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Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
ALLTEL Communications, Inc. ) File No. EB-05-SE-084
Adopted: April 20, 2005 Released: April 22,
By the Deputy Chief, Enforcement Bureau:
1. On March 21, 2005, ALLTEL Communications,
Inc. (``ALLTEL''), filed a petition for declaratory ruling
pursuant to Section 1.2 of the Commission's Rules
(``Rules''),1 seeking a ruling that its acquisition of
certain wireless properties from Cingular Wireless LLC
(``Cingular'') does not render ALLTEL a ``successor or
assign'' for purposes of the Enhanced 911 (``E911'') Consent
Decrees entered into between the Commission and Cingular or
AT&T Wireless Services, Inc. (``AT&T Wireless'').2 For the
reasons that follow, we grant ALLTEL's petition.
2. Under Phase II of the E911 rules, wireless
carriers are required to provide to the designated Public
Safety Answering Point (``PSAP'') the location of wireless
911 callers by latitude and longitude using either a
handset-based or network-based location technology, in
accordance with specified deployment and accuracy
benchmarks.3 ALLTEL is a Code Division Multiple Access
(``CDMA'') based carrier classified as a Tier II carrier for
E911 purposes4 and employs a handset-based location
technology, the SnapTrack Assisted-Global Position System
(``A-GPS'') solution. As a Tier II carrier, ALLTEL is
subject to the handset sale and activation benchmarks
specified by the Commission for Tier II carriers in the Stay
Order. By contrast, Cingular is a nationwide Tier I
wireless carrier that employs a network-based location
technology over its Time Division Multiple Access (``TDMA'')
and Global System for Mobile Communications (``GSM'') based
networks. In 2002 and 2003, the Commission entered into
Consent Decrees with both Cingular and AT&T Wireless which
terminated Enforcement Bureau investigations into the
carriers' possible violations of the E911 Phase II rules and
specified benchmarks for deployment of the carriers'
network-based location technologies over their TDMA and GSM
networks.5 The Consent Decrees define ``Cingular'' as
including its ``subsidiaries, affiliates, partners, and any
successors or assigns.''6 The Consent Decrees do not
further define what constitutes ``successors or assigns.''
3. In 2004, the Commission approved Cingular's
acquisition of AT&T Wireless, conditioned upon Cingular's
post-transaction divestiture of certain wireless assets and
spectrum holdings in designated local mobile telephony
markets.7 Implementing the post-transaction divestiture
conditions, Cingular and ALLTEL filed transfer of control
applications, in which ALLTEL sought to acquire wireless
properties, consisting of spectrum holdings and network
assets or just spectrum holdings, in 18 of the designated
local mobile telephony markets.8 On April 8, 2005, the
Wireless Telecommunications Bureau granted these transfer of
4. In connection with the transfer of control
applications, ALLTEL filed the instant petition.10 As
ALLTEL will be acquiring spectrum, TDMA and GSM network
assets, and subscribers from Cingular,11 ALLTEL seeks a
ruling that it not be deemed a successor or assign subject
to the terms and conditions of the Consent Decrees. ALLTEL
maintains that it would be unreasonably burdensome to treat
it as a successor or assign for purposes of the Consent
Decrees. Specifically, ALLTEL states that the Consent
Decrees should not apply to it because the Decrees arose out
of investigations into Cingular's possible violations of the
E911 Phase II rules, and, as such, were carrier-specific
(relating only to Cingular, a Tier I nationwide carrier) and
technology-specific (applying to Cingular's deployment of
its network-based location technology and its TDMA and GSM
equipment).12 In contrast, ALLTEL states that it is not,
and has not been, the target of any E911 investigations,
that it is a regional Tier II carrier, that it utilizes
CDMA-based equipment and handset-based location technology,
and that it is subject to the E911 Phase II handset-based
solution benchmarks established for Tier II carriers.13
ALLTEL further asserts that it is not a successor or assign
under either traditional corporate law's general rule of
successor non-liability and its four exceptions,14 or under
the alternative ``substantial continuity'' test the
Commission has used in one instance.15
5. As ALLTEL correctly notes, the Consent
Decrees do not define what constitutes ``successors or
assigns'' for purposes thereof. Likewise, neither the
Communications Act nor the Commission's rules define
``successor'' or ``assign.'' The Commission has stated that
``a successor or assign analysis is ultimately fact-based''
and that the terms successor and assign ``take their meaning
from the particular legal context in which they were
used.''16 The Commission has further stated that in
considering the particular facts and the legal context,
courts have generally looked for ``substantial continuity''
between two companies such that one entity steps into the
shoes of, or replaces, another entity.17 Considering the
particular facts and legal context before us, we do not
believe that there will be ``substantial continuity''
between Cingular and ALLTEL. Following the transaction,
Cingular and ALLTEL will both continue to operate as
competing, independent, going concerns in all of the subject
markets, each with their own assets and customers. Thus,
ALLTEL will not simply be stepping into Cingular's shoes and
``substantially continuing'' Cingular's business operations.
