*Pages 1--6 from Microsoft Word - 56656.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- 930 Released: April 26, 2006 DOMESTIC SECTION 214 APPLICATION FILED FOR TRANSFER OF CONTROL OF ICG TELECOM GROUP, INC. TO LEVEL 3 COMMUNICATIONS, LLC STREAMLINED PLEADING CYCLE ESTABLISHED WC Docket No. 06- 91 Comments Due: May 10, 2006 Reply Comments Due: May 17, 2006 On April 17, 2006, ICG Communications, Inc. (“ ICG”) and Level 3 Communications, LLC (“ Level 3”) (together, “Applicants”) filed an application pursuant to sections 63.03 and 63.04 of the Commission’s rules 1 requesting authority to transfer control of ICG Telecom Group, Inc. (“ ICG Telecom”), a holder of domestic and international Section 214 authorizations, 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) Applicants and their affiliates combined will hold less than a ten percent (10%) share of the interstate, interexchange market; (2) Applicants and their affiliates will provide U. S. local exchange services only in geographic areas served by dominant local exchange carriers (none of which are parties to the proposed transaction); and (3) none of the Applicants or their affiliates are dominant with respect to any service. 3 ICG, a Delaware corporation, through its operating subsidiary ICG Telecom, provides a variety of regulated and unregulated voice and Internet services, including Ethernet and Private 1 47 C. F. R §§ 63.03, 63.04; see 47 U. S. C. § 214. 2 Counsel for Applicants filed a supplement to this application on April 21, 2006 (Letter from Edward S. Quill, Jr. and Michael W. Fleming, Counsel for Applicants, to Marlene H. Dortch, Secretary, FCC, WC Docket No. 06- 91 (filed April 21, 2006) (Applicants Apr. 21, 2006 Letter)). 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 47 C. F. R. § 63.03( b)( 2)( i). 1 2 Line transport services, dedicated Internet access, PRI, and hosted Voice over Internet Protocol. ICG Telecom provides these services to businesses, government agencies and resellers, primarily in Colorado and Ohio, using its extensive fiber- optic network in those states. ICG Telecom, a Colorado corporation, is a wholly- owned subsidiary of ICG Holdings, Inc, a Colorado- based holding company which is itself wholly- owned by ICG. ICG is wholly- owned by MCCC ICG Holdings, LLC, a holding company located in Virginia. The following entities own or control 10% or more of the equity of MCCC ICG Holdings, LLC: M/ C Venture Partners V, L. P., a United States private equity venture fund (47%); Columbia Capital Equity Partners III (QP), L. P., a United States private equity venture fund (27%); and Columbia Capital Equity Partners III (Cayman), L. P., a Cayman Islands private equity venture fund (15%). The following entities own or control 10% or more of M/ C Venture Partners V, L. P.: California Public Employees Retirement System, 4 a United States pension fund (12%); California State Teachers Retirement System, 5 a United States pension fund (14%); and M/ C VP V, L. L. C., a United States limited liability company that is the General Partner of M/ C Venture Partners V, L. P. The following individuals, all United States citizens, own or control 10% or more and are Managers of M/ C VP V, L. L. C.: James F. Wade, David D. Croll, and Peter H. O. Claudy. Columbia Capital Equity Partners (Cayman) III, Ltd., a Cayman Islands investment company, owns or controls 10% or more and is the General Partner of Columbia Capital Equity Partners III (Cayman), L. P. The following entity owns or controls 10% or more of both Columbia Capital Equity Partners III (Cayman), Ltd. and Columbia Capital Equity Partners III (QP), L. P.: Columbia Capital Equity Partners III, L. P., and it is the sole shareholder of Columbia Capital Equity Partners (Cayman) III, Ltd. and the General Partner of Columbia Capital Equity Partners III (QP) L. P. The following entity owns or controls 10% or more and is the General Partner of Columbia Capital Equity Partners III, L. P.: Columbia Capital III, L. L. C., a United States investment company. The following individuals, all United States citizens, own or control 10% or more and are Managing Members of Columbia Capital III, L. L. C.: James B. Fleming, Jr., R. Philip Herget, III, and Harry F. Hopper, III. Level 3, a Delaware limited- liability company, provides domestic and international communications and information services. It 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 4 Interest holder is a retirement and health benefit pension fund with over 1.3 million members and assets of over $150 billion. 5 Interest holder is the largest public teacher pension organization, with more than 600,000 members and assets of over $88 billion. 2 3 Level 3 Communications, Inc., a Delaware corporation which offers a wide range of communications services over its 23,000- mile broadband fiber optic network, including IP- based services, broadband transport, collocation services, and patented Softswitch- based managed modem and voice services. One entity owns or controls 10% or more of Level 3 Communications, Inc.: Southeastern Asset Management, Inc. (“ SAM”), a Tennessee corporation, holds sole or shared voting rights for approximately 18% of the outstanding shares of Level 3 Communications, Inc. 6 SAM does not hold a seat on the board of directors of Level 3 Communications, Inc. On April 14, 2006, ICG’s parent, MCCC ICG Holdings, LLC and Level 3 entered into a Stock Purchase Agreement (“ Agreement”) to allow Level 3 to acquire all of the stock of ICG. Following consummation of the proposed transaction, ownership of ICG will be transferred from MCCC ICG Holdings, LLC to Level 3, and ICG will be a direct, wholly- owned subsidiary of Level 3. Applicants confirm that, other than the entities identified in the application, no other entity will hold a 10% or greater interest in either of the Applicants following the proposed transaction. 7 Applicants state that the proposed transaction will serve the public interest, convenience and necessity because it will provide ICG with access to Level 3’s technical, managerial, and financial strengths, which will ensure the continued viability of ICG. Applicants state that the proposed changes in ownership of ICG will not inconvenience, confuse or otherwise harm ICG Telecom’s customers. Applicants further assert that immediately following the proposed transaction, ICG Telecom’s customers will continue to receive service under the same rates, terms and conditions of service as those which customers currently receive, and no approval is sought by Applicants to discontinue any type of service. In addition, Applicants state that both Level 3 and ICG are relatively minor participants in the local exchange and exchange access markets, 8 and even if all of ICG’s revenue was treated as interstate, interexchange services, such additional revenue would not increase Level 3’s percentage of the interstate market by even a percentage point. 9 6 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 Communications, Inc. whose shares are voted by SAM owns a 10% or greater direct or indirect interest in Level 3 Communications, Inc. 7 Applicants Apr. 21, 2006 Letter at 1. 8 Id. at 2. See 2006 Form 10K, Item 7, of Level 3 Communications, Inc. available at: http:// lvlt. client. shareholder. com/ edgar. cfm, reflecting core communications revenues for Level 3, much of which is not attributable to local exchange or exchange access services, of $794 million. The addition of all ICG revenues would not add more than $70 million to this total. 9 Id. Applicants state that even with Level 3’s recent acquisition of WilTel Communications, LLC (WilTel) and Progress Telecom, LLC (Progress), and Level 3’s proposed acquisition of ICG Telecom, Level 3 will continue to hold an insignificant share of the U. S. domestic market for interstate interexchange services. In 2004, the most recent year for which the Commission has publicly disclosed revenue data, the Applicants indicate that the combined toll revenues (of which only a portion is interstate) for Level 3 and WilTel was less than $1. 7 3 6 (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 Tracey Wilson- Parker at (202) 418- 1394, or Al Lewis at (202) 418- 1561. - FCC - 6