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Before the
Federal Communications Commission
Washington, D.C. 20554
)
) File No. EB-08-IH-0220
In the Matter of
) NAL/Acct. No. 200832080097
Knology, Inc.
) FRN No. 0005066493
)
ORDER
Adopted: September 26, 2008 Released: October 7, 2008
By the Chief, Enforcement Bureau:
1. In this Order, we adopt the attached Consent Decree entered into
between the Enforcement Bureau ("Bureau") and Knology, Inc. The
Consent Decree terminates an investigation by the Bureau against
Knology, Inc. for possible violations of section 214 of the
Communications Act of 1934, as amended (the "Act"), relating to
extension of lines and transfer of control, and section 63.03 of the
Commission's rules, relating to streamlined applications for transfer
of control and assignment of section 214 authorizations, by
consummating an acquisition on January 4, 2008, prior to the end of
the streamlined pleading cycle on January 12, 2008.
2. The Bureau and Knology, Inc. have negotiated the terms of the Consent
Decree that resolve this matter. A copy of the Consent Decree is
attached hereto and incorporated by reference.
3. After reviewing the terms of the Consent Decree and evaluating the
facts before us, we find that the public interest would be served by
adopting the Consent Decree and terminating the investigation.
4. In the absence of material new evidence relating to this matter, we
conclude that our investigation raises no substantial or material
questions of fact as to whether Knology, Inc. possesses the basic
qualifications, including those related to character, to hold or
obtain any Commission license or authorization.
5. Accordingly, IT IS ORDERED that, pursuant to section 4(i) of the
Communications Act of 1934, as amended, and sections 0.111 and 0.311
of the Commission's rules, the Consent Decree attached to this Order
IS ADOPTED.
6. IT IS FURTHER ORDERED that the above-captioned investigation IS
TERMINATED.
7. IT IS FURTHER ORDERED that a copy of this Order and Consent Decree
shall be sent by first class mail and certified mail, return receipt
requested, to Chip Yorkgitis, Kelley Drye & Warren LLP, Counsel for
Knology, Inc., 3050 K Street, N.W., Washington, DC 20007.
FEDERAL COMMUNICATIONS COMMISSION
Kris Anne Monteith
Chief, Enforcement Bureau
Before the
Federal Communications Commission
Washington, D.C. 20554
)
) File No. EB-08-IH-0220
In the Matter of
) NAL/Acct. No. 200832080097
Knology, Inc.
) FRN No. 0005066493
)
CONSENT DECREE
The Enforcement Bureau ("Bureau") of the Federal Communications Commission
("Commission" or "FCC") and Knology, Inc. ("Knology" or the "Company"), by
their authorized representatives, hereby enter into this Consent Decree
for the purpose of terminating the Bureau's investigation into whether
Knology violated section 214 of the Communications Act of 1934, as amended
(the "Act"), relating to extension of lines and transfer of control, and
section 63.03 of the Commission's rules, relating to streamlined
applications for transfer of control or assignment of section 214
authorizations.
I. DEFINITIONS
1. For the purposes of this Consent Decree, the following definitions
shall apply:
a. "Act" means the Communications Act of 1934, as amended, 47 U.S.C.
S: 151 et seq.
b. "Adopting Order" means an Order of the Bureau adopting the terms of
this Consent Decree without change, addition, deletion, or
modification.
c. "Applicants" means Knology, Inc., its wholly-owned subsidiary, Knology
of Alabama, Inc., and Graceba Total Communications, Inc.
d. "Bureau" means the Enforcement Bureau of the Federal Communications
Commission.
e. "Commission" and "FCC" mean the Federal Communications Commission and
all of its bureaus and offices.
f. "Compliance Plan" means the program described in this Consent Decree
at paragraph 9.
g. "Effective Date" means the date on which the Commission releases the
Adopting Order.
h. "Graceba" means Graceba Total Communications, Inc.
i. "Investigation" means the investigation commenced by the Bureau's
February 27, 2008, Letter of Inquiry to Counsel for Knology, Inc.,
regarding allegations that Knology, Inc. and its wholly-owned
subsidiary, Knology of Alabama, Inc., and Graceba Total
Communications, Inc. ("Graceba") may have violated section 214 of the
Act, 47 U.S.C. S: 214, and section 63.03(a) of the Commission's rules,
47 C.F.R. S: 63.03(a), by consummating a transfer of control of a
section 214 blanket authorization prior to the end of the streamlined
pleading cycle established pursuant to the Applicants' filings.
j. "Knology" means Knology, Inc., its wholly-owned subsidiary Knology of
Alabama, Inc., and its predecessors-in-interest and
successors-in-interest.
k. "Parties" means Knology, Inc. and the Bureau.
