BEFORE THE FEDERAL COMMUNICATIONS COMMISSION WASHINGTON, D.C. 20554
PETITION FOR DECLARATORY RULING UNDER SECTION 310(b)(4) OF THE COMMUNICATIONS ACT OF 1934, AS AMENDED
Filed: October 14, 2022
Filed Concurrently with: FCC Form 603 — Application for Assignment of Authorization
Filed by:
Broadfield Whitaker LLP 1401 H Street NW, Suite 750 Washington, DC 20005
On behalf of Northgate Wireless Americas Inc. 2200 Wilson Boulevard, Suite 1450 Arlington, VA 22201
Counsel of Record:
Annette Galvez, Lead Partner Daniel Fong, Senior Associate Broadfield Whitaker LLP 1401 H Street NW, Suite 750 Washington, DC 20005 Tel: (202) 555-4100
Fax: (202) 555-4101
Email: agalvez@broadfieldwhitaker.com
Email: dfong@broadfieldwhitaker.com
Reviewed by / Co-Counsel:
Harold Wren, Of Counsel Calderwood & Harkness LLP 1875 K Street NW, Suite 600 Washington, DC 20006 Tel: (202) 555-7800
Email: hwren@calderwoodharkness.com
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I. INTRODUCTION AND SUMMARY
Northgate Wireless Americas Inc. ("NWA" or "Petitioner"), a Delaware corporation (Delaware Secretary of State File No. 7284619), respectfully petitions the Federal Communications Commission ("FCC" or "Commission") for a declaratory ruling under Section 310(b)(4) of the Communications Act of 1934, as amended, 47 U.S.C. § 310(b)(4). This petition is filed in accordance with the procedures established by the Commission in its Foreign Ownership Second Report and Order, FCC 13-50, 28 FCC Rcd 5741 (2013), and the Foreign Ownership Third Report and Order, FCC 16-128, 31 FCC Rcd 11272 (2016) (collectively, the "Foreign Ownership Orders").
NWA seeks advance approval for up to one hundred percent (100%) aggregate indirect foreign ownership by Northgate Telecommunications PLC ("NTP"), a public limited company organized under the laws of England and Wales (Companies House No. 08473291), with its headquarters located at 14 Cavendish Square, London W1G 0BX, United Kingdom. NTP is publicly traded on the London Stock Exchange under the ticker symbol NGTL. NTP's indirect ownership of NWA flows through a single wholly owned intermediate holding company, Northgate US Holdings LLC ("NUS Holdings"), a Delaware limited liability company. This ownership structure is straightforward, transparent, and fully consistent with the Commission's framework for evaluating foreign ownership interests in common carrier licensees.
This petition is filed concurrently with FCC Form 603 (FCC File No. 0010287-EX), in which NWA seeks FCC consent to the assignment of fourteen (14) FCC Wireless Radio Service licenses from Ridgeline Wireless Holdings LLC ("Ridgeline"), a Nevada limited liability company (NV SOS Entity No. E0428716302), to NWA. The licenses at issue are Meridian Technologies-3 (Band 66) spectrum licenses, governed by Part 27 of the FCC's Rules, 47 C.F.R. Part 27, identified by call signs WQAB201 through WQAB214. Together, these fourteen licenses cover thirty-nine megahertz (39 MHz) of paired spectrum (39 MHz uplink / 39 MHz downlink, totaling 78 MHz paired bandwidth), serving Economic Areas across portions of Nevada, eastern California, and southern Oregon, with a covered population of approximately 3.84 million POPs.
NWA respectfully requests that the Commission apply the well-established presumption favoring approval of indirect foreign ownership by entities from World Trade Organization ("WTO") member countries, consistent with the Foreign Ownership Orders and the Commission's extensive body of precedent applying that presumption. The United Kingdom, where NTP is organized and headquartered, is a founding member of the WTO. Moreover, all identified significant shareholders of NTP—Thornhill Asset Management LLP (9.7%), Sovereign Capital Partners AG (6.3%), and Dunmore Pension Trust (5.1%)—are organized in WTO-member countries (the United Kingdom and Switzerland, respectively). No identified shareholder of NTP is organized in, or a citizen of, a non-WTO-member country.
For the reasons set forth below and in the accompanying exhibits, NWA respectfully submits that the grant of this petition would serve the public interest, convenience, and necessity. The proposed transaction will enhance competition in wireless broadband markets in the relevant service areas, facilitate significant capital investment in spectrum deployment and network infrastructure, and promote broadband access in underserved rural and semi-urban communities. NWA is not aware of any national security, law enforcement, foreign policy, or trade policy concerns that would counsel against approval of this petition. NWA stands ready to cooperate fully with the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector (the "Committee") established pursuant to Executive Order 13913.
II. DESCRIPTION OF THE PETITIONER AND PROPOSED TRANSACTION
A. The Petitioner — Northgate Wireless Americas Inc.
NWA is a corporation organized under the laws of the State of Delaware, incorporated on August 22, 2022, as reflected in its Certificate of Incorporation on file with the Delaware Secretary of State (File No. 7284619). A copy of NWA's Certificate of Incorporation is attached hereto as Exhibit B. NWA's principal office is located at 2200 Wilson Boulevard, Suite 1450, Arlington, Virginia 22201.
