accepted for Filing, Public Notice, 15 FCC Rcd 1591 (WTB 1999)
(“December 1999 Public Notice”).
35 Id.
36 Wireless Telecommunication Bureau Announces it is Prepared to Grant Location and Monitoring Service
Licenses after Final Payment is Made, Public Notice, 15 FCC Rcd 7888 (WTB 2000) (“May 2000 Public Notice”).
37 Wireless Telecommunication Bureau Grants 228 Location and Monitoring Service Licenses to Progeny LMS,
Public Notice, 15 FCC Rcd 12807 (WTB 2000).
38 See Application.
39 Application, Attachment 1.
40 Id.
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Progeny LMS Holdings, in which Frenzel would hold less than 50 percent in order to admit new investors
in Progeny LMS Holdings. Frenzel would surrender de jure and de facto control and as a result no one
entity would exercise control over the licenses.41 After the transaction, Progeny LMS would be a wholly-
owned subsidiary of Progeny Holdings. Progeny Holdings membership interests would be held as
follows: 25.08 percent by Frenzel, 27.46 percent by Telecom LMS Holdings, LLC, 20.27 percent by
Columbia Capital Equity Partners IV (ECI), Ltd,42 and the remaining 24.7 percent interest would be held
by multiple members that would each hold less than a 10 percent interest. Telecom LMS Holdings, LLC
is 100 percent owned and controlled by Rajendra Singh, Neera Singh, the Singh Educational Trust, and
The Samir Raj Singh Educational Trust (“Singh Family”).43
10. This application was consented to on December 8, 2007 and the grant appeared on public
notice on December 12, 2007.44 The transaction was consummated on December 20, 2007 and the
consummation notification was filed on January 3, 2008.45 On February 12, 2008, Form 602 was filed for
Progeny LMS, LLC46 and Progeny LMS Holding, LLC.47 Both forms were filed with a request for
waiver.
11. Petition for Reconsideration. On January 11, 2008, the Petitioners filed a Petition for
Reconsideration or, alternatively a Petition to Deny, or request under Section 1.41 regarding the Bureau’s
grant of the Application and its acceptance of the Notification of Consummation. The Petitioners
challenged the Bureau’s automatic grant of the Application on numerous procedural and substantive
grounds, arguing that the Application: (1) was incomplete; (2) contained false or misleading information;
and (3) required waivers or declaratory rulings that were not requested. Moreover, the Petitioners
claimed that Progeny LMS was not qualified to hold its current M-LMS licenses. Petitioners asked that
the Bureau reverse the grant, deny the application, cancel Progeny’s licenses, and offer those licenses to
the next qualified bidder in the auction.48
Alternatively, Petitioners state that, at a minimum the
Commission must hold an evidentiary hearing to consider these matters.49
12. On January 22, 2008, Progeny LMS and Progeny Holdings filed an Opposition to the Petition
for Reconsideration (“Opposition”) in which they argue that the Petition is procedurally defective, asserts
factual inaccuracies, and raises largely irrelevant issues that have been long resolved in Progeny’s favor.50


41 Id.
42 Columbia Capital Equity Partners IV (ECI), Ltd. is controlled by Columbia Capital IV, LLC. Columbia Capital
IV, LLC indirectly owns 22.76% of the Applicant, because it controls an additional 2.49% indirect interest through
Columbia Progeny Partners IV, Inc. See Application, Attachment 1, note 1.
43 Application at Attachment 1, Exhibit B.
44 Wireless Telecommunications Bureau Assignment of License Authorization Applications, Transfer of Control of
Licensee Applications, De Facto Transfer Lease Applications and Spectrum Manager Lease Notifications,
Designated Entity Reportable Eligibility Event Applications, and Designated Entity Annual Reports Action, Public
Notice
, Report No. 3662 (WTB 2007).
45 Notification of Consummation; Wireless Telecommunications Bureau Assignment of License Authorization
Applications, Transfer of Control of Licensee Applications, De Facto Transfer Lease Applications and Spectrum
Manager Lease Notifications, Designated Entity Reportable Eligibility Event Applications, and Designated Entity
Annual Reports Action, Public Notice, Report No. 3754 (WTB 2008).
46 Progeny LMS, LLC, Form 602, File No. 0003322280 (Feb. 12, 2008).
47 Progeny LMS Holdings, LLC, Form 602, File No. 0003322287 (Feb. 12, 2008).
48 Petition at 1-2. It bears noting that, in most cases, the next qualified bidder would be one of the Petitioners.
49 Petition at 2.
50 Opposition to Petition for Reconsideration, filed by Progeny LMS, LLC and Progeny LMS Holdings, LLC, at 1,
8-9 (filed Jan. 22, 2008).
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Petitioners filed a reply to the Opposition on February 5, 200851 (“Reply”), to which Progeny LMS and
Progeny Holdings filed a further response on February 12, 2008 (“Further Response”).52

III.

