* Electronic Copy * MS Public Service Commission * 7/24/2018 * MS Public Service Commission * Electronic

Transcription

1 BEFORE THE MISSISSIPPI PUBLIC SERVICE COMMISSION MEGAGATE BROADBAND, INC. AND TELEPAK NETWORKS, INC. DOCKET NUMBER 14-UA-170 IN RE: JOINT PETITION OF TELEPAK NETWORKS, INC. AND MEGAGATE BROADBAND, INC. FOR APPROVAL OF TRANSFER OF CONTROL TO TELEPAK NETWORKS, INC. ORDER THIS DAY this cause came on to be considered by the Mississippi Public Service Commission ("Commission") on the Petition of Telepak Networks, Inc. ("Telepak") and MegaGate Broadband, Inc. ("MegaGate") ("Petition"), for an order authorizing a transfer of control of MegaGate to Telepak as described herein ("Proposed Transaction"). Petitioners are in the process of obtaining all required approvals for the Proposed Transaction from both the Federal Communications Commission ("FCC") and all applicable state regulatory authorities, including the Commission. The Commission having fully considered the Petition and the exhibits filed thereto, the testimony of Ben Pace, and upon the recommendation of the Public Utilities Staff after its review, finds as follows: Telepak is a Mississippi corporation whose principal offices are located at 1018 Highland Colony Parkway, Suite 400, Ridgeland, Mississippi Telepak is a competitive local exchange carrier ("CLEC") who obtained a certificate of public convenience and necessity to provide telecommunications services in the State of Mississippi on October 14, 1999, in Commission Docket No. 99-UA-621. Telepak is a facilities-based carrier which provides broadband services, telecommunications services, and video services 1

2 to its commercial and retail customers. Telepak is wholly owned by its parent company, Telapex, Inc., a Mississippi corporation located at 1018 Highland Colony Parkway, Suite 700, Ridgeland, MS The officers of Telepak are Hu Meena, President and CEO; Wade H. Creekmore, Jr. and James H. Creekmore, Sr., Vice Presidents; Kevin Hankins, Chief Operating Officer; Ben Pace, Chief Financial Officer; Gregg Logan, Chief Technology Officer; and Wesley Goings, Treasurer/Secretary. The Board of Directors of Telepak consists of two (2) Directors, Wade H. Creekmore, Jr. and James H. Creekmore, Sr. Following the Proposed Transaction, Telepak will continue to provide services at the same or similar rates, terms and conditions without any immediate changes. A copy of Telepak's Articles of Incorporation was attached to the Petition as Exhibit A. Information concerning Telepak's financial qualifications to provide service had been previously submitted in connection with its Eligible Telecommunications Carrier ("ETC") designation as well as its annual certifications and was therefore incorporated by reference. Because Telepak is a privately held corporation which considers its financial information to be highly proprietary and confidential, and given that such information has been made available to the Commission previously, the Commission hereby waives the requirements set forth in Items 7 and 8 of Appendix B Schedule 1. MegaGate is a Mississippi corporation with its principal location at 6184 US Highway 98 West, Suite 200, Hattiesburg, Mississippi On December 5, 1997, MegaGate obtained a certificate of public convenience and necessity to provide facilitiesbased and resale CLEC and long distance resale telecommunications services within the State of Mississippi. MegaGate owns and operates a hosted VoIP communications business which provides cloud-based unified communications as a service for businesses primarily in 2

3 Mississippi. N. Eric Jorgensen holds more than 15% of MegaGate's stock and also serves as MegaGate's sole director. A copy of MegaGate's Articles of Incorporation was attached as Exhibit B to the Petition. Information concerning MegaGate's legal, technical, managerial and financial qualifications to provide service, and a tariff containing its rates and charges, is a matter of record at the Commission, having been submitted with MegaGate's petition for certification, and was also made part of the Petition by reference. A copy of the balance sheet of MegaGate was attached under seal as Exhibit C to the Petition. A copy of the operating statement of revenues and expenses for the twelve months ending as of the date of the balance sheet was attached under seal as Exhibit D to the Petition. On June 10, 2014, Cellular South, Inc., a wholly-owned subsidiary of Telapex, Inc., entered into an Asset Purchase Agreement ("Agreement") with MegaGate, to purchase all of the assets of MegaGate, except the Excluded Assets as that term is defined in the Agreement. N. Eric Jorgensen, the majority shareholder of MegaGate, was a party to the Agreement exclusively with regard to certain non-compete and indemnification provisions therein. Under the terms of the Agreement, Cellular South reserved the right to have one or more of its affiliates purchase the assets of Megagate and pursuant thereto Telepak will purchase the vast majority of Megagate's assets. A few parcels of real property will be purchased by Cellular South's subsidiary, Cellular South Real Estate, Inc., and any spectrum assets will be assigned to another Cellular South subsidiary, Cellular South Licenses, LLC. A copy of the Agreement with the purchase price redacted was attached under seal to the Petition as Exhibit E. Approval of the Petition is in the public interest because it will enhance Telepak's ability to compete in the market for telecommunications services in Mississippi. It is not 3

4 * Electronic Copy * MS Public Service Commission * 7/24/2018 * MS Public Service Commission * Electroni anticipated that there will be any material change to the business and customers of MegaGate. The consummation of the Proposed Transaction is beneficial to MegaGate, its customers, and its employees. The Proposed Transaction will permit MegaGate to have access to significantly larger financial resources, facilities resources, and technological resources. The Proposed Transaction will also allow MegaGate and its customers to benefit from access to new technologies and service offerings that are currently provided by Telepak and its affiliates. The Proposed Transaction will not result in any changes to Telepak's provision of service to its current customers. It is anticipated that the Proposed Transaction will not have an adverse effect on non-management employees of Telepak or MegaGate. In addition, the proposed transfer of control does not raise any competitive concerns. The Direct Testimony of Ben Pace supporting the Joint Petition was attached to the Petition as Exhibit F. Except as disclosed herein, none of the parties own, directly or indirectly, any other Mississippi utility operations. Telepak has a sister company, Cellular South, Inc., that provides wireless telecommunications services throughout the State of Mississippi. Furthermore, the rural incumbent local exchange carriers, Delta Telephone Company, Inc. and Franklin Telephone Company, Inc., are also affiliates of Telepak. This Commission designated Telepak as an ETC in those areas certificated to BellSouth Telecommunications, Inc. ("BST") in the State of Mississippi, by Order dated December 15, This Commission designated MegaGate as an ETC in those areas certificated to BST in the State of Mississippi by Order dated December 29, Since Telepak is already certificated as an ETC in the same areas as Megagate, Telepak did not 4

5 MPSC Docket No. 20l4-UA-170 seek an assignment of MegaGate's ETC status and is hereby deemed to have surrendered Megagate's ETC certification. IT IS, THEREFORE, ORDERED by the Commission that: 1. The Petition in this docket is in the public interest and is hereby approved. 2. The transfer of control transaction described herein and in the Agreement is hereby approved. 3. MegaGate's ETC designation (Docket 2003-UA-473) is hereby relinquished. This Order shall be deemed issued on the day it is served upon the parties by the Commission's Executive Secretary who shall note the service date in the file of this docket. Chairman Lynn Posey voted Ö; Vic Chairman R. Stephen Renfroe voted Ö and Commissioner Brandon Presley voted Dated this, the day of September, MISSISSIPPI PUBLIC SERVICE COMMISSION kl.'. Lynn Posey, Chairman g... F R. Ste enfroe, Vic hai an ½d\S AT E : ec y. Brand n Presley, Commissioner Kath rine Collier, Ex ve Secretary Effective this the day of September,