The FCC proposed a $48,000 fine against Vero Broadband for apparently failing to get the agency’s approval before acquiring the assets of four other telecoms. Those are: San Isabel Telecom, Inc., Futurum Communications Corporation d/b/a Forethought.net, Brainstorm Internet, Inc. and Fundamental Holdings Corp., formerly d/b/a Peak Internet.
In the Notice of Apparent Liability, the Commission said the facts in the case are complex, “as reflected in the numerous revisions that the Company filed for its transfer applications over an extended period of time.” However, the agency said, “The violations are straightforward: there were three section 214 authorizations and three sets of wireless licenses that required prior FCC approval before their transfer and assignment, but the company never sought FCC approval, despite being advised to do so by the U.S. Bankruptcy Court for the District of Colorado.”
Section 214(a) of the Communications Act requires telecommunications carriers to obtain a certificate of public convenience and necessity from the Commission before constructing, extending, acquiring, or operating any line, or engaging in transmission over that line.
The FCC says violations of the filing requirements are “significant” because they impede the Commission’s ability to keep track of the ownership of licenses and authorizations it has issued, as well as ascertaining whether to refer the transaction to the Executive Branch for further review to assess any national security, law enforcement, foreign policy, or trade policy concerns.
Vero is a Colorado limited liability company that is wholly owned by Vero Broadband Holdings, Inc. Vero Holdings is a wholly owned subsidiary of VFN Holdings, Inc. VFN Holdings was created for the purpose of purchasing the assets of Futurum and San Isabel.
Futurum d/b/a Forethought.net is a privately held Colorado corporation, and held a domestic section 214(a) authorization and 32 wireless radio licenses. Futurum is the 100 percent owner of the following entities: 1) Forethought Acquisition LLC, a Colorado limited liability company which in turn is the owner of all the common stock of San Isabel. At the time of the transaction Forethought held an international section 214(a) authorization, a domestic section 214(a) authorization, and four wireless radio licenses; 2) Brainstorm, which held 31 wireless radio licenses; and 3) Fundamental Holdings Corp, a Delaware corporation, formerly d/b/a Peak Internet.
Futurum filed a voluntary petition for relief under Chapter 11 in the U.S. Bankruptcy Court for the District of Colorado in March of 2021. San Isabel and Brainstorm did the same that May.
On November 8, 2021, Denver VoIP, LLC, now known as Vero, signed an Asset Purchase Agreement, to buy all of the rights, title, and interest in and to all of the properties and assets, including the FCC licenses, of Futurum and its subsidiaries, San Isabel, Brainstorm, and Peak Internet. The bankruptcy court approved the deal on November 30, 2021. Denver VOIP changed its name to Vero. The deal closed on December 31, 2021 and the transaction was effective on January 1, 2022.
The FCC said the parties did not seek Commission approval to consummate the deal. That’s why it recommended a fine for the violations.
In response to Letters of Inquiry from the Enforcement Bureau, Futurum Debtors in Possession (DIP), San Isabel DIP, and Brainstorm DIP filed an application to assign their respective wireless radio licenses into bankruptcy in January 2023.
In its decision, the FCC said the original transaction involved the transfer of control of three section 214 authorizations and the assignment of three sets of wireless licenses out of bankruptcy.
Vero admits that “the parties did not timely seek permission to close the November transaction.” The telecom told the Commission the oversight was inadvertent and unintentional. When it filed the bankruptcy filings, it didn’t have FCC advice “and was not aware of the obligation to notify the Commission,” said the agency.
However the Commission said the bankruptcy court told Vero of its obligation to the FCC. The bureau investigation shows that Vero consummated the acquisition of 64 wireless radio licenses from the three DIP, and one international and two domestic section 214(a) authorizations, without obtaining prior Commission consent.
Vero has 30 days to seek a reduction or cancellation of the fine, or pay it.
By Leslie Stimson, Inside Towers Washington Bureau Chief
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