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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In re Applications of ) ) Pueblo MSA Limited Partnership File No. 03109-CL-TC-97) Station KNKN519 (MSA #241B) ) ) Platte River Cellular Limited Partnership) File No. 03108-CL-TC-97 Station KNKN347 (CO RSA #2B) ) ) Colorado 4 -- Park Limited Partnership) File No. 03082-CL-TC-97 Station KNKN399 (CO RSA #4B) ) ) Smoky Hill Cellular of Colorado L. P.) File No. 03114-CL-TC-97 Station KNKN348 (CO RSA #5B) ) ) Colorado 7 -- Saguache Limited Partnership) File No. 03084-CL-TC-97 Station KNKN288 (CO RSA #7B) ) ) San Isabel Cellular of Colorado L. P.) File No. 03110-CL-TC-97 Station KNKN350 (CO RSA #9B) ) ) Iowa 15 -- Dickinson Limited Partnership) File No. 03101-CL-TC-97 Station KNKN364 (IA RSA #15B) ) ) Wyoming 1 -- Park Limited Partnership) File No. 03119-CL-TC-97 Station KNKN344 (WY RSA #1B) ) ) For Consent to Transfer of Control ) ORDER Adopted: December 30, 1997 Released: December 30, 1997 By the Chief, Commercial Wireless Division, Wireless Telecommunications Bureau: I. INTRODUCTION 1. In this Order, we deny a Petition to Dismiss or Deny ("Petition") filed on August 11, 1997, by Pueblo Cellular, Inc., Platte River Cellular, Inc., Sangre De Cristo Cellular, Inc., Smoky Hill Cellular, Inc., Sand Dunes Cellular, Inc., San Isabel Cellular, Inc., Three Lakes Cellular, Inc., and Yellowstone Cellular, Inc. (collectively, "Petitioners"), requesting that the Commercial Wireless Division ("Division") dismiss or deny the above captioned applications for consent to the transfer of control of CommNet Cellular, Inc. ("CommNet") to Blackstone CCI Capital Partners L.P. ("Blackstone"). Petitioners request that, if the applications are not dismissed or denied, this case be designated for hearing. For the reasons set forth below, we deny the Petition and grant CommNet's applications for transfer of control. II. BACKGROUND 2. On June 20, 1997, CommNet filed fifty-five applications for transfer of control of its interests in certain cellular licensees. Under the proposed transaction, CommNet would merge with AV Acquisition Corp., a subsidiary formed by Blackstone and affiliated entities, resulting in 87% of CommNet being owned by Blackstone and its affiliates and CommNet shareholders retaining the remaining 13%. CommNet's percentage ownership of the licensees would remain unchanged. On July 11, 1997, the Division issued a public notice listing the applications as accepted for filing. The Petition under consideration here challenges eight of these applications. Petitioners assert that they are the controlling general partners in the eight licensees and that CommNet is attempting through its applications to transfer control of the licensees even though it does not in fact possess such control. Petitioners further claim that because CommNet's applications falsely assert that CommNet controls the licensees, they contain misrepresentations and should therefore be designated for hearing to determine whether CommNet is qualified to be a transferor. Petitioners also argue that the partnership agreements of each of the eight licensees accord them the right of first refusal when partners sell their interests in the partnerships, and that because CommNet has not honored this right of first refusal it does not have the general partner approvals necessary to close the proposed transaction with Blackstone. Finally, Petitioners contend that the applications at issue contain defective financial showings. III. DISCUSSION 3. Initially, we find that Petitioners filed unauthorized pleadings in violation of section 1.45(c) of the Commission's Rules because we did not specifically request or authorize Motion I or Motion II. Accordingly, these pleadings and the pleadings responding to them shall not be considered herein. 4. With respect to Petitioners' argument that CommNet does not control the licensees in question and that its applications falsely claim such control, we find that CommNet's applications show that CommNet has an apparent de jure or de facto controlling interest in each licensee. As CommNet and Blackstone explain in their joint opposition to the Petition, CommNet in each case: (1) is a general partner in the licensee, (2) is a general partner in a general partner in the licensee, (3) is a shareholder of a corporate general partner in the licensee, and/or (4) holds a majority of the partnership interests in the licensee. Petitioners have not shown that CommNet's descriptions of its interests are inaccurate. Petitioners assert that the ownership charts provided as exhibits to five of the applications are "incomplete" because they do not include Petitioners' interests, and that the other three demonstrate that CommNet does not control the licensee's controlling general partner. Petitioners have not, however, supplied any facts to explain how any omissions to the applications are material or how CommNet's interests fail to give it control of the licensees. Thus, we find that no misrepresentation has occurred and there is no basis for designating the applications for hearing. 