**DA 06-1573**

**Released: August 1, 2006**

**DOMESTIC SECTION 214 APPLICATION FILED FOR TRANSFER OF CONTROL OF
IBASIS, INC. TO KPN TELECOM B.V.**

**STREAMLINED Pleading Cycle Established**

**WC Docket No. 06-140**

**Comments Due: August 15, 2006**

**Reply Comments Due: August 22, 2006**

On July 7, 2006, iBasis, Inc. ("iBasis") and KPN Telecom B.V. ("KPN")
(collectively, the "Applicants") filed an application, pursuant to
section 63.04 of the Commission's rules,[^1] to transfer control of
iBasis, a holder of blanket domestic and international Section 214
authorizations, to KPN.[^2]

Applicants assert that this transaction is entitled to presumptive
streamlined treatment under section 63.03(b)(2)(i) of the Commission's
rules because: (1) the proposed transaction would result in KPN having a
market share in the interstate, interexchange market of less than 10
percent; (2) KPN would provide competitive telephone exchange services
or exchange access services (if at all) exclusively in geographic areas
served by a dominant local exchange carrier that is not a party to this
transaction; and (3) neither of the Applicants is dominant with respect
to any service.[^3]

iBasis is a Delaware publicly traded corporation located in Burlington,
Massachusetts that provides large wholesale business service and small
retail business services to customers worldwide. iBasis offers two
different retail services: disposable calling cards and an electronic
prepaid calling card service sold directly to customers on a website. No
person or entity holds a 10% or greater interest in iBasis.

KPN, a private limited liability company incorporated under the laws of
the Netherlands, provides international wholesale voice services. KPN is
a wholly owned subsidiary of Royal KPN, the legacy carrier located in,
and providing service to, the Netherlands. Royal KPN is a
publicly-listed company with no controlling shareholder. Royal KPN
offers a full range of communications service in the Netherlands,
including retail voice, Internet, data, and mobile services. Royal KPN,
through its affiliates, also provides international wholesale transport
services to carriers throughout the world. Neither Royal KPN nor KPN
offer intrastate or interstate, interexchange services in the United
States, although KPN has subsidiaries that offer international services.

The following entities or individuals own a 10% or greater interest in
Royal KPN: Capital Group International, Inc. (11.9%) (CGII), a
California corporation, and Capital Research and Management Company
(13%) ("CRMC"), a Delaware corporation. Both CGII and CRMC are
subsidiaries of The Capital Group Companies, Inc. ("CGC"), a privately
held Delaware investment management corporation. KPN states that it is
not aware of any controlling share holder of CGC. Royal KPN states that
it is not aware of any other entities that hold a 10% or greater direct
or indirect interest in the company

Pursuant to a Stock Purchase Agreement dated June 21, 2006, between KPN
and iBasis, KPN will contribute to a newly-formed KPN subsidiary, KPN
Global Carrier Services B.V. ("KGCS"), a Netherlands corporation. As
part of this reorganization, a number of KPN-affiliated carriers
involved in the provision of KPN International Wholesale Voice Services
will be folded into, or become part of, KGCS. iBasis will then, through
a separate pro forma transaction, acquire the capital stock of KGCS and
KPN International Network Services, Inc., a holder of international
section 214 authority. KPN will make a cash payment to iBasis of \$55
million dollars. In return, iBasis will issue approximately 40 million
shares of its common stock to KPN, representing approximately a 51%
ownership interest in iBasis. Thus, KGCS will become a wholly-owned
subsidiary of iBasis, and iBasis will be controlled by KPN. The
remaining shares of iBasis will continue to be publicly traded, and
iBasis will continue to be managed by its current U.S. management team.

Applicants submit that the proposed transaction will serve the public
interest. Applicants contend that the transaction will allow iBasis to
compete more effectively in the wholesale transport market.
Specifically, Applicants maintain that the transaction is expected to
yield significant synergies and cost savings resulting from better
termination costs, lower transmission costs, and other cost savings.
Applicants argue that KPN's customers will gain geographically broader
and more cost-effective international transport and termination.
Finally, Applicants state that the transaction will be conducted in a
manner that will be transparent to current customers of iBasis.

**[GENERAL INFORMATION]{.underline}**

The transfer of control identified herein has been found, upon initial
review, to be acceptable for filing as a streamlined application. The
Commission reserves the right to return any transfer of control
application if, upon further examination, it is determined to be
defective and not in conformance with the Commission's rules and
policies. Pursuant to sections 1.415 and 1.419 of the Commission's
rules, 47 CFR §§ 1.415, 1.419, interested parties may file **comments on
or before August 15, 2006** and **reply comments on or before August 22,
2006**.[^4] Unless otherwise notified by the Commission, Applicants are
permitted to transfer the assets and related control on the 31^st^ day
after the date of this notice.[^5] Comments may be filed using: (1) the
Commission's Electronic Comment Filing System (ECFS), (2) the Federal
Government's eRulemaking Portal, or (3) by filing paper copies. *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://www.fcc.gov/cgb/ecfs/> or
    the Federal eRulemaking Portal:
    [http://www.regulations.gov](http://www.regulations.gov/). Filers
    should follow the instructions provided on the website for
    submitting comments.

