REDACTED Federal Communications Commission FCC 11-64 Before the Federal Communications Commission Washington, D.C. 20554 In the Matier of MARITIME COMMUNICATIONS/LAND MOBILE, LLC Participant in Auction No. 61 and Licensee of Various ‘Authorizations in the Wireless Radio Services Applicant for Modification of Various Authorizations in the Wireless Radio Services Applicant with ENCANA OIL AND GAS (USA), INC.; DUQUESNE LIGHT COMPANY; DCP. MIDSTREAM, LP; JACKSON COUNTY RURAL MEMBERSHIP ELECTRIC COOPERATIVE; PUGET SOUND ENERGY, INC.; ENBRIDGE ENERGY COMPANY, INC.; INTERSTATE, AND LIGHT COMPANY; WISCONSIN AND LIGHT COMPANY; DIXIE LLC; DENTON COUNTY ELECTRIC COOPERATIVE, INC. , DBA COSERV ELECTRIC; AND SOUTHERN CALIFORNIA REGIONAL RAIL AUTHORITY For Commission Consent to the Assignment of Various ‘Authorizations in the Wireless Radio Services ORDER TO SHOW CAUSE, EB Docket No. 11-71 File No. EB-09-1H-1751 FRN: 0013587779 Application File Nos. 0004030479, (0004144435, 0004193028, 0004193328, (0004354053, 0004309872, 0004310060, (0004314903, 0004315013, 0004430505, (0004417199, 0004419431, 0004422320, (0004422329, 0004507921, 0004153701, (0004526264, 0004636537, and 0004604962 HEARING DESIGNATION ORDER, AND. NOTICE OF OPPORTUNITY FOR HEARING Adopted: April 18, 2011 By the Commission: 1 INTRODUCTION a In this Order to Show Cause, Hearing D Released: April 19, 2011 snation Order, and Notice of Opportunity for Hearing, we commence a hearing proceeding before the Administrative Law Judge to determineREDACTED Federal Communications Commission FCC 11-64 ultimately whether Maritime Communications/Land Mobile, LLC (“Maritime”) is qualified to be and to remain a Commission licensee, and as a consequence thereof, whether any of all ofits licenses should be revoked, and whether any or all of the applications to which Maritime is a party should be denied.’ In addition, we direct the Administrative Law Judge to determine whether Maritime should be ordered to repay to the United States Treasury the full amount of the bidding credit, plus interest, that it received as a result of claiming designated entity status in Auction No. 61; whether a forfeiture not to exceed the statutory maximum should be issued against Maritime for apparent violations of the Commission’ rules; and whether Maritime and its principals should henceforth be prohibited from participating in FCC auctions.* 2. Asdiscussed more fully below, based on the totality of the evidence, there are substantial ‘and material questions of fact as to whether Maritime: (i) violated the designated entity rules and received ‘acredit on its obligations to the United States Treasury of approximately $2.8 million to which it was not entitled; (ji) repeatedly made misrepresentations to and lacked candor with the Commission in connection with its participation in Auction No. 61 and the claimed bidding credit; (ii) failed to maintain the continuing accuracy and completeness of information furnished in its still pending long-form application; and (iv) purports to hold authorizations that have cancelled automatically for lack of construction or permanent discontinuance of operation. 3. Sections 1.2110 and 1.2112 of our rules require Maritime, in seeking designated entity status, to have disclosed in its pre-auction short-form application and in its post-auction long-form application its gross revenues and those of its affiliates, its controlling interests, and the affiliates ofits controlling interests Despite repeated Commission requests for the needed information over the last six years, substantial factual questions remain regarding Maritime’s eligibility for a small business bidding, ‘credit, Indeed, i is still not clear whether all required disclosures of interests and revenues have been made. "A list of the authorizations held by Maritime that are the subject ofthis Order is appended hereto as Attachment A. A list ofthe pending applications filed by or on behalf of Maritime that are the subject ofthis Order is appended hereto as Attachment B. 2 We note that Maritime and its principals have made various requests for confidential treatment ‘of certain information and submissions pursuant to section 0.459 of the Commission's rules, 47 CFR. § 0.459. See, e.g. Letter and Request for Confidential Treatment from Patricia J. Paoletta and Jonathan B. Mirsky, Counsel (0 Wireless Properties of Virginia, Inc. and Maritime Communications/Land Mobile, LLC, to Marlene H. Dortch, Secretary, Federal Communications Commission, dated February 10, 2011; Letter and Request for Confidential ‘Treatment from Patricia J, Paoletta and Jonathan B. Mirsky, Counsel to Wireless Properties of Virginia, Inc. and Maritime Communications/Land Mobile, LLC, to Marlene H. Dortch, Secretary, Federal Communications Commission, dated January 25, 2011; Letter and Request