*Pages 1--5 from Microsoft Word - 61167.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- 2363 Released: November 22, 2006 DOMESTIC SECTION 214 APPLICATION FILED FOR THE ACQUISITION OF CERTAIN ASSETS OF RCN TELECOM SERVICES, INC. BY ASTOUND BROADBAND, LLC STREAMLINED PLEADING CYCLE ESTABLISHED WC Docket No. 06- 209 Comments Due: December 6, 2006 Reply Comments Due: December 13, 2006 On November 6, 2006, RCN Telecom Services Inc. (“ Transferor” or “RCN”), and Astound Broadband, LLC (“ Transferee” or “Astound”) (collectively, the “Applicants”), filed a joint application, pursuant to section 63.04 of the Commission’s rules, 1 requesting authority for the acquisition of certain assets of RCN by Astound. 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 the proposed transaction would result in: (1) Applicants and their affiliates combined will hold less than a 10% share of the interstate, interexchange market; (2) Applicants and their Affiliates will provide local exchange service only in areas served by dominant local exchange carriers (none of which is a party to the proposed transaction) and; (3) none of the Applicants or their Affiliates is dominant with respect to any service that they provide. 3 RCN, a Pennsylvania corporation, is a wholly- owned subsidiary of RCN Corporation, a publicly-traded Delaware corporation. RCN and certain of its affiliates provide video, data and voice services in the Boston, New York, Philadelphia/ Lehigh Valley, Chicago, Los Angeles, San Francisco, and Washington, D. C. metropolitan markets. 4 All of the services provided by RCN and its affiliates are 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). 4 RCN Affiliates that provide competitive telecommunications services outside of California include: RCN Telecom Services of Illinois, LLC; RCN Telecom Services of Washington, D. C., Inc.; RCN Telecom Services of Massachusetts, Inc.; RCN Telecom Services of Philadelphia, Inc.; RCN- BecoCom, Inc.; RCN Communications of New York, LLP; and Starpower Communications, LLC. 1 2 competitive in nature and neither RCN nor any of its affiliates holds a dominant position in any market. RCN holds blanket domestic Section 214 authority to provide global facilities- based and global resale service. RCN is also authorized to provide local exchange and intrastate interexchange telecommunications services in California and is making the necessary filings to the California Public Utilities Commission to assign those operations to Astound. Astound, a Washington limited liability company, is a direct, wholly- owned subsidiary of WaveDivision Holdings, LLC (“ Wave”), a Delaware limited liability company. Together, Wave and Astound currently serve approximately 155,000 cable television, high- speed data and telephone customers in western Washington and California. Astound holds blanket domestic Section 214 authority to provide global resale service. The following entities directly or indirectly own or control a 10% or greater equity interest in Astound: WaveDivision Capital, LLC (10% of Class A Units in Wave), 5 a U. S. entity; Sandler Capital Partners V, L. P. (60.19% Class A Units in Wave), a U. S. entity; SCP V FTE WaveDivision Holdings, L. P. (27.01 % Class A Units in Wave), a U. S. entity; WaveDivision Networks, LLC (85% of Class B & C Units in Wave), a U. S. entity; and Steve Friedman (15% of Class B & C Units in Wave), a U. S. citizen. The following individuals, each a U. S. citizen, are members of WaveDivision Capital, LLC: Stanley A. Roberts, Rebecca M. Roberts, David E. Roberts, Vicki J. Golden- Roberts, Steven B. Weed, Marie McCauley, Steve Friedman, Sharon Friedman, Richard Kemp, Lynn Kemp, and Jon Staenberg. The general partner of Sandler Capital Partners V, L. P. and SCP V FTE WaveDivision Holdings, L. P. is Sandler Investment Partners, L. P., a U. S. entity. Sandler Capital Management, a U. S. entity, is the general partner of Sandler Investment Partners, L. P. The following individuals, each a U. S. citizen, own or control 10% or more of Sandler Capital Management: Andrew Sandler, Michael Marocco, John Kornreich, Douglas Schimrnel, and Harvey Sandler. The sole member of WaveDivision Networks, LLC is Steven Weed, a U. S. citizen. No other person or entities will directly or indirectly own a 10% or greater interest in Astound, and none of the aforementioned entities or persons have a 10% or greater interest in any telecommunications carrier other than Astound. Pursuant to an Asset Purchase Agreement dated August 17, 2006, Applicants propose to complete a transaction through which Astound will acquire certain assets of RCN, including the customer accounts associated with RCN’s domestic interstate telephone service in Northern California. The proposed transaction will not affect RCN’s operations outside of the affected service area. Upon the transfer of the customers and related assets, Astound will provide service to these customers under comparable rates, terms, and conditions as currently being provided by RCN. All of the affected customers will receive notice in compliance with the Commission's rules. 6 Applicants assert that the proposed transaction will serve the public interest because the transaction will invigorate competition in Northern California by expanding Astound’s customer base, giving Astound a greater presence in the telecommunications market in California, and making it a more viable competitor in all of its markets. The Applicants state that RCN’s business has been primarily focused on the Boston- to- Washington northeast corridor and Chicago, and its operations in California have not been of sufficient scope and scale to enable it to become an effective competitor in the 5 The limited liability company agreement pursuant to which WaveDivision Holdings, LLC is organized authorizes the issuance of three classes of units - A, B, and C. The three classes of units hold different rights to distribution of proceeds of the company (akin to common and preferred stock in a corporation). 6 Applicants state that, in addition to the telecommunications assets described, RCN has also agreed to sell its cable television and open video system operations in Northern California to Astound. 2 5 - FCC - 5