Attachment 20161229145525-627.p

20161229145525-627.p

SUPPLEMENT

Supplement

2000-12-19

This document pretains to ITC-T/C-20001212-00760 for Transfer of Control on a International Telecommunications filing.

IBFS_ITCTC2000121200760_1387743

RECEIVED DEECC 1 9 20 00 Before the FEDERAL COMMUNICATIONS C’OM[M[ISSlomfgfiiggo’“ng’,“gfi‘f;’;u Washington, D.C. 20554 © oo CC 1 £. c lay EC LJY No N N Ne NY N N Ne N) Nest Nt NA NO NO NO NT L N N NN NNN In the Matter of gCu/mie~ Gold & Appel Transfer, S.A., and Foundation for the International Non—Governmental Development of Space Streamlined ITC—T/C—20001212—00760 Transferor S, CAPSULE COMMUNICATIONS, INC. Capsule Communications, Inc., Licensee, and Startec Global Communications Corporation, and Stars Acquisition Corp. Transferee Application Pursuant to Sections 214 ofthe Communications Act of 1934, as Amended, to Transfer Control over Title II Authority APPLICATION FOR TRANSFER OF CONTROL OVER SECTION 214 AUTHORITY J. INTRODUCTION Capsule Communications, Inc. ("Capsule" or "Licensee"), Gold & Appel Transfer, S.A. ("G&A"), the Foundation for the International Non—Governmental Development of Space ("Foundation") (collectively "Tranferors") and Startec Global Communications Corporation and Stars Acquisition Corp. ("Startec" or "Transferee") (together with Licensee and Transferors, "Applicants") hereby apply, pursuant to Section 214 of the Communications Act, as

amended, 47 U.S.C. § 214, and the Commission‘s Rules, 47 C.F.R. § 63.18, for authority to transfer control over Capsule to Startec. Capsule holds Title II authority under Section 214 of the Communications Act.‘ In Applicants‘ view, this transfer of control qualifies for streamlined processing pursuant to 47 C.F.R. §§ 63.12(c)(1)(i) & (ii). Part II of this Application describes the proposed transfer of control and shows that the transaction furthers the public interest. Part III of this Application provides the additional information required by 47 C.F.R. § 63.18. II. THE PROPOSED TRANSFER OF CONTROL IS IN THE PUBLIC INTEREST Startec has reached an agreement with Transferors whereby Startec will acquire all of Capsule‘s outstanding stock, subject to all necessary regulatory approvals. Capsule holds : Section 214 authority for the provision of switched resale services. Transferors currently own 74 percent of Capsule. Specifically, the proposed transfer of control will occur pursuant to the Agreement and Plan of Reorganization By and Among Startec Global Communications Corporation, Stars Acquisition Corp., Capsule Communications, Inc., Gold & Appel Transfer, S.A., and Foundation for the International Non—Governmental Development of Space ("Agreement") dated November 2, 2000. Under this Agreement, Stars Acquisition Corp. ("Stars"), a wholly owned subsidiary of Startec, will merge with Capsule, and Capsule will be the surviving corporation existing as a wholly owned subsidiary of Startec. All issued and outstanding shares of Stars will be converted into shares of the combined Capsule. In exchange, 1 File No. ITC—91—186, DA 91—1237. Capsule is an international switched reseller that also provides limited domestic long distance and local resale services. Transferee Startec is a well—established facilities—based carrier that already possesses its own Section 214 authority.

Capsule‘s shareholders will receive a minority equity interest in Startec in accordance with a predetermined stock exchange ratio. The proposed transfer will serve the public interest. Capsuleis now a switched reseller of telecommunications services, while Startec is a well—established facilities—based carrier. Thé companies are therefore largely complementary, and Capsule‘s customer base will benefit from access to Startec‘s facilities—based services and access to Startec‘s larger capital base. Particularly in light of Caps :‘s acute and continuing financial difficulties, the merger will ensure that there is no disrupt i ofservice for Capsule‘s customers. For Startec too, the acquisition of Capsule by Startec: 1 enhance Startec‘s customer base and bolster Startec‘s ability to compete with the three I; e long—distance carriers. It will also reduce the operating costs and increase the efficiency 0. ~perating both companies. Accordingly, Startec will be better able to expand its service offerings and increase service quality while maintaining competitive rates. IIL. INFORMATION REQUESTED BY SECTION 63.18 The following information is provided in compliance with 47 C.F.R. § 63.18. a. The names, addresses, and telephone numbers of the Licensee is: Capsule Communications, Inc. 3331 Street Road, Suite 275 2 Greenwood Square Bensalem, PA 19020 (215) 633—9400 The name, address, and telephone number of the proposed Transferors are: Gold & Appel Transfer, S.A. ("G&A"), Omar Hodge Building Wickams Cay, Road Town Tortula, British Virgin Islands c/o Walt Anderson Attorney—in—Fact —3&

