20121228Cancellation of Certificate.pdf

ORIGINAL
BING HAM
?912t1EC28 9:t.9
Jean L. Kiddoo
Brett P. Ferenchak
[e-mail]
[e-mail]
December 27, 2012
• ._1 •-' - -
UTILITIES CO C
Via Overnight Delivery with Email
Jean D. Jewell, Secretary
Idaho Public Utilities Commission
472 W. Washington Street
Boise, Idaho 83702
[e-mail] A)Ft-1OS I
Re: Notification of Zayo Group, LLC and 360networks (USA) inc. Regarding
Certain Pro Forma Intra-Company Transactions and Request to Cancel
360networks (USA) inc. Certification
Dear Ms. Jewell:
Beijing
Boston
Frankfurt
Hartford
Hong Kong
London
Los Angeles
New York
Orange County
San Francisco
Santa Monica
Silicon Valley
Tokyo
Washington
Zayo Group, LLC ("Zayo") and 360networks (USA) inc. ("360networks") (collectively,
the "Parties") hereby notify the Idaho Public Utilities Commission ("Commission") of
certain pro forma intra-company transactions that will result in the assets and customers
of 360networks moving to Zayo (the "Zayo Pro Forma Transactions"). As described in
more detail below, the Zayo Pro Forma Transactions will be accomplished through (a)
the roll-up of 3 6Onetworks into Zayo through a series of pro forma mergers, with Zayo as
the surviving entity, and/or (b) the pro forma assignment of the assets and customers of
360networks to Zayo followed by the series of pro forma mergers described in (a). The
Pro Forma Transactions are part of a series of intra-company transactions that will
simplify the corporate structure of Zayo and align the portions of the business of
360networks more closely with the business structure of Zayo and Onvoy.1 Subject to
receipt of applicable regulatory approvals, Zayo proposes to complete the pro forma
intra-company transactions as soon as possible and no later than January 30, 2013.
It is the Parties' understanding that Commission approval is not required to complete the
transactions described herein. Accordingly, the Parties submit this letter for
1 In addition to the Zayo Pro Forma Transactions, certain wholesale assets and
services currently held by 360networks will be migrated to Zayo's affiliate, Onvoy, Inc.
("Onvoy") (the "Onvoy Pro Forma Transaction") (together with the Zayo Pro Forma
Transaction, the "Pro Forma Transactions"). The assets involved in the Onvoy Pro Forma
Transaction include facilities used to provide wholesale local exchange and long distance
services as well as switched access services. Zayo, 360networks and Onvoy previously
notified the Commission of the Onvoy Pro Forma Transaction. Out of an abundance of
caution, the Parties provide this additional notice of the Onvoy Pro Forma Transaction
because the transaction has not yet been completed.
A175310599.1
Bingham McCutchen LLP
2020 K Street NW
Washington, DC
20006-1806
1+1.202.373.6000
F +1.202.373.6001
hingharn. corn
Jean D. Jewell, Secretary
December 27, 2012
Page 2
informational purposes only to ensure the continuing accuracy of the Commission's
records. In support, the Parties state as follows:
Introduction
Since the time that it completed a pro forma intra-company consolidation in 2011, Zayo
has acquired a number of additional existing communications businesses, including
360networks. As a result of these acquisitions, the corporate structure of Zayo, has again
become overly complex, with numerous operating entities, many of whose services
overlap. Through the consolidation of those entities, Zayo will greatly simplify its
corporate structure and reduce the reporting and accounting burdens of Zayo (and the
regulatory agencies who receive such reports) and provide operational efficiencies.
Description of the Parties
Zayo is a Delaware limited liability company with principal offices at 400 Centennial
Parkway, Suite 200, Louisville, Colorado 80027.2 360networks is a Nevada corporation.
360networks is a wholly owned indirect subsidiary of Zayo Group. Zayo Group is a
wholly-owned direct subsidiary of Zayo Group Holdings, Inc. ("Holdings"),3 a Delaware
corporation, which in turn is a wholly owned direct subsidiary of Communications
Infrastructure Investments, LLC ("CII"), a Delaware limited liability company. CII has
no majority owner.
In Idaho, Zayo has registered as an Other Telecommunications Provider and applied for
Certification as Wholesale Telecommunication Provider. See Docket No. ZAY-T- 12-01.
360networks is authorized to provide competitive local exchange services in Idaho. See
Certificate No. 452, Order No. 29925, Docket No. WFN-T-05-1 . The Parties are also
authorized by the Federal Communications Commission ("FCC") to provide domestic
and/or international telecommunications services. Except for the wholesale voice
services currently provided by 360nehvorks that will move to Onvoy, the Company only
provides private line services (and similar non-voice services) and does not provide any
other voice services.
Additional information concerning the Company's legal, technical, managerial and
financial qualifications was submitted to the Commission in connection with various
Parties' certification applications and various corporate and financial transactions and is
therefore already a matter of public record. The Parties request that the Commission take
notice of these descriptions of the Company's qualifications and incorporate them by
2 Onvoy is a corporation organized under the laws of the State of Minnesota whose
principal address is 10300 6th Avenue North, Plymouth, Minnesota 55441.
