*Pages 1--5 from Microsoft Word - 60224.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- 2021 Released: October 12, 2006 DOMESTIC SECTION 214 APPLICATION FILED FOR THE TRANSFER OF CONTROL OF DSL. NET, INC., DSLNET COMMUNICATIONS, LLC, AND DSLNET COMMUNICATIONS VA, INC. TO MDS ACQUISITION, INC. STREAMLINED PLEADING CYCLE ESTABLISHED WC Docket No. 06- 176 Comments Due: October 26, 2006 Reply Comments Due: November 2, 2006 On September 11, 2006, DSL. net, Inc., DSLnet Communications, LLC (DSLnet), and DSLnet Communications VA, Inc. (“ DSLnet VA”) and MDS Acquisition, Inc. (“ MDS”) (collectively, the “Applicants”), filed an application, pursuant to section 63.04 of the Commission’s rules, 1 requesting authority to transfer control of DSLnet and DSLnet VA to MDS. 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) Applicants and their affiliates holding less than a 10% share of the interstate, interexchange market; (2) Applicants and their affiliates providing competitive telephone exchange services or exchange access services (if at all) exclusively in geographic area served by dominant local exchange carriers (none of which is a party to the proposed transactions); and (3) none of the Applicants or their affiliates are dominant with respect to any service. 3 1 47 C. F. R § 63.04; see 47 U. S. C. § 214. On October 10, 2006, the Applicants filed a letter supplementing their application with additional ownership information. Additionally, on October 10, 2006, the Applicants filed a amendment to their application adding DSLnet VA as an applicant to the transaction. 2 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). 1 2 DSLnet, a Delaware limited liability company, is authorized to provide intrastate telecommunications services in 47 states and the District of Columbia. DSLnet’s affiliate, DSLnet VA, a Virginia corporation, is authorized to provide intrastate telecommunications services in Virginia. DSLnet and DSLnet VA also hold blanket domestic Section 214 authority to provide interstate telecommunications services. DSLnet and DSLnet VA, Inc. are wholly owned subsidiaries of DSL. net, Inc., a publicly traded Delaware corporation. The following entities own or control 10 percent or more of either DSLnet or DSLnet VA through ownership or control of DSL. net, Inc., the parent company to DSLnet and DSLnet VA: (1) VantagePoint Venture Partners III( Q), L. P., a U. S. limited partnership (12%); and (2) VantagePoint Venture Associates III, L. L. C., a U. S. limited liability partnership (14.0%). VantagePoint Venture Associates III, L. L. C. ’s ownership arises from being general partner with VantagePoint Venture Partners III( Q), L. P. and VantagePoint Venture Partners III, L. P, a U. S. limited partnership, which owns 1.6% of DSL. net, Inc. MDS, a Delaware corporation, is a wholly owned subsidiary of MegaPath Inc. (“ MegaPath”) that has been formed for the purpose of acquiring DSL. net, Inc. and its subsidiaries. MegaPath is a provider of a variety of managed Internet Protocol (“ IP”) services including cable and satellite system broadband Internet access, mobility services such as digital certificates, global remote access, personal firewalls, and remote access virtual private networks (“ VPN”), and security service. MegaPath and its affiliates, including MDS, do not currently offer any regulated telecommunications services and therefore do not hold any telecommunications authorizations from the Commission or any state regulatory authority. The following entities own or control 10 percent or more of MDS, through ownership or control of MegaPath, the parent company: (1) Fidelity Investors VI Limited Partnership, a U. S. entity (15%); and (2) US. Venture Partners VII, L. P, a U. S. entity (10.1%). Interest owned by Fidelity Investors VI Limited Partnership is held indirectly through the following entities, each of which has a direct interest in MegaPath of less than 10 percent and is a U. S. entity: Fidelity Ventures IV Limited Partnership, Fidelity Ventures IV- E Limited Partnership, Fidelity Ventures Principals IV Limited Partnership, and Fidelity Ventures Principals IV- E Limited Partnership. Fidelity Investors VI Limited Partnership is controlled by Fidelity Investors Management Corp., a general partner of Fidelity Investors VI Limited Partnership. Fidelity Investors Management Corp. is a U. S. entity and its officers and directors are all U. S. citizens. U. S. Venture Partners VII, L. P., is a controlled by Presidio Management Group VII, L. L. C, a U. S. entity, and its managing members are all U. S. citizens. Presidio Management Group VII, L. L. C. is a general partner of U. S. Venture Partners VII, L. P., and is also the general partner of 2180 Associates Fund VII, L. P., USVP Entrepreneur Partners VII- A, L. P., and USVP Entrepreneur Partners VII-B, L. P., each of which holds less than a one percent interest in MegaPath, and is a U. S. entity. No other entity holds a 10% or greater direct or indirect interest in MegaPath. None of the above entities holds a 10% or greater interest in a domestic telecommunications services providers. Pursuant to the Purchase Agreement, on August 28, 2006, MDS purchased certain convertible promissory notes of DSL. net, Inc. which, by their terms, will allow MDS, subject to 2 5 In addition, one copy of each pleading must be sent to each of the following: (1) The Commission’s duplicating contractor, Best Copy and Printing, Inc., 445 12th Street, S. W., Room CY- B402, Washington, D. C. 20554, www. bcpiweb. com; phone: (202) 488- 5300 fax: (202) 488- 5563; (2) Cecilia Seppings, Competition Policy Division, Wireline Competition Bureau, 445 12th Street, S. W., Room 5- C230, Washington, D. C. 20554; email: cecilia. seppings@ fcc. gov; (3) Gail Cohen, Competition Policy Division, Wireline Competition Bureau, 445 12th Street, S. W., Room 5- C111, Washington, D. C. 20554; e- mail: gail. cohen@ fcc. gov; (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 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 Gail Cohen at (202) 418- 0939. - FCC - 5