Gold & Appel Transfer, S.A. 1023 31°" Street, NW 4"" Floor Washington, D.C. 20007 (202) 467—1189 Foundation for the International Non—Governmental Development of Space 1023 31" Street, NW 4"" Floor Washington, D.C. 20007 (202) 467—1189 The name, address, and telephone number of the proposed Transfereeis: Startec Global Communications Corporation 10411 Motor City Drive Bethesda, MD 20817 (301) 365—8959 b. Startec, Stars Acquisition Corp., Capsule, and Foundationare all Delaware corporations. G&A is a British Virgin Islands corporation. ¢. Correspondence concerning this Application should be directed to: Yolanda Stefanou Faerber General Counsel Startec Global Communications Corporation 10411 Motor City Drive Bethesda, MD 20817 (301) 365—8959 With copies to: Pantelis Michalopoulos Russell M. Blau Rhonda Rivens Bolton Rogena Harris Omer C. Eyal Swidler Berlin Shereff Friedman, LLP Steptoe & Johnson, LLP 3000 K Street, N.W. 1330 Connecticut Avenue, N.W. Suite 300 Washington, D.C. 20036—1795 Washington, D.C. 20007—5116 (202) 429—3000 (202) 424—7500 Counsel to Startec Global Counsel to Capsule Communications, Inc. Communications Corporation

d. Capsule is currently authorized under Title II to resell switched voice service." Startec is currently authorized under Title II to provide facilities—based and resale services." e. Transferors, Startec and Capsule are seeking authority pursuant to 47 C.F.R. § 63.18(e)(3) to transfer control over Capsule‘s existing Title II authority from Transferors to Startec. Upon FCC approval and consummation of the proposed transaction, Capsule will become affiliated with Startec‘s non—dominant foreign carrier affiliates listed in Section (i) infra." Accordingly, Startec will file a foreign carrier affiliation notification no later than 30 days after the consummation of the proposed transaction." £. See paragraph (e) above. g. Transferors, Startec and Capsule are seekingauthority pursuant to 47 C.F.R. § 63.18(e)(3) to transfer control of Licensee‘s existing Title II authority from Transferors to Startec. The grant of this Application will not constitute a major action as defined in 47 C.F.R. : § 1.1305. Accordingly, no environmental informationis required to be submitted with this Application under 47 C.F.R. § 1.1311. £ See File No. ITC—91—186, DA 91—1237, released October 8, 1991. Initial authority was granted to US Wats, Inc. and later assigned to US Wats‘s successor company, Capsule, on a pro forma basis. US Wats duly filed notice of the pro forma assignment with the Commission on May 11, 2000. See Letter from Patrick J. Whittle and Jeanne W. Stockman to Magalie Roman Salas dated May 11, 2000. Capsule also provides limited domestic long distance and local resale services. 3 See In the Matter ofStartec Incorporated, Application for Authority to Acquire and Operate Facilities and to Resell Services for Provision of Various International Services, 4 FCC Red. 6953 (1989), File No. ITC—89—099; Overseas Common Carrier Section 214 Applications Actions Taken, Public Notice, 12 FCC Red. 13325 (1997), File No. ITC—97—379. Startec, Inc. changed its name to Startec Global Communications Corporation in 1997. See Overseas Common Carrier Section 214 Applications Actions Taken, DA 97—2016, Public Notice, 13 FCC Red. 5944 (1997). * Startec has duly given the Commission notice of all of these foreign carrier affiliations. * See In the Matter ofRules and Policies on Foreign Participation in the U.S. Telecommunications Market, IB Docket No. 97—142, Order on Reconsideration, FCC 00—339 (rel. Sept. 19, 2000) (to be codified in 47 C.F.R. § 63.11). ~4§ .

