Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C.
In the Matter of
HANNON ARMSTRONG KCS FUNDING, LLC, File No. SCL-LIC-2009-______
and
TRUESTONE, LLC,
Application for a License to Land and Operate a Private Fiber-Optic Cable System Connecting the U.S. Army Kwajalein Atoll/Reagan Test Site, in the Republic of the Marshall Islands, and Guam for
THE HANTRU1 SYSTEM
JOINT APPLICATION FOR CABLE LANDING LICENSE— STREAMLINED PROCESSING REQUESTED
Hannon Armstrong KCS Funding, LLC (“Hannon Armstrong,” FCC Registration
Number 0018522391), and Truestone, LLC (“Truestone,” FCC Registration Number
0018522383) (together with Hannon Armstrong, “Applicants”), hereby jointly apply for a license
to land and operate within the United States a private fiber-optic submarine cable network connecting the U.S. Army Kwajalein Atoll/Reagan Test Site, in the Republic of the Marshall
Islands, with Guam.1 This non-common carrier cable system will be known as the HANTRU1
System (“HANTRU1”). The Applicants will operate HANTRU1 on a non-common-carrier basis
1 Hannon Armstrong and Truestone apply pursuant to “An act relating to the Landing and Operation of Submarine Cables in the United States,” codified at 47 U.S.C. §§ 34-39 (“Cable Landing License Act”); Executive Order No. 10,530, codified at 3 C.F.R. 189 (1954-1958), reprinted in 3 U.S.C. § 301 app. (1988); and to Section 1.767 of the Commission’s rules, 47 C.F.R. § 1.767.
by providing bulk capacity to a single customer—the DITCO-PAC/PL711 arm of the Defense
Information Systems Agency (“DISA”)—on individually-negotiated terms and conditions.
HANTRU1 is custom-designed to meet the needs of the U.S. Army Space and Missile Defense
Command at its facilities on Kwajalein Atoll.
The Applicants intend to begin operation of HANTRU1 in the first or second quarter of
2010. Timely grant of a cable landing license is therefore of paramount importance for
HANTRU1.
The Applicants request streamlined processing for this application, as it raises no competition or other public-interest concerns. The Applicants request streamlined processing
pursuant to Section 1.767(k)(1), as neither Applicant is affiliated with a foreign carrier in any of
HANTRU1’s destination markets. An expeditious grant of this application will significantly
advance the public interest by providing fiber-optic connectivity to critical U.S. military
installations on Kwajalein Atoll.
I. COMPLIANCE WITH SECTION 1.767
In accordance with Section 1.767 of the Commission’s rules and Executive Order No.
10,530, the Applicants submit the following information:
(1) Applicants’ Names, Addresses, and Telephone Numbers2
The names, addresses, and telephone numbers of the Applicants are:
HANNON ARMSTRONG KCS FUNDING LLC 1997 Annapolis Exchange Parkway Suite 520 Annapolis, Maryland 21401 +1 410 571 9860 tel +1 410 571 9894 fax
2 See id., § 1.767(a)(1).
2 and
TRUESTONE, LLC 11320 Random Hills Road Suite 100 Fairfax , Virginia 22030 +1 703.766.8801 tel +1 703 766 6240 fax
(2) Applicants’ Places of Incorporation3
Hannon Armstrong is a limited-liability company organized under the laws of the State of
Maryland. Truestone is a limited-liability company organized under the laws of the State of
Alaska.
(3) Contact Information4
The Commission should address correspondence regarding this application to:
Steven L. Chuslo General Counsel HANNON ARMSTRONG CAPITAL, LLC 1997 Annapolis Exchange Parkway Suite 520 Annapolis, Maryland 21401 +1 410 571 9860 +1 410 571 9894 [email protected]
and
Leslie Wheelock Senior Corporate Attorney NANA DEVELOPMENT CORPORATION 13873 Park Center Road Suite 400 N Herndon, Virginia 20171 +1 571 323 5467 tel +1 571 323 5201 fax [email protected]
3 See id., § 1.767(a)(2). 4 See id., § 1.767(a)(3).
3 with a copy to:
Kent D. Bressie HARRIS, WILTSHIRE & GRANNIS LLP 1200 18th Street, N.W., Suite 1200 Washington, D.C. 20036-2516 +1 202 730 1337 tel +1 202 730 1301 fax [email protected]
Counsel for Hannon Armstrong KCS Funding, LLC and Truestone, LLC
(4) System Description5
HANTRU1 will consist of one segment of digital fiber-optic cable connecting the U.S.
Army Kwajalein Atoll/Reagan Test Site with Guam. HANTRU1 will consist of two optical fiber pairs, with an initial configuration capacity of 20 Gbps (protected OC-192; 2 wavelengths) and a final design capacity of 160 Gbps (16 wavelengths). HANTRU1 will land at two existing buildings to be outfitted, refurbished, owned, and operated as cable stations by the U.S. Army
Kwajalein Atoll/Reagan Test Site, and at an existing cable station owned and operated by Tata
Communications (US) Inc. at Piti, Guam.