Accordingly, we find that ALLTEL's acquisition of the select
wireless properties from Cingular will not render it a
successor or assign for purposes of the Consent Decrees.
6. We believe that our finding is consistent
with the Commission's Stay Order, which addressed how
mergers and acquisitions will affect a carrier's
classification, and thus its obligations, under the E911
Phase II rules. Specifically, the Stay Order stated:
To promote certainty about the scope of a carrier's
obligations, each carrier will retain its
classification throughout the E911 Phase II deployment
process, absent a merger or acquisition. If a merger
or acquisition occurs, a carrier will be classified
according to its acquiring carrier's classification,
absent special circumstances.18
As ALLTEL is the acquiring carrier in the transaction, the
acquired wireless properties will be subject to ALLTEL's
Tier II E911 Phase II obligations.
7. Furthermore, we do not believe that our
finding will undermine the objectives of the E911 rules or
the Consent Decrees.19 The Consent Decrees arose out of
investigations of Cingular and AT&T Wireless for potential
violations of their E911 Phase II obligations and by their
terms were applicable to those carriers' GSM and TDMA
networks. No similar findings of potential violations by
ALLTEL of its E911 Phase II obligations under the Stay Order
are at issue here. Post-acquisition, Cingular will continue
to be subject to its own obligations under the Consent
Decrees, while ALLTEL will remain subject to its own
obligations under the Stay Order. Finally, we note that the
transaction will not result in any disruption of E911 Phase
II services. In this regard, in markets where ALLTEL
acquires customers from Cingular, ALLTEL plans to
expeditiously deploy CDMA technology and transition existing
subscribers to its CDMA network and handset-based solution,
but it has pledged to meet all of Cingular's current E911
Phase I and Phase II obligations using a network-based
solution as long as it has TDMA and GSM subscribers in those
8. Accordingly, IT IS ORDERED that, pursuant to
Section 1.2 of the Rules, the Petition for Declaratory
Ruling filed by ALLTEL IS GRANTED to the extent indicated
9. IT IS FURTHER ORDERED that a copy of this
Order shall be sent by first class and certified mail,
return receipt requested, to Glenn S. Rabin, Vice President,
Federal Regulatory Affairs, Alltel Communications, Inc., 601
Pennsylvania Ave., N.W., Suite 720, Washington, D.C. 20004.
Deputy Chief, Enforcement
147 C.F.R. § 1.2.
2ALLTEL Communications, Inc. Petition for Declaratory
Ruling or, in the Alternative, Request for Waiver (March
21, 2005) (``Petition'').
347 C.F.R. §§ 20.18(e)-(g).
4See Revision of the Commission's Rules to Ensure
Compatibility with Enhanced 911 Emergency Calling Systems,
17 FCC Rcd 14841 (2003) (temporarily staying the E911 Phase
II requirements for the mid-sized, regional Tier II and the
small Tier III carriers) (``Stay Order'').
5See Cingular Wireless LLC, 18 FCC Rcd 11746 (2003)
(``Cingular GSM Consent Decree''); Cingular Wireless LLC,
17 FCC Rcd 8529 (2002) (``Cingular TDMA Consent Decree'');
AT&T Wireless Services, Inc., 17 FCC Rcd 19938 (2002)
(``AT&T Wireless GSM Consent Decree''); AT&T Wireless
Services, Inc., 17 FCC Rcd 11510 (2002) (``AT&T Wireless
TDMA Consent Decree'').
