**DA 01-2815**

**Released: December 3, 2001**

**COMMISSION SEEKS COMMENT ON A JOINT APPLICATION FILED BY DSLnet
COMMUNICATIONS, LLC AND VANTAGEPOINT VENTURE PARTNERS FOR INDIRECT
TRANSFER OF CONTROL**

**Pleading Cycle Established**

**CC Docket No. 01-329**

On November 9, 2001, DSLnet Communications, LLC ("DSLnet") and
VantagePoint Venture Partners ("VPVP")[^1] (together, "Applicants"), by
their undersigned counsel and pursuant to section 214 of the
Communications Act of 1934, as amended, 47 U.S.C. § 214, and Section
63.01 of the Commission's Rules, 47 C.F.R. § 63.01, request authority
for the indirect transfer of control of DSLnet's blanket domestic
section 214 authority to VPVP.

As described more fully below, the indirect transfer of control will
occur as a result of a private equity financing transaction whereby VPVP
will acquire control of DSLnet's holding company parent, DSL.net, Inc.
("Transaction"). As a result of the Transaction, VPVP will increase its
ownership interest in DSL.net, Inc. from its current level of
approximately 33.9 percent to approximately 71.1 per cent, and VPVP will
have the ability to designate a majority of the Board of Directors of
DSL.net, Inc. The equity financing transaction, therefore, will cause an
indirect transfer of control of DSLnet to VPVP.

Applicants request expedited consideration of this application in order
for DSLnet to "realize certain financial benefits that are essential to
its continued operations." Applicants state that "immediate receipt of
the proceeds from the Transaction is critical," and request that the
public notice period for this application be shortened from 30 days to
14 days and that the Commission approve this application on an expedited
basis to allow DSL.net, Inc. and VPVP to complete the proposed
transaction as soon as possible.

VPVP is a member of a family of affiliated private investment funds with
more than \$2.5 billion under management. DSLnet is a Delaware limited
liability company with principal offices located at 545 Long Wharf
Drive, Fifth Floor, New Haven, Connecticut. DSLnet's sole member and
managing entity is DSL.net, Inc. DSLnet holds domestic interstate
section 214 authority pursuant to blanket section 214 authority
conferred by section 63.01 of the Commission's rules, 47 C.F.R. § 63.01.
DSLnet is also authorized by various state public service commissions to
provide facilities-based and/or resold local exchange and interexchange
telecommunications services in 49 states plus the District of Columbia
pursuant to certification, registration or tariff requirements, or on a
deregulated basis.

By this application, DSLnet seeks Commission approval for an indirect
majority transfer of control that will result from an equity financing
transaction planned by DSLnet's parent holding company, DSLnet, Inc.
Specifically, pursuant to agreements reached with VPVP, DSLnet, Inc.
will issue and sell preferred stock and warrants to VPVP in exchange for
VPVP providing \$15 million in equity financing to DSLnet, Inc. The
investment will take place in three installments. As a result of the
first installment, VPVP's ownership interest in DSLnet, Inc. will
increase from approximately 33.9 percent to approximately 56.3 per cent.
Following the second and third installments, VPVP's ownership interest
in DSLnet, Inc. will be approximately 64.3 per cent and approximately
71.1 per cent, respectively. In addition, VPVP will have the ability to
appoint a majority of the Board of Directors of DSLnet, Inc.

Both before and after the first installment, VPVP will have the latest
controlling interest in DSLnet.net, Inc. However, because the
Transaction will result in VPVP's ownership interest exceeding 50 per
cent, the Transaction will also result in an indirect majority transfer
of control of DSLnet. No other investor will acquire a ten per cent or
greater controlling interest in DSLnet as a result of the Transaction.

Although the Transaction will result in an indirect transfer of control
of DSLnet to VPVP, the Transaction will not involve a change in the name
under or the manner in which DSLnet currently provides
telecommunications services. Immediately following the Transaction,
DSLnet will continue to offer the services it currently offers with no
change in the rates or terms and conditions of service. DSLnet,
moreover, will continue to be led by the same team of experienced
telecommunications officers and personnel. The indirect transfer of
control of DSLnet, therefore, will be transparent to consumers.

