DRESSEN - KY Public Service Commission cases/2008-00266/East Kentucky... · jul 3 0 2008 commlssion...

JUL 3 0 2008

COMMlSSION PUBLlC SERVICE

EAST KENTUCKY NETWORK dba

A PPALA CHlA N WlFeuroL ESSS

DRESSEN CELLULAR TOWER

APPLICATION

Harlan Kentucky PSC CASE 2008-00266

m J

COMMONWEALTH OF KENTUCKY

THE APPLICATION OF EAST KENTUCKY NETWORK LIMITED LIABILITY COMPANY FOR THE ISSUANCE

NECESSITY TO CONSTRUCT A TOWER IN HARLAN COUNTY KENTUCKY)

) )

) OF A CERTIFICATE OF PUBLIC CONVENENCE AND ) CASE NO 2008-00266

In case number 9 1-002 East Kentucky Network LLC formerly Mountaineer Cellular

Limited Liability Company was granted a Certificate of Public Convenience and Necessity by the

Kentucky Public Seivice Commission to construct and operate a cellular radio

telecommunications system for KY RSA 10 East Kentucky Network LLC merger documents

were filed with the Commission on February 22001 in Case 2001-022

In an effoi-t to improve service in Harlan County East Kentucky Network LLC pursuant to KRS

278020 Subsection 1 and 807 IOZR 5OOl Section 9 is seeking the Commissionrsquos approval to construct

a tower near Index The proposed tower will be a 300 foot self-supporting tower located on a tract of

land at Dressen near the city of Harlem in Harlan County Kentucky A map and detailed directions to

the site can be found in Exlubit 8

FAA and Kentucky Airport Zoning Commission approvals have been applied for and a copy

of the application is included as Exhibit 4 and 6

No Federal Communications Commission approval is required prior to constiuction of this

facility Once service is established fi-oin this tower we must immediately notify the Federal

Communications Commission of its operation Prior approval is needed only if the proposed

facility increases the size of the cellular geographic service area This cell site will not expand the

cellular geographic service area

A geologist was employed to determine soil and rock types and to ascertain the distance to

solid bedrock The geoteclmical report is enclosed as Exhibit 3

A copy of the tower design information is enclosed as Exhibit 5 The proposed tower has

been designed by engineers at Attlstate Tower Inc and will be coiistnicted under their supervision

Their qualifications are evidenced in Exhibit 5 by the seal and signature of the registered

professional engineer responsible for this project

The tower will be erected by A amp D Communication of Cattlesburg Kentucky A amp D has

vast experience in the erection of communications towers

Enclosed and should be filed with Exhibit 10 is a survey of the proposed tower site signed

by a Kentucky registered professional engineer There is no structure within 500 feet of the

proposed tower as indicated in this enclosure Exhibit 2 is a list of all Property owners or

residents according to the property valuation administratorrsquos record who reside or own property

within 500 feet of the proposed tower in accordance with the Public Valuation Administratorrsquo

No other properties are contiguous with East Kentuckyrsquos property

Exhibit 12 back of folder contains a vertical sketch of the tower supplied by Colernaii

Engineering

Pursuant to 807 KAR5063 Sections1 (l)(L) and Section 1 (l)(n)( 1) all affected property

owners according to the property valuation administratorrsquos record who reside or own property

within 500 feet of the proposed Tower were notified by certified mail return receipt requested of

East Kentucky Network LLCrsquos proposed construction and informed of their right to intervene

They were given the docket number under which this application is filed Enclosed in Exhibit 2 is

a copy of that notification

Harlan County has no fonnal local planning unit In absence of this unit the Harlan County

Judge Executiversquos office was notified by certified mail return receipt requested of East Kentucky

Network Limited Liability Companyrsquos proposal and informed of their right to intervene They

were given the docket number under which this application is filed Enclosed in Exhibit (1) is a

copy of that notification

East Kentucky Network LLC will finance the subject Construction with earned surplus in

its General Fund

Estimated Cost of Construction 14000000 1250000 Annual Operation Expense of Tower

Two notice signs meeting the requirements prescribed by 807 ICAR 5063 Section 1(2)

measuring at least two (2) feet in height and four (4) feet in width and containing all required

language in letters of required height have been posted one at a visible location on the proposed

site arid one on the nearest public road The two signs were posted on July 282008 and will

remain posted for at least two weeks after filing of this application as specified

Enclosed in Exhibit 9 is a copy of East Kentucky Network LLCrsquos deeds to the site

Notice of the location of the proposed construction was published on the first two weeks of

August in the Harlan Daily Enterprise Enclosed is a copy of that notice in Exhibit 1 The Harlan

Daily Enterprise is the newspaper with the largest circulation in Harlan County

The proposed construction site is on a very rugged mountaintop some feet from the nearest

structure Prior to construction the site was wooded

Due to the steep hillside surrounding the proposed site the property in close proximity is

unsuitable for any type of development East Kentucky Network LLCrsquos operation will not affect

the use of nearby land nor its value No more suitable site exists in the area A copy of the search

area map is enclosed in Exhibit 8 No other tower capable of supporting East Kentucky Network

LLCrsquos load exists in the general area therefore there is 110 opportunity for co-location of our

facilities with anyone else

WHEREFORE Applicant respectfully requests that the PSC accept the foregoing

Application for filing and having met the requirements of KRS [278020( I) 278650 and

2786651 and all applicable rules and regulations of the PSC grant a Certificate of Public

Convenieiice and Necessity to consti-uct and operate the proposed tower

The foregoing document was prepared by Janice Robinson Technical Site Coordinator for

East Kentucky Network dba Appalachian Wireless All related questions or correspondence

concerning this filing should be mailed to East Kentucky Network LLC dba Appalachian

Wireless 101 Technology Trail Ivel KY 41642

SUBMITTED BY

oXampce Robinson Cell Site Coordinator

APPROVED BY DATE

Gerald Robinette General Manager

Contacts

Phone (606) 791-2375 Ext 111 Email grobinettellOehcom

Janice Robinson Technical Site Coordinator Phone (606) 791-2375 Ext 166 Email jrobinsonl66aekncom

Mailing Address

East Kentucky Network LLC dba Appalachian Wireless 101 Technology Trail Ivel Ku 41642

NotificatianhXesponse from County

Copies of Cell Site Notices

Universal Soil Bearing Aiialysis

Driving Directions and Map to Suitable

Survey of Site SignedSealed by

Site Survey Map with Property Owners identified in Accordance with PVA of

Vertical Profile Sketch of Proposed

EAST KENTUCKY NETWORK

101 TECHNOLOGY TRAIL

IVEL ICY 41642

PHONE (606) 874-7550

FAX (606) 874-7551

4lL IIIFOEI(N COM

IE WWW EKN COM

VIA US CERTIFIED MAIL

July 252008

Joseph A Giieshop JudgeExecutive P 0 Box 956 Harlan KY 4083 1

RE Public Notice-Public Service Commission of Kentucky (Case No 2008-00266)

East Kentucky Network LLC dba Appalachian Wireless has applied to the Public Service Commission of Kentucky for a Certificate of Public Convenience and Necessity to construct and operate a new facility to provide cellular telecommunications service The facility will include a 300 foot self-supporting tower with attached antennas extending upwards and an equipment shelter located on a tract of land at Dressen near the city of Harlan in Harlan County Kentucky A map showing the location of the proposed new facility is enclosed This notice is being sent to you because you are the County Judge Executive of Harlan County

The Commission invites your comments regarding the proposed construction You also have the right to intervene in this matter The Commission must receive your initial communication within 20 days of the date of this letter as shown above

Your comments and request for intervention should be addressed to Executive Directors Office Public Service Commission of Kentucky PO Box 6 15 Frankfort ICY 40602 Please refer to Case No 2008-00266 in your correspondence

(anice Robinson Technical Site Coordinator enclosure

Data use subject to license

Q 2004 DeLorme Topo USA 5 0 www delorme com

MN b 7 w

h

w i( UT -d-Camp - --- 1 = 10667ft

- _ ui _ A u -A ii

Data Zoom 14 0

dlbla Appalachian Wireless 101 TECHNOLOGY TRAIL IVEL UY 41642 Phone 6061874-7550 Fax 6061791-2225

