BROADFIELD WHITAKER LLP Attorneys at Law
1401 H Street NW, Suite 750 Washington, DC 20005 Telephone: (202) 457-8300 Facsimile: (202) 457-8301 www.broadfieldwhitaker.com
October 14, 2022
VIA ELECTRONIC FILING
Marlene H. Dortch, Secretary Federal Communications Commission 45 L Street NE Washington, DC 20554
Re: FCC Form 603 — Application for Consent to Assignment of Wireless Radio Service Authorizations Assignor: Ridgeline Wireless Holdings LLC Assignee: Northgate Wireless Americas Inc. Call Signs: WQAB201–WQAB214 (14 Licenses) Meridian Technologies-3 (Band 66) — 47 C.F.R. Part 27
Dear Secretary Dortch:
Broadfield Whitaker LLP, on behalf of its client Northgate Wireless Americas Inc. ("NWA" or "Assignee"), a corporation organized under the laws of the State of Delaware (File No. 7284619), hereby submits the enclosed FCC Form 603 requesting that the Federal Communications Commission (the "Commission" or "FCC") consent to the assignment of fourteen (14) Wireless Radio Service authorizations from Ridgeline Wireless Holdings LLC ("Ridgeline" or "Assignor"), a limited liability company organized under the laws of the State of Nevada (NV SOS Entity No. E0428716302), to NWA. The licenses at issue are Meridian Technologies-3 (Band 66) licenses, authorized under Part 27 of the Commission's Rules, 47 C.F.R. Part 27. The fourteen licenses bear call signs WQAB201, WQAB202, WQAB203, WQAB204, WQAB205, WQAB206, WQAB207, WQAB208, WQAB209, WQAB210, WQAB211, WQAB212, WQAB213, and WQAB214, respectively. A complete description of the licenses, together with a supporting narrative statement and accompanying exhibits, is provided herewith.
Concurrently with this FCC Form 603, NWA is filing a Petition for Declaratory Ruling pursuant to Section 310(b)(4) of the Communications Act of 1934, as amended, 47 U.S.C. § 310(b)(4), seeking Commission approval for up to one hundred percent (100%) indirect foreign ownership of NWA by Northgate Telecommunications PLC ("NTP"), a public limited company organized under the laws of England and Wales and publicly traded on the London Stock Exchange (LSE: NGTL). The Section 310(b)(4) Petition is filed separately but is cross-referenced herein. The Applicants respectfully request that the Commission process this FCC Form 603 application and the Section 310(b)(4) Petition together, as the transactions are interrelated and approval of both is a condition to closing of the underlying Asset Purchase Agreement.
This submission has been prepared by Annette Galvez, Partner, and Daniel Fong, Senior Associate, of Broadfield Whitaker LLP, and has been reviewed by Harold Wren, Of Counsel, of the Communications & Regulatory practice group of Calderwood & Harkness LLP, 1875 K Street NW, Suite 600, Washington, DC 20006.
The following documents are enclosed with this filing:
1. FCC Form 603 (completed);
2. Supporting Narrative Statement (attached hereto);
3. Exhibit A — Corporate Organization Chart;
4. Exhibit B — List of Licenses to Be Assigned;
5. Exhibit C — Asset Purchase Agreement (Redacted Execution Version), dated September 22, 2022;
6. Exhibit D — Certificates of Formation / Incorporation for NWA and Northgate US Holdings LLC; and
7. Exhibit E — Consent Letters from Ridgeline Members (Pinnacle Growth Capital Fund II LP and Crestwood Family Office LLC).
The concurrently filed Section 310(b)(4) Petition for Declaratory Ruling is filed separately under its own cover but is cross-referenced throughout this application and supporting narrative. We respectfully request that the Commission maintain the connection between these filings throughout the review process.
Should you have any questions regarding this submission or require additional information, please do not hesitate to contact the undersigned.
Respectfully submitted,
BROADFIELD WHITAKER LLP
By: ________
Annette Galvez Partner Telephone: (202) 457-8312
Email: agalvez@broadfieldwhitaker.com
By: ________
Daniel Fong Senior Associate Telephone: (202) 457-8347
Email: dfong@broadfieldwhitaker.com
Counsel for Northgate Wireless Americas Inc.
Broadfield Whitaker LLP 1401 H Street NW, Suite 750 Washington, DC 20005
Enclosures
cc: Claire Matsuda, VP, U.S. Operations, Northgate Wireless Americas Inc. Thomas Brennan, SVP, Regulatory Affairs, Northgate Telecommunications PLC Kevin Sato, Hargrove, Sato & Caldwell LLP (Counsel for Ridgeline Wireless Holdings LLC) Harold Wren, Calderwood & Harkness LLP
BEFORE THE FEDERAL COMMUNICATIONS COMMISSION WASHINGTON, DC 20554
SUPPORTING NARRATIVE STATEMENT
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A. Introduction and Summary
Northgate Wireless Americas Inc. ("NWA" or "Assignee") and Ridgeline Wireless Holdings LLC ("Ridgeline" or "Assignor") (collectively, the "Applicants") jointly request that the Federal Communications Commission ("FCC" or "Commission") consent to the assignment of fourteen (14) Meridian Technologies-3 (Band 66) wireless radio service licenses from Ridgeline to NWA pursuant to Section 310(d) of the Communications Act of 1934, as amended (the "Act"), 47 U.S.C. § 310(d). As described in detail herein, the proposed assignment is consistent with the public interest, convenience, and necessity, and the Commission should grant its consent.
