OHCP-Sovernet Supple

SUPPLEMENT submitted by OHCP Northeastern Fiber Buyer, Inc.

Section 1.65 Supplement

2016-09-20

This document pretains to ITC-T/C-20160818-00249 for Transfer of Control on a International Telecommunications filing.

IBFS_ITCTC2016081800249_1150199

September 20, 2016

VIA ELECTRONIC FILING

Marlene H. Dortch, Secretary
Federal Communications Commission
445 12th Street, S.W.
Room TW-A325
Washington, DC 20554

Re:       WC Docket No. 16-266
          Domestic Section 214 Application Filed for the Transfer of Control of Sovernet, Inc.,
          ION Holdco, LLC, Sovernet Fiber Corp. and National Mobile Communications
          Corporation to OHCP Northeastern Fiber Buyer, Inc.

          IB File No. ITC-T/C-20160818-00248
          IB File No. ITC-T/C-20160818-00249
          International Section 214 Applications Filed for the Transfer of Control of Sovernet,
          Inc., ION Holdco, LLC, Sovernet Fiber Corp. and National Mobile Communications
          Corporation to OHCP Northeastern Fiber Buyer, Inc.

Dear Ms. Dortch:

       ATN International, Inc. (“Transferor”) and OHCP Northeastern Fiber Buyer, Inc.
(“Transferee”), pursuant to Section 1.65 of the Commission’s Rules, and at the request of
Commission staff, hereby supplement the above-referenced transfer of control Applications to
provide additional information on any existing overlap between the competitive local exchange
(“CLEC”) operations of (1) TVC Albany, Inc. d/b/a FirstLight and its subsidiaries (collectively,
“FirstLight”)1 and Oxford Networks Holdings, Inc. and its subsidiaries (collectively “Oxford,”
and together with FirstLight, “FirstLight/Oxford),2 and (2) the above-named subsidiaries of
Transferor (collectively “Sovernet”).

       The fiber networks and businesses of FirstLight/Oxford and Sovernet are complementary
and adjacent, with minimal overlap, including with respect to their CLEC operations.

     New Hampshire. FirstLight/Oxford and Sovernet each have presence in New Hampshire, but
      with largely complementary footprints and limited CLEC overlap.
         o FirstLight/Oxford’s owned fiber network is broadly dispersed through the state, while
              Sovernet’s owned-fiber presence in New Hampshire is mostly limited to the area
              where it borders Vermont.
1
      The Commission recently granted approval for the FirstLight purchase. See ITC-T/C-20160329-00129, WC
      Docket No. 16-107; ULS File No. 0007203840; ISP-PDR-20160329-00005. That acquisition closed on
      September 7, 2016.
2
      Applications for approval of the purchase of Oxford are pending. See ITC-T/C-20160708-00185, ITC-T/C-
      20160708-00186, WC Docket No. 16-222. This supplement assumes that the Oxford acquisition has closed and
      therefore refers to the combined FirstLight and Oxford entities as FirstLight/Oxford.


                                                                                                   2



       o FirstLight/Oxford and Sovernet have low combined market share in the state of New
         Hampshire, estimated at around 7.7% in terms of annual communications market
         spending.

       o In addition to this low market share, a low percentage of the companies’ existing and
         near-net buildings overlap. Broadly speaking, there is owned fiber network overlap
         between FirstLight/Oxford and Sovernet in New Hampshire only in the Claremont-
         Lebanon MSA, where Sovernet owns fiber in Lebanon/West Lebanon and Hanover;
         and in the Keene MSA, in the Town of Chesterfield and the City of Keene.

       o Fairpoint and either Comcast or Time Warner Cable (now Charter), which are much
         larger companies than the combined entity, generally are facilities-based competitors
         in all of FirstLight/Oxford’s and Sovernet’s New Hampshire markets.

   Maine. FirstLight/Oxford serves Maine, where Sovernet has no CLEC operations. Fairpoint
    and either Comcast or Time Warner Cable (now Charter) are facilities-based competitors in
    all of FirstLight/Oxford’s Maine markets.

   Massachusetts. FirstLight/Oxford serves portions of northeastern Massachusetts. Sovernet
    owns no fiber network in Massachusetts, other than in northwestern Massachusetts.

       o There is no material overlap between FirstLight/Oxford’s CLEC operations and
         Sovernet’s operations in Massachusetts, as Sovernet has very little business presence
         in Massachusetts, and earns an immaterial amount of revenue in Massachusetts.
         Oxford owns a small amount of fiber in northeastern Massachusetts, in the Boston
         region and Sovernet owns a small amount of fiber in northwestern Massachusetts;
         FirstLight does not own any network in Massachusetts.

       o Verizon and either Comcast or Time Warner Cable (now Charter), which are much
         larger companies than the combined entity, generally are facilities-based competitors
         in all of FirstLight/Oxford’s and Sovernet’s Massachusetts markets.

