DA 06-1904

September 21, 2006

**DOMESTIC AUTHORIZATION GRANTED**

**Application Filed for the Transfer of Control of**

**Capital Telecommunications, Inc. to StarVox Communications, Inc.**

**WC Docket No. 06-127**

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

On June 16, 2006, StarVox Communications, Inc. (\"StarVox\") and Capital
Telecommunications, Inc. (\"CTI\") (together, the "Applicants") filed an
application, pursuant to sections 63.03 and 63.04 of the Commission's
rules,[^1] seeking authority to transfer control of CTI to StarVox.

The Commission released a public notice accepting the application for
streamlined processing on July 7, 2006.[^2] On July 21, 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
the transaction while the Executive Branch Agencies address potential
national security, law enforcement, and public safety issues.[^3] In
response to the requests filed by the Executive Branch Agencies, the
Wireline Competition Bureau removed the application from streamlined
review.[^4]

On September 15, 2006, the Executive Branch Agencies submitted a
Petition to Adopt Conditions to Authorizations and Licenses
("Petition").[^5] In the Petition, the Executive Branch Agencies advised
the Commission that they have no objection to the Commission\'s granting
its consent in this proceeding, provided the Commission conditions the
grant on compliance with the terms of the Assurances Letter executed by
the Applicants, a copy of which was filed in WC Docket No. 06-127 on
September 18, 2006 ("Assurances Letter").[^6]

The Wireline Competition Bureau finds, upon consideration of the record,
that grant of the application, subject to compliance with the Assurances
Letter, will serve the public interest, convenience, and necessity. Upon
consummation of the transaction, 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.[^7]
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,[^8] 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.[^9] 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.[^10]

For further information, please contact Gail Cohen at (202) 418-0939,
Competition Policy Division, Wireline Competition Bureau.

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

[^2]: *Domestic Section 214 Application Filed for Transfer of Control of
    Capital Telecommunications, Inc. to StarVox Communications, Inc.*,
    WC Docket No. 06-127, Public Notice, DA 06-1409 (rel. July 7, 2006).
    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]: *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.
    06-127 (filed July 21, 2006).

[^4]: *See Notice of Removal of Domestic Section 214 Application From
    Streamlined Treatment*, WC Docket No. 06-127, Public Notice, DA
    06-1521 (rel. July, 26, 2006).

[^5]: *See* Joint Petition to Adopt Conditions to Authorizations and
    Licenses, WC Docket No. 06-127 and ITC-T/C-20060616-00317 (filed
    Sept. 15, 2006).

[^6]: *See* Letter from Jonathan S. Marashlian, Counsel for StarVox and
    CTI, to Sigal P. Mandelker, U.S. Department of Justice, Stewart A.
    Baker, U.S. Department of Homeland Security, Elaine N. Lammert, FBI,
    WC Docket No. 06-127 (filed Sept. 18, 2006).

[^7]: 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.

[^8]: 47 C.F.R. § 0.291.

[^9]: *See* 47 C.F.R. § 1.103.

[^10]: *See* 47 C.F.R. §§ 1.106, 1.115.