**DA 04-1637**

**Released: June 04, 2004**

**DOMESTIC SECTION 214 APPLICATION FILED FOR TRANSFER OF CONTROL OF
RURAL LEC ACQUISITION LLC**

**STREAMLINED Pleading Cycle Established**

**WC Docket No. 04-193**

**Comments Due: June 18, 2004**

**Reply Comments Due: June 25, 2004**

On May 12, 2004, Rural LEC Acquisition LLC ("RLEC"), Otelco
Telecommunications LLC, Otelco Telephone LLC, Hopper Telecommunications
Company, Inc., Brindlee Mountain Telephone Company, Blountsville
Telephone Company, Inc., and Mid-Missouri Telephone Company
(collectively, "Applicants") filed an application, pursuant to sections
63.03 and 63.04(b) of the Commission's rules,[^1] requesting approval to
transfer control of RLEC and its successor in interest, Otelco Inc., in
the context of an initial public offering.[^2]

Applicants assert that the proposed transaction is eligible for
presumptive streamlined treatment under section 63.03(b)(2)(iii) of the
Commission's rules because the proposed transaction will result in
Otelco subsidiaries having a market share in the interstate,
interexchange market of less than 10 percent; the transferee would
provide competitive telephone exchange services or exchange access
services (if at all) exclusively in geographic areas served by a
dominant local exchange carrier that is not a party to the transaction;
Applicants are incumbent local exchange carriers that have fewer than
two percent of the nation's subscriber lines installed in the aggregate
nationwide, and the transaction would create no new overlapping or
adjacent service areas.

Applicants Otelco Telephone LLC, Hopper Telecommunications Company,
Inc., Brindlee Mountain Telephone Company, and Blountsville Telephone
Company, Inc., are rural local exchange carriers ("LECs") providing
basic local exchange, exchange access, and vertical as well as DSL
services in rural portions of north central Alabama. Applicant Otelco
Telecommunications LLC offers domestic and international long distance
service to local service customers of the four Alabama LECs. RLEC, a
closely-held Delaware limited liability company, is the indirect parent
of the four Alabama LECs and their long distance affiliate; RLEC owns
100% of Otelco Holdings, LLC, which owns (i) Otelco Telephone LLC, (ii)
Otelco Telecommunications LLC, (iii) through its ownership of Page and
Kiser Communications, Inc., Blountsville Telephone Company, Inc. (iv)
through its ownership of Brindlee Holdings LLC, Brindlee Mountain
Telephone Company, and (v) through its ownership of Hopper Holding
Company, Inc., Hopper Telecommunications Company. At present, RLEC has
four direct 10 percent-or-greater owners: CEA Capital Partners USA,
L.P., BancBoston Ventures, Inc., Seaport Capital Partners II, L.P., and
CEA Capital Partners USA CI, L.P. In addition, RLEC has several indirect
owners: CEA Investment Partners, L.P., CEA Capital Corp., Atlantic
American Holdings, Inc., J. Patrick Michaels, Fleet Boston Financial
Corp., CEA Investment Partners II, LLC, and Seaport Associates, LLC.

Applicant Mid-Missouri Telephone Company is a LEC providing basic local
exchange, exchange access, and vertical as well as DSL services in rural
portions of central Missouri. Mid-Missouri Holding Corp. owns 100% of
the shares of Mid-Missouri Telephone Company, and Mid-Missouri Parent,
LLC owns 100% of Mid-Missouri Holding Corp. Upon consummation of the
acquisition of Mid-Missouri Holding Corp., RLEC (and its successor,
Otelco) will indirectly own and operate five independent rural local
exchange carrier properties operating in rural north central Alabama and
central Missouri.