HANTRU1 will also include two branching units (also owned by Hannon Armstrong and operated by Truestone) that will connect to two separate cable systems owned by the Federated
States of Micronesia Telecommunications Corporation (“FSMTC”) and the Marshall Islands
National Telecommunications Authority (“MINTA”). FSMTC has contracted separately with
Tyco Telecommunications (US) Inc. (“Tyco Telecom”) for the supply and installation of a system between the western branching unit and Pohnpei, in the Federated States of Micronesia
(“FSM System”). MINTA has contracted separately with Tyco Telecom for the supply and
5 See id., § 1.767(a)(4).
4 installation of a system between the eastern branching unit and Majuro, in the Republic of the
Marshall Islands (“RMI System”). FSMTC and MINTA will own, control, construct, and
operate the FSM System and RMI System, respectively. FSMTC and MINTA have each entered into IRU agreements with Hannon Armstrong to provide onward dark-fiber connectivity to
Guam. Although the FSM System and the RMI System are beyond the scope of the Cable
Landing License Act, as neither will land in the United States, FSMTC and MINTA may require separate authority under Section 214 of the Communications Act of 1934, as amended, and
Section 63.18(e) of the Commission’s rules, to the extent they provide telecommunications
services to or from the United States.6
Exhibit A of this application provides a route map for HANTRU1. The Applicants anticipate that HANTRU1 will enter into commercial service in the first or second quarter of
2010.
(5) Landing Points7
HANTRU1’s specific landing points are located as follows:
1. Kwajalein Atoll
• Glass Beach beach manhole: 08˚-43.260 N Latitude, 167˚-43.044 E, Longitude
• Kwajalein cable stations:
o Street address for power feed equipment (“PFE”) site: HQ Transmitter Building, BCB FAC 1017
o Geographic coordinates for PFE site: 08˚-43.408 N Latitude, 167˚-43.172 E Longitude
6 See 47 U.S.C. §§ 34, 214; 47 C.F.R. § 63.18(e). 7 See id., § 1.767(a)(5).
5 o Street address for transmission equipment site: Range Operations Building, FAC 1010
o Geographic coordinates for transmission equipment site: 08˚- 43.17 N Latitude, 167˚-43.46 E Longitude
2. Guam
• Beach manhole (Agat): Lot Nos. 301-A-1 and 301-A-2, Telyfac, 13º 21' 40.32" N Latitude, 144º 38' 57.69" E Longitude
• Piti cable station:
o Street address: Lot 14, Shell Tank Farm, Piti
o Geographic coordinates: 13º 24' 56.24" N Latitude, 144º 41' 16.35" E Longitude
Maps of these specific landing points are provided in Exhibit B to this application.
(6) Regulatory Status8
The Applicants will operate HANTRU1 on a non-common carrier basis. Non-common
carrier status of the proposed system is consistent with established Commission policy and
judicial precedent, and will advance the public interest.
First, the Commission should not subject HANTRU1 to common carrier regulation because HANTRU1 will not operate on a common carrier basis as defined in NARUC I.9 The
courts have stated that “[t]he primary sine qua non of common carrier status is a quasi-public
8 See id., § 1.767(a)(6). 9 See National Ass’n of Regulatory Utility Commissioners v. FCC, 525 F.2d 630, 642 (D.C. Cir.) (“NARUC I”) (stating that the court must inquire “whether there are reasons implicit in the nature of . . . [the] operations to expect an indifferent holding out to the eligible user public”), cert. denied, 425 U.S. 992 (1976). See also Virgin Islands Telephone Corp. v. FCC, 198 F.3d 921 (D.C. Cir. 1999) (affirming FCC’s use of NARUC I test for distinguishing common-carrier and private-carrier services following enactment of the Telecommunications Act of 1996).
6 character, which arises out of the undertaking ‘to carry for all people indifferently.’”10 On
HANTRU1, however, the Applicants will not sell capacity indifferently to the user public.
