DA 94-1487 Federal Communications Commission Record 10 FCC Red No. 3 request for expeditious processing. Applicants request the Before the Commission©s consent to: (1) transfer control of IDB Com Federal Communications Commission panies© Title II authorizations and cable landing licenses to Washington, D.C. 20S54 LDDS;1 (2) transfer and/or assign IDB Companies© Title III radio authorizations to LDDS Corp.;2 (3) assign SCI©s Title II authorizations to LDDS Corp.;3 and (4) assign SCI©s Title In the Matter of III radio authorizations to LDDS Corp.4 2. We also have before us, as a part of this application, a IDB Communications File Nos. 1798-DSE-AL-94(107) request for authority pursuant to Section 212 of the Com Section 62.1 of the Group, Inc. and CSG-94-196(38)-AL munications Act, 47 U.S.C. § 212, and Commission©s Rules, 47 C.F. R. § 62.1, for interlocking Southwest CSG-94-197-AL directorates among IDB, IDB WorldCom Services, Inc., Communications, Inc. ITC-94-453-TC IDB WorldCom, Inc., IDB Mobile Communications, Inc. Transferors, SCL-94-005 ("IDB Mobile"), CICI, Inc. ("CICI"), Satellite Transmission ITC-94-454(AL) and Reception Specialists Company ("STARS"), IDB Com and 9413412 munications Corporation, LDDS Corp., and LDDS. EID-697 3. On August 31, 1994, the application was placed on public notice. On September 30, 1994, COMSAT filed a Petition to Deny in Part ("Petition to Deny"). On October LDDS Communications, Inc. d/b/a 13, 1994, the Applicants filed a Joint Opposition to the LDDSMETROMEDIA, Petition to Deny in Part ("Joint Opposition"), and on Transferee October 26, 1994, COMSAT filed a Reply to the Joint Opposition ("COMSAT Reply"). We conclude that the and related transactions. proposed transactions will serve the public interest and that the application should be granted. Application for authority pursuant to Sections 214 and 310(d) of the II. BACKGROUND Communications Act 4. IDB directly or indirectly owns four subsidiaries that of 1934, as amended, for authority provide telecommunications services: (1) IDB Worldcom to transfer control of cable landing Services, Inc. d/b/a IDB WorldCom; (2) IDB Mobile; (3) licenses, and to transfer control and CICI; and (4) STARS together with IDB d/b/a/ IDB Broad assign Title II authorizations and cast.5 IDB WorldCom provides both U.S. domestic and international telecommunications services, p Domestically, Title III licenses. IDB WorldCom provides message telephone service ("MTS") and private line service primarily on a resale basis. Internationally, it provides international message tele MEMORANDUM OPINION AND ORDER phone service ("IMTS") to approximately 55 countries on either a resale or facilities basis; private line service to Adopted: November 30,1994; Released: December 15,1994 approximately 160 countries on a facilities basis; telex ser vice to approximately 89 countries; and telegraph service.6 By the Chief, International Bureau: IDB Mobile provides international mobile satellite services, including maritime mobile satellite service ("MMSS"), aeronautical mobile satellite service ("AMSS"), and land I. INTRODUCTION mobile satellite service ("LMSS"). IDB Mobile also holds 1. On August 19, 1994, IDB Communications Group, an experimental radio license. IDB Mobile is 50% owned Inc. ("IDB") and its subsidiaries and affiliates (jointly re by IDB and 50% owned by Teleglobe International, Inc. of ferred to as the "IDB Companies"), Southwest Commu Canada ("Teleglobe"). CICI provides international private nications, Inc. ("SCI"), LDDS Communications, Inc. d/b/a/ line services to government agencies and holds a Title III LDDSMETROMEDIA ("LDDS") and LDDS Corporation private earth station license. IDB Broadcast provides do ("LDDS Corp.") (collectively the "Applicants"), pursuant mestic and international video and audio distribution and to Sections 214 and 310(d) of the Communications Act of transmission services on both a private carrier and com 1934, as amended, 47 U.S.C. § 214 and § 310(d), submitted mon carriage basis.7 the above-captioned application for transfers of control and assignments of Title II and Title III authorizations, and a 1 See infra Appendix A. Appendix A is the list of the IDB 1994) (IDB Letter). Currently, IDB Worldcom Inc. holds only Companies© § 214 authorizations and cable landing licenses. an application for a private submarine fiber optic cable between 2 See infra Appendix B. Appendix B is the list of the IDB Puerto Rico and the Dominican Republic (File No. SCL- Companies© Title HI radio authorizations. 94-001). See Application for Transfer of Control of IDB Commu 3 See infra Appendix C. Appendix C is the list of SCI©s Title II nications Group, Inc. to LDDS Communications, Inc. d/b/a authorizations. LDDSMETROMEDIA and Related Transactions ("Application"), 4 See infra Appendix D. Appendix D is the list of SCI©s Title HI Tab 7 (filed Aug. 19, 1994). radio authorizations. 