PUBLIC NOTICE FEDERAL COMMUNICATIONS COMMISSION 445 12th STREET S.W. WASHINGTON D.C. 20554 News media information 202-418-0500 Internet: http://www.fcc.gov (or ftp.fcc.gov) TTY (202) 418-2555 DA No. 11-544 Thursday March 24, 2011TEL-01489 Report No. Section 214 Applications (47 C.F.R. § 63.18); Section 310(b)(4) Requests INTERNATIONAL AUTHORIZATIONS GRANTED The following applications have been granted pursuant to the Commission’s streamlined processing procedures set forth in Section 63.12 of the Commission’s rules, 47 C.F.R. § 63.12, other provisions of the Commission’s rules, or procedures set forth in an earlier public notice listing applications accepted for filing. Unless otherwise noted, these grants authorize the applicants (1) to become a facilities-based international common carrier subject to 47 C.F.R. § 63.22; and/or (2) to become a resale-based international common carrier subject to 47 C.F.R. § 63.23; or (3) to exceed the 25 percent foreign ownership benchmark applicable to common carrier radio licensees under 47 U.S.C. § 310(b)(4). THIS PUBLIC NOTICE SERVES AS EACH NEWLY AUTHORIZED CARRIER'S SECTION 214 CERTIFICATE. It contains general and specific conditions, which are set forth below. Newly authorized carriers should carefully review the terms and conditions of their authorizations. Failure to comply with general or specific conditions of an authorization, or with other relevant Commission rules and policies, could result in fines and forfeitures. Petitions for reconsideration under Section 1.106 or applications for review under Section 1.115 of the Commission's rules in regard to the grant of any of these applications may be filed within thirty days of this public notice (see Section 1.4(b)(2)). An updated version of Sections 63.09–.25 of the rules, and other related sections, is available at http://www.fcc.gov/ib/pd/pf/telecomrules.html. For additional information, please contact the FCC Reference and Information Center, Room CY-A257, 445 12th Street SW, Washington, D.C. 20554, (202) 418-0270. Page 1 of 6 ISP-PDR-20110106-00001 E Date of Action: 03/17/2011 Covad Communications Group, Inc. (Covad), NextWeb, Inc. (NextWeb) and U.S. TelePacific Corp. (TPAC) (collectively, "Petitioners") request a declaratory ruling under section 310(b)(4) of the Communications Act of 1934, as amended, 47 U.S.C. § 310(b)(4), that it would serve the public interest to allow greater than 25% indirect foreign ownership of NextWeb. Petitioners filed a letter on March 11, 2011 updating and supplementing their Petition (collectively the Petition and the March 11, 2011 letter shall be referred to as the "Petition"). NextWeb holds licenses to provide common carrier fixed point-to-point microwave services as well as multiple leases for spectrum held under local multipoint distribution service licenses. Petitioners' request is made in connection with an application for transfer of control of NextWeb from Covad to TPAC under which NextWeb will be wholly owned by TPAC. See ULS File No. 0004550716. According to the Petitioners, NextWeb is a California corporation. TPAC, a California corporation, is a wholly-owned subsidiary of U.S. TelePacific Holdings Corp. (TPAC Holdings), a Delaware corporation. TPAC Holdings is owned by the following entities: (1) Investcorp S.A., an entity organized in the Cayman Islands, a World Trade Organization (WTO) Member country, indirectly through various entities organized under the laws of the United States or the Cayman Islands (9.57% equity and 34.07% voting; all foreign, all originating from WTO Member countries except 0.7% which is of unknown origin); (2) six Cayman Islands partnerships, owned by individual citizens and institutional investors from WTO Member countries, which have management agreements with Investcorp S.A. to vote their shares of TPAC Holdings (22.2 % equity); (3) individual citizens of WTO Member countries through Investcorp Secondary Partners I L.P. (7.25% equity); (4) individual citizens of WTO Member countries through Investcorp TPC L.P. (0.48% equity and 5.53% voting); (5) Clarity Partners, L.P., a Delaware limited partnership (20.71% equity and voting, of