Instead, the Applicants will provide bulk capacity through an individually-negotiated, sole-
source contract already executed with a single customer, DISA, for the benefit of the U.S. Army
Kwajalein Atoll/Reagan Test Site. Thus, capacity on HANTRU1 has been assigned pursuant to
individualized negotiations, depending on the characteristics and needs of a particular capacity
purchaser. The Commission has previously found that such offerings do not make an applicant a
common carrier.11
Second, the Commission should not subject HANTRU1 to common carrier regulation
because there is no legal compulsion or other public interest reason for the Applicants to operate
HANTRU1 in such a manner. Under the NARUC I test, the Commission must determine
whether the public interest requires common carrier operation of the cable system.12
Traditionally, the Commission has focused on whether the applicant has sufficient market power to warrant common carrier regulation.13 But the Commission “is not limited to that reasoning”
10 National Ass’n of Regulatory Utility Commissioners v. FCC, 533 F.2d 601, 608 (D.C. Cir. 1976) (“NARUC II”). 11 See AT&T Corp. et. al, Cable Landing License, 13 FCC Rcd. 16,232, 16,238 (Int’l Bur. 1998) (“China-U.S. Cable Order”) (finding that individualized decisions concerning the sale or lease of capacity on the China-U.S. Cable Network would not constitute the effective provision of a service to the public so as to make the applicant a common carrier); AT&T Submarine Systems, Inc., 11 FCC Rcd. 14,885, 14,904 (Int’l Bur. 1996) (“St. Thomas-St. Croix Cable Order”) (finding that an “offer of access, nondiscriminatory terms and conditions and market pricing of IRUs does not rise to the level of an ‘indiscriminate’ offering” so as to constitute common carriage), aff’d 13 FCC Rcd. 21,585 (1998), aff’d sub. nom Virgin Islands Telephone Corp. v. FCC, 198 F.3d 921 (D.C. Cir. 1999). 12 NARUC I, 525 F.2d at 642 (stating that the court must inquire “whether there will be any legal compulsion . . . to serve [the public] indifferently”). 13 See St. Thomas-St. Croix Cable Order, 11 FCC Rcd. at 14,893.
7 and has looked more broadly to determine whether common-carrier licensing is in the public interest.14 HANTRU1 poses no such competitive or other public-interest concerns.
HANTRU1 is not a typical commercial system. Instead, it is a bespoke system to be constructed to U.S. Army specifications, and intended to provide service only to DISA for the benefit of the U.S. Army pursuant to a sole-source contract, which has already been executed.
Moreover, it will provide service only to the U.S. Army, which controls all access to Kwajalein
Atoll.15 Consequently, there is no need to regulate the provision of services to other customers, as there will be no such customers.
Even if the Commission viewed HANTRU1 as a more traditional commercial system, however, the Applicants believe that HANTRU1 would not warrant common-carrier regulation for competition or other public-interest reasons. The Commission has found common carrier treatment unwarranted, even on routes with little or no available common carrier cable
14 See AT&T Corp. et. al., Cable Landing License,14 FCC Rcd. 13,066, 13,080 ¶ 39 (2000) (“Japan-U.S. Order”) (stating that “[a]lthough this public interest analysis has generally focused on the availability of alternative facilities, we are not limited to that reasoning.”); Australia-Japan Cable (Guam) Limited, Cable Landing License, 15 FCC Rcd. 24,057, 24,062 ¶ 13 (Int’l Bur. 2000) (stating that “[t]his public interest analysis generally has focused on whether an applicant will be able to exercise market power because of the lack of alternative facilities, although the Commission has not limited itself to that reasoning.”); Telefonica SAM USA, Inc. et. al., Cable Landing License, 15 FCC Rcd. 14,915, 14,920 ¶ 11 (Int’l Bur. 2000) (“Telefonica SAM Order”) (stating that “[t]his public interest analysis has focused on the availability of alternative facilities, although the Commission has stated it is not limited to that reasoning.”). 15 Hannon Armstrong’s sale of dark-fiber to FSMTC and MINTA does not constitute the provision of telecommunications, much less a telecommunications service. See Southwestern Bell Tel. Co. v. FCC, 19 F.3d 1475 (D.C. Cir. 1994) (finding that the Commission had failed to provide a sufficient analysis for concluding that dark fiber service was a common carrier service and suspending the Commission order pending proceedings on remand); Instructions for the Telecommunications Reporting Worksheet, FCC Form 499-A (2008), at 29 (instructing universal service contributors not to include revenues for dark fiber services as telecommunications revenues). As noted above, FSMTC and MINTA’s regulatory obligations are wholly independent of those of the Applicants.
