Petition for Writ of Certiorari — Cellswitch L. P. v. Federal Communications Commission

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IN THE

Supreme Court of the United States

OCTOBER TERM, 1993

CELLSWITCH L.P. et al.,

Petitioners,

FEDERAL COMMUNICATIONS COMMISSION,

Respondent.

Petition for a Writ of Certiorari to the

United States Court of Appeals for the

District of Columbia Circuit

PETITION FOR A WRIT OF CERTIORARI

DONALD E. SANTARELLI

(Counsel of Record)

A. THOMAS CARROCCIO

RICHARD O. WOLF

SANTARELLI, SMITH &

CARROCCIO

1155 Connecticut Ave., N.W.

Washington, D.C. 20036

(202) 466-6800

Counsel for Petitioners

WILSON - EPES PRINTING Co. , Inc. - 789-0096 - WASHINGTON, D.C. 20001

(A\ \

QUESTIONS PRESENTED FOR REVIEW

1. Whether the United States Court of Appeals for the

District of Columbia Circuit erred in allowing the Fed-

eral Communications Commission to deprive Petitioners

of fundamental due process by refusing to consider

amendments submitted by Petitioners in full accordance

with that agency’s promulgated procedures for the

amendment of RSA cellular applications?

2. Whether the United States Court of Appeals for

the District of Columbia erred by failing to give strict

scrutiny to both the Federal Communications Commis-

sion’s interpretation of Section 310(b) of the Communi-

cations Act of 1934, as amended, 47 U.S.C. § 310(b),

and that agency’s use of its discriminatory interpretation

of the statute to deny Petitioners the opportunity to main-

tain and prosecute their cellular applications because of

the limited participation of resident aliens in those

applications?

(i)

LIST OF PARTIES

The named parties to the proceeding in the United

States Court of Appeals for the District of Columbia Cir-

cuit were: Cellswitch L.P., Silver Wings 1988 L.P.,

Delta Cellular Partners, Independent Cellular Systems

L.P., Federal Mobile Radio L.P., Moving Phones Part-

nership L.P., Quadrangle Communications, Eastern Cel-

lular Systems L.P., U.S. RSA Telco Partners L.P., West-

ern Celltel L.P., Cells Company, L.P., Cellular Regional

Limited Partnership, Continental Alaska Limited Partner-

ship, 21st Century Telecom L.P., CGSA Telephones L.P.,

Continental Electronics L.P., and Jefferson Cellular L.P.,

as petitioners; the Federal Communications Commission,

as respondent; and Thomas Domencich, Committee for a

Fair Lottery, Romulus Engineering, Inc., James E.

Martin, Jr., CSH Cellular, Gilcom Cellular, L.P., PC

Cellular, Inc., RSA Cellular Company, Sunde Cellular

Communications, Inc., Michael B. Azeez, Excellence II,

Larsen Cellular Associates, Elleron Cellular Partners,

Percival Vaz, Optima Cellular Partnership, ATT RSA

Company, L.P., and Marco Communications Corp., as

intervenors.

None of the corporate entities have a parent or sub-

sidiary corporation.

TABLE OF CONTENTS

Page

QUESTIONS PRESENTED FOR REVIEW ............... i

ss a eee ere ii

TABLE OF AUTHORITIES 000000 ccccccccceccoee-. vi

OPINIONS OF THE COURT AND ADMINISTRA-

TIVE AGENCY BELOW .000oooo...cccccccccccccccccscoseee.---. 1

i 2

STATUTE AND REGULATIONS INVOLVED _._. 2

STATEMENT OF THE CASE oui... occcccccecccecee 2

I. NATURE OF THE CASE 0000. ccccccccccocoeeeee--.. 2

ae ED 4

A. Agency Proceeding .............0..0.0..-- 4

B. Decision Of The Court of Appeals .............. 7

REASONS FOR ALLOWANCE OF THE WRIT _... 8

I. THE COURT OF APPEALS INCORRECTLY

DECIDED THAT PETITIONERS’ RSA CEL-

LULAR APPLICATIONS COULD NOT BE

AMENDED AND IMPROPERLY AFFIRMED

THE FEDERAL COMMUNICATIONS COM-

MISSION’S DISMISSAL OF THOSE APPLI-

na ele GE ERR aaa a 9

A. The Court Of Appeals Improperly Allowed

The FCC To Ignore The Agency’s Own

Rules Governing The Amendment Of RSA

a 9

B. The Court Of Appeals Improperly Allowed

The FCC To Dismiss Petitioners’ Applica-

tions As Unacceptable For Filing Without

Providing Clear Prior Notice Of The Ac-

ceptability Criteria Relied Upon For Those

AG ans en 14

TABLE OF CONTENTS-—-Continued

Page

Il. THE COURT OF APPEALS ERRED BY NOT

REVIEWING THE FCC’S' POLICY DIS-

CRIMINATING AGAINST ALIEN GENERAL

PARTNERS UNDER A STRICT SCRUTINY

IED. insictocnsiectisuisninumntnnidatlabsicdeibabbscelabude nates 20

IEE coe taciesceic ani ante RI ae ee ER 24

APPENDIX

Decision of the United States Court of Appeals

in Moving Phones Partnership L.P. v. Federal

Communications Commission (D.C. Cir. July 30,

) RRR RT SN an ie tl eA eR aaah es la

Memorandum Opinion and Order of Federal Com-

munications Commission In Re Application of:

Continental Cellular, et al. (November 20,

NO ea a 14a

Erratum to Memorandum Opinion and Order of

Federal Communications Commission In Re Ap-

plication of: Continental Cellular, et al. (De-

IIE Ti TI ccnccterccasal coset diectdea ade tian ec 35a

Order Denying Appellants’ 21st Century Telecom

L.P., et al., Petition for Rehearing ...................... 42a

Order Denying Appellants’ 21st Century Telecom

L.P., et al., Suggestion for Rehering En Banc. 43a

Order Denying Appellants’ Delta Cellular Part-

ners, et al., Petition for Rehearing ................... 44a

Order Denying Appellants’ Delta Cellular Part-

ners, et al., Suggestion for Rehearing En Banc... 45a

Amendment 5 to the Constitution of the United

-— f Bh | RRR SeceReRer me NCRa manne 46a

Section 310(b) of the Communications Act of

1934, as amended, 47 U.S.C. §310(b) —....00000..... 47a

BF Te IE eile tnantetacctcnanidethtciahideaseiniitescenn 47a

ee a 48a

ees > | | BRR Re enn ee 49a

a a a

TABLE OF CONTENTS—Continued

Page

i, en: ee a 50a

Be ET dededitietiek octte ee 52a

Ae Gey MOOI Sobiceccneconsccctensendiaes betes 53a

OP I III Sects ee 54a

TABLE OF AUTHORITIES

Cases Page

Advanced Business Communications, Inc., 2

F.C.C.R. 580, 2 F.C.C.R. 3751 (1987) ................ 19

Ambach v. Norwick, 441 U.S. 68 (1979) ...000.000000.. 21

Amendment of the Commission’s Rules to Allow

the Selection From Among Mutually Exclusive

Competing Cellular Applications Using Random

Selection or Lotteries Instead of Comparative

Hearings, 59 Rad. Reg. 2d (P&F) 407 (1985) ..... 11

Amendment of the Commission’s Rules for Rural

Cellular Service, 60 Rad. Reg. 2d (P&F) 1029

ees oe ee Nee ae Na 12

Bernal v. Fainter, 467 U.S. 216 (1984) ...000000000.. 23

F.S. Royster Guano Co. v. Virginia, 253 U.S. 412

tr se adeenianaiainsddeonniceel 22

GTRW Partnership, 2 F.C.C.R. 4160 (Mob. Serv.

a aeeehicnsoumanaaies 19

In re Griffiths, 413 U.S. 717 (1978) .............0.-...-ee-ee 22

Hampton v. Mow Sun Wong, 426 U.S. 88 (1976)... 9, 22

Johnson v. Eisentrager, 339 U.S. 763 (1950) ........ 22

Kent Nowlin Construction Co. v. Occupational

Safety & Health Review Commission, 593 F.2d

SL RE eee 14

L.R. Willson & Sons, nIc. v. Donovan, 685 F.2d

I a ensiasanian 14

McElroy Electronics Corporation v. Federal Com-

munications Commission, 990 F.2d 1351 (D.C.

ESR NSS In dee ee ene 14

In Re Application of Nevada Broadcasting Group,

No. BPCT-850725K0, 1986 Lexis 3215 (MMB,

an PERE RC a eee 18

Nyquist v. Mauclet, 482 U.S. 1 (1977) .2000-.. 23

Plyler v. Doe, 457 U.S. 202 (1982) ................0........ 9, 22

Progressive Cellular III B-2, 5 F.C.C.R. 2772

RPE IRE a Ren NT Se oe RO 17

Radio Athens, Inc. (WATH) v. Federal Communi-

cations Commission, 401 F.2d 398 (D.C. Cir.

PE a eee 8, 15, 16, 18, 19

REM Communication, 3 F.C.C.R. 83705 (1988) ..... 13

vii

TABLE OF AUTHORITIES—Continued

Page

Salzer v. Federal Communications Commission,

778 F.2d 869 (D.C. Cir. 1985) 0.0... 8, 15, 16, 19

Seven Hills Television Co., 2 F.C.C.R. 3882 (Rev.

SRI ean ne eM one ue er aay ee 18

Spanish International Communications Corpora-

tion, 2 F.C.C.R. 3336 (1987) ................................. 19

Telemundo, Inc. v. Federal Communications Com-

mission, 802 F.2d 518 (D.C. Cir. 1986) ............. 19

Toll v. Moreno, 458 U.S. 1 (1982)... 22

United States ex rel. Accardi v. Shaughnessy, 347

OM RRR Als wee Sie eon ee 14

Vitarelli v. Seton, 359 U.S. 535 tiie 8

Wilner & Scheiner, 103 F.C.C.2d 511 (1985), re-

considered in part, 1 F.C.C.R. 12 (1986) ......... 21, 23

Constitutional Provision

U.S. Constitution, Amendment V ........... 21

Statute

Section 310(b) of the Communications Act of

1934, as amended, 47 U.S.C. § 310 (b) ..15, 16, 18, 20, 22

Regulations

eee ee, 13

sacle scase oo cao Cle 15, 16

iclie cccl tL aaa neneraLie 11,17, 18

ei pal. | na 13-14

47 C.F.R.§ 22.917... iicaaeieiaee aie 17

47 C.7.R. § 22.918 11, 12, 13, 17-18

OE othe FSBO cece reeecseneees 17

IN THE

Supreme Court of the United States

OCTOBER TERM, 1993

No.

CELLSWITCH L.P. et al.,

. Petitioners,

FEDERAL COMMUNICATIONS COMMISSION,

Respondent.

Petition for a Writ of Certiorari to the

United States Court of Appeals for the

District of Columbia Circuit

PETITION FOR A WRIT OF CERTIORARI

The Petitioners respectfully pray that a Writ of Cer-

tiorari issue to review the judgement of the United States

Court of Appeals for the District of Columbia Circuit in

this case.’

OPINIONS OF THE COURT AND

ADMINISTRATIVE AGENCY BELOW

The Panel opinion of the United States Court of Ap-

peals for the District of Columbia Circuit, dated July 30,

1993, affirmed the memorandum opinion and order of the

1 Petitioners herein are: Cellswitch L.P. (“Cellswitch”); Delta

Cellular Partners (“Delta”) ; Federal Mobile Radio L.P. (“FMR”) ;

Independent Cellular Systems L.P. (“Independent”); and Silver

Wings 1988 L..P. (“Silver Wings”).

Federal Communications Commission (“FCC”) dismiss-

ing Petitioners’ cellular applications. The Panel’s opinion

is reported at 998 F.2d 1051 and reproduced in the

Appendix at p. la. The memorandum opinion and order

of the FCC, dated November 20, 1993, is reported at 6

F.C.C.R. 6834 and reproduced in the Appendix at p.

14a, and an erratum thereto, dated December 6, 1993,

is reported at 6 F.C.C.R. 7205 and reproduced in the

Appendix at p. 35a.

JURISDICTION

The decision of the United States Court of Appeals for

the District of Columbia Circuit was issued on July 30,

1993. Petitioners, and others, filed timely petitions for

rehearing and suggestions for rehearing en banc on Sep-

tember 13, 1993. The orders denying the petitions for

rehearing and suggestions for rehearing en banc were

entered on October 5, 1993 and are reprinted in the

Appendix at pp. 42a-45a. The jurisdiction of this Court

is invoked pursuant to 28 U.S.C. § 1254(1).

STATUTE AND REGULATIONS INVOLVED

Pursuant to Sup. Ct. R. 14.1(f), there are reproduced

in the Appendix the texts of the following constitutional

provision, statute, and regulations: Fifth Amendment to

the Constitution of the United States; Section 310(b) of

the Communications Act of 1934, as amended, 47 U.S.C.

§ 310(b); 47 C.F.R. § 1.65(a); 47 C.F.R. § 22.4; 47

C.F.R. § 22.20; 47 C.F.R. § 22.23; 47 C.F.R. § 22.917

(c); 47 C.F.R. § 22.918(a-b); and 47 C.F.R. § 22.923.

STATEMENT OF THE CASE

I, NATURE OF THE CASE

The decision of the United States Court of Appeals

for the District of Columbia Circuit presents two precise

and compelling questions for resolution. The first ques-

tion is whether the court below erred when it allowed the

Federal Communications Commission (“FCC”) to ignore

its own regulations regarding critical elements of the

Rural Service Area (“RSA”) cellular application process

and, thereby, deprive Petitioners of their fundamental due

process right to be provided with clear notice of critical

application requirements. In the instant proceeding, the

court below allowed the FCC to invoke procedures and

precedent uniquely applicable to Metropolitan Statistical

Area (“MSA”) cellular applications when imposing the

ultimate sanction of dismissal upon Petitioners’ RSA cel-

lular applications. The reliance of the FCC and the court

below on MSA standards could have been reached only

through concious decisions to ignore the FCC’s specific

adoption and clear articulation of a significantly different

regulatory scheme for the processing of RSA cellular

applications. Petitioners, as RSA applicants, were en-

titled to have their applications evaluated in light of the

regulatory scheme which had been promulgated as the

specific scheme applicable to their RSA applications.

The second question presented by the instant case is

whether the FCC may avoid strict scrutiny by the courts

when it effectively makes law, by adopting an expansive

interpretation of clear statutory language, which interpre-

tation results in discriminatory treatment of a suspect

class. The court below did not subject to critical review

the FCC’s expansive interpretation of a specific, limited

statutory restriction on non-citizen participation in the

cellular radio licensing process. Instead of utilizing the

strict scrutiny standard appropriate in cases of discrimina-

tory treatment of suspect classes, the court below chose to

rely on a rational basis standard to determine that the

FCC’s discriminatory interpretation merely was not

“wholly irrational.”

II. BACKGROUND

A. Agency Proceeding

The FCC established the Domestic Public Cellular

Radio Telecommunications Service to provide cellular

telephone service throughout the United States and its

territories. The nation and its territories were divided

into 734 cellular markets, of which 306 were Metropoli-

tan Statistical Areas (“MSAs”) determined by the Census

Bureau and 428 were Rural Service Areas (“RSAs’”)

designated by the FCC. The FCC first conducted the

MSA phase of its cellular licensing process, with the RSA

phase following. Between the two phases, the FCC sub-

stantially modified its cellular application and licensing

procedures. As a result of those modifications, RSA ap-

plications were governed by a regulatory scheme signifi-

cantly different from the MSA regulatory scheme. In

each cellular market, one set of cellular radio frequencies

was reserved for use by existing wireline carriers and an-

other set of frequencies was made available for use by

“nonwireline applicants. All of Petitioners’ applications

seek authority to utilize nonwireline frequencies in RSAs.

The FCC solicited applications for authority to con-

struct and operate cellular systems in each of the cellular

markets. Applications for a particular murket could be

filed only during the specified filing window for that

market. Applications for RSA markets were filed com-

mencing with the July 13-15, 1988 filing window and

ending with the January 11-13, 1989 window. The FCC

received several hundred timely applications for the non-

wireline authorization in each RSA market. Each Peti-

tioner herein filed separate applications for the nonwire-

line authorizations in many or all of the RSAs.

After its experiences with comparative hearings involv-

ing multiple applicants for each of the first thirty cellular

markets, the FCC determined that selection among com-

peting cellular applicants could be conducted most effi-

ciently through a lottery process. Under the FCC’s rules

applicable to the RSAs, a single applicant was to be

selected by lottery from among all applicants filing timely

and complete applications for a particular market. The

qualifications of the applicant so selected would then be

reviewed without comparison to, or even consideration

of, any other applicant for that market. Initial jotteries

with respect to each of the 428 RSAs were conducted

between September 23, 1988 and December 20, 1989,

In those initial RSA lotteries, each of the Petitioners was

selected as the winner of one RSA.