Applicants state that, through the proposed transaction, DSLnet will
gain the opportunity to strengthen its competitive position through
access to the increased financial resources of its parent, DSL.net, Inc.
Moreover, the additional capital raised from the financing transaction
will significantly enhance DSLnet's operational flexibility and
efficiency, as well as its long-term financial viability. Applicants
further assert that these enhancements will inure directly to the
benefit of U.S. consumers of domestic interstate telecommunications
services, and that the

Transaction will serve the public interest in promoting competition
among domestic interstate carriers by providing DSLnet with the
opportunity to enhance its working capital and strengthen its
competitive position.

DOMESTIC SECTION 214 APPLICATION

Part 63 -- Domestic Service (47 C.F.R. § 63.01)

DSLnet Communications, LLC and VantagePoint Venture Partners request
authorization for an indirect transfer of control.

[GENERAL INFORMATION]{.underline}

The transfer of control request identified herein has been found, upon
initial review, to be acceptable for filing. 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
petitions to deny within 14 days following the release of this Public
Notice.[^2] Final action will not be taken on the applications earlier
than 15 days following the date of this Public Notice.[^3]

All filings concerning any or all matters in this Public Notice should
refer to **CC Docket No. 01-329.** An original and 4 copies of all
pleadings, in accordance with Section 1.51(c) of the Commission's rules,
47 C.F.R. § 1.51(c), must be filed with the Commission's Secretary,
Magalie Roman Salas, 445 12^th^ Street, S.W., TW-B204, Washington, D.C.
20554. In addition, one copy of each pleading must be delivered to each
of the following: (1) Qualex International, Portals II, 445 12th Street,
S.W., Room CY-B402, Washington, D.C., 20554, telephone (202) 863-2893,
facsimile (202) 863-2898; (2) Janice Myles, Common Carrier Bureau, 445
12^th^ Street, S.W., 5-B145, Washington, D.C. 20554; (3) Nandan Joshi,
Office of General Counsel, 445 12^th^ Street, S.W., 8-A820, Washington,
D.C. 20554; (4) William Dever, Common Carrier Bureau, 445 12 Street,
S.W., 5-C266, Washington, D.C. 20554.

In addition to filing paper pleadings, parties may also file pleadings
using the Commission's Electronic Comment Filing System (ECFS). *See*
Electronic Filing of Documents in Rulemaking Proceedings, 63 Fed. Reg.
24,121 (1998). Pleadings filed through the ECFS can be sent as an
electronic file via the Internet to http://www.fcc.gov/e-file/ecfs.html.
Generally,

one copy of an electronic submission must be filed. If multiple docket
or rulemaking numbers appear in the caption of this proceeding, however,
filers must transmit one electronic copy of the pleading to each docket
or rulemaking number. Parties may also submit an electronic pleading by
Internet e-mail. To obtain filing instructions for e-mail pleadings,
parties should send an e-mail to ecfs@fcc.gov, and 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. This document may also
be purchased from the Commission\'s duplicating contractor, Qualex
International, Portals II, 445 12th Street, S.W., Room CY-B402,
Washington, D.C., 20554, telephone (202) 863-2893, facsimile (202)
863-2898, or via e-mail qualexint@aol.com**.**

For further information, contact Tracey Wilson, at (202) 418-1394 or
Bill Dever, Policy and Program Planning Division, Common Carrier Bureau
at (202) 418-1578.

[^1]: VPVP for purposes of this application is comprised of four
    affiliated private investment funds: VantagePoint Venture Partners
    III (Q), L.P., VantagePoint Venture Partners III, L.P., VantagePoint
    Communications Partners, L.P. and VantagePoint Venture Partners
    1996, L.P. (collectively, the "VPVP Funds").

[^2]: *See, e.g.*, 47 C.F.R. § 63.52(c).

[^3]: *See* 47 C.F.R. § 63.52(b).