Phone 606-573-451 0 Pages

To Harlan Daily Enterprise

Attn Ad Manager

m P a g e (INCLUDING COVER

From JANICE ROBINSON

East Kentucky Network

dba Appalachian Wireless

Fax 606-573-0042 Phone 606-874-7550 Ext 166

Re PUBLIC NOTICE ADVERTISEMENT Date 072508

We would like to have the following public notice printed in the Harlan Daily Enterprise for the next two weeks The notice should state the following

1 PUBLIC NOTICE- RE Public Service Commission of Kentucky (CASE NO 2008-00266)

Notice is hereby given that East Kentucky Network LLC dba Appalachian Wireless has applied to the Kentucb Public Service Commission to construct a tower located on a tract of land at Dressen near the city of Harlan in Harlan County Kentucky The proposed tower will be a 300-foot self-supporting tower If you would like to respond to this notice please contact the Executive Director Public Service Commission 211 Sower Boulevard PO Box 615 lranIamport Kentuckv 40602 Please refer to Case No 2008-00266

If you have questions about the placement of the above mentioned notice please call me at 606-874-7550 ext 166

Thank you Janice Robinson Technical Site Coordinator

Accounting kparbnent If you have any problems with this fax please call 6061886-6007The message above and the information contained in the documents transmitted are confidential and intended only for the person(s) named above Dissemination distribution or copying of this communication by anyone other than the person(s) named above is prohibited If you have received this communication in error please noti i us immediately by telephone and return the original message to us at the address listed above via regular mail Thank you

x x x C o m m u n i c a t i o n R e s u l t R e p o r t ( J u l 25 2008 3 5 7 P M I X X

I E k n

Phrmc 6085734510 Pqon

e T i m e J u l 25 2008 355PM F i l e P a g e

0834 M e m o r y TX 6065730042 P 1 OK

No M o d e D e s t i n a t i o n P P (4 R e s u l t N o t S e n t

O P a g e (ilJCtUDING

R e a s o n f o r e r r o r E 1 ) H a n g u p o r l i n e f a i l E 3 ) N o a n s w e r E 5 ) E x c e e d e d r n a x E - m a i l s i z e

E 2 ) B U S Y E 4 ) N o f a c s i m i l e c o n n e c t i o n

E A S T K E N T U C K Y mlppelsigtgtan Wltmlssj 101 1ECllNOLOGYlRIUL IVEKY41042 Phone 6 D W 4 7550 rsfeomi 2225 NETWORK

horn JANICE ROBNSDN To Harlan Oally Enterpllso

Mn Ad Manager fad I(enludiy Natwcrsquoli

1

I t a PUBLIC NOTICE ADVEmPjEMENT D a b 07125fD1

Harlan Daily Enterprise Page 1 of 1

arla il y ris

P 0 Box 1155 Harlan KY 40831

Harlan County

Phone (606) 573-45 10

Fax (606) 573-0042

Newspaper Personnel

Publisher Pat Lay

Editor John Heizsoiz

Ad Manager Wylerze Miniavd

Circulation

Daily 5555

Publication Days

Monday thru

Saturday

Newspaper Dimensions

Page Size 6 col x 2 15

Column Width 11 picas

0 Kentucky Press Association QA neither owns nor operates any newspaper

httpwwwkypresscorndirectoryddaily-memberaspID=lO 7252008

EXHIBIT I1 LIST OF PROPERTY OWNERS

Statement Pursuant to Section 1 (1) (I) 807 KAR 5063

Section 1 (l)(I) 1 The following is a list of every property owner who according to property valuation administratorrsquos records owns property within 500 feet of the proposed tower and each have been notified by certified mail return receipt requested of the proposed construction Sectioit 1 (1) I 2 Every person listed below who according to the property valuation administratorrsquos records owns property within 500 feet of the proposed tower has been Given the Commission docket number under which the application will be processed and Sectioit 1 (1) I 3 Every person listed below who according to property valuation administratorrsquos records owns property within 500 feet of the proposed tower has been Informed of his right to request intervention

LIST OF PROPERTY OWNERS

Sally M Barr et A1 CO Clayton W Ray 223 Scarlett Drive

Lafollette TN 37766

Brothers Construction Inc P 0 Box 512

Harlan KY 4083 1

Jim amp Arlene Blanton 2550 W HWY 72 S

Suite 202 Harlan KY 4083 1

Edward amp Racheal Parsons P o box 919

Harlan ICY 4083 1

Abdulltader Dahian 120 Professional Lane Harlan KY 40831

EAST IKENTUCKY NETWORK

IVEL IltY 41642

PHONE (606 ) 874-7550

FAX (606) 874-7551

1 INFOEIltN COM

iE WWW EIltIICOM

V U US CERTIFIED MAIL

PUBLIC NOTICE

July 252008

Abdulkader Dahnan 120 Professional Lane Harlan KY 4083 1

RE Public Notice-Public Service Coinmission of Kentucky (Case No 2008-00266)

East Kentucky Network LLC dba Appalachian Wireless has applied to the Public Service Coinmission of Kentucky for a Certificate of Public Convenience and Necessity to construct and operate a new facility to provide cellular telecommunications service The facility will include a 300 foot self supporting tower with attached antennas extending upwards and an equipment shelter located on a tract of land at Dressen near the city of Harlan in Harlan County A map showing the location of the proposed new facility is enclosed This notice is being sent to you because you may own property or reside within a 500 radius of the proposed tower

Your comments and request for intervention should be addressed to Executive Directors Office Public Service Commission of Kentucky PO Box 615 Frankfort KY 40602 Please refer to Case No 2008-00266 in your correspondence

Sincerely

anice Robinson Kechnical Site Coordinator

Enclosure 1

EAST IltENTIJCIltY NETWORK

IVEL iltY 41642

PHONE (606 ) 874-7550

FAX (606) 874-7551

Ersquorsquo ampIL INFOEIltN COM

TE WWW EKN COM

PUBLIC NOTICE

July 252008

Edward amp Raclieal Parsons P 0 Box 919 Harlan KY 4083 1

East Kentucky Network LLC dba Appalachian Wireless has applied to the Public Service Comrnission of Kentucky for a Certificate of Public Convenience and Necessity to construct and operate a new facility to provide cellular telecommunications service The facility will include a 300 foot self supporting tower with attached antennas extending upwards and an equipment shelter located on a tract of land at Dressen near the city of Harlan in Harlan County A map showing the location of the proposed new facility is enclosed This notice is being sent to you because you may own property or reside within a 500rsquo radius of the proposed tower

Y o u comments and request for intervention should be addressed to Executive Directorrsquos Office Public Service Commission of Kentucky PO Box 61 5 Frankfort ICY 40602 Please refer to Case No 2008-00266 in your correspondence

Sincerely

IJanice Robinson Technical Site Coordinator Enclosure 1

iai TECHNOLOGY TRAIL

IVEL IKY 41642

PHONE (606) 874-7550

FAX 1606) 874-7551

IMFOEKN COM

iE WWW EKN COM

PUBLIC NOTICE

July 252008

Jim 8t Arlene Blantion 2250 W HWY 72 S Suite 202 Harlan KY 4083 1

East Kentucky Network LLC dba Appalachian Wireless has applied to the Public Service Commission of Kentucky for a Certificate of Public Convenience and Necessity to construct and operate a new facility to provide cellular telecommunications service The facility will include a 300 foot self supporting tower with attached antennas extending upwards and an equipment shelter located on a tract of land at Dressen near the city of Harlan in Harlan County A map showing the location of the proposed new facility is enclosed This notice is being sent to you because you may own property or reside within a 500rsquo radius of the proposed tower

Your comments and request for intervention should be addressed to Executive Directorrsquos Office Public Service Commission of Kentucky PO Box 61 5 Frankfort KY 40602 Please refer to Case No 2008-00266 in your correspondence

Sincerely

ampnice Robinson Technical Site Coordinator Enclosure 1

IVEL ICY 41642

PHONE (606) 874-7550

FAX (606) 874-7551

I INFOEKN COM E WWW EKN COM

PUBLIC NOTICE

July 252008

Brothers Construction Tnc P 0 Box 512 Harlan KY 4083 11

East Kentucky Network LLC dba Appalachian Wireless has applied to the Public Service Conmission of Kentucky for a Certificate of Public Convenience and Necessity to construct and operate a new facility to provide cellular telecommunications service The facility will include a 300 foot self supporting tower with attached antennas extending upwards and an equipment shelter located on a tract of land at Dressen near the city of Harlan in Harlan County A map showing the location of the proposed new facility is enclosed This notice is being sent to you because you may own property or reside within a 500 radius of the proposed tower

