*Pages 1--4 from Microsoft Word - 59732.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- 1902 Released: September 21, 2006 DOMESTIC SECTION 214 APPLICATION FILED FOR THE TRANSFER OF CONTROL OF US LEC CORP. TO PAETEC CORP. STREAMLINED PLEADING CYCLE ESTABLISHED WC Docket No. 06- 171 Comments Due: October 5, 2006 Reply Comments Due: October 12, 2006 On September 1, 2006, PAETEC Corp. (“ PAETEC”) and US LEC Corp. (“ US LEC”) (together, the “Applicants”), filed an application, pursuant to section 63.04 of the Commission’s rules, 1 requesting authority to transfer control of US LEC to PAETEC. 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 the proposed transaction will result in: (1) PAETEC and its affiliates having a market share in the interstate, interexchange market of less than 10 percent; (2) PAETEC and its affiliates providing competitive telephone exchange services or access services only in geographic areas served by a dominant local exchange carrier (none of which is a party to the proposed transaction); and (3) neither of the Applicants nor their affiliates being dominant with respect to any service. 3 US LEC, a Delaware corporation, provides resold and facilities- based telecommunications services in 43 states 4 and the District of Columbia through its operating subsidiaries. 5 1 47 C. F. R § 63.04; see 47 U. S. C. § 214. 2 Counsel to PAETEC supplemented the application on September 18, 2006. 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. 3 See 47 C. F. R. § 63.03( b)( 2)( i). 4 US LEC provides domestic services in all but the following seven states: Alaska, Hawaii, Idaho, Maine, New Mexico, Rhode Island, and Vermont. 1 2 PAETEC, a privately held Delaware corporation, provides resold and facilities- based telecommunications services in 48 states 6 and the District of Columbia through its operating subsidiaries, 7 The following entities own a 10 percent or greater equity interest in PAETEC Corp.: New Moon Trust U/ D/ T Dated June 1, 1995 (11%), whose trustees Jeffrey P. Sudikoff and Joyce M. Sudikoff are both U. S. citizens; and Madison Dearborn Capital Partners III, L. P., a U. S. entity (11%). The California State Teachers’ Retirement System, a U. S. pension fund, has a 14 percent equity interest in Madison Dearborn Capital Partners III, L. P. Applicants assert that no other person or entity owns a 10 percent or more, direct or indirect, equity interest in PAETEC. PAETEC and US LEC propose to complete a merger whereby both companies will become wholly owned subsidiaries of a new publicly owned holding company (“ New PAETEC”), which is expected to change its name to “PAETEC Communications Corp.” 8 Immediately following consummation of the merger, no person or entity will directly or indirectly own 10 percent or more of the equity of New PAETEC. Additionally, the operating subsidiaries of US LEC will continue to provide service to their existing customers under the US LEC name. Applicants state that the proposed transaction will serve the public interest because: (1) it will enhance the quality and variety of telecommunications products and services offered to consumers and businesses; and (2) US LEC’s customers will continue to receive service under the US LEC name with no changes in the rates or terms and conditions of service. 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 and not in conformance with the Commission’s rules and policies. Pursuant to sections 1.415 and 1.419 of the Commission’s rules, 47 CFR §§ 1.415, 1.419, interested parties may file comments on or before October 5, 2006 and reply comments on or before October 12, 2006. 9 Unless otherwise notified by the Commission, Applicants are permitted to transfer the 5 US LEC’s regulated operating subsidiaries, each U. S. companies, are: US LEC Acquisition Co.; US LEC of Alabama Inc.; US LEC Communications Inc.; US LEC Corp.; US LEC of Florida Inc.; US LEC of Georgia Inc.; US LEC of Maryland Inc.; US LEC of New York; US LEC of North Carolina Inc.; US LEC of Pennsylvania Inc.; US LEC of South Carolina Inc.; US LEC of Tennessee Inc.; and US LEC of Virginia L. L. C. 6 PAETEC provides domestic services in all states except Alaska and Hawaii. 7 PAETEC’s regulated operating subsidiaries, each U. S. companies, include PAETEC Communications, Inc. and PAETEC Communications of Virginia, Inc. 8 New PAETEC expects to be listed upon completion of the transaction on the NASDAQ Stock Market under the ticker “CLEC.” 9 See 47 C. F. R. § 63.03( a). 2