******************************************************** NOTICE ******************************************************** This document was converted from WordPerfect to ASCII Text format. Content from the original version of the document such as headers, footers, footnotes, endnotes, graphics, and page numbers will not show up in this text version. All text attributes such as bold, italic, underlining, etc. from the original document will not show up in this text version. Features of the original document layout such as columns, tables, line and letter spacing, pagination, and margins will not be preserved in the text version. 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. 9713196 Station WLK751 (Lead Call Sign of 3) ) ) Platte River Cellular Limited Partnership) File No. 9713195 Station WMR506 (Lead Call Sign of 3) ) ) Colorado 4 -- Park Limited Partnership) File No. 9713192 Station WPNB569 (Lead Call Sign of 2)) ) Smoky Hill Cellular of Colorado Limited ) File No. 9713205 Partnership ) Station WMS705 (Lead Call Sign of 2) ) ) San Isabel Cellular of Colorado Limited ) File No. 9713197 Partnership ) Station WMN628 (Lead Call Sign of 2) ) ) Wyoming 1 -- Park Limited Partnership) File No. 9713203 Station WMM656 (Lead Call Sign of 2) ) ) Iowa RSA No. 13 Limited Partnership ) File No. 03102-CL-TC-97 Station KNKQ 308, Market No. 424(B)(1)) ) Sioux Falls Cellular Limited Partnership) File No. 03112-CL-TC-97 Station KNKA 635, Market No. 267(B)(1)) ) South Dakota 7 Sully - Limited Partnership) File No. 03113-CL-TC-97 Station KNKN 304, Market No. 640(B)(1)) ) South Dakota 8 - Kingsbury Limited Partnership) File No. 03115-CL-TC-97 Station KNKN 357, Market No. 641(B)(1)) ) For Consent to Transfer of Control ) ) ORDER Adopted: February 3, 1998 Released: February 3, 1998 By the Chief, Commercial Wireless Division, and the Acting Chief, Public Safety and Private Wireless Division, Wireless Telecommunications Bureau: I. INTRODUCTION 1. In this Order we deny four Petitions to Dismiss or Deny filed separately on August 11, 1997, by Shell Rock Telephone Company and F.W.C., Inc., Dakota System, Inc., Missouri Valley Cellular, Inc., and Sanborn Cellular, Inc. (collectively, "Cellular Petitioners"). We also deny a Petition to Dismiss or Deny filed on August 14, 1997, by Pueblo Cellular, Inc., Platte River Cellular, Inc., Sangre De Cristo Cellular, Inc., Smoky Hill Cellular, Inc., San Isabel Cellular, Inc., and Yellowstone Cellular, Inc. (collectively, "Microwave Petitioners"). All petitioners request that the Wireless Telecommunications Bureau 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"). Cellular Petitioners request that, at a minimum, grant of the applications be deferred to give them time to assert certain rights, discussed below. Microwave Petitioners request that if the applications are not dismissed or denied, this case be designated for hearing. 2. The petitions before us raise virtually the same issues as previous petitions challenging the CommNet/Blackstone transfer that were filed by the Microwave Petitioners and two other parties with respect to eight cellular licenses in which CommNet holds controlling interests. These petitions were addressed in an Order released December 30, 1997, by the Commercial Wireless Division ("CWD"), which approved the transfer of control of CommNet's interest in the eight cellular licenses to Blackstone. Because the petitions addressed herein raise no new arguments or questions of fact, we deny the petitions and grant CommNet's applications for transfer of control on the same basis as in the Pueblo Order. II. BACKGROUND 3. CommNet filed applications for transfer of control of its interests in certain microwave licensees on June 19, 1997, and for transfer of control of its interests in certain cellular licensees on June 20, 1997. 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, CWD issued a public notice listing the above referenced cellular applications as accepted for filing. On July 15, 1997, the Public Safety and Private Wireless Division issued a public notice listing the above referenced microwave applications as accepted for filing. The petitions under consideration here challenge these eighteen applications. 