**DA 02-2580**

**Released: October 8, 2002**

**DOMESTIC SECTION 214 APPLICATION FILED FOR CONSENT TO TRANSFER CONTROL
OF WILLIAMS COMMUNICATIONS, LLC**

**STREAMLINED Pleading Cycle Established**

**WC Docket No. 02-320**

On September 27, 2002, Williams Communications Group, Inc. as
Debtor-in-Possession ("Williams"), and WilTel Communications Group, Inc.
("WilTel") filed an application pursuant to section 214 of the
Communications Act of 1934, as amended, 47 U.S.C. § 214, for approval to
transfer control of Williams Communications, LLC ("WCL") from Williams
to WilTel.[^1] WCL holds authority pursuant to section 214 to provide
domestic telecommunications services.[^2] The proposed transfer of
control has been approved by the United States Bankruptcy Court for the
Southern District of New York.[^3] 

Applicants assert that this application is subject to streamlined
processing under section 63.03(b)(2)(i) of the Commission's rules
because: 1) WCL will have a market share in the interstate,
interexchange market of less than 10 percent; 2) WCL will provide
competitive exchange services and exchange access only in geographic
areas served by the dominant local exchange carrier that is not a party
to this transaction; and 3) no party to this application is dominant
with respect to any service.[^4]

Through its operating subsidiary WCL, Williams operates or manages
approximately 30,000 route miles of a nationwide fiber optic network. It
provides integrated voice and data telecommunications services over its
network on a wholesale basis to other telecommunications companies.

The Applicants state that the proposed transfer of control will permit
consummation of a plan of reorganization ("POR") that provides for the
creation of WilTel, a new holding company with improved capitalization.
The POR provides for cancellation of the existing equity of Williams.
The POR also provides that WilTel will issue new common stock. The new
common stock will be distributed to existing unsecured creditors of
Williams ("Creditors") and to Leucadia National Corporation
("Leucadia"), a diversified holding company.

WCL is a wholly-owned subsidiary of Williams. WCL itself is not
undergoing reorganization. Instead, it will continue to operate
subsequent to implementation of the POR as a subsidiary of WilTel. The
ultimate ownership of WCL will change due to the ownership changes
occurring as part of the reorganization of Williams.

The POR is the result of a pre-negotiated agreement in principle between
Williams, the Creditors, The Williams Companies, Inc. (TWC),[^5] and
Leucadia. As confirmed by the bankruptcy court, the POR will permit
continued service to Williams' customers. The POR provides for WilTel to
have the following ownership structure:

-   Williams' senior redeemable notes will be cancelled, and the
    unsecured creditors of Williams, including the holders of these
    notes, will receive 55% of WilTel's common stock (subject to a
    reduction to 51.3% under certain circumstances).

-   Leucadia will purchase claims of TWC for \$180 million and will
    invest \$150 million in WilTel for approximately 45% of WilTel's
    common stock (subject to a reduction to 44% under certain
    circumstances).

Applicants assert that this transfer of control will serve the public
interest, convenience, and necessity by allowing Williams to transfer
ownership of WCL to WilTel, a new holding company with a revised
ownership structure and improved capitalization. As an operating
subsidiary of WilTel, WCL will be able to provide uninterrupted
telecommunications services to existing customers. In addition, the
Applicants contend that the proposed reorganization is pro-competitive.
The proposed transfer of control does not involve the merger or
consolidation of competing carriers. Applicants state that, instead, the
proposed transfer will permit existing carrier WCL to continue to offer
services in competition with other providers, including with incumbent
local exchange carriers. Thus, Applicants assert, implementation of the
POR is in the public interest because it will allow continuity of
service to customers and promote competition.

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

The transfer of control application 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. Interested parties may file **comments within 14 days** and
**reply comments within 21 days** of this notice.[^6] Unless otherwise
notified by the Commission, an applicant is permitted to transfer
control of the domestic lines or authorization to operate on the 31^st^
day after the date of this notice. Comments may be filed using the
Commission\'s Electronic Comment Filing System (ECFS) or by filing paper
copies. *See Electronic Filing of Documents in Rulemaking Proceedings*,
63 Fed. Reg. 24121 (1998).