l. "Rules" means the Commission's regulations found in Title 47 of the
Code of Federal Regulations.
m. "Special Temporary Authority" ("STA") means the special provisions
relating to temporary or emergency services under a section 214
authorization pursuant to section 63.25 of the Commission's rules, 47
C.F.R. S: 63.25.
n. "Telecommunications service" or "Telecommunications" means interstate
telecommunications as defined in sections 3(43) and 3(46) of the Act,
47 U.S.C. S:S: 153(43), 153(46).
II. BACKGROUND
2. Pursuant to Section 214 of the Act, telecommunications carriers must
obtain a certificate of public convenience and necessity from the
Commission before constructing, acquiring, operating, or engaging in
transmission over lines of communications, or before discontinuing,
reducing or impairing service to a community. The Commission granted
all carriers blanket authority under section 214 to provide domestic
interstate services and to construct, acquire, or operate any domestic
transmission line. In accordance with section 63.03 of the
Commission's rules, however, any domestic carrier seeking to transfer
control of lines or authorization to operate pursuant to section 214
of the Act must obtain prior approval from the Commission. Pursuant to
section 63.03(a) of the Commission's rules, an applicant, unless
otherwise notified, may transfer control on the 31st day after the
date of a Public Notice listing an application for transfer of control
of a domestic section 214 authorization as accepted for filing as a
streamlined application. A carrier may apply for Special Temporary
Authority ("STA") relating to temporary or emergency services under a
section 214 authorization pursuant to section 63.25 of the
Commission's rules.
3. Knology, Inc., through its operating subsidiaries, is a provider of
telecommunications service, interactive communications, and
entertainment services in the southeastern and north central United
States. On December 7, 2007, Applicants Graceba, a provider of
Telecommunications service in Alabama, and Knology filed an
application, pursuant to section 63.03 of the Commission's rules,
requesting approval to transfer control of a domestic section 214
authorization from Graceba to Knology. Pursuant to a Public Notice
issued by the Wireline Competition Bureau ("WCB") on December 12,
2007, the transfer was to become effective automatically on the 31st
day after the date of the Public Notice, i.e., January 12, 2008.
Without notice to WCB, however, the Applicants consummated the
transaction on January 4, 2008. After the end of the streamlined
cycle, WCB approved the transfer on January 14, 2008, effective
January 12, 2008, subject to subsequent enforcement action.
4. On February 27, 2008, the Bureau issued a Letter of Inquiry ("LOI") to
Knology. The February 27, 2008 LOI directed Knology, among other
things, to submit a sworn written response to a series of questions
relating to the acquisition agreement and the transfer of control of
Graceba to Knology. The LOI concerned allegations that the Applicants'
transaction may have violated section 214 of the Communications Act
and section 63.03(a) of the Commission's rules by consummating the
transaction on January 4, 2008, prior to the end of the streamlined
pleading cycle established pursuant to the Applicants' filings, on
January 12, 2008. Knology responded to the LOI on March 28, 2008.
III. TERMS OF AGREEMENT
5. Adopting Order. The Parties agree that the provisions of this Consent
Decree shall be subject to final approval by the Bureau by
incorporation of such provisions by reference in the Adopting Order
without change, addition, modification, or deletion.
6. Jurisdiction. Knology agrees that the Bureau has jurisdiction over it
and the matters contained in this Consent Decree and has the authority
to enter into and adopt this Consent Decree.
7. Effective Date: Violations. The Parties agree that this Consent Decree
shall become effective on the date on which the FCC releases the
Adopting Order. Upon release, the Adopting Order and this Consent
Decree shall have the same force and effect as any other Order of the
Bureau. Any violation of the Adopting Order or of the terms of this
Consent Decree shall constitute a separate violation of a Bureau
Order, entitling the Bureau to exercise any rights and remedies
attendant to the enforcement of a Commission Order.
8. Termination of Investigation. In express reliance on the covenants and
representations in this Consent Decree and to avoid further
expenditure of public resources, the Bureau agrees to terminate its
investigation. In consideration for the termination of said
investigation, Knology agrees to the terms, conditions, and procedures
contained herein. The Bureau further agrees that in the absence of new
material evidence, the Bureau will not use the facts developed in this
investigation through the Effective Date of the Consent Decree, or the
existence of this Consent Decree, to institute, on its own motion, any
new proceeding, formal or informal, or take any action on its own
motion against Knology concerning the matters that were the subject of
the investigation. The Bureau also agrees that it will not use the
facts developed in this investigation through the Effective Date of
this Consent Decree, or the existence of this Consent Decree, to
institute on its own motion any proceeding, formal or informal, or
take any action on its own motion against Knology with respect to
Knology's basic qualifications, including its character
qualifications, to be a Commission licensee or hold Commission
authorizations.