After conducting the lottery for each RSA, the FCC

issued a public notice announcing the winning applicant

therein, which notice also directed the winning applicant

to take certain steps, including the filing of amendments,

to maintain and prosecute its application. Although an

RSA applicant is barred by 47 C.F.R. § 22.918(b) from

amending its application during the period between the

filing of the application and its selection in a lottery, that

same regulation provides a post-lottery 30-day period

during which an applicant is allowed to amend its win-

ning application. Petitioners Cellswitch, FMR. Independ-

ent, and Silver Wings each filed post-lottery minor amend-

ments apprising the FCC that they had modified their re-

spective partnership agreements so as to convert their

applicant entities from general partnerships to limited

partnerships. Those amendments also converted each

non-citizen principal of those Petitioners to the status of

limited partner.

After passing a substantive review of its application by

the FCC’s staff, a lottery-winning RSA applicant was

designated a tentative selectee and subjected to a speci-

fied period of public comment and opposition. Each of

the Petitioners was designated the tentative selectee for its

cellular market, and each passed the public notice period

without comment or opposition. 47 C.F.R. § 22.918(b)

also allows a cellular applicant to file minor amendments

aaa a

to its application after being announced as a tentative

selectee. Petitioner Delta filed a post-tentative selectee

minor amendment notifying the FCC of changes in the

natures of certain of its partners, which changes had the

effect of removing all non-citizen principals from general

partner status.

The FCC’s staff, acting pursuant to delegated author-

ity, dismissed each of Petitioners’ applications as being in

violation of 47 U.S.C. § 310(b) and 47 C.F.R. § 22.4

(b).2. The FCC staff based those dismissals on the

contention that the presence of even one alien general

partner in an applicant partnership automatically rendered

the application unacceptable for filing. In dismissing

these applications, however, the FCC’s staff refused to

consider Petitioners’ timely filed amendments, each of

which had removed all aliens from general partner status.

Each Petitioner, after the dismissal of its respective

application, timely filed a petition seeking FCC staff re-

consideration of the action dismissing its application.

Those petitions for reconsideration challenged, inter alia,

the agency’s failure to give prior notice of its intent to

dismiss as unacceptable for filing any applications includ-

ing non-citizen general partners at the time of initial

filing; the expansive interpretation of 47 U.S.C. § 310(b)

relied on in the staff dismissals; and the agency’s failure

even to consider the timely amendments submitted by the

dismissed applicants.

The FCC’s staff referred Petitioners’ reconsideration

petitions, and those of several other similarly situated

applicants, to the FCC for review. On November 20,

1991, the FCC issued a consolidated memorandum opin-

ion and order rejecting the challenges to its staff's dis-

missal actions, and affirming the dismissals of the subject

applications.

247 U.S.C. §310(b) and 47 C.F.R. § 22.4 restrict the ability of

non-citizens to hold, or participate in, radio licenses, including cel-

lular licenses.

B. Decision Of The Court of Appeals

Each of Petitioners timely filed a notice of appeal on

or before December 20, 1991. Petitioners’ appeals were

consolidated with each other, and with the appeals of

several other parties affected by the action of the FCC.

Oral argument of the consolidated case was held before a

three-judge Panel of the United States Court of Appeals

for the District of Columbia Circuit on April 8, 1993.

The Panel issued its decision on July 30, 1993. The

Panel affirmed the FCC’s dismissal of Petitioners’ appli-

cations.

The Panel was able to reach its decision regarding the

acceptability and amendability of Petitioners’ RSA appli-

cations only by evaluating those RSA applications in light

of an inapplicable regulatory scheme governing amend-

ment of MSA applications. In doing so, the Panel totally

ignored the fact that, between the MSA and RSA phases

of the FCC’s cellular licensing proceedings, the agency

had adopted and promulgated distinct, fundamentally dif-

ferent application amendment procedures applicable only

to ensuing RSA applications, including Petitioners’ RSA

applications which are the subjects of this case.

In reaching its decision regarding the validity of the

FCC’s unilateral expansion of 47 U.S.C. § 310(b)’s spe-

cific, limited restrictions on the participation of non-

citizens in cellular licensees, the Panel chose to utilize a

rational basis standard, instead of the appropriate strict

scrutiny standard, for its review. Only by determining

that the FCC’s expansive interpretation was not wholly

irrational was the Panel able to justify the FCC’s whole-

sale discrimination against cellular applicants with non-

citizen general partners.

Timely petitions for rehearing and suggestions for re-

hearing en banc were filed by Petitioners on September

13, 1993. Those petitions were denied by orders of Oc-

tober 5, 1993.

REASONS FOR ALLOWING THE WRIT

In this case, the Court of Appeals has permitted the

Federal Communications Commission (“FCC”) both to

ignore its own regulations, and to impose upon Petitioners

the draconian sanction of application dismissal without

clear prior notice of the standards upon which its dis-

missal actions were based. This radical departure from

the accepted and usual requirements of elementary fair-

ness and due process calls for this Court’s exercise of its

power of supervision. The Court of Appeals also has

allowed the FCC to expand upon the clear language of

a statute in a manner which discriminates against a sus-

pect class without subjecting that discriminatory expan-

sion to the strict scrutiny mandated by the applicable

decisions of this Court.

That an agency is bound by, and m..t adhere to, its

own regulations is a “judicially evolve’ tee of adminis-

trative law” which has been “firmly estavlished” by this

Court. Vitarelli v. Seton, 359 U.S. 535, 547 (1959).

In the instant case, however, the Court of Appeals sanc-

tioned the FCC’s refusal even to consider amendments

timely submitted by Petitioners in reliance upon a rule

allowing the immediate post-lottery filing of RSA cellular

applications, which rule had been specifically adopted and

clearly promulgated by the FCC as part of its modifica-

tion of its cellular licensing procedures for the RSA

markets. It also is a usual and accepted judicial require-

ment that the FCC may not impose the sanction of dis-

missal on an application without prior “explicit notice of

all application requirements.” Salzer v. Federal Com-

munications Commission, 778 F.2d 869, 875 (D.C. Cir.

1985). In this regard, it is generally accepted that the

FCC may not invoke as application acceptability criteria

statutory or regulatory language which merely estab-

lishes license grantability criteria. Radio Athens, Inc.

(WATH) v. Federal Communications Commission, 401

F.2d 398, 403 (D.C. Cir. 1968). Despite these require-

ments for clear and explicit notice of application accept-

ability criteria, the Court of Appeals in this case im-

properly affirmed the FCC’s use of license grant criteria

as the basis for the dismissal of Petitioners’ applications.

This Court has held that “the federal power over aliens

is [not] so plenary that any agent of the National Govern-

ment may arbitrarily subject all resident aliens to dif-

ferent substantive rules from those applied to citizens.”

Hampton v. Mow Sun Wong, 426 U.S. 88, 104 (1976).

For any judicial review of laws or rules discriminatory

against resident aliens promulgated by governmental au-

thorities which do not fall within the definition of “po-

litical branches of the Federal Government,” this Court

has mandated a standard of strict scrutiny. Plyer v. Doe,

457 U.S. 202, 224-225 (1982). In the instant case, how-

ever, the Court of Appeals deliberately chose not to apply

the strict scrutiny standard when it reviewed the FCC’s

discriminatory interpretation of 47 U.S.C. § 310(b).

The failure of the Court of Appeals to apply either the

controlling decisions of this Court or the accepted and

usual standards of judicial proceedings to its review of

the FCC’s action warrants the grant of this Petition for

Writ of Certiorari.

I. THE COURT OF APPEALS INCORRECTLY DE-

CIDED THAT PETITIONERS’ RSA CELLULAR

APPLICATIONS COULD NOT BE AMENDED AND

IMPROPERLY AFFIRMED THE FEDERAL COM-

MUNICATIONS COMMISSION’S DISMISSAL OF

THOSE APPLICATIONS

A. The Court Of Appeals Improperly Allowed The

FCC To Ignore The Agency’s Own Rules Govern-

ing The Amendment Of RSA Applications

The FCC adopted and promulgated regulations govern-

ing amendments to RSA applications which were distinct

from its provisions governing amendments to MSA appli-

cations. Petitioners were adversely affected when the

FCC failed to apply the unique RSA amendments pro-

visions to their applications and, instead, wrongly im-

posed MSA amendment restrictions on Petitioners’ RSA

applications. The Court of Appeals improperly condoned

the FCC’s failure to comply with its own rules by either

failing to discern or refusing to acknowledge the deci-

sionally significant difference between the FCC’s applica-

tion amendment procedures regarding MSA applications

and the unique application amendment procedures appli-

cable to RSA applications, such as the subject applica-

tions of Petitioners.

The Court of Appeals’ own description of the regula-

tory framework governing cellular applications clearly

demonstrates that it erroneously accepted the FCC’s as-

sertion that RSA applicants were bound by the same

restrictions on amendments as had been applicable to

MSA applicants. The court below described the amend-

ment rules applicable to Petitioners’ applications as fol-

lows:

To speed the selection process, Commission rules

prohibit the filing of amendments to cellular applica-

tions until after a qualified tentative selectee has been

announced for a particular market. Only tentative

selectees may file amendments, and only minor

amendments are permitted. Applicants filing defec-

tive applications therefore have no opportunity to

file amendments either before or after the lottery to

bring applications into compliance with acceptability

criteria should they prevail in the lottery. (emphasis

added; citations omitted ).*

Although this characterization is accurate regarding MSA

applications, it cannot be construed to also govern the

amendability of RSA applications.

In adopting MSA application procedures, the FCC

gave notice that MSA applicants would not have any

opportunity to correct application defects and stated:

$998 F.2d at 1054.

Under Section 22.918(b), amendments to initial cel-

lular applications may not be filed until a tentative

selectee has been placed on public notice, and then

only by the tentative selectee. Prior to placement on

public notice (and thus prior to the filing of amend-

ments) the tentative selectee’s application will under-

go the careful review described above. Thus, the

selectee will not have an opportunity to file curative

amendments prior to the extensive staff screening.

Only after passing that screening will amendments be

permitted under Section 22.918(b). (emphasis

added) .*

The cited language reveals that any lack of opportunity

to cure MSA application defects through amendment was

merelv an outgrowth of the FCC’s sequencing of its MSA

application procedures.

47 C.F.R. § 22.20(a)(2) allows the FCC to dismiss

a cellular application as unacceptable for filing if, upon

review. the application is found not to comply with “the

[FCC's] rules, regulations, specific requirements for addi-

tional information or other requirements.” Because ex-

tensive staff screening of MSA applications occurred

prior to the time amendments could be filed, there was no

opportunity for an MSA applicant to cure initial defects

in its application in time to avoid the dismissal of that

application as unacceptable for filing.

By contrast, the RSA application processing scheme

affords a clear opportunity for the filing of amendments

at an early stage of that process. When revising its

cellular rules in anticipation of the RSA phase of the cel-

lular licensing process, the FCC modified 47 C.F.R.

§ 22.918(b) to provide for the immediate, post-lottery fil-

ing of amendments by RSA applicants, stating:

* Amendment of the Commission’s Rules to Allow the Selection

From Among Mutually Exclusive Competing Cellular Applications

Using Random Selection or Lotteries Instead of Comparative

Hearings, 59 Rad. Reg. 2d (P&F) 407, 410, n.17 (1985).

We have also examined our existing Rules concern-

ing the timetable for filing amendments pursuant to

§$ 1.65 of the Commission’s Rules and are amending

this timetable for RSA applications to require that

this information be submitted within 30 days of the

notice of lottery results. (emphasis added ).°

As a result of the FCC’s modification of its cellular proc-

essing timetable for RSA _ applications, 47 C.F.R.

§ 22.918(b) provides:

Amendments for applications . . . may not be filed

prior to conduct of the lottery for the market applied

for. The tentative selectee may file minor amend-

ments, but no major amendments except for those

listed in § 22.23(g). Information required by § 1.65

shall be filed within 14 days of publication of the

Public Notice announcing the tentative selectee in

markets below the top-90 and within 30 days of the

Public Notice announcing the lottery results for all

applications to serve Rural Service Areas. (emphasis

added).

As is apparent, the last sentence of 47 C.F.R.

§ 22.918(b) sets forth significantly different amendment

timetables for MSA and RSA applications. An RSA ap-

plication may be amended immediately after its selection

by lottery, while an MSA application, by contrast, must

first sufvive extensive staff screening before reaching the

tentative selectee stage which is a pre-condition to the

MSA applicant’s ability to amend its application. That

language also affords an RSA applicant a specific post-

lottery, but pre-tentative selectee, opportunity to amend

its application.°

5 Amendment of the Commission’s Rules for Rural Cellular Serv-

ice, 60 Rad. Reg. 2d (P&F) 1029, 1038 (1986).

6It also is significant that each FCC pvblic notice announcing

RSA lottery winning applications directed the named applicants

to file “amendments within 30 days of this Public Notice.” Those

directives clearly ratified the early amendment opportunity afforded

RSA applicants by the unambiguous language of 47 C.F.R,

§ 22.918(b).

As a post-lottery RSA amendment would precede any

extensive staff screening, it gave the RSA applicant an

opportunity to correct application defects through amend-

ment—an opportunity simply not available to MSA ap-

plicants. Therefore, the substantially different MSA regu-

latory framework and dismissal precedent relied upon by

both the Court of Appeals and the FCC is not relevant to

the amendability of Petitioners’ RSA applications.”

It is significant that the FCC, when adopting and

promulgating the early amendment procedures for RSA

applications, neither restricted an RSA applicant from

using the post-lottery amendment opportunity to correct

defects in its application, nor required that an RSA appli-

cation be found acceptable for filing before it could be

amended by post-lottery amendment. Therefore, implicit

in the opportunity to amend RSA applications pursuant

to 47 C.F.R. § 1.65 and 47 C.F.R. § 22.918(b) is the

opportunity to correct application defects through post-

lottery amendment.* Neither the FCC nor the Court of

TIn determining that cellular applicants do not have any oppor-

tunity to amend defective applications, the Court of Appeals relied

upon REM Communication, 3 F.C.C.R. 3705 (1988). However,

REM involved an MSA application, and the FCC invoked the MSA

amendment prohibition of 47 C.F.R. § 22.918(b) to reject that ap-

plicant’s post-lottery attempt to correct application defects through

amendment. In light of the post-lottery amendment opportunity

afforded RSA applicants by 47 C.F.R. § 22.918(b), which oppor-

tunity was net available to MSA applicants, REM is not a valid

precedent in this case.

* 47 C.F.R. § 1.65 requires an applicant to amend its application

“whenever the information furnished in the pending application

is no longer substantially accurate and complete in all significant

respects” or “whenever there has been a substantial change as to

any other matter which may be of decisional significance in a

Commission proceeding involving the pending application.” Ac-

cordingly, Petitioners not only were allowed to file the amendments

reporting the decisionally significant changes in their structures,

but were under an affirmative obligation to do so. Petitioners’

amendments were allowable minor amendments, as defined by 47

Appeals can now tell Petitioners that the FCC did not

intend for the post-lottery amendment opportunity to be

used to correct application defects. “It is well settled that

regulations cannot be construed to mean what an agency

intended but did not adequately express.” McElroy Elec-

tronics Corporation v. Federal Communications Commis-

sion, 990 F.2d 1351, 1366 (D.C. Cir. 1993), citing L.R.

Willson & Sons, Inc. v. Donovan, 685 F.2d 664 (D.C.

Cir. 1982); Kent Nowlin Construction Co. v. Occupa-

tional Safety & Health Review Commission, 593 F.2d 368

(10th Cir. 1979).

It is well established that an agency is bound by, and

must adhere to, its own regulations. Vitarelli, 359 U.S.

at 547. Having afforded RSA applicants the opportunity

for the early amendment of their applications imme-

diately after selection by lottery, the FCC could not re-

fuse to consider amendments timely filed in compliance

with, or in reliance on, that provision. United States ex

rel. Accardi v. Shaughnessy, 347 U.S. 260, 268 (1954).

The Court of Appeals, to the severe detriment of Peti-

tioners, improperly affirmed the FCC’s failure to meet its

concomitant obligation to give full consideration to amend-

ments filed in compliance with its promulgated rule. This

failure of the Court of Appeals warrants the allowance of

the writ of certiorari sought by this Petition.

