**DA 06-846**

**April 13, 2006**

**DOMESTIC AUTHORIZATION GRANTED**

Application for Transfer of Control of Birch Telecom, Inc.,
Debtor-in-Possession, to the Shareholders of the Newly Reorganized Birch
Telecom

WC Docket No. 06-45

**By the Chief, Wireline Competition Bureau:**

On February 17, 2006, Birch Telecom, Inc., Debtor-in-Possession ("Birch
DIP") and the shareholders of the newly reorganized Birch Telecom
(together "Applicants"), filed an application pursuant to sections 63.03
and 63.04 of the Commission's rules[^1] requesting authority to transfer
control of the domestic section 214 authorizations held by certain
subsidiaries of Birch DIP from Birch DIP to the shareholders ("New Birch
Shareholders") of the newly reorganized Birch Telecom ("New Birch")
pursuant to a Third Amended Joint Reorganization Plan proposed by Birch
DIP.[^2]

The Commission released a public notice accepting this application for
streamlined processing on February 27, 2006. On March 13, 2006, the
Department of Justice, including the Federal Bureau of Investigation,
with the concurrence of the Department of Homeland Security
(collectively, the "Executive Branch Agencies") filed with the
Commission a letter requesting that the Commission defer grant of this
application while the Executive Branch Agencies address potential
national security, law enforcement, and public safety issues.[^3] On
April 10, 2006, the Executive Branch Agencies withdrew their March 13,
2006 request to defer action on the application noting that they have no
objection to the application.[^4]

The Wireline Competition Bureau finds, upon consideration of the record,
that grant of the application will serve the public interest,
convenience, and necessity. Upon consummation of the transaction, New
Birch will have a market share in the interstate, interexchange market
of less than 10 percent, and will provide competitive telephone exchange
services or exchange access services exclusively in geographic areas
served by a dominant local exchange carrier that is not a party to the
transaction. In addition, the Applicants and their affiliates are not
dominant with respect to any service.

Consistent with Commission precedent, the Bureau accords the appropriate
level of deference to the Executive Branch Agencies' expertise on
national security and law enforcement issues.[^5] Therefore, pursuant to
section 214 of the Communications Act of 1934, as amended, 47 U.S.C.
§ 214, and section 0.291 of the Commission's rules,[^6] the Wireline
Competition Bureau hereby grants the application discussed in this
Public Notice.

Pursuant to section 1.103 of the Commission's rules, the grant is
effective upon release of this Public Notice.[^7] Petitions for
reconsideration under section 1.106 or applications for review under
section 1.115 of the Commission's rules may be filed within 30 days of
the date of this Public Notice.[^8]

For further information, please contact Adam Kirschenbaum at (202)
418-7280.

> -- FCC --

[^1]: 47 C.F.R. §§ 63.03, 63.04; *see* 47 U.S.C. § 214.

[^2]: On April 6, 2006, Birch DIP and its subsidiaries filed a
    supplement to the application.

[^3]: *See* Letter from Laura H. Parsky, Deputy Assistant Attorney
    General, United States Department of Justice Criminal Division, to
    Marlene H. Dortch, FCC, WC Docket No. 06-45 and
    ITC-ASG-20060221-00111, ITC-ASG-20060221-00112,
    ITC-ASG-20060221-00113, ITC-ASG-200060221-00114,
    ITC-ASG-20060221-00115, and ITC-ASG-20060221-00116 (dated March 13,
    2006).

[^4]: *See* Letter from Laura H. Parsky, Deputy Assistant Attorney
    General, United States Department of Justice Criminal Division, to
    Marlene H. Dortch, FCC, WC Docket No. 06-45 and
    ITC-ASG-20060221-00111, ITC-ASG-20060221-00112,
    ITC-ASG-20060221-00113, ITC-ASG-200060221-00114,
    ITC-ASG-20060221-00115, and ITC-ASG-20060221-00116 (dated April 10,
    2006).

[^5]: The Commission considers national security, law enforcement,
    foreign policy, and trade policy concerns when analyzing a transfer
    of control or assignment application in which foreign ownership is
    an issue. *See Amendment of the Commission's Regulatory Policies to
    Allow Non-U.S. Licensed Satellites Providing Domestic and
    International Service in the United States*, Report and Order, 12
    FCC Rcd 24094, 24170-72, paras. 178-82 (1997); *Rules and Policies
    on Foreign Participation in the U.S. Telecommunications Market*,
    Report and Order and Order on Reconsideration, 12 FCC Rcd 23891,
    23919-21, paras. 61-66 (1997) ("*Foreign Participation Order*"),
    Order on Reconsideration, 15 FCC Rcd 18158 (2000). In assessing the
    public interest, the Commission considers the record and accords the
    appropriate level of deference to Executive Branch expertise on
    national security and law enforcement issues. *See Foreign
    Participation Order*, 12 FCC Rcd at 23919-21, paras. 61-66.

[^6]: 47 C.F.R. § 0.291.

[^7]: *See* 47 C.F.R. § 1.103.

[^8]: *See* 47 C.F.R. §§ 1.106, 1.115.