**DA 06-1323**

**Released: June 27, 2006**

**DOMESTIC SECTION 214 APPLICATION FILED FOR TRANSFER OF CONTROL**

**OF LOOKING GLASS NETWORKS HOLDING CO., INC. TO**

**LEVEL 3 COMMUNICATIONS, INC.**

**STREAMLINED Pleading Cycle Established**

**WC Docket No. 06-116**

**Comments Due: July 11, 2006**

**Reply Comments Due: July 18, 2006**

On June 20, 2006, Looking Glass Networks Holding Co., Inc. ("Looking
Glass") and Level 3 Communications, Inc. ("Level 3") (together,
"Applicants") filed an application ("Application") pursuant to section
63.04 of the Commission's rules[^1] requesting authority to transfer
control of Looking Glass to Level 3.[^2]

Applicants assert that this transaction is entitled to presumptive
streamlined treatment pursuant to section 63.03(b)(2)(i) of the
Commission's rules because immediately following the transaction: (1)
Level 3 will hold less than a ten percent (10%) share of the interstate,
interexchange market; (2) Level 3 will provide exchange access services
only in geographic areas served by dominant local exchange carriers
(none of which are parties to the proposed transaction); and (3) neither
of the Applicants nor their affiliates are dominant with respect to any
service.[^3]

Looking Glass, a Delaware corporation, is a holding company and the
ultimate sole owner of Looking Glass Networks, Inc. ("Looking Glass
Operations") and Looking Glass Networks of Virginia, Inc. ("Looking
Glass Virginia") (together, the "Looking Glass Operating Companies").
Looking Glass Operations, a Delaware corporation, is a non-dominant
provider of high-capacity data transport services as well as
high-capacity dark fiber and carrier-neutral collocation services for
enterprise and carrier customers in 14 major markets in the United
States. Looking Glass Operations is a wholly-owned, direct subsidiary of
Looking Glass. Looking Glass Virginia, a Virginia corporation, provides
interstate, intrastate, and local data transport services in Virginia,
and is a wholly-owned, direct subsidiary of Looking Glass Operations,
and a wholly-owned, indirect subsidiary of Looking Glass.

Level 3, a Delaware corporation, is a global communications and
information services company that offers, through its operating
subsidiaries, a wide range of communications services in North America,
Europe, and Asia, including Internet-protocol-based services, broadband
transport, collocation services, and patented Softswitch-based managed
modem and voice services. Level 3 Communications, LLC ("Level 3 LLC"), a
limited-liability company, is Level 3's principal, indirect operating
subsidiary in the United States. Level 3 LLC is a wholly-owned
subsidiary of Level 3 Financing, Inc. ("Level 3 Financing"), and Level 3
Financing, in turn, is a wholly-owned subsidiary of Level 3. Level 3 is
a publicly-traded company listed on NASDAQ. One entity owns or controls
10% or more of Level 3: Southeastern Asset Management, Inc. ("SAM"), a
Tennessee corporation, holds sole or shared voting rights for
approximately 18.83% of the outstanding shares of Level 3.[^4]

On June 2, 2006, Looking Glass and Level 3 entered into an Agreement and
Plan of Merger ("Agreement") to allow Level 3 to acquire all of the
outstanding shares of Looking Glass. Level 3 will acquire Looking Glass
in a simultaneous three-step transaction. First, Looking Glass will
merge with Eldorado Acquisition One, LLC ("Eldorado"), a Delaware
limited-liability company, established by Level 3 for the purpose of
merging with Looking Glass, with Looking Glass surviving. Second, Level
3 will immediately contribute all of the common shares of Looking Glass
to Level 3 Financing. Third, Level 3 Financing will contribute all of
the common shares of Looking Glass to Level 3 LLC. Following the
completion of these three steps, Looking Glass will then be a direct
subsidiary of Level 3 LLC, and the Looking Glass Operating Companies
will be indirect subsidiaries of Level 3. Applicants confirm that no
existing shareholder or controlling group of shareholders of Looking
Glass will hold a 10% or greater direct or indirect interest in Level 3
following the proposed transaction.

Applicants state that the proposed transaction will serve the public
interest, convenience and necessity because: (1) the Looking Glass
Operating Companies will continue to operate their respective facilities
and provide service to their existing customers at the same rates,
terms, and conditions, ensuring a seamless transition for those
customers; and (2) it will allow Level 3 to use its acquisition of
Looking Glass to expand further into the enterprise market.[^5]

**[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 July 11, 2006** and **reply comments on or before July 18,
2006**.[^6] 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.[^7] 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.

**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) Albert M. Lewis, Competition Policy Division, Wireline Competition
    Bureau, 445 12th Street, S.W., Room 5-C224, Washington, D.C. 20554;
    e-mail: [albert.lewis@fcc.gov](mailto:alexis.johns@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 CY-B402, Washington, D.C. 20554, telephone: (202) 488-5300,
fax: (202) 488-5563, or via e-mail
[www.bcpiweb.com](http://www.bcpiweb.com/).

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).

For further information, please contact Cecilia Seppings at (202)
418-1588, or Al Lewis at (202) 418-1561.

\- **FCC** -

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

[^2]: Applicants have also filed an application for transfer of control
    associated with authorization for international services. Any action
    on this domestic 214 application is without prejudice to Commission
    action on other related, pending applications.

[^3]: 47 C.F.R. § 63.03(b)(2)(i).

[^4]: SAM holds voting rights for outstanding shares that are otherwise
    owned by other entities for whom SAM acts as an investment advisor.
    None of the other owners of outstanding shares of Level 3 whose
    shares are voted by SAM owns a 10% or greater direct or indirect
    interest in Level 3.

[^5]: Applicants assert that the proposed transaction will have no
    impact on any participant's share of the local exchange, exchange
    access, or interstate interexchange markets. Applicants state that
    even if Level 3 derived all of the communications revenue (excluding
    interexchange revenue and reciprocal compensation revenue) reported
    in the 2005 10-K for Level 3 Communications, Inc. from local
    exchange and exchange access (when in fact, it derived only a
    fraction of its revenues from such services), Level 3's revenues
    would likely account for less than one percent of all nationwide
    local exchange and exchange access revenues. *Citing* 2005 Form 10K,
    Item 7, of Level 3 Communications, Inc.; FCC, Statistics of
    Communications Common Carriers, at 202, Tbl. 5.20 (2004/2005 ed.)
    (providing 2003 data); FCC, Trends in Telephony Service, Tbl. 8.7
    (2005) (providing 2003 data). Applicants further note that a direct
    year-to-year comparison is not possible, as the FCC's reports do not
    include 2005 data. Applicants also state that, even assuming that
    all Looking Glass and Level 3 toll revenues were interstate
    interexchange revenues (and they are not), the combined
    interexchange revenues of Looking Glass and Level 3 would amount to
    no more than 2% of total industry-wide toll revenues, and even less
    than that percentage if all non-LEC, non-wireless toll services are
    included.

[^6]: *See* 47 C.F.R. § 63.03(a).

[^7]: Such authorization is conditioned upon receipt of any other
    necessary approvals from the Commission in connection with the
    proposed transaction.