Attachment Exhibits 1-3.pdf

This document pretains to SCL-T/C-20120924-00011 for Transfer of Control on a Submarine Cable Landing filing.

IBFS_SCLTC2012092400011_967140

                                             Exhibit 1

                    Description of Parties, Description of the Transaction,
                                and Public Interest Statement


       DOCOMO Guam Holdings, Inc. (“DOCOMO Guam”) and MCV Guam Holdings Corp.

(“MCVGH” and together with its affiliates, “MCV”) seek Federal Communications Commission

(“FCC”) consent to a transfer of control of all of the licenses and authorizations held by

subsidiaries of MCVGH to DOCOMO Guam, a wholly owned subsidiary of NTT DOCOMO,

INC. (“DOCOMO”). MCV holds domestic and international section 214 authorizations, a

submarine cable authorization, and a Cable Television Relay Service (“CARS”) license that are

used for the provision of cable television, high-speed data, Voice over Internet Protocol (“VoIP”)

in Guam and cable television and high-speed data service in the Commonwealth of the Northern

Mariana Islands (“CNMI”).


I.     Description of the Transaction

       A.      DOCOMO and DOCOMO Guam

       DOCOMO, a corporation organized under the laws of Japan, a WTO country, is a mobile

communications company that provides wireless voice and data communications to more than 60

million subscribers in Japan. DOCOMO also is a force in the continuing advancement of mobile

technologies and standards.


       DOCOMO Guam, a wholly owned subsidiary of DOCOMO, is a holding company

incorporated in Guam that provides cellular services in Guam and the CNMI through its wholly

owned subsidiary, DOCOMO PACIFIC, INC. (“DOCOMO PACIFIC”). In 2006, the FCC

approved the transfer of control of wireless providers Guam Cellular and Paging, Inc. (“Guam

Cellular”) and Guam Wireless Telephone Company, L.L.C. (“Guam Wireless”) to DOCOMO


Guam.1 In reviewing and approving that transaction, the FCC found that DOCOMO, through its

wholly owned subsidiary DOCOMO Guam, was qualified to control FCC authorizations and that

ownership of the FCC licensees by DOCOMO would result in public interest benefits for

consumers in Guam and the CNMI.2


       B.      MCV

       MCV is a broadband service provider headquartered and incorporated in Guam. Through

its wholly owned subsidiaries,3 MCV offers cable television, high-speed data, and interconnected

VoIP services to residential, hotel, and commercial subscribers located in Guam and the CNMI.

MCV is the 37th largest cable provider in the U.S., ranked by basic subscribers, and the primary

cable television provider in Guam and the CNMI. MCV is widely recognized in the community

as a customer-focused company providing high quality products and services over its state-of-

the-art hybrid fiber coax (“HFC”) network, which passes over 50,000 residential homes. MCV

overhauled its Guam system in 2003 to build the HFC network, investing over $18 million.

Since 2003, MCV has continued to invest in improving the network, gradually upgrading the

system capacity from 750 MHz to 860 MHz and then to 1 GHz.


       In Guam, MCV offers cable television, high-speed data, and VoIP services through its

own facilities. It also resells wireless service as a non-facilities-based mobile virtual network

operator (“MVNO”). In the CNMI, MCV offers cable television and high-speed data services.


1
      Applications of Guam Cellular and Paging, Inc. and DoCoMo Guam Holdings, Inc. for
Consent to Transfer Control of Licenses and Authorizations, Memorandum Opinion and Order
and Declaratory Ruling, 21 FCC Rcd 13580 (2006) (“Guam Cellular Order”).
2
       Guam Cellular Order at 13608 (¶ 54).
3
      MCV’s wholly owned subsidiaries that hold FCC licenses and authorizations are Guam
Telecom, LLC, Guam Cable Group, Inc., CNMI Telecom, LLC, and CNMI Cablevision, LLC.


                                                 2


MCV’s primary competitor is GTA TeleGuam, the incumbent local exchange carrier (“ILEC”)

on Guam. GTA TeleGuam also offers cable television, high-speed data, VoIP, and wireless

service to Guam customers. In the CNMI, MCV faces competition in the high-speed data market

from incumbent local exchange carrier Pacific Telecom, Inc., d/b/a IT&E.


       C.      The Proposed Transaction

       On August 29, 2012, MCVGH, its parent company, MCV Acquisition, LLC, Seaport

Capital Partners II, L.P., and Project Magellan Equityholders’ Representative LLC, acting in its

capacity as the representative of Seaport and the other owners of MCV Acquisition, LLC in

connection with the proposed transaction, entered into a purchase and sale agreement with

DOCOMO. Pursuant to the agreement and a subsequent assignment, DOCOMO Guam will

purchase all of the stock of MCVGH. Upon consummation of the proposed transaction,

MCVGH and its subsidiaries will become wholly owned subsidiaries of DOCOMO Guam.