DISCUSSION

13. After careful review of the record and considering the totality of the circumstances, we deny
the Petition for the reasons set forth below. Specifically, we find that: (1) the Petitioners failed to fulfill
the fundamental pleading requirements of the Commission’s rules; (2) the Petitioners’ objections to
Progeny’s conduct during Auction 21 and the validity of its Licenses are untimely and procedurally
deficient; (3) Progeny Holdings existed prior to the filing of the Application; (4) Progeny properly
disclosed the ownership and control of the Progeny companies both before and after the transfer of
control; (5) Progeny’s late-filed amendments to its Form 602 were non-fatal; (6) Petitioners’ failed to
identify essential Commission rules requiring a waiver; and (7) the Application was properly granted
under the Commission’s Immediate Approval Procedure (“IAP”) rules.

A.

Procedural Issues

1.

The Petition is Properly Considered a Petition for Reconsideration

14. The Petition was submitted as a Petition for Reconsideration or, alternatively, as a Petition to
Deny or an informal request under Section 1.41. Progeny states that the Petition cannot be properly
deemed a petition to deny or an informal request for action and that Petitioners did not comply with the
Commission’s filing requirements for petitions for reconsideration.53 Progeny asserts that the Petition is
not a petition to deny because the application was consented to and consummated prior to the filing of the
Petition.54 Progeny states that, even if the Petition was considered a petition to deny, Petitioners do not
meet the requirements of Section 1.939 of the Commission’s rules,55 because this rule required that
petitioners must be a party in interest and must provide “specific allegations of fact sufficient to make a
prima facie showing that the petitioner is a party.”56
15. Progeny also argues that the Petition also cannot be an informal request for action under
Section 1.41 of the Commission’s rules,57 because there are formal procedures in place to challenge the
transfer of control Application under Section 1.948(j)(2)(iii) of the Commission’s rules.58 Section 1.41 of
the Commission’s rules states that informal action is appropriate “[e]xcept where formal procedures are
required. . . .”59 Section 1.948(j)(2)(iii) of the Commission’s rules states that transfers of control that are
granted pursuant to the Commission’s immediate approval procedures are subject to petitions for


51 Reply to Opposition to Petition for Reconsideration and in the Alternative, Petition to Deny or Request under
Section 1.41, filed by Telesaurus Holdings GB LLC, Intelligent Transportation & Monitoring Wireless LLC, AMTS
Consortium LLC, and Telesaurus-VPC LLC, and Warren Havens (filed Feb. 5, 2008; amended Feb. 13, 2008)
(“Reply”). The Petitioners filed an “errata copy” of the Reply and an amended certificate of service. For
convenience, when referring to the Reply, we are referring to the amended copy that was filed on February 13, 2008.
52 Further Response to Petition for Reconsideration, filed by Progeny LMS, LLC and Progeny LMS Holdings, LLC
(filed Feb. 12, 2008).
53 Opposition at 2.
54 Id.
55 47 C.F.R. § 1.939.
56 Opposition at 2 (citing 47 C.F.R. § 1.939)
57 47 C.F.R. § 1.41.
58 47 C.F.R § 1.948(j)(2)(iii); Opposition at 2.
59 47 C.F.R. § 1.41.
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reconsideration.60
16. We agree that the Petition is not accurately defined as a petition to deny or a request for
informal action in this context. In the Secondary Markets Second Report and Order, the Commission
applied the IAP Rules to all wireless services61 and clearly stated that, if an application is acted upon
pursuant to IAP, the correct vehicle for challenging such an action is a petition for reconsideration.62
Since the Application was granted pursuant to the Commission’s IAP rules, the Petition must be
considered a petition for reconsideration. However, as set forth below the Petition does not satisfy the
pleading requirements for petitions for reconsideration.
2.