4. Microwave Petitioners incorporate, by reference, their Petition to Dismiss or Deny filed on August 11, 1997, against eight of CommNet's cellular transfer of control applications, which we denied in our Pueblo Order on December 30, 1997. They assert that the above referenced microwave applications should be denied for the same reasons given in the earlier petition, except that they do not challenge the applications' showings regarding the transferee's financial qualifications as they had in the earlier petition. Thus, Microwave Petitioners assert that CommNet is attempting through its applications to transfer control of the licensees even though it does not in fact possess such control. Microwave 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. Both Microwave Petitioners and Cellular Petitioners argue that the partnership agreements of each of the eighteen 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 the Commission should not approve the proposed transaction with Blackstone. III. DISCUSSION 5. For the same reasons expressed in our Pueblo Order, we find no merit to the Microwave Petitioners' arguments challenging the above referenced applications. Thus, we find that CommNet's applications show that CommNet has an apparent de jure or de facto controlling interest in each licensee. We also find that the Microwave Petitioners have failed to show that CommNet's descriptions of its interests are inaccurate, that any omissions to the applications are material, or how CommNet's interests fail to give it a controlling interest in the licensees. Thus, we find that no misrepresentation has occurred and there is no basis for designating the applications for hearing. 6. Turning to the argument that CommNet has violated its partnership agreements by failing to honor a right of first refusal, an argument advanced by both Microwave Petitioners and Cellular Petitioners, we find, as we did in the Pueblo Order, that Petitioners' claims amount to a private contractual dispute that is outside the scope of our review. Moreover, we find that neither the Microwave Petitioners nor the Cellular Petitioners have presented any public interest reasons for denying the applications. 7. We stress, however, that our action here does not foreclose any relief to which Microwave Petitioners or Cellular Petitioners might ultimately be entitled based on the outcome of any civil litigation. In this connection, we note that Dakota Systems, one of the Cellular Petitioners, filed a "Verified Complaint for Declaratory Judgment and Other Relief" in the Circuit Court, Second Judicial Circuit, County of Minnehaha, South Dakota, concerning the right of first refusal provision of its partnership agreement. There is no information before us, however, indicating that this proceeding has resulted in a final judgment. Our decision here is a limited one that does not affect the rights of CommNet or any petitioner in the licenses; rather, it merely approves a change in the ownership of CommNet. Thus, our decision is without prejudice to any civil judgment that may result from petitioners' pursuit of appropriate remedies for any contractual injury they may have suffered. IV. CONCLUSION 8. Having reviewed the pleadings filed in this matter, we conclude that the grant of the above captioned applications to transfer control of CommNet to Blackstone will serve the public interest, convenience, and necessity. Accordingly, we deny Microwave Petitioners' and Cellular Petitioners' Petitions to Dismiss or Deny and grant CommNet's applications. 9. We also hereby grant all uncontested transfer applications in connection with the CommNet/Blackstone transaction that were identified in the July 11, 1997, and July 15, 1997, public notices referenced in paragraph 3 above. 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 101.47(b) of the Commission's Rules, 47 C.F.R.  0.331 and 101.47(b), the Petition to Dismiss to Deny filed by Microwave Petitioners on August 14, 1997, IS HEREBY DENIED. 11. IT IS FURTHER 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 Petitions to Dismiss or Deny filed by Cellular Petitioners on August 11, 1997, ARE HEREBY DENIED. 12. 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 101.1 of the Commission's Rules, 47 C.F.R.  0.331 and 101.1, the above captioned microwave applications to transfer control from CommNet Cellular, Inc. to Blackstone CCI Capital Partners L.P. ARE HEREBY GRANTED. 13. 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 22.130 of the Commission's Rules, 47 C.F.R.  0.331 and 22.130, the above captioned cellular applications to transfer control from CommNet Cellular, Inc. to Blackstone CCI Capital Partners L.P. ARE HEREBY GRANTED. 14. 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 22.130 of the Commission's Rules, 47 C.F.R.  0.331 and 22.130, the uncontested microwave and cellular 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 D'wana R. Terry Acting Chief, Public Safety and Private Wireless Division Wireless Telecommunications Bureau