B. The Court Of Appeals Improperly Allowed The

FCC To Dismiss Petitioners’ Applications As Un-

acceptable For Filing Without Providing Clear

Prior Notice Of The Acceptability Criteria Relied

Upon For Those Dismissals

As noted above, Petitioners, as RSA applicants, had

the right to amend their applications immediately after

being announced as lottery winners. The FCC, alleging

C.F.R. § 22.23(c) (4), because they reported limited structural

changes which did not result in any substantial changes in the

beneficial ownership or control (de jure or de facto) of the

Petitioners.

oo aa

that Petitioners’ applications were unacceptable for filing,

refused even to consider Petitioners’ amendments. It was

the FCC’s contention that the subject applications were

unacceptable for filing because those applications, as orig-

inally filed, were not in compliance with the citizenship

requirements of either Section 310(b) of the Communi-

cations Act of 1934, as amended, 47 U.S.C. § 310(b), or

47 C.F.R. § 22.4(b). In light of the position taken by

the FCC, it is evident that the FCC was utilizing those

statutory and regulatory citizenship requirements as appli-

cation acceptability for filing criteria. The Court of Ap-

peals erred by affirming the FCC’s wrongful reliance on

citizenship requirements as application acceptabilty for

filing criteria.

It is a firmly established legal principal that all FCC

applicants are “entitled to expect rules defining the re-

quired content of applications that are reasonably com-

prehensible to men acting in good faith.”* Nowhere is

this requirement of clear guidance more critical than with

regard to application acceptability criteria. When pre-

viously faced with the appeal of an FCC applicant whose

application had been dismissed for failure to meet alleged

acceptability criteria imposed by the FCC, the D.C. Cir-

cuit stated:

The quid pro quo for stringent acceptability criteria

is explicit notice of all application requirements:

“{w]hen the sanction is as drastic as dismissal with-

out any consideration whatever of the merits, ele-

mentary fairness compels clarity in the notice of the

material required as a condition for consideration.”

The less forgiving the FCC’s acceptability standard,

the more precise its requirements must be.’® (em-

phasis added).

® Radio Athens, Inc. (WATH) v. FCC, 401 F.2d 398, 403 (D.C.

Cir. 1968).

10 Salzer v. FCC, 778 F.2d 869, 875 (D.C. Cir. 1985), citing Radio

Athens, 401 F.2d at p. 404.

In its Radio Athens decision, the D.C. Circuit specifi-

cally prohibited the FCC from construing statutory or

regulatory license grantability provisions as application

acceptabiliiy criteria. In holding that applicants are en-

titled to clear notice as to which of the FCC’s myriad

rules the agency intends to utilize as application accept-

ability criteria, that court observed:

The rule itself does not indicate that an application

with a [specified] problem will be dismissed without

consideration, but merely advises that a license will

not be granted if the [specified] violation perists.”

Radio Athens, Salzer, and their progeny clearly stand

for the proposition that statutory or regulatory provisions

intended by the FCC as application acceptability criteria

must be unequivocally articulated as such. In fact, the

Radio Athens court cited, as an exemplar, an FCC regu-

lation which utilized the phrase “no application will be

accepted” as an example of the precision and clarity re-

quired in the promulgation of application acceptability

criteria.

As noted above, cellular citizenship requirements are

set forth in 47 U.S.C. $ 310(b), and echoed in its regu-

latory counterpart, 47 C.F.R. $ 22.4(b).” Section 310

(b) provides only that licenses may not be “granted to or

held by” entities exceeding specified levels of alien par-

ticipation. Nothing in the language of Section 310(b)

can be construed as a bar to the filing of applications

with non-citizen participation in excess of the specified

levels. Hence. neither the FCC nor the Court of Appeals

could legitimately find that Section 310(b) established

any accentabilty for filing criteria based on citizenship.

11 Radio Athens, 401 F.2d at 403.

12 As the statutory and regulatory provisions are virtually iden-

tical, they will be collectively referred to herein as “Section 310

(b).”

{

Petitioners recognize that application acceptability cri-

teria based on citizenship may have been promulgated in

statutory or regulatory provisions other than Section 210

(%). For example, the FCC has consistently construed

the cellular application content requirements of 47 C.F.R.

§ 22.923 as application acceptability criteria. An exam-

ination of that regulation, however, reveals absolutely no

reference to citizenship requirements."

Neither the Court of Appeals nor the FCC has been

able to identify any FCC pronouncement precisely speci-

fying citizenship requirements as application acceptability

criteria. The Court of Appeals, however, attempted to

draw such criteria out of 47 C.F.R. §$ 22.20(a)(2) in

rationalizing the FCC’s dismissal of Petitioners’ applica-

tions. Although that regulation provides “examples of

common deficiencies which result in defective applica-

tions,” it contains no reference to cicizenship or alienage.

On the basis of its reading of that provision, however,

the Court of Appeals concluded thiat:

Taken together, the rule governing acceptability, 47

C.F.R. § 22.20(a)(2), and the rule governing the

acceptance of amendments to applications, 47 C.F.R.

'3 Progressive Cellular I1] B-2, 5 F.C.C.R. 2772 (1990) (RSA

applicant dismissed for failure to properly demonstrate its financial

qualifications as required by 47 C.F.R. § 22.923 (a) (7)).

14 The lack of any reference in 47 C.F.R. § 22.923 to citizenship

or alienage stands in sharp contrast to that provision’s require-

ment of a financial exhibit demonstrating, inter alia, “how the

applicant intends to finance construction.” The regulation’s specific

instruction to “See § 22.917” gives a prospective applicant clear

notice of precise financial requirements. Further, by following up

on the referral to 47 C.F.R. § 22.517, an RSA applicant can readily

ascertain exactly how to meet the FCC’s financial application ac-

ceptability criteria. That rule also gives clear notice that an ap-

plicant must comply with the financial criteria “at the time it files

its application.” The clarity with which these rules articulate

financial requirements as application acceptability criteria demon-

states that the FCC is fully aware of its obligation to alert ap-

plicants to application acceptability criteria.

§ 22.918(b), alerted prospective applicants that they

had to possess the qualifications to be a licensee on

the day of filing, that one such qualification was com-

pliance with section 310(b), and that no curative

amendments would be accepted for non-complying

applications.”

The Court of Appeals’ premises and conclusions re-

flected in this statement are wrong.’ Salzer does not allow

47 C.F.R. § 22.20(a)(2) to be read to construe Section

310(b) as a critical filing requirement, or to set filing dates

as the deadlines for compliance of substantive qualifica-

tions. In fact, when 47 C.F.R. § 22.20(a)(2) and the

RSA amendment provisions of 47 C.F.R. § 22.918(b) are

“taken together’, as urged by the Court of Appeals, they

provide applicants with the prospect of being able to

amend any defects in their applications prior to any review

which may lead to dismissal on substantive grounds. In

addition, the holding in Radio Athens prohibits constru-

ing the “grant” language of Section 310(b) as “acceptabil-

ity for filing” criteria.

The case law extant prior to the filing of Petitioners’

applications also is devoid of dny notice that the citizen-

ship requirements of Section 310(b) constituted an “ap-

plication acceptability” criterion. The FCC’s staff, in

dismissing an application which had not been timely

amended, noted that “aliens are not prohibited by Section

310(b) from applying for licenses, only from ‘holding’

them.” ‘7 The FCC’s Review Board, characterizing the

citizenship provisions as “prospective and remedial rather

than retrospective and/or punitive,” allowed an applicant

15 998 F.2d at 1057.

16 Any analysis by the Court of Appeals involving 47 C.F.R.

§ 22.918(b) is vitiated by that court’s repeated failure to discern

the decisionally significant difference between the MSA amendment

procedures and the RSA amendment procedures set forth in that

regulation. See, also, pp. 9-14, supra.

17 In Re Application of Nevada Broadcasting Group, No. BPCT-

850725K0, 1986 Lexis 3215 at *4 (MMB, June 19, 1986).

a —————

to demonstrate its citizenship qualifications by a_post-

filing amendment of its ownership structure.’ The FCC

characterized citizenship restrictions as “grant” require-

ments and allowed an originally non-complying applicant

to take the “remedial action” of amending its ownership

structure.” Even the D.C. Circuit had affirmed an FCC

decision allowing compliance with citizenship qualifica-

tions by post-filing amendment.”

Prior to the filing of RSA applications, the only FCC

pronouncements regarding alien participation in cellular

applications were FCC staff decisions in two MSA cases.

Advanced Business Communications, Inc., 2 F.C.C.R.

580, 2 F.C.C.R. 3751 (1987); GTRW Partnership, 2

F.C.C.R. 4160 (1987). In Advanced, an MSA applica-

tion initially was dismissed as unacceptable for filing be-

cause an initial staff review revealed the presence of an

alien corporate officer. After the filing of a post-dis-

missal amendment, the application was reinstated and

granted with the explanation that the initial dismissal had

occurred only becaue “no correcting amendment was re-

ceived by the Commission prior to the time the applica-

tion was reached for processing by the staff.” Advanced,

2 F.C.C.R. at 3751. Jn light of the result in that case,

and considering that it was decided in light of the MSA

provisions of 47 C.F.R. § 22.918(b), Advanced gave

RSA applicants no notice that citizenship was an applica-

tion acceptability criterion.

In GTRW, the applicant was a general partnership,

with alien general partners, at the time it filed its MSA

18 Seven Hills Television Co., 2 F.C.C.R. 3882, 3882 (Rev. Bd.

1987).

19 Spanish International Communications Corporation, 2 F.C.C.R.

3336, 3339 (1987). The FCC also noted that it would enforce

citizenship requirements with an eye toward “ensuring future

compliance with the statute” rather than imposing sanctions for

non-compliance.

20 Telemundo, Inc. v. Federal Communications Commission, 802

F.2d 513, 518 (D.C. Cir. 1986).

application. After the applicant filed a post-lottery amend-

ment converting itself to a limited partnership, and its

alien participants to limited partners, the application was

granted. Although the FCC recently has repudiated

GTRW, that repudiation does not change the fact that

GTRW gave prospective cellular applicants, such as Pe-

titioners, a clear signal that citizenship requirements were

not application acceptability criteria and, therefore, could

be corrected by post-filing amendment.

It is clear that the accepted and usual course of ju-

dicial review, as articulated in the Radio Athens and

Salzer line of cases, requires scrutiny of the criteria used

by the FCC as the basis for its dismissal of an applica-

tion. A reviewing court must determine whether the dis-

missed applicant was afforded clear and precise prior no-

tice of the alleged application acceptability for filing cri-

teria supporting the dismissal. Even though the Court

of Appeals in this case did not subject the FCC to cri-

tical examination, any review of the applicable statutes,

regulations and case law reveals that the FCC failed to

meet the most fundamental requirement of fairness; proper

notice of its intent to apply citizenship as an application

acceptability criterion.

Contrary to what the Court of Appeals concluded,

Petitioners’ applications were not unacceptable for filing.

Therefore, Petitioners were entitled to file, and have con-

sidered, their post-lottery amendments demonstrating their

citizenship qualifications.

II. THE COURT OF APPEALS ERRED BY NOT RE-

VIEWING THE FCC’S POLICY DISCRIMINATING

AGAINST ALIEN GENERAL PARTNERS UNDER

A STRICT SCRUTINY STANDARD

Section 310(b) sets forth specific limitations on the

participation of non-citizens in radio licenses, including

cellular licenses. Because that statute is silent as to any

participation by aliens in general partnership licensees. the

FCC took it upon itself to adopt, by declaratory ruling,

a total prohibition on alien general partners. Wilner &

Scheiner, 103 F.C.C.2d 511 (1985), reconsidered in part,

| F.C.C.R. 12 (1986). But for this FCC-created prohibi-

tion on alien general partners, there would be no question

as to Petitioners’ qualifications to be cellular licensees.

It cannot be denied that the FCC’s total prohibition on

alien general partners is more restrictive than the congres-

sionally enacted statutory provision governing alien par-

ticipation in radio licenses. The statutory provision spe-

cifically limits only alien participation in corporate li-

censees, and is silent as to the participation of aliens in

general partnership licensees. The FCC, by contrast, ex-

tends the discrimination beyond corporations into general

partnerships. The statutory provision allows aliens to hold

up to twenty percent of the ownership interest in a licensee

entity, while the FCC bars aliens from any ownership

participation in a general partnership licensee. Certainly,

the FCC has gone beyond the clear language of the stat-

ute and established discriminatory legal constraints on

aliens, including resident aliens, where none existed

before.”

In the instant case, Petitioners have repeatedly chal-

lenged the FCC’s total prohibition on alien general part-

ners as an unwarranted denial of equal protection as guar-

anteed by the due process clause of the Fifth Amendment.

In the course of their challenges, Petitioners have consist-

ently sought to have the FCC’s policy against alien gen-

eral partners reviewed under a strict scrutiny standard.

However, the Court of Appeals, like the FCC, wrong-

21 Section 310(b) does prohibit aliens from being officers or di-

rectors of corporate licensees. The FCC decided to totally prohibit

alien general partners on the novel theory that general partners

are the functional equivalents of corporate officers and directors.

When choosing the route of total prohibition, the FCC rejected less

restrictive options (e.g., contractual limitations on alien participa-

tion in partnership management), which would have been more

consistent with the statute’s accommodation of limited participa-

tion by aliens in licensee corporations,

fully refused to apply a strict scrutiny standard to its

review of this issue.

It is not without significance that all of the non-citizens

associated with Petitioners’ applications are resident aliens.”

This Court has ruled that aliens should be accorded rights

on a “generous and ascending” scale as they increase their

identify with our society. Johnson v. Eisentrager, 339

U.S. 763, 770-71 (1950). Resident aliens, who have the

closest ties with our society, are always a “suspect class”

for differential treatment under laws applicable to the

general public. Plyler v. Doe, 457 U.S. at 216, n.14.

While enactments of the Congress and other “political

branches of the Federal Government” are given substan-

tial weight by the courts when measuring such decisions

against aliens’ claims of denial of equal protection, the

states are given no deference in such regard. Plyler v.

Doe, 457 U.S. at 224. Even the “federal power over

aliens is [not] so plenary that any agent of the National

Government may arbitrarily subject all resident aliens to

different substantive rules from those applied to citizens.”

Hampton v. Mow Sun Wong, supra, 426 U.S. at 104.

As an independent regulatory agency, the FCC is neither

part of the legislature, nor part of the political branch

directed by the President. Accordingly, the FCC is not

one of the “political branches of the Federal Government”

and, therefore, any of its rules, policies or actions which

discriminate against aliens, and especially resident aliens,

must be subjected to a standard of strict scrutiny upon

judicial review.

“Resident aliens, like citizens, pay taxes, support the economy,

serve in the Armed Forces, and contribute in myriad other ways

to our society.” In re Griffiths, 413 U.S. 717, 719 (1973). “[Flor

most legislative purposes there simply are no meaningful differ-

ences between resident aliens and citizens, see Ambach v. Norwick,

441 U.S. 68, 75 (1979), so that aliens and citizens are ‘persons

similarly circumstanced’ who must ‘be treated alike.’ F'.S. Royster

Guano Co. v. Virginia, 253 U.S. 412, 415 (1920).” Toll v. Moreno,

458 U.S. 1, 20 (1982).

Had the Court of Appeals properly subjected the FCC’s

prohibition on alien general partners to the strict scrutiny

standard, the prohibition could not have survived. Under

the strict scrutiny standard, “ ‘inquiry must be made

whether the means adopted to achieve the goal are nec-

essary and precisely drawn.’ Examining Board v. Flores

de Otero, 426 U.S., at 605.” Nyquist v. Mauclet, 432

U.S. 1, 7 (1977). “In order to withstand strict scrutiny,

the law must advance a compelling state interest by the

least restrictive means available.” Bernal v. Fainter, 467

U.S. 216, 219 (1984).

The FCC policy prohibiting general partnerships with

any element of alien participation is unnecessary, over-

broad and not the least restrictive means available to

achieve the FCC’s asserted purpose. The FCC has not

articulated any reason as to why its broad disqualification

of general partners is necessary to serve a claimed na-

tional security interest. Instead, the FCC has asserted.

albeit inaccurately, that Section 310(b) left the agency

with no choice but to impose a total prohibition on alien

participation in general partnerships. Wilner & Scheiner,

| F.C.C.R. at 14.

The Court of Appeals acted in a manner contrary to

the applicable decisions of this Court when it deliberately

refused to apply the strict scrutiny standard in its review

of the FCC’s discriminatory prohibition on alien general

partners.

CONCLUSION

For the foregoing reasons, this Petition for a Writ of

Certiorari should be granted.

Respectfully submitted,

DONALD E. SANTARELLI

(Counsel of Record)

A. THOMAS CARROCCIO

RICHARD O. WOLF

SANTARELLI, SMITH &

CARROCCIO

1155 Connecticut Ave., N.W.

Washington, D.C. 20036

(202) 466-6800

January 3, 1994 Counsel for Petitioners

APPENDIX

Pee

A SR Rs ee & yr

APPENDIX

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued April 8, 1993 Decided July 30, 1993

No. 91-1611

MOVING PHONES PARTNERSHIP a

my Appellant

FEDERAL COMMUNICATIONS COMMISSION,

Appellee

THOMAS DOMENCICH AND COMMITTEE

FOR A FAIR LOTTERY

ROMULUS ENGINEERING, INC.

JAMES E. MARTIN, Jr.

