*Pages 1--5 from Microsoft Word - 52727.doc* PUBLIC NOTICE Federal Communications Commission 445 12 th Street, S. W. Washington, D. C. 20554 News Media Information 202 / 418- 0500 Fax- On- Demand 202 / 418- 2830 TTY 202 / 418- 2555 Internet: http:// www. fcc. gov ftp. fcc. gov DA 05- 2867 Released: October 31, 2005 DOMESTIC SECTION 214 APPLICATION FILED FOR TRANSFER OF CONTROL OF NETWORK TELEPHONE CORPORATION TO TALK AMERICA INC. AND TALK AMERICA HOLDINGS, INC. STREAMLINED PLEADING CYCLE ESTABLISHED WC Docket No. 05- 300 Comments Due: November 14, 2005 Reply Comments Due: November 21, 2005 On October 19, 2005, Network Telephone Corporation (“ Network Telephone”), Talk America Inc. (“ Talk America”) and Talk America Holdings, Inc. (“ Talk Holdings,” and together with Talk America, “Talk”), filed an application, pursuant to sections 63.03 and 63.04 of the Commission’s rules, 1 seeking approval to transfer control of Network Telephone to Talk. 2 Applicants assert that this transaction is entitled to presumptive streamlined treatment under section 63.03( b)( 2)( i) of the Commission’s rules because after the proposed transaction: (1) Talk will have a market share in the interstate, interexchange market of less than ten percent; (2) Talk will provide competitive services exclusively in areas served by dominant local carriers that are not parties to the proposed transaction; and (3) the Applicants are not currently dominant with respect to any domestic service, and will not become dominant with respect to any domestic service after consummation of the proposed transaction. 3 1 47 C. F. R §§ 63.03, 63.04; see 47 U. S. C. § 214. 2 Network Telephone and Talk are referred to herein collectively as the “Applicants.” Applicants are also filing applications for transfer of control associated with authorization for international services. Any action on this domestic 214 application is without prejudice to Commission action on other related, pending applications. The Commission previously approved the transfer of control of Network Telephone from NT Corp. to ITC DeltaCom, Inc., however the transfer was never consummated. See Notice of Streamlined Domestic 214 Applications Granted, WC Docket Nos. 04- 392 & 04- 393, DA 04- 3649, Public Notice (rel. Nov. 19, 2004); Letter from Yaron Dori, Partner, Hogan & Hartson L. L. P., to Marlene H. Dortch, Secretary, FCC, WC Docket Nos. 04- 392 & 04- 393 and File Nos. SES- T/ C- 20041001- 01572 & ITC- T/ C- 20041001- 00386/ 390 (filed Feb. 4, 2005). 3 47 C. F. R. § 63.03( b)( 2)( i). 1 2 Network Telephone, a privately- held Florida corporation, is a facilities- based telecommunications company that provides local and long distance telephone service, and data services primarily to small and medium sized business customers in Alabama, Florida, Georgia, Kentucky Louisiana, Mississippi, North Carolina, South Carolina, and Tennessee. Network Telephone is a direct, wholly owned subsidiary of NT Corporation (“ NT Corp.”), a privately-held Delaware corporation. The following entities hold ten percent or greater ownership interests in NT Corp.: (1) Spectrum Equity Investors III, L. P., a Delaware limited partnership, (12.85%); (2) Private Equity Investors IV, L. P., a Delaware limited partnership, (16.72%); and (3) Diamond One LLC, a Florida limited liability corporation, (17.05%). Talk America, a Pennsylvania corporation, is authorized to provide local and long distance telecommunications services virtually nationwide and offers a bundle of these phone services to residential and small business customers. Talk America is a direct, wholly owned subsidiary of Talk Holdings, a publicly held Delaware corporation. No entity owns directly or indirectly ten percent or more of the equity of Talk Holdings. In addition to Talk America, Talk Holdings has three other subsidiaries that offer domestic telecommunications services: (1) Talk America of Virginia, Inc., which provides local and long distance services to customers in Virginia; (2) The Other Phone Company, Inc., which provides local and long distance services to customers in Alabama, Florida, Georgia, Kentucky, Louisiana, Mississippi, North Carolina, South Carolina, and Tennessee; and (3) LDMI Telecommunications, Inc., which provides local and long distance telephone service, and data services primarily to small and medium sized business customers in Michigan and Ohio and long distance services throughout the United States. On October 18, 2005, the parties signed an Agreement and Plan of Merger (the “Agreement”) providing for Talk America’s acquisition of all of the issued and outstanding capital stock of NT Corp. Following completion of the Transaction, Network Telephone will remain a direct, wholly owned subsidiary of NT Corp. and NT Corp. will be a direct, wholly owned subsidiary of Talk America, which itself will remain a direct, wholly owned subsidiary of Talk Holdings. Applicants state that the proposed transaction is in the public interest because the transaction will be generally transparent to Network Telephone’s customers. The Applicants also assert that the transfer of control will not result in a change of carrier and Network Telephone will continue to provide the same services at the same rates, terms, and conditions as at present and any future changes in the rates, terms, and conditions of service will be made consistent with applicable law. GENERAL INFORMATION The transfer of control identified herein has been found, upon initial review, to be acceptable for filing as a streamlined application. The Commission reserves the right to return any transfer of control application if, upon further examination, it is determined to be defective 2 5 For further information, please contact Tracey Wilson- Parker at (202) 418- 1394, or Adam Kirschenbaum at (202) 418- 7280. - FCC - 5