h. The principal business of Startec, a publicly traded corporation, is the provision of telecommunications services. Mr. Ram Mukunda, a U.S. citizen, owns approximately 25 percent of the outstanding shares of Startec; Mr. Mukunda is the President, Chief Executive Officer, Treasurer and Director of Startec, and resides at 8906 Durham Road, Potomac, Maryland 20854. No other person or entity currently owns, directly or indirectly, ten percent or more of Startec‘s equity. As a result of this transaction, Applicants estimate that G&A and the Foundation together would acquire approximately 12% of Startec‘s equity, subject to fluctuating stock prices." Startec has two interlocking directorates with foreign carriers. In addition to holding the aforementioned positions with Startec, Mr. Mukunda is also a Director of Startec Global Communications (H.K.) Ltd; Startec Global Communications U.K. Ltd.; Startec Global Communications GmbH (Germany); Startec Global Communications (Holland) B.V.; Startec Global Communications Company (Canada) and Phone Systems & Network, S.A. (France). Mr. Prabhav V. Maniyar, Corporate Vice President, Chief Financial Officer and Director of Startec, is also a Director of Startec Global Communications (H.K.) Ltd.; Startec Global Communications (Chile) S.A.; Startec Global Communications U.K. Ltd.; Startec Global Communications (Holland) B.V.; Startec Global Communications Company (Canada); and Vancouver Telephone Company. 4: Startec certifies, by its signature to this Application, that it is not a foreign carrier, but is affiliated with the non—dominant foreign carriers listed immediately below, each of which lacks 50 percent market share in the international transport and the local access markets on the 6 Thus, no alien entity would acquire more than 20% of the equity of Startec as a result of this transaction.

foreign end of the respective routes.‘ Accordingly, upon approval of this transaction, Licensee will become affiliated with these same foreign affiliates: Startec Global Communications U.K. Ltd. ("Startec UK") is a wholly—owned direct subsidiary of Startec. Startec UK is authorized to offer services in and through the United Kingdom, Ireland, Austria, Australia, Sweden, and New Zealand. Startec Global Communications (Switzerland) GmbH ("Startec Switzerland"), a wholly owned direct subsidiary of Startec, is registered to supply telecommunications services in and through Switzerland. Startec owns 85 percent of Phone Systems & Network, S.A. ("PSN"), which holds a Voice Telephony License in France. PSN also holds a special network access registrationin the Netherlands that allows PSN to provide retail and wholesale services and interconnection with Royal KPN Netherlands, N.V. Global Communications (GmbH), a wholly—owned indirect subsidiary of Startec, owns 100 percent of Startec Global Communications (Germany) GmbH, which is licensed to provide international wholesale and prepaid telecommunications | services in Germany. Startec Global Communications Company (Canada) is a wholly—owned indirect subsidiary of Startec that holds a Class A License to provide retail and wholesale telecommunications services in Canada. Vancouver Telephone Company ("VTC"), an indirect wholly—owned subsidiary of Startec, is a competitive carrier registered to resell long distance service in Canada. 7 Indeed, the Commission recently confirmed that none of Startec‘s foreign affiliates possesses market power in its relevant markets. In the Matter ofPCI Communications, Inc. Transferor, and Startec Global Communications Corporation, Transferee; Applicationfor Approval of Transfer ofControl ofan Entity Holding International Authorizations to Provide Telecommunications Services Between the United States and International Points, DA 99—1976, Memorandum Opinion and Order, 14 FCC Red. 16082 (Sept. 4, 1999) ("MO&O"). Furthermore, Startec has subsequently filed an additional notification of two other affiliations with non—dominant carriers, which duly went through the Commission‘s public notice and Comment period procedure without objection. Foreign Carrier Affiliation Notification, DA 00— 1457, Public Notice, Report No. FCN—00030 (rel. June 29, 2000) ("FCAN"), File No. FCN— NEW—20000623—00038.