CSH CELLULAR

GILCOM CELLULAR, L.P.

PC CELLULAR, INC.

RSA CELLULAR COMPANY

SUNDE CELLULAR COMMUNICATIONS, INC.,

Intervenors

AND CONSOLIDATED CASES 91-16] 3, 91-1614, 91-1615,

91-1616, 91-1617, 91-1621, 91-1626, 91-1627, 91-1628,

91-1629, AND 91-1636

Appeals from an Order of the

Federal Communications Commission

A. Thomas Carroccio argued the cause for appellants.

With him on the joint brief were J. Laurent Scharff,

Gertrude J, White, Michael F. Morrone, Mark F. Evens,

Michael R. Bennet, Richard O. Wolf, Edward R. Kump,

Denise Moline, and Lloyd D. Young. Glen Franklin

Koontz also entered an appearance for appellants in Nos.

91-1611, 91-1613, 91-1614, 91-1615, and 91-1616.

Sue Ann Kanter, Counsel, Federal Communications

Commission, argued the cause for appellee. On the brief

were Renee Licht, General Counsel; Daniel M. Arm-

strong, Associate General Counsel; and Roberta L. Cook,

Counsel, Federal Communications Commission. John E.

Ingle and Robert L. Pettit, Counsel, Federal Communica-

tions Commission, also entered appearances for appellee.

Mark D. Schneider argued the cause for intervenors

Thomas Domencich and Committee for a Fair Lottery;

James E. Martin, Jr.; CSH Cellular; Gilcom Cellular,

L.P.; PC Cellular, Inc.; RSA Cellular Company; Michael

B. Azeez; Excellence II; Elleron Cellular Corp.; Percival

Vaz; Larsen Cellular Associates; ATT R S A Company,

L.P.; Marco Communications Corp.; and Sunde Cellular

Communications, Inc. With him on the joint brief were

Carter G. Phillips, Carl W. Northrop, Stephen Kaffee,

Kenneth E. Hardman, Benito Gaguine, Arthur V.

Belendiuk, Thomas Gutierrez, Eliot J. Greenwald, David

J. Kaufman, Thomas L. Siebert, and Paul C. Besozzi.

George L. Lyon, Jr. entered an appearance for intervenor

Gilcom Cellular, L.P. Michael D. Sullivan entered an

appearance for intervenor Romulus Engineering, Inc.

Richard S. Myers entered an appearance for intervenor

Optima Cellular Partnership. Stephen E. Coran entered

an appearance for intervenor Excellence II.

Before Mikva, Chief Judge, and SENTELLE and

HENDERSON, Circuit Judges.

Opinion for the Court filed by Circuit Judge SENTELLE.

SENTELLE, Circuit Judge: Appellants, all partnerships,

applied to the Federal Communications Commission

(“Commission” or “FCC”) for authorization to construct

and operate cellular systems. The FCC dismissed the

applications on the ground that each proposed to include

one or more alien general partners, violating alien owner-

ship restrictions in the Communications Act (“Act”), 47

U.S.C. § 310(b) (1991 Supp.), and the FCC’s rules.

Because the Commission reasonably interpreted the Act

as prohibiting the grant of a radio license to a partnership

with aliens among its general partners, and because the

dismissal of appellants’ applications was reasonable and

consistent with the FCC’s strict rules for processing cellu-

lar applications, we affirm the Commission’s decision.

A. Regulatory Framework

In 1981, the Commission adopted rules to govern com-

mercial implementation of cellular telephone service, 47

C.F.R. § 22 subpart K (1993). In doing so, the FCC

divided the spectrum into two frequency blocks, for “wire-

line carriers” (telephone companies) and “nonwireline

carriers” (applicants other than telephone companies), to

allow two cellular carriers to be licensed in each market

area. Confronting a growing demand for cellular service,

the FCC solicited applications for nonwireline cellular

systems in each designated market and adopted expedited

application filing and processing rules designed to mini-

mize the administrative burden on its staff and to permit

orderly processing of thousands of cellular applications.

See, e.g., Cellular Communication Systems, 86 F.C.C.2d

469, 498-501 (1981), modified, 89 F.C.C.2d 58 (1982),

further modified, 90 F.C.C.2d 571 (1982), petition for

review dismissed, United States v. FCC, No. 82-1526

(D.C. Cir. 1984).

After experiencing significant delays in its expedited

comparative hearing process, the Commission decided that

selection among competing applications could be con-

ducted most efficiently through lottery in all markets be-

yond the largest thirty." Under the current procedures,

the FCC includes in the lottery all applications that

facially comply with processing requirements and contain

a certification that the application is complete and con-

tains all information required by the application form and

the FCC’s cellular rules. Lottery Further Reconsideration

Order, 59 Rad. Reg. 2d (P & F) 407, 410 & n.16. The

FCC applies a “letter-perfect” standard to the pre-lottery

requirements. Applications not complying with the initial

requirements are dismissed and lose any further oppor-

tunity to be considered in the lottery. /d.

The Commission’s staff reviews only the application

selected by lottery to ensure that it is acceptable for filing

—that is, that it complies with FCC rules, regulations,

and other requirements. 47 C.F.R. § 22.20(a)(2). If the

application does not meet the standards for acceptability,

it is dismissed without further consideration. If, however,

it is acceptable, it is placed on public notice as the tenta-

tive selectee, offering unsuccessful applicants the oppor-

tunity to challenge the application. Lottery Further Re-

consideration Order, 59 Rad. Reg. 2d (P & F) at 410.

To speed the selection process, Commission rules pro-

hibit the filing of amendments to cellular applications

until after a qualified tentative selectee has been announced

for a particular market. Only tentative selectees may file

amendments, and only minor amendments are permitted.

Cellular Lottery Order, 98 F.C.C.2d at 220; 47 C.F.R.

§ 22.918(b). Applicants filing defective applications

therefore have no opportunity to file amendments either

before or after the lottery to bring applications into com-

pliance with acceptability criteria should they prevail in

the lottery. Lottery Further Reconsideration Order, 59

as 1 Cellular Lottery Order, 98 F.C.C.2d 175, 179 (1984), recon., 101

F.C.C.2d 577 (1985), further recon., 59 Rad. Reg. 2d (P & F) 407

(1985) (Lottery Further Reconsideration Order), aff'd in relevant

part, Mazxcell Telecom Plus, Ine. v. FCC, 815 F.2d 1551 (D.C. Cir.

1987).

Rad. Reg. 2d (P & F) at 410 n.17: see also, e.g., REM

Communication, 3 F.C.C.R. 3705 (1986).

In the consolidated appeals before us, appellants, seven-

teen disappointed cellular applicants, challenge the FCC’s

decisions dismissing their applications upon discovery that

each proposed to operate its licensed radio common car-

rier facility with one or more general partners who were

aliens. The Commission held that the applications violated

section 310(b)(3) of the Communications Act, prohibit-

ing the grant of radio licenses to aliens and to corpora-

tions having a certain level of alien Ownership or having

aliens as officers or directors. 47 U.S.C. § 310(b) (3)

(1988), incorporated in section 22.4 of the FCC’s rules.

47 C.F.R. § 22.4(b)(3) (1993).

B. Proceedings Below

In the earliest of these proceedings, Continental Cellu-

lar, appellant in case No. 91-1621, applied for a cellular

radio facility on the nonwireline frequency to service the

Alaska 2 (Bethal) Rural Services Area (“RSA”), on

July 15, 1988. Like all the appellants, Continental certi-

fied that it had complied with the requirements of section

310(b) of the Communications Act and section 22.4(b)

of the Commission’s rules. Its application was selected in

the lottery. See PN Rep. No. CL-88-168 (F.C.C. released

Sept. 27, 1988). The Commission’s Mobil Services Divi-

sion Staff examined Continental’s application and rejected

it as unacceptable for filing because Continental had pro-

posed to operate as a general Partnership with at least

three alien general partners in violation of section 310

(b)(3) of the Act and section 22.4(b)(3) of the FCC

rules. The Commission denied reconsideration of the dis-

missal, holding that the staff had properly concluded that

the inclusion of aliens as general partners violated the

prohibitions of section 310(b)(3). The FCC also re-

jected Continental’s argument that alien general partners

could exempt themselves from the Statutory restrictions by

accepting a partnership agreement purporting to insulate

them from the management of partnership affairs, and

concluded that even if such an exemption were permissi-

ble, Continental’s partnership agreement was insufficient

to establish such insulation. Continental Cellular I, 5

F.C.C.R. at 691-92.

With its petition for reconsideration, Continental sub-

mitted an amendment seeking to change its general part-

nership with the alien partners becoming limited partners.

The Commission held that Continental’s application could

not be atnended to comply with alien ownership rules, as

it had properly been found defective and unacceptable for

filing. 5 F.C.C.R. at 693 n.9, (citing 47 C.F.R.

§ 22.918(b) and REM Communication, 3 F.C.C.R.

3705). Continental appealed the FCC’s order to this

court, which remanded the case to the Commission for

further consideration of the record at FCC’s request.

In the interim, each of the other appellants was named

the tentative selectee for a market in which it had won

the lottery. Each, however, had filed as a general part-

nership, including between one and four alien partners.

Following the lotteries, each sought to file a curative

amendment to change its general partnership to a limited

partnership or to remove the alien general partners.? As

it had with regard to the Continental application, the

staff dismissed the other applications as ineligible for

2 Unlike the other appellants, Quadrangle Communications did

not convert to a limited partnership because its only alien general

partner died after its original application application had been

filed. Instead Quadrangle amended its application to reflect the

fact of the partner’s death, and requested a waiver of section 22.922

of the Commission’s rules, 47 C.F.R. § 22.922, to permit an involun-

tary transfer of the deceased partner’s interest to the non-alien

executrix of the partner’s estate. Though the FCC subsequently

remanded Quadrangle’s application, because Quadrangle, like the

other appellants, failed to conform with the Commission’s “letter-

perfect” cellular application processing rules and procedures, we

vacate the remand and deny Quadrangle’s appeal.

filing, because they had proposed ownership structures

that did not comply with the requirements of section

310(b)(3) and section 22.4(b)(3) of the FCC’s rules.

Continental and the other appellants petitioned for re-

consideration. The Commission consolidated their cases

with Continental’s. Continental Cellular Il, 6 F.C.C.R.

6834, 6835 (1991). The FCC refused to reconsider the

dismissals, holding that appellants’ applications properly

were dismissed as unacceptable for filing. It ruled that

the inclusion of aliens as general partners as originally

proposed violated section 310(b)(3), whether or not

alien general partners purported to insulate themselves

from management of partnership affairs, and that even

were such a statutory exemption permissible, none of the

applicants had made a showing of such insulation. Like-

wise, the Commission rejected contentions of some appel-

lants that dismissal of the applications denied them their

Fifth Amendment right to equal protection regardless of

alienage. Finally, the FCC declined to accept amend-

mendments curing the violation of section 310(b) (3),

holding that under clear Commission rules and precedent,

curative amendments may not be submitted for a defec-

tive cellular application. 6 F.C.C.R. at 6836, (citing

Progressive Cellular Ill B-2, 5 F.C.C.R. 2772 (1990) );

REM Communication, 3 F.C.C.R. 3705 (1988).

II.

Section 310(b) prohibits the grant of radio licenses,

including licenses in the common carrier service, to aliens

and to corporations evidencing specific levels of alien

Ownership or control. Section 310(b)(3) forbids the

grant of a radio license to any corporation in which an

officer or director is an alien, or of which more than

twenty percent of the stock is owned or voted by aliens.

The Commission adopted the statutory language verbatim

in its rules governing mobile radio services, including the

cellular service. 47 C.F.R. § 22.4. These alien ownership

restrictions reflect a long-standing determination to “safe-

guard the United States from foreign influence” in broad-

casting. Kansas City Broadcasting Co., 5 Rad. Reg.

(P & F) 1057, 1093 (1952). This policy against allow-

ing aliens to have any controlling influence in a licensee

was established long before the applications at issue were

filed. No less well established in the tenet of partnership

law that a general partner has control of partnership af-

fairs as against the outside world. Section 9(1), Uniform

Partnership Act; Picone v. Comm’l Paste Co., 60 So.2d

590 (1952). Although the language of section 310(b)

and the corresponding rule refers to corporations only,

the statutory restrictions have been extended to noncor-

porate entities and associations. In Wilner and Scheiner,

103 F.C.C.2d 511 (1985), recon. in part, 1 F.C.C.R. 12

(1986) (“Wilner & Scheiner Reconsideration Order’),

the FCC applied the alien ownership restrictions of sec-

tion 310(b) to limited partnerships and other types of

partnership and corporate interests. In that decision, the

FCC held that for purposes of section 310(b), the posi-

tion occupied by general partners in a partnership is

directly comparable to that of officers and directors in a

corporation, see 103 F.C.C.2d at 520 n.3; therefore, alien

general partners are in a position to exercise foreign in-

fluence in broadcast media, in contravention of the na-

tional security policy underlying the statute.

Although broadcast radio stations were the dominant

medium when the national security policy underlying sec-

tion 310(b) was developed, the rationale is equally ap-

plicable to common carrier radio stations, as they, also,

are part of the nation’s communications network. Desnite

their concession that “the national security purpose of

Section 310(b) can be a legitimate reason for discrimina-

tion against aliens,’ Pet. Br. at 37, appellants assert a

constitutional claim that this court should extend a strict

standard of review to distinctions based on alienage. We

disagree.

ree

Supreme Court precedent instructs that classifications

based in alienage in federal Statutes are permissible so

long as the challenged statute is not a “wholly irrational”

means of effectuating a legitimate government purpose.

Matthews v. Diaz, 426 U.S. 67, 83 (1976). In Matthews,

the Court unanimously upheld denial of Medicare bene-

fits to certain aliens, Similarly, in Foley y. Connelie, 435

U.S. 291 (1978), the Court held that a state statute

limiting membership in the state police force to U.S. citi-

zens did not violate the Equal Protection Clause of the

Fourteenth Amendment. In upholding the legislation, the

Court made clear that it had “never Suggested that [legis-

lation imposing restraints on aliens] is inherently invalid,

nor have we held that all limitations on aliens are sus-

pect.” Id. at 294. Instead, the Court explained, the

application of strict scrutiny to the exclusion of aliens as

a class has been limited to “exclusions [which] struck at

the noncitizens’ ability to exist in the community” by

denying them essential welfare assistance, educational

benefits, or the right to engage in public employment or

the practice of licensed professions. Id. at 295.° The

3 We note that Foley involves state, rather than federal, regula-

tion of aliens. Even so, for the purpose of this case, that fact

represents a distinction without a difference. The denial of Medi-

care benefits which survived the rational basis test in Matthews

could well withstand the Foley analysis, which applied strict scru-

tiny to “exclusions [which] struck at the noncitizens’ ability to

exist in the community,” 435 U.S. at 295, based on the Court’s con-

clusion such exclusions were “inconsistent with the congressional

determination to admit the alien to permanent residence.” Id. In

fact, the facets of community life from which aliens may not be

excluded, including eligibility for public employment, educational

benefits, or “welfare assistance essential to life itself,” are those

that, if withheld, would directly cause economic dependence or

physical harm. In contrast, receipt of Medicare benefits, while

desirable, might legitimately be considered a perquisite of citizen-

ship, insofar as a government’s decision not to extend such benefits

to aliens does not necessarily involve withholding of essential wel-

fare assistance, as would, for example, the denial of food stamps or

emergency services at a hospital.

10a

opportunity to own a broadcast or common carrier radio

station is hardly a prerequisite to existence in a com-

munity. Therefore, we apply a rational basis, not a strict

scrutiny test.

The national security policy satisfies the requirement

that there be a “showing of some rational relationship

between the interest sought to be protected and the limit-

ing classification.” /d. at 296. We thus deny appellants’

constitutional claim.

Appellants next turn to statutory claims. In analyzing

their arguments, we use the framework of inquiry laid out

in Chevron U.S.A. Inc. v. Natural Resources Defense

Council, 467 U.S. 837, 842-43 (1984). “If the intent of

Congress is clear, that is the end of the matter... . [If],

[however], the statute is silent or ambiguous with respect

to the specific issue, the question for the court is whether

the agency’s answer is based on a permissible construc-

tion of the statute.”

Appellants first argue that the Commission’s practices

deviate from the plain meaning of section 310(b). They

assert that because the statute specifically bars aliens from

“holding” licenses, the statute permits aliens to apply for

them. Thus, they argue, in dismissing their applications,

the FCC improperly interpreted and relied on section

310(b) of the Communications Act. Appellants’ at-

tempted plain meaning argument rests on a non sequitur.

The statute’s prohibition on aliens holding licenses cannot

sensibly be construed to plainly, or even likely, grant per-

mission for aliens to file license applications. It would

avail appellants little to have the right to file a licensing

application when they could not, because of their com-

position, hold a license were it awarded to them.

