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                            Before the
                Federal Communications Commission
                      Washington, D.C. 20554
                                                               
In the Matter of

K.O. COMMUNICATIONS, INC.

Licensee of Cellular Radiotelephone Station
KNKN665, Market 658A (Texas 7 - Fannin)
Rural Service Area

          and

LONE STAR COMMUNICATIONS
GROUP, INC.

Investigation Into Possible Abuse of the
Commission's Processes 
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                   MEMORANDUM OPINION AND ORDER

     Adopted:  December 30, 1998             Released:  December 31, 1998  

By the Acting Chief, Wireless Telecommunications Bureau:

     I. INTRODUCTION. . . . . . . . . . . . . . . . . . . . . . . .  1

     II. BACKGROUND . . . . . . . . . . . . . . . . . . . . . . . .  2
               A. Prior Proceedings. . . . . . . . . . . . . . . . . . .  2
               B. The Assignment Application and Lone Star's Petition to Deny  3
               C. Withdrawal of Petition to Deny and Grant of Transfer of Control Application  5
               D.  Wilson Petition for Reconsideration and Dismissal of Transfer of Control Application  8
               E. Lone Star's Revocation Petition. . . . . . . . . . . .  9
               F. The Investigation Order. . . . . . . . . . . . . . . . 10

     III. DISCUSSION. . . . . . . . . . . . . . . . . . . . . . . . 11

     IV. CONCLUSION AND ORDERING CLAUSE . . . . . . . . . . . . . . 14

                        I. INTRODUCTION
                                
     1.  The Acting Chief, Wireless Telecommunications Bureau, pursuant to delegated authority, has
before him (a) his Memorandum Opinion and Order, 13 FCC Rcd 12765 (Wireless Tel. Bur. 1998)
(Investigation Order); and (b) the results of an investigation by the Bureau's Enforcement and Consumer
Information Division to determine whether Lone Star Communications Group, Inc. ("Lone Star") abused
the Commission's processes by filing a "Petition for Revocation of License" against K.O. Communications,
Inc. ("KO").  Based upon our investigation, we conclude that there is insufficient evidence that Lone Star
acted with an intent to abuse our processes to justify enforcement action.  Accordingly, we terminate our
investigation of Lone Star's qualifications to be a Commission licensee.

                         II. BACKGROUND

A. Prior Proceedings

     2.  On September 24, 1988, K.O. Communications, a Partnership ("KO Partnership") filed an
application for a construction permit for a new cellular station in the Texas 7 - Fannin Rural Service Area
(RSA).  In the original application, KO Partnership described itself as a "domestic partnership" with six
partners:  Paul B. Kozel, Alexander E. Kozel, Leesa A. Kozel, Kimberly L. Kozel, Julie C. Kozel, and
Rima E. Kozel.  Paul B. Kozel, Leesa Kozel, Kimberly Kozel, and Julie C. Kozel are all siblings.  Their
father is Paul L. Kozel.  Alexander E. Kozel and Rima E. Kozel are brother and sister.  Their father is
Dr. Eugene Kozel, who is the brother of Paul L. Kozel.  At the same time, Paul L. Kozel and Dr. Eugene
Kozel were principals in Savoy Communications, Inc., which also filed an application for the Texas 7
RSA.  The KO Partnership application for a construction permit was selected in the lottery and was
granted on April 12, 1991.

     3.  Shortly afterwards, on June 19, 1991, the KO Partnership and its partners filed two interrelated
pro forma assignment applications.  In the first assignment application (File No. 00303-CL-AL-1-91), the
KO Partnership proposed to assign the construction permit to its individual partners.  The second
assignment application (File No. 00304-CL-AL-1-91) proposed assignment of the construction permit from
the individual partners to K.O. Communications, Inc. ("KO").  KO was a corporation which was shown to
have eight stockholders:  the original six partners of the KO Partnership, plus Paul L. Kozel (who had a
6.66 per cent interest) and Eugene W. Kozel (who had a 3.34 per cent interest).  Both assignment
applications were granted on July 1, 1991, and the assignments were consummated on July 8, 1991.  KO
also reported by amendment on July 24, 1991 that, as consummated, each of its eight shareholders had
acquired a 12.5 percent interest in KO.

