Attachment DA-17-52.pdf

DA-17-52.pdf

PUBLIC NOTICE submitted by Federal Communications Commission

Public Notice

2017-01-12

This document pretains to ITC-T/C-20161220-00369 for Transfer of Control on a International Telecommunications filing.

IBFS_ITCTC2016122000369_1166657

PUBLIC NOTICE Federal Communications Commission News Media Information 202 / 418-0500 445 12th St., S.W. Internet: http://www.fcc.gov Washington, D.C. 20554 TTY: 1-888-835-5322 DA 17-52 Released: January 12, 2017 APPLICATIONS FILED BY CONSOLIDATED COMMUNICATIONS HOLDINGS, INC. AND FAIRPOINT COMMUNICATIONS, INC. FOR THE ASSIGNMENT OR TRANSFER OF CONTROL OF CERTAIN DOMESTIC AND INTERNATIONAL AUTHORIZATIONS PLEADING CYCLE ESTABLISHED WC Docket No. 16-417 Comments/Petitions Due: February 13, 2017 Reply/Oppositions Due: February 28, 2017 Consolidated Communications Holdings, Inc. (Consolidated Holdings) and FairPoint Communications, Inc. (FairPoint) (together, Applicants) filed a series of applications pursuant to sections 214 and 310(d) of the Communications Act of 1934, as amended (Act),1 seeking approval for various assignments and the transfer of control of licenses and authorizations held by FairPoint to Consolidated Holdings.2 FairPoint, a publicly-traded Delaware Corporation, functions as a holding corporation for a number of subsidiaries (the Licensees) that provide telecommunications services.3 FairPoint’s Licensees provide telecommunications services as incumbent local exchange carriers (incumbent LEC), interexchange carriers (IXC), competitive local exchange carriers (competitive LEC), and global resale service carriers.4 The Licensees provide voice, data and broadband internet access services.5 Applicants state that these operations include approximately 310,000 broadband subscribers and 377,000 residential voice subscribers, as well as an extensive fiber network with more than 210,000 miles of fiber optic cable and 1,300 communications towers.6 1 47 U.S.C. §§ 214, 310(d). 2 See Consolidated Communications Holdings, Inc. and FairPoint Communications, Inc. Application for authority pursuant to Section 214 of the Communications Act of 1934, as amended, to Transfer Indirect Control of Domestic and International Section 214 Authorization Holders to Consolidated Communications Holdings, Inc., WC Docket No. 16-417 (filed Dec. 21, 2016) (Lead Application). The file numbers for the other applications are listed infra. 3 Lead Application at 4. 4 Id. at 9-15. 5 Id. at 4. 6 Id. Exhibit A and Sections III and IV of the Application detail a list of services provided by the Licensees and the states where they provide them.

Consolidated Holdings, a publicly-traded Delaware corporation, provides a variety of telecommunications services through its subsidiaries including local and long-distance telephone services and high-speed broadband Internet access services.7 Consolidated Holdings’ operating companies include both incumbent LECs and competitive LECs serving approximately 219,000 residential broadband connections, 409,000 business broadband connections, 189,000 residential voice lines, and 269,000 business voice lines in 11 states.8 The Applicants state that, post-consummation, no person or entity will hold a ten percent or greater interest in Consolidated Holdings.9 On December 3, 2016, FairPoint and Consolidated Holdings entered into the Agreement and Plan of Merger (Agreement).10 Pursuant to the terms of the Agreement, Consolidated Holdings through Falcon Merger Sub (Merger Sub) will acquire all of the outstanding equity interests in FairPoint in exchange for Consolidated Holdings stock valued at approximately $1.5 billion.11 Specifically, Merger Sub will merge with and into FairPoint, whereupon the separate existence of Merger Sub will cease and FairPoint will be the surviving corporation.12 Upon completion of the transaction, Consolidated Holdings will contribute all of the equity interest in FairPoint to its direct, wholly owned subsidiary, Consolidated Communications, Inc. (CCI), so that FairPoint will be a direct, wholly owned subsidiary of CCI.13 As a result, all of FairPoint’s Licensees will become indirect subsidiaries of Consolidated Holdings.14 The Applicants state that the proposed transaction is in the public interest. The Applicants assert that FairPoint and Consolidated Holdings do not compete with each other in any service territory, as their service areas do not overlap and are not adjacent.15 The Applicants further state that FairPoint’s customers will not experience any immediate changes in services, rates, terms, or conditions of service.16 The Applicants contend that Consolidated Holdings’ previous experience with integrating, improving, and upgrading broadband networks of incumbent LECs will continue with FairPoint.17 They maintain that the Applicants’ focus on deployment and maintenance of advanced telecommunications networks will improve service for all subscribers, including in rural areas.18 Further, the Applicants maintain that 7 Id. at 3. 8 Id. at 3, 6. 9 Id. at 12. Applicants state that at present, the following entities own or control ten percent or more of Consolidated Holdings’ stock: BlackRock Institutional Trust Company, BlackRock Inc., and The Vanguard Group Inc. Id. at 2-3. 10 Id. at 5. 11 Id. 12 Id. 13 Id. 14 Id. at 5. Applicants state that, after consummation, Bob Udell, the current President and Chief Executive Officer of Consolidated Holdings, will continue to serve as President and CEO of the combined company. One director from the FairPoint Board of Directors will join the Board of Directors of Consolidated Holdings, which will expand from 8 to 9 directors. Id. 15 Id. at Exhibit C, pages 10-12. 16 Id. at Exhibit C, page 5. 17 Id. at Exhibit C, page 3. 18 Id. at Exhibit C, pages 2-4. 2