Sincerely

mice Robinson Technical Site Coordinator Enclosure 1

IVEL IltY 41642

PHONE (606) 874-7550

FAX (606) 874-7551

INFOQEKN COM

[E WWW EKN COM

PUBLIC NOTICE

July 252008

Sally M Barr et A1 CO Clayton W Ray 223 Scarlett Drive Lafollette TN 37766

S inc ere1 y

ofanice Robinson Technical Site Coordinator Enclosure 1

C

---- Data use subject to license 0 2004 Detorme Top0 USA 5 0

www deiorme corn 4 i c MnN 16 7 W)

1 = 1 066 7 f t Data Zoom 14-0

WENDELL R HOLMES PG 120 Church Street

Whitesburg KY 41858 (606) 633-1511

June 6 2008

Harlan Tower Site

Purpose

A site assessment was conducted for Appalachian Wireless on a tract of land located in Harlan County in the City of Harlan Kentucky The site of the proposed tower is now forestland property The purpose of this investigation was to determine the depth to bedrock and of what type of rock the bedrock consists

Site Investigation

The trenching method was used to determine at what depth and what type of bedrock material is present at the proposed tower site A Caterpillar Excavator was used to expose the bedrock material It is approximately 100 feet to the sandstone bedrock (See attachments for location and descriptions of materials encountered) The terrain in Harlan County is slightly to moderately steep The tower site is located on a point above the confluence of Catron Creek and Martin Fork both being tributaries of the Cumberland River approximately two tenths of a mile west of the junction of KY 72 and US 421 in Harlan County The sandstone formation below the tower site is approximately 1000 feet thick based on the information obtained from the site investigation and geologicai maps of the area

Conclusions

The proposed tower site is located on a point in the area The sandstone bedrock on the proposed tower site is park of the Hance Formation and is lower to middle Pennsylvanian in age Tests were not cortducted to determine the load-bearing strength of the bedrock However it is apparent that the tower will be constructed on the sandstone bedrock formation

The field work for this site was performed by Wendell R Holmes using generally accepted methods in the practice of geological science

Thickness 100

500

500 L

Whitesburg Ky 41858

Geologist Log

depth _II

100 Soil Yellowish Brown with

600 Sandstone Brown and Weathered

1100 Sandstone with Gray and Brown

plant and rock fragments -

Shale streaks

Location Harlan Tower Site

Unit 1 Total I Strata I Description

TC 56-50E (Rev 0205) -I- _ I Kentucky Transportation Cabinet Kentucky Airport Zoning Cornmission 200 Mero Street Frankfort K Y T e n t u c k y Aeronatitlcal Study Number

I APPLICATION FOR PERMIT TO CONSTRUCT OR ALTER A STRUCTURE INSTRUCTIONS INCLUDED __ 1 APPLICANT - Name Address Telephone Fax etc

East Kentucky Network LLC co Lukas Nace Gutierrez amp Sachs Chtd 1650 Tysons Blvd Suite 1500 McLean VA 22102 T 703-584-8667 F 703-584-8692

-_----- -- 2 Representative ol Applicant -- Name Address Telephone Fax

Ali Kuzehkanani Lukas Nace Gulierrez amp Sachs Chtd 1650Tysons Blvd Suite 1500 McLean VA 22102 T 703-584-8667 F 703-584-8692

---

3 AppiicaUon for E New Construction Alteration 0 Existing

4 Duration a Permanent c] Temporary (Months ---Days --)

5 Work Schedule Slart ~ ~ ~ 0 0 8 ~ - End 711 512008

6 Type Antenna Tower c] Crane 0 Building 0 Power Line a Landfill 0 Water Tank Other

I MarklnglPainting andor Lighting Preferred

Red Lights and Paint

0 White - Medium Intensity

White - High intanslty

Dual - Red amp Medium Intensity White

Dual - Red 8 High Intensity White

Other _

9

10

11

12

13

14

15

16

17

18

19

20

3 6 49 50 6 Latitude - _-- ~ _I-

Longitude 83- Ag-- ~ __-____ Datum NAD83 a NAD27 a Other---

Nearest Kentucky City Dressen

44 5

County Harlan

Nearest Kentucky public use or Military airport

Tucker Guthrie Memorial Airport --I---

Distance from I3 to StructureL25mt ----

Direction from 1113 to Struclure -

Site Elevation (AMSL) 140000 Feet

Total Structure Height (AGL) 31500 Feet

1 715 00 Overall Height (f116 + 1117) (AMSL) __I_____ --Feet

Previous FAA andor Kentucky Aeronautical Study Number(s)

Description of Location (Attach USGS 7 5 minute Quadrangle Map or an Airport layout Drawlng wilh the precise sile marked and any certined survey)

Site is located approx 0 3 mi (0 5 km) west of Dressen (Harlan) KY

--I__-

8 FAA Aeronautlcal Study Numberv-----

21 Description of Proposal _I __I

The structure will include a 300 tower wlth top-mounted antennas (overall height of 315 AGL) The ERP will be 500 watts

_- -- --- 22 Has a NOTICE OF CONSTRUCTION OR ALTERATION (FAA Form 7460-1) been filed wilh the Federal Aviation Administration

-- tx1 NO EI yes When June 191 2008 l--ll--l--__-I_- ~ ___ CERTIFICATION I hereby certify that ail the above statements made Qy e are true complete and correct to the best of my knowledge and belief

I_- 611 912008 Date

-- -

Ali KuzehkananilDlr of Engineering Printed Name and Titie

PENALTIES Persons failing to comply with Kentucky Revlsed Statutes (KRS 183861 through 183 990) and Kentucky Administrative Regulations (602 IltAP 05OSerIes) are liable for fines andlor imprisonment as set forth in KRS 183 990(3) Non-compliance with Federal Aviation Administration Regulations may resui in further penallles

Commission Action a Chairman KAZC Administrator KAZC

L] Approved

a Disapproved ______-Date ______________ -- _- --

OEAAA Mapping littpsoeaaafaagovoeaaaexter~~aleFilingmapViewer jsploce itionID

1 o f 1 6192008 1031 AM

- 300

280

260

240

220

200

180

160

140

120

100

80

60

40

20

- 0

123-6

4-0

PLAN VIEW

PLAN VIEW REF 1 ) (6) 1625 LINES 2) ( 1 ) 1625 LINE 3) STEP BOLTS

----

- o Y

-1-1-1 w w w zzz C L C L C L Q Q Q

w 0 -0 -0 -0 A o a m b W M N N N gtI

PCL81 s 1 E

33lldS dVl 3N13kJOJN138 H13N31 ~ZIS we

AWSS333N SI 3N13fldS tlW3 lN3W380JN138

SlN3W3LllnD38 8LE 13V 01 N~HM ~0138 UVH~ 01 w3tl z

WkiOjN03 11VHS S33lldS dVl 11V 1 3N13lldS W8 lN3W33kJOjNI38

831N33 NO ZL 1V S311 P M S8W3 lV311t13A 6 (01)

Al31W3d3S 038nOd N3HM lN33V 3NION08 AXOd3 3Sn

NOUWlSnlll klltJVl3 01 03UlWO A33SOdUnd N338 SVH llVEl0 3WOS 01 LSSLCI wisv md fiisN3a Boi3otld (J~UIOOW HI do xs6

01 Cl113VdW03 N338 SVH IVHl Stl3AVl X31Hl 8 NI 033Vld 1VltlllVW TIM a3ow ii3~ v 38 iwHs sNoiivaNnoj ~KL aNnow aNv WIN numw 6

3Ut13N03 30 Stl3NU03 03SOdX3 11V 1V Stl3~lWVH3 3CllAOOtld 8 L

E 38 i1VHS St1W 3N13tlOJN138 803 t13A03 3UWN03 WnWlNIW 9 03UlWt13d ION SI StlV8 lN3W33UOJN13tl 30 3NI013M 80 3NIaN38 013U