     4.  On May 30, 1991, KO entered into two agreements with Lone Star.  The first agreement
granted a company controlled by Vincent Sedmak, Lone Star's principal (which later assigned its rights to
Lone Star), the option to purchase ninety percent of KO's stock for approximately $18,500,000 in
consideration for an option fee of $100,000.  The second agreement appointed Sedmak's corporation as
the manager for planning, constructing, developing, and operating the cellular system.  On June 12, 1991,
the agreement was modified to provide that Lone Star would acquire the construction permit and then
assign the permit to an unnamed third party.  That agreement provided that if a definitive purchase
agreement was not signed by August 1, 1991, the agreements between the parties would terminate, and KO
could keep the $100,000 option fee.  The parties did not sign a definitive purchase agreement within that
the agreed time frame, and KO terminated its agreements with Lone Star on August 2, 1991.

B. The Assignment Application and Lone Star's Petition to Deny

     5.  KO proceeded to construct station KNKN 665. On November 5, 1993, KO filed an application
to assign its license to McCaw Communications of Gainesville TX, Inc. (File No. 00679-CL-TC-94). 
Lone Star filed a "Petition to Dismiss Or Deny" on January 2, 1994 (the "Lone Star Application Petition"). 
In that petition, Lone Star argued that Paul L. Kozel was an undisclosed real-party-in-interest in the
original KO Partnership application, and that Paul L. Kozel exercised both de facto and de jure control
over the KO Partnership without Commission approval.  Lone Star's argument was based upon certain
statements allegedly made by Paul L. Kozel and Steven L. Wasserman, KO's corporate counsel, that Paul
L. Kozel controlled KO and that Paul L. Kozel had paid all of KO's application expenses.  Lone Star
argued that the KO Partnership's failure to disclose Paul L. Kozel's status as a real-party-in-interest
violated the then-existing Sections 22.13(a)(1) and 22.923(b)(7) of the Commission's Rules.  Lone Star
also posited that Paul L. Kozel may have had an interest in another cellular application in the same RSA,
and if that was the case, such an interest would violate then-existing Sections 22.921 (prohibiting multiple
ownership interests in competing nonwireline RSA applications) and 22.33(b)(2) (prohibiting partial
settlement agreements between competing nonwireline RSA applicants) of the Commission's Rules.  Lone
Star also argued that a power of attorney signed by Paul B. Kozel in favor of Paul L. Kozel on May 1,
1991 (shortly after the KO Partnership received the construction permit) granted the father de facto and de
jure control over the KO Partnership.

     6.  KO opposed Lone Star's petition to deny on February 18, 1994 (the "KO Petition Opposition"). 
In the opposition, KO provided affidavits from Paul L. Kozel and Mr. Wasserman denying that they ever
told Lone Star or its representatives that Paul L. Kozel controlled KO.  With respect to the application
expenses, KO explained that they were paid by Chesterfield Management, Inc. (Chesterfield), a Pizza Hut
franchisee in Central Indiana.  Paul L. Kozel owns forty percent of Chesterfield's stock, and each of his
children owns ten percent of Chesterfield's stock.  When Chesterfield paid KO expenses, its books showed
a distribution of profit to the children of Paul L. Kozel (four of the shareholders of KO), and those children
were then deemed to have paid KO's expenses.  The two children of Eugene Kozel, Alexander Kozel and
Rima Kozel, declared that their father gave them money which was used to pay KO expenses.  With
respect to the power of attorney Paul B. Kozel granted his father, KO explains that Paul Byron gave his
father the power of attorney because Paul Byron was diagnosed with lymphoma in 1990, and Paul Byron
"was concerned that my fatigue and lack of stamina (which resulted from the cancer) could adversely affect
[KO]'s business."  KO also denied that the power of attorney transferred control of the partnership
because, under the partnership agreement, the consent of two-thirds of the partnership interests was needed
to make decisions, transfer interests, or to bind the partnership.

