*Pages 1--5 from Microsoft Word - 58835.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- 1573 Released: August 1, 2006 DOMESTIC SECTION 214 APPLICATION FILED FOR TRANSFER OF CONTROL OF IBASIS, INC. TO KPN TELECOM B. V. STREAMLINED PLEADING CYCLE ESTABLISHED WC Docket No. 06- 140 Comments Due: August 15, 2006 Reply Comments Due: August 22, 2006 On July 7, 2006, iBasis, Inc. (“ iBasis”) and KPN Telecom B. V. (“ KPN”) (collectively, the “Applicants”) filed an application, pursuant to section 63.04 of the Commission’s rules, 1 to transfer control of iBasis, a holder of blanket domestic and international Section 214 authorizations, to KPN. 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: (1) the proposed transaction would result in KPN having a market share in the interstate, interexchange market of less than 10 percent; (2) KPN would provide competitive telephone exchange services or exchange access services (if at all) exclusively in geographic areas served by a dominant local exchange carrier that is not a party to this transaction; and (3) neither of the Applicants is dominant with respect to any service. 3 iBasis is a Delaware publicly traded corporation located in Burlington, Massachusetts that provides large wholesale business service and small retail business services to customers worldwide. iBasis offers two different retail services: disposable calling cards and an electronic 1 47 C. F. R. § 63.04; see 47 U. S. C. § 214. 2 Applicants have also filed an application for consent to transfer authorization for international services. Any action on this domestic 214 application is without prejudice to Commission action on other related pending applications. On July 25, 2006, Applicants filed a supplement to their application. See Supplement to Joint Application for Transfer of Control, WC Docket No. 06- 140 (filed July 25, 2006). 3 See 47 C. F. R. § 63.03( b)( 2)( i). 1 2 prepaid calling card service sold directly to customers on a website. No person or entity holds a 10% or greater interest in iBasis. KPN, a private limited liability company incorporated under the laws of the Netherlands, provides international wholesale voice services. KPN is a wholly owned subsidiary of Royal KPN, the legacy carrier located in, and providing service to, the Netherlands. Royal KPN is a publicly- listed company with no controlling shareholder. Royal KPN offers a full range of communications service in the Netherlands, including retail voice, Internet, data, and mobile services. Royal KPN, through its affiliates, also provides international wholesale transport services to carriers throughout the world. Neither Royal KPN nor KPN offer intrastate or interstate, interexchange services in the United States, although KPN has subsidiaries that offer international services. The following entities or individuals own a 10% or greater interest in Royal KPN: Capital Group International, Inc. (11.9%) (CGII), a California corporation, and Capital Research and Management Company (13%) (“ CRMC”), a Delaware corporation. Both CGII and CRMC are subsidiaries of The Capital Group Companies, Inc. (“ CGC”), a privately held Delaware investment management corporation. KPN states that it is not aware of any controlling share holder of CGC. Royal KPN states that it is not aware of any other entities that hold a 10% or greater direct or indirect interest in the company Pursuant to a Stock Purchase Agreement dated June 21, 2006, between KPN and iBasis, KPN will contribute to a newly- formed KPN subsidiary, KPN Global Carrier Services B. V. (“ KGCS”), a Netherlands corporation. As part of this reorganization, a number of KPN-affiliated carriers involved in the provision of KPN International Wholesale Voice Services will be folded into, or become part of, KGCS. iBasis will then, through a separate pro forma transaction, acquire the capital stock of KGCS and KPN International Network Services, Inc., a holder of international section 214 authority. KPN will make a cash payment to iBasis of $55 million dollars. In return, iBasis will issue approximately 40 million shares of its common stock to KPN, representing approximately a 51% ownership interest in iBasis. Thus, KGCS will become a wholly- owned subsidiary of iBasis, and iBasis will be controlled by KPN. The remaining shares of iBasis will continue to be publicly traded, and iBasis will continue to be managed by its current U. S. management team. Applicants submit that the proposed transaction will serve the public interest. Applicants contend that the transaction will allow iBasis to compete more effectively in the wholesale transport market. Specifically, Applicants maintain that the transaction is expected to yield significant synergies and cost savings resulting from better termination costs, lower transmission costs, and other cost savings. Applicants argue that KPN’s customers will gain geographically broader and more cost- effective international transport and termination. Finally, Applicants state that the transaction will be conducted in a manner that will be transparent to current customers of iBasis. 2 5 duplicating contractor, Best Copy and Printing, Inc., Portals II, 445 12th Street, S. W., Room CYB402, Washington, D. C. 20554, telephone: (202) 488- 5300, fax: (202) 488- 5563, or via e-mail www. bcpiweb. com. For further information, please contact Cecilia Seppings at (202) 418- 1588, or Dennis Johnson at (202) 418- 0809. - FCC - 5