80133dSNI 833N13N3 lN301S3tl 3Hl 01 lN3S 38 11VHS

S

P

E

Z

L m

I OS O-SC

I

NOUvaNnO3 LaNV t13MOl

30 831N33

LUKAS NAC GUT1 z ampSACHS CHARTERED 1650 TYSONS BOULEVARD SUITE 1500 MCLEAN VIRGINIA 22102 703 584 8678 703 504 8696 FAX

WWW FCCLAW GOM

RUSSELL D LUKAS DAVID L NACE THOMAS GUTIERREZ ELIZABETH A SACHS GEORGE L LYON J R PAMELA L GIST

DAVID A LAFURlA TOOD SLAMOWITZ B LYNN F RATNAYALE STEVEN M CHERNOFF KATHERINE PATSAS

CONSULTlNG ENGINEERS

ALI KUZEHKANANI LEILA REZANAVAZ -

OF COUNSEL LEONARD S KOLSKY

JOHN CIMKO

J K HAGE lli JOHN J MCAVOY

HON GERALD s MCGOWAN

TAMARA DAVIS-BROWN

June 192008

-- Via US Mail

EXPRESS PROCESSING CENTER Federal Aviation Administration Southwest Regional Office Air Traffic Airspace Branch ASW-520 2601 Meacliam Blvd Fort Worth TX 761 37-4298

Dear FAA Evaluator

Enclosed is an FAA Form 7460-1 (Notice of Proposed Construction or Alteration) for a new 315 communications tower stmcture (300 tower plus 15 antennallightning rod) near Dressen (I-farlan) Iltentucky The site (Dressen) is located 03 mi (05 Ian) west of Dressen Branch

The proponent East Kentuclcy Network LLC is the licensee for PCS Block A service in a portion of the Knoxville TN Metropolitan Statistical Area (ICnoxville MTA) MarIetNo 44A12 Transmit teclmology to be employed at this station is CDMA in the PCS Band A fi-equaicy band ( 1 850 - 1 860 MHz arid 1930 - 1940 MIIz) the maximum ERP is 500 Watts

The transmitting systems at this site will be installed and maintained such that transmitter spurious radiation in the frequency range of 1 18 MIdz to 137 WIz is attenuated at least 71 dB below the unniodulated carrier level

Should you have any questions or require additional infommtion please do not hesitate to call tlie undersigned at the above identified telephone number

Sincerely

Director of Engineering

Enclosure

cc East Kentuclcy Nehvork LL C Attention Marty Thaclcer and Gerald Robinett

Notice of Proposed Construction or Alteration Off Airport httpsoeaaafaagovoeaaaexternaleFilinglocationActionjspaction=

Notice of Proposed Construction or Alteration - Off Airport

Details for Case Dressen Show Project Summary

I Case Status

ASN 2008-ASO-3428-OE

Status Accepted

Construct ion Al terat ion i n f o r m a t i o n

Notice Of Construction

Duration Permanent

if Temporary Months Days

Work Schedule - Start 07012008

Work Schedule - End 0715zo08

State Filing Filed with State

St ructure Deta i ls

Latitude 36 49 5060 N

Longitude 83 19 44 50 W

Horizontal Datum NAD83

Site Elevation (SE)

Structure Height (AGL)

MarkingLighting Dual-red and medium intensity

1400 (nearest foot)

315 (nearest foot)

Other

Nearest City Rressen

Nearest State Kentucky

Description of Location Dressen (Harlan) KY

Description of Proposal

Site is located approx 0 3 mi (0 5 km) west of

A new 300 tower plus top-mounted antennas (overall height of 315 AGL)

Date Accepted 06192008

Date Determined

Letters None

Structure Summary

Structure Type Tower

Structure Name Dressen

FCC Number

Prior ASN

Common Frequency Bands

Low Freq High Freq 806 824 824 849 651 866 869 694 896 901 901 902 930 93 1 93 1 932 932 932 5 935 940 940 941 1850 1910 1930 1990 2305 2310 2345 2360

Specif ic Frequencies

Freq Unit MHZ MHz

MHz MHz

MHz

MHz MHz MHz MHz MHz MHz MHz MHz MHz MHz

ERP 500 500 500 500 500

7 3500 3500

17 1000 3500 1640 1640 2000 2000

ERP Un W W W W W W W W

dBW W W W W W W

1 o f 1 6192008 1103 AM

INDEPENDENT AUDITORrsquoS REPORT ON THE FINANCIAL STATEMENTS

FINANCIAL STATEMENTS

Balance sheets Stateinelits of iiicome Statements of membersrsquo equity Statements of cash flows Notes to firiancial statenients

C O N T E N T S

Page

1

INDEPENDENT AUDITORrsquoS REPORT ON THE SUPPLEMENTARY INFORMATION

SUPPLEMENTARY INFORMATION

Statement of iiicoine detail

rsquo2 3 4

5-6 7-13

14

15 and 16

EAST KENTUCKY NETWORIC LLC DB A APPALACHIAN WIRELJ3SS

FINANCIAL REPORT

December 312006

INDEPENDENT AUDITORS REPORT

To the Members East Kentucky Network LLC dba Appalachian Wireless Ivel Kentuclcy 41642

We have audited the accoiiipaiiyiiig balance sheets of East Kentucky Network LLC dba Appalaclian Wireless as of December 3 12006 and 2005 and the related statements of iiicoiiie members equity and cash flows for the years then ended These financial statements are the respoiisibility of the Companys managemelit Our responsibility is to express an opinion an these financial statements based on our audits

We conducted our audits in accordance with auditing standards generally accepted in the United States of America Those standards require that we plan aiid perform the audit to obtain reasonable assuraiice about whether the fiiiaiicial statements are free of material misstatement An audit iiicludes examining on a test basis evidence supporting the amounts and disclosures in the financial statements An audit also iiicludes assessing the accountiiig principles used and significant estiiiiates made by management as well as evaluating the overall fiiiaiicial statement presentation We believe that our audits provide a reasonable basis for our opinion

In our opinion the financial statements referred to above present fairly in all inaterial respects the financial position of East Ilteiituclcy Network LLC dba Appalachian Wireless as of December 3 1 2006 and 2005 and the results of its operations and its cash flows for the years then ended in conformity with accounting principles generally accepted in the United States of America

Louisville Iltent~iclcy March 15 2007

I

EAST KENTUCKY NETWORK LLC DB A APPALACHIAN WIRELESS

BALANCE SHEETS December 312006 and 2005

ASSETS

CURRENT ASSETS Cash and cash equivalents Short-term iiives till eiits Accounts receivable less allowance for doubtful

A C C O L I ~ ~ ~ S receivable inembers (Notes 5 aiid 6) USF receivable (Note 7 ) Inventory Prepaid expenses

accounts of $567790 in 2006 aiid $375856 in 2005

Total current assets

PROPERTY PLANT AND EQUIPMENT (Note 3) Plant in service

General support MTSO equipment Cell equi pin en t Paging equipiiieiit Fiber ring

Unfinished plant

Less accumulated depreciation

OTHER ASSETS

Investment in affiliated coinpmy RTFC (Note 3) hitangible assets net of accuinulated amortization

Other of $2646913 in 2006 and $2179654 in 2005 (Note 2)

2006 2005 I -

$ 2818346 $ 1046669 46271 43803

2802673 1560267 37612 3149

- 589913 1584039 1056766

173657 143547- $ 7462598 $ 4444114

$ 18914927 $ 10633736 13354875 11934434 39339797 34785982 3321068 33204 16 647 1128 62454 12

657524 3992696 $ 82059319 $ 70912676

33358066 278 10940- $ 48701253 $ 43101736

$ 862394 $ 875133

4497032 4623855 27550 - 28669

$ 5386976 $ 5527657 -

$ 61550827 $ 53073507

The Notes to Financial Statements are an integral part of these statements

- 2 -

LIABILITIES AND MEMBERS EQUITY

CURRENT LIABILITIES Curreiit iiiaturities of long-term debt (Note 3) Accounts payable Accounts payable meiiiber (Notes 5 and 6) Accrued expenses Accrued state corporation taxes Customer deposits

Total current liabilities

LONG-TERM DEBT less current maturities (Note 3)

MEMBERS EQUITY

2005 - 2006 -

$ 1200000 $ 48033 1166909 851643

2899 293 6 2113530 1457463

232157 85989 3171603 - 2911380

$ 5033098 $ 2737444

13000000 13297220

435 17729 37038843

$ 61550827 $ 53073507

EAST KENTUCKY NETWORK LLC DBA APPALACHIAN WIRELESS

i

REVENUE Retail Roaiier Long distance Paging Equipineiit sales cellular Equipineiit sales paging 0 ther