NWA was formed specifically to serve as the FCC licensee and assignee of the Ridgeline license portfolio in connection with the proposed transaction described herein. NWA is a wholly owned subsidiary of Northgate US Holdings LLC, which is in turn wholly owned by NTP. This corporate structure was designed to provide a clear and transparent ownership chain from the FCC licensee level up to the ultimate foreign parent, consistent with the Commission's requirements and preferences for straightforward organizational structures in Section 310(b)(4) proceedings.
As of the date of this filing, NWA does not currently hold any FCC licenses. This petition is filed in connection with NWA's first proposed license holdings. NWA has been capitalized by NTP through NUS Holdings for the specific purpose of consummating the proposed acquisition of the Ridgeline license portfolio and undertaking wireless operations in the relevant service areas.
Claire Matsuda, Vice President, U.S. Operations, oversees NWA's day-to-day operational activities from the Arlington, Virginia office. Ms. Matsuda is a citizen of the United States. Her declaration, attesting to the accuracy of the facts set forth in this petition and confirming the purpose and operational structure of NWA, is attached hereto as Exhibit I.
B. The Proposed Transaction
Pursuant to an Asset Purchase Agreement dated September 22, 2022 (the "APA"), between Ridgeline Wireless Holdings LLC (as Seller and Assignor) and NWA (as Buyer and Assignee), NWA proposes to acquire fourteen (14) Meridian Technologies-3 (Band 66) Wireless Radio Service licenses currently held by Ridgeline. The licenses are more fully identified in the concurrently filed FCC Form 603 (FCC File No. 0010287-EX) and in Exhibit G attached hereto. All fourteen licenses are governed by Part 27 of the FCC's Rules, 47 C.F.R. Part 27, and are identified by call signs WQAB201 through WQAB214.
The agreed purchase price for the license portfolio is One Hundred Twenty-Six Million Five Hundred Thousand Dollars ($126,500,000). The transaction is structured as an asset purchase of bare FCC spectrum licenses. Ridgeline's approximately 142,000 subscriber accounts are not being acquired as part of this transaction; Ridgeline will retain its operating business, including all subscriber relationships, network infrastructure, customer premises equipment, and associated operational assets. Upon consummation of the transaction, Ridgeline intends to continue providing wireless services to its existing subscriber base through spectrum leasing or alternative spectrum arrangements, the details of which are outside the scope of this petition.
An earnest money deposit of Four Million Five Hundred Thousand Dollars ($4,500,000) has been funded into escrow with Meridian National Bank, N.A., as escrow agent, as of September 30, 2022. The closing of the transaction is conditioned upon, among other things, receipt of FCC consent to the assignment of the licenses and the grant of this petition for declaratory ruling under Section 310(b)(4).
The transaction represents NTP's entry into direct U.S. spectrum ownership. NTP currently maintains a presence in the U.S. wireless market through mobile virtual network operator ("MVNO") arrangements with third-party carriers, as well as through its enterprise SaaS platforms serving U.S. business customers. The acquisition of the Ridgeline license portfolio will complement these existing U.S. operations and enable NTP, through NWA, to deploy its own wireless broadband infrastructure in the relevant service areas. NTP views this acquisition as a strategic entry point into the U.S. spectrum market and anticipates making substantial additional capital investments in network buildout following consummation of the transaction.
C. The Assignor — Ridgeline Wireless Holdings LLC
Ridgeline Wireless Holdings LLC is a limited liability company organized under the laws of the State of Nevada (NV SOS Entity No. E0428716302), with its principal office located at 450 South Virginia Street, Suite 800, Reno, Nevada 89501. Ridgeline is a privately held regional wireless operator founded in 2014.
Ridgeline's membership interests are held as follows:
All of Ridgeline's members are U.S. persons. Garrett Nolan and Diane Chua are citizens of the United States. Pinnacle Growth Capital Fund II LP is a Delaware limited partnership, and Crestwood Family Office LLC is a Nevada limited liability company; both are domestic entities with no foreign ownership or control.
Ridgeline currently holds the fourteen Meridian Technologies-3 (Band 66) licenses that are the subject of this transaction and provides wireless service to approximately 142,000 subscribers in rural and semi-urban markets across portions of Nevada, eastern California, and southern Oregon. For fiscal year 2021, Ridgeline reported revenue of approximately $87.4 million and earnings before interest, taxes, depreciation, and amortization ("EBITDA") of approximately $19.2 million.
As noted above, Ridgeline will retain its subscriber base and operating business following the consummation of the proposed transaction. The sale of the license portfolio is Ridgeline's strategic decision to monetize its spectrum holdings while continuing to serve its subscribers through alternative spectrum arrangements.
III. LEGAL FRAMEWORK — SECTION 310(b)(4) OF THE COMMUNICATIONS ACT
A. Statutory Provision
Section 310(b)(4) of the Communications Act of 1934, as amended, 47 U.S.C. § 310(b)(4), provides that no common carrier or aeronautical en route or aeronautical fixed radio station license shall be granted to or held by any corporation directly or indirectly controlled by another corporation 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 of such license." The Commission has consistently interpreted this provision as vesting it with broad discretion to approve foreign ownership interests above the twenty-five percent (25%) benchmark where such approval serves the public interest.