The proposed assignment arises from an Asset Purchase Agreement ("APA") dated September 22, 2022, between Ridgeline, as Seller and Assignor, and NWA, as Buyer and Assignee, for the purchase and assignment of spectrum licenses covering geographic areas in Nevada, eastern California, and southern Oregon. A redacted copy of the executed APA is attached hereto as Exhibit C.
Significantly, the proposed assignment involves the transfer of bare spectrum licenses only. Ridgeline's operating business — including its approximately 142,000 subscriber accounts, network infrastructure, customer contracts, and associated goodwill — is not being acquired by NWA and will be retained by Ridgeline. Ridgeline will continue to operate its existing wireless telecommunications business independently following consummation of the transaction.
The total purchase price for the fourteen licenses is $126,500,000, as set forth in Section 3.1 of the APA. This price reflects a per-MHz-POP price of approximately $0.845, based on approximately 3.84 million covered POPs and 39 MHz of paired spectrum (39 MHz uplink / 39 MHz downlink, for a total of 78 MHz of paired bandwidth). There is no contractual price-adjustment mechanism; the purchase price is fixed.
The proposed transaction will serve the public interest by placing valuable mid-band spectrum in the hands of an entity with the financial resources and strategic commitment to deploy broadband wireless services across the covered markets. NWA is a wholly owned indirect subsidiary of Northgate Telecommunications PLC ("NTP" or "Northgate"), a public limited company organized under the laws of England and Wales and publicly traded on the London Stock Exchange. NTP has a market capitalization of approximately £4.8 billion and projected FY2022 revenue of approximately £2.57 billion. NTP's entry into direct U.S. spectrum ownership, complementing its existing U.S. MVNO operations, represents a substantial capital commitment to the U.S. wireless market and will bring additional competition, investment, and broadband deployment to the covered markets in Nevada, eastern California, and southern Oregon.
Because NWA will be one hundred percent (100%) indirectly owned by NTP, a foreign entity, the proposed indirect foreign ownership implicates Section 310(b)(4) of the Act, 47 U.S.C. § 310(b)(4). Accordingly, NWA has concurrently filed a Petition for Declaratory Ruling pursuant to Section 310(b)(4) seeking Commission approval for up to 100% indirect foreign ownership. The Applicants respectfully request that the Commission process this FCC Form 603 application and the Section 310(b)(4) Petition together.
B. Description of the Parties
1. Assignor — Ridgeline Wireless Holdings LLC
Ridgeline Wireless Holdings LLC ("Ridgeline") is a limited liability company organized under the laws of the State of Nevada, bearing NV SOS Entity No. E0428716302. Ridgeline maintains its principal office at 450 South Virginia Street, Suite 800, Reno, Nevada 89501.
Ridgeline was founded in 2014 by Garrett Nolan and operates as a regional wireless telecommunications provider serving rural and semi-urban markets across Nevada, eastern California, and southern Oregon. Over the past eight years, Ridgeline has built a subscriber base of approximately 142,000 accounts and has invested in network infrastructure across its service territory to provide wireless voice and data services.
For the fiscal year ended December 31, 2021, Ridgeline reported revenue of approximately $87.4 million and earnings before interest, taxes, depreciation, and amortization ("EBITDA") of approximately $19.2 million. These financial results reflect the scale and maturity of Ridgeline's operations in its regional markets.
The ownership structure of Ridgeline is as follows:
Pinnacle Growth Capital Fund II LP is a Delaware limited partnership whose general partner is Pinnacle Growth Capital Management LLC. The Managing Director of Pinnacle Growth Capital Management LLC is Robert Almeda. Pinnacle Growth Capital Fund II LP holds certain consent rights over change-of-control transactions under the terms of Ridgeline's limited liability company agreement (the "Ridgeline LLC Agreement"). The requisite consent of Pinnacle Growth Capital Fund II LP has been obtained with respect to the proposed transaction, as documented in a side letter executed in September 2022, a copy of which is attached hereto as part of Exhibit E.
Crestwood Family Office LLC is a Nevada limited liability company whose principal is Eleanor Crestwood. Crestwood Family Office LLC holds a passive membership interest in Ridgeline and does not participate in the management or operations of the company. The consent of Crestwood Family Office LLC to the proposed transaction has been obtained, as documented in a side letter executed in September 2022, a copy of which is also attached as part of Exhibit E.
In connection with the proposed transaction, Ridgeline engaged Stonebridge Advisory Group LLC as its sell-side financial advisor. Stonebridge Advisory Group LLC maintains its principal office at 555 California Street, Suite 2100, San Francisco, California 94104. The engagement is managed by Helen Tran, Managing Director.
As noted above, Ridgeline will retain its operating business, including its subscriber base, network infrastructure, and ongoing operations, following consummation of the proposed assignment. The licenses being assigned represent spectrum authorizations that are separable from Ridgeline's ongoing business operations.