Total revenue

EXPENSES Cost of cellular service Cost of paging service Cost of equipiiieiit sales cellular Cost of equipmeiit sales paging Cus t oilier service Billing Selling Maintenance Utilities Bad debts Recoveiy of bad debts Cell site rental

Advertisiiig General and admiiistrative OcCLlpallcy Depreciation Amortizatioii

Taxes

Total expenses

STATEMENTS OF INCOME Years Ended December 312006 and 2005

2006 2005 - $ 24156320

696430g 155046 852O 1 1

2922817 27894

3065078 $ 38143475

--

$ 7888446 411177

68 13457 58755

1330573 1097834 2703570 1267034

454008 800268 (90925) 158500 56527 1

1574298 2238348

334981 5541628

508526 $ 33655749

$ 20908570 6868904

177350 1039429 2152962

57632 - 2359809

$ 33564656

$ 7924553 510665

49 12998 78428

1208726 1200135 213 1009 1042844

354870 672263

(120673) 135012 257247

1139697 2249226

359928 4635200

49524 1 $ 29187369

$ 4487726 $ 4377287- Incoiiie from operations LA-

OTHER INCOME (EXPENSE) Interest iiicoiiie Interest expense Universal Service Fund income (Note 7) Impairineiit of goodwill (Note 8)

Tuosne before taxes

$ 49052 $ 23915 (821277) (795898)

3716602 5 89P 13 I - - (33 1286)

$ 2944377 $ (513356)

$ 7432103 $ 3863933

1 IlteiitucIsy corporation tax expense 399157 170197

Net income $ 7032946 $ 3693734 I I

- 3 -

STATEMENTS OF MEMBERS EQUITY Years Ended December 312006 and 2005

Peoples Rural

Telephone i

Gearhait Mountain coop- Communi- Tele- Tliaclcer- erative

Cellular cations coininun i- Grigsby Corp- Seivices Company cations Telephone oration

Inc Inc Inc - Co Inc Inc Total

Balance January 1 2005 $ 6781309 $ 6781309 $ 6781309 $ 6781309 $ 6781308 $33906544 Net incoiiie 73 8747 738747 738747 738746 738747 3693734 Capital distributions (112287) (112287) (112287) (112287) (112287) (561435)

Balance December 31 2005 $ 7407769 $ 7407769 $ 7407769 $ 7407768 $ 7407768 $37038843 Net inco IN e 1406589 1406589 1406589 1406590 1406589 7032946 Capital distributions (110812) (110812) (110812) (110812) (110812) (554060)

Balance Deceiiiber 312006 $ 8703546 $ 8703546 $ 8703546 $ 8703546 $ 8703545 $43517729

-4-

I

STATEMENTS OF CASH PLOWS Years Ended December 312006 and 2005

CASH FLOWS FROM OPERATING ACTIVITIES Net incoin e Adjustments to recoiicile net iiicoiiie to iiet cash provided

by operatiiig activities Depreciation Aiiiortizatioii Impairineiit of goodwill Changes in assets aiid liabilities iiet of the effects

of iiivestiiig and fiiiaiiciiig activities (Increase) in accouiits receivable Decrease iii accounts receivable ineiiibers (Increase) decrease in USF receivable (Increase) in iiiveiitory (Tncrease) decrease in prepaid expenses (Increase) decrease in other assets Increase (decrease) in accounts payable Increase (decrease) in accouiits payable member Increase in accrued expenses Increase in accrued state corporatioii taxes Increase in custoiiier deposits

Net cash provided by operating activities

CASH FLOWS FROM INVESTING ACTIVITIES Purchase of property plant and equipment Purchase of iiitaiigible assets Proceeds from sale of short-term investme~its

Net cash (used in) iiivestiiig activities

CASH FLOWS FROM FINANCING ACTIVITIES Capital distributioiis Proceeds fioin loiig-term borrowings Payinents on long-tesm borrowings

Net cash provided by financing activities

Net iiicrease (decrease) in cash aiid cash equivalents

Cash and casli equivaleiits Beampuursquoiig

Eliding

-- 2006 2005

$ 7032946 $ 3693734

5541628 4635200 508526 495241

- - 331286

(1242406) (34463) 589913

(527273) (30110) 13858

315266 (37)

656067 146168 26223

$ 12996306

(78367) 51248

(589913) (23 013 0)

5O 12 (646)

(29 1123) 2332

339038 85989

139030 $ 8587931

$ (11182411) $(11469668) (340437) (299159)

(2468) 56197- $ (1 1712630) $ (1 15253 16)

$ (554060) $ (561435) 14200000 3450000

(13345253) (83273 11 $ 300687 $ 2055834

$ 1771677 $ (1068865)

1046669 2115534

$ 2818346 $ 1046669

Tlie Notes to Financial Statements are an integral part of these stateineiits

- 5 -

EAST KENTUCKY NETWORK LLC DBA APPALACHIAN WPRELESS

STATEMENTS OF CASH PLOWS (Continued) Years Ended December 312006 and 2005

2006 2005 SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

Cash payments for iiiterest $ 866941 $ 788610

Cash payiiieiits for state corporation taxes $ 167000 $ 84207

SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES Settlement of note payable fiom iiiipairiiieiit of goodwill $ - - $ 400000

Settleiiieiit of accrued iiiterest fro111 impairinelit of goodwill $ _ - 56000

I

The Notes to Fhiancial Statements are an integral part of these statements

- 6 -

I I ( lsquo

NOTES TO FINANCIAL STATEMENTS

Note 1 Suininary of Significant Accounting Policies

Nature of operations

East Kentucky Network LLC dba Appalachian Wireless is a Kentucky limited liability coiiipaiiy formed by the merger of Appalachian Cellular LLC Mountaineer Cellular LLC and East Kentucky Network LLC on January 1 2000 The Company is engaged in cellular telephone coniiiiuiiications and paging services to residential and conimercial customers located in eastern Kentucky The Companyrsquos five members consist of Cellular Services Tnc Gealheart Coiiiiilunicatioiis Company Inc Mountain Telecommunications Inc Peoples Rural Telephone Cooperative Corporation Inc and Thacker-Grigsby Telephone Co Inc

Cash

The Company niaiiitains its cash balances which exceed the $100000 federally insured limit with several financial institutions These financial institutions have strong credit ratings and management believes that credit risk related to the accounts is minimal

Cash equivalents

For purposes of the statement of cash flows the Company considers temporary investments having a maturity of three months or less to be cash equivalents

short-term iiives tments

Certificates of deposit having original maturities between three and nine months are classified as short-term investments are canied at cost which approximates fair value and are held to maturity

Iiiveiitory

Inventory is coiiiposed of cellular telephone equipment paging equipment and accessories purchased for resale during the ordinary course of business The inventory is valued at the lower of cost or marlcet cost being determined by the first-in first-out (FIFO) method

Property plant and equipment

Property plant and equipment are recorded at cost Depreciation is provided using the straight-line method over the estimated useful lives of the assets

Investment

The investment in affiliated compaiiy is composed of equity certificates in Rural Telephone Finance Cooperative and is reported at cost which approximates fair value

- 7 -

Note 1 Suiiiinary of Significant Accounting Policies (Continued)

Intangible assets

The customer lists non-compete agreements FCC licenses and use of name are recorded at cost and are being amortized over 15 years by the straight-line method The excess cost over the fair value of the net assets acquired (goodwill) reIated io paging acquisitions is measured for impairment on an annual basis and written down if necessary to its estimated value at that time During the prior year the Company expensed the remaining balance of goodwill as ai1 iinpairineiit (see Note 8)

Recognitioii of revenue

Cellular service and paging revenues are recognized when earned Monthly access and feature charges are billed one month in advance aiid recogiiized as revenue the following niontli Revenue froin telephone and accessories sold are recognized as revenue upon delivery to the customer

Advertisiiig

Advertising costs are expensed as incurred At December 31 2006 and 2005 these costs were $1574298 and $1139697 respectively

Income taxes

Under existing provisions of the Internal Revenue Code the income or loss of a limited liability company is recognized by the members for incoine tax purposes Accordingly no provision for federal iiicoine taxes has been provided for in the accompanying financial statements Effective for years beginning on or after January 1 2005 the State of Kentucky enacted legislation which now provides for the taxation of limited SabiSty companiesrsquo at the entity level The accompanying fiiiancial statements include the related state tax liability under the new regulations

