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Federal Register / Vol. 67, No.

218 / Tuesday, November 12, 2002 / Notices 68599

and an itemization of the expenses for that the Applicants have failed to EchoStar’’). The proposed transaction
which it is seeking reimbursement. Each demonstrate that the proposed involves the split-off of Hughes from
remaining party to any written or oral transaction would not cause GM, followed by the merger of the
agreement must submit an affidavit anticompetitive and other harms, and Hughes and EchoStar companies. The
within 5 days of the petitioner’s request have failed to demonstrate that the proposed merged entity, New EchoStar,
for approval stating that it has paid no potential public interest benefits would have a new ownership structure
consideration to the petitioner in excess resulting from the transaction would and would continue to provide DBS
of the petitioner’s legitimate and outweigh those harms. Accordingly, subscription television service under
prudent expenses. pursuant to 47 U.S.C. 309(e) and 409(a), the DirecTV brand name.
OMB Control Number: 3060–0214. the Commission designates the 2. The merger proposes to combine
Title: Section 73.3526, Local Public application for hearing to determine the two major DBS providers in the
Inspection File of Commercial Stations. whether the public interest, United States-EchoStar (marketed as the
Form Number: N/A. convenience, and necessity will be Dish Network) and DirecTV Holdings,
Type of Review: Extension of a served by its grant. LLC (‘‘DirecTV’’), a wholly-owned
currently approved collection. DATES: See SUPPLEMENTARY INFORMATION subsidiary of Hughes, into one single
Respondents: Business or other for- section for document filing dates. entity. The proposed merged entity,
profit entities. ADDRESSES: Please file documents with
New EchoStar, would have a new
Number of Respondents: 12,289. the Investigations and Hearing Division, ownership structure and would
Estimated Time per Response: 1 to 2.5 Enforcement Bureau, Federal continue to provide DBS subscription
hours. Communications Commission, Room 3– television service under the DirecTV
Frequency of Response: B431, 445 12th Street, SW., Washington, brand name. New EchoStar would also
Recordkeeping; third party disclosure. DC 20554. acquire Hughes Network Services, Inc.
Total Annual Burden: 1,379,212 (‘‘HNS’’) and PanAmSat Corp. EchoStar
FOR FURTHER INFORMATION CONTACT:
hours. and Hughes also filed a joint application
Charles W. Kelley, Chief, Investigations requesting authority to launch and
Total Annual Costs: None. and Hearing Division, Enforcement
Needs and Uses: 47 CFR Section operate NEW ECHOSTAR 1, a direct
Bureau, at (202) 418–1420. broadcast satellite that would be located
73.3526 requires each licensee/ SUPPLEMENTARY INFORMATION: This is a
permittee of a commercial AM, FM, or at the 110° W.L. orbital location (the
summary of the Federal ‘‘Satellite Application’’). The Applicants
TV broadcast station to maintain a file Communications Commission’s Hearing
for public inspection. The contents of claim that grant of the Satellite
Designation Order, CS Docket No. 01– Application would allow New EchoStar
the file vary according to type of service 348, adopted on October 9, 2002, and
and status. The data are used by the to offer local broadcast channels in all
released on October 18, 2002. The full 210 U.S. Designated Market Areas
public and the FCC staff in field text is available for inspection and
investigations to evaluate information (‘‘DMAs’’). Based on the record, the
copying during normal business hours Commission is unable to find that the
about the station’s performance. in the FCC Reference Information public interest, convenience and
Federal Communications Commission. Center, Room CY–A257, 445 12th Street, necessity would be served by the grant
Marlene H. Dortch, SW., Washington, DC 20554. It may also of the Merger Application and Satellite
Secretary. be purchased from the Commission’s Application.
