E7-14876. Pendleton C. Waugh, Charles M. Austin, and Jay R. Bishop, Preferred Communication Systems, Inc., Preferred Acquisitions, Inc.-Order To Show Cause and Notice of Opportunity for Hearing

AGENCY:

Federal Communications Commission.

ACTION:

Notice.

SUMMARY:

This document commences a hearing proceeding by directing Preferred Communication Systems, Inc., Preferred Acquisitions, Inc., and their principals, to show cause why the wireless licenses held by these entities should not be revoked, and by designating those licenses for an evidentiary hearing on issues relating to the qualifications of Preferred Communication Systems, Inc., Preferred Acquisitions, Inc., and their principals, to be and remain Commission licensees.

DATES:

Petitions by persons desiring to participate as a party in the hearing, pursuant to 47 CFR 1.223, may be filed no later August 31, 2007. See SUPPLEMENTARY INFORMATION section for dates that named parties should file appearances.

ADDRESSES:

Office of the Secretary, Federal Communications Commission, 445 12th Street, SW., Washington, DC 20554, and copies thereof shall be served on the Chief, Investigations and Hearings Division, Enforcement Bureau, Room 4-C330.

FOR FURTHER INFORMATION CONTACT:

Gary A. Oshinsky and Anjali K. Singh, Investigations and Hearings Division, Enforcement Bureau at [phone]; and Jennifer A. Lewis, Assistant Chief, Investigations and Hearings Division, Enforcement Bureau at [phone].

SUPPLEMENTARY INFORMATION:

This is a summary of the Commission's Order to Show Cause and Notice of Opportunity for Hearing, FCC 07-125, released July 20, 2007. The full text of the Order to Show Cause and Notice of Opportunity for Hearing (Order) is available for inspection and copying from 8 a.m. to 4:30 p.m. Monday through Thursday or from 8 a.m. to 11:30 a.m. on Friday at the FCC Reference Information Center, Room CY-A257, 445 12th Street, SW., Washington, DC 20554. The complete text may be purchased from the Commission's copy contractor, Best Copy and Printing, Inc. (BCPI), Portals II, 445 12th Street, SW., Room CY-B402, Washington, DC 20554, telephone [phone], facsimile 202-488-5563, or you may contact BCPI at its Web site: http://www.BCPIWEB.com. When ordering documents from BCPI, please provide the appropriate FCC document number, FCC 07-125. The Order is also available on the Internet at the Commission's Web site through its Electronic Document Management System (EDOCS): http://hraunfoss.fcc.gov/​edocspublic/​SilverStream/​Pages/​edocs.html. Alternative formats are available to persons with disabilities (Braille, large print, electronic files, audio format), send an e-mail to [e-mail] or call the Consumer and Governmental Affairs Bureau at 202-418-0530 (voice), [phone] (tty).

Summary of the Order

In the Order, the Commission commences a hearing proceeding to determine whether Pendleton C. Waugh (“Waugh”), Jay R. Bishop (“Bishop”), Charles M. Austin (“Austin”), and the entities they own and control, Preferred Communication Systems, Inc. (“PCSI”), and Preferred Acquisitions, Inc. (“PAI”), its wholly-owned subsidiary (collectively, “Preferred”), licensee of certain wireless stations, are qualified to be and remain Commission licensees. Among other issues, the hearing proceeding will consider whether these parties: (1) Failed to disclose a real-party-in-interest and engaged in unauthorized transfers of control of Commission licenses; (2) misrepresented material facts to the Commission; (3) lacked candor in their dealings with the Commission; (4) failed to disclose the involvement of convicted felons in ownership and control of the licenses; (5) failed to file required forms and information and respond fully to Enforcement Bureau letters of inquiry; and (6) discontinued operation of certain licenses without prior Commission approval. Based on whether violations of the Commission's rules are found, the hearing proceeding will also determine whether forfeitures are to be issued and/or whether the subject licenses must be revoked.

