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Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
File No. EB-08-IH-1508
ARINC, Inc. )
NAL/Acct. No. 200932080038
Licensee of Various Wireless and )
Common Carrier Authorizations FRN No. 0007909054
)
ORDER
Adopted: May 14, 2009 Released: May 14, 2009
By the Investigations and Hearings Division, Enforcement Bureau:
1. In this Order, we adopt the attached Consent Decree entered into
between the Enforcement Bureau ("Bureau") and ARINC, Inc. ("ARINC").
The Consent Decree terminates an investigation by the Bureau against
ARINC for possible violation of section 310(d) of the Communications
Act of 1934, as amended (the "Act"), and Sections 25.119 and 1.948 of
the Commission's rules in connection with the unauthorized transfer of
control of various licenses and authorizations held both directly and
indirectly by ARINC.
2. The Bureau and ARINC 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 ARINC 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 Act
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 James Barker, Latham & Watkins LLP, 556 11th Street,
N.W., Suite 1000, Washington, DC 2 0004.
FEDERAL COMMUNICATIONS COMMISSION
Hillary S. DeNigro
Chief, Investigations and Hearings Division,
Enforcement Bureau
Before the
Federal Communications Commission
Washington, D.C. 20554
In the Matter of )
File No. EB-08-IH-1508
ARINC, Inc. )
NAL/Acct. No. 200932080038
Licensee of Various Wireless and )
Common Carrier Authorizations FRN No. 0007909054
)
CONSENT DECREE
1. The Enforcement ("Bureau") and ARINC Communications, Inc. ("ARINC" or
the "Company"), by their authorized representatives, hereby enter into
this Consent Decree for the purpose of terminating the Bureau's
investigation of ARINC's compliance with Section 310(d) of the
Communications Act of 1934, as amended (the "Act"), and Sections
25.119 and 1.948 of the Commission's rules relating to transfers of
control of Commission licenses and authorizations.
I. DEFINITIONS
2. 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. "ARINC" means ARINC, Inc., its predecessors-in-interest and
successors-in-interest, controlling entities, parent, subsidiaries,
and affiliates, and each of their respective officers, directors,
employees, agents, representatives, or other person acting or
purporting to act on behalf of ARINC.
c. "Bureau" means the Enforcement Bureau of the Federal Communications
Commission.
d. "Carlyle" means Carlyle Partners IV Telecommunications L.P., TC Group
IV, LP (the general partner of Carlyle Partners IV Telecommunications
L.P.) and TC Group IV Managing G.P. LLC (the general partner of TC
Group IV, LP), each of which is an indirect parent and controlling
entity of ARINC.
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 15.
g. "Effective Date" means the date on which the Commission releases the
Adopting Order.
h. "Investigation" means the investigation commenced by the Bureau's
November 4, 2008, Letter of Inquiry regarding whether ARINC violated
section 310(d) of the Act and Sections 25.119 and 1.948 of the
Commission's rules in connection with the transfer of control of
certain licenses held by ARINC.
i. "Order" or "Adopting Order" means an Order of the Commission adopting
the terms of this Consent Decree without change, addition, deletion,
or modification.
j. "Parties" means ARINC and the Bureau.
k. "Rules" means the Commission's rules and regulations found in Title 47
of the Code of Federal Regulations.
II. BACKGROUND
3. Section 310(d) of the Act requires that holders of FCC licenses or
authorizations obtain a certificate of public convenience and
necessity from the Commission before "transferr[ing], assign[ing] or
dispos[ing] of [such licenses] in any manner, voluntarily or
involuntarily, directly or indirectly, or by transfer of control of
any corporation holding such permit or license. . . ." In accordance
with Sections 25.119 and 1.948 of the Commission's rules, a transfer
of a station license or wireless authorization by transfer of control
of any corporation or any other entity holding such license requires
application to and prior approval from the Commission.
4. ARINC provides communications, engineering and integration solutions
for commercial, defense and government customers worldwide. It holds
or controls a non-common carrier earth station license/authorization,
an international Section 214 authorization, seven private fixed
microwave licenses and 154 private land mobile radio licenses. ARINC
is ultimately controlled by Carlyle, which, on February 13, 2008,
effectuated a corporate reorganization. As a result, an intermediate
holding company indirectly controlling ARINC was replaced. The
reorganization resulted in a pro forma transfer of control of licenses
and authorizations held by ARINC requiring prior Commission consent
pursuant to Section 310(d) of the Act and of Section 25.119 and 1.948
of the Commission's Rules. ARINC did not request or obtain such prior
consent. Approximately two months later, in April 2008, ARINC
discovered and voluntarily disclosed the matter to the Commission.
ARINC subsequently filed appropriate remedial applications with the
Commission, all of which have since been granted.
5. Thereafter, the Bureau initiated its Investigation by directing a
letter of inquiry to Carlyle requesting information about the February
13, 2008, transaction. Carlyle responded on November 19, 2008.
III. TERMS OF AGREEMENT
6. 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.
7. Jurisdiction. ARINC 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.
8. Effective Date; Violations. The Parties agree that this Consent Decree
shall become effective on the date on which the Bureau 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.