[FR Doc. 02–28709 Filed 11–8–02; 8:45 am] copy contractor, Qualex International, 3. The Applicants claim that one of
BILLING CODE 6712–01–P Room CY–B402, 445 12th Street, SW., the most important benefits of the
Washington, DC 20554, telephone (202) proposed merger is the increased ability
863–2983, facsimile (202) 863-2898, or of DBS operators to compete with cable
FEDERAL COMMUNICATIONS via e-mail at qualexint@aol.com, or may systems in the multichannel video
COMMISSION be viewed via the internet at: http:// programming distribution (‘‘MVPD’’)
www.fcc.gov/ Document_Indexes/ market by eliminating current
[CS Docket No. 01–348; FCC 02–284]
Media/2002_index_MB_Order.html. duplicative programming. They contend
Application of EchoStar Alternative formats are available to the merger would benefit consumers by
Communications Corp. (a Nevada persons with disabilities by contacting increasing available DBS capacity to
Corp.), General Motors Corp., and Martha Contee at (202) 418–0260 or offer significantly more local-into-local
Hughes Electronics Corp. (Delaware TTY (202) 418–2555. programming, and to expand its
Corps.) offerings of high-definition television
Synopsis of the Order
(‘‘HDTV’’) programming, pay-per-view
AGENCY: Federal Communications 1. In the Hearing Designation Order (‘‘PPV’’), video-on-demand (‘‘VOD’’),
Commission. (‘‘Order’’), the Commission considers interactive television (‘‘ITV’’), and
ACTION: Notice. the application (the ‘‘Application’’) of broadband satellite Internet services.
EchoStar Communications Corporation They claim the merger would ultimately
SUMMARY: In this document, the FCC (‘‘EchoStar’’), General Motors result in improved products, prices and
designates for hearing the application of Corporation (‘‘GM’’), and Hughes overall quality to consumers. The
EchoStar, General Motors and Hughes Electronics Corporation (‘‘Hughes’’) for Applicants also claim that their
(collectively, the ‘‘Applicants’’) to consent to transfer control of various commitment to price DBS service on a
transfer control of Commission Commission authorizations, including uniform nationwide basis will provide
authorizations, including direct direct broadcast satellite (‘‘DBS’’) and benefits to customers in both urban and
broadcast satellite and fixed satellite fixed satellite space station rural areas since competition in the
space station authorizations, earth authorizations, earth station most densely populated and heavily
station authorizations, and other related authorizations, and other related contested areas will require that New
authorizations to EchoStar authorizations held by their wholly- or EchoStar set the national price low
Communications Corp. (‘‘New majority-owned subsidiaries to EchoStar enough to compete for new subscribers
EchoStar’’). The Commission concludes Communications Corporation (‘‘New in these urban areas, consequently

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68600 Federal Register / Vol. 67, No. 218 / Tuesday, November 12, 2002 / Notices

providing competitive prices to 7. The Commission analyzed the verifiable, or will be able to mitigate
customers in rural areas. potential harms of the proposed merger anticompetitive effects of the merger.
4. The Applicants claim that the on competition in the relevant product We find that the bulk of the Applicants’
proposed merger would allow New markets. We first performed a structural promised benefits with respect to MVPD
EchoStar to provide broadband Internet analysis considering the relevant services appear to be either
access service to the country and, thus, product and geographic markets, inadequately supported by the data
more effectively compete with cable’s identifying the market participants, and supplied; not merger-specific;
bundled offering of high-speed Internet then examining structural factors that achievable through means other than
access and MVPD products and affect the likelihood of competitive monopoly control over all available full-
telephone companies’ DSL offerings. harms. The structural analysis suggests CONUS DBS spectrum; or are otherwise
The Applicants contend that the merger that the merger, which reduces the not cognizable under our public interest
would allow for the timely introduction number of competitors from three to two standard. Moreover, the Applicants
of nationwide competition in the in some markets, and two to one in have failed to show that the proposed
broadband markets, including rural and other markets, would likely result in merger is necessary to achieve many, if
underserved areas. substantial anticompetitive harms. not all, of their claimed public interest
5. Sections 214(a) and 310(d) of the Under traditional structural antitrust benefits—they merely allege that it will
Communications Act of 1934, as analysis, there appears to be a provide them the means with which to
amended (the ‘‘Communications Act’’), substantial likelihood that the proposed provide these benefits. Our central
47 U.S.C. 214(a) and 310(d), require the merger will significantly increase concern is that with the resulting high
Commission to find that the public concentration in an already degree of concentration in all MVPD
interest, convenience and necessity concentrated MVPD market. markets, the Applicants’ incentives to
would be served by grant of the Merger 8. We find that the merger is likely to carry through on their promises of
Application. We first assess whether the lessen competition through unilateral enhanced competition will be
proposed transaction complies with the actions by New EchoStar and/or through decreased, rather than increased. Thus,
specific provisions of the Act, other coordinated interaction among market although the Commission fully
applicable statutes, and the participants which could result in recognizes the value of having free over-
Commission’s rules. The public interest substantial consumer welfare losses, the-air broadcasting service in all 210
standards of 47 U.S.C. 214(a) and 310(d) even assuming realization of all of the DMAs, we do not believe that the
involve a balancing process that weighs cost savings alleged by the Applicants. merger is more likely to bring satellite
the potential public interest harms The record suggests that the services delivery of such service than the status
against the potential public interest provided by DirecTV and EchoStar are quo. Therefore, we cannot give very
benefits. Our public interest evaluation close substitutes, and that in the much weight to the Applicants’
encompasses the ‘‘broad aims of the absence of significant savings in proposed benefits.