Onvoy also is a wholly owned direct subsidiary of Holdings.
Onvoy is authorized to operate as a wholesale provider pursuant to Docket No. OVS-
T-12-02, Order No. 32576.
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Bingham McCutchen LIP
b I ngha rn cam
Jean D. Jewell, Secretary
December 27, 2012
Page 3
reference herein. In support of its financial qualifications, the Company's financial
statements from its most recent SEC Form i0-Q is available at
http://www.zayo.com!sites/defaultlfiles/Zayo_FY3Q2O 12_i 0-Q_0.pdf.
Contacts
Questions, correspondence or other communications concerning this Notice should be
directed to the Parties' counsel of record:
With Copies To:
Jean L. Kiddoo Scott E. Beer, General Counsel
Brett P. Ferenchak Jill Sandford, Associate General
Bingham McCutchen LLP Counsel
2020 K Street, N.W. Zayo Group, LLC
Washington, DC 20006-1806 400 Centennial Parkway, Suite 200
202-373-6697 (Tel) Louisville, CO 80027
202-373-6001 (Fax) 914-421-7585 (tel)
jean.kiddoobingham.com 914-421-6793 (fax)
[e-mail] [e-mail]
[e-mail]
Description of the Pro Forma Transactions
In order to simplify its corporate structure, Zayo is undertaking certain pro forma intra-
company transactions that will result in customers and assets moving from 360networks
and Zayo. Depending on the timing of various state regulatory approvals, the Zayo Pro
Forma Transactions will be accomplished by (1) the roll-up of 360networks into Zayo
through a series of pro forma mergers, with Zayo as the surviving entity (i.e. its merging
subsidiaries will cease to exist as separate corporate entities); and/or (2) the pro forma
assignment of assets and customers of 360networks to Zayo, followed by the series of
pro forma mergers. Ultimately, Zayo will be the Company entity that provides
telecommunications services throughout the United States (except for the wholesale voice
services currently provided by 360networks that will migrate to Onvoy). Diagrams
illustrating the organizational structure of the Company and Onvoy before and after the
Pro Forma Transactions are provided in Exhibit A.
The proposed Pro Forma Transactions will not result in any changes to the services
received by customers, including rates, terms and conditions of service. Each customer's
service will be assigned to Zayo and Onvoy pursuant to terms of that customer's service
contract that permit assignment to affiliates and/or pursuant to the customer's
authorization. In addition, each of the affected customers will receive notice of the Pro
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Bingham MCutchen LIP
b ngh am corn
Jean D. Jewell, Secretary
December 27, 2012
Page 4
Forma Transactions that affect their service. A sample of the notice that will be sent to
customers that will become Zayo customers is provided as Exhibit B.5
ReQuest to Cancel 360networks Authorizations
Following the Pro Forma Transactions, 360networks will no longer provide
telecommunications services in Idaho and ultimately will cease to exist as a corporate
entity. Therefore, the Parties request that, effective upon notification from the Parties that
the Pro Forma Transactions have been completed, 360networks' authorizations be
cancelled. Further, the Parties request that the Commission return and permit cancellation
of any bond or letter of credit (or similar security) that 360networks may have provided
in connection with its authorizations.
Public Interest Considerations
The Parties submit that the pro forma intra-company transactions described herein are in
the public interest. The Zayo Pro Forma Transactions will simplify the Company's
existing corporate structure and thereby reduce its reporting and accounting burdens and
provide other operational efficiencies. As a result of the efficiencies and focus, the
Company will become a stronger competitor to the ultimate benefit of consumers
Furthermore, the Pro Forma Transactions will be virtually transparent to customers and
will not result in any change in their services. Since all affected customers are already
familiar with, and are receiving invoices including the "Zayo" brand, the Zayo Pro
Forma Transactions will not result in customer confusion. Moreover, the rates, terms and
conditions of their services will not change as a result of these purely intra-company
transactions.
Finally, all of Zayo's subsidiaries, including the Parties, have the same corporate officers.
Therefore, there will be no change in the managerial qualifications of the
telecommunications provider serving the customers affected by the Zayo Pro Forma
Transactions.
A sample of the notice that will be sent to customers of the Company that will
become Onvoy and/or Zayo customers is provided as Exhibit C.
A/75310599.1
Bingham MCutchen LIP
bnghamcom
Jean D. Jewell, Secretary
December 27, 2012
Page 5
An original and seven (7) copies of this letter are enclosed for filing. Please date-stamp
the extra copy and return it in the envelope provided. This notification has also been
filed via email. Should you have any questions regarding this filing, please do not
hesitate to contact us.
