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Before the
Federal Communications Commission
Washington, D.C. 20554
)
) File No. EB-08-IH-0973
In the Matter of
) NAL/Acct. No. 200932080035
Hughes Communications, Inc.
) FRN No. 0007600661
)
ORDER
Adopted: March 31, 2009 Released: March 31, 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 Hughes Communications,
Inc. ("Hughes"). The Consent Decree terminates an investigation by the
Bureau against Hughes for possible violation of section 310(d) of the
Communications Act of 1934, as amended (the "Act"), and section 25.119
of the Commission's rules in connection with the unauthorized transfer
of control of various licenses and authorizations held both directly
and indirectly by Hughes.
2. The Bureau and Hughes 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 Hughes 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 Stephen D. Baruch, Senter & Lerman PLLC, 2000 K Street,
N.W., Suite 600, Washington, DC 2 0006.
FEDERAL COMMUNICATIONS COMMISSION
Hillary S. DeNigro
Chief, Investigations and Hearings Division,
Enforcement Bureau
Before the
Federal Communications Commission
Washington, D.C. 20554
)
) File No. EB-08-IH-0973
In the Matter of
) NAL/Acct. No. 200932080035
Hughes Communications, Inc.
) FRN No. 0007600661
)
CONSENT DECREE
1. The Enforcement ("Bureau") and Hughes Communications, Inc. ("Hughes"
or the "Company"), by their authorized representatives, hereby enter
into this Consent Decree for the purpose of terminating the Bureau's
investigation into whether Hughes violated section 310(d) of the
Communications Act of 1934, as amended (the "Act"), and section 25.119
of the Commission's rules in connection with the unauthorized transfer
of control of various licenses and authorizations held both directly
and indirectly by Hughes.
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. "Bureau" means the Enforcement Bureau of the Federal Communications
Commission.
c. "Commission" and "FCC" mean the Federal Communications Commission and
all of its bureaus and offices.
d. "Compliance Plan" means the program described in this Consent Decree
at paragraph 15.
e. "Effective Date" means the date on which the Commission releases the
Adopting Order.
f. "Hughes" means Hughes Communications, Inc. and its
predecessors-in-interest and successors-in-interest.
g. "Investigation" means the investigation commenced by the Bureau's
November 19, 2008 Letter of Inquiry regarding whether Hughes violated
section 310(d) of the Act and section 25.119 of the Commission's rules
in connection with the unauthorized transfer of control of Hughes,
which holds various licenses and authorizations both directly and
indirectly.
h. "Order" or "Adopting Order" means an Order of the Commission adopting
the terms of this Consent Decree without change, addition, deletion,
or modification.
i. "Parties" means Hughes and the Bureau.
j. "Rules" means the Commission's 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 section 25.119 of the Commission's rules, a transfer of a station
license by transfer of control of any corporation or any other entity
holding such license requires application to and prior approval from
the Commission. The Commission employs a public interest standard
under section 310(d) of the Act that involves the examination of the
public interest impact of a proposed transaction.
4. Prior to July 13, 2007, Hughes was the indirect subsidiary of Apollo
Capital Management IV, Inc. and AIF IV Management, Inc. (collectively,
"Apollo IV"). Hughes directly controlled a noncommon carrier Title III
space station license/authorization for the SPACEWAY 3 satellite (Call
Sign S2663). Additionally, at all relevant times, Hughes was the
parent company of Hughes Network Systems, LLC ("HNS"). HNS, in turn,
was the parent of HNS License Sub, Limited and HNS License Sub, LLC
(collectively, "HNS Subsidiaries"). Both prior to and immediately
after July 13, 2007, the HNS Subsidiaries directly controlled 17
non-common carrier earth station licenses. Additionally, HNS License
Sub, LLC directly controlled four authorizations in the Experimental
Radio Service.
5. On July 13, 2007, in the second step of a three-step transaction that
concluded on August 8, 2007, control of Hughes and the HNS
Subsidiaries was transferred from Apollo IV to BRH Holdings GP, Ltd.
No filing was made with the Commission to authorize the transfer of
control over the licenses held by Hughes and the HNS Subsidiaries. One
week after discovering the unauthorized transfers of control of the
various Commission licenses, Hughes disclosed this matter to the
Commission. Hughes and the HNS Subsidiaries filed applications
requesting nunc pro tunc approval of transfer of control of the space
and earth station licenses on September 4 and 5, 2007. Applications
requesting approval for transfer of control of the experimental
licenses were filed with the Commission on September 24, 2007. On June
12, 2008, the Commission granted consent for the transfer of control
of the space station licenses. The Commission granted consent for the
transfer of control of the earth station licenses on June 17, 2008,
and it granted consent for the transfer of control of the experimental
radio services licenses on June 23, 2008.