     7.  Lone Star filed a reply to the KO opposition on March 24, 1994.  Lone Star discussed KO's
opposition in considerable detail.  Lone Star also argued that KO violated Section 22.921(b) of the
Commission's Rules (as it existed in 1994) because Paul L. Kozel and Dr. Eugene Kozel had an interest
in Savoy, which also filed an application for the Texas 7 RSA.  Lone Star also alleged that the Kozels
violated the then-existing Section 22.33(b)(2) of the Commission's Rules "by filing [mutually exclusive]
applications for the License in the RSA and agreeing (whether in writing or by verbal understanding) that
all of the Kozels would participate in the ownership of the License and operation of the System regardless
of which Kozel application was selected first in the Lottery."

C. Withdrawal of Petition to Deny and Grant of Transfer of Control Application

     8.  On February 8, 1995, Lone Star filed a "Request for Approval of Withdrawal of Petition to
Dismiss or Deny." Attached to the request was a settlement agreement between KO, McCaw, Lone Star,
and Sedmak.  The agreement provided that Lone Star would receive the following compensation:  (a) up to
$264,241.85 as reimbursement of expenses in connection with the filing of the Lone Star Application
Petition and Reply; (b) $900,000 for the release of all civil claims Lone Star may have against KO; and (c)
the refund of the $100,000 option fee Lone Star paid KO in 1991.  These payments took the form of
credits toward Lone Star's purchase of a 2.83 percent equity interest in KO.  In the request, Lone Star
represented "that grant of the instant request, withdrawal of Lone Star's Petition and grant of the above-
captioned Application complies with the Commission's Section 22.29(b) policy favoring settlements and
will directly serve the public interest."

     9.  The idea of a settlement was apparently first proposed by Scott Anderson, counsel for McCaw,
to counsel for Lone Star at the PCIA convention in Seattle in August 1994.   Lone Star and its counsel,
Richard Becker, also allege that Commission counsel advised Mr. Becker "that a settlement was desirable
because it would ensure that the License was placed in the hands of a qualified carrier such as McCaw." 
The initial proposal considered by the parties involved the sale of a five percent interest in the license to
Lone Star at the same price for which Lone Star had an option to acquire a ninety percent interest in the
license in May, 1991, along with McCaw.  In the middle of October, 1994, after further negotiations
between Lone Star and McCaw, Lone Star reached a tentative agreement with McCaw under which Lone
Star would acquire a 2.83 percent interest in the license for $598,545.00.  McCaw would also loan Lone
Star $1,800,000, with the collateral for that loan being its interest in the license, and Lone Star's share of
the profits would be used to pay off the loan.  Lone Star's interest was subject to put and call options. 
During the period from November 1994 to February 1995, the parties exchanged draft agreements and
conducted additional negotiations.  Finally, on February 3, 1995, the parties reached an "Agreement for
Purchase of Stock," which provided that Lone Star would purchase a 2.83 percent interest in the license for
$1,862,786.85.  Of that amount, however, Lone Star was only required to pay $598,545.00 -- Lone Star
was given various credits for the remainder of the purchase price, representing either monies it had paid or
its release of claims against KO.

     10.  The settlement agreement was principally negotiated between Lone Star and McCaw.  KO
has represented to the Bureau that it "is simply not in a position" to provide a history of the settlement
negotiations because it was not principally involved in the negotiations and because it changed
communications counsel shortly after the settlement agreement was approved.

     11.  At the time the settlement agreement was entered into, "Lone Star continued to believe that
[KO] did not possess the qualifications to be, and remain, a Commission licensee."  Lone Star offers the
following reasons for entering into a settlement agreement:

          (i)  the parties and the Commission would not be required to further deplete their already
     limited resources on this litigation; (ii) [KO] would no longer control the License and the
     facilities authorized thereunder; and (iii) cellular service in the Texas 7 market would be
     provided by a carrier whose character was not in doubt.

As noted above, Lone Star represented "that grant of the instant request, withdrawal of Lone Star's Petition
and grant of the above-captioned Application complies with the Commission's Section 22.29(b) policy
favoring settlements and will directly serve the public interest."  When the settlement agreement was
submitted, Lone Star did not inform the Commission that Lone Star still believed KO was not qualified to
be a Commission licensee.  Lone Star denies that there is any inconsistency between its advocacy of the
grant of the transfer of control application and its belief that KO was not qualified to be a Commission
licensee.  Specifically, it cites several cases where it contends that assignment applications were granted
although unresolved questions were raised concerning the assignor's qualifications.  Lone Star also argues
that "the Commission had the continuing authority to address the substantive allegations against [KO] at
any time, sua sponte. . ."