Respectfully submitted,
M. ~Wa (
Jean L. Kiddoo
Brett P. Ferenchak
Counsel for the Parties
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Bingham McCutcher LIP
bngharnconi
LIST OF EXHIBITS
Exhibit A Diagrams of the Pre- and Post-Pro Forma Intra-Company Transactions Corporate
Organization Structure of the Parties
Exhibit B Sample Customer Notice
Exhibit C Sample Customer Notice
Verification
A/75310599.1
EXHIBIT A
Diagrams of the Pre- and Post-Pro Forma Intra-Company Transactions
Corporate Organization Structure of the Parties
A/75310599.1
Corporate Organizational Structure of Zayo and Onvoy
Before the Pro Forma Transactions
* The entities listed herein only include Zayo and Onvoy and
those subsidiaries of Zayo that (1) hold authorization to
provide intrastate telecommunications services in this state
or (2) are in the chain of ownership of those entities.
Communications Infrastructure
Investments, LLC.
(CII")
Zayo Group Holdings, Inc.
(Holdings")
Onvoy, Inc. Zayo Group, LLC --
- ('Onvoy") ('Zayo")
Certain wholesale
assets currently owned 360networks
by 360networks will I holdings (USA) inc.
move from the (360-Holdings")
Company to Onvoy
--------------------- I 360neorks (USA) inc.
('360networks")
Unless otherwise indicated all ownership percentages are 100%.
-1-
Corporate Organizational Structure of Zayo and Onvoy
After the Pro Forma Transactions
* The entities listed herein only include Zayo and Onvoy and
those subsidiaries of Zayo that (1) hold authorization to Communications Infrastructure
provide intrastate telecommunications services in this state Investments, LLC.
or (2) are in the chain of ownership of those entities. ("CII')
Zayo Group Holdings, Inc.
(Holdings")
Onvoy, Inc. Zayo Group, LLC
(Onvoy") ("Zayo")
Unless otherwise indicated all ownership percentages are 100%.
-2-
t *:i :1I :i I:]
Sample Customer Notice
The applicable affected customers will receive notice of the Zayo Pro Forma Transactions
through a bill notation. The notice will be provided to customers in their bill issued at least 30
days to the Zayo Pro Forma Transactions. The text of the bill notation will be substantially
similar to the following:
On or about [DATE], subject to receipt of any necessary regulatory
approvals, Zayo Group, LLC will undertake an internal corporate
consolidation. Thus, the Zayo corporate entity that will provide your
telecommunications services will be Zayo Group, LLC. Your services and
the associated pricing and terms and conditions of service will not change
as a result of this internal consolidation. There is no charge associated with
this change. You will receive a bill from Zayo and we will continue to
resolve any issues you may have with your account or service using the
same customer service number: 1-866-236-2824.
We recognize that, subject to the terms of your contract, you always have a
choice in providers and believe that this internal consolidation will enhance
our ability to serve you. Zayo looks forward to continuing to provide you
with the superior service you are accustomed to receiving and to the
opportunity to provide you additional services.
A175310599.I
EXHIBIT C
Sample Customer Notice
The applicable affected customers will receive notice of the Onvoy Pro Forma
Transaction through a bill notation. The notice will be provided to customers in their bill issued
at least 30 days prior to the Onvoy Pro Forma Transaction. The text of the bill notation will be
substantially similar to the following:
On or about [DATE], subject to receipt of any necessary regulatory
approvals, 360networks, Zayo Group and Onvoy will undertake certain
internal changes resulting in Onvoy being the entity that will provide your
wholesale voice telecommunications services and Zayo Group being the
entity that will provide your non-voice telecommunication services, if any.
Your services and the associated pricing and terms and conditions of
service will not change as a result of this internal change. There is no
charge associated with this change. You will receive bills from Onvoy for
your wholesale voice telecommunications services and Zayo for your non-
voice telecommunications services. Onvoy and Zayo will resolve any
issues you may have with your account or service using the following
customer service numbers: 1-800-933-1224 for Onvoy; 1-866-236-2824 for
Zayo.
We recognize that, subject to the terms of your contract, you always have a
choice in providers and believe that this internal change will enhance our
ability to serve you. Onvoy Voice Services and Zayo look forward to
continuing to provide you with the superior service you are accustomed to
receiving and to the opportunity to provide you additional services.
A/753 10599.1
VERIFICATION
A/753 10599.1
STATE OF COLORADO §
§
COUNTY OF BOULDER §
VERIFICATION
I, Scott E. Beer, am Vice President, General Counsel and Secretary of Zayo Group, LLC
and its subsidiaries (collectively, "Zayo") and Onvoy, Inc. ("Onvoy"); that I am authorized to
make this Verification on behalf of Zayo and Onvoy; that the foregoing filing was prepared
under my direction and supervision; and that the contents are true and correct to the best of my
knowledge, information, and belief.
Scott E.
Vice President, General Counse l,Iecretary
Zayo Group, LLC
Onvoy, Inc.
Sworn and subscribed before me this 7 day of November, 2012.
LAURA C. MARTINEZ
otary Public
Sta of Color
0

-State of Colorado CNdtar~ Public
My commission expires Of.Ot)C/
tI7h'
A/75245323.1