Nor can appellants credibly claim to have been un-

fairly surprised by the FCC interpreting the presence of

alien general partners in their organization as violations

of section 310(b)(3); Wilner and Scheiner extended the

lla

Communications Act’s prohibition of the grant of broad-

cast licenses to corporations with aliens serving as officers

or directors to partnerships with aliens serving as general

partners.

In light of the foregoing, it is clear that a ban on alien

Ownership exists; what is lacking is a clear direction from

Congress as to the point at which the FCC will effectuate

the ban. Under the second step of Chevron, that deci-

sion belongs to the agency provided only that its interpre-

tation is a reasonable one, consistent with the statute.

Here, it is clear that the Commission’s regulatory scheme

is entirely consistent with the congressional mandate em-

bodied in section 310(b), as tested by the Chevron

analysis.

The FCC intended the cellular lottery process as a

quick, simple method for selecting prospective licensees.

See Cellular Lottery Order, 98 F.C.C.2d at 179-82, 219-

22; Cellular Lottery Further Reconsideration, 59 Rad.

Reg. 2d (P & F) at 409. Under these cellular application

processing rules and procedures, the Commission prop-

erly concluded that an application that does not comply

with all the rules and requirements, including both pro-

cedural and substantive requirements relating to the filing

and content of the application, must be dismissed.

The procedures set out by the Commission indicate that

compliance was an important element in the FCC's deci-

sion to announce a successful applicant as the tentative

selectee. See 47 C.F.R. §$ 22.20(a): Cellular Lottery

Order, 98 F.C.C.2d at 195. In amending section 22.918

(b) to “strictly limit{ ] the filing of amendments to appli-

cations . . . under lottery selection procedures,” id. at

220, the Commission barred subsequent amendments

throughout the application process, and limited subsequent

amendments to those intended to correct minor errors or

omissions in otherwise qualified applications. Prior Com-

mission decisions Support this interpretation. See, é.2.,

REM Communication, 3 F.C.C.R. 3705; Progressive Cel-

a re a ee He ie nc ate

12a

lular Ill B-2, 5 F.C.C.R. 2772, 2773 (1990). Indeed,

appellants present no evidence suggesting that the Com-

mission ever has allowed applicants to file amendments

to establish their basic qualifications to become licensees.

Nor can appellants prevail by arguing that the FCC

offered insufficient notice that applications violating sec-

tion 310(b) of the Act and section 22.4 of the FCC

rules were unsuitable for filing and would be dismissed.

Taken together, the rule governing acceptability, 47

C.F.R. § 22.20(a)(2), and the rule governing acceptance

of amendments to applications, 47 C.F.R. § 22.918(b),

alerted prospective applicants that they had to possess

the qualifications to be a licensee on the day of filing,

that one such qualification was compliance with section

310(b), and that no curative amendments would be ac-

cepted for non-complying applications. This notice was

all that was necessary.

Thus, there is no support for appellants’ contention

that the Commission erred in not exempting from section

310(b)(3) partnerships in which alien general partners

contractually relinquish control and management. Aside

from the deviation from the “letter-perfect” rule that such

an exception would entail, appellants have failed to show

that the FCC was unreasonable in concluding that it had

no power to accord an exemption to individuals holding

positions otherwise subject to section 310(b) simply be-

cause they agree not to exercise the power of their posi-

tions. Continental Cellular I, 5 F.C.C.R. at 692; Con-

tinental Cellular II, 6 F.C.C.R. at 6836; Wilner and

Scheiner Reconsideration Order, 1 F.C.C.R. at 14-15.

Appellants cannot successfully defend their contention

that they effectively cured hte violation simply by ensur-

ing that the alien partners could not control the partner-

ship. Even as a practical matter, though the proffered

partnership agreements vested day-to-day control in a

single managing partner, they neither excluded alien gen-

eral partners from involvement in the management or

13a

operation of the partnership, nor precluded an alien from

holding the position of managing partner. In these cir-

cumstances, the FCC could reasonably conclude that the

proposed agreements were insufficient to remove the alien

general partners from the restriction of section 310( b)

(3), even assuming such an exemption were available.

Continental Cellular 11, 6 F.C.C.R. at 6836.

When Congress has intended to give the Commission

discretion to depart from a specified level of control in

section 310(b), it has spoken explicitly. See 47 U.S.C.

§ 310(b)(4). The absence of such plain language here

only supports the FCC’s interpretation.

CONCLUSION

The FCC’s rules and regulations for selection of cellu-

lar licensees made clear that all applications had to

qualify for selection before any amendments would be

allowed. Because each appellant before us listed an alien

as a general partner in the first instance, in violation of

the Commission’s rules implementing section 310(b) of

the Communications Act, their applications did not qual-

ify for selection on the date of filing and therefore could

not be awarded. The Commission was well within its

authority to dismiss the applications, and we therefore

affirm its order.

It is so ordered.

14a

BEFORE THE

FEDERAL COMMUNICATIONS COMMISSION

WASHINGTON, D.C. 20554

File No. 10003-CL-P-316-A-88

IN RE APPLICATION OF: CONTINENTAL CELLULAR

For facilities in the Domestic Public Cellular

Telecommunications Radio Service on Fre-

quency Block A, in Market 316, Alaska 2

(Bethel).

and

File Nos. 10109-CL-P-675-A-88, 10311-CL-P-403-A-88,

10621-CL-P-366-A-89, 10513-CL-P-460-A-89,

10226-CL-P-423-A-88, 10625-CL-P-370-A-89,

10511-CL-P-458-A-89, 10104-CL-P-545-A-88,

10613-CL-P-313-A-89, 10504-CL-P-440-A-89,

10038-CL-P-319-A-88, 10049-CL-P-699-A-88,

10449-CL-P-509-A-89, 10265-CL-P-488-A-88,

10407-CL-P-659-A-88, 10420-CL-P-672-A-89,

10083-CL-P-61 1-A-88, 10174-CL-P-634-A-88,

10230-CL-P-427-A-88,

IN RE: NINETEEN RURAL SERVICE AREA APPLICATIONS

FILED BY PARTNERSHIPS WITH ALIEN PARTNERS

MEMORANDUM OPINION AND ORDER

Adopted: November 8, 1991;

Released: November 20, 1991

15a

By the Commission:

1. INTRODUCTION

1. The Commission has before it a proceeding involv-

ing alien ownership of a Commission cellular applicant

remanded from the U.S. Court of Appeals for the District

of Columbia Circuit at the Commission’s request, for fur-

ther consideration and refinement of the record.’ Con-

tinental Cellular (Continental)? filed its application as a

general partnership. One of the general partners was a

non-United States citizen.*

On April 24, 1990, Thomas Domencich and the Committee for

a Fair Lottery filed a Motion to consolidate this proceeding with

22 other proceedings also involving alien ownership. On November

28, 1990, various counsel representing 17 of the applicants dis-

missed in those other proceedings also requested we consider the

records in those proceedings with the one at bar, and requested the

opportunity to present oral argument.

* Continental Cellular has, since originally filing it application,

altered its ownership structure. Continental’s successor in interest

is Continental Alaska Limited Partnership.

* The record in this proceeding includes: (1) a Petition for Re

consideration filed by Continental on November 30, 1988; (2) Com-

ments of Romulus Engineering filed February 13, 1989; (3) Com-

ments on the Participation of Non-Citizen Principals in Cellular

Applications filed by various legal counsel representing cellular

applicants on November 3, 1989); (4) Furthur Comments on the

Participation of Non-Citizen Principals in Cellular Applications

filed by other legal counsel representing a cellular applicant on

January 3, 1990; (5) Supplementary Comments of Continental filed

November 28, 1990; (6) various related pleadings. As the issues

raised by Continental, the applicants which were general partner-

ships when filed, Romulous Engineering and the commentors in the

Participation of Non-Citizen Principals, are virtually identical, the

parties will be referred to collectively as “the petitioners” unless

specifically referred to by name. The petition filed by Sacramento

RSA Limited Partnership (Sacramento) differs insofar as it was

a limited partnership when it initially filed its application.

16a

2. The Mobile Services Division (MSD) has also dis-

missed twenty other applications for various nonwireline

RSA markets because the applicants had impermissible

alien non-insulated partners under Section 310(b)(3) of

the Communications Act. All of these applicants have

filed petitions for reconsideration. Because of the similar-

ity of the issues presented in nineteen of these proceed-

ings named in the Committee for a Fair Lottery’s motion,

we are consolidating the pleadings of those applicants

(listed in Appendix A) hereto.* Additionally, we deny

the petitioners’ requests for oral argument because the

written record is sufficient to allow us to make a decision.

3. Continental argues that the MSD has erred in dis-

missing its application for violation of the alien owner-

ship rules as they pertain to partnerships interests held by

foreign citizens. Upon further consideration of the record,

we find that the MSD was correct in returning Con-

tinental’s application as defective. We also find the MSD

properly returned all of the applications listed in Ap-

pendix A.

Il. BACKGROUND

4. Continental filed an application for a non-wireline

facility to serve the Alaska 2 (Bethel) Rural Service Area

(RSA) on July 15, 1988. A lottery was held and Con-

tinental was announced as the tentative selectee on Sep-

4 We are not including the pleadings filed by FutureWave Gen-

eral Partners (File No. 10810-CL-P-615-A-89), Rural America

General Partnership L.P. (File No. 10802-CL-P-560-A-89), or U.S.

Telco Partners (File No. 10815-CL-P-620-A-89) as requested by

the Committee for a Fair Lottery as those proceedings involve

different issues. Great Western Cellular Partners (File No. 10269-

CL-P-492-A-90) has also been dismissed for violation of our alien

ownership rules. As it also involves different alien ownership issues,

it will not be included with the other dismissals in this Order.

17a

tember 27, 1988.° The MSD returned Continental’s ap-

plication on October 26, 1988 for failure to comply with

the alien ownership restricions of the Communications

Act because Continental’s partnership contained three

alien general partners.” On November 30, 1988, Con-

tinental filed a Petition for Reconsideration, arguing that

Section 310(b)(3) of the Act and Section 22.4 of the

Commission’s rules only prohibit a grant of a license to a

foreign owned corporation and make no mention of part-

nerships. Continental also argued that it has insulated

the alien partners from management and control of the

partnership. Finally, Continental stated that its amend-

ment changing the partnership to a limited partnership

should be allowed.

5. In Continental Cellular, 5 FCC Red 691 (1990),

the Commission denied reconsideration, stating that while

the Act and rules may only specifically refer to corpora-

tions, the alien ownership restrictions are also applicable

to non-corporate entities and associations. Relying on

Wilner & Scheiner, 103 FCC 2d 511 (1985), reconsid-

ered in part, 1 FCC Red 12 (1986), (Wilner & Scheiner

and Wilner & Scheiner Reconsideration Order), the Com-

mission stated that the statutory restrictions were specifi-

cally interpreted to encompass partnerships. In Wilner &

Sheiner Reconsideration Order, the Commission reasoned

that non-limited partners’ occupy positions comparable

to those held by officers and directors in a corporation

and construed the officer and director restrictions to apply

5 Public Notice, Report No. CL-88-168 (released September 27,

1988).

® The dismissal also cited Continental’s failure to reveal all of

its partners in its application. Given our disposition here it is

unnecessary to address this issue.

7 “Non-limited” partners refer to partners in a partnership with-

out limited partners (such as Continental’s partnership as orig-

inally filed) and to general partners within a limited partnership.

Wilner & Scheiner Reconsideration Order, 1 FCC Red at note 4,

18a

to these partnership interests.*° Additionally, the Commis-

sion found that although Continental may have tried to

insulate the alien partners from management and control,

Section 310(b)(3) of the Act reflects a Congressional

concern over alien ownership of Commission licenses even

in those circumstances where the alien’s ownership inter-

est does not confer actual control. The Commission con-

cluded that Continental’s application had been properly

returned and Continental was not permitted subsequently

to file a corrective amendment.

6. Continental then filed an appeal with the U‘S.

Court of Appeals for the District of Columbia Circuit

(court). On October 1, 1990, at the Commission’s re-

quest, the court remanded the case for further considera-

tion of the record.” On November 28, 1990, Continental

filed Supplemental Comments. The 18 general partner-

ship applicants filed applications for various RSA mar-

kets, won the lottery in a market, and were named tenta-

tive selectee for the markets. in which they won the lot-

tery. The general partnership applicants each had from

one to four alien general partners which owned from 2 to

25.984 percent of the applicant. All of these applicants

filed amendments to change their alien general partners to

limited partners after their applications were filed or to

otherwise divest the alien of any control in the partner-

ship. The MSD dismissed these applications for failure to

comply with the alien ownership restrictions in Section

310(b)(3) of the Act. All of the general partnerships

filed petitions for reconsideration of their dismissals.

Sacramento filed an application as a limited partnership

pursuant to California law, won a lottery and was named

tentative selectee for that market. Sacramento’s applica-

tion was dismissed because it had a 4.545 percent alien

8 Id. at n. 42 and accompanying text.

3 By Public Notice (Report No. CL-91-21 (released October 26,

1990)), the Commission invited Continental to file comments in

order to supplement the record.

19a

non-insulated limited partner in violation of Section 310

(b)(3) of the Act.

III. DISCUSSION

A. Inclusion of a Partnership within the Prohibitions of

Section 310(b) (3)

7. The petitioners argue that the prohibitions of Sec-

tion 310(b)(3) of the Act and Section 22.4 of the rules

do not refer or apply to partnership interests because the

language of the prohibitions specifically refers only to cor-

porate interests. We do not agree. Section 310(b) (3) of

the Act ® addresses the participation of foreigners in the

provision of broadcast, common carrier. aeronautical en

route or aeronautical fixed services.'' The proscriptions

of Section 310(b) (3) are also reflected in Section 22.4 of

our rules."* While the language of the statute and rule

10 Section 310(b) (3) states in pertinent part:

(b) No... common carrier... license shall be granted to or

held by—

* &

(3) any corporation of which any officer or director is an

alien or of which more than one-fifth of the capital stock is

owned of record or voted by aliens or their representatives

thereof or by any corporation organized under the laws of a

foreign country.

! Various petitioners reason that their alien partners are from

friendly nations and/or have close ties with the United States.

The statute makes no distinction between resident and non-resi-

dent aliens; offers no exception depending on the length of the

alien’s U.S. residence; and provides no exemption because the

alien is a citizen of a close ally of the United States. The restric-

tions of the statute constitute a flat prohibition against certain

levels of alien ownership.

% Section 22.4 states in pertinent part:

(b) Alien Ownership. An authorization may not be granted to

or held by:

* & &

(3) Any corporation of which any officer or director is an

alien or of which more than one-fifth of the capital stock is

20a

specifically addresses corporate applicants, the alien own-

ership restrictions have been applied with equal force to

non-corporate entities and associations.” As we noted in

Wilner & Scheiner:

the definitional language of the Communications Act

provides that the statutory proscriptions extend be-

yond corporate entities. The definition of “corpora-

tion” contained in the Communications Act “in-

cludes any corporation, joint-stock company or asso-

ciation.” Since a .. . partnership is one form of

“association,” the statutory language itself establishes

that interests in these types of businesses are prop-

erly encompassed within the scope of Section 310

(b).

103 FCC 2d at 514 (footnotes omitted). The Commis-

sion also noted that use of the word “includes” in the

statutory definition of “corporation” suggests there are

additional entities which fall under the definition. The

petitioners argue that because the definition of “person”

in the Act includes both associations and partnerships,

owned of record or voted by aliens or their representatives

or by a foreign government or representative thereof or any

corporation organized under the laws of a foreign country.

13 See, e.g., Farragut Television Corp., 4 RR 2d 350 (1965)

(policy holders of a mutual insurance company); Kansas City

Broadcasting Co., 5 RR 2d 1057 (1952) (members of a church);

Chicagoland TV Co., 4 RR 2d 747 (1965) (members of a labor

union) ; and Wilner & Scheiner, supra (partnerships) ; PrimeMedia

Broadcasters, Inc., 3 FCC Red 4293 (1988) (partnerships). See

also Reexamination of the Commission’s Rules and Policies Re-

garding the Attribution of Ownership Interests in Broadcast,

Cable Television and Newspaper Entities, 97 FCC 2d 997, 1009

(1984), reconsidered in part, 58 Rad. Reg. (P & F) 2d 604 (1985),

further reconsidered, 1 FCC Red 802 (1986) (Attribution Orders)

(alien ownership prohibition “applies equally to all financial inter-

ests in all business forms of licensees’’).

14 “Person” includes an individual, partnership, association, joint-

stock company, trust, or corporation. 47 U.S.C. Section 153(i).

2la

the latter are not included within the definition of cor-

poration. This argument would Suggest that in an attempt

to curb alien ownership of certain communications facili-

ties, Congress prevented only foreign-controlled corpora-

tions from holding Commission licenses but not foreign-

controlled partnerships. We find this argument untenable.

