20140924Notice of Transfer Transaction.pdf

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Kotherine K. Mudge
Vice President- Reguloiory Affoirs & Litigotion
1835-8 Kromer Lone, Suite 100
Austin, Texos 78758phone: [phone]fox: 512.794.6006
kotherine.m [e-mail]
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VU OWRNIGHT DELIWRY
Ms. Jean Jewell
Secretary
Idaho Public Utilities Commission
472 W . Washington Street
Boise,ldaho 83702
Re: Notification of a Transfer Transaction of Customers and Assets from MegaPath
Corporation to GC Pivotal, LLC dlbla Global Capacity
Dear Ms. Jewell:
MegaPath Corporation ("MegaPath") and GC Pivotal, LLC d/b/a Global Capacity ("Global
Capacity" and together with MegaPath, "the Parties") hereby notifu the Idaho Public Utilities
Commission ("Commission") of their intention to participate in a transaction whereby MegaPath will
transfer certain of its network assets and non-telephone voice service customers to Global Capacity
(the "Transaction"). In order to provide services to the acquired customers and to enable Global
Capacity to have the full set of rights as a facilities-based competitive exchange company, Global
Capacity is separately filing an application to amend its existing authority to include facilities-based
local exchange and interexchange authority ("Certification Application"), and requests that the
Commission associate this letter with the Certification Application. MegaPath and Global Capacity
anticipate and are working towards a closing on or before December 31, 2014, with the changes
effective January l, 2015.
Description of the Parties
A. MegaPath Corporation
MegaPath Corporation ("MegaPath"), is a Virginia corporation with principal offices at 6800
Koll Center Parkway, Suite 200, Pleasanton, CA94566. MegaPath is a leading nationwide provider
of integrated voice and data communications. MegaPath offers commercial DSL, Voice over IP
("VolP"), Tl, Ethernet, Web hosting, managed security, IP and dial-up, wireless broadband, and
bundled VoIP and data services to small and medium-sized businesses, enterprise businesses through
MegaPath's network and through lnternet Service Providers, value-added resellers,
telecommunications carriers and affinity groups, as well as commercial DSL, Tl, Ethernet, and other
data services to wholesale customers who provide their own services using the MegaPath network.
In ldaho, MegaPath is authorized to provide local exchange and interexchange services
pursuant to Commission authorization issued in Case No. CVD-T-07-01 on April 8,2014. MegaPath
is also authorized by the Federal Communications Commission ("FCC") to provide international and
domestic interstate telecommunications services as a non-dominant carrier.
Letter to Jean Jewell, Secretary
September 23,2014
Page2
CCGI Holding Corporation ("CCGI Holding") is a Delaware corporation with offices located
at 555 Anton Blvd., Ste. 200, Costa Mesa, CA 92626. CCGI Holding is the parent company of
MegaPath. CCGI is privately held by investors, including Platinum Equity LLC ("Platinum").
Neither CCGI Holding nor Platinum offer any regulated telecommunications services. Platinum is a
privately held Delaware limited liability company with offices located at 360 North Crescent Drive,
Beverly Hills, California 90210. Platinum is a global firm specializing in the merger, acquisition,
and operation of companies that provide services and solutions to customers in a broad range of
business markets, including information technology, telecommunications, logistics, manufacturing,
and entertainment di stribution.
B.GC Pivotal,LLc
GC Pivotal, LLC, d/b/a Global Capacity is a Delaware limited liability company with
principal offices located at 180 North LaSalle Street, Suite 2430, Chicago, IL 60601. Global
Capacity improves the efficiency and reduces the cost of buying access networks globally. Through
its One Marketplace, Global Capacity brings together customers and suppliers in an automated
platform that provides ubiquitous access network solutions that deliver on its brand promise -
Connectivity Made Simple.
Global Capacity is separately filing an application with the Commission for facilities-based
local exchange and interexchange authority. Global Capacity is also authorized by the FCC to
provide international and domestic interstate telecommunications services as a non-dominant carrier.
Global Capacity is a portfolio company of Pivotal Group ("Pivotal"), a leading investment
corporation headquartered in Phoenix, Arizona, that concentrates on private equity and real estate
investments. Pivotal does not offer any regulated telecommunications services.
Description of Transfer of Certain Assets and Customers
MegaPath and Global Capacity entered into a Membership Interest Purchase Agreement
dated as of September 5,2014 (the "Agreement") whereby Global Capacity intends to obtain certain
network assets and certain customers served by those assets from MegaPath (the "Transaction"). The
assets to be transferred consist of MegaPath's network, composed of equipment in the company's
collocation spaces (e.g., DSLAMs, routers, cable, and racks), applications used to provide service,
equipment related to the company's points of presence and transport, wholesale and certain direct
access customers and their respective contracts, and other associated assets (the "Subject Assets").
MegaPath does not intend to transfer its certifications and other authority to provide
telecommunications services to Global Capacity; nor will it undergo a transfer of control as a result
of this transaction. As MegaPath will no longer require its authority to provide telecommunications
in the state following the close of the Transaction, MegaPath requests that the Commission cancel its
authority upon notice of consummation of the Transaction.
The Parties emphasize that the customers being transferred as part of the Transaction are data
broadband service customers and not telephone voice service customers. As no voice service
customers are being transferred to Global Capacity as a result of the Transaction, and since Global
Capacity will not be providing voice service to any customers, the FCC and Commission anti-
slamming and/or mass migration rules do not apply to the customer transfer taking place as part of
the Transaction. Nonetheless, the Parties intend to notify customers of the assignment of their
Letter to Jean Jewell, Secretary
September 23,2014
Page 3
service and contracts to Global Capacity as provided in their existing service contract, or at least 30
days prior to such transfer. In the interest of assuring seamless and unintemrpted service, all of the
assigned customers will continue to receive service from Global Capacity under the same rates, terms
and conditions of service as were previously provided by MegaPath. Future changes in the rates,
terms and conditions of service to the affected customers will be undertaken pursuant to customer
contracts and any applicable federal and state notice and tariffrequirements.
Public Interest Considerations
The proposed Transaction described herein is consistent with the public interest and will not
impair the ability of the Parties to provide services to the public. The Transaction will result in the
assignment of certain network assets and the customers served by those assets (1.e., broadband data
customers) to a company with a history of providing high quality communications services. Global
Capacity's operations are overseen by a well-qualified management team with substantial
telecommunications experience and technical expertise.
The Transaction is structured to assure an orderly transition of customers from MegaPath to
Global Capacity. In accordance with the terms of their service contracts and the rules and procedures
of the Commission and applicable state(s), affected customers will be properly notified of the
Transaction and the change in their telecommunications services provider from MegaPath to Global
Capacity. In addition, immediately following consummation of the Transaction, Global Capacity
will continue to provide service to customers with no immediate change in their rates or terms and
conditions of service. The Transaction will therefore be virtually transparent and seamless to the
affected customers in terms of the services they currently receive.
Conclusion
An original and I copy of this letter are enclosed for filing. Please date-stamp the additional
copy of this filing and return it in the envelope provided. Please do not hesitate to contact the
undersigned ifyou have any questions.
Vice President - Regulatory Affairs & Litigation
Jeremy Kissel
Jeflrey Strenkowski