RigNet Letter.pdf

LETTER submitted by RigNet SatCom, Inc.

RigNet Letter

2013-10-23

This document pretains to ITC-ASG-20130815-00212 for Assignment on a International Telecommunications filing.

IBFS_ITCASG2013081500212_1017093

Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 ) In the Matter of ) ) File No. ISP-PDR-2013-_______ RigNet SatCom, Inc. ) ) Petition for Declaratory Ruling Under Section ) 310(b)(4) of the Communications Act, as Amended ) To Permit Indirect Foreign Investment ) Above 25 Percent ) ) PETITION FOR DECLARATORY RULING UNDER SECTION 310(b)(4) OF THE COMMUNICATIONS ACT OF 1934, AS AMENDED RigNet SatCom, Inc. (“RigNet”), pursuant to 47 U.S.C. §310(b)(4) (“Section 310(b)(4)”) and the Commission’s implementing rules Section 1.990 et seq., hereby petitions the Commission for a declaratory ruling that it would serve the public interest to permit foreign ownership in RigNet’s parent, Rignet, Inc., in excess of the 25% foreign-ownership benchmark in Section 310(b)(4).1 RigNet also requests that the Commission permit (1) the specific foreign investors described herein to increase their equity and voting interests up to a non-controlling 49.99% interest and (2) additional aggregate indirect and/or voting interests by foreign investors up to 100%. I. BACKGROUND AND OWNERSHIP DESCRIPTION RigNet is Delaware corporation, headquartered at 1880 S. Dairy Ashford, Suite 300 Houston, TX 77077. RigNet is a global provider of managed remote communications, systems 1 Although RigNet does not currently hold any authorization subject to Section 310(b)(4), the Commission previously found that it would serve the public interest to allow indirect foreign ownership of RigNet in excess of the 25 percent benchmark set forth in Section 310(b)(4). See A/75669710.3

integration and collaborative applications dedicated to the oil and gas industry, focusing on offshore and onshore drilling rigs, offshore production facilities and energy maritime. RigNet provides specialized solutions ranging from fully managed voice and data networks to more advanced applications that include video conferencing and real-time data services. RigNet’s secure communications and private extranet allow its customers to manage information flows and execute mission-critical operations primarily in remote areas, including offshore and land- based drilling rigs, offshore and onshore production facilities, energy maritime vessels and regional support offices, where conventional telecommunications infrastructure is either unavailable or unreliable. Pursuant to an Asset Purchase Agreement (“Agreement”), dated August 1, 2013, RigNet and Stratos Offshore Services Company (“Stratos”) propose to complete a transaction whereby RigNet will acquire from Stratos certain assets, including certain licenses, related network facilities, and customer accounts in the oil and gas industry associated with Stratos’ retail energy business (the “Transaction”). The Transaction entails a purchase of the Stratos business operating pursuant to certain Section 214 authorizations, wireless and earth station licenses, related network facilities and certain customer accounts. (In a separate service agreement, RigNet will become a key distribution partner to Inmarsat offering Global Xpress, a new generation, high throughput satellite communications service, and L-Band services worldwide.) Stratos holds Industrial/Business Pool, Conventional (IG), Industrial/Business Pool- Commercial/Conventional (IK), Wireless Communications Service (WS), Common Carrier Fixed Point-to-Point Microwave Services (CF), Microwave Industrial/Business Pool (MG), International Authorizations Granted, Public Notice Report No. TEL-01085 (rel. Nov. 9, 2006); Petition for Declaratory Ruling, IBFS File No. ISP-PDR-20060815-00011. -2- A/75669710.3

3650-2700 MHz (NN), Broadband Radio Service (BR), and Offshore Radiotelephone (CO) licenses (collectively, “Wireless Radio Services Licenses”) and earth station licenses that will be acquired by RigNet and are subject to the Section 310(b)(4) foreign ownership restrictions.2 RigNet is a wholly owned subsidiary of RigNet, Inc., a publicly held Delaware corporation. No single individual or entity holds direct equity or voting interests in RigNet, Inc. of 10% or more, other than Energy Growth AS, a Norwegian limited liability company, which currently holds a 25.3% non-controlling interest in RigNet, Inc. Energy Growth AS is wholly owned by Energy Growth Holding AS, a Norwegian limited liability company, which is in turn wholly owned by CSV III AS, a Norwegian limited liability company. Cubera Secondary KS, a Norwegian limited liability partnership, owns a 60.5% ownership stake in CSV III AS,3 and the remaining 39.5% interest in CSV III AS is held by two Norwegian limited liability companies (the equity and voting interests of both are entirely held by Norwegian entities and individuals), neither of which holds a 10% indirect equity or voting interest in RigNet. Cubera Secondary (GP) AS, a Norwegian limited liability company, is the general partner of, and holds a 1% equity interest, in Cubera Secondary KS. The limited partners of Cubera Secondary KS are organized in, or are citizens of, Norway, Luxembourg, Switzerland, Sweden, or the UK-Scotland. None of the Cubera limited partners holds a 10% indirect equity or voting interest in RigNet. Namlos AS, a Norwegian limited liability company, owns a 45.9% stake in Cubera Secondary (GP) AS, and the remaining 54.1% interest in Cubera Secondary (GP) AS is held by two Norwegian 2 RigNet and Stratos will file applications for Commission approval of the assignment of: (1) Wireless Radio Services Licenses, (2) spectrum leases, (3) earth station authorizations, and (4) domestic and international Section 214 authorizations. 3 Note that all references to indirect voting interests have been calculated by counting any interest above 50% in any link of the ownership chain as a 100% interest. -3- A/75669710.3