Use of estiinates

Management uses estimates and assuivptions in preparing financial statements Those estimates and assumptions affect the reported amounts of assets and liabilities the disclosure of contingent assets and liabilities and the reported revenues and expenses

- 8 -

Note 2 Intangible Assets

Intangible assets consist of the following at December 3 12006

Gross Accuinulated Amortization -- Amount

Customer lists Non-compete agreements FCC licenses Use of name Other

$ 5363530 $ (2152951)

1141593 (330542)

408474 (37509) $ 7143945 $ (2646913)

220348 (1 2 1571)

10000 (43 3 4)

Gross Accumulated Amount Amortization

Custoiiier lists Non-comp et e a greeiiieii ts FCC licenses Use of name Other

$ 5363530 $ (1795634) 220348 (106898)

1141593 (264446) 10000 (3668) 68038 -- (9008)

$ 6803509- $ (2179654)

Aggregate amortization expense related to these intangible assets for the years ended December 31 2006 and 2005 totaled $467259 and $437982 respectively The following represents the total estimated amortization of intangible assets for each of the succeeding five years

Year ending December 3 1

2006 2007 2008 2009 2010

$ 450000 450000 450000 450000 450000

- 9 -

I

Note 3 Long-Term Debt

i ( Y

i

Long-term debt consists of the followiiig at December 3 1

2005 I----

2006 Note payable Fifth Third Bank (a) Dated 022806 variable rate

(541 at 323106) Notes payable RTFC )

Paid in full 030106

Paid in Eull030106

Paid in full 030106

Paid in full 0310 106

Paid in full 030106 Lines of Credit RTFC

Paid in full 030106

Dated 111397 variable rate

Dated 111397 fixed rate

Dated 021301 vaiiable rate

Dated 02 1301 variable rate

Dated 072701 vaijable rate

Line of credit variable rate (c)

Line of credit variable rate (d)

Line of Credit Fifth Third Bank (e) Due 032808 variable rate

(541 at 1231OG)

(a) On February 28 2006 the ComF ny borrow

$14200000 $ -

- - 194957

- 899406

- - 727521

- - 618521

- - 7 8 6457

- - 932200

- - 28453 I 1

- - 5000000

- - 1750000

$ 13754373 _ _ $

d $14200000 to restructure its debt The note is payable in 10 annual installments of $1200000 for 2007 $1400000 for 2008 through 2012 and $1500000 for 2013 through 2016 with a variable interest rate The note is collateralized by the assets of the Company

(b) The notes payable to Rural Telephone Finance Cooperative (RTFC) were secured by mortgage and security agreements that include substantially all of the assets of the Conipany In addition the Company was required to purchase equity certificates in RTFC equal to 5 of the total amounts borrowed The notes were payable in quarterly installiiients over 15 years with interest at variable or flxed rates set by RTFC The notes were paid in full on March 12006

- 10-

Note 3 Loiig-Term Debt (Continued)

(c) The line of credit agreement with RTFC provided for borrowings up to $5000000 The agreeiiient carried an interest rate at prime plus one and one-half percent was unsecured and was renewed June 28 2004 for 24 months The line of credit was paid in full on March 1 2006

(d) The line of credit agreement with RTFC provided for borrowings up to $2000000 The agreeiiieiit carried an interest rate at prime plus one and one-half percent was unsecured and due May 162006 The line of credit was paid in full on March 12006

(e) The line of credit agreement with Fifth Third Bank provides for borrowing up to $3000000 The agreement carries a variable interest rate is secured by certain assets of the conipaiiy and is due March 28 2008

Approximate maturities or payments required 011 priiicipal under note payable agreenients for each of the succeeding five years are as follows

Year eliding December 3 1

2006 2007 2008 2009 20 10

$ 1200000 1400000 1400000 1400000 1400000

Note 4 Retireinelit Plans

The Coiiipaiiy has a 401(k) plan for qualifying employees who have reached twenty-one years of age Eligible einployees axe allowed to invest up to 15 of their coinpensation and the Company has agreed to match 100 of the first 3 of the employees contribution and 50 of the employees contribution between 3 and 5 The Company contributed $73607 and $67460 inatcling funds for its 401(1) plan during the years ended December 31 2006 and 2005 respectively

The Conipaiy also offers an employer sponsored retirement savings plan for qumied employees who have reached twenty- one years of age The Company has agreed to contribute 9 of the eligible employees compensation plus an additional 5 of the original contribution

The Company contributed $259859 and $221669 to its retirement savings plan during the years ended December 3 12006 and 2005 respectively

1 1

I

Note 5 Related Party Transactions

The Coiiipaiiy shares persolinel with oiie of its members The Company paid $1 14996 and $132681 for shared persoiinel during the years elided December 31 2006 and 2005 respectively The Conipaiiy also leased offices and warehouse space from two members The leases are for an unspecified length of time The monthly lease payments total approximately $1000 hi addition the Coiiipany iiicurred interconnection and telephone charges from its ineinbers aggregating $752095 and $786283 for the years ended December 31 2006 aiid 2005 respectively

The Coinpaiiy leases two cellular tower sites from the officers and majority shareholders of a member for $100 per month for each site The leases are for an unspecified length of time In addition the Coiiipany leases two other sites froin a coinpany owned by this member for $600 each on a iiionth to month basis

The Coiiipaiiy leases cellular tower sites from the parent coiiipany of one of its other members for $1039 per nionth The leases are for five years with options to renew

The Coinpaiiy pays coniiiiissions to two of it members for phone sales to customers The amount of coniiiiissioiis paid to related parties was $45484 and $43873 for 2006 and 2005 respectively

Note 6 Operating Leases

The Coinpaiiy has entered into operating leases with its members and other customers to provide fiber optic traisiiiission capacity aiid ancillary services The terms of these leases are for 15 years

Total rental income earned from these operating lease commitments included in the stateiiieiits of income were $1130809 and $1254902 for the years ended December 31 2006 and 2005 respectively Rental income earned froiii the Companyrsquos members from these leases was $631789 and $713599 for the years ended December 31 2006 and 2005 respectively

Investments in operating leases are as follows at December 3 1 2006 2005

Fibes ring Accumulated depreciation

$ 6471128 $ 6245412 I

(982379) (773028) $ 5488749 $ 5472384

The future minimum rental payments expected to be received under these lease agreements for each of the succeeding five years are approximately $700000 each year based upon new contracts negotiated during 2005

I

- 12-

Note 6 Operating Leases (Continued)

The Coinpaiiy has also entered into lease agreeinents with its members to obtain fiber optic traiisiiiission and digital iiiicrowave traiisinission services The terms of these leases are for 15 years

Rental expenses incurred under these operating lease coimiitments included in the statements of income wese $194083 and $33329 for the years ended December 31 2006 and 2005 respectively The future iiiiiiiniuni lease payments required under these lease agreements for each of the succeeding five years are $1 15734 each year

N0te 7 Eligible Telecolniiiuiiicatioii Carrier

Duriiig the prior year the Coiiipany was granted Eligible Telecoimniiniation Carrier (ETC) status by the Kentucky Public Service Commission As an ETC the Conipany receives funding from the federal Universal Service Fund (USF) to support the high cost of providing local telephone service in rural areas USF paynients amounted to $3716602 and $589913 for 2006 and 2005 respectively

Note 8 hiipairiiient of Goodwill

During 2005 the Coiiipaiiy coinpleted its annual valuation of the acquired goodwill related to paging acquisitions Pursuant to the valuation the Company expensed the remaining balance of goodwill 111 managementrsquos judgment die underlying assets associated with the goodwill wese determined to be of substantially less value than the amount originally paid The Conipany disputed the amount based upon the estimated current market value of the purchased customer lists which approximates the cimeiit amortized book value Accordingly the entire balance of the remaining iiote payable issued as part of the acquisitions along with the related accrued interest has been written off due to the impairment of goodwill

The following is a sumniary of the impairment of goodwill expense included in the financial statements for the year ended December 3 12005

Goodwill Note payable Accrued interest

$ 187286 (400000)