9. Compliance Plan. For purposes of settling the matters set forth
herein, Knology agrees to create within thirty (30) calendar days from
the Effective Date a Compliance Plan related to future compliance with
the Act, the Commission's Rules, and the Commission's Orders. The Plan
will include, at a minimum, the following components:
a. Knology will conduct an education program for company lawyers,
managers, and other parties responsible for and involved in the
purchase, sale, or acquisition of telecommunications assets and
telecommunications carriers, regarding the rules and requirements
applicable to assignments and transfers of control under section 214
of the Act and the Commission's rules.
b. Knology commits to file applications relating to transactions
involving transfers of control or assignments to the FCC
sufficiently in advance of the targeted transaction closing or
consummation date if it determines such approvals are needed.
c. In transactions involving transfers of control or assignments,
Knology will, as a practice, seek federal regulatory counsel
involvement early in the process to ascertain what approvals, if
any, are required.
d. Knology will implement a policy of contacting federal regulatory
counsel in advance in the event that Knology and other parties to
the transaction consider moving the closing date before the original
target closing date to ascertain whether any special temporary
authority or other regulatory relief may be required to lawfully
complete the transaction at an earlier time.
e. Knology will seek and obtain from the Commission special temporary
authority or other regulatory relief if it desires to close prior to
receiving federal regulatory approval.
10. Compliance Reports. Knology will file compliance reports with the
Commission ninety (90) days after the Effective Date, twelve (12)
months after the Effective Date, and twenty-four (24) months after the
Effective Date. Each compliance report shall include a compliance
certificate from an officer, as an agent of Knology, stating that the
officer has personal knowledge that Knology has established operating
procedures intended to ensure compliance with this Consent Decree,
together with an accompanying statement explaining the basis for the
officer's compliance certification. All compliance reports shall be
submitted to Hillary S. DeNigro, Chief, Investigations and Hearings
Division, Enforcement Bureau, Federal Communications Commission, 445
12th Street, S.W., Washington, D.C. 20554. All reports shall also be
submitted electronically to Ms. DeNigro at Hillary.DeNigro@fcc.gov.
11. Termination Date. Unless stated otherwise, the requirements of this
Consent Decree will expire twenty-four (24) months after the effective
date.
12. Section 208 Complaints: Subsequent Investigations. Nothing in this
Consent Decree shall prevent the Commission or its delegated authority
from adjudicating complaints filed pursuant to section 208 of the Act
against Knology or its affiliates for alleged violations of the Act,
or for any other type of alleged misconduct, regardless of when such
misconduct took place. The Commission's adjudication of any such
complaint will be based solely on the record developed in that
proceeding. Except as expressly provided in this Consent Decree, this
Consent Decree shall not prevent the Commission from investigating new
evidence of noncompliance by Knology of the Act, the rules, or the
Adopting Order.
13. Voluntary Contribution. Knology agrees that it will make a voluntary
contribution to the United States Treasury in the amount of twelve
thousand dollars ($12,000) within ten (10) business days after the
Effective Date of the Adopting Order. The payment must be made by
check or similar instrument, payable to the Order of the Federal
Communications Commission. The payment must include the Account Number
and FRN Number referenced in the caption to the Adopting Order.
Payment by check or money Order may be mailed to Federal
Communications Commission, P.O. Box 979088, St. Louis, MO 63197-9000.
Payment by overnight mail may be sent to U.S. Bank - Government
Lockbox #979088, SL-MO-C2-GL, 1005 Convention Plaza, St. Louis, MO
63101. Payment by wire transfer may be made to ABA Number 021030004,
receiving bank Federal Reserve Bank of New York, and account number
27000001. Knology will also send an electronic notification on the
date payment is made to Gerald Chakerian at Gerald.Chakerian@fcc.gov.
14. Waivers. Knology waives any and all rights it may have to seek
administrative or judicial reconsideration, review, appeal or stay, or
to otherwise challenge or contest the validity of this Consent Decree
and the Adopting Order, provided the Commission issues the Adopting
Order without change, addition, modification, or deletion to the
Consent Decree as executed by Knology. Knology shall retain the right
to challenge Commission interpretation of the Consent Decree or any
terms contained herein. If either Party (or the United States on
behalf of the Commission) brings a judicial action to enforce the
terms of the Adopting Order, neither Knology nor the Commission shall
contest the validity of the Consent Decree or the Adopting Order, and
Knology shall waive any statutory right to a trial de novo. Knology
hereby agrees to waive any claims it may otherwise have under the
Equal Access to Justice Act, 5 U.S.C. S: 504 and 47 C.F.R. S: 1.1501
et seq., relating to the matters addressed in this Consent Decree.