Prior to this acquisition, RLEC proposes (1) the merger of Otelco
Holdings LLC into its parent company, RLEC and (2) a *pro forma*
conversion of RLEC into a Delaware corporation, changing its name to
Otelco Inc. ("Otelco"). Otelco proposes to conduct a public offering
whereby it will issue Income Deposit Securities ("IDS"), each of which
will represent one share of Class A Common Stock and a note representing
senior subordinated debt. The offering is expected to reduce the current
owners' collective interest to an amount not exceeding 20%. Furthermore,
the original equity holders collectively will hold no less than 10%,
having granted an option to the underwriters as an over-allotment
contingency. It is anticipated that the IDSs will, following the public
offering, be widely held, and that no single shareholder will hold a
controlling interest in Otelco. As part of the proposed transaction,
RLEC's successor proposes to acquire the stock of Mid-Missouri Holding
Corp. Mid-Missouri Holding Corp. will survive as a wholly owned
subsidiary of Otelco. Mid-Missouri Parent, LLC will receive IDSs and
shares of Otelco.

Applicants contend that the proposed transaction is in the public
interest. After the proposed transaction, each LEC will continue to
exist and operate in its same service territory, under the same trade
name, providing service pursuant to existing rates, terms and
conditions. Applicants state that the proposed transactions will,
accordingly, be transparent to consumers. Applicants state that the
proposed ownership structure and investment participation will provide
capital for the improvement and expansion of telecommunications services
within existing service areas, may allow both the payoff of existing
debt and also access to additional capital to assist with strategic and
economic acquisitions as such opportunities may arise. Moreover, the
Applicants assert that the proposed transaction will enable customers of
both the Alabama and Missouri rural operating companies to experience
the benefit of projected efficiencies in operations which the
consolidation promises.

**[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. Interested parties may file **comments on or before June 18,
2004** and **reply comments on or before June 25, 2004**.[^3] Unless
otherwise notified by the Commission, Applicants are permitted to
transfer control on the 31^st^ day after the date of this notice.[^4]
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 e-mail to ecfs@fcc.gov, and should include the following
words in the subject line \"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
appears 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, Natek, 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, Best Copy and Printing,
    Inc., 445 12th Street, SW, Room CY-B402, Washington, DC 20554,
    telephone 1-800-378-3160, or via e-mail
    [[www.bcpiweb.com]{.underline}](http://WWW.BCPIWEB.COM/).

(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](mailto:jmyles@fcc.gov);

(3) Kimberly Jackson, Competition Policy Division, Wireline Competition
    Bureau, 445 12^th^ Street, S.W., Room 5-C142, Washington, D.C.
    20554; e-mail: [kimberly.jackson@fcc.gov]{.underline};

(4) Julie Veach, Competition Policy Division, Wireline Competition
    Bureau, 445 12^th^ Street, S.W., Room 5-C124, Washington, D.C.
    20554; e-mail: <julie.veach@fcc.gov>;

(5) Susan O'Connell, Policy Division, International Bureau, 445 12^th^
    Street, S.W., Room 7-B544, Washington, D.C. 20554; email:
    [susan.o'connell@fcc.gov](mailto:cynthia.bryant@fcc.gov); and

(6) Christopher Killion, Office of General Counsel, 445 12^th^ Street,
    S.W., Room 8-C740, Washington, D.C. 20554; e-mail:
    <ckillion@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, Best Copy and Printing, Inc., Portals II, 445 12th Street,
SW, Room CY-B402, Washington, DC 20554, telephone 1-800-378-3160, or via
e-mail [[www.bcpiweb.com]{.underline}](http://WWW.BCPIWEB.COM/).

For further information, please contact Tracey Wilson, at (202)
418-1394, or Kimberly Jackson at (202) 418-7393.

\- **FCC** -

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

[^2]: Applicants are also filing an application for consent to transfer
    control of authorization for international and wireless services.
    Any action on this domestic 214 application is without prejudice to
    Commission action on other related pending applications.

[^3]: *See* 47 C.F.R. § 63.52(b).

[^4]: Such authorization is conditioned upon receipt of any other
    necessary approvals from the Commission in connection with the
    proposed transaction.