8 operations, where “competing facilities will at least partially constrain the operations of the
[cable system] so that it will not become a bottleneck facility.”16 Under the first prong of the
NARUC I test, the Commission has considered competition from intermodal facilities, including satellite facilities17 and terrestrial microwave facilities.18 In so doing, the Commission has recognized that the existence of facilities that are technically inferior to (and thus not perfect substitutes for) the proposed cable system can sufficiently constrain the exercise of market power to make common carrier regulation unnecessary.19 Moreover, although the satellite and terrestrial microwave circuits cited in many International Bureau licensing decisions were
16 Japan-U.S. Order, 14 FCC Rcd. at 13,080 ¶ 39; St. Thomas-St. Croix Cable Order, 11 FCC Rcd. at 14,900 ¶ 51 (declining to require common carrier treatment for first fiber optic cable facility given existing, albeit technically inferior, facilities); Guam-Philippines Order, 14 FCC Rcd. at 1927 ¶ 10 (finding, where existing cable facilities on the route had reached capacity limits, “that alternative indirect routes, circuits on non-common carrier cable systems, satellite links, and the prospect of future cable construction constrain the ability of the G-P Cable System to exercise market power”). 17 AT&T Corp., et. al., Cable Landing License, 14 FCC Rcd. 1923, 1927 ¶ 10 (Int’l Bur. 1998) (“Guam-Phillipines Order”) (stating that “[s]atellite circuits, for example, may be inferior for carrying voice traffic, but can nevertheless compete with fiber optic circuits for providing many non-voice services”); Japan-U.S. Order, 14 FCC Rcd. at 13,080 n.56 (noting that the US-Japan route was also served “by satellite capacity over Intelsat and other satellite systems”); Alaska United Order, 12 FCC Rcd. at 18,297 ¶ 16 (proposed route served by “circuits on the Telstar 303 and Aurora 2 satellites”); SSI Atlantic Crossing LLC, 13 FCC 5961, 5963 & n.12 (Int’l Bur. 1997) (noting that Intelsat satellite circuits will provide competitive alternative facilities to the Atlantic Crossing cable system), modified, 12 FCC Rcd. 17,435 (Int’l Bur. 1997), further modified, 13 FCC Rcd. 7171 (Int’l Bur. 1998); TeleBermuda International, L.L.C., 11 FCC Rcd. 21,141, 21,145 & n.14 (1996) (noting that Intelsat satellite circuits will provide the only alternative common carrier facilities to the BUS-1 cable system); Tel-Optik Ltd., 100 FCC 2d 1033, 1041 (1985) (“TelOptik”) (noting that with a private cable system, “[b]ulk users of broadband and high-speed digital satellite circuits will be able to use cable to satisfy their transmission capacity needs and any special operational and technical requirements”). 18 General Communication, Inc., Cable Landing License, 12 FCC Rcd. 18,292, 18,297 ¶ 16 (Int’l Bur. 1997) (“Alaska United East Order”) (proposed route served by “terrestrial microwave service”). 19 Guam-Philippines Order, 14 FCC Rcd. at 1927 ¶ 10 (rejecting the argument that the Commission should not consider satellite services as a satisfactory competitive alternative).
9 common-carrier in nature, neither the Bureau nor the Commission has explicitly required that
such circuits be regulated on a common-carrier basis in order to justify licensing competing
undersea cable facilities on a non-common-carrier basis. To the contrary, the concept of
20 intermodal competition is much broader.
Applying this precedent here, intermodal facilities are sufficiently available to constrain
Applicants’ operations to prevent the exercise of market power, making common carrier regulation unnecessary. Several satellite facilities provide competing services to connect
Kwajalein Atoll and the RMI, including AsiaSat 2; AsiaSat 3S; AsiaSat 4; Intelsat’s IS-2, IS-8,
IS-602, IS-605, and IS-701; and SES New Skies’ NSS-5 (to be replaced by the recently-launched
NSS-9). All of these satellites will compete with HANTRU1. Together, these facilities offer
more than 5,000 MHz of C- and Ku-Band capacity at Kwajalein Atoll. While these intermodal
facilities may not be full substitutes for HANTRU1, as the Commission has found in granting
other licenses, they will still act to constrain Applicants from exercising undue market power.
By itself, the fact that HANTRU1 will be the first fiber-optic facility to connect the RMI
with Guam and beyond does not require the Commission to regulate the system on a common
carrier basis. As the Commission has explained, “requiring current identical substitute common
carrier facilities before non-common carrier facilities will be authorized would serve as a
disincentive for entities to take risks and expend capital to expand and upgrade facilities.21
Indeed, if the Commission “were to require all cable systems that increase the availability of advanced technology in a region to be common carrier, few cables would even qualify as non-
20 See St. Thomas-St. Croix Cable Order, 11 FCC Rcd. at 14,896 ¶ 39 (noting that “[u]nder NARUC I and Commission precedent, our decision necessarily must consider whether the proposed cable system is a competitive ‘bottleneck’ (i.e., whether there are no competitive substitutes, enabling the owner to restrict output or raise prices), or whether there are, in fact, competitive alternatives.”). 21 St. Thomas-St. Croix Cable Order, 11 FCC Rcd. at 14,898 ¶ 44.
10 common carrier.”22 Accordingly, the Commission has not imposed common carrier regulation
on the first fiber-optic facility on a route where existing, albeit technically inferior, facilities provided competition and the market remained open to new fiber optic entrants.23 That
reasoning equally applies here. Although HANTRU1 will be the first fiber optic cable to serve
the proposed route, it will not function as a bottleneck facility so as to warrant common carrier
because existing satellite facilities will provide competitive alternatives.
The Applicants’ intended operation of HANTRU1 is consistent with the Commission’s
long-standing policy to encourage competition through private submarine cable transmissions,
pursuant to which the Commission has granted numerous cable landing licenses.24
(7) Cable Ownership Information25
HANTRU1 will be owned as follows:
• Wet-Link and Shore-End Segments: Hannon Armstrong will own the wet-link portion
of HANTRU1, as well as the Kwajalein Atoll and Guam shore-end portions of
HANTRU1. Hannon Armstrong has granted an IRU to Truestone, which has, in turn,
entered into an agreement with DISA to provide service for the benefit of the U.S. Army
Kwajalein Atoll/Reagan Test Site. Truestone will operate these facilities under a
management agreement with Hannon Armstrong.