9. 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 the
Investigation, ARINC 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 the
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 ARINC concerning the matters that were the subject of
the Investigation. The Bureau also agrees that it will not use the
facts developed in the 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 ARINC with respect to
ARINC's basic qualifications, including its character qualifications
to be a Commission licensee or authorized common carrier or hold
Commission authorizations.
10. Compliance Plan. ARINC agrees that it will develop, within thirty (30)
calendar days from the Effective Date, an internal Compliance Plan to
ensure ARINC's future compliance with the Act, the Commission's rules,
and the Commission's orders governing the assignment or transfer of
control of FCC licenses and authorizations. The Compliance Plan shall
include the following components:
a. Compliance Training Program. ARINC will establish an FCC compliance
training program for any employee who engages in activities related to
the purchase, sale, acquisition, assignment or transfer of control of
companies, entities or assets subject to FCC regulation by or
involving ARINC. Training sessions will be conducted at least annually
for such employees to ensure compliance with the Act and the FCC's
regulations and policies pertaining to assignments and transfers of
control and, for new employees who are engaged in such activities,
within the first sixty (60) days of employment. The Compliance
Training Program will contain information for ARINC personnel
regarding the need to conduct thorough due diligence regarding
potential FCC licenses of any company in a potential merger or
acquisition transaction, the need to monitor any corporate
reorganization for potential license assignment or transfer issues,
and the need to obtain prior FCC approval for all assignments and
transfers of control of FCC licenses or authorizations.
b. Review and Monitoring. ARINC management will review the FCC Compliance
Training Program annually to ensure that it addresses the objectives
set forth herein.
c. Parent Companies. ARINC will work with Carlyle to institute internal
controls that ensure future transactions that contemplate a change in
control of ARINC companies are communicated to ARINC management in
advance of any actual transfer of control and ensure the requirements
of all appropriate regulatory authorities are timely satisfied.
d. Annual Report. Twelve months and twenty-four months after the
Effective Date, ARINC shall submit an affidavit or declaration under
penalty of perjury, signed and dated by an authorized officer of ARINC
with personal knowledge of the representations therein, verifying that
ARINC has complied with the terms of this Consent Decree. The
declaration shall be submitted to the Chief, Investigations and
Hearings Division, Enforcement Bureau, Federal Communications
Commission, 445 12th Street, S.W., Washington, D.C. 20554. The
declaration or affidavit must comply with section 1.16 of the
Commission's rules, 47 C.F.R. S: 1.16, and be substantially in the
form set forth therein.
e. Termination. ARINC's obligations under this Paragraph shall expire
twenty-four (24) months after the Effective Date.
11. Voluntary Contribution. ARINC agrees that it will make a voluntary
contribution to the United States Treasury in the amount of Fifteen
Thousand Dollars ($15,000.00). The payment will be made within 30 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 the
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. ARINC will also send electronic notification
within forty-eight (48) hours of the date said payment is made to
Gary.Oshinsky@fcc.gov.
12. Waivers. ARINC 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 Order adopting this Consent Decree, provided the Commission
issues an Order adopting the Consent Decree without change, addition,
modification, or deletion. ARINC 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 ARINC nor the Commission shall contest the
validity of the Consent Decree or the Adopting Order, and ARINC shall
waive any statutory right to a trial de novo. ARINC 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.
13. 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 ARINC does not expressly
consent) that provision will be superseded by such Commission rule or
Order.
14. Successors and Assigns. ARINC agrees that the provisions of this
Consent Decree shall be binding on its successors, assigns, and
transferees.
15. 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.
16. Modifications. This Consent Decree cannot be modified without the
advance written consent of both Parties.
17. 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.
18. Authorized Representative. Each party represents and warrants to the
other that it has full power and authority to enter into this Consent
Decree.
19. 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.
________________________________ ________________________________
Hillary S. DeNigro John M. Belcher
Chief Chairman and Chief Executive
Officer
Investigations and Hearings
Division, Enforcement Bureau ARINC, Inc.
________________________________ ________________________________
Date Date
47 U.S.C. S: 310(d).
47 C.F.R. S:S: 25.119, 1.948.
47 U.S.C. S: 154(i).
47 C.F.R. S:S: 0.111, 0.311.
47 U.S.C. S: 310(d).
47 C.F.R. S:S: 25.119, 1.948.
47 C.F.R. S: 25.119.
47 U.S.C. S: 310(d).
47 C.F.R. S:S: 25.119(d), 1.948.
See Letter from Ben Bartolome, Deputy Chief, Investigations and Hearings
Division, Enforcement Bureau, Federal Communications Commission, to
Jennifer Hindin, Esq., Wiley Rein LLP, counsel for ARINC, dated November
4, 2008.
See Letter from James Barker, Esq., Latham and Watkins LLP, counsel for
Carlyle, to Gary Oshinsky and Gary Schonman, Investigations and Hearings
Division, Enforcement Bureau, Federal Communications Commission, dated
November 19, 2008.
Federal Communications Commission DA 09-1012
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Federal Communications Commission DA 09-1012
Federal Communications Commission DA 09-1012
Federal Communications Commission DA 09-1012