5. Turning to Petitioners' argument that CommNet may not consummate the proposed transaction without first offering to Petitioners the interests it wishes to transfer, we find that the only issue raised by this contention is whether the transaction would violate the various licensees' partnership agreements and that this issue falls outside the scope of our review. Thus, we agree with CommNet and Blackstone that Petitioners' claims amount to a private contractual dispute that is outside the Commission's jurisdiction. Petitioners cite a letter from the Public Safety and Private Wireless Division of the Wireless Telecommunications Bureau (the "Bureau") as precedent for the dismissal of CommNet's applications until CommNet satisfies its contractual agreement with the Petitioners. Petitioners also cite to Northwest Broadcasting, Inc., for the proposition that the Bureau should at least condition any grant upon the outcome of civil actions regarding ownership of the interests CommNet is attempting to transfer. However, the TAS Letter is inapposite because it concerned a request for waiver to allow someone other than the licensee to sign the application. No such waiver request is before us here. Petitioners' reliance on Northwest is also misplaced. In Northwest, the Commission affirmed the grant of assignments of licenses with the condition that its action was without prejudice to any further action that might be appropriate once a final ruling was issued in an ongoing civil court proceeding concerning the petitioned assignment of license transaction. In this case, however, petitioners have not indicated the existence of any pending court proceeding, and therefore there is no need for us to condition our decision on the outcome of a private contractual dispute among the parties. Indeed, in Northwest the Commission reiterated its policy of not acting on matters resulting from private contracts, stating that "[a]bsent a prior court injunction we would not ordinarily withhold consent to an otherwise acceptable transaction." The issue before us here is whether there is any reason that allowing Blackstone to assume control of CommNet would be inconsistent with the public interest. We find that Petitioners have presented no public interest reason for denying the applications. 6. We stress, however, that our action here does not foreclose any relief to which Petitioners might ultimately be entitled based on the outcome of any subsequent civil litigation. Our decision here is a limited one that does not affect either CommNet's or Petitioners' rights in the licenses; rather, it merely approves a change in the ownership of CommNet. Thus, Petitioners remain free to pursue appropriate remedies for any contractual injury they may have suffered. 7. Finally, Petitioners contend that the applications at issue here should be dismissed as defective because the financial showing submitted by CommNet and Blackstone does not contain the documentation required by section 22.937 of the Commission's rules. Petitioners state that CommNet referenced the wrong rule section, section 101.53(c), in its applications and failed to submit a firm financial commitment letter or financial documentation, or request a waiver of the section 22.937 requirements. CommNet counters that, while its financial showing may not have been letter-perfect, it has met the standard requiring "reasonable assurance that the funds will be available." Further, CommNet and Blackstone submitted a Commitment Letter of the Chase Manhattan Bank and Chase Securities, Inc., and a Declaration of Blackstone CCI Capital Partners L.P. which state their commitment to provide the financial resources required by our rules. 8. Because CommNet seeks to transfer its interests in operational facilities, Blackstone must demonstrate only its ability to finance the acquisition of the facility. The financial showing submitted clearly states that "Blackstone and its affiliates will invest up to approximately $142 million in equity in the transaction and the Chase Manhattan Corporation has committed to provide and arrange all of the financing to complete the recapitalization of CommNet Cellular Inc." We find that CommNet and Blackstone have made a financial showing sufficient to warrant grant of the pending applications. IV. CONCLUSION 9. Having reviewed the pleadings filed in this matter, we conclude that grant of the above captioned applications to transfer control of CommNet to Blackstone will serve the public interest, convenience, and necessity. We find no substantial and material questions of fact regarding CommNet's qualifications to be a transferor. Accordingly, we deny Petitioners' Petition to Dismiss or Deny and grant CommNet's applications. V. ORDERING CLAUSES 10. In view of the foregoing, IT IS ORDERED, that, pursuant to sections 4(i) and 309(d) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i) and 309(d), and sections 0.331 and 22.132(b) of the Commission's Rules, 47 C.F.R.  0.331 and 22.132(b), the Petition to Dismiss or Deny filed by Petitioners on August 11, 1997, IS HEREBY DENIED. 11. IT IS FURTHER ORDERED, that, pursuant to sections 4(i) and 310(d) of the Communications Act of 1934, as amended, 47 U.S.C.  154(i) and 310(d), and sections 0.331 and 22.137 of the Commission's Rules, 47 C.F.R.  0.331 and 22.137, the above captioned applications to transfer control from CommNet Cellular, Inc. to Blackstone CCI Capital Partners L.P. ARE HEREBY GRANTED. FEDERAL COMMUNICATIONS COMMISSION David L. Furth Chief, Commercial Wireless Division Wireless Telecommunications Bureau