(56000) $ 331286

- 13 -

i

Note 1 Summary of Significant Accounting Policies

East Kentuclcy Network LLC dba Appalachian Wireless is a Ke~ituclcy limited liability company formed by the merger of Appalachian Cellular LLC Mountaineer Cellular LLC aiid East Kentucky Network LLC 011 January 1 7000 The Company is engaged in cellular telephone coiiiiiiuiiications and paging services to residential and conimercial customers located in eastern Kentucky The Companyrsquos five members consist of Cellular Services Inc Gearheart Communications Company Inc Mountain Telecommunications Inc Peoples Rural Telephaiie Cooperative Corporation Inc and TIiacIcer-Grigsby Telephone Co Inc

Cash

The Company maiiitaiiis its cash balances which exceed the $100000 federally insured limit with several fiiiaiicial institutions These financial institutions have strong credit ratings and iiiaiiagenient believes that credit risk related to the accounts is minimal

Cash equivalents

For purposes of the statement of cash flows the Company considers temporary investinents haviiig a maturity of three months or less to be cash equivalents

Short-term investments

Certificates of deposit having original maturities between three arid nine months are classified as short-teriii investnients are carried at cost which approximates fair value and are held to niaturity

Inventory

Iiiveiitory is composed of cellular telephone equipment paging equipment and accessories purchased for resale during the ordinary course of business The inventory is valued at the lower of cost or market cost being determined by the first-in first-aut (FIFO) method

Investment

The investment in affiliated company is composed of equity certificates in Rural Telephone Finance Cooperative and is reported at cost which approximates fair value

- 7 -

Note 1 Suiiiiiiary of Significant Accounting Policies (Continued)

Iiitaiigible assets

The customer lists non-compete agreements FCC licenses and use of name are recorded at cost and are being amortized over 15 years by the straight-line method The excess cost over the fair vaIue of the net assets acquired (goodwill) related to paging acqriisitions is measured for iiiipairnient on an annual basis and written down if necessary to its estimated vaIue at that time During the prior year the Coiiipany expensed the remaining balance of goodwill as an impairineiit (see Note 8)

Recognition of revenue

Cellular service and paging revenues are recognized when earned Monthly access and feature charges are billed one month in advance and recognized as revenue the following month Revenue from telephone and accessories sold are recognized as revenue upon delivery to the customer

Advertisiilg

Advertisiiig costs are expensed as incurred At December 31 2006 and 2005 these costs were $1574298 aiid $1139697 respectively

Income taxes

Under existing provisions of the hiter~~al Revenue Code the income or loss of a limited liability coiiipany is recognized by the members for income tax purposes Accordingly no provision for federal incoiiie taxes has been provided for in the accompanying financial statements Effective for years beginning on or after January 1 2005 the State of Kentucky enacted legislation which now provides for the taxation of limited liability companiesrsquo at the entity level The accoiiipanying fiiiancial statements include the related state tax liability under the new regulations

Use of estimates

Maiiagement uses estimates and assuniptions in preparing financial statements Those estimates and assuniptions affect the reported amounts of assets and liabilities the disclosure of contingent assets and liabilities and tlie reported revenues and expenses

- 8 -

Intangible assets consist of the following at December 312006

Custoiner lists Noli-compete agreements FCC licenses Use of iiaiiie Other

$ 5363530 $ (2152951) 220348 (121577)

1141593 (330542)

408474 II (37509) $ 7143945- $ (2646913)

10000 (4334)

2006 2007 2008 2009 2010

Gross Accumulated Amount Amortization --

Custonies lists Noli-compete agreements FCC licenses Use of name Other

$ 5363530 $ (1795634) (106898)

1141593 (264446) 220348

10000 (3668) _________-- 68038 (9008)

$ 6803509 $ (2179654)

Aggregate aiiortizatiaii expense related to these intangible assets for the years ended December 31 2006 and 2005 totaled $467259 and $437982 respectively The following represents the total estimated amortization of intangible assets for each of the succeeding five years

$ 450000 450000 450000 450000 450000

- 9 -

I

Note payable Fifth Third Bank (a) Dated 022806 variable rate

Paid in full 030106

Paid in full 03010G Lines of Credit RTFC

Paid in full 030106

Paid in 5111 030106

Dated 111397 vaIiable rate

(541 at 123106)

2006

$14200000

2005 - _I

194957

899406

727521

61 8521

786457

932200

28453 11

5000000

1750000

- -

$13754373

(a) On February 28 2006 the Company borrowed $14200000 to restructure its debt The note is payable in 10 annual installments of $1200000 for 2007 $1400000 for 2008 through 2012 and $1500000 for 2013 through 2016 with a variable interest rate The note is collateralized by die assets of the Company

(b) The notes payable to Rural Telephone Finance Cooperative (RTFC) were secured by mortgage and security agreements that include substantially all of the assets of the Conipany In addition the Company was required to purchase equity certificates in RTFC equal to 5 of the total amounts borrowed The notes were payable in quarterly installments over 15 years with interest at variable or fixed rates set by RTFC The notes were paid in full on March 12006

-10-

(c) The line of credit agreement with RTFC provided for borrowings up to $5000000 The agreement carried ail interest rate at prime plus one and one-half percent was unsecured and was renewed June 28 2004 for 24 months The line of credit was paid in full on March 12006

(d) The line of credit agreement with RTFC provided for borrowings up to $2000000 The agreeiiient carried an interest rate at prime plus one and one-half percent was unsecured aiid due May 162006 The line of credit was paid in full on March 12006

(e) The line of credit agreement with Fifth Third Bank provides for borrowing up to $3000000 The agreement carries a variable interest rate is secured by certain assets of the company and is due March 28 2008

Approximate maturities or payments required on principal under note payable agreements for each of the succeeding five years are as follows

2006 2007 2008 2009 2010

$ 1200000 1400000 1400000 1400000 1400000

Note 4 Retireiiieiit Plans

The Company has a 401(k) plan for qualifying employees who have reached twenty-one years of age Eligible eiiiployees axe allowed to invest up to 15 of their coinpensation and the Coiiipaiiy has agreed to match 100 of the first 3 of the employees contribution and 50 of the eixployees contribution between 3 and 5 The Company contributed $73607 and $67460 matchirig funds for its 401(1) plan during the years ended December 31 2006 and 2005 respectively

The Conipauy also offers an employer sponsored retirement savings plan for qualified employees who have reached twenty-one years of age The Company has agreed to contribute 9 of the eligible employees compensation plus an additional 5 of the original contribution

The Conipaiiy contributed $259859 and $221669 to its retirement savings plan during the years ended December 3 12006 and 2005 respectively

I

1 1

I

NOTES TO FINANCIAT STATEMENTS

The Coiiipaiiy shares personnel with one of its members The Company paid $1 14996 and $132681 for shared personnel dining the years ended December 31 2006 and 2005 respectively The Coiiipaiiy also leased offices and warehouse space from two members The leases are for an unspecified length of tiine The monthly lease payments total approximately $7000 hi addition the Company incurred interconnection and telephone charges from its members aggregating $752095 and $786283 for the years elided December 31 2006 and 2005 respectively

The Coinpaiiy leases two cellular tower sites from the officers and majority shareholders of a iiieiiiber for $100 per month for each site The leases are for an unspecified length of time In addition the Coiiipany leases two other sites from a coinpany owned by this member for $600 each 011 a iiiontli to month basis

The Company leases cellular tower sites from the parent company of one of its other members for $1039 per month The leases are for five years with options to renew

The Company pays conimissioiis to two of it members for phone sales to customers The aiiiouiit of comniissions paid to related parties was $45484 and $43873 for 2006 and 2005 respectively

The Company has entered into operating leases with its members and other customers to provide fiber optic hansiiiission capacity and ancillary services The terins of these leases are for 15 years

Total rental iiicoiiie earned from these operatiiig lease commitments included in the stateiiieiits of income were $1130809 and $1254902 for the years ended December 31 2006 and 2005 respectively Rental income earned from the Companys members from these leases was $631789 and $713599 for the years ended December 31 2006 and 2005 respectively

Fiber ring Accumulated depreciation

$ 6471128 $ 6245412 (982379) (773028)

$ 5488749 $ 5472384

- 12-

The Company has also entered into lease agreements with its members to obtain fiber optic traiisinission and digital inicrowave transmission services The terms of these leases are for 15 years

Rental expenses incurred under these operating lease coimiitments included in the statements of iiicoine were $194083 and $33329 for the years ended December 31 2006 and 2005 respectively The future iiiininiuni lease payments required under these lease agreements for each of tlie succeeding five years are $1 15734 each year

