FCC Record, Volume 1, No. 4, Pages 549 to 785, November 10 - November 21, 1986 Page: 607
ii, 549-785, iii p. ; 28 cm.View a full description of this book.
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Federal Communications Commission Record
Before the
Federal Communications Commission
Washington, D.C. 20554
In re Application ofARNOLD C. LEONG
File No.37267-CL-P-174-A-86
For a construction permit to
establish a cellular system
operating on Frequency Block A in
the Domestic Public Cellular Radio
Telecommunications Service for the
Lafayette, Louisiana Metropolitan
Statistical Area
MEMORANDUM OPINION AND ORDER
Adopted November 7, 1986; Released November 14, 1986
By the Common Carrier Bureau:
A. Introduction
1. Gary F. Anderson (Anderson)' has filed a petition to
deny the above-captioned application for the non-wireline
construction permit for the Lafayette, Louisiana Metropolitan
Statistical Area (MSA). The application of Arnold
C. Leong (Leong) was selected first in the lottery held for
the market on June 27, 1986. The Commission announced
Leong as the tentative selectee in Public Notice,
Report No. CL-86-339, released August 1, 1986. The petition
is opposed by Leong.
B. Financial Qualifications
2. Anderson alleges that Leong has failed to demonstrate
that he has a firm financial commitment.
Anderson notes that Leong relies on a financing letter
from Mitsubishi Electric America. Inc. (MEA) and that
MEA in turn relies on financing from its parent. Mitsubishi
Electric Corporation (MELCO). Anderson asserts
that because MELCO's balance sheet is current only as of
March 31, 1985, Leong has failed to demonstrate his
financial ability to construct and operate the proposed
system.
3. Leong responds that MELCO has the capability to
fund the proposed system. He points out that the total
assets of MELCO for the years ending March 31, 1985
and March 31, 1984 were, respectively, approximately
$7.3 and $6.3 billion. Noting that these assets substantially
exceed the $1,721,686 commitment MEA provided for the
Lafayette non-wireline system., he refers to the line of
Commission precedent holding that a demonstration of
ownership of total assets vastly in excess of the amount
committed will substitute for a net liquid assets showing.2
He concludes that an assets-to-commitment ratio of 4,218
to 1 for 1985 and 3,684 to 1 for 1984 demonstrates that
there is no reasonable argument that MELCO lacks the
capability to finance the proposed system. Leong also
asserts that because there is no Commission rule regarding
age of a balance sheet provided by a financing entity
that is other than a recognized lending institution, there is
no procedural defect in his financial showing.3Discussion
4. Section 22.917(b)(1)(i) of the Rules requires applicants
obtaining financing from entities other than a
recognized lending institution to submit proof that the
financing entity has the funds available and uncommitted
to another cellular application. The August 25, 1986
MEA letter demonstrates that MEA, as an entity other
than a recognized lending institution, has the funds available
and uncommitted to another cellular application.
MELCO's July 18, 1986 letter agrees to provide MEA
funding up to an amount of $30,000.000. MELCO's attached
balance sheet demonstrates, under the "total assets"
test. that it has sufficient assets to fund a maximum
$30.000.000 commitment. Its total net assets for the year
ending March 31, 1985 were approximately $1.6 billion.
Thus, its total assets-to-commitment ratio is over 53 to 1.
This is considerably stronger financial showing than that
found acceptable in American Cellular Corp., supra.
5. After careful review of the application and associated
pleadings. we find Arnold C. Leong legally, technically
and otherwise qualified to become a Commission licensee.
C. Ordering Paragraphs
6. Therefore, for the foregoing reasons, IT IS ORDERED,
That the application of Arnold C. Leong, File
No. 37267-CL-P-174-A-86, IS GRANTED.
7. The Petition to Deny filed by Gary F. Anderson IS
DENIED.
8. This order is issued under Section 0.291 of the
Commission's rules and is effective on its release date.
Petitions for reconsideration under Section 1.106 or applications
for review under Section 1.115 of the rules may
be filed within 30 days of the date of public notice of this
order. See Section 1.4(b)(2).
FEDERAL COMMUNICATIONS COMMISSION
Kevin J. Kelley
Chief. Mobile Services Division
Common Carrier Bureau
FOOTNOTES
Anderson is an applicant for the non-wireline construction
permit in Lafayette, Louisiana. Anderson was not selected as
one of the top-ten ranked applicants in the June 27, 1986
lottery for the market.
2 See American Cellular Corp., 103 F.C.C. 2d 26, 30-31 (1986)
(a demonstration of total net assets in excess of 14 times the
amount of the commitment is sufficient to dispense with the
net liquid assets requirements).
3 Leong concludes that the absence of a requirement in the
Commission's rules on the age of a lender's balance sheet
demonstrates the Commission's intent to leave to the applicant's
discretion what evidence it will submit to show that its
lender has sufficient funds available and uncommitted to another
cellular system. Nonetheless, Leong submits a balance
sheet for MELCO for the year ending March 31, 1986. It shows
total assets of over $10.7 billion and total net assets of over $2.7
billion.
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United States. Federal Communications Commission. FCC Record, Volume 1, No. 4, Pages 549 to 785, November 10 - November 21, 1986, book, November 1986; Washington D.C.. (https://digital.library.unt.edu/ark:/67531/metadc1580/m1/64/: accessed April 19, 2024), University of North Texas Libraries, UNT Digital Library, https://digital.library.unt.edu; crediting UNT Libraries Government Documents Department.