Acquisition of NewComm Wireless Services by TEM Peurto Rico from ClearComm
This page provides information on applications filed by NewComm Wireless Services, Inc. (“NewComm”), ClearComm, L.P. (“ClearComm”), and TEM Puerto Rico, Inc. (“TEM”) pursuant to Sections 214 and 310(d) of the Communications Act of 1934, as amended, seeking Commission approval of the transfer of control of licenses and authorizations presently held by NewComm and ClearComm to TEM. This transfer of control would occur as the result of TEM acquiring a majority voting ownership interest in NewComm. These applications pertain to licenses for the Personal Communications Services (“PCS”), Fixed Microwave Services, and to an international Section 214 authorization. Additionally, TEM has filed a petition for a declaratory ruling that indirect foreign ownership of NewComm, which would exceed twenty-five percent as a result of the proposed transfer of control, is consistent with the public interest pursuant to section 310(b)(4) of the Act.
These applications have been consolidated under WT Docket No. 02-366, and most of the record in the proceeding is accessible through the Electronic Comment Filing System. Copies of documents in the record may also be obtained for a fee from FCC's duplicating contractor Qualex International, or may be viewed and/or copied at the FCC Reference Center.
Part 24 – PCS, File Number 001049003, Licensee NewComm Wireless Services, Inc., Lead Call Sign KNLF736 Acrobat | Acrobat | Acrobat | Acrobat | Acrobat | Acrobat | Acrobat | Acrobat | Acrobat | Acrobat | Acrobat | Acrobat
Part 101 – Fixed Microwave Services, File Number 0001048972, Licensee NewComm Wireless Services, Inc., Lead Call Sign WPQN608
International Section 214 Application
Authorization Holder ClearComm, L.P., Authorization Number ITC-214-19990615-00426, File Number ITC-T/C-20021015-00512
Petition For Declaratory Ruling Under Section 310(b)(4) of the Act, File No. ISP-PDR-20021015-00035
NewComm holds two PCS and 131 Fixed Microwave Services licenses, and an authorization to provide international global resale and facilities-based telecommunications services pursuant to Section 214 of the Act. NewComm is currently majority owned and controlled by ClearComm, a Delaware limited partnership, which holds 87.9% of NewComm’s equity. NewComm has minority investors, Syndicated Communications Venture Partners IV, L.P. (“Syncom”) and Fleet Development Ventures Group (“Fleet”), which hold an 8.02% interest and a 4.08% interest, respectively. TEM, a corporation organized under the laws of the Commonwealth of Puerto Rico, is wholly-owned by Telefónica Móviles, S.A. (“Móviles”), a publicly-traded Spanish corporation controlled by Telefónica, S.A. (“Telefónica”), also a publicly-traded Spanish corporation.
In March 1999, ClearComm entered into a Joint Venture Agreement with Telefónica Larga Distancia de Puerto Rico, Inc. (“TLD”), an indirect Telefónica subsidiary, forming NewComm. Under the terms of the Joint Venture Agreement, ClearComm assigned its licenses to NewComm, and TLD loaned working capital to NewComm. As evidence of its loan, TLD received promissory notes secured by a TLD right to convert those notes, as well as certain subsequent non-dilution promissory notes, into approximately 49.9% of the equity and 25% of the voting rights of NewComm.
The parties state that the proposed transfer of control of NewComm to TLD’s affiliate, TEM, will occur in three steps. First, TLD will assign its promissory notes with their attendant conversion rights to TEM, in exchange for 100% of the voting interests in TEM. TLD also will assign to TEM its rights under a Contribution Agreement, between ClearComm, TLD, and NewComm, which provides TLD with the right to convert the 49.9% equity interest in NewComm into a 49.9% voting ownership interest upon conversion of the promissory notes. Additionally, TLD will assign to TEM its rights under a Stock Purchase Agreement, between TLD and ClearComm, to acquire additional shares in NewComm in order to obtain a total voting and ownership interest of 50.1%. Second, control of TEM will be transferred from TLD to Móviles. Third, after Commission consent is obtained, TEM will exercise the rights pursuant to the promissory notes, Contribution Agreement, and the Stock Purchase Agreement to acquire the 50.1% majority interest in NewComm. Due to certain non-dilution provisions associated with the Syncom and Fleet investments, their interests will remain unchanged. Upon conversion of the promissory notes and consummation of the Stock Purchase Agreement, NewComm will be owned 50.1% by TEM, 37.8% by ClearComm, 8.02% by Syncom and 4.08% by Fleet. Ultimately, NewComm will be controlled by TEM, and ultimately, through Móviles, by Telefónica.
ClearComm and TEM state that this transaction will include the transfer of C and F Block PCS licenses to TEM. The Commission’s Rules state that “[n]o assignment or transfer of control of a license for frequency Block C or frequency Block F won in closed bidding pursuant to the eligibility requirements of Â§ 24.709 will be granted,” except when, among other instances, “[t]he application for assignments or transfer of control is filed on or after the date the licensee has notified the Commission pursuant to Â§ 24.203(c) that its five-year construction requirement has been satisfied.” ClearComm and TEM state that five-year build-out notifications have been filed for all of the wireless licenses implicated in the transfer of control applications to TEM.
Additionally, ClearComm and TEM acknowledge that any remaining debt under the installment payment plan will be paid prior to or upon consummation of the transfer of control of the PCS licenses to TEM.
Day 1 was on: 11/21/02
This information was last updated on: 11/2/04
|Reason for Stop|