Source: FCC 214 Application

On October 25, 2010, Robert C. Pierson and Smithville Holding Company, Inc. (Smithville Holding), Rice Belt Holdings, Inc. (RB Holdings), Rice Belt Telephone Company, Inc. (RB Telephone) (collectively, Applicants) filed an application pursuant to section 63.03 of the Commission’s rules to transfer control of RB Holdings from Robert C. Pierson to Smithville Holding.

RB Holdings, an Arkansas corporation, is a holding company that owns RB Telephone, an Arkansas corporation and incumbent local exchange carrier (incumbent LEC), which provides local exchange telephone services (including interstate exchange access services) and domestic interexchange long distance toll services in three rural local exchanges (the Fisher, Waldenberg and Weiner exchanges) in northeastern Arkansas.  Rice Belt Holdings, Inc. is wholly owned by Robert C. Pierson, a U.S. citizen.   RB Holdings and RB Telephone have no other direct or indirect ownership interests in any other entities that offer domestic telecommunications services.

Smithville Holdings, an Indiana corporation, is a holding company that does not directly provide domestic telecommunications services.  Smithville Holding wholly owns, among other entities, Smithville Communications, Inc., d/b/a Smithville Telephone Company (Smithville Communications), an incumbent LEC that owns and operates twelve rural telephone exchanges in southern Indiana.  Smithville Holdings has no existing operations, subsidiaries or affiliates in Arkansas.  Smithfield Holdings is owned by the following Indiana trusts: Darby A. McCarty Residuary Trust (78.14% Voting, 15.06% Nonvoting); Darby A. McCarty Revocable Trust (21.86% Voting, 0.42% Nonvoting); Darby A. McCarty Irrevocable Trust (No Voting, 26.10% Nonvoting); Cullen H. McCarty Revocable Trust (No Voting, 39.17% Nonvoting); Cullen H. McCarty Irrevocable Trust (No Voting, 18.71% Nonvoting).

The Applicants have agreed to a proposed transaction for the sale of all of the stock of RB Holdings held by Mr. Pierson to Smithville Holding.  At the completion of the proposed transaction, RB Holdings will be a wholly owned subsidiary of Smithville Holding and an affiliate of Smithville Communications.  Control of RB Holdings will give Smithville Holding control of RB Telephone and its blanket domestic section 214 authorization.  Applicants assert that the proposed transaction is entitled to presumptive streamlined treatment under section 63.03(b)(2)(iii) of the Commission’s rules and that a grant of the application will serve the public interest, convenience, and necessity.

The Wireline Competition Bureau of the FCC on October 6,2010 approved the application of Community Telephone Company, Inc. (Community) and Hilliary Communications, LLC (Hilliary) to transfer control of Community to Hilliary.  

Charles D. Mattingly, Jr., on behalf of PP Capital, a minority interest holder in Community, filed a comment seeking dismissal of the application, claiming that consummation of the transaction would adversely affect minority interest holders and would therefore harm the public interest because of the possibility of litigation.  The FCC ruled thast transfer of control proceedings before the Commission are not the proper forum for resolving issues of private dispute such as those related to the rights of minority interest holders.  Furthermore, there is no requirement that the Commission refrain from acting on a transfer of control until a state commission has reviewed the proposed transfer, as Mr. Mattingly suggests.   Accordingly, we reject Mr. Mattingly’s request to dismiss or reject the application.

The Bureau finds, upon consideration of the record, that the proposed transfer will serve the public interest, convenience, and necessity, and therefore grants the requested authorization.