which 4.24% constitutes foreign investment of WTO origin); (6) Clarity Advisors L.P., a Delaware limited partnership (2.98% equity and voting, all of U.S. origin); (7) Clarity Associates, a Delaware limited partnership (0.28% equity and voting, all of U.S. origin); (8) ten private equity funds, all organized in the Cayman Islands, held by individual citizens of WTO Member countries (collectively 24.1% equity and voting, all foreign, all of WTO origin); and, (9) U.S. individuals and approximately 50 U.S. trusts for U.S. individuals (12.33% equity and voting). The foreign interests in TPAC Holdings are approximately 67.84% (equity) and 63.70% (voting, of which approximately 0.7% is of unknown origin and thus deemed to originate from a non-WTO Member country). According to the Petitioners, Investcorp S.A. is wholly owned by Investcorp Holdings Limited (Investcorp Holdings), a Cayman Islands entity which is owned by (1) CP Holdings Limited, a Cayman Islands entity (40.4% voting); (2) Investcorp Bank B.S.C. (Investcorp Bank), a bank organized under the laws of Bahrain (100% equity and 22.1% voting); (3) Ownership Holdings Limited, a Cayman Islands entity (19.8% voting); (4) SIPCO Limited (SIPCO) a Cayman Islands entity (9.8% voting); and, (5) Investcorp Funding Limited a Cayman Islands entity (7.9% voting). CP Holdings Limited is 55.6% owned by Ownership Holdings Limited, a Cayman Islands entity; and 44.4% owned by two Cayman Islands entities, which are each owned by citizens of WTO Member countries. Investcorp Bank is owned by: (1) CP Holdings Limited (40.4% equity and voting); (2) Ownership Holdings (19.8% equity and voting); (3) SIPCO (9.8% equity and voting); (4) various public owners of Global Depository Receipts and of unknown citizenship (0.7% equity and voting); (5) approximately 300 public stockholders (21.4% equity and voting) who are citizens of WTO Member countries; and, (6) Investcorp Funding Limited (7.9% equity and voting -- as treasury shares). Ownership Holdings Limited is owned by SIPCO Limited (63.4% equity and voting); and two Cayman Islands entities (36.6% equity and voting) which are each owned by individual citizens of WTO Member countries. The equity of SIPCO Limited is owned by individuals who are citizens of Bahrain; its voting interests are held by SIPCO Holdings Limited, an entity organized in the Cayman Islands, the equity and the voting interests of which are owned by individual citizens of WTO Member countries, including the United States (14.28%). Petitioners state that the general partner of Clarity Partners, L.P., Clarity Advisors, L.P. and Clarity Associates, L.P. is Clarity GenPar, LLC, a Delaware limited liability company. The managing members of Clarity GenPar, LLC are Barry Porter, Stephen P. Rader, and David Lee, each of whom is a U.S. citizen. The equity interests in Clarity Partners, L.P. are held as follows: citizens of the U.S. (4.383%); citizens of Taiwan (4.225%); U.S. banks (56.393%); Canadian or Japanese banks (4.246%); U.S. private equity (18.750%); U.K. private equity (12.003%). Pursuant to the rules and policies established in the Commission's Foreign Participation Order, 12 FCC Rcd 23891 (1997), Order on Reconsideration, 15 FCC Rcd 18158 (2000), we find that the indirect foreign ownership of NextWeb in excess of the 25 percent benchmark in section 310(b)(4) is consistent with the public interest. Specifically, this ruling permits Investcorp S.A. (and Investcorp Holdings Limited, Investcorp Bank B.S.C., Investcorp Funding Limited, CP Holdings Limited, Ownership Holdings Limited, SIPCO Limited and SIPCO Holdings Limited, through their ownership in Investcorp S.A.) to hold, individually and collectively, up to and including 34.07% of the voting interests in TPAC Holdings. With respect to other foreign interests held directly or indirectly in TPAC Holdings, this ruling authorizes only the foreign ownership interests described in the Petition. This ruling does not authorize the 0.7 percent indirect interest of unknown origin and thus ascribed to non-WTO Member investment. NextWeb may accept up to and including an additional, aggregate 25 percent indirect equity