WASHINGTON-The joint venture between BellSouth Corp. and SBC Communications Inc. to create the sixth nationwide wireless carrier hit a speed bump in its cruise for approval last month when a small Michigan cellular operator objected.
Thumb Cellular L.P. filed papers with the Federal Communications Commission claiming that SBC could not transfer control of its license to the new, as yet unnamed, venture because it no longer controlled any interest.
“SBC intends to transfer or assign to [the joint venture] an interest in TCLP. [This] contemplates a continuation of the ruse in which SBC claims a cognizable interest in TCLP,” said Thumb.
SBC and BellSouth strongly disputed the claim and said the issues raised in the Thumb objection were better handled by a state court.
“The petition to dismiss or deny filed by [TCLP] does not challenge any aspect of the proposed [commercial mobile radio services] joint venture of SBC and BellSouth … This transfer of control proceeding is not the appropriate forum to consider Thumb’s claims. Its assertion that Ameritech was not a partner raises state law issues that, under well-established policy, are to be left to the courts,” said the companies in response.
This is the second time this year this issue has surfaced. On March 20, Thumb objected when the FCC granted pro forma authorization to transfer control of Ameritech’s 23-percent interest to SBC. Thumb claims Ameritech no longer holds this interest.
“As far as I was concerned until I happened upon the transfer of control, I had long forgotten that Ameritech was even a partner,” said Timothy E. Welch, Thumb’s Washington counsel.
The issue goes back to the early 1990s when Thumb was created. At the time, Ameritech could not offer long-distance services due to the Modified Final Judgment that broke up Ma Bell. And since Thumb wanted to offer long-distance services, it dissolved the partnership with Ameritech Mobile Communications Inc. But Ameritech Mobile would not go quietly into the night and threatened to sue.
“We believe you are reading the partnership agreement upside down … It is Agri-Valley [Communications Inc., Thumb’s general partner] which is threatening to violate material provisions of the agreement after being advised specifically not to do so … AMCI will be forced to use its legally available options” to prevent Thumb from dissolving the partnership, said John K. Cusack, AMCI director of external affairs, in a letter dated Sept. 16, 1991.
Welch says that SBC/Ameritech has neither paid into nor received any compensation from Thumb. Since they have not paid into the running of Thumb, they own no interest.
“They own a zero-percent interest,” said Welch.
The FCC has yet to respond to Thumb’s initial petition for reconsideration but Welch expects that to happen shortly.
This will be given “higher scrutiny given the parties involved. [The FCC] can move quickly if it wants to,” said Welch.
SBC, on the other hand, does not expect the FCC to rule on this issue.
Thumb’s petition “has done nothing more than trigger us to respond. The FCC has said it will [not rule] on cases of minority interest … We don’t anticipate a different response,” said SBC spokeswoman Saralee Boteler.
BellSouth spokesman Bill McCloskey said the two companies were forced to respond to the Thumb filing because Thumb “raised a character issue.”
“Our attorneys have found us to be in full compliance with the partnership agreement and indeed it remains legally in force in the state of Michigan,” said Boteler.