Indeed, it is consistent with the Congressional intent to

find limited partnership included within the auspices of

Section 310(b)(3). Id. at 514-5. To reiterate, the Com-

mission determined in Wilner & Scheiner, when asked to

decide whether aliens may hold limited partnership inter-

ests exceeding the statutory limitation placed on share-

holders of a corporate licensee, that limited partnership

interests are subject to the citizenship requirements of

Section 310(b)(3). Therefore, the inclusion of partner-

ship interests within the prohibitions of Section 310(b)

(3) is consistent with the Congressional objective and

Commission decisions, and does not represent a new in-

terpretation or rule.

B. Curative Amendments

8. The petitioners argue that the Act does not pro-

hibit the filing of an application with foreign ownership.

They posit that any changes prior to final grant are ac-

ceptable." The Act does, however, allow the Commis-

sion to make any rules and regulations as it may deem

necessary.’* Our cellular processing rules provide that an

1° The fact that all of these applicants except Continental were

listed on publie notices as tentative selectees is irrelevant to our

determination in this case. Being named tentative selectee only

reflects that an application has received a limited pre-screening by

the staff. Each public notice indicates that the application may

later be dismissed if found to be defective. See, e.g., Public Notice,

Report No. CL-89-254 (released August 24, 1989). See also 47

C.F.R. Section 22.2(b) (acceptance for filing “will not preclude

the subsequent return or dismissal of the application if it is found

to be defective or not in acocrdance with the Commission’s rules,”).

16 Section 4(i) of the Communications Act of 1934 states that:

(i) The Commission may perform any and all acts, make

such rules and regulations, and issue such orders, not incon-

22a

application will be dismissed as unacceptable for filing if

it “does not comply with the Commission’s rules, regula-

tions, specific requirements for additional information or

other requirements.” 47 C.F.R. Section 22.20(a)(2).

An application that does not comply with the alien own-

ership provisions of the Act and our rules, 47 U.S.C. Sec-

tion 310(b)(3); 47 C.F.R. Section 22.4(b) (3), is thus

unacceptable for filing and properly dismissed.

9. In Cellular Lottery Rule Making, 98 FCC 2d 175

(1984), in the interest of administrative efficiency, the

Commission framed Section 22.918(b) of the rules to

“strictly limit[] the filing of amendments to applications

for the below 90 markets under lottery procedures.” I/d.

at 220.'7 While Section 22.918(b) does permit the filing

sistent with this Act, as may be necessary in the execution

of its functions.

Section 303 of the Act states in pertinent part that:

Sec. 303. Except as otherwise provided in this Act, the Com-

mission from time to time, as public convenience, interest, or

necessity requires shall

* & &

(r) Make such rules and regulations and prescribe such re-

strictions and conditions, not inconsistent with law, as may

be necessary to carry out the provisions of this Act, or any

international radio or wire communications treaty or con-

vention insofar as it relates to the use of radio to which the

United States is or may hereafter become a party.

17 Although many of the petitioners argue that applicants for

radio broadcast facilities have been allowed to amend their appli-

cations, the procedure associated with processing of certain ap-

plications in the Mass Media Bureau is quite different from the

licensing procedure involved here. For example, the procedure

for screening applications for FM broadcast service construction

permits follows a three-step tenderability-acceptability-grantability

review, which contains a thirty day amendment-as-of-right period

following the public notice of acceptance for tender. During this

period an applicant may file corrective amerdments. See Report

and Order on FM Application Processing, 58 RR 2d 776 (1985).

This approach was not adopted for the processing of cellular appli-

23a

of minor amendments by the tentative selectee, we have

consistently construed Section 22.918(b) to prohibit post-

filing or post-lottery amendments to cure acceptability

defects. See Progressive Cellular III B-2, 5 FCC Rcd

2772 (1990); REM Communications, 3 FCC Rcd 3705

(1988).’* Accordingly, under our cellular processing

standards, any application containing a defect, such as

violation of the alien ownership restrictions, is dismissed

without opportunity to cure. The fact that the alien own-

ership restrictions in the Act and our rules do not ex-

plicitly say a noncompying application may not be filed

does not change this analysis. The language of the. alien

owneship provision cannot reasonably be read to mean

that a noncomplying application can be filed. This fact

is particularly true given Question 12 on FCC Form 401

for a Common Carrier radio station authorization,” asks

cations in part because of the large volume of applications expected

to be filed for the cellular service. See Cellular Lottery Reconsid-

eration Order, 59 RR 2d 407, 410-411 (1985).

18 There are differences between the use of the Section 22.918(b)

minor amendment period in cellular proceedings and the amend-

ment-as-of-right period in FM broadcast proceedings. The cellular

minor amendment period does not allow a Part 22 applicant to

correct an alien application defect, but submission of such a cor-

rection by an FM applicant during the amendment-as-of-right

period is permitted. There are other differences between the

processing procedures. For instance, during the amendment-as-of-

right period, an FM broadcast applicant may amend its financial

qualifications and correct multiple ownership problems whereas a

cellular applicant may not do either. A cellular applicant may only

file amendments which are considered minor, non-curative amend-

ments as defined by Section 22.918 of the Commission’s rules. It

is well accepted that the Commission may utilize different processing

standards for different services. See e.g., David R. Williams d/b/a

Industrial Communications, 58 Rad. Reg. 2d (P & F) 38 (1983),

aff'd sub nom. Williams v. FCC, 721 F.2d 1424 (D.C. Cir. 1983).

19 Question 12 on FCC Form 401 asks in pertinent part:

Does the applicant certify that it complies with Section 310(b)

of the Communications Act of 1934, as amended, and Section

24a

applicants to certify compliance with the statute’s alien

ownership restrictions. It cannot be reasonably argued,

therefore, that an alien cellular applicant can assume it

can file a non-grantable application and fix it later.”

Therefore, to the extent the application violated the alien

ownership restrictions, the MSD was correct in refusing

to accept the change of ownership amendments filed by

the various applicants in this proceeding.

C. Insulation of Non-Limited Partners

10. Certain petitioners argue that their alien non-

limited partners had been insulated from management of

the partnership and therefore were in compliance with

Section 310(b)(3)’s ownership restrictions because they

would be below the 20 percent alien ownership bench-

marks.” The Commission in Wilner & Scheiner, how-

ever, made it clear that all non-insulated partnership in-

terests, such as the interests at issue here, will be attrib-

uted and considered comparable to the interests held by

officers and directors for alien ownership purposes. 103

FCC 2d at 520 n. 43. On reconsideration, the Commis-

sion specifically rejected the suggestion that such non-

limited partners could avoid the dictates of Section 310

(b)‘3) by insulation. 1 FCC Rcd at 15 (“We have no

power to accord a statutory ‘exemption’ to a person hold-

ing a positional interest otherwise subject to the scope of

22.4 of the Commission’s Rules regarding alien ownership and

control?

All of the applicants in this proceeding answered “yes” to

the above question. -

20 See PrimeMedia Broadcasting, Inc., supra (affirming dis-

missal of partnership application filed by aliens).

21 For example, Continental’s original partnership agreement,

while placing no specific limitations on any of the partners’ powers,

stated that the day-to-day management would be conducted by one

managing partner elected by a majority vote of the partners. This,

it asserts, insulates the alien non-limited partner.

25a

Section 310(b) because he or she agrees, as a matter of

private contract, not to exercise the powers inherent in

that position”). Only insulated limited partners may be

treated as shareholders (and not as officers and direc-

tors), and then, only when certain circumstances are

met. The partners here were all non-limited partners

and accordingly, their interests are attributed as those of

an Officer or director.

11. Additionally, even assuming an exemption could

be created for insulated non-limited partners, these peti-

tioners, whose aliens originally filed as general partners,

utterly fail to demonstrate that their alien partners were

insulated from participating in the day-to-day manage-

ment of the partnerships if we were to apply the non-

attribuiton standards. The partnership agreements them-

selves, the best evidence of partner rights, contain no pro-

visions that preclude the alien general partners from vot-

ing on all partnership business, participating in the man-

agement of the business or acting as an officer or em-

ployee of the partnership. Even assuming the limited

partner non-attribution standards, of Wilner and Scheiner

and the Attribution Orders applied, we find that the peti-

tioners have failed to provide sufficient grounds to avoid

22 Wilner & Scheiner, 103 FCC 2d at 520 n. 43. The Commission

indicated it would use the standards of the Attribution Orders

to determine whether a limited partner was insulated for Section

310(b) (3) purposes. The Attribution Orders required that in

order for a limited partner’s interest not to be attributed the

partnership agreement must state, in express terms, that the ex-

empt limited partner is prohibited from becoming actively in-

volved in the management or operation of the communications

business of the partnership. Moreover, the exempt limited partner

must not be allowed to vote for the removal of a general partner

except for cause. Additionally, the limited partnership agreement

must bar the exempted limited partner from serving, in any ma-

terial capacity, as an independent contractor or agent. Finally, ©

the exempt limited partner cannot act as an employee of the

limited partnership if his or her functions, directly or indirectly,

relate to the communications enterprises of the company.

26a

treating these alien partners as officers or directors of the

partnerships in question.”

D. The GTRW Partnership Decision

12. Citing GTRW Partnership, 2 FCC Rcd 4160

(Mob. Serv. Div. 1987) (GTRW), the petitioners argue

that the Commission has previously allowed an applicant

with alien partners to file an amendment correcting the

Section 310(b)(3) deficiency. In GTRW, the partner-

ship filed as a general partnership but later submitted an

amendment pursuant to Section 1.65 of our rules inform-

ing the Commission that the partnership list filed with its

application had omitted two partners. The amendment

further stated that one of the originally named general

partners was, in fact, an alien; it designated her, and one

other originally named partner, as limited partners. Alli

other partners remained general partners. The MSD ac-

cepted the amendment and granted GTRW’s application,

stating that “GTRW corrected, in a timely filed Section

1.65 amendment, the actual citizenship” of the limited

partner and that the “nondisclosure of alien ownership in

the original application was inadventent.” 2 FCC Rcd at

4161.

13. The GTRW decision on its face does not even

address whether a general partnership with an alien gen-

eral partner can amend its ownership structure to make

the alien a limited partner. Nevertheless, from a review

of GTRW’s cellular application and pleadings filed in

that proceeding, it is apparent that GTRW filed its appli-

23 Continental disputes the Commission’s conclusion in Wilner

& Scheiner Reconsideration Order that a partner cannot by private

contract insulate itself from management to exempt the partner-

ship from Section 310(b) because any reliquishment of control of

a non-limited partner’s power would be “extremely unusual.” 1

FCC Red at 14. However, as noted above, the Commission did

not rely simply on the fact that such a contract would be unusual,

but also said it had no authority to create such an exemption. /d.

at 15.

27a

cation as a general partnership, later amended to make

an alien a limited partner, and the MSD granted the

application. Applying the standards we set forth in the

Cellular Lottery Rule Making, supra, we cannot support

the result reached by the MSD in GTRW.* Upon dis-

covering that GTRW’s application contained an alien

general partner, the MSD should have returned the appli-

cation and denied any subsequent corrective amendment.

Accordingly, to the extent by inference GTRW can be

viewed as reflecting policies that are inconsistent with the

Commission’s rules, we overrule it.”®

E. Equal Protection

14, Various petitioners argue that dismissal of appli-

cations for alien ownership is improper because it denies

the applicants (both aliens and U.S. citizens) their right

to equal protection as guaranteed by the Due Process

Clause of the Fifth Amendment.” Distinctions based on

*4We are not by this decision, however, taking any action on

the original GTRW license or GTRW’s successors in interest since

that grant is now final.

*5 Petitioners argue that we may disavow GTRW only prospec-

tively. We disagree. The Commission is not bound to apply a

decision issued on delegated authority that is contrary to the Com-

mission’s rules. See e.g., Armor Family Broadcasting Group v.

FCC, 918 F.2d 960 (D.C. Cir. 1990); Clyde W. Pierce, 4 FCC

Red 2378 (1989). Despite the erroneous decision in GTRW, we

believe the Commission’s rules were clear that alien ownership

defects could not be corrected and thus met the standards set

forth in Salzer v. FCC, 778 F.2d 869 (D.C. Cir. 1985).

26 We note that the Commission is among several federal agencies

which Congress has mandated to regulate foreign ownership. See

e.g., 10 U.S.C. Section 2272 (no aeronautical design contract shall

be awarded to a corporation with more than 25 percent alien owner-

ship); 16 U.S.C. Section 797(e) (Federal Power Commission pro-

hibited to issue licenses for dam construction to aliens or alien

controlled entities) ; 30 U.S.C. Section 1015 (geothermal production

leases on federal lands may be issued only to U.S. citizens or

domestic corporations or governments) ; 33 U.S.C. Sections 1502(5),

28a

alienage in federal statutes are permissible as long as the

statute is not “wholly irrational” in meeting a legitimate

government purpose. Matthews v. Diaz, 426 U.S. 67, 83

(1976). With respect to the Communications Act, the

United States Court of Appeals for the Seventh Circuit

held that alien restrictions found elsewhere in the Act do

not violate the Fifth Amendment. Campos v. FCC, 650

F.2d 890 (7th Cir. 1981). The court in Campos only

required a showing that the federal exemption of aliens

was not wholly irrational in order to be upheld. Congress’

intent, with regard to Section 310, was to protect the

security of the airwaves in time of war. Noe at 741

(citing 68 Cong. Rec. 3037 (1927); see also Coalition

for the Preservation of Hispanic Broadcasting v. FCC, 893

F.2d 1349 (D.C. Cir. 1991). Indeed, no petitioner has

questioned the national public interest established by Con-

gress in Section 310(b)(3) of the Act to protect the

security of domestic airwaves.”

15. Furthermore, the authority relied upon by the

petitioners is inapposite. Both Plyer v. Doe, 457 USS.

202 (1982), and Takahashi v. Fish and Game Commis-

sion, 334 U.S. 409 (1947), only suggest that a state can-

1503(g) (only U.S. citizens and domestic corporations can own and

operate a deepwater port); and 42 U.S.C. Sections 2133, 2134

(Nuclear Regulatory Commission may not issue licenses to any

alien, alien controlled corporation, or foreign government).

27The court in Campos found that Section 303 of the Act,

authorizing the Commission to prohibit aliens from obtaining

amateur radio operator’s licenses, does not violate the Fifth

Amendment.

28 We also reject the argument that U.S. citizens who are

partners in partnerships with impermissible alien ownership are

denied equal protection by dismissing the instant applications.

United States citizens who join partnerships with aliens are not

a@ suspect class and, therefore, Section 310(b) is constitutional

insofar as it affects U.S. citizens for the same reasons that Sec-

tion 310(b) is constitutional with respect to its treatment of

aliens.

29a

not establish laws which discrimiante against aliens with-

out meeting a substantial governmental interest. The fed-

eral government is allowed more latitude to regulate

aliens than are the states. The reason for this greater

latitude is “predicated not merely on the fact that immi-

gration is an exclusively federal interest, but also on the

fact that the federal power is of a political nature sub-

ject to narrow judicial review.” 650 F.2d at 894. As the

U.S. Supreme Court noted in Hampton v. Mow Sun

Wong, 426 U.S. 88 (1976), “there may be overriding

national interests which justify selective federal legislation

that would be unacceptable for an individual state.” /d.

at 100. In conclusion, there is a rational basis for the

alien ownership restrictions and accordingly, we find the

petitioners’ argument unsupported and without merit.”

F. Sacramento

16. When Sacramento filed its application, it w2s a

limited partnership consisting of one general partner and

22 limited partners, one of which was an alien. Sacra-

mento’s application was dismissed because the alien lim-

ited partner was not sufficiently insulated under Wilner &

Scheiner and the Attribution Orders. Specifically, the

MSD stated that the alien limited partner was permitted

to advise the partnership in day-to-day operations and to

vote in the removal of the general partner without cause

—both prohibited powers under the attribution rules. See

discussion, supra, at n.22 and accompanying text. Sacra-

mento argues that its limited partners do not exercise

control comparable to officers and directors.

29 Certain petitioners do contend that the threat posed by the

alien ownership of cellular facilities is significantly less than the

threat posed by the alien ownership of broadcast facilities. How-

ever, Section 310(b) (3) of the Act does not make such a distinc-

tion. Accordingly, the actual threat of any alien contro] may not

be taken into consideration,

30a

17. While the Sacramento partnership agreement may

provide certain indicia of insulation, it also contains ele-

ments of potential control that are not allowed by Section

310(b) (3) of the Act. See Wilner & Scheiner, 103 FCC

2d at 516; see also PrimeMedia Broadcasting, Inc., 3

FCC Red 4293, 4294 (1988). The alien limited partner

in Sacramento may advise the partnership in day-to-day

activities and may vote to remove the managing general

partner without cause. The authority to exercise either of

these powers shows a high degree of involvement as both

can directly involve the power to manage the day-to-day

affairs of the partnership. Since the alien can both advise

the managing partner and vote to remove him without

cause, the managing partner stands under the threat of

being removed if he does not follow the alien partner’s

advice. These are not the kind of rights enjoyed by an

insulated limited partner, and they exceed the control

allowable under Section 310(b)(3). While Sacramento

claims that its limited partnership agreement complies

with the California Limited Partnership Act, the stand-

ards for insulation under Wilner & Scheiner Reconsidera-

tion Order have not been met. The burden is on Sacra-

mento to demonstrate that its partnership agreement does

not provide the alien limited partner with sufficient in-

sulation to fall outside the strictures of Section 310(b)

(3). Sacramento has failed to meet that burden.” There-

fore, we find the MSD was correct to return the applica-

tion of Sacramento.