Petitioners Did Not Comply with the Commission’s Rules Governing
Petitions for Reconsideration

17. Progeny asserts that the Petitioners did not comply with the Commission’s pleading
requirements for petitions for reconsideration.63 Section 1.106(b)(1) states that an entity that is not a party
to a proceeding must “state with particularity the manner in which the person’s interests are adversely
affected by the action taken.”64 Progeny states that Petitioners are not a party to the transfer of control
application and did not state how they were adversely affected by the consent to the transfer of control
application.65
Moreover, they assert that “[t]he restructuring of Progeny that resulted from the
Application had no effect on Petitioners whatsoever.”66 Thus, Progeny concludes that Petitioners did not
comply with the Commission’s filing requirements and the Petition should be dismissed as defective.67
18. In the Reply, Petitioners counter that they have standing, under Sections 309(d) and 405 of
the Communications Act, as amended,68 as persons whose interests are adversely affected by the
Commission’s action. They further assert that the facts that underlie their pleadings could not have been
presented earlier due to Progeny’s withholding of information.69 However, Progeny never challenges the
Petitioners’ standing but rather asserts that the Petition was procedurally defective.
19. Under the Commission’s Rules, since Petitioners are not parties to this proceeding, they must
“state with particularity the manner in which the person’s interests are adversely affected by the action
taken” to bring a petition for reconsideration.70 As noted in Section II above, the Petitioners make several
allegations regarding the information included in the Application, the completeness of the Application
itself, the ownership and control of Progeny LMS and Progeny Holdings, and Progeny LMS’ original


60 See 47 C.F.R § 1.948(j)(2)(iii).
61 See In the Matter of Promoting Efficient Use of Spectrum Through Elimination of Barriers to the Development of
Secondary Markets, Second Report and Order, Order on Reconsideration, and Second Further Notice of Proposed
Rulemaking
, 19 FCC Rcd 17503, 17557-17558 ¶110 (2004) (“Secondary Markets Second Report and Order”).
62 Id. at ¶101.
63 Opposition at 2.
64 47 C.F.R. § 1.106(b)(1).
65 Opposition at 3.
66 Id.
67 Id.
68 47 U.S.C. §§ 309(d), 405.
69 Reply at 1.
70 See 47 C.F.R. §1.106(b)(1); Wireless Co., L.P., Order, 10 FCC Rcd 13233, 13235 ¶ 7 (WTB 1995) citing Sierra
Club v
. Morton, 405 U.S. 727, 733 (1972).
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qualifications to hold the Progeny Licenses.71 However, at no point do the Petitioners state that these
alleged deficiencies will cause Petitioners direct injury or provide any evidence sufficient to impute such
injury. Neither do the Petitioners attempt to establish a causal link between the transfer of control and
any actual harm that would befall the Petitioners as a result of its approval. Therefore, the Petitioners
clearly fail to satisfy their burden under 1.106(b) and, as such, the Petition must be dismissed as
procedurally defective.
3.

Petitioners’ Objections to Progeny’s Conduct During Auction 21 and the
Validity of its Licenses Are Untimely and Procedurally Deficient

20. Petitioners assert that Progeny violated the Commission’s auction and licensing rules before,
during, and after Auction 21.72 Petitioners argue that, under the Commission’s rules and Commission and
court precedent, these violations rendered Progeny’s Auction 21 long-form application invalid.73 In
support of these arguments, Petitioners attach an ex parte filing that was originally submitted as part of
the ongoing M-LMS rulemaking proceeding and includes an amended complaint filed by Otto Frenzel,
Progeny LMS, and LMS Spectrum Partners, LLC against Curtis Johnson, Progeny Post LMS, LLC, and
Lawrence Green in Indiana State Court as well as other public documents.74 According to Petitioners,
these documents show that Progeny LMS: (1) did not exist until after Auction 21; (2) failed to disclose
the controlling interest holder’s affiliates and revenues; (3) failed to ask for and receive required waivers;
and (4) submitted false certifications to the Commission.75 Petitioners also argue that this information
was “kept secret” and not disclosed to the Commission at the time the Progeny Licenses were granted.76
Petitioners cite to three cases – McKay v. Wahlenmaier,77 Biltmore v. FCC,78 and Superior Oil Co. v.
Udall79
– in support of the proposition that such “new facts” result in disqualification.80 Petitioners also
argue that Progeny does not address these legal precedents in its Opposition so it is conceding these
arguments.81
21. In its Opposition, Progeny states that “[t]he circumstances raised in the Petition, such as the
Indiana state court proceeding brought by Frenzel, were acknowledged in the Commission’s public notice
accepting Progeny’s amended long-form application for filing…[t]he issues raised by Havens in the
Petition have long since been put to rest by the Commission and are irrelevant to the instant
proceeding.”82 Accordingly, Progeny does not address the substantive arguments raised by the Petitioners
with regard to Auction 21.
22. After careful examination of the Petitioners’ allegations and the relevant Commission


