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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 the Matter of ) ) Memorandum of Agreement between ) the Federal Communications Commission ) and Elkins Institute, Inc. ) ORDER Adopted: March 16, 1999 Released: March 17, 1999 By the Chief, Public Safety and Private Wireless Division, Wireless Telecommunications Bureau: INTRODUCTION 1. By letter dated September 30, 1998, the Chief of the Public Safety and Private Wireless Division (Division), Wireless Telecommunications Bureau, notified Mr. Bill Elkins and Ms. Laura Elkins and Mr. J. David Byrd that the Federal Communications Commission (FCC) was cancelling the Commercial Operator License Examination Manager (COLEM) agreement between the FCC and Elkins Institute, Inc. effective thirty days after their receipt of such letter by certified mail. The Elkins Corporation (Bill and Laura Elkins, et al, and hereinafter referred to as "Elkins") submitted a Petition for Reconsideration and a Petition for Stay of the Division's cancellation action. In addition, BFT Training Unlimited, Inc. d/b/a the Elkins Institute (BFT) submitted a Motion for Petition for Reconsideration and a Motion for Petition for a Stay of the Division's cancellation action. For the reasons set forth below, we grant the petitions for stay submitted by Elkins and BFT to the extent described herein. BACKGROUND 2. On September 28, 1990, Congress amended Section 4(f) of the Communications Act of 1934, as amended, to allow the FCC to privatize the functions of preparing and administering examinations for a commercial radio operator license or endorsement. In doing so, the FCC was authorized to accept and employ the services of persons that it determines to be qualified. In addition, Congress authorized the FCC to prescribe regulations to select, oversee, sanction, and dismiss any person authorized under this paragraph to be utilized by the FCC. 3. On February 12, 1993, the FCC released a Report and Order (Report) adopting the rules to privatize commercial radio operator license examinations. The Report stated that rather than adopting any special entry criteria, the FCC would announce a filing window for the acceptance of applications to be COLEMs and give preference to those entities proposing to provide the best level of service. The terms of the applicant's proposal were deemed to be of such importance to the FCC in certifying the entity as an examination manager that they were required to be incorporated by reference into the agreement between the FCC and the certified entity. 4. On July 16, 1993, the FCC executed a Memorandum of Agreement (MOA) with Elkins Institute, Inc. (Elkins Institute) in which the FCC found Elkins Institute qualified to perform the duties of a COLEM pursuant to the provisions of Section 4(f)(5) of the Communications Act of 1934, as amended. The FCC made this finding based on the substance of Elkins Institute's request for certification, which was incorporated by reference into the agreement, and which included detailed information as to its organization, qualifications, and prevention of conflicts of interest as well as its proposed examination procedures, fees, and services. The MOA also provided that "any changes to the terms specified in the request must be mutually agreed on in writing by both parties." The MOA provided further that the "agreement may be cancelled by either party hereto by giving [30 days] written notification to the other party of its intent to cancel . . . ." 5. We have been informed that, on January 1, 1997, Elkins Institute filed for bankruptcy protection in the United States Bankruptcy Court, Northern District of Texas, Dallas Division. BFT states that although not originally filed as such, the case was ultimately converted to a Chapter 7 liquidation proceeding. BFT contends that on May 19, 1997, James W. Cunningham, Trustee in Bankruptcy, assigned all rights to the assets of Elkins Institute, including, inter alia, the July 16, 1993 MOA, to BFT. BFT states that for a period of time after transfer of the assets of Elkins Institute, Bill Elkins, Laura Elkins, and Laura Sue Elkins were retained on a contract basis by BFT to perform services and maintain certain Elkins Institute relationships with the Designated Examiners. According to BFT, it severed its relationship with Bill, Laura and Laura Sue Elkins in June of 1998. During the summer of 1998, staff of the Division's Licensing and Technical Analysis Branch learned that both the Elkins Corporation and BFT had conducted commercial operator license examinations in the name of Elkins Institute. Subsequently, each party asked the FCC to declare it the COLEM certified by the FCC under the 1993 MOA. 6. On September 30, 1998, the Chief of the Division, notified Mr. Bill Elkins and Ms. Laura Elkins and Mr. J. David Byrd that the FCC was cancelling the COLEM agreement between the FCC and Elkins Institute, Inc. effective thirty days after their receipt of such letter by certified mail. Subsequently, the Elkins Corporation and BFT submitted Petitions for Reconsideration and Stay of the Division's cancellation action. 7. The Elkins Corporation argues that a stay is needed during the time its petition for reconsideration is pending to minimize damage to hundreds of designated examiners and thousands of past, present, and future examinees. BFT also contends that a stay should be granted because it is the rightful owner of the MOA and is the entity which has the right to operate as a COLEM. In addition, BFT contends that absent a stay it will be put out of the business of conducting commercial operator license examinations. Thus, BFT argues that the concomitant irreparable harm far outweighs any alleged injury to other parties, and the public interest is best served by maintaining the status quo. DISCUSSION 8. In determining whether to grant the extraordinary remedy of a stay, the Commission considers the following factors: (1) whether the party requesting the stay is likely to succeed on the merits; (2) whether irreparable harm would occur in the absence of a stay; (3) whether other interested parties would be substantially harmed if a stay is granted; and (4) whether the public interest weighs in favor of the grant of a stay. The Elkins Corporation asserts that it is not opposing the Commission's decision to cancel the MOA but contends that a stay is required to minimize potential harm to its designated examiners and future examinees. 9. Based on our review of the BFT Petition for Stay and the Elkins Petition for Stay and in consideration of the factual circumstances involved in this matter, we conclude that absent a stay, substantial harm would accrue to third parties. In this connection, we note that Designated Examiners, who are in the business of training personnel and administering various license examinations have continued to administer commercial operator license examinations using the services of the Elkins Corporation and BFT. In addition, hundreds of applications for various commercial operator licenses have been submitted to the FCC since notification of the Division's cancellation action regarding the Elkins Institute MOA was given to principals of the Elkins Corporation and BFT. We note that in several instances, particularly the Global Maritime Distress Safety System (GMDSS), a proper license is a condition of employment. Therefore, we conclude that it would not be in the public interest to penalize the Designated Examiners and the applicants who paid to take and passed the examinations without notice that the Elkins Institute MOA was the subject of a cancellation action. Thus, based on the facts before us, we find that the public interest weighs in favor of a grant of interim relief to such Designated Examiners and applicants. Specifically, the Division will process those commercial radio operator license applications received after November 6, 1998 for BFT and November 16, 1998 for Elkins that are currently pending at the FCC. 10. Accordingly, IT IS ORDERED that the Motion for Petition for Stay filed by BFT Training Unlimited, Inc. d/b/a the Elkins Institute and the Petition for Stay filed by The Elkins Corporation ARE GRANTED to the extent indicated herein. 11. This action is 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 D'wana R. Terry Chief, Public Safety and Private Wireless Division Wireless Telecommunications Bureau