PCSI is the licensee of the following Specialized Mobile Radio (“SMR”), site-by-site stations, which are subject to the hearing: WPDU206 (Santurce, PR); WPDU210 (Santurce, PR); WPDU218 (Santurce, PR); WPDU222 (Santurce, PR); WPDU263 (Santurce, PR); WPDU266 (Santurce, PR); WPDU271 (Santurce, PR); WPDU275 (Santurce, PR); WPDU279 (Santurce, PR); WPDU287 (Santurce, PR); WPEF461 (Santurce, PR); WPEU434 (Santurce, PR); WPEX345 (Santurce, PR); WPEY418 (Santurce, PR); WPEY419 (Santurce, PR); WPEY421 (Santurce, PR); WPEY422 (Santurce, PR); WPEY423 (Santurce, PR); WPEY424 (Santurce, PR); WPEY425 (Santurce, PR); WPEY427 (Santurce, PR); WPEY429 (Santurce, PR); WPEY430 (Santurce, PR); WPEY431 (Santurce, PR); WPEY432 (Santurce, PR); WPEY445 (Santurce, PR); WPEY446 (San Juan, PR); WPEY447 (Santurce, PR); WPEY448 (Santurce, PR); WPEY450 (Santurce, PR); WPEY451 (Santurce, PR); WPEZ750 (Santurce, PR); WPFA265 (San Juan, PR); WPFA266 (Santurce, PR); WPFA268 (Santurce, PR); WPFA269 (Santurce, PR); WPFA270 (Santurce, PR); WPFA273 (Santurce, PR); WPFA278 (Santurce, PR); WPFA280 (Santurce, PR); WPFD607 (Santurce, PR); WPFD808 (Santurce, PR); WPFD809 (Santurce, PR); WPFD810 (Santurce, PR); WPFD811 (Santurce, PR); WPFD812 (Santurce, PR); WPFE472 (Santurce, PR); WPFE934 (Cayey, PR); WPFG589 (no ULS address; coordinates 18-16-08.8 N, 066-04-00.5 W); WPFG599 (Caguas, PR); WPFM597 (Cayey, PR); WPFM600 (San Juan, PR); WPFN354 (Aguada, PR); WPFN600 (Anasco, PR); WPFN636 (Anasco, PR); WPFN725 (Anasco, PR); WPFQ293 (Charlotte Amalie, VI); WPFS846 (Saint Croix, VI); WPFS856 (Saint Croix, VI); WPFT334 (Saint Croix, VI); WPFT335 (Saint Croix, VI); WPFT335 (Aguada, PR); WPFT356 (Aguada, PR); WPFT357 (Saint Croix, VI); WPFT369 (Charlotte Amalie, VI); WPFT416 (Charlotte Amalie, VI); WPFT417 (Saint Croix, VI); WPFT968 (Charlotte Amalie, VI); WPFV692 (Charlotte Amalie, VI); WPFV884 (Mayaguez, PR); WPFX997 (Mayaguez, PR); WPFZ805 (Mayaguez, PR); WPFZ806 (Mayaguez, PR); WPFZ807 (Mayaguez, PR); WPFZ808 (Mayaguez, PR); WPGD852 (Mayaguez, PR); and WPGD855 (Mayaguez, PR).

Preferred Acquisitions, Inc., is the licensee of the following SMR Economic Area (“EA”) stations, which are subject to the hearing: WPRQ941 (BEA013—Washington-Baltimore, DC-MD-VA-WV-PA); WPRQ942 (BEA015—Richmond-Petersburg, VA); WPRQ943 (BEA016—Staunton, VA-WV); WPRQ944 (BEA017—Roanoke, VA-NC-WV); WPRQ945 (BEA048—Charleston, WV-KY-OH); WPRQ946 (BEA164—Sacramento-Yolo, CA); WPRQ947 (BEA165—Redding, CA-OR); WPRQ948 (BEA174—Puerto Rico and the U.S. Virgin Islands); WPRQ949 (BEA016—Staunton, VA-WV); WPRQ950 (BEA017—Roanoke, VA-NC-WV); WPRQ951 (BEA048—Charleston, WV-KY-OH); WPRQ952 (BEA162—Fresno, CA); WPRQ953 (BEA165—Redding, CA-OR); WPRQ954 (BEA174—Puerto Rico and the U.S. Virgin Islands); WPRQ955 (BEA016—Staunton, VA-WV); WPRQ956 (BEA017—Roanoke, VA-NC-WV); WPRQ957 (BEA048—Charleston, WV-KY-OH); WPRQ958 (BEA162—Fresno, CA); WPRQ959 (BEA163—San Francisco-Oakland-San Jose, CA); WPRQ960 (BEA164—Sacramento-Yolo, CA); WPRQ961 (BEA165—Redding, CA-OR); WPRQ962 (BEA174—Puerto Rico and the U.S. Virgin Islands); WPRQ963 (BEA013—Washington-Baltimore, DC-MD-VA-WV-PA); WPRQ964 (BEA015—Richmond-Petersburg, VA); WPRQ965 (BEA016—Staunton, VA-WV); WPRQ966 (BEA017—Roanoke, VA-NC-WV); WPRQ967 (BEA174—Puerto Rico and the U.S. Virgin Islands); WPRQ968 (BEA013—Washington-Baltimore, DC-MD-VA-WV-PA); WPRQ969 (BEA015—Richmond-Petersburg, VA); WPRQ970 (BEA016—Staunton, VA-WV); WPRQ971 (BEA017—Roanoke, VA-NC-WV); WPRQ972 (BEA174—Puerto Rico and the U.S. Virgin Islands); WPRQ973 (BEA013—Washington-Baltimore, DC-MD-VA-WV-PA); WPRQ974 (BEA015—Richmond-Petersburg, VA); WPRQ975 (BEA016—Staunton, VA-WV); WPRQ976 (BEA017—Roanoke, VA-NC-WV); WPRQ977 (BEA162—Fresno, CA); and WPRQ978 (BEA164—Sacramento-Yolo, CA).