     12.  On February 24, 1995, the Wireless Telecommunications Bureau released a public notice
announcing its approval of the withdrawal of the petition to deny and the grant of the transfer of control
application.  The public notice reads as follows:

          On November 5, 1993, the following assignment application was filed and appeared on
     Public Notice, Report No. CL-94-18, released 12/02/93.  A Petition to Deny was filed by
     Lone Star Communications, Inc., but was subsequently withdrawn.  The request for
     approval of the withdrawal of the pleadings, the copy of the written agreement and
     affidavits have been reviewed and are hereby approved pursuant to Section 22.129 of the
     Commission's Rules.  Pursuant to an amendment filed by counsel, dated 2/10/95, the
     proposed transaction has been restructured from an assignment to a transfer of control and
     the transferee's name changed to "McCaw Unrestricted Holdings, Inc."  The Commission
     has found the application to be in the public interest and has granted the application
     effective February 21, 1995.

          00679-CL-TC-1-94  Transfer of Control K.O. Communications, Inc., Station KNKN665
     from K.O. Communications, Inc. to McCaw Unrestricted Holdings, Inc., Market 658A -
     TX 7 - Fannin RSA.

D.  Wilson Petition for Reconsideration and Dismissal of Transfer of Control Application

     13.  On March 27, 1995, Nicholas R.Wilson ("Wilson") filed a "Petition for Reconsideration" of
the Public Notice.  Wilson's petition incorporated the basic allegations contained in the Lone Star petition
to deny.  Wilson also alleged that Lone Star had filed its petition to deny "as a 'strike pleading' scheme to
obtain money from the Kozel interests and the McCaw interests" and that the settlement violated Section
22.129 of the Commission's Rules.  KO, McCaw, and Lone Star each filed pleadings opposing or seeking
summary dismissal of Wilson's petition for reconsideration.

     14.  Three days before Wilson filed his petition with the Commission, he had instituted a civil
lawsuit in the United States District Court for the Northern District of Ohio, Eastern Division, against KO,
its partners/shareholders, McCaw, Sedmak, and related corporate entities.  Wilson's civil complaint alleged
that he had an agreement with KO under which he would design and construct the system and be
responsible for selling the system in return for receiving ten percent of the proceeds of any sale of the
system.  Wilson also alleged that he had a separate agreement with Sedmak under which Sedmak agreed
to pay Wilson a commission if any transaction between KO and Sedmak was consummated concerning the
cellular system in the Texas 7 RSA.

     15.  Before action was taken on the petition for reconsideration, however, the parties to the transfer
of control application terminated their agreements and, on May 17, 1996, requested dismissal of the
application.  There was no further activity concerning KO at the Commission until the Lone Star
Revocation Petition was filed on September 30, 1997.

E. Lone Star's Revocation Petition

     16.  On September 30, 1997, Lone Star filed its Revocation Petition.  Most of the arguments Lone
Star made in its Revocation Petition were arguments it made in its 1994 petition to deny the assignment
application.  Lone Star's Revocation Petition also made the new argument that Wilson was an undisclosed
real-party-in-interest in the KO Partnership application and that Wilson later acquired de facto control over
KO.  KO opposed the Lone Star Revocation Petition on October 15, 1997, and Lone Star filed a reply on
November 14, 1997.

     17.  In its opposition, KO argued that Lone Star's filing of the Revocation Petition was an abuse of
the Commission's processes.  KO specifically alleged that "Lone Star's Sole Motivation in Filing its Petition
is to Obstruct [KO] From Conducting Its Business and Extract a 'Greenmail' Payment."  It offered the
following "evidence" of Lone Star's improper motive:  (1) KO's belief that Lone Star could gain nothing
from revocation but could benefit from pressuring KO to withdraw the petition in return for a payment; (2)
the similarity of Lone Star's current charges to the charges Lone Star first made and then withdrew in
connection with the assignment application; (3) Sedmak's failure to bring the pertinent facts to the
Commission's attention in 1991, when he became aware of many of the facts he alleges; (4) KO's belief that
Lone Star's petition was motivated by its discovery that a KO principal attended a PCIA conference and the
belief that KO was about to conduct a major business transaction; and (5) KO's claim that the Lone Star
Revocation Petition "contains numerous deliberate misrepresentations of fact" and "is completely bereft of
any supported allegations which could lead to a finding adverse to [KO]."