Unlike Section 310(b)(3), which imposes a bright-line prohibition on direct foreign ownership of common carrier licensees above the twenty percent (20%) threshold, Section 310(b)(4) addresses indirect foreign ownership through intervening parent entities and permits the Commission to exercise its judgment regarding the public interest implications of such ownership. The legislative history and the Commission's longstanding practice confirm that the twenty-five percent (25%) benchmark in Section 310(b)(4) is not an absolute cap, but rather a threshold that triggers Commission review and the exercise of discretionary authority.
This petition is properly filed under Section 310(b)(4) because the foreign ownership at issue is indirect: NTP, a foreign corporation, does not directly own or control NWA, the proposed FCC licensee. Rather, NTP's ownership interest in NWA flows through NUS Holdings, a Delaware limited liability company that is the direct parent of NWA. Accordingly, the Section 310(b)(4) framework governs this transaction, and the Commission has discretion to approve indirect foreign ownership above twenty-five percent (25%)—up to and including one hundred percent (100%)—where it determines that such approval serves the public interest.
B. FCC Foreign Ownership Order and WTO Presumption
In its Second Report and Order in the foreign ownership proceeding, Review of Foreign Ownership Policies for Common Carrier and Aeronautical Radio Licensees under Section 310(b)(4) of the Communications Act of 1934, as Amended, FCC 13-50, 28 FCC Rcd 5741 (2013), the Commission adopted a streamlined framework for the review of foreign ownership interests in common carrier licensees under Section 310(b)(4). This framework was further refined in the Third Report and Order, FCC 16-128, 31 FCC Rcd 11272 (2016), which established additional procedures for the filing and processing of petitions for declaratory ruling under Section 310(b)(4).
Under the Foreign Ownership Orders, the Commission applies a rebuttable presumption that indirect foreign ownership by entities from WTO-member countries is consistent with the public interest and should be approved, absent countervailing national security, law enforcement, foreign policy, or trade policy concerns. This presumption reflects the Commission's determination, informed by the trade commitments undertaken by WTO-member countries in the context of the General Agreement on Trade in Services ("GATS") and the WTO Basic Telecommunications Agreement, that open investment from WTO-member countries generally promotes competition, innovation, and the deployment of advanced telecommunications infrastructure in the United States.
The Commission has applied this favorable presumption in numerous proceedings and has consistently approved indirect foreign ownership interests from WTO-member countries where no countervailing factors were identified. See, e.g., Fenmore Industries, 28 FCC Rcd 14,316 (2013) (approving Japanese indirect ownership of Sprint); Tidewater Corporation, 16 FCC Rcd 15371 (2001) (approving German indirect ownership); Tidewater Partners LLC, 19 FCC Rcd 19,731 (2004) (approving United Kingdom indirect ownership); Stonefield Group, 29 FCC Rcd 7338 (2014) (approving Mexican indirect ownership).
The United Kingdom is a founding member of the WTO, having been a member since January 1, 1995 (initially as part of the European Communities, and continuing as an independent WTO member following its withdrawal from the European Union). Accordingly, the favorable WTO presumption applies to NTP and to the indirect foreign ownership interests flowing through NTP to NWA. Switzerland, the jurisdiction of organization of Sovereign Capital Partners AG (one of NTP's significant shareholders), is also a WTO member. All identified significant shareholders of NTP are organized in WTO-member countries.
C. Executive Order 13913 and Committee Review
On April 4, 2020, the President issued Executive Order 13913, establishing the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector (the "Committee"). The Committee, which is chaired by the Attorney General and includes the Secretary of Homeland Security and the Secretary of Defense as members (with other agencies participating as appropriate), is authorized to review applications and petitions before the Commission that involve foreign ownership or control of telecommunications services companies.
NWA acknowledges that the Committee may review this petition and the concurrently filed FCC Form 603 application in accordance with the procedures established under Executive Order 13913 and the Commission's implementing rules. NWA stands ready to cooperate fully with any inquiry by the Committee, including providing supplemental information, responding to questions, and entering into any mitigation agreements or conditions that may be deemed appropriate by the Committee and the Commission.
As of the date of this filing, NWA is not aware of any national security, law enforcement, foreign policy, or trade policy concerns that would warrant denial of this petition or the imposition of extraordinary conditions. NTP is a publicly traded company listed on the London Stock Exchange, subject to robust regulatory oversight by the Financial Conduct Authority ("FCA") and the Prudential Regulation Authority ("PRA") in the United Kingdom, as well as the regulatory framework of the United Kingdom's Office of Communications ("Ofcom") with respect to its telecommunications operations. The United Kingdom is a close and longstanding ally of the United States, a member of the "Five Eyes" Intelligence-sharing alliance, and a party to numerous bilateral agreements on security cooperation, law enforcement assistance, and mutual legal assistance.