71 See Petition.
72 Petition at 3.
73 Id. at 4.
74 See Petition, Exhibit 2. Exhibit 2 was originally submitted to as Telesaurus Holdings LLC, Ex Parte Presentation,
WT 06-49 (May 7, 2007).
75 See Petition at 3-4 and Exhibit 2; Reply at 3-5.
76 Reply at 3.
77 226 F.2d 35 (D.C. Cir. 1955).
78 321 F.3d 155 (D.C. Cir. 2003).
79 409 F. 2d 1115 (D.C. Cir. 1969).
80 Reply at 4.
81 Id. at 5.
82 Opposition at 8.
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records, we find that the Petition does not raise novel issues or bring to light previously unknown
information regarding Auction 21 or the validity of the Progeny Licenses. The issues raised by the
Petitioners, including those associated with the litigation initiated by Frenzel, were considered by the
Bureau in granting the Progeny Licenses.83 Indeed, in the December 1999 Public Notice, the Bureau
specifically referenced documents from the Indiana litigation and noted that documents relating to the
court proceedings were available for public review at the Commission.84 Petitioners do not provide any
new information in their pleadings nor do they offer evidence that any relevant documents were withheld
from the Commission or concealed from the public. Accordingly, Petitioners’ claim that these matters
were not considered by the Bureau during its deliberations or that they were somehow concealed from the
public is without merit.
23. Because Petitioners offer no evidence that would require the Bureau to reexamine its grant of
the Progeny Licenses, the Petition must be viewed as an untimely petition to deny insofar as it deals with
issues related to Auction 21. The November 1999 Form 601 was placed on public notice after Auction 21
and the public was given ample opportunity to comment or object in accordance with the pleading
schedule.85 As participants in Auction 21, any of the Petitioners that bid on the Progeny Licenses in that
auction would have had standing to file a petition to deny the grant of the Progeny Licenses.86 As noted
in the December 1999 Public Notice, petitions to deny should have been filed by December 16, 1999.87
However, no comments or petitions were filed by any of the Petitioners (or any other party) in response to
any of the public notices. Petitioners cannot use this unrelated proceeding to address issues that should
have properly been raised eight years before the Application was filed. Thus, insofar as the Petition
addresses matters related to Auction 21 or the original grant of the Progeny Licenses, we find it to be
untimely and procedurally deficient and we hereby dismiss all such arguments in their entirety.88

B.

The Progeny Transfer of Control Application was valid

24. Petitioners contend that the Application contained numerous misstatements and factual errors
that should disqualify the Application. Notably, Petitioners claim that: (1) Progeny Holdings did not exist
at the time of the Application; (2) Progeny failed to properly disclose the ownership and control of the
Progeny companies; (3) Progeny failed to update its Form 602 as required by Commission rules; (4)
Progeny failed to apply for necessary waivers; and (5) the Application should not have been granted
under IAP. Notwithstanding the fact that the Petition is procedurally defective, we have examined the


83 See December 1999 Public Notice.
84 Id. at 2 and note 3.
85 Id.
86 See 47 C.F.R. §1.939 and 47 C.F.R. § 1.208.
87 December 1999 Public Notice.
88 We note for the record that the Petitioners and other entities controlled by Mr. Havens have raised these same
issues in several other proceedings, including Docket No. 06-49 and Docket No. 11-49. We have previously
cautioned Mr. Havens and entities controlled by him, including the Petitioners, against filing abusive or harassing
pleadings” with the Commission. See In the Matter of Mobex Network Services, LLC, to Renew Licenses for
Automated Maritime Telecommunications System (AMTS) Stations in Various Locations in the United States, to
Transfer Control of AMTS Licenses, to Assign AMTS Licenses, Order on Reconsideration, 22 FCC Rcd 665, 672
¶16 (WTB 2007); Petition for Reconsideration of Various Auction 87 Public Notices, Memorandum Opinion and
Order
, DA 12-676 (WTB 2012). Indeed, Mr. Havens was recently sanctioned for making repetitious and frivolous
filings in an unrelated proceeding. See Warren C. Havens, Applications to Provide Automated Maritime
Telecommunications System Stations at Various Locations in Texas, and Applications to Provide Automated
Maritime Telecommunications System Stations at Chaffee, Aspen, Colorado Springs, Copper Mountain, and
Leadville, Colorado, Memorandum Opinion and Order, 27 FCC Rcd 2756 (2012). We hereby reiterate this warning
and encourage Petitioners to refrain from raising these well-settled issues in other proceedings.
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Petitioners’ substantive claims regarding the Application and find them to be without merit. Accordingly,
for the reasons set forth below, we find that the Application complies with Commission rules and was
correctly approved under IAP.
1.