       Charts showing the current ownership and post-closing ownership are attached as Exhibit

3.


II.    The Proposed Transaction is in the Public Interest

       Pursuant to Sections 214(a) and 310(d) of the Act, the Commission must determine

whether the proposed transfer of control would serve the public interest, convenience and

necessity.4 In making this determination, the Commission must first find that the proposed

transaction complies with the specific provisions of the Communications Act, other applicable


4
         47 U.S.C. §§ 214(a) and 310(d). See, e.g., Intelsat, Ltd., Transferor, and Zeus Holdings
Limited, Transferee, Consolidated Application for Consent to Transfers of Control of Holders of
Title II and Title III Authorizations and Petition for Declaratory Ruling under Section 310 of the
Communications Act of 1934, as Amended, Order and Authorization, 19 FCC Rcd 24820, 24825
(¶ 14) (2004).


                                                3


statutes, the Commission’s rules, and federal communications policy.5 The Commission next

considers whether the proposed transaction would result in any public interest harm and employs

a balancing test, weighing any public interest harms against the public interest benefits. The

proposed transfer of control does not violate any law or rule, and, for the reasons discussed

below, it will strongly promote the public interest.


       DOCOMO Guam and DOCOMO are Fully Qualified to Control FCC Licenses.

DOCOMO Guam and DOCOMO control an FCC licensee, DOCOMO PACIFIC, that currently

provides service in Guam and the CNMI. This entity was acquired in 2006, when the FCC

approved the transfer of control of wireless provider Guam Cellular and Paging, Inc. (“Guam

Cellular”) to DOCOMO Guam and the assignment of licenses and authorizations held by Guam

Wireless Telephone Company, L.L.C. (“Guam Wireless”) to Guam Cellular.6 The name of

Guam Cellular subsequently was changed to DOCOMO PACIFIC. In reviewing and approving

that transaction, the FCC found that DOCOMO, through its wholly owned subsidiary DOCOMO

Guam, was qualified to control FCC authorizations and that indirect ownership of the FCC

licensees by DOCOMO would result in public interest benefits for consumers in Guam and the

CNMI.7



5
       See, e.g., Constellation, LLC and Intelsat Holdings, Ltd. (Intelsat/PanAmSat Merger),
Memorandum Opinion and Order, 21 FCC Rcd 7368, 7378 (¶ 17) (2006); Verizon
Communications Inc. and MCI Inc., Applications for Approval of Transfer of Control,
Memorandum Opinion and Order, WC Docket No. 05-75, 20 FCC Rcd 18433, 18443 (¶ 16)
(2005); SBC Communications Inc. and AT&T Corp., Applications for Approval of Transfer of
Control, Memorandum Opinion and Order, WC Docket No. 05-65, 20 FCC Rcd 18290, 18300 (¶
16) (2005).
6
       Guam Cellular Order, supra note 1.
7
       Id. at 13608 (¶ 54).


                                                 4


       U.S. Customers Will Benefit From DOCOMO’s Expertise, Management and Financial

Stability. Approval of this transaction will promote the public interest because it will allow

DOCOMO to bring its telecommunications expertise, management resources, and financial

stability to MCV’s operations in Guam and the CNMI.8 After the transaction, current customers

of MCV will continue to enjoy cable television, high-speed data, VoIP, and non-facilities-based

wireless telephone service without reduction, impairment, or discontinuance of service. Indeed,

due to the telecommunications experience and management of DOCOMO, customers may

experience an improved level of service.9


       No Competitive Harm. The proposed transaction will not result in any competitive harm.

MCV and DOCOMO Guam provide entirely distinct service offerings in Guam and the CNMI.

DOCOMO Guam’s wholly owned subsidiary, DOCOMO PACIFIC, provides facilities-based

wireless services in Guam and the CNMI. MCV provides cable television, high-speed data,

VoIP services and resold wireless services in Guam. MCV only provides limited resold services

in Guam. Specifically, it only resells this service to a limited number of its own customers in

Guam that already receive at least two of three services (cable television, high-speed data, or

VoIP) provided by MCV. MCV only provides cable television and high-speed data services in

the CNMI.




8
        See, e.g., Iridium Holdings LLC and GHL Acquisition Corp. (Transfer of Control),
Memorandum Opinion and Order and Declaratory Ruling, 24 FCC Rcd 10725, 10736 (¶ 26)
(2009).
9
        See, e.g., Acquisition of Certain Assets of CIMCO Communications, Inc. by Comcast
Phone LLC, Comcast Phone of Michigan, LLC and Comcast Business Communications, LLC,
Memorandum Opinion and Order and Order on Reconsideration, 25 FCC Rcd 3401, 3403 (¶ 4)
(2010).