6. On November 19, 2008, the Bureau issued a letter of inquiry to Hughes.
The LOI directed Hughes, among other things, to submit a sworn written
response to a series of questions relating to the unauthorized
transfer of control of various licenses and authorizations held both
directly and indirectly by Hughes. Hughes responded December 9, 2008.
Hughes also requested the Bureau consider resolving its investigation
with a Consent Decree.
III. TERMS OF AGREEMENT
7. 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.
8. Jurisdiction. Hughes 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.
9. 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.
10. 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, Hughes 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 Hughes 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 Hughes with respect to
Hughes's basic qualifications, including its character qualifications
to be a Commission licensee or authorized common carrier or hold
Commission authorizations.
11. Compliance Plan. Hughes agrees that it will develop, within thirty
(30) calendar days from the Effective Date, an internal Compliance
Plan to ensure Hughes'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. Hughes 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 Hughes. 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 Hughes 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. Hughes management will review the FCC
Compliance Training Program annually to ensure that it addresses the
objectives set forth herein.
c. Parent Company(ies). Hughes will work with all direct and indirect
parent companies to institute internal controls that ensure future
transactions that contemplate a change in control of Hughes companies
are communicated to Hughes management in advance of any actual
transfer of control and ensure the requirements of all appropriate
regulatory authorities are timely satisfiedt.
d. Annual Report. Twelve months and twenty-four months after the
Effective Date, Hughes shall submit an affidavit or declaration under
penalty of perjury, signed and dated by an authorized officer of
Hughes with personal knowledge of the representations therein,
verifying that Hughes 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. Hughes's obligations under this Paragraph shall expire
twenty-four (24) months after the Effective Date.
12. Voluntary Contribution. Hughes agrees that it will make a voluntary
contribution to the United States Treasury in the amount of twelve
thousand dollars ($12,000.00). 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. Hughes will also send electronic notification
within forty-eight (48) hours of the date said payment is made to
michele.berlove@fcc.gov.
13. Waivers. Hughes 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. Hughes 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 Hughes nor the Commission shall contest the
validity of the Consent Decree or the Adopting Order, and Hughes shall
waive any statutory right to a trial de novo. Hughes 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.
14. 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 Hughes does not expressly
consent) that provision will be superseded by such Commission rule or
Order.
15. Successors and Assigns. Hughes agrees that the provisions of this
Consent Decree shall be binding on its successors, assigns, and
transferees.
16. 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.
17. Modifications. This Consent Decree cannot be modified without the
advance written consent of both Parties.
18. 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.
19. Authorized Representative. Each party represents and warrants to the
other that it has full power and authority to enter into this Consent
Decree.
20. 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 Dean A. Manson
Chief Senior V.P., General Counsel &
Secretary
Investigations and Hearings
Division, Enforcement Bureau Hughes Communications, Inc.
________________________________ ________________________________
Date Date
47 U.S.C. S: 310(d).
47 C.F.R. S: 25.119.
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: 25.119.
See Letter from Trent B. Harkrader, Deputy Chief, Investigations and
Hearings Division, Enforcement Bureau, FCC, to Stephen D. Baruch,
Leventhal Senter & Lerman PLLC, dated November 19, 2008 ("LOI").
47 U.S.C. S: 310(d).
47 C.F.R. S: 25.119.
47 U.S.C. S: 310(d).
47 C.F.R. S: 25.119(d).
See 47 U.S.C. S: 310(d).
Actions Taken, Public Notice, 23 FCC Rcd 9337 (2008).
Satellite Communications Services Re: Actions Taken, Public Notice, 2008
WL 2444752, Report No. SES-01043 (June 18, 2008).
See File Nos. 0028-EX-TC-2007 (Call Sign WD2XFP), 0030-EX-TC-2007 (Call
Sign WE2XEW), and 0031-EX-TC-2007 (Call Sign WD2XRV). The application for
the fourth experimental radio service license (File No. 0029-EX-TC-2007,
Call Sign WD2XJU) was dismissed without prejudice following the surrender
of the license in May 2008.
See November 19, 2008 LOI.
See Letter from Stephen D. Baruch and David S. Keir, Leventhal Senter &
Lerman PLLC, to Gerald Chakerian, Attorney Advisor, Investigations and
Hearings Division, Enforcement Bureau, FCC, dated December 9, 2008.
Federal Communications Commission DA 09-693
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Federal Communications Commission DA 09-693
Federal Communications Commission DA 09-693
Federal Communications Commission DA 09-693