   New York. Both FirstLight/Oxford and Sovernet have presence in New York, but with
    largely complementary footprints and limited CLEC overlap. FirstLight/Oxford and
    Sovernet generally own and operate fiber networks in different areas throughout the state of
    New York.

       o FirstLight/Oxford serves the eastern part of the state, including a metro network in
         Albany, where Sovernet has limited metro network presence, and in Westchester
         County.

       o Sovernet operates a regional, intercity network across the western and central portions
         of the state, connecting such large markets as Buffalo, Rochester, Syracuse and Utica.
         However, only ~23% of its network in New York is owned, with the remainder leased
         or under IRU.


                                                                                                   3



       o FirstLight/Oxford and Sovernet have low combined market share in the state of New
         York, estimated at around 0.6% in terms of annual communications market spending.

       o In addition to this low market share, a low percentage of the companies’ existing and
         near-net buildings overlap. Broadly speaking, there is owned fiber network overlap
         primarily in Albany-Schenectady-Troy. However, Sovernet does not own any metro
         intra-city fiber that connects to customers in this region, other than to several carrier
         PoPs, carrier hotels or central offices.

       o Verizon and either Comcast or Time Warner Cable (now Charter), which are much
         larger companies than the combined entity, generally are facilities-based competitors
         in all of FirstLight/Oxford’s and Sovernet’s New York markets.

   Vermont. Both FirstLight/Oxford and Sovernet have presence in Vermont, but with largely
    complementary footprints and limited CLEC overlap. FirstLight/Oxford and Sovernet
    generally own and operate fiber networks in different areas throughout the state of Vermont.

       o FirstLight/Oxford’s network is focused in the northwestern portion of the state that
         borders New York.

       o Sovernet’s network is more broadly dispersed through the state.

       o FirstLight/Oxford and Sovernet have low combined market share in the state of
         Vermont, estimated at around 9.6% in terms of annual communications market
         spending.

       o In addition to this low market share, a low percentage of the companies’ existing and
         near-net buildings overlap. Broadly speaking, there is owned fiber network overlap
         primarily in the following metro areas: Burlington, Barre, Claremont-Lebanon (a
         New Hampshire-Vermont MSA), Middlebury, and Rutland. However,
         FirstLight/Oxford’s revenues in Vermont are concentrated in Burlington, which
         represents 61% of FirstLight/Oxford’s Vermont monthly recurring revenue; in
         contrast, Burlington represents only 20% of Sovernet’s Vermont revenues, as they are
         more broadly dispersed through Vermont. Moreover, while FirstLight/Oxford’s
         Vermont revenues are concentrated in Burlington, the entire state of Vermont
         represents less than 5% of FirstLight/Oxford’s total revenues.

       o Incumbent local exchange carriers (Telephone Operating Company of Vermont) and
         either Comcast or Charter, which are much larger companies than the combined
         entity, generally are facilities-based competitors in all of FirstLight/Oxford’s and
         Sovernet’s Vermont markets. Moreover, in the Burlington market, there is higher
         competitive presence than the rest of the state, with Lightower, VTel Data, Burlington
         Telecom, and Level 3 all providing facilities-based services.


                                                                                                   4


     Pennsylvania. FirstLight/Oxford owns no fiber in Pennsylvania, a market in which Sovernet
      has very limited presence in the northeastern region of the state. Incumbent local exchange
      telephone and cable television companies are facilities-based competitors in all of Sovernet’s
      Pennsylvania markets.

        The complementary nature of FirstLight/Oxford’s and Sovernet’s networks and CLEC
operations means that local business customers will continue to enjoy service from their current
network provider, but with the benefit of the complete product portfolio of FirstLight/Oxford and
Sovernet, as well as the potential for additional network construction to more business locations
due to the increased capital available to the combined companies. At the same time, the broader
geographic coverage resulting from the combination of FirstLight/Oxford and Sovernet is
expected to allow the combined company to better serve large regional business and
telecommunications carrier customers, increasing competition in this segment of the market.

         Please let us know if you need any additional information.

                                               Respectfully submitted,


         /s/ Patrick S. Campbell                       /s/ Craig Gilley
         Patrick S. Campbell                           Craig Gilley
         Paul, Weiss, Rifkind, Wharton                 Mintz Levin Cohn Ferris Glovsky
         & Garrison LLP                                and Popeo PC
         2001 K Street, N.W.                           701 Pennsylvania Avenue, NW
         Washington, D.C. 20006                        Suite 900
         (202) 223-7300                                Washington, DC 20004
         pcampbell@paulweiss.com                       (202) 434-7459
                                                       cagilley@mintz.com

         Counsel to OHCP Northeastern                  Counsel to ATN International, Inc.
         Fiber Buyer, Inc.


cc:      Brett Ferenchak, Counsel to TVC Albany, Inc.
         Sherrese M. Smith, Counsel to Oxford Network Holdings, Inc.
         Dennis Johnson, FCC Wireline Competition Bureau
         Jodie May, FCC Wireline Competition Bureau



Document Created: 2016-09-20 20:35:32
Document Modified: 2016-09-20 20:35:32

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