*Pages 1--5 from Microsoft Word - 57940.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 06- 1323 Released: June 27, 2006 DOMESTIC SECTION 214 APPLICATION FILED FOR TRANSFER OF CONTROL OF LOOKING GLASS NETWORKS HOLDING CO., INC. TO LEVEL 3 COMMUNICATIONS, INC. STREAMLINED PLEADING CYCLE ESTABLISHED WC Docket No. 06- 116 Comments Due: July 11, 2006 Reply Comments Due: July 18, 2006 On June 20, 2006, Looking Glass Networks Holding Co., Inc. (“ Looking Glass”) and Level 3 Communications, Inc. (“ Level 3”) (together, “Applicants”) filed an application (“ Application”) pursuant to section 63.04 of the Commission’s rules 1 requesting authority to transfer control of Looking Glass to Level 3. 2 Applicants assert that this transaction is entitled to presumptive streamlined treatment pursuant to section 63.03( b)( 2)( i) of the Commission’s rules because immediately following the transaction: (1) Level 3 will hold less than a ten percent (10%) share of the interstate, interexchange market; (2) Level 3 will provide exchange access services only in geographic areas served by dominant local exchange carriers (none of which are parties to the proposed transaction); and (3) neither of the Applicants nor their affiliates are dominant with respect to any service. 3 Looking Glass, a Delaware corporation, is a holding company and the ultimate sole owner of Looking Glass Networks, Inc. (“ Looking Glass Operations”) and Looking Glass Networks of Virginia, Inc. (“ Looking Glass Virginia”) (together, the “Looking Glass Operating 1 47 C. F. R § 63.04; see 47 U. S. C. § 214. 2 Applicants have also filed an application 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. 3 47 C. F. R. § 63.03( b)( 2)( i). 1 2 Companies”). Looking Glass Operations, a Delaware corporation, is a non- dominant provider of high- capacity data transport services as well as high- capacity dark fiber and carrier- neutral collocation services for enterprise and carrier customers in 14 major markets in the United States. Looking Glass Operations is a wholly- owned, direct subsidiary of Looking Glass. Looking Glass Virginia, a Virginia corporation, provides interstate, intrastate, and local data transport services in Virginia, and is a wholly- owned, direct subsidiary of Looking Glass Operations, and a wholly- owned, indirect subsidiary of Looking Glass. Level 3, a Delaware corporation, is a global communications and information services company that offers, through its operating subsidiaries, a wide range of communications services in North America, Europe, and Asia, including Internet- protocol- based services, broadband transport, collocation services, and patented Softswitch- based managed modem and voice services. Level 3 Communications, LLC (“ Level 3 LLC”), a limited- liability company, is Level 3’s principal, indirect operating subsidiary in the United States. Level 3 LLC is a wholly- owned subsidiary of Level 3 Financing, Inc. (“ Level 3 Financing”), and Level 3 Financing, in turn, is a wholly- owned subsidiary of Level 3. Level 3 is a publicly- traded company listed on NASDAQ. One entity owns or controls 10% or more of Level 3: Southeastern Asset Management, Inc. (“ SAM”), a Tennessee corporation, holds sole or shared voting rights for approximately 18.83% of the outstanding shares of Level 3. 4 On June 2, 2006, Looking Glass and Level 3 entered into an Agreement and Plan of Merger (“ Agreement”) to allow Level 3 to acquire all of the outstanding shares of Looking Glass. Level 3 will acquire Looking Glass in a simultaneous three- step transaction. First, Looking Glass will merge with Eldorado Acquisition One, LLC (“ Eldorado”), a Delaware limited- liability company, established by Level 3 for the purpose of merging with Looking Glass, with Looking Glass surviving. Second, Level 3 will immediately contribute all of the common shares of Looking Glass to Level 3 Financing. Third, Level 3 Financing will contribute all of the common shares of Looking Glass to Level 3 LLC. Following the completion of these three steps, Looking Glass will then be a direct subsidiary of Level 3 LLC, and the Looking Glass Operating Companies will be indirect subsidiaries of Level 3. Applicants confirm that no existing shareholder or controlling group of shareholders of Looking Glass will hold a 10% or greater direct or indirect interest in Level 3 following the proposed transaction. Applicants state that the proposed transaction will serve the public interest, convenience and necessity because: (1) the Looking Glass Operating Companies will continue to operate their respective facilities and provide service to their existing customers at the same rates, terms, and conditions, ensuring a seamless transition for those customers; and (2) it will allow Level 3 to use its acquisition of Looking Glass to expand further into the enterprise market. 5 4 SAM holds voting rights for outstanding shares that are otherwise owned by other entities for whom SAM acts as an investment advisor. None of the other owners of outstanding shares of Level 3 whose shares are voted by SAM owns a 10% or greater direct or indirect interest in Level 3. 5 Applicants assert that the proposed transaction will have no impact on any participant’s share of the local exchange, exchange access, or interstate interexchange markets. Applicants state that even if Level 3 derived all 2 5 (4) Susan O’Connell, Policy Division, International Bureau, 445 12th Street, S. W., Room 7- B544, Washington, D. C. 20554; email: susan. o’connell@ fcc. gov; and (5) James Bird, Office of General Counsel, 445 12th Street, S. W., Room 8- C824, Washington, D. C. 20554; e- mail: james. bird@ fcc. gov. Filings and comments are also available for public inspection and copying during regular business hours at the FCC Reference Information Center, Portals II, 445 12th Street, S. W., Room CY- A257, Washington, D. C. 20554. They may also be purchased from the Commission’s duplicating contractor, Best Copy and Printing, Inc., Portals II, 445 12th Street, S. W., Room CY-B402, Washington, D. C. 20554, telephone: (202) 488- 5300, fax: (202) 488- 5563, or via e- mail www. bcpiweb. com. People with Disabilities: To request materials in accessible formats for people with disabilities (braille, large print, electronic files, audio format), send an e- mail to fcc504@ fcc. gov or call the Consumer & Governmental Affairs Bureau at 202- 418- 0530 (voice), 202- 418- 0432 (tty). For further information, please contact Cecilia Seppings at (202) 418- 1588, or Al Lewis at (202) 418- 1561. - FCC - 5