e Startec Global Communications (H.K.) Ltd. ("Startec H.K."), a direct wholly owned subsidiary of Startec, is licensed in Hong—Kong to provide public telecommunications services. j. Startec and Licensee certify that they are seeking authority to transfer control of Licensee, which is not currently affiliated with any foreign carriers. Upon FCC approval and consummation of the proposed transaction, Licensee will become affiliated with the foreign carriers listed in paragraph (i) above. Accordingly, Startec and Licensee certify that Licensee will continueto provide service to those countries. Startec and Licensee also certify that they do not seek, through this application, to provide international services to any other country (other than those listed above, which Startec is already authorizedto serve) in which (1) Startec is a foreign carrier; (2) Startec controls a foreign carrier; (3) anentity that controls or otherwise owns more than 25% ofStartec also controls a foreign carrier in that country; or (4) two or more foreign carriers (or parties that control foreign carriers) together own more than 25% of Startec and are parties to, or beneficiaries of, a contractual relationship affecting the provision or marketing ofinternational basic telecommunications services in the United States. k. Under the proposed transaction, Licensee will, through its control by Startec, become affiliated with the foreign carriers in foreign countries as listed in Section (i) supra. The named foreign countries are all members of the World Trade Organization ("WTO"), andthe MO&QO and the FCAN reflect the Commission‘s view that the affiliated foreign carriers lack market power in the corresponding foreign countries.* 1. As demonstrated in paragraph (m) below, Licensee will continue to be entitled to non—dominant status on all international routes, including affiliated routes, once the proposed transaction is approved. m. Pursuant to 47 C.F.R. § 63.10(a)(3), Startec and Licensee will continue to be entitled to non—dominant status on all routes once the proposed transaction is approved. The See note 7 supra.

Commission has recently determined that "none of [Startec‘s] affiliated foreign carriers has sufficient market power to affect competition adversely in the U.S. market."" The MO&O specifically addressed all the Startec foreign affiliates except VTC and Startec H.K.; these were the object of the FCAN Public Notice released on June 29, 2000, and went through the Commission‘s notification process without objection.‘" Licensee presently has no foreign affiliations; therefore, Startec will maintain non—dominant status on all routes and Licensee is entitled to the same non—dominant treatment that applies to Startec. n. Startec and Licensee certify that they have not agreed to accept special concessions directly or indirectly from any foreign carrier or administration with respect to any U.S. international route where the foreign carrier possesses sufficient market power on the foreign end of the route to affect competitionadverselyin the U.S. market and will not enter into such agreements in the future. 0. Additionally, Applicants certify, pursuant to 47 C.F.R. § 1.2002, that neither they nor any other party to this Application are subject to a denial of any federal benefits pursuant to Section 5301 of the Anti—Drug Abuse Act of 1988. See 21 U.S.C. § 853a. p. This Application qualifies for streamlified processing pursuant to 47 C.F.R. §§ 63.12(c)(1)(i) & (ii). As demonstrated is paragraph (m) above, Licensee will continue to qualify for non—dominant status on all international routes, including affiliated routes, once the proposed transaction is approved. IV. CONCLUSION For the reasons set forth above, Applicants request that the Commission promptly grant this Application for transfer of control over Licensee from Transferors to Startec.

Respectfully submitted, Startec Global Communications Corfioration bar..) 1 £ By: iesd i j Pantelis Michalopoulos Xdlein'dfgtefanofilFaerber Rhonda M. Bolton ,Genéral Counsel Omer C. Eyal f Startec Global Communications Steptoe & Johnson LLP & Corgoration 1330 Connecticut Avenue, N.W. 10411 Motor City Drive Washington, D.C. 20036 Bethesda, MD 20817 (202) 429—3000 (301) 767—1405 Counselfor Startec Global Communications Corporation Dated: December 12 , 2000.

Respectfully submitted, Capsule Communications, Inc. ( t'/7 ; By: Q/\ 7 Russell M. Blau David B. Htwilz Rogena Harris President and Chief Executive Officer Swidler Berlin Shereff Friedman, LLP Capsule Communications, Inc. 3000 K Street, NW 3331 Street Road, Suite 275 Suite 300 2 Greenwood Square Washington, D.C. 20007—5116 Bensalem, PA 19020 (202) 424—7835 (215) 244—3433 Counselfor Capsule Communications, Inc. Dated: December 12. 2000

