**DA 06-1765**

**September 1, 2006**

**DOMESTIC AUTHORIZATION GRANTED**

**Application for Transfer of Control of iBasis, Inc. to KPN Telecom
B.V.**

WC Docket No. 06-140

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

On July 7, 2006, iBasis, Inc. ("iBasis") and KPN Telecom B.V. ("KPN")
(collectively, the "Applicants") filed an application, pursuant to
section 63.04 of the Commission's rules,[^1] to transfer control of
iBasis, a holder of blanket domestic and international Section 214
authorizations, to KPN.[^2]

The Commission released a public notice accepting this application for
streamlined processing on August 1, 2006.[^3] On August 15, 2006, the
Department of Homeland Security, with the concurrence of the Department
of Justice and the Federal Bureau of Investigation (collectively, the
"Executive Branch Agencies"), filed a letter requesting that the
Commission defer grant of this application while the Executive Branch
Agencies address potential national security, law enforcement, and
public safety concerns.[^4]

On August 25, 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 do not object to the grant of the applications of iBasis and KPN
provided that the Commission conditions such grant on compliance with
the terms of the commitment letter executed by the Applicants, a copy of
which was attached to the Joint Petition as Exhibit I ("Commitment
Letter").[^6]

The Wireline Competition Bureau finds, upon consideration of the record,
that grant of the application, subject to compliance with the Commitment
Letter, will serve the public interest, convenience, and necessity. Upon
consummation of the proposed 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 this transaction is dominant with
respect to any domestic service.

Consistent with Commission precedent, the 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 Dennis Johnson at (202)
418-0809.

> -- FCC --

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

[^2]: Applicants have also filed an application for consent to transfer
    authorization for international services. Any action on this
    domestic 214 application is without prejudice to Commission action
    on other related pending applications. On July 25, 2006, Applicants
    filed a supplement to their application. *See* Supplement to Joint
    Application for Transfer of Control, WC Docket No. 06-140 (filed
    July 25, 2006).

[^3]: *Domestic Section 214 Application Filed for the Transfer of
    Control of iBasis Inc. to KPN B.V.*, WC Docket No. 06-140, Public
    Notice, DA 06-1573 (rel. August 1, 2006).

[^4]: *See* Letter from Paul Rosenzweig, Counselor to the Asst. Secy.
    (Policy Directorate) and Acting Assistant Secretary for Policy
    Development, United States Department of Homeland Security, to
    Marlene H. Dortch, Secretary, Federal Communications Commission, WC
    Docket No. 06-140 (filed August 15, 2006).

[^5]: *See* Petition to Adopt Conditions to Authorizations and Licenses,
    WC Docket No. 06-140 (filed August 25, 2006) *correcting* Petition
    to Adopt Conditions to Authorizations and Licenses, WC Docket No.
    06-140 (filed August 24, 2006).

[^6]: *Id* at Exhibit I.

[^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.