     18.  In the period in between May 17, 1996, when the parties requested dismissal of the transfer of
control application, and September 30, 1997, when Lone Star filed its Revocation Petition, the only
communications between KO and Lone Star involved the law suit filed by Wilson.  Various transmittal
letters and copies of pleadings were exchanged between counsel for KO and counsel for Lone Star.  No
evidence has been offered that Lone Star made any threats against or made any demands upon KO in this
time period.

     19.  Lone Star claims that the "Revocation Petition was not filed for the purpose of 'greenmail' or
for any other pecuniary or improper motive violative of the Commission's Rules or policies."  In the same
vein, Lone Star earlier claimed that it "filed its Petition with the appropriate federal agency to raise the
extremely important issues surrounding the circumstances under which [KO] obtained the License for the
Texas 7 RSA . . . ."  When asked why it waited until September 1997 to file the Revocation Petition,
Lone Star explained that while Lone Star's counsel had drafted the Revocation Petition as early as April
1997, it was advised by its counsel in the Wilson litigation that "filing the Revocation Petition would have a
negative impact on" Lone Star's position in that proceeding.  Wilson's law suit was dismissed on July 15,
1997.  Since Lone Star's Revocation Petition relied in part upon allegations contained in Wilson's
complaint, it is apparent that, if the Revocation Petition had been filed while Wilson's law suit was still
pending, there would have been a danger that Wilson could have used the Revocation Petition as evidence
that Lone Star believed his law suit had merit.  Even after the Wilson law suit was dismissed, Lone Star
sought counsel from "various sources" which resulted in revisions to the pleading before September 30,
1997.

     20.  Lone Star learned most of the events relating to Paul L. Kozel's role with respect to KO
occurred during or before Lone Star's attempt to acquire the construction permit from KO in 1991.  Lone
Star did not bring the facts to the Commission's attention until 1994, when it filed the petition to deny
against the assignment application.  When asked why it did not bring the facts to the Commission's
attention earlier, Lone Star explained that until October 1993, Lone Star was pursuing the acquisition of
the construction permit, and "Lone Star had not yet fully sorted out all the details of such actions nor had
Lone Star analyzed whether such actions, in fact, violated Commission requirements."

F. The Investigation Order

     21.  On July 7, 1998, the Bureau released its Investigation Order.  With respect to the arguments
Lone Star had made in its petition to deny, the Bureau held that when the Bureau granted the transfer of
control application, it "determined that Lone Star's allegations concerning Paul L. Kozel's role in the KO
Partnership do not raise substantial and material questions concerning KO's qualifications to be a
Commission licensee."  Since the transfer of control application had been granted in a public notice with
no accompanying order, the Bureau explained in detail its reasons for concluding that Lone Star's
allegations did not raise substantial and material questions of fact concerning KO's qualifications to be a
Commission licensee.  The Bureau then rejected Lone Star's new argument that Wilson was a real-party-
in-interest in KO's application or that he subsequently acquired de facto control over KO.  The Bureau
therefore denied Lone Star's request that revocation proceedings be instituted against KO.

     22.  With respect to KO's abuse of process claims, the Bureau rejected KO's allegations that the
Lone Star Revocation Petition was frivolous.  The Bureau concluded that there was a reasonable basis in
fact and in law for Lone Star's allegations, and there was no evidence that Lone Star filed its petition for
purposes of delay.  The Bureau noted, however, that the circumstances surrounding the filing of Lone
Star's petition to deny, its settlement agreement with KO and McCaw, and the subsequent filing of the
Revocation Petition raised questions concerning Lone Star's motivations for filing the Revocation Petition. 
The Bureau wrote:

          Lone Star claims that it filed the petition "to raise the extremely important issues
     surrounding the circumstances under which [KO] obtained the License for the Texas 7
     RSA . . . ."  Lone Star knew most of those pertinent facts in 1991, but it did not bring
     those facts to the Commission's attention until 1994.  Lone Star then voluntarily withdrew
     its petition and other claims in return for a promised payment of over $1,000,000, which
     was to be applied towards the purchase of an equity interest in the licensee.  Moreover,
     Lone Star represented in the settlement filing that the grant of the transfer of control
     application would be in the public interest, which appears to have been an implicit
     representation that KO was qualified to be a Commission licensee.  Lone Star then was
     silent for almost three years after the settlement was approved.  It then presented a petition
     incorporating, for the most part, the same arguments it made in 1994.  Under those
     circumstances, we have difficulty accepting at face value Lone Star's explanation for its
     motivation because:  (1) it did not bring the facts to the Commission's attention when it
     first learned the facts, and (2) it has not reconciled the statements it made when seeking
     approval of the settlement with the later filing of its revocation petition.

                        III. DISCUSSION

     23.  "Abuse of process is a broad concept that includes use of a Commission process to achieve a
result that the process was not intended to achieve or use of that process to subvert the purpose the process
was intended to achieve."  It includes conduct such as filing strike applications or pleadings, harassing an
opponent, or filing an application or pleading for the purpose of effectuating a settlement.  "In an
adjudicatory proceeding, a conclusion that abuse of process has occurred requires a specific finding,
supported by the record, of abusive intent."  As a result of our investigation, we conclude that there is
insufficient evidence of abusive intent to justify either enforcement action or further proceedings against
Lone Star.

     24.  Our primary concern in instituting this investigation was whether Lone Star had filed the
Revocation Petition for the purpose of extracting a settlement payment from KO.  It is undisputed that
Lone Star never made any approach or threat to KO seeking payment prior to filing the Revocation
Petition.  While KO previously speculated that Lone Star knew that KO was planning a business
transaction around the time the Revocation Petition was filed, Lone Star and Sedmak have specifically
denied such knowledge, and KO has admitted that it has no proof of Lone Star's knowledge.

     25.  Nonetheless, even in the absence of a direct approach, circumstantial evidence could be
sufficient to prove that a petitioner filed a pleading for the purpose of extracting a settlement.  For example,
in WWOR-TV, Inc., 7 FCC Rcd 636 (1992), the Commission concluded that an applicant had filed its
application for the purpose of extracting a settlement based upon the fact that the applicant's "account of its
intent" was "at best without credibility and at worst false and misleading," as well as other circumstances
which supported a finding that the application was filed for an improper purpose.  Specifically, the
applicant had claimed that it filed an application challenging the renewal application of WWOR-TV
because of perceived inadequacies in the service being offered by the owners of WWOR-TV, but it was
later discovered that the applicant was formed only three weeks after the new owners took over WWOR-
TV.  Given the implausibility of the applicant being able to judge the performance of the new licensee in
such a short period of time, and other circumstantial evidence showing that the applicant's principals were
interested in settlement, the Commission concluded that the applicant had filed for purposes of reaching a
settlement.

     26.  In contrast, in this case, the circumstances surrounding Lone Star's filings do not allow us to
find the "specific evidence" of "abusive intent" which must be present in order to find an abuse of process. 
Lone Star strenuously denies that it filed the Revocation Petition for the purpose of entering into a
settlement agreement.  In the absence of an explicit demand or approach by Lone Star, we would only find
that Lone Star filed the Revocation Petition for purposes of settlement if the circumstances provided clear
evidence of such an intent.  In this case, the circumstances do not clearly point in that direction.  Lone Star
never received an explicit ruling on its allegations.  While we implicitly rejected Lone Star's allegations
when we granted the transfer of control application, Lone Star could plausibly believe, as it claims, that
its filing was appropriate "to ensure that the Commission fully and completely reviewed the circumstances
pursuant to which [KO] obtained the License."  Furthermore, when the settlement was never effectuated,
Lone Star's relationship with KO returned to the status quo ante.  Since there was no longer any
application pending before the Commission, the only way Lone Star could bring its allegations back to the
Commission's attention was to file the Revocation Petition.  Accordingly, the circumstances are consistent
with Lone Star having a bona fide interest in raising questions concerning KO's qualifications to be a
Commission licensee.