Progeny Holdings Existed Prior to the Filing of the Application

25. In the Application, Progeny states that “[t]he Applicant proposes to create a holding company
called Progeny LMS Holdings, LLC . . . transfer Frenzel’s interest in the Applicant to the Transferee and
dilute Mr. Frenzel’s interest to less that 50 [percent] in order to admit new investors to the transferee.”89
Petitioners claim that Progeny Holdings is described as a “proposed entity” and that “an Application
cannot be granted based on a proposed entity.”90 In its Opposition, Progeny states that Progeny Holdings
was formed in Delaware on December 6, 2007, one day before the Application was filed, and attached the
certificate of formation.91 Petitioners respond that they relied on the Application in which Progeny states
that it plans to create a holding company and that they cannot presume an entity actually exists.92 Further,
Petitioners argue that it is too late to provide the documentation showing that the entity was actually
formed and, therefore, the Application must be dismissed as defective.93
26. Progeny has provided the certificate of formation to demonstrate that the company was
formed and registered before the Application was filed, therefore, we do not find any defect in the
Application that would warrant a dismissal. Furthermore, the Commission does not have a rule that
requires Progeny to file the certificate of formation with the Commission so Progeny’s decision not to
provide the certificate of formation with its Application does not render the Application defective.94
2.

Progeny Properly Disclosed and Documented Ownership and Control of the
Progeny Companies both Before and After the Transfer

27. Petitioners allege that there is no information or explanation in the Application regarding the
ownership or control of Progeny prior to or after the transfer of control.95 Progeny argues that the pre-
transfer and post-transfer ownership and control of Progeny were fully disclosed in the Application and
that Petitioners’ arguments are inaccurate and should be disregarded.96
28. Pre-Transfer Progeny. Petitioners state that the Application does not clearly identify who
controlled pre-transfer Progeny.97 Specifically, Petitioners claim that the Application, which states that
“[t]he Applicant is currently 50.18 [percent] owned and controlled by Otto N. Frenzel. . . ”98 is unclear


89 Application at Attachment 1.
90 Petition at 3.
91 Opposition at 3.
92 Reply at 5.
93 Id. at 5.
94 We also dismiss Petitioners claim that Progeny should have filed a sworn affidavit along with its certificate of
formation. Even if the certificate had been required, as Progeny notes, the Commission typically gives official
notice to government documents that are accessible to the public. See Further Response at 5 (citing Citadel
Broadcasting Company for Renewal of Licenses for Stations, Memorandum Opinion and Order, 22 FCC Rcd 7083,
7094 ¶21 (2007)).
95 Petition at 3, 5-6.
96 Opposition at 3-5.
97 Petition at 3 and 5; Reply at 6.
98 Application at Attachment 1, Exhibit A.
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and can be read in two different ways.99 Petitioners state that “[f]rom this it is not clear whether or not
[Progeny] is stating that 50.18 [percent] of the interests in [Progeny] is owned and controlled by Frenzel
or if Mr. Frenzel holds 50.18 [percent] and also has de facto and de jure control of the pre-transfer
[Progeny]. Holding 50.18 percent does not mean that a person actually controls an entity.”100 Further,
Petitioners state that the Opposition cannot be used to cure this defect in the application.101
29. Progeny asserts that the Application clearly explains the ownership and control of pre-
transfer Progeny when it states “[t]he Applicant is currently 50.18 [percent] owned and controlled by Otto
N. Frenzel”102 In addition, the pre-transfer ownership and control of Progeny LMS is reflected in the
ownership chart that was provided in Exhibit A of the Application.103 Specifically, Progeny states that
“Havens ignores the fact that ‘the Applicant’ is the subject of the quoted sentence and the verb
‘controlled’ clearly refers to the subject.”104 Thus, Progeny states that it accurately reported that Frenzel
held both de jure and de facto control of Progeny prior to its transfer of control to the Transferee.105
30. We agree that Progeny’s disclosure regarding the control of pre-transfer Progeny is sufficient.
In its Application, Progeny clearly stated that Frenzel held 50.18 percent interest in pre-transfer Progeny
and thus had ownership and control of the company. We have thoroughly reviewed the Application,
including the ownership information submitted by Progeny, and we are satisfied with Progeny’s showing
regarding the ownership and control of pre-transfer Progeny. Moreover, Petitioners provide no evidence
or precedent to support their claim that the Application was somehow unclear or deficient as a matter of
law.
31. Post-Transfer Progeny. Petitioners also assert that the ownership and control of post-transfer
Progeny is not disclosed and that the real party in interest must be disclosed under the Commission’s
rules.106 Petitioners argue that Progeny failed to disclose the real party in interest and/or control group as
required by the instructions for the Form 603 and Sections 1.2112(a)107 and 1.2110(b)(3)(ii)108 of the
Commission’s rules.109 They also assert that, while the Application listed Progeny Holdings as the real
party in interest, the Form 603 instructions state that the real party in interest must be a person and cannot
be the applicant. In addition, if there is more than one real party in interest, an applicant must add an
attachment to specify who is in control.110 In the Reply, Petitioners argue that Progeny fails to refute the
argument that the Application failed to disclose the real party in interest and, further, that Progeny admits
that no one has de jure or de facto control, but fails to disclose who controls.111