15. Severability. The Parties agree that if any of the provisions of the
Adopting Order or the Consent Decree shall be invalid or
unenforceable, such invalidity or unenforceability shall not
invalidate or render unenforceable the entire Adopting Order or
Consent Decree, but rather the entire Adopting Order or Consent Decree
shall be construed as if not containing the particular invalid or
unenforceable provision or provisions, and the rights and obligations
of the Parties shall be construed and enforced accordingly. In the
event that this Consent Decree in its entirety is rendered invalid by
any court of competent jurisdiction, it shall become null and void and
may not be used in any manner in any legal proceeding.
16. Subsequent Rule or Order. The Parties agree that if any provision of
the Consent Decree conflicts with any subsequent rule or Order adopted
by the Commission (except an Order specifically intended to revise the
terms of this Consent Decree to which Knology does not expressly
consent) that provision will be superseded by such Commission rule or
Order.
17. Successors and Assigns. Knology agrees that the provisions of this
Consent Decree shall be binding on its successors, assigns, and
transferees.
18. Final Settlement. The Parties agree and acknowledge that this Consent
Decree shall constitute a final settlement between the Parties. The
Parties further agree that this Consent Decree does not constitute
either an adjudication on the merits or a factual or legal finding or
determination regarding any compliance or noncompliance with the
requirements of the Act or the Commission's Rules and Orders. The
Parties agree that this Consent Decree is for settlement purposes only
and that by agreeing to this Consent Decree, Knology does not admit
or deny any fact, noncompliance, violation, or liability for violating
the Act in connection with the matters that are the subject of this
Consent Decree.
19. Modifications. This Consent Decree cannot be modified without the
advance written consent of both Parties.
20. Paragraph Headings. The headings of the Paragraphs in this Consent
Decree are inserted for convenience only and are not intended to
affect the meaning or interpretation of this Consent Decree.
21. Authorized Representative. Each party represents and warrants to the
other that it has full power and authority to enter into this Consent
Decree.
22. Counterparts. This Consent Decree may be signed in any number of
counterparts (including by facsimile), each of which, when executed
and delivered, shall be an original, and all of which counterparts
together shall constitute one and the same fully executed instrument.
________________________________
Kris Anne Monteith
Chief
Enforcement Bureau
________________________________
Date
________________________________
Chad Wachter
Vice President, General Counsel
Knology, Inc.
________________________________
Date
47 U.S.C. S: 214.
47 C.F.R. S: 63.03.
47 U.S.C. S: 154(i).
47 C.F.R. S:S: 0.111, 0.311.
47 U.S.C. S: 214.
47 C.F.R. S: 63.03.
See Letter from Trent B. Harkrader, Deputy Chief, Investigations and
Hearings Division, Enforcement Bureau, FCC, to Randall W. Sifers, Kelley,
Drye & Warren LLP, Counsel for Knology, Inc., dated February 27, 2008
("February 27, 2008 LOI").
See 47 U.S.C. S: 214(a).
See Implementation of Section 402(b)(2)(A) of the Telecommunications Act
of 1996; Petition for Forbearance of the Independent Telephone &
Telecommunications Alliance, Report and Order and Second Memorandum
Opinion and Order, 14 FCC Rcd 11364 (1999); 47 C.F.R. S: 63.01.
See Implementation of Further Streamlining Measures for Domestic Section
214 Authorizations, Report and Order, 17 FCC Rcd 5517, 5521, P: 5 (2002);
47 C.F.R. S: 63.03.
47 C.F.R. S: 63.03(a).
47 C.F.R. S: 63.25.
Public Notice, "Domestic Section 214 Application Filed for the Transfer of
Control of Graceba Total Communications, Inc. to Knology of Alabama, Inc.,
Streamlined Pleading Cycle Established," 22 FCC Rcd 21494 (Wir. Comp. Bur.
2007).
Public Notice, "Notice of Domestic Section 214 Authorization Granted," 23
FCC Rcd 261 (Wir. Comp. Bur. 2008). On January 7, 2008, WCB requested that
the Applicants file an application for Special Temporary Authority, and on
January 9, 2008, WCB granted it by date-stamping the letter request. See
Letter from Randall W. Sifers, Kelley, Drye & Warren LLP, Counsel for
Knology, Inc., to Marlene H. Dortch, Secretary, FCC, dated January 9,
2008.
February 27, 2008 LOI.
See Letter from Edward A. Yorkgitis, Jr., Kelley, Drye & Warren LLP,
Counsel for Knology, Inc., to Trent B. Harkrader, Deputy Chief,
Investigations and Hearings Division, Enforcement Bureau, FCC, dated March
28, 2008.
Federal Communications Commission DA 08-1876
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Federal Communications Commission DA 08-1876
Federal Communications Commission DA 08-1876
1