2. Assignee — Northgate Wireless Americas Inc.
Northgate Wireless Americas Inc. ("NWA") is a corporation organized under the laws of the State of Delaware, bearing Delaware File No. 7284619. NWA was incorporated on August 22, 2022, for the specific purpose of acquiring and holding FCC wireless radio service licenses in connection with NTP's entry into direct U.S. spectrum ownership. NWA maintains its principal office at 2200 Wilson Boulevard, Suite 1450, Arlington, Virginia 22201.
Claire Matsuda serves as Vice President, U.S. Operations, for NWA and is the primary operational contact for the company. Ms. Matsuda is responsible for overseeing NWA's regulatory filings, compliance obligations, and business development activities in the United States.
NWA is a wholly owned subsidiary of Northgate US Holdings LLC ("NUS Holdings"), a limited liability company organized under the laws of the State of Delaware. NUS Holdings was formed on August 30, 2022, as an intermediate holding entity in the corporate chain between NWA and NTP. NUS Holdings has no operations or other subsidiaries and was formed solely to serve as the direct parent of NWA.
NUS Holdings is, in turn, a wholly owned subsidiary of Northgate Telecommunications PLC ("NTP" or "Northgate"), a public limited company organized under the laws of England and Wales, bearing Companies House No. 08473291. NTP maintains its headquarters at 14 Cavendish Square, London W1G 0BX, United Kingdom.
NTP is publicly traded on the London Stock Exchange under the ticker symbol "NGTL." As of the third quarter of 2022, NTP had a market capitalization of approximately £4.8 billion. For the fiscal year ended December 31, 2021, NTP reported revenue of approximately £2.31 billion. NTP's projected revenue for the fiscal year ending December 31, 2022, is approximately £2.57 billion, reflecting continued organic growth across its European operations and its expanding U.S. MVNO business.
The senior leadership of NTP includes the following individuals:
• Marcus Enfield — Chief Executive Officer
• Priya Dasgupta — General Counsel
• Thomas Brennan — Senior Vice President, Regulatory Affairs
NTP operates mobile virtual network operator ("MVNO") platforms and enterprise software-as-a-service ("SaaS") platforms across the United Kingdom and Western Europe. NTP's MVNO operations serve millions of subscribers across multiple European markets, and its enterprise SaaS platforms provide telecommunications management, billing, and analytics solutions to wireless carriers and large enterprises.
In the United States, NTP currently conducts MVNO operations through third-party carrier arrangements. The proposed acquisition of the fourteen Meridian Technologies-3 licenses from Ridgeline represents NTP's entry into direct U.S. spectrum ownership. Direct spectrum ownership will complement NTP's existing U.S. MVNO operations by enabling NWA to deploy its own network infrastructure in the covered markets, reducing reliance on third-party carrier arrangements and enabling more efficient and cost-effective service delivery to U.S. subscribers.
NWA has the requisite financial qualifications to hold and deploy the licenses sought. As a wholly owned indirect subsidiary of NTP, NWA has access to NTP's substantial financial resources, including capital markets access, internal cash flow generation, and established banking relationships. NTP's £4.8 billion market capitalization and approximately £2.57 billion in projected annual revenue provide ample financial backing for the capital investment required to deploy broadband wireless services across the covered markets.
Certificates of incorporation and formation for NWA and NUS Holdings, respectively, are attached hereto as Exhibit D.
3. Ownership Chain Diagram
The complete ownership chain from the licensee to the ultimate parent entity is depicted in the Corporate Organization Chart attached as Exhibit A and summarized below:
Northgate Telecommunications PLC (Public limited company, England and Wales; Companies House No. 08473291; LSE: NGTL)
As further described in Section E below and in the concurrently filed Section 310(b)(4) Petition, 100% of the equity interests in NWA will be held, directly and indirectly, by foreign entities. No U.S. persons hold any ownership interest in NWA, NUS Holdings, or NTP.
C. Description of the Licenses to Be Assigned
1. License Details
The proposed assignment involves fourteen (14) FCC Wireless Radio Service licenses in the Meridian Technologies-3 band (Band 66), authorized under Part 27 of the Commission's Rules, 47 C.F.R. Part 27. The licenses bear call signs WQAB201 through WQAB214, inclusive.
The spectrum at issue consists of 39 MHz of paired spectrum (39 MHz uplink / 39 MHz downlink), for a total of 78 MHz of paired bandwidth. The licenses provide geographic coverage across Economic Areas ("EAs") in Nevada, eastern California, and southern Oregon, with an aggregate covered population of approximately 3.84 million POPs.
A complete listing of the fourteen licenses, together with their respective EA numbers, geographic coverage areas, spectrum Block designations, and other pertinent information, is set forth in the table below and in the detailed license schedule attached as Exhibit B:
All fourteen licenses are currently in good standing and are not subject to any pending enforcement actions, forfeitures, or revocation proceedings. Ridgeline has represented in the APA that all licenses are valid and subsisting and that Ridgeline is in material compliance with all applicable FCC rules and regulations.
2. Buildout Status
Ridgeline has met interim construction benchmarks on eleven (11) of the fourteen (14) licenses. Specifically, the licenses bearing call signs WQAB201 through WQAB211 have satisfied the applicable interim construction requirements under the Commission's rules.