the consolidated company will improve broadband and speed for all subscribers, specifically those subscribers served by incumbent LECs.19 Request for Waiver of Section 61.41(c)(2) of the Commission’s Rules The Applicants have received prior waivers of section 61.41(c)(2) of the Commission’s rules, sometimes referred to as the “all-or-nothing rule,” with respect to their incumbent LEC rate-of-return operations, and request a waiver of this rule to be granted to the newly consolidated operations.20 According to the Applicants, this waiver of section 61.41(c)(2) would allow the operating entities of the Applicants to maintain the status quo, and continue to be regulated pursuant to rate-of return regulation with regard to tariffing and price regulation while being treated as price cap companies for Connect America Fund purposes.21 The Applicants submit that the waiver is merited to prevent disruption of the daily operations of the companies.22 The Applicants state that requiring the operating companies to transition from rate-of-return to price cap regulation while managing the other compensation transitions that the Commission requires would be disruptive and costly with no clear public interest benefit.23 SECTION 214 AUTHORIZATIONS A. International The application for consent to the transfer of control of certain international section 214 authorizations from FairPoint to Consolidated Holdings has been assigned the file numbers listed below. File Number Authorization Holder Authorization Number ITC-T/C-20161220-00361 Chautauqua & Erie Communications, Inc. ITC-214-19940509-00155 ITC-T/C-20161220-00376 St. Joe Communications, Inc. ITC-214-19950920-00045 ITC-T/C-20161220-00359 The El Paso Long Distance Company ITC-214-19960626-00271 ITC-T/C-20161220-00362 C-R Long Distance, Inc. ITC-214-19960404-00139 ITC-T/C-20161220-00373 ST Long Distance, Inc. ITC-214-19961118-00578 ITC-T/C-20161220-00366 Germantown Long Distance Company ITC-214-19970113-00018 ITC-T/C-20161220-00374 Taconic TelCom Corp. ITC-214-19970219-00095 ITC-T/C-20161220-00357 Berkshire Cable Corp. ITC-214-19970416-00213 ITC-T/C-20161220-00360 BE Mobile Communications, Inc. ITC-214-19970710-00391 ITC-T/C-20161220-00367 FairPoint Carrier Services, Inc. ITC-214-19980610-00403 ITC-T/C-20161220-00365 Elltel Long Distance Corp. ITC-214-19981228-00891 ITC-T/C-20161220-00371 Quality One Technologies, Inc. ITC-214-19990713-00464 ITC-T/C-20161220-00362 C-R Long Distance, Inc. ITC-214-20000320-00156 19 Id. at Exhibit C, pages 4-10. 20 Id. at Exhibit C, pages 13-15. Section 61.41(c)(2) of the Commission’s rules requires that a telephone company or group of telephone companies that become affiliated with a price cap carrier by merger, acquisition or similar transaction “shall become subject to price cap regulation no later than one year following the effective date” of the transaction. 47 CFR § 61.41(c)(2). 21 Lead Application at Exhibit C, page 14. 22 Id. at Exhibit C, pages 14-15. 23 Id. at 15. 3