for Confidential Treatment from Patricia J. Paoletta and Jonathan B. Mirsky, Counsel to Wireless Properties of Virginia, ne. and Maritime Communications/Land Mobile, LLC, to Marlene H, Dorteh, Secretary, Federal Communications Commission, dated December 29, 2010: Letter and Request for Confidential Treatment from Dennis C. Brown, Esq., Counsel to MCLM, to Michele Ellison, Chie, Enforcement Bureau, Federal Communications Commission, dated March 29, 2010, Pursuant to 47 CFR. § 0.459(d)(3), we are deferring action on such confidentiality requests, and are according confidential treatment to the relevant information until such time as a ruling is made. See 47 CFR. § 0.459(4)(3). Therefore, we will release 0 the public a redacted version of the Order, where "[REDACTED]" will indicate information for which the submitter has requested confidential treatment, ‘The unredacted version of this Order will be made available to Maritime. 247 CER. §§ 1.2110, 1.2112.REDACTED Federal Communications Commission FCC 11-64 4, _Inboth its short-form and long-form applications filed in 2005, Maritime disclosed only the interests of Maritime’s named principal Sandra M. DePriest and her affiliates. Maritime claimed that Sandra DePriest was the sole officer and key employee of Maritime and appears to have concluded that because her husband, Donald R. DePriest, was not an “officer” or “director” of Maritime, his interests ‘were not relevant to the designated entity analysis. However, Maritime was obligated to disclose Donald DePriest’s revenues pursuant to the spousal affiliation requirements set forth in section 1.2110 of our rules. Furthermore, there is credible evidence suggesting that Donald DePriest was a real party in interest behind Maritime and exercised de facto control of Maritime ~ both of which would also req attribution of his interests under our designated entity rules. Among other things, Donald DePriest incorporated Maritime, [REDACTED]. 5. Even after the Commission directed Maritime to disclose Mr. DePriest’s interests, Maritime's submissions appear to have lacked candor. Tt was more than a year after its initial auetion filing before Maritime amended its long-form application (at staff direction) to disclose what the company represented, at that time, were the gross revenues of Donald DePriest and his affiliates. In the ‘amendment, Maritime stated, among other things, that Donald DePriest controlled a single revenue- producing company: American Nonwovens Corporation. Several weeks later ~ and only in response to ‘ongoing administrative litigation ~ Maritime belatedly acknowledged that Donald DePriest actually controlled three more entities: Charisma Broadcasting Co., Bravo Communications, Inc., and Golden ‘Triangle Radio, Inc. Some three years later — and again only in response to a written request for information from the Wireless Telecommunications Bureau (“WTB”) under section 308(b) of the Communications Act ~ Maritime divulged more than two dozen additional affiliates of Donald DePriest. Several months thereafter — and only in response to an Enforcement Bureau letter of inquiry ~ Maritime disclosed information about Donald DePriest’s involvement in a large multinational corporation, MCT Corp., which had potentially attributable revenue [REDACTED]. The timing and substance of these disclosures raise material questions of fact about whether Maritime and its principals engaged in a pattern of deception and misinformation designed to obtain and conceal an unfair economic advantage over ‘competing auction bidders through the misappropriation of monies that would otherwise have flowed to the United States Treasury. 6. There are also substantial and material questions of fact about whether Maritime made repeated and affirmative misrepresentations and provided false certifications to the Commission in both its short- and long-form applications, as well as in various filings submitted over the last six years, in violation of sections 1.17 and 1.2105 of the Commission's rules.* 7. The integrity of our auctions program is of paramount importance, and we take allegations ‘and evidence of auction misconduct very seriously. The Commission relied to its detriment on Maritime’s initial and purportedly “corrective” filings ~ including in its dismissal of a petition to deny. As the Commission has stated, “(we rely] heavily on the truthfulness and accuracy of the information provided to us. If information submitted to us is incorrect, we cannot properly carry out our statutory responsibilites."* Consistent with our obligations under sections 309(«) and (e) of the Communications 847 CER. §§ 1.17, 1.2108. 5 In the Matter of Amendment of Section 1.17 of the Commission's Rules Concerning Truthfil Statements to the Commission, Notice of Proposed Rulemaking, 17 FCC Red 3296, 3297 4 3 (2002).