Note 7 Eligible Telecolniliunicatioii Carrier

During the prior year the Company was granted Eligible Telecoininuniation Carrier (ELTC) status by the Kentucky Public Sesvice Conimissioii As an ETC the Company receives funding froiii the federal Universal Service Fund (USF) to support the high cost of providing local telephone service in rural areas USF payments amounted to $3716602 and $589913 for 2006 and 7005 respectively

Note 8 Inipairnient of Goodwill

During 2005 the Conipaiiy completed its annual valuation of the acquired goodwill related to paging acquisitions Pursuant to the valuation the Company expensed the remaining balance of goodwill In managementrsquos judgment the underlying assets associated with the goodwill were determined to be of substantially less value than the amount originally paid The Coiiipany disputed the amount based upon tlie estimated current market value of the purchased customer lists which approximates the current amortized book value Accordingly the entire balance of the remaining note payable issued as part of the acquisitions along with the related accrued interest has been written off due to the inipairnient of goodwill

The followiUg is a sumniary of the impairment of goodwill expense included in the financial statements for the year ended December 3 I 2005

$ 787286 (400000) 156000)

$ 331286

- 13 -

Directions to Dressen Tower

From the Harlan County Courthouse located at the intersection of first St and Central St Take Central St l mile to the Jct of Central St and 42 1 Turn left onto 421 and go 12 miles to Hwy 72 Turn Right onto Hwy 72 and continue for 4 miles to Blanton Drive Turn right onto Blanton Dr and Continue for 2 miles to gravel road Take gravel road

for 9 miles to tower site

Directions were written by

Marty Thacker Appalachian Wireless 606-438-2355 Ext 11 1 (office) 606-634-9505 (Cell Phone) m thackertotel corn (email)

No usaole 1 o ~ e r s 1mnc r search aica

2 -

lt i 124251 - __ __

Data use SLJbjeCt to license TN Scale 1 28 125

0 2004 DeLorme Top0 USA 5 0 www delorme com

A

MN ( 6 7W)

Data Zoom 12-7 1 = 2 343 8 fl

DEED OF CONVEYANCE

THIS DEED OF CONVEYANCE made and entered into this amp day of

2008 by and between Brothers Hardware and Building Supply Inc a Kentucky

Corporation P 0 Box 5 12 Harlan Kentucky 4083 1 referred to hereinafter as GRANTOR and

33- + East Kentucky Network LLC a Kentucky Limited Liability Company 101 Technology Trail Ivel

Kentucky 4 1642 referred to hereinafter as GRANTEE

WITNESSETH That for the consideration of $4000000 the receipt ofwhich is hereby

acknowledged the GRANTOR does hereby grant sell and convey unto the GRANTEE its

successors and assigns forever all of its right title and interest in and to that certain tract or parcel

of land lying and being in Harlan County Kentucky and more particularly described as follows

A certain tract of land located in the City of Harlan Harlan County Kentucky and being near the end of the Ridge North of the confluence of Catron Creek and Martins Fork of Clover Fork of the Cumberland River and more particularly described as follows

BEGINNING at a set TT-Bar on the boundary line between Brothers Construction and Sally M Ban Charles M Ray Dorothy H Kirby Stanford Bruce Hendrickson and Carolyn H Wilson (DB 316 P 43) and being S 58 23 02 W 2356 from a found Re-Bar with cap stamped DKW 2729 and having KY South NAD 83 Coordinates of N-l83061517 E-234890706 thence running down the hill and severing the land of Brothers Construction Inc S 3 1 36 58 E a distance of 10000 to a Mag Nail with a metal cap stamped S d t LS 2661 set in a lead plug in a rock out cropping thence around the hill S 58 23 02 W a distance o f 10000 to a set TT-Bar thence up the hill N 3 1 36 58 W a distance of 10000 to a Mag Nail with a metal cap stamped Summit LS 2661 set in a rock on the line of Sally M Barr Charles M Ray Dorothy H Kirby Stanford Bruce Hendrickson and Carolyn H Wilson and being on the ridge thence with said line down the ridge N 58 23 02 E a distance of 10000 to the point of beginning and c o n t a g 023 acres more or less according to a survey conducted by personnel under the direct supervision of Steven E Haywood PLS 2661 with Summit Engineering Inc on April 232008

4 -1-

Unless stated otherwise any monument referred to herein as a TT-Bar is a steel T- Bar having three radial arms of one-half inch and is 18 inches in length with a metal cap stamped Summit Engineering LS 266 1 All bearings stated herein are Grid North and are based on a GPS observation taken at the site

Also granted to Grantee is a right of way easement for purposes of ingress and egress across the existing road located on property of Grantor

1) Being part of the property conveyed by that certain deed dated December 101996 from Ball F m Incorporated by its Successor Har-Co Fuels Incorporated a Kentucky corporation to Brothers Construction hcrecorded in the office of the Harlan County Clerk Harlan Kentucky in Deed Book 327 at page 359

2) Articles of Merger effective December 3 12000 Brothers Construction Inc - Brothers Hardware and Building Supply Inc recorded in said Clerkrsquos affice in Corporation Book 20 page 667

TO HAVE AND TO HOLD all of the hereinabove described real property together with

the appurtenances thereunto belonging unto the GRANTEE its successors and assigns forever The

GRANTOR hereby covenants to and with the GRANTEE that it is lawfully seized in fee simple of

said property that it has good right to sell and convey same as herein done that its title to said

property is clear perfect and unencumbered and that it will warrant generally the said title

IN WITNESS WHEREOF the GUNTOR has hereunto executed said deed by and

through its duly authorized officer as of the day and year first above written

BROTHERS hL4RDWARE ANI) BUILDING

CONSIDERATION CERTWICATE

We the O R and GRANTEE to the above Deed hereby certify that the

v57 -2-

consideration paid by the GRANTEE to the GRANTOR reflected above in this deed is $4000000

and is the fbll consideration paid for the subject property

BROTHERS HARDWARE AND BTJILDING SUPPLY INC G W T O R

EAST KENTUCKY NETWORK LLC GRANTlFfE

B GeEld F Robinette Manager

STATE OF KENTUCKY )

COUNTY0FHARLAN 1 -r

This Deed of Conveyance and Consideration Certificate was on this 2J day of

2008 produced before me and duly signed acknowledged and sworn to by Brothers

Hardware and Building Supply Inc a ICentuclcy Corporation (successor by merger to Brothers LyIBis=_ Construction Inc) by and through its President Britt Blanton GRANTOR herein

My Coampssion Expires - ~ g 4 9 J

Notary Public State of Kentucky at Large STATE OF KENTUCKX)

COUNTY OF FLOYD )

9 This Consideration Certificate in the hereinabove deed was on this dl day of

2008 produced before me and duly signed and sworn to by Gerald F Robinette

Manager of East Kentucky Network LLC a Kentucky Limited Liability Company for and on behalf

Y5zs -3 -

of said limited liability company GRANTEE herein

My Commission Expires ~ 2 - 7 ~ 27-9

fldggamp Notary Public State ofKen6clcy at Large

THIS INSTRUMENT PREPARED WITH BENEFIT OF TITLE

Attorney at Law PO Drawer 999 Harlan KY 4083 1 (606) 573-8857 ZOffice Pilesdecdsdeed brothers hardware to east kentucky nehvork Ilc wpd

STATE OF KENTUCKY

COUNTY OF HARLAN

I Wanda S Clem Clerk of the County in and for the County and State aforesaid certify that

day of ampJ 2008 atlQ y2Q k M lodged for record whereupon the same with the foregoing and this Certificate have been

the foregoing Deed of Conveyance was on the

duly recorded in my office in Deed Rook lsquoI 3 Page qc5d Witness my hand this 2008

WANDA S CLEM IX4RLAN COUNTY CLERK

BY DC

459 -4-

CASE NO 2008-00266

CONTAINS

LARGE OR OVERSIZED

MAP(S)

RECEIVED ON July 30 2008

www delorme com
ON THE FINANCIAL STATEMENTS
Stateinelits of iiicome
Statements of memberstrade equity
ON THE SUPPLEMENTARY INFORMATION

Page 2: DRESSEN - KY Public Service Commission cases/2008-00266/East Kentucky... · jul 3 0 2008 commlssion publlc service east kentucky network d/b/a a ppala chla n wlf?€l esss dressen