Communications Act,’’ which includes, marginal cost, such a loss of facilities- 11. The Applicants’ promises of a
among other things, preserving and based intramodal competition is likely future Ka-Band broadband satellite
enhancing competition in relevant to harm consumers by eliminating a product that is competitive on both
markets, ensuring that a diversity of viable service provider in every market, service quality and price with cable and
voices is made available to the public, creating the potential for higher prices DSL products would be a significant
and accelerating private sector and lower service quality, and advance, if these promises were to be
deployment of advanced services. In negatively impacting future innovation. realized. However, the proposed merger
determining the competitive effects of 9. Our analysis indicates that the of the two companies with the strongest
the merger, our analysis is not limited Applicants’ proposed national pricing incentive and ability to compete for
by traditional antitrust principles. The plan will unlikely remedy the likely satellite broadband services contradicts
Commission also focuses on whether competitive harms. National pricing the Communications Act’s preference
the merger will accelerate the decline of does not mean low pricing and the for competition. The Applicants’
market power by dominant firms in the proposed plan would leave the reliance on an economies of scale
relevant communications markets. Applicants free to price discriminate on argument fails to support its claimed
6. We find that elimination of one a targeted basis, particularly with benefits arguments.
nationwide DBS competitor, without respect to promotions, installation and 12. On balance, we cannot find in the
any cognizable evidence of offsetting equipment offers and to discriminate record that the Applicants have made a
enhancement of viewpoint diversity, with respect to service quality. In sufficient showing either that the harms
would disserve the Commission’s policy addition, the plan proposes that we from the proposed transaction will be
goal of viewpoint diversity. In reviewing approve the replacement of viable insubstantial or the alleged benefits will
spectrum policy concerns, we find that facilities-based competition with outweigh them. Serious questions
allowing one satellite company to regulation inconsistent with the remain as to whether the proposed
control all current U.S. allotted full- Communications Act and our policies transaction would do significant and
CONUS DBS orbital locations is and goals. The Act and our policies and irreversible damage to competition in
inconsistent with the public interest. goals aim to replace, wherever possible, several markets without sufficient
The record demonstrates that significant the regulatory safeguards needed to offsetting and cognizable public interest
nationwide benefits in the MVPD ensure consumer welfare in benefits.
market have been brought about by the communications markets served by a 13. We direct the Administrative Law
competition between EchoStar and single provider, with free market Judge (‘‘ALJ’’) to prepare an Initial
DirecTV. The record shows that competition, and particularly with Decision on the following issues:
consolidating all full-CONUS DBS facilities-based competition.