and/or voting interests from TPAC Holdings' foreign investors that are described in the Petition and from other foreign investors subject to the following conditions. First, this ruling shall not be construed to permit any foreign individual or entity that is not described in the Petition to acquire control of NextWeb or to acquire an indirect equity or voting interest in NextWeb that exceeds 25 percent without obtaining additional, prior approval from the Commission. Second, for purposes of calculating the additional, aggregate 25 percent amount, NextWeb shall include the 0.7 percent interest attributed to investors from non-WTO Member countries. We grant the Petition to Adopt Conditions to Authorizations and Licenses (Petition to Adopt Conditions) filed in this proceeding on March 10, 2011, by the Department of Justice and the Department of Homeland Security. Accordingly, we condition this grant on U.S. TelePacific Holdings Corp. and U.S. TelePacific Corp. abiding by the commitments and undertakings contained in their March 7, 2011 Letter of Assurance (LOA). A copy of the Petition to Adopt Conditions and the LOA are publicly available and may be viewed on the FCC web-site through the International Bureau Filing System (IBFS) by searching for ISP-PDR-20110106-00001 and accessing "Other filings related to this application" from the Document Viewing area. Grant of Authority Petition for Declaratory Ruling U. S. TELEPACIFIC CORP Page 2 of 6 ITC-214-20090403-00146 E Global or Limited Global Facilities-Based Service, Global or Limited Global Resale Service Date of Action: 03/18/2011 Service(s): Application for authority to provide facilities-based service in accordance with section 63.18(e)(1) of the Commission’s rules, and also to provide resale service in accordance with section 63.18(e)(2) of the Commission’s rules, 47 C.F.R. § 63.18(e)(1), (2). Grant of Authority International Telecommunications Certificate Sun Star Telecom Corp. ITC-214-20100326-00127 E Global or Limited Global Facilities-Based Service, Global or Limited Global Resale Service Date of Action: 03/18/2011 Service(s): Application for authority to provide facilities-based service in accordance with section 63.18(e)(1) of the Commission’s rules, and also to provide resale service in accordance with section 63.18(e)(2) of the Commission’s rules, 47 C.F.R. § 63.18(e)(1), (2). Grant of Authority International Telecommunications Certificate Guycom Telecom Corp ITC-214-20100823-00344 E Global or Limited Global Facilities-Based Service, Global or Limited Global Resale Service Date of Action: 03/18/2011 Service(s): Application for authority to provide facilities-based service in accordance with section 63.18(e)(1) of the Commission’s rules, and also to provide resale service in accordance with section 63.18(e)(2) of the Commission’s rules, 47 C.F.R. § 63.18(e)(1), (2). Grant of Authority International Telecommunications Certificate MegaTech Services LLC ITC-ASG-20110308-00062 E Date of Action: 03/23/2011 TO: Notification filed on March 8, 2011, of the pro forma assignment of international section 214 authorization, ITC-214-20000507-00304, from DOCOMO Pacific, Inc. to NTT DOCOMO USA, Inc., effective February 25, 2011. DOCOMO Pacific, Inc. and NTT DOCOMO USA, Inc. are both wholly-owned indirect subsidiaries of Nippon Telegraph and Telephone Corporation. NTT DOCOMO USA, Inc. is classified as a dominant carrier on the U.S-Japan route pursuant to section 63.10 of the Commission's rules, 47 C.F.R. § 63.10. DOCOMO PACIFIC, Inc. Grant of Authority FROM: Current Licensee: NTT DOCOMO USA, Inc. DOCOMO PACIFIC, Inc. Assignment NTT DOCOMO USA, Inc. ITC-T/C-20101203-00472 E Date of Action: 03/18/2011 TO: Application for consent to transfer control of international section 214 authorization, ITC-214-20030115-00014, held by Systems Resource Group Limited (SRG), from its current shareholders to Cable Bahamas Ltd. (CBL). Pursuant to a Share Purchase Agreement dated September 10, 2010, the shareholders of SRG have agreed to sell all of their shares to CBL. SRG will then be a wholly-owned subsidiary of CBL. CBL is organized under the laws of the Bahamas. A