IV. FOREIGN OWNERSHIP STRUCTURE AND OWNERSHIP CHAIN
A. Proposed Ownership Chain
The proposed ownership structure of NWA, from the licensee level up to the ultimate parent entity, is set forth below:
Level 1 — FCC Licensee:
Northgate Wireless Americas Inc. ("NWA")
• Entity Type: Corporation
• Jurisdiction of Organization: Delaware
• Delaware SOS File No.: 7284619
• Date of Incorporation: August 22, 2022
• Principal Office: 2200 Wilson Boulevard, Suite 1450, Arlington, VA 22201
• Role: Proposed holder of all 14 FCC Wireless Radio Service licenses (call signs WQAB201 through WQAB214)
• Citizenship: United States (domestic corporation)
Level 2 — Direct Parent / Intermediate Holding Company:
Northgate US Holdings LLC ("NUS Holdings")
• Entity Type: Limited Liability Company
• Jurisdiction of Organization: Delaware
• Date of Formation: August 30, 2022
• Principal Office: 2200 Wilson Boulevard, Suite 1450, Arlington, VA 22201
• Role: Intermediate holding company; direct parent of NWA
• Ownership of NWA: 100% of equity and voting interests
• Citizenship: United States (domestic LLC)
Level 3 — Ultimate Parent Entity:
Northgate Telecommunications PLC ("NTP")
• Entity Type: Public Limited Company
• Jurisdiction of Organization: England and Wales, United Kingdom
• Companies House No.: 08473291
• Principal Office: 14 Cavendish Square, London W1G 0BX, United Kingdom
• Stock Exchange Listing: London Stock Exchange (LSE: NGTL)
• Market Capitalization: Approximately £4.8 billion (Q3 2022)
• Role: Ultimate parent entity; sole source of indirect foreign ownership in NWA
• Ownership of NUS Holdings: 100% of equity and membership interests
• Citizenship: United Kingdom (foreign entity — WTO-member country)
NTP is the ultimate parent entity and the sole source of indirect foreign ownership in NWA. Both NWA and NUS Holdings are U.S.-organized entities with their principal offices in the United States, at the same address in Arlington, Virginia. NUS Holdings serves as an intermediate holding company and does not conduct independent operations; its sole purpose is to hold the equity interest in NWA. The ownership chain is a simple, vertical, two-tier structure with no lateral branches, joint ventures, or complex intercompany arrangements that would complicate the Commission's review.
B. Diagram of Ownership Structure
The following diagram illustrates the proposed ownership chain from NTP down to the FCC licensee level, including the identified significant shareholders of NTP:
OWNERSHIP CHAIN DIAGRAM
(See also Exhibit A for full organizational chart)
A detailed corporate organizational chart and ownership chain diagram, presented in graphic format, is attached hereto as Exhibit A.
C. Nature and Extent of Foreign Ownership
As illustrated above, NTP, a foreign entity organized under the laws of England and Wales (United Kingdom), will indirectly own one hundred percent (100%) of the equity and voting interests of NWA, the proposed FCC licensee, through NUS Holdings LLC. This indirect foreign ownership is entirely attributable to NTP's ownership of NUS Holdings, which in turn owns NWA.
Because the aggregate indirect foreign ownership of NWA exceeds the twenty-five percent (25%) benchmark set forth in Section 310(b)(4), this petition seeks the Commission's advance approval for up to one hundred percent (100%) aggregate indirect foreign ownership. The entirety of the foreign ownership flows through a single, transparent chain with two intermediate U.S.-organized entities—NUS Holdings (a Delaware LLC) and NWA itself (a Delaware corporation). There are no other sources of foreign ownership in NWA, no foreign entities hold direct ownership interests in NWA, and the Section 310(b)(3) direct ownership prohibition is not implicated because NWA's sole direct parent, NUS Holdings, is a domestic limited liability company.
The simplicity and transparency of this ownership structure facilitate the Commission's review and ongoing monitoring of compliance with Section 310(b)(4). NWA submits that this structure is consistent with the organizational arrangements that the Commission has approved in numerous prior Section 310(b)(4) proceedings involving publicly traded foreign ultimate parent companies.
V. IDENTIFICATION OF FOREIGN OWNERSHIP INTERESTS (5% OR GREATER, AND SIGNIFICANT SHAREHOLDERS)
A. Shareholders of Northgate Telecommunications PLC
NTP is publicly traded on the London Stock Exchange under the ticker symbol NGTL. As of the third quarter of 2022, NTP's approximate market capitalization was £4.8 billion. NTP reported revenue of £2.31 billion for fiscal year 2021, and projected revenue of £2.57 billion for fiscal year 2022 as of the date of this filing. NTP's shares are widely held by the investing public, with trading conducted on the London Stock Exchange's Main Market in accordance with the listing rules of the Financial Conduct Authority.
NTP's senior management includes:
• Marcus Enfield — Chief Executive Officer
• Priya Dasgupta — General Counsel
• Thomas Brennan — Senior Vice President, Regulatory Affairs
In accordance with the Commission's Foreign Ownership Orders, Petitioner identifies below all shareholders holding five percent (5%) or more of NTP's outstanding ordinary shares, based on NTP's most recent shareholder register and public filings as of the filing date of this petition. NTP's shareholder register is maintained in accordance with the Companies Act 2006 (United Kingdom) and the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority.
1. Thornhill Asset Management LLP — 9.7%
Thornhill Asset Management LLP is a diversified institutional asset management firm that manages investment portfolios on behalf of institutional clients, including pension funds, endowments, and insurance companies. Thornhill's interest in NTP is held in a passive, portfolio investment capacity, and Thornhill does not have any board representation on NTP's board of directors, does not exercise control over NTP's management or operations, and does not have any contractual right to appoint directors or officers of NTP, NUS Holdings, or NWA. No officer, director, partner, or member of Thornhill Asset Management LLP holds any direct ownership interest in NWA or NUS Holdings.