Three licenses covering southern Oregon Economic Areas — call signs WQAB212 (EA-162, Klamath Falls), WQAB213 (EA-163, Lakeview), and WQAB214 (EA-164, Burns) — have not yet met their interim construction benchmarks. The interim benchmarks for these three licenses are due on March 14, 2025, and the final construction deadlines fall on March 14, 2028. Ridgeline has represented that it has not made significant infrastructure investments in these southern Oregon markets and that construction progress to date on these three licenses is limited.
NWA is fully committed to meeting all applicable buildout requirements upon consummation of the assignment. NWA's business plan for the covered markets includes the deployment of network infrastructure in the southern Oregon EAs in advance of the applicable interim benchmarks. NTP's financial resources and telecommunications expertise will support NWA's ability to meet these obligations within the timeframes prescribed by the Commission's rules. NWA acknowledges that, upon consummation of the assignment, it will assume all buildout obligations associated with the assigned licenses, including the interim and final construction requirements for the three southern Oregon licenses, and will be subject to the same regulatory consequences as any other licensee for failure to comply with such requirements.
3. Spectrum Valuation
In connection with the negotiation of the APA, the parties commissioned an independent spectrum valuation from Vantage Spectrum Consultants Inc. ("Vantage Spectrum"), a nationally recognized spectrum valuation and consulting firm with offices at 1700 Pennsylvania Avenue NW, Suite 520, Washington, DC 20006. The valuation engagement was led by Dr. Raymond Kessler, Principal Consultant at Vantage Spectrum.
Vantage Spectrum delivered its valuation report on September 12, 2022. The report employed multiple valuation methodologies, including comparable transactions analysis, discounted cash flow analysis, and replacement cost analysis. The per-MHz-POP valuation derived from these methodologies supports the agreed purchase price of approximately $0.845 per MHz-POP. This valuation is consistent with recent market transactions for mid-band spectrum in comparable geographic markets and reflects the current value of Meridian Technologies-3 (Band 66) spectrum in the covered Economic Areas.
The Vantage Spectrum valuation report is available to the Commission upon request.
D. Description of the Transaction
1. Asset Purchase Agreement
The proposed assignment arises from an Asset Purchase Agreement executed on September 22, 2022, between Ridgeline, as Seller and Assignor, and NWA, as Buyer and Assignee. A redacted copy of the executed APA is attached hereto as Exhibit C.
The key terms of the APA are summarized below:
Purchase Price. The purchase price for the fourteen licenses is $126,500,000, as set forth in Section 3.1 of the APA. The purchase price is fixed and there is no contractual price-adjustment mechanism. The purchase price is payable in full in immediately available funds at closing.
Transaction Structure. The transaction is structured as an asset purchase of bare spectrum licenses only. Ridgeline will retain its operating business, including its approximately 142,000 subscriber accounts, network infrastructure, customer contracts, employee relationships, trade names, and associated goodwill. The APA does not contemplate the transfer of any assets other than the fourteen FCC wireless radio service licenses identified in the agreement.
Earnest Money Deposit. An earnest money deposit of $4,500,000, representing approximately 3.56% of the purchase price, was funded into escrow on September 30, 2022. The escrow agent is Meridian National Bank, N.A., located at 333 South Hope Street, Suite 4800, Los Angeles, California 90071. Sandra Okonkwo serves as the designated Escrow Officer. The annual escrow fee is $12,500, payable by NWA. The escrow deposit is fully refundable to NWA in the event that the FCC does not grant consent to the assignment or if other closing conditions are not satisfied, subject to the terms and conditions set forth in the APA and the escrow agreement.
Closing Conditions. The closing of the transaction is subject to the satisfaction or waiver of customary closing conditions, including, among others:
(a) the grant by the FCC of its consent to the assignment of the fourteen licenses from Ridgeline to NWA pursuant to Section 310(d) of the Act;
(b) to the extent required, the grant by the FCC of a Declaratory Ruling approving up to 100% indirect foreign ownership of NWA pursuant to Section 310(b)(4) of the Act;
(c) the accuracy in all material respects of the representations and warranties of each party as of the closing date;
(d) the performance in all material respects by each party of its covenants and obligations under the APA;
(e) the absence of any order, injunction, or other legal restraint preventing the consummation of the transaction; and
(f) the receipt of all other governmental approvals and consents required for the consummation of the transaction.
Long-Stop Date. The APA provides for a Long-Stop Date of March 15, 2023, by which all closing conditions must be satisfied or waived and the closing must occur. If the closing does not occur by the Long-Stop Date, either party may terminate the APA, subject to the terms and conditions set forth therein. The earnest money deposit will be returned to NWA in the event of termination due to the failure to obtain FCC consent by the Long-Stop Date.
2. Transaction Timeline
The following timeline summarizes the key milestones in the negotiation and execution of the proposed transaction:
The Letter of Intent executed on June 15, 2022, between NTP and Ridgeline set forth the principal terms upon which the parties would negotiate a definitive agreement for the acquisition of Ridgeline's spectrum licenses. Following the execution of the Letter of Intent, the parties conducted customary due diligence, including a review of Ridgeline's license portfolio, buildout status, regulatory compliance history, and financial condition, as well as the independent spectrum valuation conducted by Vantage Spectrum. The corporate formation of NWA and NUS Holdings in August 2022 was undertaken in preparation for the execution of the definitive APA and the filing of the requisite regulatory applications.