                                                 5


       Each of the services provided by MCV is subject to competition in Guam and the CNMI,

and acquisition of MCV by DOCOMO Guam will not affect the number of competitors for these

services. For example, there are currently four facilities-based wireless carriers in Guam: GTA

TeleGuam, IT&E, iConnect, and DOCOMO PACIFIC. DOCOMO Guam’s proposed

acquisition of control of MCV, which provides only non-facilities-based resold wireless services,

will not reduce the number of competitors. The Commission has previously found no

competitive harm exists where a transaction is unlikely to result in a reduction in the number of

potential competitors.10


       Foreign Ownership. DOCOMO is a company incorporated in Japan, a WTO member

country. This application is not subject to the foreign ownership limitations in Section 310(b) of

the Communications Act of 1934, as amended because MCV does not own or control any

broadcast, common carrier or aeronautical FCC authorizations.11 Moreover, the Commission

recognizes the importance of foreign investment in the communications industry, noting that

such investment has “proven to be an important source of equity financing for U.S.

telecommunications companies, fostering technical innovation, economic growth, and job



10
        See, e.g., Bell Atlantic New Zealand Holdings, Inc., Transferor, and Pacific Telecom,
Inc., Transferee, Order and Authorization, 18 FCC Rcd 23140 (2003).
11
        47 U.S.C. § 310(b). As the FCC held over thirty years ago, “Section 310 of the Act
applies only to telecommunications facilities licensed by the Commission and only to
telecommunications facilities that make use of radio frequencies (generally only broadcast and
common carrier radio licenses). We do not read it as reflecting a general policy against foreign
investment in communications enterprises in the United States.” Parts 76 and 78 of the
Commission’s Rules to Adopt General Citizenship Requirements for Operation of Cable
Television Systems and for Grant of Station Licenses in the Cable Television Relay Service, 77
F.C.C.2d 73, 81 (¶ 20) (1980); see also Application of GRC Cablevision, Inc., Charleston,
Clarksville, Jeffersonville, and Sellersburg, Ind., 47 F.C.C.2d 467 (1974). Moreover, “Congress,
in adopting revision to Section 310 in 1974, did not include nonbroadcast licenses (such as those
within the cable television relay service) within the general ownership prohibitions of the
section.” Citizenship Requirements Order, 77 F.C.C.2d at 81 n.7 (emphasis added).


                                                6


creation.”12 Indeed, the Commission has previously reviewed ownership of FCC licenses and

authorizations by DOCOMO and found this ownership to be in the public interest.13


       Continuity of National Security Protections. DOCOMO Guam is a party to the

Agreement between Guam Cellular and Paging, Inc. and DOCOMO Guam Holdings, Inc. on the

one hand, and the Federal Bureau of Investigation (“FBI”), the U.S. Department of Justice

(“DOJ”), and the U.S. Department of Homeland Security (“DHS”) (collectively the “Executive

Agencies”) on the other attached as an Appendix to the FCC order dated November 13, 2006 in

WC Docket No. 06-96.14 DOCOMO Guam affirms that the commitments and undertakings in

the Agreement will continue to be binding after the proposed transfer of control. In addition,

DOCOMO Guam agrees to accept as a condition to grant of the proposed transfer of control that

the terms and conditions of the Agreement apply to the additional facilities and licenses proposed

to be transferred to DOCOMO Guam. A copy of this application will be provided to the

Executive Branch Agencies as well. Accordingly, the proposed transaction does not raise any

national security or law enforcement concerns.


III.   Treatment of Pending Applications

       In addition to the licenses and authorizations identified in these applications, MCV may

file additional applications or have pending applications granted prior to grant of the transfer


12
       Review of Foreign Ownership Policies for Common Carrier and Aeronautical Radio
Licensees under Section 310(b)(4) of the Communications Act of 1934, as Amended, IB Docket
No. 11-133, Notice of Proposed Rulemaking, FCC 11-121, ¶ 2 (Aug. 9, 2011).
13
        See Guam Cellular Order, supra note 1. DOCOMO Guam is considered dominant with
respect to the U.S.-Japan route and agrees to comply with the dominant carrier safeguards in
Section 63.10(c) & (e) of the rules in the provision of international service between the United
States and Japan.
14
       See Guam Cellular Order, supra note 1.