2. Sovereign Capital Partners AG — 6.3%
Sovereign Capital Partners AG is a Swiss-based institutional investment firm that manages private and institutional capital across diversified asset classes, including publicly traded equities. Sovereign Capital's interest in NTP is held as a passive portfolio investment, and Sovereign Capital does not have board representation on NTP's board of directors, does not participate in the management or operations of NTP, and does not have any contractual right to appoint directors or officers of NTP, NUS Holdings, or NWA. No officer, director, or partner of Sovereign Capital Partners AG holds any direct ownership interest in NWA or NUS Holdings.
3. Dunmore Pension Trust — 5.1%
Dunmore Pension Trust is a United Kingdom pension trust established for the benefit of employees and retirees of the Dunmore Group, a diversified British industrial conglomerate. The trust's investments in publicly traded equities, including its holding in NTP, are managed by professional trustees and investment managers. Dunmore Pension Trust's interest in NTP is held as a passive portfolio investment, and the trust does not exercise any control over NTP's management or operations. No trustee, fiduciary, or investment manager of Dunmore Pension Trust holds any direct ownership interest in NWA or NUS Holdings.
4. Public Float — 78.9%
The remaining seventy-eight point nine percent (78.9%) of NTP's outstanding ordinary shares are held by the investing public through trading on the London Stock Exchange. This percentage is calculated as follows:
100.0% (total outstanding ordinary shares) − 9.7% (Thornhill Asset Management LLP) − 6.3% (Sovereign Capital Partners AG) − 5.1% (Dunmore Pension Trust) = 78.9% (public float)
NTP is not aware of any other shareholder holding five percent (5%) or more of its outstanding ordinary shares as of the filing date of this petition. NTP monitors its shareholder register on an ongoing basis in accordance with applicable UK securities laws and the Disclosure Guidance and Transparency Rules of the Financial Conduct Authority, which require shareholders to disclose when their holdings cross certain thresholds.
Given the publicly traded nature of NTP's shares on the London Stock Exchange, the composition of the public float may change over time as shares are bought and sold in the ordinary course of trading. NWA commits to filing updates with the Commission if any new foreign shareholder acquires five percent (5%) or more of NTP's outstanding shares, or if any non-WTO-member-country shareholder acquires five percent (5%) or more of NTP's outstanding shares, in accordance with the Commission's reporting requirements.
B. No Shareholder Exceeds 10% — Reporting Thresholds
As detailed above, no single identified shareholder of NTP holds ten percent (10%) or more of NTP's outstanding equity. Thornhill Asset Management LLP, the largest identified shareholder, holds 9.7% of NTP's ordinary shares. This holding falls below the ten percent (10%) threshold that the Commission has identified as a level of heightened scrutiny in certain contexts.
Under the Commission's streamlined procedures established in the Foreign Ownership Orders, Petitioner identifies all holders at or above the five percent (5%) threshold and provides the information required for each such holder, including the holder's full legal name, entity type, jurisdiction of organization, citizenship, percentage ownership, nature of interest, and WTO-member-country status. Petitioner has provided this information for all three identified significant shareholders and certifies that no other shareholder is known to hold five percent (5%) or more of NTP's outstanding shares as of the filing date.
C. Citizenship of Shareholders — All From WTO-Member Countries
All three identified significant shareholders of NTP are organized in and citizens of WTO-member countries. Thornhill Asset Management LLP and Dunmore Pension Trust are organized in England and Wales, United Kingdom, which is a founding member of the WTO. Sovereign Capital Partners AG is organized in Switzerland, which has been a WTO member since July 1, 1995.
While individual holders within the 78.9% public float may include nationals of non-WTO-member countries, NTP is not aware of any non-WTO-country shareholder holding five percent (5%) or more of its outstanding ordinary shares. The London Stock Exchange, on which NTP's shares are traded, is a global exchange with an overwhelmingly international institutional investor base, and the vast majority of trading volume on the LSE is attributable to investors from WTO-member countries, including the United Kingdom, the European Union member states, the United States, Japan, Canada, Australia, and other major economies.
The favorable WTO presumption applies to the entire ownership chain. All known foreign ownership in NWA flows through NTP, and all identified significant shareholders of NTP are from WTO-member countries. Accordingly, the Commission's presumption that indirect foreign ownership from WTO-member countries is consistent with the public interest applies with full force to this petition.
VI. OFFICERS, DIRECTORS, AND KEY PERSONNEL
A. NTP Board of Directors and Senior Officers
NTP's board of directors and senior officers, as set forth in NTP's public filings with Companies House and the London Stock Exchange, include the following individuals:
Board of Directors:
Senior Officers:
The board composition and officer roster are matters of public record for a company listed on the London Stock Exchange and are subject to the governance requirements of the UK Corporate Governance Code, the Companies Act 2006, and the FCA's Listing Rules. NTP maintains a governance structure consistent with best practices for publicly traded UK companies, including a majority-independent board, separate Chairman and CEO roles, and an audit committee, a remuneration committee, and a nomination committee composed of independent non-executive directors.
All of NTP's directors and senior officers are citizens of WTO-member countries (the United Kingdom, France, Nigeria, Sweden, and the United States). The citizenships of NTP's directors and officers are identified in NTP's Annual Report, relevant excerpts of which are attached hereto as Exhibit H, and in NTP's corporate governance documents, relevant excerpts of which are attached as Exhibit D.