     27.  One of our concerns in commencing the investigation was Lone Star's motive in waiting until
September 1997 to file the Revocation Petition, when the settlement was aborted in May 1996.  It is now
apparent that the cause of that delay was Wilson's law suit.  Specifically, Lone Star was advised that its
position in the Wilson law suit could be harmed if it filed the Revocation Petition while Wilson's law suit
was pending.  We do not condone Lone Star's decision to delay filing the Revocation Petition for its own
tactical reasons.  We expect that petitioners who wish to challenge a licensee's qualifications will bring
such facts to the Commission's attention in a reasonably prompt manner.  The investigation does not show,
however, that the timing of Lone Star's filing evidences a desire to delay any filing or plans of KO or to
extract a payment from KO.  The record does not support KO's assertion that Lone Star was aware of any
business transactions contemplated by KO.  Accordingly, unlike in WWOR-TV, Inc., supra, the timing of
Lone Star's actions does not provide clear evidence of abusive intent.

     28.  Another concern that prompted our investigation was whether Lone Star's arguments in the
Revocation Petition were inconsistent with representations it made in connection with the settlement
agreement.  If a party made allegations to the Commission, repudiated those allegations in connection with
a settlement, and then refiled those allegations, we could view such conduct as potentially abusive of our
processes.  In this case, Lone Star filed a petition to deny against KO, then entered into a settlement
agreement and represented that a grant of the transfer of control application would be "in the public
interest." As a general matter, the Communications Act requires that the Commission make a finding that a
transferor is qualified to be a Commission licensee before the application can be granted.  While Lone
Star cites certain exceptions to that policy, none of the exceptions it cites would have been applicable to
the KO application.  Accordingly, Lone Star's statement could be read as an implicit representation that it
believed KO was qualified to be a Commission licensee.

     29.  In this case, however, we cannot find that Lone Star's various representations evidence an
intent to abuse the Commission's processes.  When it submitted the settlement agreement, Lone Star did not
explicitly repudiate the allegations in its petition.  If it had done so, and then filed the Revocation Petition,
such conduct would raise very serious questions as to Lone Star's intent.  Lone Star, however, in fact said
that it believed a grant of the transfer of control application "will directly serve the public interest."  While
that statement could easily be read as a representation that KO is qualified to be a Commission licensee, it
could also be read more generally as a request to approve the settlement agreement because it "reasonably
effectuated Lone Star's intentions . . . ."  We caution Lone Star and its counsel to be more precise in the
future when making representations to the Commission.  Under these circumstances, however, we cannot
find enough of an inconsistency in Lone Star's statements to constitute an abuse of process.

     30.  We reject KO's other arguments supporting its assertion that KO has abused the Commission's
processes.  Given Lone Star's prior demonstrated interest in acquiring ownership of the license for the
Texas 7 RSA, we disagree that Lone Star had nothing to gain from revocation of KO's license.  If KO's
license was revoked, the Commission would have established some sort of procedure for selecting another
licensee, and Lone Star would have had the opportunity to apply for that license.  While it is true that
Lone Star did not bring these facts to the Commission's attention when it learned of the facts, we have
concluded that the timing of Lone Star's filings does not evidence an intent to file for an improper
purpose.  Finally, we have previously rejected KO's argument that the Revocation Petition was
frivolous.

               IV. CONCLUSION AND ORDERING CLAUSE
                                
     31.  The Bureau will not tolerate frivolous pleadings or pleadings filed for the purpose of
extracting settlements from our licensees and applicants.  If the circumstances surrounding the filing of a
pleading raise questions concerning abuse of process, we will, as we have done in this case, investigate
thoroughly.  The Bureau will vigorously follow the Commission's directive to take appropriate enforcement
action against frivolous and improper pleadings.  In this case, however, based upon our investigation, we
conclude that the record does not support a conclusion that Lone Star has abused our processes.

     32.  ACCORDINGLY, IT IS ORDERED that the investigation to determine whether Lone Star
abused the Commission's processes and this proceeding IS TERMINATED.

                         FEDERAL COMMUNICATIONS COMMISSION

                         Gerald P. Vaughan
                         Acting Chief, Wireless Telecommunications Bureau