Trust, independent of both CBL and the Government of the Bahamas, holds a 26.74% equity and voting interest in CBL. The trustee is Dr. Keva Bethel, a citizen of the Commonwealth of the Bahamas. The Government of the Bahamas holds a combined 21.39% equity and voting interest in CBL through the National Insurance Board (16.23%), an instrumentality of the Government of the Bahamas, and the Treasurer of the Government of the Bahamas (5.16%). No other individual or entity holds a ten percent or greater direct or indirect equity or voting interest in CBL. This authorization is without prejudice to the Commission's action in any other related pending proceedings. Systems Resource Group Limited Grant of Authority FROM: Current Licensee: CABLE BAHAMAS LTD. Systems Resource Group Limited Transfer of Control Systems Resource Group Limited Page 3 of 6 ITC-T/C-20110223-00058 E Date of Action: 03/18/2011 TO: Application to transfer control of international section 214 authorization, ITC-214-20110131-00021, held by Public Interest Network Services, Inc. (PINS) to CornerStone Telephone Company, LLC (CornerStone). CornerStone will purchase 100% of the issued and outstanding stock of PINS, and PINS will become a wholly-owned subsidiary of CornerStone. The following U.S. citizens hold a ten percent or greater interest in CornerStone: Daniel Yamin (15%), Donald Walsh (15%), Stanley D. Russell (12.50%), Jack A. Overton, Jr. (12.50%) and Estate of Jeffrey S. Doerr (12.50%) (sole beneficiary is Wendy Doerr). This authorization is without prejudice to the Commission's action in any other related pending proceedings. Public Interest Network Services, Inc. Grant of Authority FROM: Current Licensee: CornerStone Telephone Company, LLC Public Interest Network Services, Inc. Transfer of Control Public Interest Network Services, Inc. ITC-T/C-20110228-00056 E Date of Action: 03/18/2011 TO: Application to transfer control of international section 214 authorization, ITC-214-19971117-00708, held by Bright Long Distance LTD (BLD) to Com Net, Inc. Com Net, Inc. currently holds an 18.5% interest in BLD. Com Net, Inc. is purchasing the membership interests of all of the other owners of BLD. BLD will then be a wholly-owned subsidiary of Com Net, Inc. No individual or entity has a ten percent or greater direct or indirect equity or voting interest in Com Net, Inc. This authorization is without prejudice to the Commission's action in any other related pending proceedings. Bright Long Distance LTD Grant of Authority FROM: Current Licensee: Com Net, Inc. Bright Long Distance LTD Transfer of Control Bright Long Distance LTD Page 4 of 6 CONDITIONS APPLICABLE TO INTERNATIONAL SECTION 214 AUTHORIZATIONS (1) These authorizations are subject to the Exclusion List for International Section 214 Authorizations, which identifies restrictions on providing service to particular countries or using particular facilities. The most recent Exclusion List is attached to this Public Notice. The list applies to all U.S. international carriers, including those that have previously received global or limited global Section 214 authority, whether by Public Notice or specific written order. Carriers are advised that the attached Exclusion List is subject to amendment at any time pursuant to the procedures set forth in Streamlining the International Section 214 Authorization Process and Tariff Requirements, IB Docket No. 95-118, 11 FCC Rcd 12884 (1996), para. 18. A copy of the current Exclusion List will be maintained in the FCC Reference and Information Center and will be available at http://www.fcc.gov/ib/pd/pf/telecomrules.html#exclusionlist. It also will be attached to each Public Notice that grants international Section 214 authority. (2) The export of telecommunications services and related payments to countries that are subject to economic sanctions may be restricted. For information concerning current restrictions, call the Office of Foreign Assets Control, U.S. Department of the Treasury, (202) 622-2520. (3) Carriers shall comply with the requirements of Section 63.11 of the Commission's rules, which requires notification by, and in certain circumstances prior