limited liability companies and one Swedish limited liability company (the equity and voting interests of each are entirely held by Norwegian individuals), none of which holds a 10% indirect equity or voting interest in RigNet and are entirely owned by Norwegian citizens. Namlos AS is wholly owned by Jorgen Kjaernes, a citizen of Norway. Exhibit A is a diagram depicting the ownership and control of RigNet and Energy Growth. II. INFORMATION REQUIRED BY SECTION 1.991 Pursuant to Section 1.991 of the Commission’s Rules, RigNet submits the following information in support of this Petition: (a) Contact Information, FRN, Place of Organization, and Type of Business of each Applicant: RigNet SatCom, Inc. 1880 S. Dairy Ashford, Suite 300 Houston, TX 77077 (281) 674-0100 (Tel) FRN: 0015217680 Place of Organization: Delaware Type of Business: Corporation Name and Title of Officer Certifying Information: Mark Slaughter, Chief Executive Officer and President (b) Legal Counsel Contact: For RigNet: With a copy to: Catherine Wang Bob Ward Danielle Burt RigNet, Inc. Bingham McCutchen LLP 1880 S. Dairy Ashford, Suite 300 2020 K St. NW, 11th Fl. Houston, Texas 77077 Washington, DC 20006 281-674-0775 (Tel) 202-373-6000 (Tel) 281-674-0101 (Fax) 202-373-6001 (Fax) bob.ward@rig.net catherine.wang@bingham.com danielle.burt@bingham.com (c)(2) Information about Assignment Applications, including Filing Date, and Types of Radio Services Covered -4- A/75669710.3

RigNet expects to file assignment applications for the Wireless Radio Services Licenses and satellite earth stations by August 15, 2013. As described above, RigNet will hold the following types of radio service authorizations upon completion of the Transaction: Industrial/Business Pool, Conventional (IG), Industrial/Business Pool-Commercial/Conventional (IK), Wireless Communications Service (WS), Common Carrier Fixed Point-to-Point Microwave Services (CF), Microwave Industrial/Business Pool (MG), 3650-2700 MHz (NN), Broadband Radio Service (BR), and Offshore Radiotelephone (CO), and will hold earth station licenses.4 (d) Type of Declaratory Ruling Request RigNet requests a declaratory Ruling pursuant to Section 310(b)(4) and Section 1.990(a)(1) of the Commission’s Rules. (e)/(g) Direct Equity/Voting Interests of 10% or More The following entity directly holds 10% or more of the stock of RigNet, Inc.: Name: Energy Growth AS Address: Tordenskioldsgate 6B 0160 Oslo Citizenship: Norway Principal Business: Investment % Held: 25.3% equity/voting (f)/(g) Indirect Equity/Voting Interests of 10% or More The following entities indirectly hold an interest in RigNet, Inc. of 10% or more: Name: Energy Growth Holding AS Address: Tordenskioldsgate 6B 0160 Oslo Citizenship: Norway Principal Business: Investment % Held: 25.3% equity/voting (owns 100% of Energy Growth AS) Name: CSV III AS Address: Tordenskioldsgate 6B 0160 Oslo Citizenship: Norway Principal Business: Investment 4 RigNet and Stratos will also be filing applications to implement the assignment of certain spectrum leases. -5- A/75669710.3

% Held: 25.3% equity/voting (owns 100% of Energy Growth Holdings AS) Name: Cubera Secondary KS Address: Tordenskioldsgate 6B 0160 Oslo Citizenship: Norway Principal Business: Investment % Held: 25.3% voting/15.3% equity (owns 60.5% of CSV III AS) Name: Cubera Secondary (GP) AS Address: Tordenskioldsgate 6B 0160 Oslo Citizenship: Norway Principal Business: Investment % Held: 25.3% voting/0.15% equity (General Partner of Cubera Secondary KS) Name: Namlos AS Address: Jarveien 16 B 1358 Jar Citizenship: Norway Principal Business: Investment % Held: 11.6% voting/0.07% equity (owns 45.9% of Cubera Secondary (GP) AS) Namlos AS is 100% owned Jorgen Kjaernes, a citizen of Norway, who may be contacted at Tordenskioldsgate 6B, 0160 Oslo, Norway. Mr. Kjaernes indirect interest in RigNet, Inc. is 11.6% voting and 0.07% equity. (h)(1) Estimate of Aggregate Foreign Ownership Exhibit B provides a percentage estimate of RigNet, Inc.’s aggregate direct and indirect (1) foreign equity interests which totals 43.14% and (2) foreign voting interests which totals 42.14%.5 To determine these percentages for RigNet, Inc.’s largest shareholders and its officer and director shareholders, RigNet, Inc. surveyed the Securities and Exchange Commission filings and other publicly available materials issued by its shareholders and requested information from its institutional investors that report beneficial ownership interests in RigNet, Inc. For investors who hold less than 5% of RigNet, Inc.’s shares, RigNet Inc. surveyed the contact addresses of all 5 These interests were calculated pursuant to the standards and criteria set forth in Section 1.992 of the Commission’s rules. -6- A/75669710.3


Document Created: 2013-10-23 14:48:11
Document Modified: 2013-10-23 14:48:11
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