B. NWA Officers and Directors
NWA's officers and directors, as appointed at the time of its incorporation and as currently serving, are as follows:
Ms. Matsuda is responsible for the day-to-day management and operational activities of NWA in the United States, including regulatory compliance, coordination with the FCC and other government agencies, and management of NWA's U.S.-based personnel and operations. NWA's board is comprised of individuals who are U.S. citizens or who are authorized to serve as directors of a Delaware corporation. Day-to-day U.S. operations of NWA will be managed by U.S.-based personnel operating from NWA's principal office in Arlington, Virginia.
C. NUS Holdings
NUS Holdings is a single-member Delaware limited liability company, wholly owned by NTP. NUS Holdings was formed on August 30, 2022, as reflected in its Certificate of Formation on file with the Delaware Secretary of State, a copy of which is attached hereto as Exhibit C. NUS Holdings serves as an intermediate holding company between NTP and NWA and has no independent operations, employees, or business activities other than holding the equity interest in NWA. The sole manager of NUS Holdings is NTP, acting through its authorized officers. Thomas Brennan, NTP's SVP of Regulatory Affairs and a U.S. citizen, serves as the authorized person for NUS Holdings for purposes of U.S. regulatory filings and correspondence.
VII. PUBLIC INTEREST ANALYSIS
A. Competitive and Consumer Benefits
The proposed transaction will serve the public interest by enhancing competition and expanding consumer choice in the wireless broadband markets served by the Ridgeline license portfolio. NTP's entry into the U.S. wireless market as a direct spectrum holder will introduce an additional competitive participant in the Nevada, eastern California, and southern Oregon service areas, supplementing the existing competitive landscape that currently includes both national and regional wireless carriers.
NTP's entry will bring substantial additional capital resources to bear on wireless infrastructure deployment in these service areas. NTP is a major international telecommunications company with extensive operational experience across the United Kingdom and Western Europe, including the deployment and operation of wireless networks, the management of large-scale subscriber bases, and the development of innovative software-as-a-service ("SaaS") platforms for enterprise customers. This international expertise, combined with NTP's significant financial resources, will enhance the quality and availability of wireless broadband services available to consumers and businesses in the relevant markets.
NTP currently operates MVNO arrangements with third-party carriers in the United States and provides enterprise SaaS platforms to U.S. business customers. However, direct spectrum ownership will enable NTP, through NWA, to exercise greater control over network quality, coverage, and service offerings. This transition from MVNO to facilities-based operation is consistent with the Commission's longstanding policy of promoting facilities-based competition, which the Commission has recognized as the most robust form of competition in telecommunications markets.
The covered population of approximately 3.84 million POPs in the relevant Economic Areas includes a significant proportion of rural and semi-urban communities that are currently underserved or unserved by high-speed wireless broadband. NTP's commitment to investing in network buildout in these communities aligns with the Commission's stated goals of promoting broadband access for all Americans and closing the digital divide. The injection of NTP's capital and technical expertise into these markets will create meaningful benefits for consumers, businesses, and communities that currently have limited competitive options for wireless broadband service.
B. Investment and Network Deployment
NTP's financial resources are more than adequate to support the acquisition of the Ridgeline license portfolio and the subsequent deployment of wireless broadband infrastructure in the relevant service areas. As of the third quarter of 2022, NTP's approximate market capitalization was £4.8 billion, and NTP reported fiscal year 2021 revenue of £2.31 billion. NTP's projected fiscal year 2022 revenue was £2.57 billion, reflecting continued growth and strong demand for NTP's telecommunications products and services. Relevant excerpts from NTP's Annual Report, including key financial data, are attached hereto as Exhibit H.
NTP intends to deploy the Meridian Technologies-3 spectrum acquired from Ridgeline to expand wireless broadband service across the relevant Economic Areas, including the deployment of LTE and, where technically and commercially feasible, 5G NR infrastructure. NTP's network deployment plans are informed by its extensive international experience in wireless network rollout and its analysis of the specific geographic, demographic, and competitive conditions in the relevant service areas. NTP anticipates making capital expenditures of approximately $45 million to $60 million over the first three years following consummation of the transaction for initial network deployment, site acquisition, backhaul buildout, and equipment procurement.
The transaction supports several of the Commission's core policy objectives:
• Promoting Broadband Deployment: The transaction will result in the deployment of wireless broadband infrastructure to communities that are currently underserved, directly advancing the Commission's broadband deployment goals and its obligations under Section 706 of the Telecommunications Act of 1996.
• Promoting Competition: The entry of a new, well-capitalized competitor into the relevant wireless markets will increase competitive pressure on incumbent carriers, potentially leading to lower prices, improved service quality, and greater innovation.
• Promoting Efficient Spectrum Utilization: The Ridgeline license portfolio includes Meridian Technologies-3 spectrum that is currently underutilized relative to its full potential. NTP's acquisition and deployment of this spectrum will promote more efficient utilization of a scarce public resource, consistent with the Commission's spectrum management objectives.
C. No Countervailing Public Interest Concerns
The Commission's public notice period for the concurrently filed FCC Form 603 application and this petition closed on December 5, 2022. During the public notice period, no petitions to deny were filed by any party.
One informal objection was filed on November 28, 2022, by Great Basin Rural Broadband Cooperative ("Great Basin"), a rural telecommunications cooperative based in Elko, Nevada. Great Basin's informal objection raised general concerns about foreign ownership of wireless licenses under Section 310(b)(4) and expressed apprehension about the potential impact of the proposed transaction on rural wireless service in northeastern Nevada. NWA filed a timely opposition to Great Basin's informal objection on December 9, 2022, which has been submitted to the Commission as a separate filing in this proceeding.