ITC-T/C-20161220-00372 Orwell Communications, Inc. ITC-214-20001019-00628 ITC-T/C-20161220-00374 People Mutual Long Distance Company ITC-214-20001207-00717 ITC-T/C-20161220-00368 GTC, Inc. ITC-214-20011019-00531 ITC-T/C-20161220-00370 Marianna Tel., Inc. ITC-214-20011025-00599 ITC-T/C-20161220-00358 UI Long Distance, Inc. ITC-214-20030206-00049 ITC-T/C-20161220-00369 Northern New England Telephone ITC-214-20030516-00243 Operations LLC ITC-T/C-20161220-00363 Comerco, Inc. ITC-214-20030521-00254 ITC-T/C-20161220-00364 Enhanced Communications of Northern ITC-214-20070206-00437 New England, Inc. B. Domestic The Applicants request transfer of control of domestic section 214 authority in connection with the proposed transaction.24 In light of the complexity and number of license transfers contemplated by the Application and the associated public interest review, the domestic transfer of control applications are not subject to streamlined treatment.25 WIRELESS AUTHORIZATIONS File Number Authorization Holder Lead Call Sign 0007597973 Northern New England Telephone Operations LLC WBB246 0007600311 Ellensburg Telephone Company WBA948 0007600313 Telephone Operating Company of Vermont LLC WQJB443 0007600316 FairPoint Communications, Inc. WQIM469 GENERAL INFORMATION The applications referenced herein have been found, upon initial review, to be acceptable for filing. The Commission reserves the right to return any application if, upon further examination, it is determined to be defective and not in conformance with the Commission’s rules and policies. Interested parties may file comments on or before February 13, 2017, and reply comments on or before February 28, 2017. Pursuant to sections 1.415 and 1.419 of the Commission’s rules, 47 CFR §§ 1.415, 1.419, interested parties may file comments and reply comments on or before the dates indicated on the first page of this document. Comments may be filed using the Commission’s Electronic Comment Filing System (ECFS). See Electronic Filing of Documents in Rulemaking Proceedings, 63 FR 24121 (1998).  Electronic Filers: Comments may be filed electronically using the Internet by accessing the ECFS: http://apps.fcc.gov/ecfs/. 24 See Id. at Exhibit A. 25 See 47 C.F.R. § 63.03(c)(1). 4

 Paper Filers: Parties who choose to file by paper must file an original and one copy of each filing. If more than one docket or rulemaking number appears in the caption of this proceeding, filers must submit two additional copies for each additional docket or rulemaking number. Filings can be sent by hand or messenger delivery, by commercial overnight courier, or by first- class or overnight U.S. Postal Service mail. All filings must be addressed to the Commission’s Secretary, Office of the Secretary, Federal Communications Commission.  All hand-delivered or messenger-delivered paper filings for the Commission’s Secretary must be delivered to FCC Headquarters at 445 12th St., SW, Room TW-A325, Washington, DC 20554. The filing hours are 8:00 a.m. to 7:00 p.m. All hand deliveries must be held together with rubber bands or fasteners. Any envelopes and boxes must be disposed of before entering the building.  Commercial overnight mail (other than U.S. Postal Service Express Mail and Priority Mail) must be sent to 9300 East Hampton Drive, Capitol Heights, MD 20743.  U.S. Postal Service first-class, Express, and Priority mail must be addressed to 445 12th Street, SW, Washington DC 20554. 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). In addition, provide one copy of each pleading to each of the following: 1) Dennis Johnson, Wireline Competition Bureau, dennis.johnson@fcc.gov; 2) David Krech, International Bureau, david.krech@fcc.gov; 3) Linda Ray, Wireless Telecommunications Bureau, linda.ray@fcc.gov; 4) Neil Dellar, Office of General Counsel, TransactionTeam@fcc.gov. mailto: The proceeding in this Notice shall be treated as a “permit-but-disclose” proceeding in accordance with the Commission’s ex parte rules.26 Persons making ex parte presentations must file a copy of any written presentation or a memorandum summarizing any oral presentation within two business days after the presentation (unless a different deadline applicable to the Sunshine period applies). Persons making oral ex parte presentations are reminded that memoranda summarizing the presentation must (1) list all persons attending or otherwise participating in the meeting at which the ex parte presentation was made, and (2) summarize all data presented and arguments made during the presentation. If the presentation consisted in whole or in part of the presentation of data or arguments already reflected in the presenter’s written comments, memoranda or other filings in the proceeding, the presenter may provide citations to such data or arguments in his or her prior comments, memoranda, or other filings (specifying the relevant page and/or paragraph numbers where such data or arguments can be found) in lieu of summarizing them in the memorandum. Documents shown or given to Commission staff during ex parte meetings are deemed to be written ex parte presentations and must be filed consistent with rule 1.1206(b), 47 C.F.R. § 1.1206(b). Participants in this proceeding should familiarize themselves with the Commission’s ex parte rules. 26 47 C.F.R. §§ 1.1200 et seq. 5

To allow the Commission to consider fully all substantive issues regarding the Applications in as timely and efficient a manner as possible, petitioners and commenters should raise all issues in their initial filings. New issues may not be raised in responses or replies.27 A party or interested person seeking to raise a new issue after the pleading cycle has closed must show good cause why it was not possible for it to have raised the issue previously. Submissions after the pleading cycle has closed that seek to raise new issues based on new facts or newly discovered facts should be filed within 15 days after such facts are discovered. Absent such a showing of good cause, any issues not timely raised may be disregarded by the Commission. For further information, please contact Dennis Johnson, Wireline Competition Bureau, (202) 418- 0809; David Krech, International Bureau, (202) 418-7443; or Linda Ray, Wireless Telecommunications Bureau, (202) 418-0257. - FCC - 27 See 47 C.F.R. §1.45(c). 6


Document Created: 2017-01-18 11:55:03
Document Modified: 2017-01-18 11:55:03
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