• Cable Station on Kwajalein Atoll: The U.S. Department of the Army will outfit,
refurbish, own, and operate two existing buildings to serve as the cable station at the U.S.
Army Kwajaleain Atoll/Reagan Test Site facilities on Kwajalein Atoll. Although these
22 Id. 23 See id. 24 See Tel-Optik, 100 FCC at 1041. 25 See 47 C.F.R. § 1.767(a)(7).
11 facilities will be owned and controlled by the U.S. Army, the cable station is, as a
technical matter, located outside the United States and its territories, meaning that the
U.S. Army, as its owner, need not be a joint applicant for the HANTRU1 cable landing
license.26
• Cable Station on Guam: Tata Communications (US) Inc. f/k/a VSNL
Telecommunications (US) Inc. (“Tata”) will continue to own and operate the existing
cable station at Piti, Guam, which the Commission has licensed separately as part of the
TGN Pacific system.27 Truestone will enter into an agreement with Tata giving
Truestone an IRU in Tata’s conduit connecting the HANTRU1 beach landing at Agat
with the Piti cable station and an IRU in the collocation space in the Piti cable station
building. In part IV below, the Applicants request a waiver of Section 1.767(h)(1) of the
Commission’s rules so that they need not add Tata as a joint applicant to this application.
Hannon Armstrong and Truestone recognize that in the event that (1) they should terminate the management agreement or (2) Hannon Armstrong should seek to replace Truestone with another entity responsible for operating HANTRU1, that Hannon Armstrong, Truestone, and any third party would seek the prior consent of the Commission for any transfer of de facto control over
HANTRU1 or assignment of a joint interest in a cable landing license granted for HANTRU1.
In the event that Hannon Armstrong were to terminate its management agreement with
Truestone, Hannon Armstrong has the right to step into Truestone’s agreement with DISA, to ensure continuity of service to DISA and the U.S. Army.
26 See 47 C.F.R. § 1.767(h)(1). 27 See Actions Taken Under the Cable Landing License Act, Public Notice, 20 FCC Rcd. 8557 (2005), FCC File No. SCL-ASG-20050304-00005 (granting consent to transfer of control over Tyco Networks (Guam) L.L.C.’s joint interest in the Tyco Pacific undersea cable system (later renamed TGN Pacific), from Tyco International Ltd. to VSNL Telecommunications (US) Inc.).
12 (8) Corporate Control and Affiliate Information28
The Applicants submit the following information specified in Sections 63.18(h) through
(k) and Section 63.18(o) of the Commission’s rules:
(i) Certification Regarding Ownership, Citizenship, Principal Businesses, and Interlocking Directorates29
By its signature below, Hannon Armstrong certifies to the following. Hannon Armstrong is directly and wholly owned by its sole member, Hannon Armstrong Capital, LLC (“HAC”), a limited-liability company organized under the laws of the State of Maryland and engaged in the business of contract and project finance. HAC’s address is as follows:
1997 Annapolis Exchange Parkway Suite 520 Annapolis, Maryland 21401
HAC has two 10-percent-or-greater owners:
(1) Jeffrey W. Eckel: Mr. Eckel directly owns 20 percent of HAC’s membership
interests. Mr. Eckel is President and Chief Executive Officer of HAC and a U.S.
citizen. His address is:
1997 Annapolis Exchange Parkway Suite 520 Annapolis, Maryland 21401
(2) MissionPoint HA Parallel Fund L.P. (“MissionPoint”): MissionPoint directly owns
75 percent of HAC’s membership interests. MissionPoint is an investment
partnership organized under the laws of the State of Delaware specifically to hold the
investment in HAC; it owns no other entities or investments. MissionPoint’s address
is:
28 See 47 C.F.R. § 1.767(a)(8). 29 See id., § 63.18(h).
13 20 Marshall Street, Suite 300 Norwalk, Connecticut 06854
Three entities hold ownership or carried interests in MissionPoint:
(1) MissionPoint HA Parallel Fund Corp. (“Limited Partner”): Limited Partner directly
owns 10 percent of MissionPoint. It is a corporation organized under the laws of the
State of Delaware and engaged in the business of operating as the limited partner in
MissionPoint. Limited Partner’s address is:
20 Marshall Street, Suite 300 Norwalk, Connecticut 06854
(2) MissionPoint HA Parallel Fund, LLC (“HoldCo I”): HoldCo I owns 90 percent of
MissionPoint. HoldCo I LLC is a limited-liability company organized under the laws
of the State of Delaware and engaged in the business of operating as an alternative
investment vehicle established for tax purposes. HoldCo I’s address is:
20 Marshall Street, Suite 300 Norwalk, Connecticut 06854
(3) MPCP I GP, LLC (“General Partner”): As MissionPoint is a partnership, a third
entity, General Partner, maintains a carried interest which allows it to share in the
upside, if any, resulting from the investment in MissionPoint, provided that Limited
Partner and HoldCo I first realize a return of capital and a targeted return. The
maximum percentage realizable by General Partner is 20 percent. In exchange for
this carried interest, General Partner manages the business affairs of MissionPoint. It
may be removed at any time by vote of not less than 75 percent of the investors in
HoldCo I and MissionPoint HA Parallel Fund II, LLC (described below). General
Partner a limited liability company organized under the laws of the State of Delaware.
