Attachment Petition to Adopt Co

Petition to Adopt Co

SUPPLEMENT

Supplement

2011-09-27

This document pretains to SCL-T/C-20110512-00018 for Transfer of Control on a Submarine Cable Landing filing.

IBFS_SCLTC2011051200018_918742

Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. In the Matter of LEVEL 3 COMMUNICATIONS, INC. IB Docket No. 11-78 Petition for Declaratory Ruling Under Section File No. ISP-PDR-2011-____ 310(b)(4) of the Communications Act of 1934, as Amended PETITION FOR DECLARATORY RULING Pursuant to 47 U.S.C. § 310(b)(4) (“Section 310(b)(4)”) and the Commission’s implementing rules and policies therefor, Level 3 Communications, Inc. (“Level 3 Parent”) (FRN 0005868732), hereby petitions the Commission for a declaratory ruling that it would serve the public interest to permit the direct foreign ownership of Level 3 Parent, and thus the indirect foreign ownership of Level 3 Parent’s Title III-licensed subsidiaries TelCove FWL, Inc. (“TelCove”) (FRN 0014359079), and Vyvx, LLC (“Vyvx”) (FRN 0010597771), in excess of the 25-percent foreign-ownership benchmark in Section 310(b)(4). TelCove holds 193 Local Multipoint Distribution Service (“LMDS”) licenses and 177 39 GHz licenses. Vyvx holds fifteen common-carrier satellite earth station authorizations. Level 3 Parent has entered into an agreement to acquire Global Crossing Limited (“GCL”) through an amalgamation under Bermuda law, a transaction that will return GCL and its subsidiaries to U.S. management control and predominantly U.S. ownership at closing (the “Proposed Transaction”). GCL is currently indirectly majority-owned and controlled by Singapore Technologies Telemedia Pte Ltd (“ST Telemedia”). ST Telemedia, a Singapore investment holding company, indirectly holds a majority interest in GCL of approximately 59.9

percent. As consideration for the Proposed Transaction, GCL’s existing shareholders—including ST Telemedia’s wholly-owned subsidiary, STT Crossing Ltd (“STT Crossing”)—will receive stock in Level 3 Parent in exchange for cancellation of their GCL shares, thereby decreasing the foreign ownership in GCL’s operating subsidiaries but increasing the aggregate indirect foreign ownership of TelCove and Vyvx. Level 3 Parent therefore petitions the Commission for a declaratory ruling allowing aggregate indirect foreign ownership in TelCove and Vyvx in excess of 25 percent—specifically, 46.11 percent at closing, consisting of: (i) an approximate 24.47-percent indirect equity-and- voting interest to be acquired by STT Crossing (a foreign investor from Singapore, a World Trade Organization (“WTO”) Member country), (ii) an aggregate approximate 11.42-percent indirect equity-and-voting interests that are held or will be acquired by other investors from WTO Member countries, and (iii) an aggregate approximate 10.22 percent indirect equity-and- voting interests to be acquired by retail investors of unknown nationality (and one known investor arguably from a non-WTO Member country).1 Level 3 Parent also requests that, consistent with Commission precedent, the Commission permit Level 3 Parent to accept an additional aggregate 25-percent indirect equity and/or voting interests from foreign investors without seeking prior Commission approval under Section 310(b)(4). This additional aggregate 25-percent interest would consist of (i) potential additional ownership by ST Telemedia (through STT Crossing) up to 34.5 percent (i.e., up to an additional 10.03 percent interest), consistent with the limitations under a Stockholder Rights Agreement by 1 Concurrently with this petition, Level 3 and its subsidiaries and GCL and its subsidiaries have filed applications to transfer control of: (1) transmit-receive non-common carrier satellite earth station authorizations held by Global Crossing Americas Solutions, Inc. (“GCAS”); (2) cable landing licenses held by GT Landing II Corp. and GCAS; and (3) domestic and international Section 214 authorizations held by various GCL subsidiaries. 2

and between Level 3 Parent and STT Crossing, and (ii) potential ownership by other foreign investors accounting for the remaining balance (i.e., 14.97 percent). This margin would also accommodate potential fluctuations in ownership in publicly traded Level 3 Parent stock. Level 3 Parent requests that the Commission accept this additional aggregate foreign ownership provided that (1) no more than 25 percent of Level 3 Parent’s total ownership is attributable to entities from non-WTO countries and/or (2) no more than 25 percent is attributable to a single previously unidentified entity from a WTO Member country.2 For the reasons set forth below, the Commission should grant the requested declaratory ruling. I. BACKGROUND A. Parties to the Proposed Transaction 1. GCL GCL is a global telecommunications company. It is organized as a Bermuda exempted limited-liability company with its principal executive offices in Hamilton, Bermuda, and its principal administrative offices in Florham Park, New Jersey. GCL is a publicly-traded company listed on NASDAQ (symbol: GLBC). Through its subsidiaries, GCL owns and operates a global Internet Protocol (“IP”)-based fiber optic network directly connecting more than 300 cities in 30 countries. GCL uses this network to provide telecommunications services and data and IP-based services to corporations, government agencies, and telecommunications carriers. GCL’s U.S. operating subsidiaries hold numerous Commission authorizations for international telecommunications services, undersea cable facilities, and non-common-carrier 2 See, e.g., Robert M. Franklin, Transferor Inmarsat, Plc, Transferee, Memorandum Opinion and Order and Declaratory Ruling, 24 FCC Rcd. 449, 480 ¶ 70 (Int’l Bur. 2009); TelCove, Inc., Order and Declaratory Ruling, 21 FCC Rcd. 3982, 3984 ¶ 3 (Int’l Bur. 2006). 3


Document Created: 2011-09-27 13:55:32
Document Modified: 2011-09-27 13:55:32
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