6 The Applicants did not indicate the number of countries to 5 See Letter from Rick Whitt, IDB Communications Group, which IDB provides telegraph service. Inc., to Susan O© Connell and Helene Schrier, FCC (Nov. 15, 7 See IDB Letter, at 1-3. 1110 10 FCC Red No. 3 Federal Communications Commission Record DA 94-1487 5. In 1992, the Commission authorized SCI, a Delaware several countries.14 LDDS controls or soon will control a corporation, to be the assignee of the Title III licenses of number of companies engaged in similar business activities, IDE Communications Corporation and CICI.8 While IDB such as LDDS Corp. and WilTel. LDDS Corp., a Delaware and CICI retain ownership of the underlying radio facili corporation, owns and operates common carrier point- ties, SCI holds the licenses to these Title III facilities and to-point microwave stations, international and domestic has a long-term (10 year) operator agreement with IDB earth stations, and other radio facilities for the purpose of and CICI under which SCI is to control, operate and. providing facilities-based long distance telecommunications maintain the systems. Neither IDB nor CICI has any own services. WilTel provides resale of IMTS to most interna ership interest in SCI, nor does SCI have any ownership in tional locations and is authorized to provide facilities-based IDB or CICI. SCI is owned by Jeffrey P. Sudikoff (49%), private line service between the United States and Canada Peter Hartz (11%), and Edward R. Cheramy (40%).9 and facilities-based switched and private line service be 6. LDDS, a Georgia corporation, is the nation©s fourth tween the United States and Cuba. 16 WilTel also is au largest long-distance carrier.10 Domestically, LDDS provides thorized to engage in non-interconnected private line resale MTS and private line service on a resale and facilities basis, to sixty-five countries. 17 but operates primarily as a reseller. The International Bu 8. On August 1, 1994, LDDS and IDB entered into an reau recently approved LDDS© proposed acquisition of Agreement and Plan of Merger ("Merger Agreement"), WilTel, Inc., WilTel International, Inc., and WilTel Under pursuant to which LDDS would acquire the IDB Com sea Cable, Inc. (collectively, "WilTel")." WilTel operates an panies, subject to Commission and other regulatory extensive fiber optic network within the United States. approvals. 18 Under the Merger Agreement, a new entity, 7. Internationally, LDDS provides IMTS primarily as a 123 Corp., would be created as a wholly-owned Delaware reseller. It provides facilities-based IMTS to Canada only. It subsidiary of LDDS for the purpose of implementing the has received authority to provide facilities-based IMTS to merger. Upon closing of the transaction, 123 Corp. would many other countries.12 LDDS has authority to provide merge with IDB and cease to exist. IDB, the surviving switched and private line services via resold private lines corporation in the merger, would continue its corporate between the United States and Canada13 as well as to existence as a wholly-owned subsidiary of LDDS. provide resold non-interconnected private line service to 8 CICI, Inc. et. al., Memorandum Opinion, Order, Authorization 1994). and Certificate, 7 FCC Red 6031 (Int. Fac. Div. 1992) (CICI). 13 LDDS Communications, Inc., Order and Certificate, 9 FCC 9 Application , Attachment C, Exhibit 2. Red 1844 (Int. Fac. Div. 1994). 10 Both Metromedia Company and ALLTEL Corporation hold 14 LDDS Communications, Inc., Order, Authorization and Cer more than 10% of LDDS© shares. ALLTEL provides local ex tificate, 9 FCC Red 1379 (Int. Fac. Div. 1994) (Brazil, Ireland, change services. Metromedia Company primarily manages port Singapore and the U.K.). Very few private lines are provided on folio companies in the hospitality, technology and auto parts any of these routes. See LDDS Letter, supra note 12. businesses. John W. Kluge is the Chairman of the Board of 15 Application, Attachment B, Exhibit 2. Additionally, Ap LDDS Communications, Inc. and is a general partner of plicants certify that they do not have an affiliation with a Metromedia Company. Stuart Subotnick, a director of LDDS foreign carrier as defined in 47 C.F.R. § 63.01(r). See generally, Communications and the other general partner of Metromedia Application. Company, holds a 50% ownership interest in Q Broadcasting, See Application to Transfer Control of WilTel, Inc., and Inc., which owns radio stations WSTC(AM) and WQQQ(FM) in WilTel International, Inc. to LDDS Communications, Inc. d/bla Stamford, Connecticut. See Application, Attachment A, Exhibit LDDSMETROMEDIA and related transactions, at 2 and Attach 2. ment C, Exhibit 1 (filed Aug. 25, 1994); WTG Central, Inc. 11 Application to Transfer Control of WilTel, Inc., and WilTel (WilTel, Inc.), Order, Authorization and Certificate, 6 FCC Red International, Inc. to LDDS Communications, Inc. d/bla 2339 (Int. Fac. Div. 1991) (authorizing private line service be LDDSMETROMEDIA and related transactions, Memorandum tween the United States and Canada); WilTel International, Inc., Opinion and Order, DA 94-1258 (Int.