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If you need the complete document, download the WordPerfect version or Adobe Acrobat version, if available. ***************************************************************** Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) Pacific Telecom, Inc. ) Transferor, ) ) File No. SCL-86-002-M-TC-2 and ) ) Neptune Pacific Holdings, Inc. ) Transferee ) ) Joint Application for Approval of Transfer of) Control of Pacific Telecom Cable, Inc., a) Corporation Holding a License to Land ) and Operate in the United States a ) Submarine Fiber Optic Cable ) Between the United States and Japan ) ) MEMORANDUM OPINION AND ORDER Adopted: April 1, 1998 Released: April 2, 1998 By the Chief, Telecommunications Division: I. INTRODUCTION 1. On January 23, 1998, Neptune Pacific Holdings, Inc. ("Neptune Pacific") and Pacific Telecom, Inc. ("PTI") (collectively "the Applicants") filed an application for approval of the transfer of control of Pacific Telecom Cable, Inc. ("PTC") from PTI to Neptune Pacific. The Applicants submitted the application pursuant to the Cable Landing License Act and Section 1.767 of the Commission's Rules. For the following reasons we grant the Applicants' request. II. BACKGROUND 2. Neptune Pacific is a Delaware corporation whose officers and directors are all U.S. citizens. It was formed by affiliates of a Washington, D.C.-based merchant banking firm, The Carlyle Group, with extensive experience in the design, construction, operation and maintenance of submarine fiber optic cable systems. Although Neptune Pacific is indirectly majority-owned by foreign investors, it is not affiliated with a foreign telecommunications carrier. All of the directors and officers of Neptune Pacific are U.S. citizens, and any entity that owns, directly or indirectly, greater than 10 percent interest in Neptune Pacific is controlled by U.S. citizens. 3. PTC, a Delaware corporation, holds the license for a non-common carrier submarine cable between Pacific City, Oregon, and Japan with a branching unit to Seward, Alaska. PTC is 80 percent owned by PTI, a wholly-owned subsidiary of Century Telephone Enterprises. Cable & Wireless, plc holds the remaining 20 percent of PTC. PTI provides local exchange and mobile telecommunications services in rural communities across the United States. All the owners and officers of PTC are a matter of record and are incorporated in this application. PTC will continue to operate the North Pacific Cable on a non- common carrier basis. 4. Neptune Pacific and PTI request authority for Neptune Pacific to acquire all of the ownership interests in PTC. PTC, however, will continue to exist and will remain the licensee following completion of the proposed transaction. Neptune Pacific proposes to change the name of PTC to Neptune Pacific Cable, Inc. The application was placed on public notice on February 11, 1998, and no parties filed comments. Pursuant to Section 1.767(b) of the Commission's rules, the Cable Landing License Act, and Executive Order No. 10530, we informed the Department of State of the application. The Department of State, after coordinating with the National Telecommunications and Information Administration and the Department of Defense, approved of the proposed ownership change. III. DISCUSSION 5. The joint applicants state that consummation of the proposed transaction would serve the public interest for all the same reasons the Commission recognized in granting the cable landing license to PTC. For example, the North Pacific Cable provides additional capacity in the Pacific Ocean region. Also, as evidenced by the recent authorization to General Communications, Inc. authority for the Alaska United Cable System, and the recent transfer of the Alaska Northstar Cable System, there has been increased competition in the telecommunications market in Alaska. The North Pacific Cable will further enhance competition. The joint applicants state that granting their request would not undermine the beneficial aspects of the North Pacific Cable nor would it be novel or inconsistent with the Commission's rules. 6. Accordingly, we conclude that a grant of the application would be consistent with the Cable Landing License Act. We therefore consent to the proposed transfer of control of Pacific Telecom Cable, Inc. to Neptune Pacific. We modify the conditions of the initial authorization to reflect this transfer of control. We do not modify the conditions of the authorization to address those issues raised in PTC's petition for review. IV. ORDERING CLAUSES 7. In consideration of the foregoing, IT IS ORDERED that the application, File No. SCL-86- 002-M-TC-2 IS GRANTED, and the Applicants are authorized to transfer control of Pacific Telecom Cable, Inc. to Neptune Pacific Holdings, Inc. The cable landing license, SCL-86-002, IS MODIFIED to reflect this transfer of control. 8. This Order is issued under Section 0.261 of the Commission's rules, 47 C.F.R.  0.261, and is effective upon release. Petitions for reconsideration under Section 1.106 or applications for review under Section 1.115 of the Commission's rules, 47 C.F.R.  1.106, 1.115, may be filed within 30 days of the date of public notice of this order (see 47 C.F.R.  1.4(b)(2)). FEDERAL COMMUNICATIONS COMMISSION Diane J. Cornell Chief, Telecommunications Division International Bureau