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application or consummation of the proposed transfer of control. DOCOMO Guam therefore

requests that, consistent with Commission precedent, the grant of these applications include

authority for the transfer of control of: (i) all licenses and authorizations issued or assigned to

MCV and its subsidiaries during the pendency of the applications and prior to the consummation

of any approved transaction; and (ii) all applications pending at the time of consummation of the

proposed transfer of control. DOCOMO Guam will supplement, as necessary, any filed

applications that are pending upon the consummation of the proposed transfer of control to

reflect the new ownership.15




15
       See 47 C.F.R. § 1.65.


                                                   8


                                                  Exhibit 2

                                           FCC Authorizations

   File Number/Call Sign                      Licensee                                Authorization
ITC-214-20050825-00347                 CNMI Telecom, LLC                    Global facilities-based and resale
                                                                            services
ITC-214-20050825-00349                 Guam Telecom, LLC                    Global facilities-based and resale
                                                                            services
ITC-214-19910624-00006                 Guam Cable Group, Inc.1              Authority to resell the switched
                                                                            message telephone services of
                                                                            existing common carriers to
                                                                            provide international switched
                                                                            services between the U.S.
                                                                            mainland, Guam and various
                                                                            overseas points
ITC-214-19921211-00121                 Guam Cable Group, Inc.               Authority to lease circuits from
                                                                            Comsat
ITC-214-19950613-00022                 Guam Cable Group, Inc.               Authority to Acquire and Operate
                                                                            Capacity on the TPC-5 Cable
                                                                            system
ITC-214-19960730-00354                 Guam Cable Group, Inc.               Global facilities-based and resale
                                                                            services)
ITC-214-20030404-00169                 Guam Cable Group, Inc.               Global facilities-based and resale
                                                                            services
Domestic Section 214                   Guam Telecom, LLC                    Blanket authority to provide
Authority                                                                   domestic telecommunications
                                                                            services
SCL-LIC-19980309-00005                 Guam Cable Group, Inc.               China-U.S. Cable System
WLY-826                                CNMI Cablevision, LLC                Cable television relay service
                                                                            license




  1
   In 2006, the FCC approved the transfer of control of the five international Section 214 authorizations held
  by Guam Cable Group, Inc. to its current ownership by MCVGH. See FCC File No. ITC-T/C-20061107-
  00503.


                                                             Exhibit 3
                                    CURRENT OWNERSHIP OF MCVGH*
                                           Seaport Capital Partners II, L.P. (89.6%)
                                                      Seaport Investment, LLC (1.8%)
                                         Suguler Guff Small Buyout Opportunities Fund, LP (5.1%)
                                        Suguler Guff Small Buyout Opportunities Fund (F), LP (2.8%)
                                          Suguler Guff Small Buyout Opportunities Fund (T) (0.6%)
                                                              Employee (0.2%)



                                                 MCV Acquisition, LLC (MCVA)
                                                      (Delaware LLC)


                                             MCV Guam Holding Corp (MCVGH)
                                                        (Guam Corporation)



                                                                              MCV CNMI Holding Corp (MCVCH)
       MCV Guam Investments, LLC (MCVGI)                                           (CNMI Corporation)
               (Delaware LLC)



                                                                                 MCV CNMI Investments, LLC (MCVCI)
Guam Telecom, LLC              Guam Cablevision, LLC                                     (Delaware LLC)
 (Delaware LLC)                   (Delaware LLC)



                                                                          CNMI Telecom, LLC           CNMI Cablevision, LLC
Guam Cable Group, Inc.                                                     (Delaware LLC)               (Delaware LLC)
(Delaware Corporation)


*All ownership percentages are 100% unless otherwise noted.


                                 PROPOSED NEW OWNERSHIP OF MCVGH*

     Japan Ministry of Finance                         Public Shareholders
                         32.59%                      67.41%

                      NIPPON TELEGRAPH AND
                     TELEPHONE CORPORATION
                        (Japanese Corporation)                           Public Shareholders

                       63.32% equity/66.65% voting                           36.68% equity/33.35% voting

                                                       NTT DOCOMO, INC.
                                                      (Japanese Corporation)



                                                DOCOMO Guam Holdings, Inc.
                                                   (Guam Corporation)


                                              MCV Guam Holding Corp (MCVGH)
                                                    (Guam Corporation)


                                                                                MCV CNMI Holding Corp (MCVCH)
                MCV Guam Investments, LLC (MCVGI)
                                                                                     (CNMI Corporation)
                        (Delaware LLC)

                                                                                  MCV CNMI Investments, LLC (MCVCI)
       Guam Telecom, LLC              Guam Cablevision, LLC                               (Delaware LLC)
        (Delaware LLC)                   (Delaware LLC)

     Guam Cable Group, Inc.                                             CNMI Telecom, LLC             CNMI Cablevision, LLC
     (Delaware Corporation)                                              (Delaware LLC)                 (Delaware LLC)

*All ownership percentages are 100% unless otherwise noted.



Document Created: 2012-09-21 14:47:01
Document Modified: 2012-09-21 14:47:01

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