notification by, U.S. carriers acquiring an affiliation with foreign carriers. A carrier that acquires an affiliation with a foreign carrier will be subject to possible reclassification as a dominant carrier on an affiliated route pursuant to the provisions of Section 63.10 of the rules. (4) Carriers shall comply with the Commission's International Settlements Policy and associated filing requirements contained in Sections 43.51, 64.1001 and 64.1002 of the Commission's Rules, 47 C.F.R. §§ 43.51, 64.1001, 64.1002. The Commission modified these requirements most recently in International Settlements Policy Reform: International Settlement Rates, First Report and Order, FCC 04-53, 19 FCC Rcd 5709 (2004). In addition, any carrier interconnecting private lines to the U.S. public switched network at its switch, including any switch in which the carrier obtains capacity either through lease or otherwise, shall file annually with the Chief, International Bureau, a certified statement containing, on a country-specific basis, the number and type (e.g., 64 kbps circuits) of private lines interconnected in such manner. The Commission will treat the country of origin information as confidential. Carriers need not file their contracts for interconnection unless the Commission specifically requests. Carriers shall file their annual report on February 1 (covering international private lines interconnected during the preceding January 1 to December 31 period) of each year. International private lines to countries which the Commission has exempted from the International Settlements Policy at any time during a particular reporting period are exempt from this requirement. See 47 C.F.R. § 43.51(d). The Commission's list of U.S. international routes that are exempt from the International Settlements Policy may be viewed at http://www.fcc.gov/ib/pd/pf/isp_exempt.html. (5) Carriers authorized to provide private line service either on a facilities or resale basis are limited to the provision of such private line service only between the United States and those foreign points covered by their referenced applications for Section 214 authority. A carrier may provide switched services over its authorized resold private lines in the circumstances specified in Section 63.23(d) of the rules, 47 C.F. R. § 63.23(d). (6) A carrier may engage in "switched hubbing" to countries that do not appear on the Commission's list of U.S. international routes that are exempt from the International Settlements Policy, set forth in Section 64.1002, 47 C.F.R. § 64.1002, provided the carrier complies with the requirements of Section 63.17(b) of the rules, 47 C.F.R. § 63.17(b). The Commission's list of U.S. international routes that are exempt from the International Settlements Policy may be viewed at http://www.fcc.gov/ib/pd/pf/isp_exempt.html. (7) Carriers shall comply with the "No Special Concessions" rule, Section 63.14, 47 C.F.R. § 63.14. (8) Carriers regulated as dominant for the provision of a particular communications service on a particular route for any reason other than a foreign carrier affiliation under Section 63.10 of the rules shall file tariffs pursuant to Section 203 of the Communications Act, as amended, 47 U.S.C. § 203, and Part 61 of the Commission's Rules, 47 C.F.R. Part 61. Carriers shall not otherwise file tariffs except as permitted by Section 61.19 of the rules, 47 C.F.R. § 61.19. Except as specified in Section 20.15 with respect to commercial mobile radio service providers, carriers regulated as non-dominant, as defined in Section 61.3, and providing detariffed international services pursuant to Section 61.19, must comply with all applicable public disclosure and maintenance of information requirements in Sections 42.10 and 42.11. (9) Carriers shall file the annual reports of overseas telecommunications traffic required by Section 43.61(a). Carriers shall also file the quarterly reports required by Section 43.61 in the circumstances specified in paragraphs (b) and (c) of hS i Page 5 of 6 that Section. (10) Carriers shall file annual reports of circuit status and/or circuit additions in accordance with the requirements set forth