DA 06-1335

June 28, 2006

**DOMESTIC AUTHORIZATIONS GRANTED**

**Application Filed for the Transfer of Control of the CTC
Communications Group, Inc. and the Choice One Communications, Inc.
Subsidiaries to Surviving Corporation**

**WC Docket No. 06-47**

**Application Filed for the Transfer of Control of Conversent
Communications, Inc. Subsidiaries from Conversent Communications, Inc.
to**

**CTC Communications Group, Inc. and Choice One Communications Inc.**

**WC Docket No. 06-85**

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

On February 22, 2006, CTC Communications Group, Inc., ("CTC Group") and
Choice One Communications Inc. ("Choice One") filed an application,
pursuant to sections 63.03 and 63.04 of the Commission's rules,[^1]
seeking authority to transfer control of the CTC Group subsidiaries and
the Choice One subsidiaries as a result of the merger of CTC Group with
and into Choice One ("Transaction No. 1"). Additionally, on April 10,
2006, CTC Group, Choice One, and Conversent Communications, Inc.
("Conversent") (collectively, the "Applicants") filed an application,
pursuant to sections 63.03 and 63.04 of the Commission's rules,[^2]
requesting authority to transfer control of the Conversent subsidiaries
as a result of the acquisition of Conversent by CTC Group and Choice One
("Transaction No. 2").

The Commission released a public notice accepting each application for
streamlined processing on March 27, 2006[^3] and May 8, 2006,[^4]
respectively. On April 10, 2006, the United States Department of
Homeland Security ("DHS") with the concurrence of the United States
Department of Justice ("DOJ"), including the Federal Bureau of
Investigation ("FBI") (collectively, the "Executive Branch Agencies")
filed a letter requesting that the Commission defer grant of Transaction
No. 1 while the Executive Branch Agencies address potential national
security, law enforcement, and public safety issues.[^5] On May 22,
2006, the Executive Branch Agencies filed another letter requesting that
the Commission defer grant of Transaction No. 2.[^6] In response to the
requests filed by the Executive Branch Agencies, the Wireline
Competition Bureau removed the applications from streamlined review.[^7]

On June 23, 2006, the Executive Branch Agencies and the Applicants
submitted a Joint Petition to Adopt Conditions to Authorizations and
Licenses ("Joint Petition").[^8] In the Joint Petition, the Executive
Branch Agencies advised the Commission that they do not object to the
grant of the applications of CTC Group, Choice One, and Conversent
provided that the Commission conditions such grant on compliance with
the terms of the assurances letter executed by the Parties, a copy of
which was attached to the Joint Petition as Exhibit C ("Assurances
Letter").

The Wireline Competition Bureau finds, upon consideration of the record,
that grant of the applications, subject to compliance with the
Assurances Letter, will serve the public interest, convenience, and
necessity. Upon consummation of both transactions, the resulting entity
will have a market share in the U.S. 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 in the U.S. that is not a
party to the transaction. In addition, no party to these transactions is
dominant with respect to any domestic service.

Consistent with Commission precedent, the Wireline Competition Bureau
accords the appropriate level of deference to the Executive Branch
Agencies' expertise on national security and law enforcement issues.[^9]
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,[^10] the Wireline Competition Bureau hereby grants the
applications 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.[^11] 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.[^12]

For further information, please contact CeCi Seppings at (202) 418-1588
or Denise Coca at (202) 418-0574, Competition Policy Division, Wireline
Competition Bureau.

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

[^2]: 47 C.F.R §§ 63.03, 63.04; *see* 47 U.S.C. § 214.

[^3]: *Domestic Section 214 Application Filed for Transfer of Control of
    the CTC Communications Group, Inc. and the Choice One
    Communications, Inc. Subsidiaries to Surviving Corporation*, WC
    Docket No. 06-47, Public Notice, DA 06-667 (rel. Mar. 27, 2006).

[^4]: *Domestic Section 214 Application Filed for the Transfer of
    Control of the Conversent Communications, Inc. Subsidiaries from
    Conversent Communications, Inc. to CTC Communications Group, Inc.
    and Choice One Communications, Inc.*, WC Docket No. 06-85, Public
    Notice, DA 06-995 (rel. May 8, 2006).

[^5]: *See* Letter from Stewart A. Baker, Assistant Secretary for
    Policy, United States Department of Homeland Security, to Marlene H.
    Dortch, Secretary, Federal Communications Commission, WC Docket No.
    06-47 (filed Apr. 10, 2006).

[^6]: *See* Letter from Stewart A. Baker, Assistant Secretary for
    Policy, United States Department of Homeland Security, to Marlene H.
    Dortch, Secretary, Federal Communications Commission, WC Docket No.
    06-85 (filed May 22, 2006). *See also* Letter from Stewart A. Baker,
    Assistant Secretary for Policy, United States Department of Homeland
    Security, to Marlene H. Dortch, FCC, WC Docket No. 06-85 and
    ITC-T/C-20060410-00227, ITC-T/C-20060410-00228, and
    ITC-T/C-20060410-00229 (filed May 22, 2006). The Executive Branch
    Agencies filed a revised letter on May 24, 2006.

[^7]: *See Notice of Removal of Domestic Section 214 Application From
    Streamlined Treatment*, WC Docket No. 06-47, Public Notice, DA
    06-873 (rel. Apr. 18, 2006); *Notice of Removal of Domestic Section
    214 Application From Streamlined Treatment*, WC Docket No. 06-85,
    Public Notice, DA 06-1149 (rel. May 30, 2006).

[^8]: *See* Joint Petition to Adopt Conditions to Authorizations and
    Licenses, WC Docket No. 06-47 and ITC-T/C-20060222-00100,
    ITC-T/C-20060222-00101, ITC-T/C-20060222-00102,
    ITC-T/C-20060222-00103, ITC-T/C-20060222-00105,
    ITC-T/C-20060222-00106; WC Docket No. 06-85 and
    ITC-T/C-20060410-00227, ITC-T/C-20060410-00228, and
    ITC-T/C-20060410-00229 (filed June 23, 2006).

[^9]: 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.

[^10]: 47 C.F.R. § 0.291.

[^11]: *See* 47 C.F.R. § 1.103.

[^12]: *See* 47 C.F.R. §§ 1.106, 1.115.