The Commission received information that alleged, among other things, that PCSI had transferred control over its licenses to Waugh, a convicted felon, and that Waugh was in control of PCSI's and PAI's licenses. The Commission directed two letters of inquiry to PCSI. During the course of the investigation, the Commission discovered that PCSI, PAI, Austin, Waugh, and Bishop may have engaged in additional violations of the Commission's rules. For example, it appeared that PCSI may have also transferred ownership interests to Bishop, another convicted felon. Additionally, it appeared that PCSI and PAI may have misrepresented information concerning their ownership status and PAI's operational readiness. Further, it appeared that PCSI failed to respond fully to the Commission's second letter of inquiry and that PAI failed to update the Commission concerning material changes in its operational readiness. The Commission determined that Waugh's and Bishop's felony convictions and potential ownership interest in and control over PCSI and PAI raise a substantial and material question of fact as to the qualifications of PCSI, PAI, and their principals to be and to remain Commission licensees, and may warrant revocation of PCSI's and PAI's licenses. Thus, pursuant to sections 312(a) and 312(c) of the Communications Act of 1934, as amended, 47 U.S.C. 312(a) and (c) and section 1.91 of the Commission's rules, 47 CFR 1.91, the Order directs PCSI, PAI, Waugh, Austin, and Bishop to show cause why the PCSI's and PAI's licenses should not be revoked, based upon the following issues: (1) Whether Pendleton C. Waugh was an undisclosed real party in interest in filings before the Commission, in willful and/or repeated violation of section 1.2112 of the Commission's Rules, 47 CFR 1.2112; (2) whether Preferred Communication Systems, Inc. (“PCSI”), engaged in an unauthorized transfer of control, in willful and/or repeated violation of section 310(d) of the Communications Act of 1934, as amended (the “Act”), 47 U.S.C. 310(d); (3) whether PCSI and/or Preferred Acquisitions Inc. (“PAI”) misrepresented material facts to, and/or lacked candor in its dealings, with the Commission, in willful and/or repeated violation of section 1.17 of the Commission's Rules, 47 CFR 1.17; (4) the effect of Pendleton C. Waugh's and Jay R. Bishop's felony convictions on their qualifications and those of PCSI and PAI to be and remain Commission licensees; (5) whether PCSI and/or PAI failed to maintain the continuing accuracy of filings pending before the Commission in willful and/or repeated violation of section 1.65 of the Commission's Rules, 47 CFR 1.65; (6) whether PCSI failed to respond fully and completely to official requests for information from the Commission, in willful and/or repeated violation of section 308(b) of the Act, 47 U.S.C. 308(b); (7) whether, in fact, PCSI discontinued operation of its licenses for more than one year, pursuant to section 90.157 of the Commission's Rules, 47 CFR 90.157; (8) in light of the evidence adduced pursuant to the foregoing issues, whether the captioned individuals and/or entities are qualified to be and remain Commission licensees; and (9) in light of the evidence adduced pursuant to the foregoing issue, whether the referenced authorizations should be revoked.

The hearing will also consider whether, in light of the findings on the above issues, forfeitures shall be issued in an amount not to exceed $5,280,000.

Copies of the Order to Show Cause and Notice of Opportunity for Hearing are being sent by certified mail, return receipt requested, to Austin, PCSI, PAI, their counsel of record, Charles J. Ryan, III, Waugh, and Bishop. To avail themselves of the opportunity to be heard, Preferred Communication Systems, Inc., Preferred Acquisitions, Inc., Pendleton C. Waugh, Charles M. Austin, and Jay R. Bishop, pursuant to section 1.91(c) and section 1.221 of the Commission's rules, 47 CFR 1.91(c) and 47 CFR 1.221, in person or by their attorneys, must within 30 days of the Commission's release of this Order, file in triplicate a written notice of appearance stating an intention to appear on the date fixed for the hearing and present evidence on the issues specified in this Order.

Federal Communications Commission.

Marlene H. Dortch,

Secretary.