99 Reply at 6.
100 Id.
101 Id.
102 Opposition at 4 (quoting Application, Attachment 1).
103 See Application at Attachment 1, Exhibit A.
104 Further Response at 3.
105 Id.
106 Petition at 5; Reply at 6.
107 47 C.F.R. § 1.2112(a).
108 47 C.F.R. § 1.2110(b)(3)(ii).
109 Reply 6-7
110 Id. at 6-7.
111 Id. at 6.
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32. Progeny responds that the Application specifically states who will control Progeny post
transaction. The Application states that “no one entity will have de jure or de facto control of the
Transferee” and fully discloses those entities who will hold at least a 10 percent interest in Progeny
Holdings after the transfer.112 Progeny explains that no one entity owns, votes, or controls more than 50
percent of the equity in transferee (Progeny Holdings), which, in turn, owns and controls 100 percent of
Progeny LMS.113 Progeny further states that the real party in interest is the entity that owns or controls
the applicant, and in this instance it is Progeny Holdings.114 Progeny also notes that, when alleging that
Progeny was required to disclose the control group, Petitioners argue that applicants always have a
control group.115 However, Progeny argues that Petitioners contradict themselves by referencing Section
1.2110(b)(3)(ii) of the Commission’s rules,116 which addresses applicants without controlling interests.117
Thus, Progeny concludes that Petitioners have acknowledged that companies can be structured without
identifiable de jure or de facto control groups.118
33. In arguing that all of Progeny LMS’ owners must be disclosed because Progeny LMS does
not disclose its control group, Petitioners rely on Section 1.2110(b)(3)(ii) of the Commission’s rules,
which states that “[w]here an applicant (or licensee) cannot identify controlling interests under the
standards set forth in this section, the gross revenues of all interest holders in the applicant, and their
affiliates, will be attributable.”119 This rule requires that, for the purposes of determining whether an
applicant is eligible for designated entity status, an entity that cannot identify its controlling interests must
attribute the gross revenues of all of its interest holders in its calculation for determining eligibility for
small business and entrepreneur provisions.120
However, Section 1.2110(b)(3)(ii) is specific to
determining eligibility for designated entity benefits and, therefore, does not apply to the Application.
34. Petitioners are correct that the Commission’s rules state that an applicant must disclose the
real party or parties in interest, “including a complete disclosure of the identity and relationship of those
persons or entities directly or indirectly owning or controlling (or both) the applicant.”121 Although an
applicant has to disclose its real party in interest, we agree that it is possible for no one entity to be in
control of a company. Progeny fully disclosed its post-transfer corporate structure, including all entities
that will own 10 percent or more of Progeny Holdings and Petitioners do not present any evidence that
the structure of post-transfer Progeny is not as Progeny has disclosed. Therefore, we find that Progeny’s
statements regarding its post-transfer ownership and control fully complied with the Commission’s rules.
3.

Progeny’s Late Filed Amendments to Form 602 Were Non-Fatal

35. Petitioners assert that Progeny has not filed an updated or new Form 602 for either the pre- or
post-transaction Progeny as required by Sections 1.919122 and 1.2112123 of the Commission’s rules.124


112 Application at Attachment 1.
113 Application at Exhibit 1; Opposition at 4.
114 Further Response at 3.
115 Id. at 3-4.
116 47 C.F.R. § 1.2110(b)(3)(ii).
117 Further Response at 3-4.
118 Id. at 4.
119 1.2110(b)(3)(ii).
120 1.2110(b).
121 1.2112(a)(1).
122 47 C.F.R. § 1.919.
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Petitioners further claim that the only Form 602 on file lists Frenzel as holding 100 percent of the
ownership of Progeny.125 Petitioners conclude that since these Form 602s were not filed, the Application
is defective.126
36. In its Opposition, Progeny claims that Petitioners’ statements are inaccurate and that it in fact
maintained its Form 602 as required by the Commission’s rules.127 However, in its Further Response,
Progeny admits that it inadvertently failed to file an updated Form 602 to reflect the information included
in the Application.128 Progeny states that it corrected the error and filed a request for waiver of the
relevant Commission rules.129 Progeny further argues that “[a] waiver is appropriate in this case because
Progeny’s ownership information was disclosed fully in Progeny’s Application, the failure to update the
form was inadvertent, and the oversight was promptly corrected.”130
37. Progeny should have filed Form 602 ownership reports for pre-transfer and post-transfer
Progeny at the time it filed the Application, in accordance with Sections 1.919(a)131 and 1.2112.132
However, while Progeny did not make a timely filing of the Form 602s in accordance with our rules, we
find that failure to do so was not prejudicial in this specific situation because the required ownership
information was accurately disclosed in the Application. We conclude that a waiver is appropriate under
these limited circumstances because the underlying purpose of the rule – ensuring that the relevant
ownership information was accurately disclosed – would be frustrated if we disallow the late filed Form
602s. Accordingly, we find that a waiver, pursuant to Section 1.925 of the Commission’s rules,133 to
allow for the late-filed Form 602s is in the public interest.
4.