89 Sacramento only refers generally to provisions within its

partnership agreement which state the powers of the managing

general partner instead of referring to any provision which limits

the alien limited partner’s power to the degree called for by the

Attribution Order.

| |

3la

IV. CONCLUSION

18. In conclusion, we apply the rationale of Wilner &

Scheiner that the statutory prohibition against alien own-

ership of cellular licenses pertains to partnerships as well

as corporations, and that interests of non-limited partners

will be considered comparable to those of an officer or

director in a corporation. Therefore, any applicant with

a non-limited alien partner is prohibited from being

granted a license under Section 310(b)(3) of the Act.

Additionally, a cellular applicant whose ownership in-

cludes a non-limited alien partner cannot later amend

its application to cure that defect. Further, a limited

partner must be sufficiently insulated in order not to be

considered maintaining the control of an officer or direc-

tor. Finally, the MSD’s decision in GTRW may not be

relied upon to support submission of an amendment that

under Commission rules and policies should be dismissed.

Therefore, we reject the petitioners’ arguments.

V. ORDERING CLAUSES

19. Accordingly, WE AFFIRM our decision in Con-

tinental Cellular as modified herein that the Mobile Serv-

ices Division was correct in returning the application

filed by Continental Cellular and refusing Continental an

opportunity to amend to correct the defect. It is therefore

ORDERED that the Petition for Reconsideration, as sup-

plemented, filed by Continental IS HEREBY DENIED.

20. IT IS FURTHER ORDERED that the Petitions

for Reconsideration filed by 21st Century (Utah), 21st

Century (Ind), Cells, Cellswitch, CRLP, Cellwave, CGSA,

Electronics, Delta, Eastern, Federal, Independent, Jeffer-

son, Moving Phones, Quadrangle, Sacramento, Silver

Wings, USTP and Western ARE HEREBY DENIED.

FEDERAL COMMUNICATIONS COMMISSION

Donna R. Searcy

Secretary

32a

APPENDIX A

The following applications have been consolidated with

the Continental Cellular for consideration on the record:

21st CENTURY TELECOM

(Hereafter referred to as 21st Century (Utah) )

File No. 10109-CL-P-675-A-88

Utah 3—Juab

21st CENTURY TELECOM

(Hereafter referred to as 21st Century (Ind) )

File No. 10311-CL-P-403-A-88

Indiana 1—Newton

CELLS COMPANY L.P.

(Hereafter referred to as Cells)

File No. 10621-CL-P-366-A-89

Florida 7—Hamilton

CELLSWITCH L.P.

(Hereafter referred to as Cellswitch)

File No. 10513-CL-P-460-A-89

Louisiana 7—West Feliciana

CELLULAR REGIONAL LIMITED PARTNERSHIP

(Hereafter referred to as CRLP)

File No. 10266-CL-P-423-A-88

Iowa 12—Winneshick

CELLWAVE TELEPHONE SERVICES L.P.

(Hereafter referred to as Cellwave)

File No. 10625-CL-P-370-A-89

Florida 1 1—Monroe

CGSA TELEPHONES

(Hereafter referred to as CGSA)

File No. 10511-CL-P-458-A-89

Louisiana 5—Beauregard

CONTINENTAL ELECTRONICS

(Hereafter referred to as Electronics)

File No. 10104-CL-P-545-A-88

Nevada 3—Storey

33a

DELTA CELLULAR PARTNERS

(Hereafter referred to as Delta)

File No. 10613-CL-P-313-A-89

Alabama 7—Butler

EASTERN CELLULAR SYSTEMS L.P.

(Hereafter referred to as Eastern)

File No. 10540-CL-P-440-A-89

Kansas 13—Edwards

FEDERAL MOBILE RapIo

(Hereafter referred to as Federal )

File No. 10038-CL-P-319-A-88

Arizona 2—Coconino

INDEPENDENT CELLULAR SYSTEMS L.P.

(Hereafter referred to as Independent)

File No. 10049-CL-P-699-A-88

Washington 7—Skamania

JEFFERSON CELLULAR L.P.

(Hereafter referred to as Jefferson )

File No. 10449-CL-P-509-A-89

Missouri 6—Marion

MOVING PHONES PARTNERSHIP L.P.

(Hereafter referred to as Moving Phones)

File No. 10265-CL-P-488-A-88

Minnesota 7—Chippewa

QUADRANGLE COMMUNICATIONS

(Hereafter referred to as Quadrangle)

File No. 10407-CL-P-659-A-88

Texas 8—Gaines

SACRAMENTO RSA LIMITED PARTNERSHIP *

(Hereafter referred to as Sacramento )

File No. 10420-CL-P-672-A-89

Texas 21—Chambers

34a

SILVER WINGS 1988 L.P.

(Hereafter referred to as Silver Wings)

File No. 10083-CL-P-61 1-A-88

Oregon 6—-Crook

U.S. RSA TELCO PARTNERS

(Hereafter referred to as USTS)

File No. 10174-CL-P-634-A-88

South Dakota 1—Harding

WESTERN CELLTEL L.P.

(Hereafter referred to as Western )

File No. 10230-CL-P-427-A-88

Iowa 16—Lyon

35a

BEFORE THE

FEDERAL COMMUNICATIONS COMMISSION

WASHINGTON, D.C. 20554

File No. 10003-CL-P-316-A-88

IN RE APPLICATION OF: CONTINENTAL CELLULAR

For facilities in the Domestic Public Cellular

Telecommunications Radio Service on Fre-

quency Block A. in Market 316. Alaska 2

(Bethel).

and

File Nos. 10109-CL-P-675-A-88, 10311-CL-P-403-A-88,

1062 1-CL-P-366-A-89, 10513-CL-P-460-A-89,

10226-CL-P-423-A-88, 10625-CL-P-370-A-89,

1051 1-CL-P-458-A-89, 10104-CL-P-545-A-88,

10613-CL-P-313-A-89, 10504-CL-P-440-A-89,

10038-CL-P-319-A-88, 10049-CL-P-699-A-88,

10449-CL-P-509-A-89, 10265-CL-P-488-A-88

10407-CL-P-659-A-88, 10420-CL-P-672-A-89,

10083-CL-P-611-A-88, 10174-CL-P-634-A-88,

10230-CL-P-427-A-88

IN RE: NINETEEN RURAL SERVICE AREA APPLICATIONS

FILED BY PARTNERSHIPS WITH ALIEN PARTNERS

ERRATUM

Released: December 6, 1991

The Memorandum Opinion and Order, FCC 91-355,

released November 20, 1991, in the above-captioned

matter inadvertantly included the application filed by

36a

Cellwave Telephone Services L.P. (File No. 10625-CL-

P-370-A-89) for the Florida 11 (Monroe) RSA. While

this application was initially dismissed for impermissible

alien ownership, the issues involved are different from

those discussed in the underlying Order. Accordingly,

the Order is hereby amended as follows:

File No. 10003-CL-P-316-A-88

IN RE APPLICATION OF: CONTINENTAL CELLULAR

For facilities in the Domestic Public Cellular

Telecommunications Radio Service on Fre-

quency Block A, in Market 316, Alaska 2

(Bethel).

and

File Nos. 10109-CL-P-675-A-88, 10311-CL-P-403-A-88,

10621-CL-P-366-A-89, 10513-CL-P-460-A-89,

10226-CL-P-423-A-88, 10511-CL-P-458-A-89,

10104-CL-P-545-A-88, 10613-CL-P-313-A-89,

10504-CL-P-440-A-89, 10038-CL-P-319-A-88,

10049-CL-P-699-A-88, 10449-CL-P-509-A-89,

10265-CL-P-488-A-88, 10407-CL-P-659-A-88,

10420-CL-P-672-A-89, 10083-CL-P-61 1-A-88,

10174-CL-P-634-A-88, 10230-CL-P-427-A-88

* * * *

IN RE: EIGHTEEN RURAL SERVICE AREA APPLICATIONS

FILED BY PARTNERSHIPS WITH ALIEN PARTNERS

2. The Mobile Services Division (MSD) has also dis-

missed twenty other applications for various nonwireline

RSA markets because the applicants had impermissible

alien non-insulated partners under Section 310(b)(3) of

the Communications Act. All of these applicants have

filed petitions for reconsideration. Because of the similar-

ity of the issues presented in eighteen of these proceed-

ings named in the Committee for a Fair Lottery’s mo-

37a

tion, we are consolidating the pleadings of those appli-

cants (listed in Appendix A) hereto.‘ Additionally, we

deny the petitioners’ requests for oral argument because

the written record is sufficient to allow us to make a

decision.

* * * *

6. Continental then filed an appeal with the USS.

Court of Appeals for the District of Columbia Circuit

(court). On October 1, 1990, at the Commission’s re-

quest, the court remanded the case for further consider-

ation of the record. On November 28, 1990, Continen-

tal filed Supplemental Comments. The 17 general part-

nership applicants filed applications for various RSA

markets, won the lottery in a market, and were named

tentative selectee for the markets in which they won the

lottery. The general partnership applicants each had from

one to four alien general partners which owned from 2

to 25.984 percent of the applicant. All of these appli-

cants filed amendments to change their alien general

partners to limited partners after their applications were

filed or to otherwise divest the alien of any control in the

partnership. The MSD dismissed these applications for

failure to comply with the alien ownership restrictions in

Section 310(b)(3) of the Act. All of the general part-

nerships filed petitions for reconsideration of their dis-

missals. Sacramento filed an application as a limited

partnership pursuant to California law, won a lottery and

was named tentative selectee for that market. Sacra-

4We are not including the pleadings filed by FutureWave Gen-

eral Pratners (File No. 10810-CL-P-615-A-89), Rural America

General Partnership L.P. (File No. 10802-CL-P-560-A-89), U.S.

RSA Telco Partners (File No. 10815-CL-P-620-A-89), or Cellwave

Telephone Services L.P. (File No. 10625-CL-P-370-A-89) as re-

quested by the Committee for a Fair Lottery as those proceedings

involve different issuers. Great Western Cellular Partners (File

No. 10269-CL-P-492-A-90) has also been dismissed for violation

of our alien ownership rules. As it also involves different alien

ownership issues, it will not be included with the other dismissals

in this Order.

38a

mento’s application was dismissed because it had a 4.545

percent alien non-insulated limited partner in violation

of Section 310(b)(3) of the Act.

* * * *

20. IT IS FURTHER ORDERED that the Petitions

for Reconsideration filed by 21st Century (Utah), 2\Ist

Century (Ind.), Cells, Cellswitch, CRLP, CGSA, Elec-

tronics, Delta, Eastern, Federal, Independent, Jefferson,

Moving Phones, Quadrangle, Sacramento, Silver Wings,

USTP and Western ARE HEREBY DENIED.

39a

APPENDIX A

The following applications have been consolidated with

the Continental Cellular for consideration on the record:

2ist CENTURY TELECOM

(Hereafter referred to as 21st Century (Utah) )

File No. 10109-CL-P-675-A-88

Utah 3—Juab

21st CENTURY TELECOM

(Hereafter referred to as 21st Century (Ind) )

File No. 10311-CL-P-403-A-88

Indiana |—Newton ;

CeLL_s CoMPANY L.P.

(Hereafter referred to as Cells)

File No. 10621-CL-P-366-A-89

Florida 7—Hamiilton

CELLSWITCH L.P.

(Hereafter referred to as Cellswitch)

File No. 10513-CL-P-460-A-89

Louisiana 7—West Feliciana

CELLULAR REGIONAL LIMITED PARTNERSHIP

(Hereafter referred to as CRLP)

File No. 10266-CL-P-423-A-88

lowa |2—Winneshiek

CGSA TELEPHONES

(Hereafter referred to as CGSA)

File No. 10511-CL-P-458-A-89

Louisiana 5—-Beauregard

CONTINENTAL ELECTRONICS

(Hereafter referred to as Electronics)

File No. 10104-CL-P-545-A-88

Nevala 3—-Storey

DELTA CELLULAR PARTNERS

(Hereafter referred to as Delta)

File No. 10613-CL-P-313-A-89

Alabama 7—Butler

40a

EASTERN CELLULAR Systems L.P.

(Hereafter referred to as Eastern)

File No. 10504-CL-P-440-A-89

Kansas 13—Edwards

FEDERAL MosBiLe Rapio

(Hereafter referred to as Federal )

File No. 10038-CL-P-319-A-88

Arizona 2—Coconino

INDEPENDENT CELLULAR SySTEMS L.P.

(Hereafter referred to as Independent )

File No. 10049-CL-P-699-A-88

Washington 7—Skamania

JEFFERSON CELLULAR L.P.

(Hereafter referred to as Jefferson)

File No. 10449-CL-P-509-A-89

Missouri 6—Marion

MOVING PHONES PARTNERSHIP L.P.

(Hereafter referred to as Moving Phones)

File No. 10265-CL-P-488-A-88

Minnesota 7—Chippewa

QUADRANGLE COMMUNICATIONS

(Hereafter referred to as Quadrangle)

File No. 10407-CL-P-659-A-88

Texas 8—Gaines

SACRAMENTO RSA LIMITED PARTNERSHIP

(Hereafter referred to as Sacramento)

File No. 10420-CL-P-672-A-89

Texas 21—-Chambers

SILVER WINGS 1988 L.P.

(Hereafter referred to as Silver Wings )

File No. 1083-CL-P-61 1-A-88

Oregon 6—Crook

U.S. RSA TELCO PARTNERS

(Hereafter referred to as USTS)

File No. 10174-CL-P-634-A-88

South Dakota 1—Harding

4la

WESTERN CELLTEL L.P.

(Hereafter referred to as Western)

File No. 10230-CL-P-427-A-88

lowa 16—Lyon

FEDERAL COMMUNICATIONS COMMISSION

Richard Firestone

Chief, Common Carrier Bureau

42a

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 91-1611

MOVING PHONES PARTNERSHIP L.P..,

Appellant

Vv.

FEDERAL COMMUNICATIONS COMMISSION,

Appellee

and Consolidated Cases

Before: Mikva, Chief Judge; Sentelle and Henderson,

Circuit Judges

ORDER

[Filed Oct. 5, 1993]

Upon consideration of Appellants’, 21st Century Tele-

com L.P., et al., petition for rehearing, filed September

13, 1993, it is

ORDERED, by the Court, that the petition is denied.

Per Curiam

FoR THE CoOuRT:

RON GARVIN,

Clerk

By: ‘s’ Linda Jones

LINDA JONES

Deputy Clerk

43a

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 91-1611

MOVING PHONES PARTNERSHIP L.P.,

i" Appellant

FEDERAL COMMUNICATIONS: COMMISSION,

Appellee

and Consolidated Cases

Before: Mikva, Chief Judge; Wald, Edwards, Silberman,

Buckley, Williams, D. H. Ginsburg, Sentelle,

Henderson, and Randolph, Circuit Judges

ORDER

[Oct. 5, 1993]

Appellants’, 21st Century Telecom L.P., et al., Sug-

gestion For Rehearing En Banc has been circulated to the

full Court. No member of the Court requested the taking

of a vote thereon. Upon consideration of the foregoing

it is

ORDERED, by the Court en banc, that the suggestion

is denied.

Per Curiam

FoR THE CourRT:

RON GARVIN,

Clerk

By: /s/ Linda Jones

LINDA JONES

Deputy Clerk

44a

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 91-1611

MOVING PHONES PARTNERSHIP L.P.,

Appellant

Vv.

FEDERAL COMMUNICATIONS COMMISSION,

Appellee

and Consolidated Cases

Before: Mikva, Chief Judge; Sentelle and Henderson,

Circuit Judges

ORDER

[Filed Oct. 5, 1993]

Upon consideration of Appellants’, Delta Cellular Part-

ners, et al., petition for rehearing, filed September 13,

1993, it is

ORDERED, by the Court, that the petition is denied.

Per Curiam

For THE Court:

Ron GARVIN,

Clerk

By: s_ Linda Jones

LINDA JONES

Deputy Clerk

45a

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

No. 91-1611

MOVING PHONES PARTNERSHIP L.P.,

Appellant

Vv.