Comments filed through the ECFS can be sent as an electronic file via
the Internet to \<http://www.fcc.gov/e-file/ecfs.html\>. Generally, only
one copy of an electronic submission must be filed. If multiple docket
or rulemaking numbers appear in the caption of this proceeding, however,
commenters must transmit one electronic copy of the comments to each
docket or rulemaking number referenced in the caption. In completing the
transmittal screen, commenters 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 for e-mail comments, commenters
should send an e-mail to ecfs@fcc.gov, and should include the following
words in the body of the message, \"get form \<your e-mail address\>.\"
A sample form and directions will be sent in reply.

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
appear in the caption of this proceeding, commenters 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). The Commission\'s contractor, Vistronix, Inc., 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 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 mail, Express
Mail, and Priority Mail should be addressed to 445 12th Street, SW,
Washington, D.C. 20554. All filings must be addressed to the
Commission\'s Secretary, Office of the Secretary, Federal Communications
Commission.

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

(1) the Commission's duplicating contractor, Qualex International, 445
    12^th^ Street, S.W., Room CY-B402, Washington, D.C. 20554; e-mail:
    qualexint@aol.com; facsimile: (202) 863-2898; phone: (202) 863-2893.

(2) Tracey Wilson, Competition Policy Division, Wireline Competition
    Bureau, 445 12^th^ Street, S.W., Room 5-C437, Washington, D.C.
    20554; e-mail: twilson@fcc.gov, and

(3) Dennis Johnson, Competition Policy Division, Wireline Competition
    Bureau, 445 12^th^ Street, S.W., Room 6-A461, Washington, D.C.
    20554; e-mail: dcjohnso@fcc.gov; and

(4) Imani Ellis-Cheek, Telecommunications Division, International
    Bureau, 445 12^th^ Street, S.W., Room 6-A739, Washington, D.C.
    20554; email: iellis@fcc.gov; and

(5) Nandan Joshi, Office of General Counsel, 445 12^th^ Street, S.W.,
    Room 8-A820, Washington, D.C. 20554; e-mail: njoshi@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, SW, Room CY-A257, Washington, DC,
20554. They may also be purchased from the Commission\'s duplicating
contractor, Qualex International, Portals II, 445 12th Street, SW, Room
CY-B402, Washington, DC, 20554, telephone 202-863-2893, facsimile
202-863-2898, or via e-mail qualexint@aol.com.

For further information, please contact Tracey Wilson, at (202) 418-1394
or Bill Dever, Competition Policy, Wireline Competition Bureau at (202)
418-0809.

\- **FCC** -

[^1]: Williams, WilTel and WCL are collectively referred to herein as
    the "Parties" or the "Applicants."

[^2]: The Parties have filed separate applications for consent to
    transfer control of other Commission authorizations held by WCL,
    which will be processed separately. Any action on this domestic 214
    application is without prejudice to Commission action on other
    related pending applications.

[^3]: *See* Order Confirming Second Amended Joint Plan of Reorganization
    of Williams Communications, Group, Inc. and CG Austria, Inc., *In re
    Williams Communications Group, Inc. and CG Austria, Inc.,* Chapter
    11 Case No. 02-11957 (BRL) (Bankr. S.D.N.Y. Sept. 30, 2002).

[^4]: 47 C.F.R. § 63.03(b)(2)(i).

[^5]: TWC is Williams' former parent company, from which Williams was
    spun off in April 2001. TWC holds approximately 4.5 percent of
    Williams' outstanding shares. TWC is also the largest unsecured
    creditor of Williams, and owns and leases to WCL the headquarters
    building and certain other assets of WCL. *See* Letter from Karis A.
    Hastings, Counsel to the Applicants, to William Dever, Wireline
    Competition Bureau (Oct. 7, 2002).

[^6]: *See* 47 C.F.R. § 63.03(a).