6See Cingular GSM Consent Decree, 18 FCC Rcd at 11748 ¶
2(c); Cingular TDMA Consent Decree, 17 FCC Rcd at 8531 ¶
2(c). The Consent Decrees with AT&T Wireless similarly
define ``AT&T Wireless'' as including its ``subsidiaries,
and any successors or assigns.'' See AT&T Wireless GSM
Consent Decree, 17 FCC Rcd at 19941 ¶ 3(c); AT&T Wireless
TDMA Consent Decree, 17 FCC Rcd at 11514 ¶ 6(c).
7See Applications of AT&T Wireless Services, Inc. and
Cingular Wireless Corp. for Transfer of Control of Licenses
and Authorizations, 19 FCC Rcd 21522, 21620-24 ¶¶ 254-66
(2004) (detailing the divestiture conditions).
8See ALLTEL Corporation and Cingular Wireless LLC Seek
Consent to Transfer of Control of Alltel Newco LLC, Public
Notice, DA 05-389 (WTB, February 14, 2005).
9See Public Notice, Report No. 2124 (WTB, April 13, 2005).
10ALLTEL concurrently filed a petition with the Wireless
Telecommunications Bureau, seeking a limited waiver of the
applicable Phase II benchmarks in order to transition
customers in the affected markets from Cingular's TDMA and
GSM networks to ALLTEL's CDMA network. See ALLTEL
Communications, Inc. Petition for Limited Waiver, CC Docket
No. 94-102, filed March 21, 2005. ALLTEL's waiver petition
will be addressed separately by the Wireless
11ALLTEL noted that in ten of the eighteen markets which it
is acquiring from Cingular, it will obtain either spectrum
and network assets, or spectrum only, but not subscribers.
In these ten markets, ALLTEL will commence service using
CDMA-only technology and will provide Phase II service
exclusively via an A-GPS handset-based solution. In the
remaining eight markets, ALLTEL will obtain spectrum,
network assets and subscribers. In these eight markets,
ALLTEL plans to expeditiously deploy CDMA technology and
transition existing subscribers to its CDMA network and
handset-based solution. Petition at 4-5. However, ALLTEL
states that it will continue to meet all of Cingular's
current E911 Phase I and Phase II obligations using a
network-based solution as long as it has TDMA and GSM
subscribers in those markets. Petition at 14.
12Petition at 3-5.
14See, e.g., North Shore Gas Co. v. Salomon Inc., 152 F.3d
642 (7th Cir. 1998). The four exceptions to the general
rule of successor non-liability are: (1) the purchaser
expressly or impliedly agrees to assume the liabilities;
(2) the transaction is a de facto merger or consolidation;
(3) the purchaser is a ``mere continuation'' of the seller;
and (4) the transaction is an effort to fraudulently escape
liability. Id. at 651.
15Applications of Ameritech Corp. and SBC Communications,
Inc., 14 FCC Rcd 14712 (1999) (``Ameritech-SBC Order''),
rev'd on other grounds sub nom., Assoc. of Communications
Enterprises, 235 F.3d 662 (D.C. Cir. 2001) (applying the
``substantial continuity'' test to determine whether a
carrier's affiliate was bound by the carrier's
16Ameritech-SBC Order, 14 FCC Rcd at 14897, 14900, citing
Howard Johnson Co. v. Detroit Local Joint Executive Board,
Hotel and Restaurant Employees and Bartenders International
Union, AFL-CIO, 417 U.S. 249 (1974) (stating that
determinations about successorship must be based on ``the
facts of each case and the particular legal obligation
which is at issue'' and that ``there is and can be no
single definition of `successor' which is applicable in
every legal context).
17Ameritech-SBC Order, 14 FCC Rcd at 14897 (citations
18Stay Order, 17 FCC Rcd 14841, 14848 ¶ 23 (2002).
19Id. at 13-14.
20See n. 11 supra.