On December 7, the FCC adopted a consent decree with an international carrier resolving several alleged transfers of FCC authorizations without prior approval. This marks the latest in a series of enforcement actions in the area of ownership violations. Many of these involve carriers providing foreign terminations. The consent decree underscores the importance for all regulated carriers to monitor changes in ownership, even pro forma changes, and to seek prior FCC approval for the changes.
The latest consent decree involves Tricom USA, Inc., a carrier that provided long distance international telecommunications primarily to resellers and other carriers. Tricom held a domestic 214, an international 214 and submarine cable landing licenses in order to provide these services. As explained in the consent decree, Tricom filed for Chapter 11 bankruptcy in 2008, leading to a reorganization of the carrier. The carrier properly filed for approval to transfer its authorizations during the bankruptcy and following its expected transition from bankruptcy.
However, upon emergence from bankruptcy, its largest shareholder received substantially more shares than initially anticipated, resulting in the shareholder holding a majority stake in the carrier, rather than a minority stake. Further, this shareholder than transferred ownership in Tricom to a subsidiary of the shareholder, without seeking the FCC’s approval to do so. None of the violations appeared to be intentional, and all involved pro forma transfers of control of Tricom.