3. Representations and Warranties Insurance
In connection with the proposed transaction, the parties have obtained an indicative representations and warranties insurance policy from Apex Continental Insurance Ltd. ("Apex Continental"), a Bermuda-domiciled insurance company with a U.S. branch office located at 140 Broadway, Suite 3500, New York, New York 10005. The indicative policy was underwritten by Fiona Ashworth of Apex Continental.
The indicative premium for the representations and warranties insurance policy is $1,012,000, representing approximately 0.8% of the $126,500,000 purchase price. The policy has not yet been bound and is expected to be bound prior to or at the closing of the transaction. The representations and warranties insurance policy is intended to provide the buyer with recourse for losses arising from breaches of the seller's representations and warranties under the APA, subject to customary retention amounts, exclusions, and policy limits.
The availability of representations and warranties insurance is a market-standard feature in spectrum license transactions and does not affect the obligations of the parties under the APA or the regulatory conditions to closing.
E. Foreign Ownership — Section 310(b)(4) Analysis
1. Applicability. Section 310(b)(4) of the Communications Act of 1934, as amended, 47 U.S.C. § 310(b)(4), provides that no common carrier radio station license shall be held by a corporation of which more than twenty-five percent (25%) 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. The statute further provides that the Commission may, if it finds it consistent with the public interest, grant such a license notwithstanding the foreign ownership.
Because NWA will hold common carrier wireless licenses under Part 27 of the FCC's Rules, Section 310(b)(4) is implicated by the proposed indirect foreign ownership structure. As described in Section B above, NWA is a wholly owned subsidiary of NUS Holdings, which is in turn a wholly owned subsidiary of NTP, a public limited company organized under the laws of England and Wales. Accordingly, one hundred percent (100%) of the equity and voting interests in NWA will be held, indirectly, by a foreign entity, which exceeds the twenty-five percent (25%) benchmark set forth in Section 310(b)(4).
To address this foreign ownership, NWA has filed a concurrent Petition for Declaratory Ruling seeking specific approval from the Commission for up to 100% indirect foreign ownership of NWA by NTP and its shareholders. The Section 310(b)(4) Petition has been filed separately under its own cover letter but is cross-referenced throughout this narrative and the FCC Form 603 application. The Applicants respectfully request that the Commission consider and act upon the Section 310(b)(4) Petition in conjunction with this FCC Form 603 application.
2. Significant Foreign Shareholders of NTP
NTP is publicly traded on the London Stock Exchange (LSE: NGTL). The following table identifies all shareholders holding five percent (5%) or more of NTP's outstanding shares based on the most recent public filings and shareholder register:
Each of the identified significant shareholders is organized or established in a country that is a member of the World Trade Organization ("WTO"). Specifically, Thornhill Asset Management LLP and Dunmore Pension Trust are organized or established in the United Kingdom, and Sovereign Capital Partners AG is organized in Switzerland. No shareholder from a non-WTO-member country holds five percent (5%) or more of NTP's shares.
To the best of NWA's knowledge, information, and belief, no individual or entity from a non-WTO-member country holds a significant ownership interest, directly or indirectly, in NWA, NUS Holdings, or NTP. A more detailed analysis of NTP's shareholder composition is provided in the concurrently filed Section 310(b)(4) Petition.
3. WTO-Member-Country Presumption
The Commission has established a rebuttable presumption that indirect foreign ownership of common carrier licensees above the twenty-five percent (25%) benchmark in Section 310(b)(4) is consistent with the public interest where the foreign ownership is held by entities from WTO-member countries. See Rules and Policies on Foreign Participation in the U.S. Telecommunications Market, IB Docket Nos. 97-142 and 95-22, Report and Order and Order on Reconsideration, 12 FCC Rcd 23891 (1997) (the "Foreign Participation Order"); see also Commission Procedures for Reviewing Requests for Section 310(b)(4) Foreign Ownership Rulings, Public Notice, DA 20-673 (July 2, 2020).
The United Kingdom and Switzerland are both founding members of the World Trade Organization and are parties to the WTO Basic Telecommunications Agreement. Accordingly, NTP and each of its identified significant shareholders — Thornhill Asset Management LLP (United Kingdom), Sovereign Capital Partners AG (Switzerland), and Dunmore Pension Trust (United Kingdom) — qualify for the favorable presumption established by the Commission in the Foreign Participation Order.
Application of the WTO-member-country presumption is appropriate in this case because: (i) all identified holders of significant ownership interests in NTP are from WTO-member countries; (ii) the proposed indirect foreign ownership does not raise any competitive concerns, as NWA does not currently hold any FCC spectrum licenses; and (iii) the proposed indirect foreign ownership is consistent with the United States' commitments under the WTO Basic Telecommunications Agreement to provide market access to foreign telecommunications providers.
