**DA 06-2097**

**Released: October 23, 2006**

**DOMESTIC SECTION 214 APPLICATION FILED FOR THE TRANSFER OF CONTROL OF
BROADWING CORPORATION TO**

**LEVEL 3 COMMUNICATIONS, LLC.**

**STREAMLINED Pleading Cycle Established**

**WC Docket No. 06-193**

**Comments Due: November 6, 2006**

**Reply Comments Due: November 13, 2006**

On October 17, 2006, Broadwing Corporation ("Broadwing Parent") and
Level 3 Communications, LLC ("Level 3 LLC" or "Transferee") (together,
"Applicants") filed an application ("Application") pursuant to section
63.04 of the Commission's rules[^1] requesting authority to transfer
control of Broadwing Parent to Level 3 LLC.[^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)
Transferee will hold less than a ten percent (10%) share of the
interstate, interexchange market; (2) Transferee will provide
competitive telephone exchange services or 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]

Broadwing Parent, a Delaware corporation, is a holding company with two
wholly-owned, principal operating subsidiaries: (1) Broadwing
Communications, LLC ("Broadwing"), a Delaware limited liability company
providing data, video, and voice (local, intrastate, interstate)
services in all 50 states and the District of Columbia to businesses,
carriers, and some residential customers, and (2) Corvis Equipment, LLC,
a developer of network equipment. Applicants state that Broadwing Parent
owns 100 percent of Broadwing Communications Holdings, Inc., a Delaware
corporation, that in turn owns 100 percent of C III Communications, LLC,
a Delaware limited liability company. Both of these latter entities
operate as holding companies and are not involved in telecommunications
operations.

Level 3 LLC, a Delaware limited liability company, provides domestic
telecommunications and information services on a nationwide basis. It is
an indirect, wholly-owned subsidiary of Level 3 Communications, Inc.
(Level 3 Parent), a Delaware corporation that offers, through its
operating subsidiaries, communications services on a nationwide basis,
including Internet-protocol-based services, broadband transport,
collocation services, and voice services. Level 3 LLC is a wholly-owned
subsidiary of Level 3 Financing, Inc. ("Level 3 Financing"), and Level 3
Financing, LLC, in turn, is a wholly-owned subsidiary of Level 3 Parent.
Level 3 Services, LLC, a Delaware limited liability company established
for the purpose of merging with Broadwing Parent, offers no services and
is a direct, wholly-owned subsidiary of Level 3 Parent. Level 3 Parent
is a publicly-traded Delaware company. Applicants state that one entity
owns or controls 10 percent or more of Level 3 Parent: Southeastern
Asset Management, Inc. ("SAM"), a Tennessee investment corporation that
is employee-owned and that holds sole or shared voting rights for 13.09
percent of the outstanding shares of Level 3 Parent that are otherwise
owned by other entities for whom SAM acts as an investment advisor.
Applicants state that none of SAM's owners holds a 10 percent or greater
direct or indirect interest in Level 3 Parent.

Pursuant to an October 16, 2006 Agreement and Plan of Merger
("Agreement"), Level 3 Parent will acquire all of Broadwing Parent's
outstanding shares by paying total consideration of approximately \$1.4
billion. Level 3 Parent will acquire Broadwing Parent in a simultaneous
three-step transaction. First, Broadwing Parent will merge with Level 3
Services, LLC, with Level 3 Services, LLC surviving. Second, Level 3
Parent will immediately contribute all of its membership interest in
Level 3 Services, LLC to Level 3 Financing, Inc. Third, Level 3
Financing, Inc. will contribute all of the membership interest in Level
3 Services, LLC to Level 3 LLC, at which time Level 3 Services, LLC may
be re-named. Following the completion of these three steps, Level 3
Services, LLC will then be a direct subsidiary of Level 3 LLC, and
Broadwing will be an indirect, wholly-owned subsidiary of Level 3 LLC.
Applicants further state that no existing stockholder or controlling
group of stockholders of Broadwing Parent will have a 10 percent or
greater direct or indirect interest in Level 3 Parent or Level 3 LLC as
a result of the proposed transaction.

Applicants state that the proposed transaction will serve the public
interest, convenience and necessity because: (1) Broadwing will continue
to operate its facilities and provide service to 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 Broadwing to expand further into the enterprise
market.[^4]

**[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 November 6, 2006** and **reply comments on or before November
13, 2006**.[^5] 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.[^6] 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) Jodie May, Competition Policy Division, Wireline Competition Bureau,
    445 12th Street, S.W., Room 5-C234, Washington, D.C. 20554; e-mail:
    jodie.may@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 Jodie May at (202) 418-0913.

\- **FCC** -

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

[^2]: Applicants filed a supplement to the application on October 19,
    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]: 47 C.F.R. § 63.03(b)(2)(i).

[^4]: 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 Parent and its operating subsidiaries 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
    services (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 154, 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 Commission's reports do not include 2005
    data. Applicants also state that, even assuming that all Broadwing
    and Level 3 toll revenues were interstate interexchange revenues
    (and they are not), the combined interexchange revenues of both
    would amount to less than three percent of total industry-wide toll
    revenues, and only two percent if all non-local exchange carrier,
    non-wireless toll services are included.

[^5]: *See* 47 C.F.R. § 63.03(a).

[^6]: Such authorization is conditioned upon receipt of any other
    necessary approvals from the Commission in connection with the
    proposed transaction.