FEDERAL COMMUNICATIONS COMMISSION,

Appellee

and Consolidated Cases

Before: Mikva, Chief Judge; Wald, Edwards, Silberman,

Buckley, Williams, D. H. Ginsburg, Sentelle,

Henderson, and Randolph, Circuit Judges

ORDER

[Filed Oct. 5, 1993]

Appellants’, Delta Cellular Partners, et al., Suggestion

For Rehearing En Banc has been circulated to the full

Court. No member of the Court requested the taking of

a vote thereon. Upon consideration of the foregoing it is

ORDERED, by the Court en banc, that the suggestion

is denied.

Per Curiam

FoR THE COURT:

RON GARVIN,

Clerk

By: /s’ Linda Jones

LINDA JONES

Deputy Clerk

46a

CONSTITUTIONAL AND STATUTORY

PROVISIONS INVOLVED

CONSTITUTION OF THE

UNITED STATES OF AMERICA

AMENDMENT 5

No person shall be held to answer for a capital, or other-

wise infamous crime, unless on a presentment or indict-

ment of a Grand Jury, except in cases arising in the land

or naval forces, or in the Militia, when in actual service

in time of War or public danger; nor shall any person be

subject for the same offence to be twice put in jeopardy

of life or limb; nor shall be compelled in any criminal

case to be a witness against himself, nor be deprived of

life, liberty, or property, without due process of law; nor

shall private property be taken for public use, without

just compensation.

————x«<«“3e

47a

47 U.S.C. § 310

LIMITATION ON HOLDING AND

TRANSFER OF LICENSES

Sec. 310. [47 U.S.C. 310] (a) The station license re-

quired under this Act shall not be granted to or held by

any foreign government or the representative thereof.

(b) No broadcast or common carrier or aeronautical

en route or aeronautical fixed radio station license shall

be granted to or held by—

(1) any alien or the representative of any alien;

(2) any corporation organized under the laws of

any foreign government;

(3) any corporation of which any officer or di-

rector is an alien or of which more than one-fifth of

the capital stock is owned of record or voted by

aliens or their representatives or by a foreign govern-

ment or representative thereof or by any corporation

organized under the laws of a foreign country;

(4) any corporation directly or indirectly con-

trolled by any other corporation of which any officer

or more than one-fourth of the directors are aliens,

or of which more than one-fourth of the capital stock

is owned of record or voted by aliens, their represent-

atives, or by a foreign government or representative

thereof, or by any corporation organized under the

laws of a foreign country, if the Commission finds

_that the public interest will be served by the refusal

or revocation of such license.

47 C.F.R. § 1.65

§ 1.65 Substantial and significant changes in information

furnished by applicants to the Commission.

(a) Each applicant is responsible for the continuing

accuracy and completeness of information furnished in a

48a

pending application or in Commission proceedings involv-

ing a pending application. Except where paragraph (b)

of this section applies, whenever the information furnished

in the pending application is no longer substantially accu-

rate and complete in all significant respects, the applicant

shall as promptly as possible and in any event within 30

days, unless good cause is shown, amend or request the

amendment of his application so as to furnish such addi-

tional or corrected information as may be appropriate.

Except where paragraph (b) of this section applies, when-

ever there has been a substantial change as to any other

matter which may be of decisional significance in a Com-

mission proceeding involving the pending application, the

applicant shall as promptly as possible and in any event

within 30 days, unless good cause is shown, submit a

statement furnishing such additional or corrected infor-

mation as may be appropriate, which shall be served upon

parties of record in accordance with § 1.47. Where the

matter is before any court for review, statements and re-

quests to amend shall in addition be served upon the Com-

mission’s General Counsel. For the purposes of this sec-

tion, an application is “pending” before the Commission

from the time it is accepted for filing by the Commission

until a Commission grant or denial of the application is

no longer subject to reconsideration by the Commission or

to review by any court.

47 C.F.R. § 22.4

§ 22.4 Eligibility.

(a) General. Authorizations will be granted upon

proper application if:

(1) The applicant is qualified under the applicable

laws and the regulations, policies and decisions issued

under those laws; :

(2) There are frequencies available to provide satis-

factory service; and

49a

(3) The public interest, convenience or necessity would

be served by a grant.

(b) Alien ownership. An authorization may not be

granted to or held by:

(1) Any alien or the representative of any alien.

(2) Any corporation organized under the laws of any

foreign government.

(3) Any corporation of which any officer or director

is an alien or of which more than one-fifth of the capital

stock is owned of record or voted by aliens or their repre-

sentatives or by a foreign government or representative

thereof or any corporation organized under the laws of a

foreign country.

(4) Any corporation directly or indirectly controlled

by any other corporation of which any officer or more

than one-fourth of the directors are aliens, or of which

more than one-fourth of the capital stock is owned of

record or voted by aliens, their representatives, or by a

foreign government or representative thereof, or by any

corporation organized under the laws of a foreign country,

if the Commission finds that the public interest will be

served by the refusal or revocation of such license.

47 C.F.R. § 22.20

§ 22.20 Defective applications.

(a) Unless the Commission shall otherwise permit, an

application will be unacceptable for filing and will be

returned to the applicant with a brief statement as to the

omissions or discrepancies if:

(1) The application is defective with respect to com-

pleteness of answers to questions, informational showings,

execution, or other matters of a formal character, or

(2) The application does not comply with the Com-

mission’s rules, regulations, specific requirements for ad-

ditional information or other requirements.

50a

(b) Some examples of common deficiencies which re-

sult in defective applications under paragraph (a) of this

section are:

(1) The application is not filled out completely and

signed (responses intended to be omitted must include the

notation “not applicable” or “N/A”);

(2) The application does not demonstrate how the

proposed radio facilities will seive the public need or in-

terest;

(3) The application does not demonstrate compliance

with the special requirements applicable to the radio

service involved;

(4) [Reserved]

(5) The application does not include an environmental

assessment as required for an action that may have a

significant impact upon the environment, as defined in

§ 1.1307 of this chapter.

(6) [Reserved]

(7) The application is filed after the cutoff date pre-

scribed in § 22.31 of this part;

(8) The application proposes the use of a frequency

not allocated to such use.

(d) If an applicant is requested by the Commission to

file any documents or any supplementary or explanatory

information not specifically required in the prescribed ap-

plication form, a failure to comply with such request within

a specified time period will be deemed to render the appli-

cation defective and will subject it to dismissal.

47 C.F.R..§ 22.23

§ 22.23 Amendment of applications. (See also § 22.918) :

(a) Amendments as of right. A pending application

may be amended as a matter of right if the application

Sla

has not been designated for hearing or placed on public

notice for a random selection process.

(1) Amendments shall comply with § 22.29, as ap-

plicable; and

(2) Amendments which resolve interference conflicts

or amendments under § 22.29 may be filed at any time.

(b) The Commission or the presiding officer may

grant requests to amend an application designated for

hearing or selected under the random selection process

only if a written petition demonstrating good cause is

submitted and properly served upon the parties of record.

Commission will classify all amendments as minor except

in the cases listed below. An amendment shall be deemed

to be a major amendment subject to §§ 22.27 and 22.31

under any of the following circumstances:

(1) Change in technical proposal. If the amendment

results in a substantial change in the engineering proposal

such as (but not necessarily limited to) :

(i) A change in, or an addition of, a radio frequency;

(ii) A change in the class of station (e.g., from con-

trol to base).

(2) Amendments to proposed base station facilities. If

the amendment enlarges the reliable service area of the

proposed base station facilities by more than one (1)

mile along any of eight radials spaced every forty-five

(45) degrees from zero degree True North. This will not

apply if the extension is into a service area presently au-

thorized to the applicant and on the same frequency.

(3) If in the Domestic Public Cellular Radio Tele-

communications Service, the amendment results in an

increase in the Cellular Geographic Service Area.

(4) Changes in ownership or control. If the amend-

ment specifies a substantial change in beneficial owner-

52a

ship or control (de jure or de facto) of an applicant.

Provided, however, such a change would not be consid-

ered major if it is unvoluntary or where it merely amends

an application for modification of an authorized station

to reflect a change in ownership or control that has pre-

viously been approved by the Commission.

(f) Any amendment to an application shall be signed

and shall be submitted in the same manner, and with the

same number of copies, as was the original application.

Amendments may be made in letter form if they comply

in all other respects with the requirements of this chapter.

47 C.F.R. § 22.917

§ 22.917 Demonstration of financial qualifications.

for a new station shall demonstrate, at the time it files

its application that it has either a firm financial commit-

ment or available financial resources necessary to con-

struct and operate for one year its proposed cellular sys-

tem. The firm financial commitment may be contingent

on the applicant obtaining a construction permit. The

same commitment may be used for each application filed,

subject to the following provisions:

(i) Where a non-wireline applicant provides a firm fi--

nancial commitment that is not contingent upon the ap-

plicant obtaining a construction permit, the commitment

need not be market specific and may be applied to any

market or markets applied for as long as the commitment

is sufficient to cover the costs of the proposed RSA

systems.

(ii) Where a non-wireline applicant provides a firm

financial commitment that is contingent upon the appli-

cant obtaining a construction permit and that is restricted

on its face to a specific market or markets, the commit-

ment may be used only for the markets to which it refers

53a

and must be sufficient to cover the costs of the proposed

RSA systems.

(iii) Where a non-wireline applicant provides a firm

financial commitment that is contingent upon the appli-

cant obtaining a construction authorization and that in-

dicates that the bank or lending institution has reviewed

the projects for which the applicant is applying, but the

commitment is not restricted to any specific market, it

may be applied to any market or markets applied for as

long as the commitment is sufficient to cover the costs of

the proposed RSA systems.

47 C.F.R. § 22.918

§ 22.918 Amendment of cellular applications.

(a) Top-90 markets. Minor and technical amend-

ments and those required by § 1.65 of the rules; but no

major amendments as defined in § 22.23(c), may be

proffered within forty-five days of public notice of the

filing of an application for the top-90 cellular modified

Metropolitan Statistical Areas.

(b) Markets below the top-90 and Rural Service

Areas. Amendments for applications for below-90 cellu-

lar markets may not be filed prior to conduct of the lot-

tery for the market applied for. The tentative selectee

may file minor amendments, but no major amendments

except for those listed in § 22.23(g). Information fe-

quired by § 1.65 shall be filed within 14 days of publica-

tion of the Public Notice announcing the tentative selec-

tee in markets below the top-90 and within 30 days of

the Public Notice announcing the lottery results for all

applications to serve Rural Service Areas.

54a

47 C.F.R. § 22.923

§ 22.923 Content and form of Rural Service Area ap-

plications.

(a) Applications for new stations or for modified fa-

cilities increasing the Cellular Geographic Service Area

of existing stations shall be filed on FCC Form 401. The

following exhibits shall be attached to any such applica-

tion:

(1) An exhibit including a map or maps of the cellu-

lar system's existing Cellular Geographic Service Area, if

any, and the Cellular Geographic Service Area proposed

in the application. This exhibit shall contain all the in-

formation specified in § 22.903(a)(1). In addition, this

exhibit shall include an 8% by 11 inch reduced copy of

a 1:250,000 or 1:500,000 scale map, depicting the com-

plete RSA and any CGSA(s) therein. Boundaries of the

RSA, CGSA(s), and 39 dBu contours must be clearly

indicated, required by § 22.903(a). The full-size map

need not be included in the microfiche copies of the ap-

plication, but must be present in the original application

from which the microfiche is made. For microfiching

purposes, the reduced map is sufficient.

(2) An exhibit containing the engineering data and

calculations used to derive the service contours shown.

See § 22.903(c).

(3) An exhibit stating how the proposal complies with

the Commission’s cellular design concepts, and indicating

the applicant’s projected method for coordinated expan-

sion of the system in response to changing service

demands.

(4) An exhibit indicating the basis which the appli-

cant will use to determine whether sufficient congestion

exists to warrant cell-splitting.

(5) An exhibit indicating the frequency plan to be

used if the application is granted.

55a

(6) An exhibit indicating the applicant's service pro-

posals for local subscribers and roamers, including its

method of handling complaints. If no change is made in

service proposals previously authorized, this exhibit may

be omitted.

(7) For new stations only, an exhibit including full

particulars regarding the cost of construction of the pro-

posed facilities and demonstrating how the applicant in-

tends to finance construction. See § 22.917.

(8) Where the applicant is a wireline carrier, an ex-

hibit indicating exactly how its proposed system would

interconnect with the landline network. This information

must be of sufficient specificity to enable a potential com-

petitor to design its system to connect with the landline

system in exactly the same manner if the competitor so

chooses.

(9) An exhibit setting forth the information required

by § 22.13(a)(1). Individual applicants holding less

than 5% interest in a publicly held company must dis-

close the fact that the corporation and the applicant both

have filed applications in the same RSA, its disclosure

must include its percentage interest held in the company.

(10) An exhibit indicating the state and counties in-

cluded in the applicant’s CGSA.

(11) An exhibit indicating whether a grant of the ap-

plication will be a major action under § 1.1305 of the

Commission’s Rules.

(b) Applications for construction permits for initial

cellular systems for Rural Service Areas shall be filed as

set forth below:

(1) Two microfiche copies of each application must

be submitted and enclosed in microfiche jackets and be

placed in a sealed 5 inch x 7% inch microfiche envelope.

One microfiche jacket shall be labeled “Original” and the

other jacket labeled “Copy”. The microfiche must be

a ee ee

56a

reproduced only in negative form and in black and white

(blue/biack film which appears black to the naked eye

is acceptable). The original microfiche must be of

archival quality as defined in § 22.2 of these Rules. Ap-

plicants are required to submit a Transmittal Sheet For

Cellular Applications, copies of which may be obtained

by contacting the Consumer Assistance Office, Federal

Communications Commission, 1919 M_ Street, NW.,

Washington, DC 20554.

(2) Within seven (7) days of the release date of the

public notice announcing the lottery results, the applicant

selected first in the lottery shall submit the original and

two hard copies of the application which must be en-

closed in stiff covers and fastened securely along the left

edge without exposed sharp edges (e.g., looseleaf binders,

plastic binding strips, covered metal clasps).

(3) For initial RSA applications, FAA notification

should not be made at the time of filing. Upon release of

the public notice designating the tentative selectee, the

applicant so designated must file Notice of Proposed Con-

struction or Alteration (FAA Form 7460-1) with the

FAA for any antenna or tower sites requiring FAA notifi-

cation. Block 3A of FAA Form 7460-1 must contain the

RSA number after the phone number so that the com-

pleted form can be associated with the proper applica-

tion.

(4) FCC Form 401, Schedule B, Page 3, must con-

tain the RSA number after the applicant’s name so that

the form may be reassociated with the application after

proper clearances have been obtained.

(5) The applicant’s name and the market, market

number and frequency block applied for must appear at

top right hand corner of each microfiche application. In

addition the applicant’s name and the market, market

number and frequency block must also appear on a 5 x

7% inch microfiche envelope, which shall contain the

microfiche applications. This information must be clearly

57a

labeled in print or mechanically reproduced. In addition,

the information on the transmittal sheet and on the

microfiche envelope must be identical.

(6) The completed transmittal sheet, the filing fee,

and the microfiche envelope shall be placed in a 9 inch x

12 inch sealed enveloped. The applicants name and RSA

market number must prominently be displayed in the

center of the envelope for all applications sent by mail

and placed in the lower left hand corner for applications

delivered to the Strip Commerce Center Facility.

(7) All applicants must certify to the following on the

Transmittal Sheet:

CERTIFICATION

I hereby certify, under penalties of perjury, this appli-

cation for an initial cellular authorization is complete in

every respect and contains all of the information required

by FCC Form 401 and the Commission’s cellular applica-

tion rules. I acknowledge that if, upon Commission in-

spection, this certification is shown to be incorrect, this

application shall be dismissed without further considera-

tion.

I also certify the applicant is the real party in interest

in this application and there are no agreements or under-

standings, other than those specified in this application,

which provide that someone other than the applicant

shall have an indirect or direct ownership interest. It is

also certified that the application intends to construct and

operate the station’ as proposed and that there are no

-agreements or understandings that are inconsistent with

thatintent. ~

I declare, under penalties of perjury, that I am the

authorized representative of the above-named applicant

in the above entitled matter, that I have read the fore-

going certification; and the matter and things therein

stated are true and correct.

58a

Executed on

—I[date]

—Signature —

Type /Print Name

Type Print Title

All persons signing the Certification must do so using

ink. No mechanical reproduction of signatures may be

used.

stations which do not involve new facilities, an increase

in height or power of existing facilities, or an increase

of any CGSA boundary, may be filed on FCC Form 489.

(1) Applications to extend the 39 dBu contours be-

yond the borders of the RSA once the original RSA ap-

plication is granted must be accompanied by a detailed

engineering justification demonstrating the necessity for

such extensions.

——E———EEEEww

This is a copy of a public record, reproduced as it was published. It is not legal advice, and it may not be the version a court would rely on. Check the official source before you cite it.