-   For ECFS filers, if multiple docket or rulemaking numbers appear in
    the caption of this proceeding, filers must transmit one electronic
    copy of the comments for each docket or rulemaking number referenced
    in the caption. In completing the transmittal screen, filers should
    include their full name, U.S. Postal Service mailing address, and
    the applicable docket or rulemaking number. Parties may also submit
    an electronic comment by Internet e-mail. To get filing
    instructions, filers should send an e-mail to <ecfs@fcc.gov>, and
    include the following words in the body of the message, "get form."
    A sample form and directions will be sent in response.

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-   Paper Filers: Parties who choose to file by paper must file an
    original and four copies 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 (although we continue to experience delays in receiving U.S. Postal
Service mail). All filings must be addressed to the Commission's
Secretary, Office of the Secretary, Federal Communications Commission.

The Commission's contractor will receive hand-delivered or
messenger-delivered paper filings for the Commission's Secretary at 236
Massachusetts Avenue, N.E., Suite 110, Washington, D.C. 20002. The
filing hours at this location are 8:00 a.m. to 7:00 p.m. All hand
deliveries must be held together with rubber bands or fasteners. Any
envelopes must be disposed of [before]{.underline} 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 should be addressed to 445 12th Street, S.W., Washington
D.C. 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).

**You may submit comments, identified by the above noted docket number,
by any of the following methods:**

-   Federal eRulemaking Portal:
    [http://www.regulations.gov](http://www.regulations.gov/). Follow
    the instructions for submitting comments.

-   Federal Communications Commission's Web Site:
    <http://www.fcc.gov/cgb/ecfs/>. Follow the instructions for
    submitting comments.

-   People with Disabilities: Contact the FCC to request reasonable
    accommodations (accessible format documents, sign language
    interpreters, CART, etc.) by e-mail: <FCC504@fcc.gov> or phone:
    202-418-0530 or TTY: 202-418-0432.

**In addition, one copy of each pleading must be sent to each of the
following:**

(1) The Commission's duplicating contractor, Best Copy and Printing,
    Inc., 445 12th Street, S.W., Room CY-B402, Washington, D.C. 20554,
    [www.bcpiweb.com](http://www.bcpiweb.com/); phone: (202) 488-5300
    fax: (202) 488-5563;

(2) Cecilia Seppings, Competition Policy Division, Wireline Competition
    Bureau, 445 12th Street, S.W., Room 5-C230, Washington, D.C. 20554;
    email: <cecilia.seppings@fcc.gov>;

(3) Dennis Johnson, Competition Policy Division, Wireline Competition
    Bureau, 445 12th Street, S.W., Room 5-B155, Washington, D.C. 20554;
    e-mail: <dennis.johnson@fcc.gov>;

(4) Susan O'Connell, Policy Division, International Bureau, 445 12th
    Street, S.W., Room 7-B544, Washington, D.C. 20554; email:
    [susan.o'connell@fcc.gov](mailto:cynthia.bryant@fcc.gov); and

(5) James Bird, Office of General Counsel, 445 12th Street, S.W., Room
    8-C824, Washington, D.C. 20554; e-mail: <james.bird@fcc.gov>.

Filings and comments are also available for public inspection and
copying during regular business hours at the FCC Reference Information
Center, Portals II, 445 12th Street, S.W., Room CY-A257, Washington,
D.C. 20554. They may also be purchased from the Commission's duplicating
contractor, Best Copy and Printing, Inc., Portals II, 445 12th Street,
S.W., Room CYB402, Washington, D.C. 20554, telephone: (202) 488-5300,
fax: (202) 488-5563, or via e-mail
[www.bcpiweb.com](http://www.bcpiweb.com/).

For further information, please contact Cecilia Seppings at (202)
418-1588, or Dennis Johnson at (202) 418-0809.

\- **FCC** -

[^1]: 47 C.F.R. § 63.04; *see* 47 U.S.C. § 214.

[^2]: Applicants have also filed an application for consent to transfer
    authorization for international services. Any action on this
    domestic 214 application is without prejudice to Commission action
    on other related pending applications. On July 25, 2006, Applicants
    filed a supplement to their application. *See* Supplement to Joint
    Application for Transfer of Control, WC Docket No. 06-140 (filed
    July 25, 2006).

[^3]: *See* 47 C.F.R. § 63.03(b)(2)(i).

[^4]: *See* 47 C.F.R. § 63.03(a).

[^5]: Such authorization is conditioned upon receipt of any other
    necessary approvals from the Commission in connection with the
    proposed transaction.