The Application Did Not Require Waivers That Would Preclude Processing
Under the Commission’s IAP Rules

38. Under Section 1.948(j)(2)(C), an application may be processed under IAP if it does not
require a waiver of applicable Commission rules.134 Petitioners repeatedly assert that the transfer of
control of the Progeny licenses required waivers of the Commission’s rules and/or declaratory rulings.135
Many of the Petitioners’ claims appear to be in reference to the original grant of the Progeny licenses,


(...continued from previous page)
123 47 C.F.R. § 1.2112.
124 Reply at 5.
125 Id.
126 Reply at 5-6.
127 Opposition at 4-5.
128 Further Response at 4.
129 Id.
130 Id.
131 47 C.F.R. § 1.919(a).
132 47 C.F.R. § 1.2112.
133 47 C.F.R § 1.925. A request for waiver may be granted “if it is shown that: (1) [t]he underlying purpose of the
rule(s) would not be served or would be frustrated by application to the instant case, and that a grant of the requested
waiver would be in the public interest; or (ii) [i]n the view of unique or unusual factual circumstances of the instant
case, application of the rule(s) would be inequitable, unduly burdensome or contrary to the public interest, or the
applicant has no reasonable alternative.”
134 47 C.F.R. § 1.948(j)(2)(C).
135 See Petition at 3-4, 8-9, and Exhibit 1.
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though others may have been intended to apply to the Commission’s rules governing license transfers, or
other Commission rules.136 However, as Progeny accurately points out, Petitioners never specifically
identify the Commission rules that they believe should be waived or that would require a “declaratory
ruling” with respect to the transfer of control.137 Other than a waiver permitting Progeny to submit a late-
filed Form 602, we are not aware, and the Petitioners have not identified, any Commission rules that must
be waived in order to grant the Application. As noted, waiver of the late-filed Form 602 is appropriate
because the requisite information was contained in the Application. We find that this limited waiver is
not in contravention of policies underlying IAP because it does not implicate other potential public
interest concerns associated with the Licenses.138 The waiver merely permits the acceptance of the late-
filed Form 602, it does not introduce any new issues regarding the information in the Application or the
Form 602. In addition, to the extent that Petitioners argue that waivers would have been necessary to
correct perceived issues related to Auction 21 and/or the validity of the Progeny Licenses, we do not
consider these arguments in light of our findings in this order.139
5.

The Application Was Properly Considered and Granted Under the IAP
Rules

39. Petitioners argue that the Application did not satisfy the Commission’s requirements for
immediate transfer approval under the IAP rules.140 To qualify for approval under IAP, an application
must be “sufficiently complete…and also must establish, through certifications, that the following
additional qualifications are met:…(C) the assignment or transfer of control does not require a waiver of,
or declaratory ruling pertaining to, any applicable Commission rules, and there is no pending issue as to
whether the license is subject to revocation, cancellation, or termination by the Commission.”141
Petitioners claim that: (1) the Application is incomplete; (2) Progeny’s certifications are false; (3) the
Application requires waivers or declaratory rulings to be granted; and (4) there are pending issues as to
whether the licenses are subject to revocation, cancellation, or termination.142 As such, the Petitioners
claim that the Application is defective and its grant under the IAP procedures was invalid.143 We have
addressed Petitioners’ first three claims in this order and have found that (1) the Application was
complete; (2) the certifications made by Progeny were sufficient; and (3) Progeny did not fail to submit
any required requests for waivers or declaratory rulings.
40. With regard to the “pending issues” that would prevent approval under the IAP rules,
Petitioners rely on an Application for Review (“AFR”) filed by Petitioners in a separate docket that
challenged the Mobility Division’s grant of an extension of the construction deadlines for the Progeny
Licenses.144
Progeny argues that the fact that Petitioners filed an Application for Review of a
Commission action does not automatically mean that there are actual open issues that would prevent the


