Public Notice TEL01627NS

Accepted for Filing Non-Streamlined Public Notice

International Telecommunications

2013-07-25

FCC.report > IB > Public Notices > TEL01627NS

Filings Included

File Number	Service
ISP-PDR-20130715-00003	International Telecommunications

IBFS_PN_1005090

ISP-PDR-20130715-00003 E BFI Licenses, LLC
Petition for Declaratory Ruling
BFI Licenses, LLC ("BFI" or the "Petitioner") filed a petition for declaratory ruling ("Petition") asking the Commission to allow BFI to exceed
the 25 percent foreign ownership benchmark set forth in section 310(b)(4) of the Communications Act of 1934, as amended (the "Act"). BFI
states that it holds numerous FCC licenses, including licenses classified as common carrier in the fixed point-to-point microwave and local
television transmission services, as well as several common carrier fixed-satellite service earth stations. The Petition is being filed in connection
with the proposed exercise of warrants that would increase the foreign ownership of BFI's indirect, controlling U.S.-organized parent company
above 25 percent.

BFI is a Delaware limited liability company. BFI is and will remain a wholly-owned subsidiary of Encompass Digital Media, Inc.
("Encompass"), a Delaware corporation which is, in turn, wholly owned by Encompass Digital Media Group, Inc. ("EDMG"), another Delaware
corporation. Petitioner states that CSC Encompass Holdings, LLC ("CSC Holdings"), a Delaware limited liability company, holds a controlling,
84.62% equity and voting interest in EDMG. CSC Holdings is an investment holding company managed by investment professionals at Court
Square Capital Partners ("Court Square"), a New York private equity firm. The remaining 15.38% of EDMG is owned by individual investors
and managers, almost all of whom are U.S. citizens and none of whom holds a greater than 10% interest in EDMG.

The sole managing member of CSC Holdings is Court Square Capital GP, LLC (the "GP"), a Delaware limited liability company which has the
exclusive right to vote CSC Holdings' controlling interest in EDMG. The GP is owned and controlled by the investment professionals at Court
Square, each of whom is a U.S. citizen. No member of GP holds a 10% or greater interest in EDMG. The GP is managed and controlled by a
Board of Managers ("Board"), comprised of U.S. individuals who will continue to serve on the Board so long as they remain investment
professionals at Court Square. Decisions of the Board, including designation of replacement members, are made by majority vote.

The GP is also the sole general partner of two Court Square managed investment funds - Court Square Capital Partners II, L.P. ("CSC Fund II")
and Court Square Capital Partners (Executive) II, L.P. ("CSC Executive II") - both of which are organized in Delaware and together hold 94.53%
of CSC Holdings' equity interests. MIHI, LLC ("MIHI"), a Delaware limited liability company, holds 5.46% equity interest in CSC Holdings.
Upon conversion of warrants issued to two additional Court Square managed funds - Court Square Capital Partners (Offshore) II, L.P. ("CSC
Offshore II"), organized in the Cayman Islands, and Court Square Capital Partners II-A, L.P. ("CSC Fund II-A"), organized in Delaware -
investment fund equity in CSC Holdings will be held approximately as follows: CSC Offshore II (24.58%); CSC Fund II-A (15.49%); CSC Fund
II (55.58%); CSC Executive II (1.06%); and MIHI (3.27%). Petitioner states that all fund investors are strictly passive, with no right to vote or
otherwise participate in the management of the respective fund.

The Petitioner calculates that, as a result of foreign equity interests held in the Court Square funds (and treating all equity investment in MIHI as
foreign, because it is unidentifiable), foreign equity ownership of CSC Holdings upon conversion of the warrants would be 49.30%, representing
a 41.72% foreign equity interest and a 49.30% foreign voting interest in BFI's indirect controlling U.S. parent, EDMG. Petitioner states that an
additional 2.33% of EDMG's equity and voting interests are and would continue to be held directly in EDMG by foreign individuals, resulting in
total foreign equity and voting interests held directly and indirectly (through CSC Holdings) in EDMG of 44.05% and 51.63%, respectively.
Petitioner provides information to demonstrate that all direct and indirect equity and voting interests in EDMG are properly ascribed to the
United States and other World Trade Organization ("WTO") Member countries. The Petitioner asserts that allowing the widely dispersed,
insulated, indirect, non-controlling foreign investment described in its Petition is consistent with the public interest standard of section 310(b)(4)
of the Act.

The Commission has adopted new rules applicable to foreign ownership of common carrier and certain aeronautical radio station applicants,
licensees, and spectrum lessees pursuant to section 310(b) of the Act. See Foreign Ownership Second Report and Order, FCC 13-50, 28 FCC
Rcd 5741 (2013). The new rules will become effective August 9, 2013, see 78 Fed. Reg. 41314 (July 10, 2013). The Commission will apply the
new rules in acting on the Petition.

Interested parties may file comments on or before August 8, 2013, and reply comments on or before August 15, 2013.

REMINDER:

Applicants must certify that neither the applicant nor any party to the application is subject to a denial of federal benefits
by federal and/or state courts under authority granted in 21 U.S.C. § 862. See 47 C.F.R. §§ 1.2001–.2003.

An updated version of Section 63.09-.25 of the rules, and other related sections, is available at
http://www.fcc.gov/ib/pd/pf/telecomrules.html

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Document Created: 2013-07-24 16:39:46
Document Modified: 2013-07-24 16:39:46

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