spectrum with one provider would 10. We considered the evidence of • Issue 1: Whether the proposed
transaction is likely to cause anticompetitive
likely eliminate these benefits to the efficiencies and other public interest harm. In reaching a determination on this
detriment of consumers, without benefits that the Applicants claim will issue, the following should be considered: (a)
providing adequate off-setting public result from the merger. We cannot find The product market (e.g., whether the
interest benefits. that the benefits are merger specific, relevant product market is MVPD service,

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Federal Register / Vol. 67, No. 218 / Tuesday, November 12, 2002 / Notices 68601

DBS service, or some other subset of MVPD shall be at a time and place and in front Pacific International Television, Inc.;
service); (b) the geographic market (e.g., of an ALJ to be specified in a subsequent Communication Workers of America;
whether the proper geographic market is Order. Paxson Communications Corp.; Carolina
local, and whether, for purposes of analysis, 15. Pursuant to 47 U.S.C. 309(e), the
the relevant geographic markets should be Christian Television, Inc. and LeSea
aggregated into three categories—markets not
burden of proof with respect to the Broadcasting Corporation; Univision
served by any cable system; markets served introduction of evidence and the burden Communications, Inc.; Eagle III
by low-capacity cable systems; markets of proof with respect to the issues Broadcasting, LLC; and Brunson
served by high-capacity cable systems; and specified in this Order shall be upon Communications, Inc., are made parties
the relative number of households in each of GM, Hughes, and EchoStar, the
these categories) and the number of to the proceeding pursuant to 47 CFR
applicant parties in this proceeding.
subscribers per market; (c) the market 16. The Commission’s Consumer and 1.221(d). To avail themselves of the
participants, market shares and Government Affairs Bureau, Reference opportunity to be heard, pursuant to 47
concentration; (d) the timeliness, likelihood, Information Center, shall send copies of CFR 1.221(e), each of these parties, in
and sufficiency of entry to offset any person or by its attorneys, shall file in
potential adverse competitive effects that this Order to all parties by certified
mail, return receipt requested. triplicate, a written appearance, stating
may result from the proposed transaction; (e)
the effects of the proposed transaction on 17. The Chief, Enforcement Bureau, its intention to appear on the date fixed
price, quality and innovation (considering shall be a party to the designated for the hearing and present evidence on
the likelihood of coordinated behavior among hearing. the issues specified in this Order. Such
competing firms and the ability of the 18. A copy of each document filed in written appearance shall be filed within
Applicants to unilaterally take this proceeding subsequent to the date 20 days of this Order becoming effective
anticompetitive actions); (f) the efficacy, of adoption of this Order shall be served
potential harms, and potential benefits of pursuant to paragraph 16 above. Such
on the counsel of record appearing on written appearance must also be
Applicants’ proposed national pricing plan;
(g) the proposed transaction’s effect on the
behalf of the Chief, Enforcement Bureau. accompanied by the fee specified in 47
ability of multichannel video programmers to Parties may inquire as to the identity of CFR 1.1107 or be accompanied by a
reach certain niche audiences; and (h) any such counsel by calling the deferral request pursuant to 47 CFR
conditions proposed by the Applicants. Investigations and Hearings Division of
1.1117. If any of these parties fails to file
• Issue 2: Whether the proposed the Enforcement Bureau at (202) 418–
transaction is likely to cause other public 1420. Such service shall be addressed to an appearance within the time
interest harms. In reaching a determination the named counsel of record, specified, it shall, unless good cause for
on this issue, the following should be Investigations and Hearings Division, such failure is shown, forfeit its hearing
considered: (a) the proposed transaction’s rights.
effect on viewpoint diversity; and (b) the
Enforcement Bureau, Federal
proposed transaction’s effect on the Communications Commission, 445 12th 22. Pursuant to 47 CFR 1.223, any
Commission’s spectrum policies. Street, S.W., Room 3–B431, Washington, person seeking to participate as a party
• Issue 3: Whether the proposed D.C. 20554. in the hearing may file a petition to
transaction is likely to yield any public 19. Within 30 days of the mailing of intervene. Such petition shall be filed
interest benefits. In reaching a determination this Order pursuant to paragraph 16 within 30 days of the full text or a
on this issue, the following should be above, the parties may file an amended
considered: (a) whether the cost savings and
summary of this Order being published
application with the Commission to in the Federal Register. Such petition to
other benefits claimed by Applicants are non- ameliorate the competition concerns
speculative, credible and transaction-specific intervene must either establish, under
and are likely to flow through to the public;
identified in this Order and may also oath, that a person is a party in interest,
and (b) whether the proposed transaction’s file a petition to suspend the hearing in which case the petition shall be
impact on the provision of Internet access pending review of the amended
granted; or such petition must set forth
service via satellite is likely to be beneficial application.