Respectfully submitted, Gold & Appel Transfer, S.A. By: Russell M. Blau Walt Anderson Rogena Harris Attorney—in—Fact Swidler Berlin Shereff Friedman, LLP Gold & Appel Transfer, S.A. 3000 K Street, NW Omar Hodge Building Suite 300 Wickams Cay, Road Town Washington, D.C. 20007—5116 Tortula, British Virgin Islands (202) 424—7835 Counselfor Gold & Appel Transfer, S.A. 1023 31* Street, NW 4" Floor Washington, D.C. 20007 (202) 467—1189 Dated: /‘o1 —1[ —06

Respectfully submitted, Foundation for the International Non—Governmental Development of Space Russell M. Blau By: [I<—_) __MWaltAnderson Rogena Harris President Swidler Berlin Shereff Friedman, LLP Foundation for the International 3000 K Street, NW Non—Governmental Development Suite 300 of Space Washington, D.C. 20007—5116 1023 31° Street, NW (202) 424—7835 4 Floor Washington, D.C. 20007 (202) 467—1189 Counselfor the Foundation for the International Non—Governmental Development ofSpace Dated: [ ~ // — OO

dEC-fZ-EU 11:31 From:STEPTOE & JOHNSON 2024293902 T—683 P.02/03 Job—269 1330 Connecticut Avenue, NW STEPTOE & JOHNSON LLP Washington, DC 20036—1785 Telephaone 202. 428.3000 ATTORNEYS AT LAW Facsimile 202.423.3907 www.steptos.com Pantelis Mik lopoulos 202.429.64% pmichalo@ stos.com December ;, 2000 ByHANEL ELIVERY Ms. Fran l nstein Policy anc acilities Branch Internatior Bureau Federal C©e munications Commission The Portal Room 6—C866 _ 445 Twelf Street, SW Washingte D.C. 20554 _ Re—_. In the Matter of Gold & Appel Transfer, S.A. and Foundation for the International Non—Governmental Development of Space, Transferors; Capsule Communications, Inc., Licensee; Startec Global Communications . Corp. and Stars Acquisition Corp., Transferee: Application for Transfer of Control of Authority Over Section 214 Authority, File No. ______ Dear Ms.] anstein: . On behalf of Gold & Appel Transfer, S.A. ("G&A"), the Foundation for the _ Internatior Non—Governmental Development of Space (the "Foundation"), Capsule Communic ons, Inc. ("Capsule"), Startec Global Communications Corp. and Stars Acquisition Corp. (coll :ively, "Applicants"), we write to provide supplemental information regarding the above—cap ied Application for Transfer of Control of Authority over Capsule‘s Section 214 Authority in connection with the merger of Capsule and Stars Acquisition Corp. In their Application, Applicants estimated that G&A and the Foundation together would acquire approximately 12% of Startec‘s equity, subject to fluctuating stock prices. See Application at 6. Because the stock exchange ratio is based on a moving average calculation, the precise percentage of Startec‘s equity that each of the two companies will own is uncertain. While it is possible that neither company will own 10% of Startec‘s equity, it is also possible that G&A would acquire more than 10% of Startec‘s equity. Specifically, Applicants estimate that G&A would acquire no more than 10.87% of Startec‘s equity and the Foundation would acquire no more than 1.73% of Startec‘s equity. In light of the possibility that G&A may own more than WASHINGTON PHOENIX LOS ANGELES

DEC—22—C0 11:32 From:STEPTOE & JOHNSON 2024293902 T—683 P.03/03 Job—269 Ms. Fran Eisenstein December 22, 2000 Page 2 10% of Startec‘s equity, and out of an abundance of caution, Applicants hereby supply the following supplemental information about G&A. G&A is 100% owned by Iceberg Transport, S.A. (a Panamanian company) 53Street (Calle 53) Urbanizacion, Obarmo, Torre Swiss Bank Panama City, Republic of Panama The principal businesses of Iceberg Transport are investment and sale of equity securities and venture capital investments. If you have any questions regarding this matter, pleas(: give either of us a call. Sincerely, éé%@més Pan:elis MiGalopsulos Steptoc & IJohnson, LLP 1330 Connecticut Avenue, NW Washington, D.C. 20036 (202}) 429—6494 Counsel for Startec Global Communication: Corporation and Stars Acquisition Corporation TLoOoomHowu|£em RusseH M. Blau Rogena Harns Swidler Berlin Shereff Friedman, LLP 3000 K Street, NW Suite 300 Washington, D.C. 20007 (202) 295—8303 Counsel for Capsule Communications, Inc.


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