**DA 03-1732**

**Released: May 19, 2003**

**DOMESTIC SECTION 214 APPLICATION FILED FOR TRANSFER OF CONTROL OF
COMMONWEALTH TELEPHONE ENTERPRISES, INC.**

**STREAMLINED Pleading Cycle Established**

**WC Docket No. 03-114**

On April 25, 2003, Eldorado Equity Holdings, Inc. ("Eldorado") and
Commonwealth Telephone Enterprises, Inc. ("CTE") (together "Applicants")
filed an application, pursuant to sections 63.03 and 63.04 of the
Federal Communications Commission's (Commission) rules,[^1] for consent
to transfer ultimate control of CTE to the public shareholders of CTE
("Transferee").[^2]

Applicants assert that the application qualifies for presumptive
streamlined treatment under section 63.03(b)(1)(ii) of the Commission's
rules because the Transferee is not a telecommunications provider.
Applicants state that following the completion of this proposed stock
restructuring, it is not anticipated that any individual or group will
control 10 percent or more of the voting stock of CTE.

CTE is a publicly traded company organized under Pennsylvania law which,
through its subsidiaries, is engaged in a variety of communications
services. CTE is the parent company of Commonwealth Telephone Company,
which operates as an incumbent local exchange carrier in eastern and
central Pennsylvania. CTE's two wholly-owned subsidiaries, CTSI, LLC and
Commonwealth Long Distance, provide domestic interstate interexchange
services.

Eldorado is an indirect, wholly-owned subsidiary of Level 3
Communications, Inc., which offers interexchange telecommunications
services nationwide as a non-dominant carrier. Eldorado holds the
largest single block of common stock in CTE. Applicants state that
Eldorado does not have *de jure* control over CTE, as it does not
control a majority of the voting stock and does not have the power to
appoint a majority of the directors or the corporate officers.
Nonetheless, Applicants explain that several individuals affiliated with
Eldorado's parent company are directors of CTE, and Eldorado may
exercise *de facto* control over CTE.

CTE has two classes of stock. The common stock has one vote per share,
and the Class B common stock has 15 votes per share. Eldorado owns
approximately 50.2% of the Class B common stock, giving it approximately
29.3% of the total voting power in the corporation. Both classes of
stock are publicly traded.

CTE, with Eldorado's consent, has proposed to amend its Articles of
Incorporation to convert each share of Class B common stock into 1.09
shares of common stock with one vote per share. If this proposed
conversion is completed, Eldorado's shares will account for
approximately 4.6% of the voting power of the corporation. One other
shareholder will control approximately 9%, and another will control 7%.
Thus, Applicants argue that even if Eldorado is currently deemed to
exercise *de facto* control over CTE, it will no longer be able to do so
after the conversion. Such control would thereupon be transferred to the
stockholders of CTE as a group.

The Applicants assert that granting this application will serve the
public interest in promoting competition by providing CTE the
opportunity to enhance its ability to attract capital and strengthen its
competitive position. The principals of Level 3 have determined that
financial and competitive benefits will result from the restructuring of
Eldorado's holdings in CTE. Applicants state that this proposed
transaction will not change the management or services provided by CTE
to customers.

**[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 within 14 days** and
**reply comments within 21 days** of this notice.[^3] 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.[^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 an 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, 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](mailto:jmyles@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) William Dever, Competition Policy Division, Wireline Competition
    Bureau, 445 12^th^ Street, S.W., Room 5-C266, Washington, D.C.
    20554; e-mail: [wdever@fcc.gov](mailto:dcjohnso@fcc.gov); and

(5) 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

(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, 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 Dennis Johnson (202) 418-0809.

\- **FCC** -

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

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

[^3]: *See* 47 C.F.R. § 63.03(a).

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