In its opposition, NWA demonstrated that Great Basin's concerns are fully addressed by this petition and the established WTO presumption. The informal objection did not identify any specific national security, law enforcement, foreign policy, or trade policy concerns, nor did it present any evidence or argument sufficient to rebut the presumption favoring approval of indirect foreign ownership from WTO-member countries. Great Basin's generalized concerns about foreign ownership, without more, do not constitute a basis for denial under the Commission's established framework. See Foreign Ownership Second Report and Order, FCC 13-50, at ¶ 66 (explaining that the WTO presumption may be rebutted only by specific, credible evidence of countervailing public interest concerns).
NWA is not aware of any national security, law enforcement, foreign policy, or trade policy concerns that would counsel against approval of this petition. NTP is a publicly traded company headquartered in the United Kingdom, a close ally of the United States with deep and longstanding cooperation on security, intelligence, law enforcement, and trade matters. The transaction does not involve any entity from a country of concern, and no foreign government or state-owned enterprise has any ownership interest in NTP, NUS Holdings, or NWA.
D. WTO-Member-Country Presumption
As set forth in Sections III.B and V.C above, the United Kingdom is a WTO member country, and all identified significant shareholders of NTP are organized in WTO-member countries (the United Kingdom and Switzerland). The Commission's well-established presumption that indirect foreign ownership from WTO-member countries is consistent with the public interest applies with full force to this petition.
The Commission has applied this presumption in a long line of precedent and has consistently granted Section 310(b)(4) petitions where the foreign ownership is attributable to entities from WTO-member countries and no specific, credible evidence of countervailing public interest concerns has been presented. NWA submits that the circumstances of this petition are squarely within the heartland of cases in which the WTO presumption has been applied and that no circumstances exist to rebut this presumption.
The ownership structure is transparent and straightforward, involving a single ultimate foreign parent (NTP) organized in a WTO-member country (the United Kingdom), with all identified significant shareholders also from WTO-member countries. The transaction will promote competition, investment, and broadband deployment in the relevant service areas. The Commission should therefore apply the WTO presumption and grant this petition.
VIII. NATIONAL SECURITY REVIEW — COMMITTEE FOR THE ASSESSMENT OF FOREIGN PARTICIPATION
NWA acknowledges that Executive Order 13913 (April 4, 2020) authorizes the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector (the "Committee") to review applications and petitions before the Commission that involve foreign ownership of, or other foreign participation in, entities holding FCC authorizations. The Committee, chaired by the Attorney General with the Secretary of Homeland Security and the Secretary of Defense as members, is tasked with identifying and addressing any risks to national security or law enforcement interests that may be associated with foreign participation in the U.S. telecommunications sector.
NWA has provided the information required to facilitate the Committee's review of this petition and the concurrently filed FCC Form 603 application, including the detailed ownership structure, shareholder information, corporate governance documentation, and officer and director information set forth herein and in the attached exhibits. NWA will cooperate fully with any supplemental requests for information from the Committee or its member agencies, and NWA's counsel remains available to meet with Committee representatives at their convenience.
As of the filing date of this petition, no adverse findings have been communicated to NWA or its counsel in connection with any preliminary review by the Committee or its member agencies. NWA is not aware of any circumstances that would give rise to national security, law enforcement, or other concerns warranting denial of this petition or the imposition of extraordinary conditions.
NWA respectfully notes the following factors that weigh in favor of a finding that the proposed foreign ownership does not present national security or law enforcement concerns:
• NTP is a publicly traded company listed on the London Stock Exchange, subject to comprehensive regulatory oversight in the United Kingdom, including by the Financial Conduct Authority, the Prudential Regulation Authority, and Ofcom.
• The United Kingdom is among the closest and most trusted allies of the United States, with extensive bilateral agreements and cooperative arrangements on national security, intelligence sharing (including as a member of the "Five Eyes" alliance), law enforcement cooperation (including the Mutual Legal Assistance Treaty between the United States and the United Kingdom), and trade.
• No foreign government or state-owned enterprise has any ownership interest in NTP, NUS Holdings, or NWA.
• All identified significant shareholders of NTP are private-sector institutional investors from WTO-member countries (the United Kingdom and Switzerland).
• NWA's day-to-day U.S. operations will be managed by U.S.-based personnel, including Claire Matsuda, a U.S. citizen, and Thomas Brennan, a U.S. citizen, who will be responsible for regulatory compliance and coordination with U.S. government agencies.
NWA is prepared to enter into any appropriate mitigation agreement or national security agreement with the Committee, should the Committee determine that such an agreement is warranted. NWA understands that the Commission typically defers to the Committee's assessment on national security matters and will comply with any conditions or commitments that may be agreed upon.
IX. COMPLIANCE WITH REPORTING AND FILING REQUIREMENTS
NWA commits to full compliance with all post-approval reporting and filing requirements established by the Commission in the Foreign Ownership Orders and any conditions that may be imposed in connection with the grant of this petition. Specifically, NWA commits to the following:
1. New Foreign Ownership Interests: NWA will file an updated petition for declaratory ruling or other appropriate notification with the Commission if any new foreign entity acquires a five percent (5%) or greater direct or indirect ownership interest in NWA, NUS Holdings, or NTP, to the extent that NWA or NTP becomes aware of such acquisition through NTP's shareholder monitoring processes or public disclosure requirements.