General Partner’s address is:
14 20 Marshall Street, Suite 300 Norwalk, Connecticut 06854
Limited Partner is a wholly-owned, direct subsidiary of MissionPoint HA Parallel Fund II, LLC
(“HoldCo II”). HoldCo II is a limited-liability company organized under the laws of the State of
Delaware and engaged in the business of operating as an alternative investment vehicle
established for tax purposes. HoldCo II’s address is:
20 Marshall Street, Suite 300 Norwalk, Connecticut 06854
On a fully-diluted basis, none of the owners of membership interests in HoldCo I or HoldCo II
holds a 10-percent-or greater interest in Hannon Armstrong. Please refer to Exhibit C for the
ownership diagram of Hannon Armstrong.
By its signature below, Truestone certifies to the following. Truestone is a direct,
wholly-owned subsidiary of Qivliq, LLC (“Qivliq”), an Alaska Native Corporation organized
under the laws of the State of Alaska and engaged in the business of providing shared
administrative and operational services to its operating companies and affiliates. Qivliq’s
address is:
13873 Park Center Road Suite 400 N Herndon, Virginia 20171
Qivliq is a direct, wholly-owned subsidiary of NANA Development Corporation
(“NANA Development”), an Alaska Native Corporation organized under the laws of the State of
Alaska. NANA Development operates as a holding company, with interests in the mining,
management services, engineering, government contracting, and hospitality industries. NANA
Development’s address is:
1001 East Benson Blvd. Anchorage, Alaska 99508
15
NANA Development is a direct, wholly-owned subsidiary of NANA Regional Corporation
(“NANA”), an Alaska Native Corporation created by the U.S. Congress under the Alaska Native
Claims Settlement Act of 1971 to represent the interests of the Iñupiaq people of the Northwest
Arctic in Alaska and organized under the laws of the State of Alaska. NANA’s address is:
P.O. Box 49 Kotzebue, Alaska 99752
NANA has no 10-percent-or greater shareholders. NANA is owned by 14,000 individual shareholders of Iñupiaq descent, most if not all of whom are presumed to be U.S. citizens.
Neither Hannon Armstrong nor Truestone has any interlocking directorates with a foreign carrier.
(ii) Certification Regarding Foreign Carrier Status and Foreign Affiliations30
By their respective signatures below, Hannon Armstrong and Truestone each certifies
that it is not a foreign carrier or affiliated with any foreign carrier.
(iii) Certification Regarding Destination Markets31
By its signature below, Hannon Armstrong certifies to the following: (1) it is not a
foreign carrier in any country outside the United States; (2) it does not control a foreign carrier in
any other country; (3) no entity owning more than 25 percent of Hannon Armstrong or
controlling Hannon Armstrong controls a foreign carrier in any other country that is a destination
market for HANTRU1, i.e., the Republic of the Marshall Islands; and (4) no grouping of two or
more foreign carriers (or parties that control foreign carriers) own, in aggregate, more than 25
percent of Hannon Armstrong and are parties to, or beneficiaries of, a contractual relation
30 See id., §§ 1.767(a)(8), 63.18(i). 31 See id., §§ 1.767(a)(8), 63.18(j).
16 affecting the provision or marketing of international basic telecommunications services in the
United States.
By its signature below, Truestone certifies to the following: (1) it is not a foreign carrier
in any country outside the United States; (2) it does not control a foreign carrier in any other
country; (3) no entity owning more than 25 percent of Truestone or controlling Truestone controls a foreign carrier in any other country that is a destination market for HANTRU1, i.e.,
the Republic of the Marshall Islands; and (4) no grouping of two or more foreign carriers (or
parties that control foreign carriers) own, in aggregate, more than 25 percent of Truestone and
are parties to, or beneficiaries of, a contractual relation affecting the provision or marketing of
international basic telecommunications services in the United States.
(iv) Certification Regarding WTO Status, Market Power, and the Effective Competitive Opportunities Test32
As neither Hannon Armstrong nor Truestone has made an affirmative certification in
response to Section 63.18(j) of the Commission’s rules, neither Hannon Armstrong nor
Truestone need make a showing under Section 63.18(k) of the Commission’s rules.33
(v) Certification Regarding the Anti-Drug Abuse Act of 198834
By the signatures below, the Applicants certify that no party to this application is subject to a denial of federal benefits that includes FCC benefits pursuant to Section 5301 of the Anti-
Drug Abuse Act of 1988.
32 See id., §§ 1.767(a)(8), 63.18(k). 33 List of WTO Members and Observers (as of July 27, 2007), available at
17 (9) Certification Regarding Routine Conditions Set Forth in Section 1.767(g) of the Commission’s Rules35
By the signatures below, the Applicants certify that they accept and will abide by the routine conditions specified in Section 1.767(g) of the Commission’s rules.