or harmful. 20. To avail themselves of the the interest of petitioner in the
• Issue 4: On balance, whether the public opportunity to be heard, GM, Hughes, proceedings, show how such
interest, convenience and necessity would be and EchoStar, pursuant to 47 CFR petitioner’s participation will assist the
served by the grant of the Merger Application 1.221(c) and 1.221(e), in person or by Commission in the determination of the
and the Satellite Application. their respective attorneys, shall file in issues in question, set forth any
14. Pursuant to 47 U.S.C. 309(e), the triplicate, a written appearance, stating proposed issues in addition to those
application for consent to transfer an intention to appear on the date fixed already designated for hearing, and be
control of various Commission for the hearing and present evidence on accompanied by the affidavit of a person
authorizations, including DBS and fixed the issues specified in this Order. Such with knowledge as to the facts set forth
satellite space station authorizations, written appearance shall be filed within in the petition, in which case the ALJ
earth station authorizations, and other 20 days of the mailing of this Order may grant or deny the petition to
related authorizations held by wholly-or pursuant to paragraph 16 above. intervene, and may limit intervention to
majority-owned subsidiaries of EchoStar Pursuant to 47 CFR 1.221(c), if the a particular stage or stages of the
Communications Corporation (a Nevada parties fail to file an appearance within proceeding, in his or her discretion.
corporation), General Motors the specified time period, the Pursuant to 47 CFR 1.225, no person
Corporation, and Hughes Electronics applications will be dismissed with shall be precluded from providing any
Corporation to EchoStar prejudice for failure to prosecute. relevant, material and competent
Communications Corporation (a 21. The National Rural testimony at the hearing because he or
Delaware corporation); and the joint Telecommunications Cooperative; she lacks sufficient interest to justify
application submitted by EchoStar and American Cable Association; Northpoint intervention as a party.
Hughes requesting authority to launch Technology, Ltd.; National Association
and operate New Echostar 1, a direct of Broadcasters; Pegasus 23. The application for transfer of
broadcast satellite that would be located Communications Corp.; The Word control of the licenses and
at the 110° W.L. orbital location (FCC Network; Johnson Broadcasting, Inc. authorizations at issue in this
File No. SAT–LOA–20020225–00023) and Johnson Broadcasting of Dallas, proceeding will be held in abeyance
are designated for hearing. The Hearing Inc.; Family Stations, Inc. and North pending the outcome of this proceeding.

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68602 Federal Register / Vol. 67, No. 218 / Tuesday, November 12, 2002 / Notices

Federal Communications Commission. 1. The Media Bureau (‘‘MB’’) and the any Federal agency, the applicant must
Marlene H. Dortch, Wireless Telecommunications Bureau include such information as part of the
Secretary. (‘‘WTB’’) (collectively, ‘‘Bureaus’’) same attached statement. Applicants are
[FR Doc. 02–28581 Filed 11–8–02; 8:45 am] supplement the ‘‘Auction No. 32 Filing reminded that the statement must be
BILLING CODE 6712–01–P
Window Public Notice’’ released made under penalty of perjury and,
November 19, 1999, which announced a further, submission of a false
five-day period for the filing of certification to the Commission is a
FEDERAL COMMUNICATIONS applications for new AM stations and serious matter that may result in severe
COMMISSION major modifications to authorized AM penalties, including monetary
stations. This document informs forfeitures, license revocations,
[Report No. AUC–02–32–H (Auction No. 32); applicants that they must submit exclusion from participation in future
DA 02–2757] additional information for incorporation auctions, and/or criminal prosecution.
as part of their short-form application 5. ‘‘Former defaulters’’—i.e.,
Additional Information Required for (FCC form 175) for Auction No. 32. The applicants, including their attributable
Completion of FCC Form 175 and applicants, listed in attachment A of the interest holders, that in the past have
Exhibits for Auction No. 32; Auction of October 21, 2002, public notice, must defaulted on any Commission licenses
Construction Permits for New AM file the additional information or been delinquent on any non-tax debt
Broadcast Stations Scheduled for identified below by 6 p.m. eastern time owed to any Federal agency, but that
December 10, 2002 on Monday, October 28, 2002. The have since remedied all such defaults
following instructions are provided for and cured all of their outstanding non-
AGENCY: Federal Communications filing this additional information.
