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PA Bulletin, Doc. No. 02-1921

NOTICES

Tentative Order

[32 Pa.B. 5368]

Public Meeting held
October 10, 2002

Commissioners Present:  Glen R. Thomas, Chairperson, statement follows; Robert K. Bloom, Vice Chairperson; Aaron Wilson, Jr.; Terrance J. Fitzpatrick, statement dissenting in part follows; Kim Pizzingrilli

Joint application of ITCDeltaCom Communications, Inc. and its indirect parent, ITCDeltaCom, Inc., for approval of a change in indirect control of the former; Doc. No. A-310467F0003

Tentative Order

By the Commission:

   On August 7, 2002, ITCDeltaCom Communications, Inc. (DeltaCom) and its ultimate parent, ITCDeltaCom, Inc. (ITC Parent), filed the previously-captioned application pursuant to Chapter 11 of the Pennsylvania Public Utility Code, 66 Pa.C.S. §§ 1101--1103. Copies of the application were served upon the Office of Consumer Advocate and the Office of Small Business Advocate. Further notice was not required and no protest period was established. No protests or comments have been received. DeltaCom is a jurisdictional utility, having been certificated as an interexchange reseller (IXC) pursuant to our Order entered March 4, 1998, at A-310467. ITC Parent is not a jurisdictional entity.

   DeltaCom is a direct subsidiary of Interstate FiberNet, Inc., which in turn is wholly-owned by ITC Parent. In June 2002, ITC Parent filed a voluntary petition in U. S. Bankruptcy Court for the District of Delaware and expects to receive final approval of a Plan of Reorganization in October 2002. Under the Plan of Reorganization, bondholders of ITC parent will receive newly issued stock in ITC parent and will thereupon hold a majority of the outstanding voting stock of the parent. The same bondholders-turned-stockholders are to elect four of the seven directors of the reorganized parent, and therefore control will have passed from existing shareholders to the current bondholders. It is this change in indirect control of DeltaCom for which the applicants now seek our approval.

   The proposed change in control will not change the status of DeltaCom as a jurisdictional utility. DeltaCom will continue offer the same type of service under its currently effective tariff, and the change in control will be transparent to DeltaCom's customers. The joint applicants aver that the reorganization and associated conversion of debt to equity will strengthen the finances of ITC Parent and its subsidiaries, and thus improve the resources available to the utility, DeltaCom. The proposed transaction thus appears to meet the standard set by City of York v. Pennsylvania Public Utility Commission, 446 Pa. 136, 295 A.2d 825 (1972), that the change in control provide an affirmative public benefit.

   Having reviewed the instant application, we have tentatively determined that the proposed transaction leading to the change in indirect majority control of DeltaCom is necessary or proper for the service, accommodation, convenience, or safety of the public, and that the application should be approved; Therefore,

It Is Ordered That:

   1.  The application concerning changes in indirect control of ITCDetlaCom Communications, Inc. is hereby tentatively approved as in the public interest.

   2.  A copy of this Tentative Order be published in the Pennsylvania Bulletin giving the public 10 days from the date of publication to file written comment or request oral hearing.

   3.  Absent the filing of adverse public comment or request for oral hearing within 10 days from the date of publication pursuant to Ordering Paragraph No. 2, this Tentative Order shall become final without further order of the Commission.

   4.  Upon this Tentative Order becoming final pursuant to the provisions of Ordering Paragraph No. 3, the Secretary shall issue to ITCDeltaCom Communications, Inc. a Certificate of Public Convenience consistent with Ordering Paragraph No. 1.

JAMES J. MCNULTY,   
Secretary

[Pa.B. Doc. No. 02-1921. Filed for public inspection October 25, 2002, 9:00 a.m.]


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