II. CERTIFICATION REGARDING SERVICE TO EXECUTIVE BRANCH AGENCIES
Pursuant to Section 1.767(j) of the Commission’s rules,36 the Applicants have sent a complete copy of this application to the U.S. Department of State, the U.S. Department of
Commerce, and the Defense Information Systems Agency. The Applicants’ counsel has certified such service in the certificate of service attached to this application.
III. REQUEST FOR STREAMLINED PROCESSING
The Applicants request streamlined processing pursuant to Section 1.767(k)(1) of the
Commission’s rules.37 The application raises no competition, public interest, or foreign ownership concerns that would merit consideration outside the Commission’s streamlined review process. Hannon Armstrong and Truestone have certified above that neither is a foreign carrier or affiliated with a foreign carrier in any of the cable’s destination markets.38 By the signature below, the Applicants certify that they are aware of and will comply with the requirements of the
Coastal Zone Management Act of 1972, as amended (“CZMA”), and the National Oceanic and
35 See id., §§ 1.767(a)(9), (g). 36 See id., § 1.767(j). 37 See id., § 1.767(k)(2). 38 See id., § 1.767(k)(1).
18 Atmospheric Administration’s CZMA implementing rules, codified at 15 C.F.R. Part 930
Subpart D.39
IV. REQUEST FOR WAIVER OF SECTION 1.767(h)(1)
The Applicants hereby request a waiver of Section 1.767(h)(1) of the Commission’s rules
so that Tata need not be a joint applicant for the HANTRU1 cable landing license. “The purpose
of [Section 1.767(h)(1)] is to ensure that entities having a significant ability to affect the
operation of the cable system become licensees so that they are subject to the conditions and
responsibilities associated with the license.”40 Tata, however, will not have the ability to affect
significantly HANTRU1’s operation. Moreover, the addition of Tata as a joint applicant would
not be necessary to ensure compliance by the Applicants with the Cable Landing License Act,
the Commission’s cable landing license rules, or the terms of any cable landing license.
For HANTRU1’s Guam landing, Tata will provide certain limited services that would not
provide it with any ability to affect significantly HANTRU1’s operation. Truestone will enter into an agreement with Tata granting HANTRU1 an IRU for Tata’s beach manhole at Agat, and
39 See Federal Communications Commission, Modification of the Rules and Procedures Governing the Provision of International Telecommunications Service, Notice of Final Rule, 72 Fed. Reg. 54,365 (Sept. 25, 2007) (establishing an effective date of October 25, 2007, for the note to Section 1.767(a)(10) but not Section 1.767(k)(4), which remains subject to approval by the Office of Management and Budget). In certifying its awareness of and compliance with the CZMA, the Applicants do not concede that the legality or policy- appropriateness of the Commission’s new CZMA rules, given the pending challenge by the North American Submarine Cable Association (“NASCA”) to the Commission’s CZMA- related findings, conclusions, and rules adopted in the Commission’s Report and Order, FCC 07-118, in IB Docket No. 04-47 (released June 22, 2007). See NASCA Consolidated Petition for Reconsideration and Petition to Defer Effective Date, IB Docket No. 04-47 (filed Oct. 25, 2007). 40 See Actions Taken Under the Cable Landing License Act, Public Notice, FCC File SCL-LIC- 20070222-00002, 23 FCC Rcd. 227, 229 (Int’l Bur. 2008) (“TPE Cable Landing License”) (citing Review of Commission Consideration of Applications under the Cable Landing License Act, Report and Order, 16 FCC Rcd. 22,167, 22,194-95 ¶¶ 53-54 (2001)).
19 for conduit connecting the beach manhole with Tata’s Piti cable station. Truestone will also enter into a collocation agreement with Tata whereby Tata will provide Truestone with collocation space in the Piti cable station building. The IRU agreement will have an initial term of 10 years, while the collocation agreement will have an initial term of 5 years. Each of these agreements will grant Truestone an option to extend the agreement, at Truestone’s sole election, for an additional 15 years (in the case of the IRU agreement) and for an additional 20 years (in the case of the collocation agreement), so that each agreement would cover the 25-year term of the cable landing license to be issued by the Commission.41 In the event that Hannon Armstrong were to terminate its management agreement with Truestone, Hannon Armstrong has the right to step into Truestone’s agreement with Tata to ensure continuity of service to DISA and the U.S.
Army.
Truestone will have exclusive control over and access to HANTRU1 terminal equipment, which it will collocate in Tata’s Piti cable station building. Equipment for HANTRU1 will be separately caged and controlled exclusively by the Applicants from their network operations center in Rockville, Maryland. The Applicants will retain operational authority over their
HANTRU1 facilities and provide direction to Tata in all matters relating to HANTRU1.
Pursuant to the agreement between Truestone and Tata, Tata will perform certain limited
“remote hands” monitoring, testing, and maintenance services on the Applicants’ equipment, which would be performed in accordance with Truestone’s directions.
