Attachment DOJ Petition - Intel

DOJ Petition - Intel

SUPPLEMENT

Petition/LOA

2012-02-14

This document pretains to ITC-T/C-20111123-00355 for Transfer of Control on a International Telecommunications filing.

IBFS_ITCTC2011112300355_941472

Federal Communications Commission DA 12-768 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) Intelsat Global Holdings, S.A. ) IB Docket No. 11-205 ) Applications to Transfer Control of Intelsat ) Licenses and Authorizations from BC Partners ) Holdings Limited to Public Ownership ) ORDER Adopted: May 16, 2012 Released: May 16, 2012 By the Chief, International Bureau: I. INTRODUCTION 1. In this Order, we consider a series of applications (the “Application”) filed by Intelsat Global Holdings, S.A. (“Intelsat”) to transfer control of all the licenses and authorizations held by Intelsat License LLC, Intelsat New Dawn Company, Ltd., Intelsat USA License LLC, and Intelsat General Corporation (“Intelsat Licensees”) pursuant to a public offering of newly issued voting shares by Intelsat, subsequent voting share sales by current shareholders and possible private placements of newly issued voting shares.1 Based on the record established in this proceeding, we find that grant of the Application will serve the public interest, convenience, and necessity.2 II. BACKGROUND A. Description of the Applicants 1. Prior to the Proposed Transaction 1 Intelsat License LLC and Intelsat New Dawn Company, Ltd., Application for Transfer of Control, Narrative, IBFS File Nos. SAT-T/C-20111123-00225, SAT-T/C-20111123-00226, SES-T/C-20111123-01403, SES-T/C-20111206- 01427, ITC-T/C-20111123-00354, and ITC-T/C-20111123-00355. In October 2011, the Commission granted authority for the pro forma transfer of control of all space and earth station licenses held by Intelsat Licensees. These transactions involved the creation of new holding companies and removal of certain other holding companies. Satellite Communications Services Information, re: Actions Taken, Public Notice, Report No. SES-01390 (rel. Oct. 19, 2011); Policy Branch Information, Actions Taken, Public Notice, DA 11-1713, Report No. SAT-00815 (rel. Oct. 14, 2011). We granted an extension of the deadline for consummation of these transactions to April 10, 2012 on December 13, 2011. On March 16, 2012, Intelsat filed a request for a further 120 day extension request, ending on August 8, 2012 to consummate these transactions but subsequently closed on the transactions. Intelsat consummated the transactions on April 10, 2012 and filed the consummation notice on April 23, 2012. Letter from Jennifer D. Hindin, Counsel for Intelsat to Marlene H. Dortch, Secretary, Federal Communications Commission, Apr. 23, 2012. 2 Intelsat Global Holdings, S.A. also filed a transfer of control application for its Private Land Mobile Radio Licenses in File No. 0004961083, which will be addressed separately.

Federal Communications Commission DA 12-768 2. Intelsat, a Luxembourg company, is the indirect parent company of the Intelsat Licensees.3 Intelsat’s controlling parent company is BC Partners Holdings Limited (“BCP”), a United Kingdom- based investment firm organized under the laws of Guernsey.4 BCP is owned by seventeen individual shareholders5 and currently indirectly owns approximately 71.9 percent voting equity interests in Intelsat and has the power to elect a majority of the six members of the Intelsat Board of Directors.6 Silver Lake Group, L.L.C. (“SLP”), a U.S.-based investment firm, controls entities which indirectly own approximately 15.87 percent of the voting interests in Intelsat.7 The managing members of SLP are three U.S. citizens: James Davidson, Glenn Hutchins and David Roux.8 Other investors, including Credit Suisse, Ridgemont Equity Partners and members of Intelsat’s management hold the remaining equity interests in Intelsat.9 2. After the Proposed Transaction 3. Upon the closing of the transaction, Intelsat10 will be owned by its existing owners plus the owners of the newly issued shares.11 At that point, the shares of Intelsat will be publicly traded and Intelsat’s current owners will have the option of further reducing their ownership interests. The percentage of voting interest each shareholder will have will depend on the number of common shares issued and sold. Intelsat believes that no one entity or individual will hold 50 percent or more of the voting shares in Intelsat after the transaction is completed. BCP would no longer have voting control through a majority of stock.12 4. Intelsat states that the Board of Directors will continue to be its governing body after the transaction. Intelsat envisions that the Board of Directors will have eight members who will be elected by shareholders, who will be given one vote per common share, at a general meeting. Intelsat believes there is a significant chance that BCP will no longer be empowered to elect a majority of directors.13 B. Description of the Transaction 5. Intelsat will offer newly issued voting shares to the public and may sell additional shares through private placements. Subsequently, current owners may reduce their shareholdings through 3 Application at 2. 4 Id. at 3. 5 Intelsat Holdings, Ltd., Transferor, and Serafina Holdings Limited, Transferee, Consolidated Application for Consent to Transfer Control of Holders of Title II and Title III Authorizations, Memorandum Opinion and Order, 22 FCC Rcd 22151, 22154, ¶ 8 (2007) (“Intelsat-Serafina Order”). The shareholders are citizens of: the United States (one); the United Kingdom (four); Germany (three); Italy (four); France (four); and Greece (one). Id. 6 Application at 3. 7 Id at 3, and Exhibit 1. See Appendix B for an organization chart showing Intelsat’s ownership before the transaction. 8 Intelsat-Serafina Order, 22 FCC Rcd at 22155, ¶ 11. 9 Application at 3. 10 Prior to the closing of the transaction, Intelsat Global Holdings, S.A will be renamed Intelsat S.A. 11 Application at 4. 12 Intelsat also believes that none of the current owners of Intelsat, other than BCP, will retain more than a ten percent interest after the transactions. Id. at 5. Intelsat anticipates that holders of the publicly-traded shares will own more than 40 percent of Intelsat. Id. Intelsat indicates that it will provide exact ownership percentages for all ten percent or greater shareholders in its notice of consummation following the transfer of control. Id. 13 Id. 2