in Rules for Filing of International Circuit Status Reports, CC Docket No. 93-157, Report and Order, 10 FCC Rcd 8605 (1995). See 47 C.F.R. § 43.82. See also §§ 63.22(e), 63.23(e). These requirements apply to facilities-based carriers and private line resellers, respectively. See also http:www.fcc.gov/ib/pd/pf/csmanual.html. (11) Carriers should consult Section 63.19 of the rules when contemplating a discontinuance, reduction or impairment of service. Further, the grant of these applications shall not be construed to include authorization for the transmission of money in connection with the services the applicants have been given authority to provide. The transmission of money is not considered to be a common carrier service. (12) If any carrier is reselling service obtained pursuant to a contract with another carrier, the services obtained by contract shall be made generally available by the underlying carrier to similarly situated customers at the same terms, conditions and rates. 47 U.S.C. § 203. (13) To the extent the applicant is, or is affiliated with, an incumbent independent local exchange carrier, as those terms are defined in Section 64.1902 of the rules, it shall provide the authorized services in compliance with the requirements of Section 64.1903. (14) Except as otherwise ordered by the Commission, a carrier authorized here to provide facilities-based service that (i) is classified as dominant under Section 63.10 of the rules for the provision of such service on a particular route and (ii) is affiliated with a carrier that collects settlement payments for terminating U.S. international switched traffic at the foreign end of that route may not provide facilities-based switched service on that route unless the current rates the affiliate charges U.S. international carriers to terminate traffic are at or below the Commission's relevant benchmark adopted in International Settlement Rates, IB Docket No. 96-261, Report and Order, 12 FCC Rcd 19806 (1997). See also Report and Order on Reconsideration and Order Lifting Stay in IB Docket No. 96-261, FCC 99-124 (rel. June 11, 1999). For the purposes of this rule, "affiliated" and "foreign carrier" are defined in Section 63.09. Exclusion List for International Section 214 Authorizations The following is a list of countries and facilities not covered by grant of global Section 214 authority under Section 63.18(e)(1) of the Commission's Rules, 47 C.F.R. § 63.18(e)(1). In addition, the facilities listed shall not be used by U.S. carriers authorized under Section 63.18 of the Commission's Rules unless the carrier's Section 214 authorization specifically lists the facility. Carriers desiring to serve countries or use facilities listed as excluded hereon shall file a separate Section 214 application pursuant to Section 63.18(e)(3) of the Commission's Rules. See 47 C.F.R. § 63.22(c). Countries: Cuba (Applications for service to Cuba shall comply with the separate filing requirements of the Commission's Public Notice, DA 10-112, dated January 21, 2010, "Modification of Process to Accept Applications for Service to Cuba and Related Matters.") Facilities: All non-U.S.-licensed satellite systems that are not on the Permitted Space Station List, maintained at http://www.fcc.gov/ib/sd/se/permitted.html. See International Bureau Public Notice, DA 99-2844 (rel. Dec. 17, 1999). This list is subject to change by the Commission when the public interest requires. Before amending the list, the Commission will first issue a public notice giving affected parties the opportunity for comment and hearing on the proposed changes. The Commission may then release an order amending the exclusion list. This list also is subject to change upon issuance of an Executive Order. See Streamlining the Section 214 Authorization Process and Tariff Requirements, IB Docket No. 95-118, FCC 96-79, 11 FCC Rcd 12,884, released March 13, 1996 (61 Fed. Reg. 15,724, April 9, 1996). A current version of this list is maintained at http://www.fcc.gov/ib/pd/pf/telecomrules.html#exclusionlist. For additional information, contact the International Bureau's Policy Division, (202) 418-1460. Page 6 of 6