136 Id.
137 Opposition at 5.
138 See Secondary Markets Second Report and Order, 19 FCC Rcd at 17519 ¶ 28.
139 See Section III(A)(3).
140 Petition at 3-4 and Exhibit 1.
141 47 C.F.R. § 1.948(j)(2).
142 Petition at Exhibit 1.
143 Id. at 4 and Exhibit 1.
144 See Petition at 4 and Exhibit 1; In the Matter of Request of Progeny LMS, LLC for a Three-Year Extension of
the Five-Year Construction Requirement for its Multilateration Location and Monitoring Services Economic Area
Licenses; Grant of Request for Extension of Five-Year Construction Requirement for FCR, Inc.’s Multilateration
Location and Monitoring Services Economic Area Licenses, Application For Review (filed March 2, 2007).
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grant of the Application under the IAP Rules. They note that Petitioners filed the Application for Review
after the Division had issued an Order granting the three-year extension and a second order rejecting
Petitioners’ petition for reconsideration.145 They further argue that the Application for Review is an
example of the sort of harassment that the Commission has cautioned Petitioners to avoid and that it
should not act as an impediment to the Application’s automatic approval.146
41. While it is true that the AFR is currently before the Commission, we find that the specific
circumstances here permit us to approve the Application under the IAP procedures. In the Progeny
Extension Order
, we found that Progeny’s failure to timely construct its Licenses was due entirely to
causes beyond its control and that the public interest would be served by granting an extension of the
construction requirements.147 We subsequently denied Havens’ petition for reconsideration and affirmed
our findings.148 In addition, the transfer of control at issue does not alter the character of the Licenses such
that even if the Commission were to address the AFR and find in Havens’ favor, the Licenses would
automatically terminate regardless of whether or not the transfer is approved.149 Thus, since no decision
on the AFR is likely to have a material effect on the subject transfer, there is no reason for us to subject it
to a lengthier review process. Accordingly, considering the totality of the circumstances in this case, we
find that the Application was properly approved under the IAP rules.

IV.

CONCLUSION

42. We find that the Petition was procedurally defective and that the Petitioners failed to comply
with the Commission’s rules governing petitions for reconsideration. Moreover, even if the Petitioners
had followed the proper procedures, they failed to present any substantive arguments or supporting
evidence that would entitle them to relief. In addition, with regards to the Petitioners’ assertions
regarding the conduct of Auction 21 and the validity of the original grant of Progeny’s licenses, we find
the Petition to be untimely and procedurally defective.

V.

ORDERING CLAUSES

43. Accordingly, IT IS ORDERED that, pursuant to Section 1.106 of the Commission’s Rules, 47
C.F.R., § 1.106, the Petition for Reconsideration filed by Petitioners is DENIED.
44. IT IS FURTHER ORDERED that, pursuant to Section 1.925 of the Commission’s rules, 47
C.F.R. §1.925, Sections 1.919 and 1.2112, 47 C.F.R. §§1.919 and 1.2112, ARE WAIVED to permit


145 Opposition at 6-7 citing Request of Progeny LMS, LLC for a Three-Year Extension of the Five-Year
Construction Requirement for its Multilateration Location and Monitoring Services Economic Area Licenses, ULS
File Nos. 0002049041-0002049297, Memorandum Opinion and Order, 21 FCC Rcd 5928 (WTB MD-2006)
(“Progeny Extension Order”); and Request of Progeny LMS, LLC for a Three-Year Extension of the Five-Year
Construction Requirement for its Multilateration Location and Monitoring Services Economic Area Licenses, ULS
File Nos. 0002049041-0002049297, Order on Reconsideration and Memorandum Opinion and Order, 22 FCC Rcd
1925 (WTB MD-2007) (“Reconsideration Order”).
146 Opposition at 7.
147 See Progeny Extension Order at 5933 ¶16.
148 See Reconsideration Order at 1927 ¶7.
149 While the Commission has stated that IAP should not be used where a license is subject to revocation,
cancellation, or termination for failure to meet construction requirements, for example, see Secondary Markets
Second Report and Order
, 19 FCC Rcd at 17554 ¶ 101 n. 165, we emphasize that the pending AFR cited by
Petitioners challenges the decisions granting and affirming extensions of construction deadlines for Progeny and
other M-LMS licensees. Given the totality of the circumstances here, including the fact that the transaction affects
only control of the Licenses and no other aspect of the Licenses, we conclude that it was appropriate to process the
Application under IAP.
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acceptance of Progeny’s late-filed Form 602.
45. These actions are taken under delegated authority pursuant to Sections 0.131 and 0.331 of the
Commission’s Rules, 47 C.F.R. §§ 0.131, 0.331.
FEDERAL COMMUNICATIONS COMMISSION

Roger S. Noel
Chief, Mobility Division

Wireless Telecommunications Bureau
16

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