A detailed analysis of the applicability and non-rebuttal of the WTO-member-country presumption is provided in the concurrently filed Section 310(b)(4) Petition.
4. National Security Review
The Applicants are aware that the proposed transaction may be subject to review by the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector (the "Committee") pursuant to Executive Order 13913 of April 4, 2020. The Committee, which is chaired by the Attorney General and includes the Secretary of Homeland Security and the Secretary of Defense, among other members, is charged with reviewing applications involving foreign participation in the U.S. telecommunications sector and providing recommendations to the Commission regarding the national security, law enforcement, and public safety implications of such transactions.
NWA and NTP will cooperate fully with any review by the Committee and will provide all information and documents requested in connection with such review. The Applicants will execute any mitigation agreements, security agreements, or other arrangements that the Committee may reasonably require as a condition to its approval or non-objection.
No adverse national security findings are anticipated in connection with the proposed transaction. NTP is a publicly traded company domiciled in the United Kingdom, a close ally of the United States with longstanding security and intelligence cooperation. NTP's operations are concentrated in the United Kingdom and Western Europe, and NTP has no operations in, or significant commercial relationships with, countries of concern from a national security perspective. Preliminary informal engagement with relevant government agencies has not identified any national security concerns with respect to the proposed transaction.
F. Anti-Trafficking / Unjust Enrichment Considerations
Section 1.2111 of the Commission's Rules, 47 C.F.R. § 1.2111, governs anti-trafficking rules and unjust enrichment payment obligations applicable to licenses originally acquired at auction. These rules are designed to prevent licensees from acquiring spectrum at auction using small business or other designated entity bidding credits and then transferring the licenses shortly thereafter to non-designated entities at a profit, while retaining the benefit of the bidding credits.
The Applicants have analyzed whether any of the fourteen licenses at issue in this application (call signs WQAB201 through WQAB214) are subject to holding-period restrictions or unjust enrichment payment obligations under Section 1.2111 of the Commission's Rules. The analysis considered the auction history of each license, any bidding credits or other incentives applied at the time of original acquisition, and the elapsed time since the initial grant of each license.
To the extent that any of the fourteen licenses remain subject to unjust enrichment payment requirements under Section 1.2111, Ridgeline has represented in the APA that it will comply with all applicable unjust enrichment payment obligations and will make any required payments to the United States Treasury in connection with the proposed assignment. Ridgeline has further represented that, to its knowledge, it has not received any designated entity bidding credits or other incentives that would give rise to unjust enrichment payment obligations in connection with the proposed assignment.
The Applicants will provide supplemental information regarding the anti-trafficking and unjust enrichment analysis to the Commission upon request. A detailed analysis of each license's auction history and any applicable holding-period restrictions or unjust enrichment payment obligations is available for the Commission's review.
G. Public Interest Analysis
Under Section 310(d) of the Act, the Commission must determine that the proposed assignment of licenses will serve the public interest, convenience, and necessity before granting its consent. The Commission evaluates whether the transaction will serve the public interest by weighing any potential public interest harms against the potential public interest benefits. See, e.g., Applications of Harborline & Co. US, Inc. and Sprint Corporation, Memorandum Opinion and Order, Declaratory Ruling, and Order of Proposed Modification, 34 FCC Rcd 10578 (2019) (¶ 7). As demonstrated below, the proposed assignment of the fourteen Meridian Technologies-3 licenses from Ridgeline to NWA will serve the public interest, and no competitive or other harms will result.
1. Enhanced Service to Covered Markets
The proposed assignment will place the Meridian Technologies-3 (Band 66) spectrum in the hands of NWA, an entity backed by NTP's substantial financial resources. NTP's market capitalization of approximately £4.8 billion and projected FY2022 revenue of approximately £2.57 billion provide a strong financial foundation for the capital investment required to deploy and expand broadband wireless services across the covered Economic Areas in Nevada, eastern California, and southern Oregon.
The covered markets encompass approximately 3.84 million POPs, including significant rural and semi-urban populations that have historically been underserved by the nation's largest wireless carriers. The Commission has repeatedly recognized the importance of ensuring that spectrum resources are deployed to serve rural and underserved communities. See, e.g., Expanding Flexible Use of the 3.7 to 4.2 GHz Band, Report and Order and Order of Proposed Modification, 35 FCC Rcd 2343 (2020) (¶ 10). The proposed assignment directly advances this objective by transferring the licenses to a well-capitalized entity with the resources and commitment to invest in network deployment across these markets.
NTP's extensive experience in operating mobile telecommunications networks and enterprise SaaS platforms across the United Kingdom and Western Europe provides NWA with access to proven operational expertise and best practices that can be applied to the deployment and management of wireless broadband services in the covered markets. The combination of NTP's financial resources, operational expertise, and strategic commitment to the U.S. market will result in enhanced service offerings for consumers and businesses in Nevada, eastern California, and southern Oregon.
2. Acceleration of Buildout
NWA commits to meeting all interim and final construction benchmarks for all fourteen licenses, including the three southern Oregon licenses (WQAB212, WQAB213, and WQAB214) that have not yet met their interim benchmarks. The interim benchmarks for these three licenses are due March 14, 2025, and the final construction deadlines fall on March 14, 2028.