Federal Communications Commission DA 12-768 market transactions or secondary offerings. Intelsat will time the offering based upon a variety of conditions including industry and company factors and general market conditions. After the offerings, Intelsat intends to list its shares on a major U.S. stock exchange. The proceeds of the public offering will be used for general corporate purposes, including the repayment of portions of Intelsat’s indebtedness.14 C. Application and Review Process 6. The Application was placed on Public Notice on December 20, 2011.15 On January 6, Intelsat submitted a letter stating that the application does not contemplate any modification to the Intelsat Licenses or conditions and states that approval of the application will have no effect on the license conditions imposed by the Commission to promote compliance with the provision of the International Telecommunications Satellite Organization Agreement.16 On January 18, 2012, the Department of Justice (DOJ), including the Federal Bureau of Investigation with the concurrence of the Department of Homeland Security (“Executive Branch Agencies”) filed a letter requesting that the Commission defer judgment regarding this matter until DOJ had finished reviewing the matter for any national security, law enforcement, and public safety issues.17 On February 14, 2012, the Executive Branch Agencies filed a Petition to Adopt Conditions to Authorizations and Licenses.18 No other comments were filed. III. PUBLIC INTEREST ANALYSIS 7. Pursuant to sections 214 and 310(d) of the Communications Act, we must determine whether the Applicants have demonstrated that the proposed assignment and transfer of control of licenses and authorizations will serve the public interest, convenience, and necessity.19 In making this assessment, we first assess whether the proposed transaction complies with the specific provisions of the Communications Act,20 other applicable statutes, and the Commission’s rules.21 Our public interest 14 Application at 4. 15 Intelsat Global Holdings S.A. Files to Transfer Control of Intelsat Licenses and Authorizations from BC Partners Holdings Limited to Public Ownership, IB Docket No. 11-205, Public Notice, DA 11-2038 (Dec. 20, 2011). 16 Letter from Kalpak Gude, Intelsat Corporation, to Marlene H. Dortch, Federal Communications Commission, Jan. 6, 2012. See also 47 U.S.C. § 316(a); Petition of the International Telecommunications Satellite Organization under Section 316 of the Communications Act, as Amended, IB Docket No. 06-137, Order of Modification, 23 FCC Rcd 2764 (Int’l Bur., 2008). 17 Letter from U.S. Department of Justice, National Security Division, to Marlene H. Dortch, Federal Communications Commission, Jan. 18, 2012. 18 Department of Justice, National Security Division, Petition to Adopt Conditions to Authorizations and Licenses, IB Docket No. 11-205 (Feb. 14, 2012). 19 47 U.S.C. §§ 214, 310(d). 20 Section 310(d), 47 U.S.C. § 310(d), requires that we consider the applications as if the proposed transferee were applying for the licenses directly under section 308 of the Act, 47 U.S.C. § 308. See, e.g., AT&T Inc. and Cellco Partnership d/b/a Verizon Wireless Seek FCC Consent To Assign or Transfer Control of Licenses and Authorizations and Modify a Spectrum Leasing Arrangement, WT Docket No. 09-104, Memorandum Opinion and Order, 25 FCC Rcd 8704, 8716 ¶ 22 (2010) (“AT&T-Verizon Wireless Order”); Applications of AT&T Inc. and Centennial Communications Corp. For Consent to Transfer Control of Licenses, Authorizations, and Spectrum Leasing Arrangements, WT Docket No. 08-246, Memorandum Opinion and Order, 24 FCC Rcd 13915, 13927 ¶ 27 (2009) (“AT&T-Centennial Order”); Applications of Cellco Partnership d/b/a Verizon Wireless and Atlantis Holdings LLC For Consent to Transfer Control of Licenses, Authorizations, and Spectrum Manager and De Facto Transfer Leasing Arrangements and Petition for Declaratory Ruling that the Transaction is Consistent with Section 310(b)(4) of the Communications Act, WT Docket No. 08-95, Memorandum Opinion and Order and Declaratory Ruling, 23 FCC Rcd 17444, 17460 ¶ 26 (2008) (“Verizon Wireless-ALLTEL Order”); Sprint Nextel Corporation and Clearwire Corporation Applications for Consent to Transfer Control of Licenses, Leases, and Authorizations, WT Docket No. 08-94, Memorandum Opinion and Order, 23 FCC Rcd 17570, 17578 ¶ 19 (2008) (“Sprint Nextel- (continued....) 3


Document Created: 2012-03-02 11:28:51
Document Modified: 2012-03-02 11:28:51
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