In a recent Order, the FCC’s Enforcement Bureau (“Bureau”) entered into a Consent Decree to terminate an investigation of AST Telecom, LLC d/b/a Blue Sky Communications (“AST”) for alleged violations of the FCC’s transfer of control requirements.  In reaching the Consent Decree, AST agreed to make a $35,000 voluntary contribution to the United States Treasury.

Pursuant to the transfer of control rules, FCC licensees are required to obtain Commission consent prior to transferring control or assigning an FCC license.   AST was the winning bidder for two Advanced Wireless Service licenses in FCC Auction No. 78.  Shortly after the auction,  AST’s corporate parent, eLandia, underwent a capital structure reorganization which effectuated a substantial transfer of control of AST.  AST  neglected to file applications with the FCC for consent to effectuate the transfer of control.  The Bureau learned of the reorganization through its own investigation, and issued a Letter of Inquiry to AST seeking more information.

The Consent Decree demonstrates the importance of obtaining FCC consent to any transfer of control or reorganization.  Failing to determine whether a corporate reorganization requires FCC consent can lead to costly investigations and enforcement penalties.

Clients with questions about this Advisory should contact the attorney assigned to their account.