The fact that Ridgeline has not yet met the interim construction benchmarks for the three southern Oregon licenses underscores the importance of the proposed transaction to the public interest. By transferring these licenses to NWA, which has access to NTP's financial resources and is committed to deploying network infrastructure in the southern Oregon markets, the proposed assignment will accelerate the deployment of broadband wireless services in areas that would otherwise continue to lack service. NTP's entry into direct U.S. spectrum ownership represents a significant capital commitment that will facilitate the deployment of advanced wireless services, including 5G and other next-generation technologies, in the covered markets.
NWA's business plan for the covered markets contemplates the deployment of network infrastructure in a phased approach, beginning with the most densely populated Economic Areas and extending to the more rural areas, including the southern Oregon markets. NWA anticipates that it will meet or exceed the interim construction benchmarks for the three southern Oregon licenses well in advance of the March 2025 deadline.
3. Competitive Benefits
The proposed transaction will introduce a new, well-capitalized competitor with international experience in telecommunications and SaaS into the U.S. wireless market. NTP's existing U.S. MVNO operations, conducted through third-party carrier arrangements, demonstrate NTP's commitment to the U.S. market and its ability to serve U.S. consumers. Direct spectrum ownership will enable NWA to move beyond its current MVNO model and deploy its own network infrastructure, resulting in more efficient service delivery, lower costs, and greater control over service quality.
The entry of a new spectrum holder and potential facilities-based carrier in the covered markets will increase competition, potentially leading to lower prices, improved service quality, and greater innovation for consumers. The Commission has consistently recognized that increasing the number of competitors in wireless markets serves the public interest. See, e.g., Policies Regarding Mobile Spectrum Holdings, Report and Order, 29 FCC Rcd 6133 (2014) (¶ 2). NWA's entry into the covered markets as a new spectrum holder is fully consistent with this policy objective.
4. No Competitive Harms
NWA does not currently hold any FCC spectrum licenses in any band or any geographic market. Accordingly, the proposed assignment raises no spectrum aggregation concerns under the Commission's policies regarding mobile spectrum holdings. See id. There is no overlap between NWA's current operations and Ridgeline's service area that would give rise to competitive concerns, and the proposed assignment will not result in any increase in spectrum concentration in the covered markets.
The proposed transaction does not involve a merger or combination of existing wireless carriers, and it does not result in the elimination of a competitor from any market. Ridgeline will continue to operate its wireless telecommunications business using its retained network infrastructure and subscriber base following consummation of the assignment, albeit without the Meridian Technologies-3 spectrum licenses being assigned to NWA. To the extent Ridgeline requires spectrum to continue its operations, Ridgeline has indicated that it holds other spectrum authorizations and has entered into spectrum lease arrangements that will enable it to continue serving its subscribers without disruption.
5. Continuity of Service
As noted throughout this narrative, the proposed transaction involves the transfer of bare spectrum licenses only. Ridgeline will retain its subscriber base of approximately 142,000 accounts, its network infrastructure, its customer contracts, and all other assets and operations associated with its wireless telecommunications business. Ridgeline will manage the transition to alternative spectrum arrangements independently, and NWA will not assume any of Ridgeline's customer-facing operations or obligations.
No disruption to Ridgeline's existing subscribers or to any third-party service providers is anticipated as a result of the proposed assignment. Ridgeline has represented in the APA that it has developed a transition plan to ensure continuity of service for its subscribers and that it will implement this plan in an orderly manner following consummation of the assignment.
In sum, the proposed assignment will generate substantial public interest benefits — including accelerated deployment of broadband wireless services, increased competition, and more efficient use of spectrum resources — without causing any competitive or other harms. The Commission should find that the proposed assignment serves the public interest, convenience, and necessity.
H. Legal Counsel and Contact Information
1. Counsel for Assignee (Northgate Wireless Americas Inc.)
Broadfield Whitaker LLP Annette Galvez, Partner Daniel Fong, Senior Associate 1401 H Street NW, Suite 750 Washington, DC 20005 Telephone: (202) 457-8312 (A. Galvez) / (202) 457-8347 (D. Fong) Facsimile: (202) 457-8301
Email: agalvez@broadfieldwhitaker.com / dfong@broadfieldwhitaker.com
Calderwood & Harkness LLP Harold Wren, Of Counsel (Communications & Regulatory) 1875 K Street NW, Suite 600 Washington, DC 20006 Telephone: (202) 778-5400
Email: hwren@calderwoodharkness.com
Calderwood & Harkness LLP Engagement Details: Matter No.: 1018-00009 Responsible Partner: Sylvia Hartwell Billing Partner: Leonard Cross Calderwood & Harkness LLP — New York Office 375 Park Avenue, 40th Floor New York, NY 10152
2. Counsel for Assignor (Ridgeline Wireless Holdings LLC)
Hargrove, Sato & Caldwell LLP Kevin Sato, Lead Partner (Regulatory/Telecom) Mariana Quelibo, Associate 100 West Liberty Street, Suite 1200 Reno, NV 89501 Telephone: (775) 348-2700
Email: ksato@hsclaw.com / mestevez@hsclaw.com
3. Applicant Contact
Northgate Wireless Americas Inc. Claire Matsuda, VP, U.S. Operations 2200 Wilson Boulevard, Suite 1450 Arlington, VA 22201 Telephone: (703) 812-4600
Email: cmatsuda@northgatewireless.com
Northgate Telecommunications PLC Thomas Brennan, SVP, Regulatory Affairs 14 Cavendish Square London W1G 0BX, United Kingdom Telephone: +44 20 7946 0123
Email: tbrennan@northgatetelecom.co.uk
I. Request for Expedited Processing
The Applicants respectfully request that the Commission process this FCC Form 603 application, together with the concurrently filed Section 310(b)(4) Petition for Declaratory Ruling, on an expedited basis.