Commission. tax delinquencies—will be eligible to
I. Provisions Regarding Defaulters and bid in Auction No. 32, provided that
ACTION: Notice.
Former Defaulters (Form 175 Exhibit F) they are otherwise qualified. However,
SUMMARY: This document supplements a 2. Part 1 of the Commission’s rules former defaulters are required to pay
public notice released November 19, requires each applicant to certify on its upfront payments that are fifty percent
1999, which announced a five-day FCC form 175 application that neither it more than the normal upfront payment
period for the filing of applications for nor its controlling interest holders or amounts. See 47 CFR 1.2106(a).
new AM stations and major affiliates is in default on any II. FCC Registration Number Required
modifications to authorized AM Commission license and that they are To Log On to the FCC Auction 175
stations. The document informs not delinquent on any non-tax debt Application & Search System
applicants of additional information for owed to any Federal agency. In
incorporation as part of their short-form addition, the Commission’s rules, as 6. Bidders are reminded that they are
application (FCC form 175) for Auction amended by the ‘‘Part 1 Fifth Report required to send their FCC Registration
No. 32. and Order,’’ 65 FR 52323 (August 29, Number (FRN) to the FCC Operations
DATES: Auction No. 32 applicants must 2000), require each applicant to attach Group by 5 p.m. eastern time on Friday,
file the additional information to its FCC form 175 application a October 25, 2002. To do this, applicants
identified in this document by 6 p.m. statement made under penalty of must include the entity name, Taxpayer
e.t. on Monday, October 28, 2002. perjury indicating whether or not the Identification Number (TIN), and FRN
Auction No. 32 is scheduled to begin on applicant, or any of the applicant’s in an e-mail to auction32@fcc.gov or fax
December 10, 2002. controlling interests or their affiliates, as to Kathryn Garland at (717) 338–2850.
defined by § 1.2110 of the Commission’s This information must be received by 5
FOR FURTHER INFORMATION CONTACT: p.m. eastern time on Friday, October 25,
rules, have ever been in default on any
Kenneth Burnley at the Auctions and Commission license or have ever been 2002.
Industry Analysis Division, Wireless delinquent on any non-tax debt owed to
Telecommunications Bureau at (202) 7. Use of an FRN is mandatory for all
any federal agency. See 47 CFR filers logging on to the FCC Auctions
418–0660. 1.2105(a)(2)(xi). 175 Application & Search system. To
SUPPLEMENTARY INFORMATION: This is a 3. The applicants identified in obtain an FRN, an applicant must
summary of a public notice released by attachment A of the October 21, 2002, register its TIN using the Commission
the Wireless Telecommunications public notice must include this Registration System (CORES). To access
Bureau on October 21, 2002. The statement as exhibit F of their FCC form CORES, point a web browser to the FCC
complete text of the public notice, 175 for Auction No. 32 and MUST Auctions page at http://wireless.fcc.gov/
including the attachment, is available submit this exhibit by electronic mail no auctions/ and click the CORES link
for public inspection and copying later than 6 p.m. eastern time on under Related Sites. Next, follow the
during regular business hours at the Monday, October 28, 2002, at the directions provided to register and
FCC Reference Information Center, following address: auction32@fcc.gov. receive your FRN. Applicants need to be
Portals II, 445 12th Street, SW., Room The exhibit F must be in the form of an sure to retain this number and password
CY–B402, Washington, DC 20554. The attachment to the electronic mail and and keep such information strictly
October 21, 2002, public notice may formatted as an Adobe Acrobat (pdf) confidential.
also be purchased from the or Microsoft Word document.
Commission’s duplicating contractor, 4. If any of an applicant’s controlling Federal Communications Commission.
Qualex International, Portals II, 445 interest holders or affiliates, as defined Margaret Wiener,
12th Street, SW., Room CY–B402, by § 1.2110 of the Commission’s rules, Chief, Auctions and Industry Analysis
Washington, DC 20554, telephone (202) have ever been in default on any Division, WTB.
863–2893, facsimile (202) 863–2898, or Commission license or have ever been [FR Doc. 02–28706 Filed 11–8–02; 8:45 am]
via e-mail qualexint@aol.com. delinquent on any non-tax debt owed to BILLING CODE 6712–01–U

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