2. Non-WTO-Member-Country Interests: NWA will file an updated petition for declaratory ruling or other appropriate notification with the Commission if any entity organized in or a citizen of a non-WTO-member country acquires a five percent (5%) or greater direct or indirect ownership interest in NWA, NUS Holdings, or NTP, to the extent that NWA or NTP becomes aware of such acquisition.
3. Committee Conditions: NWA will comply with any and all conditions imposed by the Commission or agreed upon with the Committee for the Assessment of Foreign Participation in the United States Telecommunications Services Sector in connection with this petition or the concurrently filed FCC Form 603 application.
4. Periodic Reporting: NWA will comply with any periodic reporting requirements established by the Commission's Foreign Ownership Orders, including any requirements to update the shareholder information provided in this petition.
5. Record Maintenance: NWA will maintain accurate and current ownership records reflecting the direct and indirect ownership interests in NWA, NUS Holdings, and NTP, and will make such records available to the Commission upon request.
6. Material Changes: NWA will promptly notify the Commission of any material changes to the ownership structure, corporate governance, or officer and director composition of NWA, NUS Holdings, or NTP that could affect the Commission's analysis under Section 310(b)(4).
NWA's commitment to ongoing compliance with these requirements underscores the transparency and good faith with which this petition is filed. NWA and NTP recognize the importance of the Commission's oversight role with respect to foreign ownership of FCC licensees and are committed to maintaining an open and cooperative relationship with the Commission and its staff.
X. REQUESTED RELIEF
For the foregoing reasons, NWA respectfully requests that the Commission issue a declaratory ruling pursuant to Section 310(b)(4) of the Communications Act, 47 U.S.C. § 310(b)(4), as follows:
1. Approving up to one hundred percent (100%) aggregate indirect foreign ownership of NWA by Northgate Telecommunications PLC, a public limited company organized under the laws of England and Wales (Companies House No. 08473291), through Northgate US Holdings LLC, a Delaware limited liability company, consistent with the ownership structure described herein;
2. Specifically approving the indirect foreign ownership interests of the following identified significant shareholders of NTP:
(a) Thornhill Asset Management LLP (9.7% of NTP's outstanding ordinary shares; organized in England and Wales, United Kingdom — WTO member);
(b) Sovereign Capital Partners AG (6.3% of NTP's outstanding ordinary shares; organized in Switzerland — WTO member);
(c) Dunmore Pension Trust (5.1% of NTP's outstanding ordinary shares; organized in England and Wales, United Kingdom — WTO member);
3. Permitting changes in NTP's shareholder base (as a publicly traded entity on the London Stock Exchange) up to and including one hundred percent (100%) aggregate foreign ownership, subject to the standard condition that NWA file updates with the Commission if any new foreign shareholder acquires five percent (5%) or more of NTP's outstanding shares, or if any non-WTO-member-country shareholder acquires five percent (5%) or more of NTP's outstanding shares; and
4. Finding that the grant of this petition serves the public interest, convenience, and necessity, consistent with Section 310(b)(4) of the Communications Act, the Commission's Foreign Ownership Orders, and the Commission's established precedent applying the WTO presumption to indirect foreign ownership from WTO-member countries.
XI. CONCLUSION
For the foregoing reasons, Northgate Wireless Americas Inc. respectfully submits that this petition satisfies all requirements of Section 310(b)(4) of the Communications Act and the Commission's Foreign Ownership Orders. The proposed foreign ownership of NWA is entirely attributable to Northgate Telecommunications PLC, a publicly traded company organized in the United Kingdom, a founding WTO-member country. All identified significant shareholders of NTP are organized in WTO-member countries—the United Kingdom and Switzerland. The ownership structure is transparent and straightforward, involving a single foreign ultimate parent and two intermediate U.S.-organized entities.
The proposed transaction serves the public interest by promoting competition and investment in wireless broadband markets in Nevada, eastern California, and southern Oregon; by facilitating the deployment of wireless broadband infrastructure in underserved rural and semi-urban communities; and by promoting efficient utilization of valuable Meridian Technologies-3 spectrum resources. No national security, law enforcement, foreign policy, or trade policy concerns have been identified, and no petitions to deny were filed during the public notice period. The one informal objection that was filed has been fully addressed in NWA's separately filed opposition and does not raise concerns beyond those addressed by this petition and the established WTO presumption.
NWA respectfully requests prompt action on this petition in conjunction with the concurrently filed FCC Form 603 application (FCC File No. 0010287-EX), so that the proposed transaction may be consummated and NTP may commence its planned investment in wireless broadband deployment in the relevant service areas.
XII. CERTIFICATION AND SIGNATURE BLOCK
Respectfully submitted,
BROADFIELD WHITAKER LLP
By: ________
Annette Galvez Lead Partner Broadfield Whitaker LLP 1401 H Street NW, Suite 750 Washington, DC 20005 Tel: (202) 555-4100
Fax: (202) 555-4101
Email: agalvez@broadfieldwhitaker.com
By: ________
Daniel Fong Senior Associate Broadfield Whitaker LLP 1401 H Street NW, Suite 750 Washington, DC 20005 Tel: (202) 555-4102
Email: dfong@broadfieldwhitaker.com
Counsel for Northgate Wireless Americas Inc.
Date: October 14, 2022