As described in Section D above, the Asset Purchase Agreement between Ridgeline and NWA contains a Long-Stop Date of March 15, 2023. If FCC consent to the assignment of the fourteen licenses is not obtained by the Long-Stop Date, either party will have the right to terminate the APA, in which case the earnest money deposit will be returned to NWA and the transaction will not close. Timely processing of this application is therefore essential to enable the Applicants to consummate the proposed transaction within the timeframe contemplated by the APA.
The Applicants believe that expedited processing is warranted in this case for several reasons. First, the proposed transaction is a straightforward assignment of bare spectrum licenses that does not involve any complex operational integration or customer transition issues. Second, the foreign ownership structure is transparent and well-documented, and the indirect foreign ownership is held entirely by entities from WTO-member countries, entitling the Applicants to the favorable presumption established by the Commission in the Foreign Participation Order. Third, NWA does not currently hold any FCC spectrum licenses, and the proposed assignment raises no spectrum aggregation or competitive concerns. Fourth, no petitions to deny or objections are anticipated that would warrant delay, although the Applicants acknowledge that the statutory comment period will open upon the issuance of public notice by the Commission.
The Applicants are committed to responding promptly to any requests for additional information from the Commission and will work diligently to facilitate the Commission's review of this application.
J. Conclusion and Request for Relief
For the foregoing reasons, the Applicants respectfully request that the Commission:
1. Grant consent to the assignment of the fourteen (14) Meridian Technologies-3 (Band 66) wireless radio service licenses (call signs WQAB201, WQAB202, WQAB203, WQAB204, WQAB205, WQAB206, WQAB207, WQAB208, WQAB209, WQAB210, WQAB211, WQAB212, WQAB213, and WQAB214) from Ridgeline Wireless Holdings LLC to Northgate Wireless Americas Inc. pursuant to Section 310(d) of the Communications Act of 1934, as amended, 47 U.S.C. § 310(d); and
2. Grant the concurrently filed Section 310(b)(4) Petition for Declaratory Ruling, approving up to one hundred percent (100%) indirect foreign ownership of Northgate Wireless Americas Inc. by Northgate Telecommunications PLC, a public limited company organized under the laws of England and Wales, and its shareholders.
The proposed assignment serves the public interest, convenience, and necessity. The transaction will place valuable mid-band spectrum in the hands of a well-capitalized entity committed to deploying broadband wireless services across underserved rural and semi-urban markets in Nevada, eastern California, and southern Oregon, will introduce a new competitor into the U.S. wireless market, and will not result in any competitive harms or disruption to existing services. The Commission should grant its consent without conditions and on an expedited basis.
K. Verification and Signature
Verification. I, Claire Matsuda, Vice President, U.S. Operations, of Northgate Wireless Americas Inc., hereby verify under penalty of perjury that I am an authorized representative of Northgate Wireless Americas Inc.; that I have read the foregoing Supporting Narrative Statement and the accompanying FCC Form 603 application; that the statements of fact contained therein are true and correct to the best of my knowledge, information, and belief; and that this verification was executed on October 14, 2022.
________________________________________
Claire Matsuda Vice President, U.S. Operations Northgate Wireless Americas Inc. 2200 Wilson Boulevard, Suite 1450 Arlington, VA 22201
Date: October 14, 2022
Counsel for Assignee
BROADFIELD WHITAKER LLP
By: ________
Annette Galvez Partner 1401 H Street NW, Suite 750 Washington, DC 20005 Telephone: (202) 457-8312
Email: agalvez@broadfieldwhitaker.com
By: ________
Daniel Fong Senior Associate 1401 H Street NW, Suite 750 Washington, DC 20005 Telephone: (202) 457-8347
Email: dfong@broadfieldwhitaker.com
Counsel for Northgate Wireless Americas Inc.
Date: October 14, 2022
EXHIBIT LIST
Exhibit A — Corporate Organization Chart
Exhibit A consists of a diagram depicting the full ownership chain from Northgate Wireless Americas Inc. (the Licensee/Assignee) to Northgate Telecommunications PLC (the ultimate parent entity), as follows:
Northgate Telecommunications PLC (Public limited company, England and Wales; Companies House No. 08473291; LSE: NGTL)
Significant Shareholders:
• Thornhill Asset Management LLP (England and Wales): 9.7%
• Sovereign Capital Partners AG (Switzerland): 6.3%
• Dunmore Pension Trust (England and Wales): 5.1%
• Public Float: 78.9%
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Northgate US Holdings LLC (Delaware LLC; formed August 30, 2022)
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