Since the adoption of Section 1.767(h)(1) in late-2001, the International Bureau has often declined to require owners of existing and separately-licensed cable stations to be joint applicants or licensees for new undersea cable systems that connect, or will connect, to those
41 See 47 C.F.R. § 1.767(g)(14).
20 existing cable stations and has generally declined to require a waiver of Section 1.767(h)(1).42
Most recently, the International Bureau granted a waiver to the joint applicants for the American
Samoa Hawaii System, declining to require that AT&T, Inc.—which owns the existing cable station at Keawaula, Hawaii—be a joint applicant or licensee for the American Samoa Hawaii
System, which will land at the Keawaula cable station.43
42 See Actions Taken Under the Cable Landing License Act, Public Notice, FCC File No. SCL- LIC-20060413-00004, 21 FCC Rcd. 6380 (Int’l Bur. 2006) (declining to require that AT&T- which owned an existing cable station at Seward, Alaska-be a joint applicant or licensee for the Kodiak-Kenai Cable System, which landed at the Seward cable station); Actions Taken Under the Cable Landing License Act, Public Notice, FCC File No. SCL-LIC-20050418- 00010, 20 FCC Rcd.14,639 (Int’l Bur. 2005) (declining to require that AT&T and Global Crossing St. Croix, Inc.—which owned existing cable stations in Puerto Rico and St. Croix, respectively—be joint applicants or licensees for the Global Caribbean Network, which landed at the Puerto Rico and St. Croix cable stations); Actions Taken Under the Cable Landing License Act, Public Notice, FCC File No. SCL-LIC-20031125-00032, 19 FCC Rcd. 446 (Int’l Bur. 2004) (declining to require that Global Crossing St. Croix, Inc.—which owned the existing cable station in St. Croix, USVI—be a joint applicant or licensee for the Antilles Crossing system, which landed at the St. Croix cable station); Actions Taken Under the Cable Landing License Act, Public Notice, FCC File No. SCL-LIC-20031209-00033, 19 FCC Rcd. 8564 (Int’l Bur. 2003) (declining to require that Telecomunicaciones Ultramarinas de Puerto Rico, Inc.-which owned an existing Puerto Rico cable station-be a joint applicant or licensee for the SMPR-1 system, which landed at the Puerto Rico cable station), aff’d Order on Review, 20 FCC Rcd. 18,732 (2005). 43 Actions Taken Under the Cable Landing License Act, Public Notice, DA 09-45 (Int’l Bur., rel. Jan. 16, 2009) (finding that “Applicants will retain operational authority over their ASHC System facilities and provide direction to AT&T in all matters relating to the ASHC System”). See also Actions Taken Under the Cable Landing License Act, Public Notice, 23 FCC Rcd. 13,419, 13,420 (Int’l Bur. 2008) (declining to require that Tata Communications (US) Inc.—which owns the existing cable station at Piti, Guam, where the PPC 1 System will land—be a joint applicant or licensee for the PPC 1 System, finding that “Applicants will retain operational authority over PPC 1 System facilities and provide direction to [Tata] in all matters relating to the PPC 1 System.”); TPE Cable Landing License, 23 FCC Rcd. at 229 (declining to require that WCI Cable, Inc. (“WCIC”)—which owns an existing cable station at Nedonna Beach, Oregon—be a joint applicant or licensee for the Trans-Pacific Express Network (“TPE”), which will land at WCIC’s Nedonna Beach cable station, finding. that “WCIC will not have the ability to affect the operation of the TPE Network. Verizon will retain effective operational authority and provide direction to WCIC in all matters relating to the TPE Network”).
21
CERTIFICATE OF SERVICE
I, Kent D. Bressie, hereby certify that consistent with Section 1.767(j) of the
Commission’s rules, 47 C.F.R. § 1.767(j), I have served copies of the foregoing Joint
Application for Cable Landing License of Hannon Armstrong KCS Funding LLC and Truestone,
LLC, by hand- or overnight delivery on this 23 day of February 2009, to the following:
Richard Beaird Acting U.S. Coordinator Int’l Communications & Information Policy Bureau of Economic, Energy & Business Affairs U.S. DEPARTMENT OF STATE EB/CIP : Room 4826 2201 C Street, N.W. Washington, D.C. 20520-5818
Kathy Smith Chief Counsel U.S. DEPARTMENT OF COMMERCE/NTIA 14th Street and Constitution Avenue, N.W. Room 4713 Washington, D.C. 20230
Hillary Morgan Deputy General Counsel, Regulatory & International Law Code RGC DEFENSE INFORMATION SYSTEMS AGENCY 701 South Courthouse Road Arlington, Virginia 22204
Kent D. Bressie
LIST OF EXHIBITS
Exhibit A: General Route Map for the Kwajalein Cable System
Exhibit B: Maps Providing Specific Landing Point Information in Compliance with 47 C.F.R. § 1.767(a)(5)
Exhibit C: Chart depicting Ownership Structure of Hannon Armstrong Capital, LLC