Mergers & Acquisitions: Mesa Telecoms Investments Acquiring Dobson Fiber & Wholly-Owned Subsidiaries
March 21, 2022 – The FCC’s Wireline Competition Bureau is seeking comment on a Section 214 Application filed by Dobson CC Limited Partnership (DLP – the Transferor) and Mesa Telecoms Investments, LLC (the Transferee).[1]
DLP and Mesa Telecoms are requesting FCC consent for the indirect transfer of control of Dobson Technologies, Inc. d/b/a Dobson Fiber and its wholly-owned subsidiaries, from DLP to Mesa Telecoms.[2]
Due to the complexity of the transaction, the Bureau accepted the application for non-streamlined processing. Also, the application and associated international application, have been referred to the relevant Executive Branch agencies for their views on any national security, law enforcement, foreign policy, or trade policy concerns related to the foreign ownership of the applicants. The applicants will be submitting a separate application to transfer control of non-common carrier wireless licenses held by Dobson subsidiaries Dobson Telephone Company and Vantage Telecom.
Comments on the DLP and Mesa Telecoms Section 214 application are due on or before April 4, 2022. Reply comments are due April 11, 2022.
DLP, Dobson Fiber & Subsidiaries
As explained in the application, DLP, the controlling shareholder of Dobson Fiber, is a family office for the Dobson family, and holds a 77.12% ownership interest in Dobson Fiber. The other direct shareholder of Dobson Fiber is Eight Bar Financial Partners I, LP, a limited partnership formed in the Cayman Islands whose primary business is investments. Eight Bar holds a 22.88% equity interest in Dobson Fiber. It has several investments in providers of utilities and utility infrastructure in the communications and technology sectors.[3]
Dobson Fiber, based in Oklahoma, is a privately-owned company that holds ownership of various companies operating as ILECs and CLECs in Oklahoma, Arkansas, and Texas.[4] Through its subsidiaries, Dobson Fiber owns and operates a 4,900-mile fiber optic network in Arkansas, Oklahoma and Texas. It also provides competitive local exchange service, exchange access service, long distance, and broadband internet service, both retail and wholesale, as a CLEC to less than a thousand customers primarily around the state of Oklahoma and northern Texas. Dobson Fiber’s wholly owned subsidiaries include the following:
Dobson Telephone Company, Inc. – an ILEC that serves exchanges (approximately 5,200 access lines) in western and eastern Oklahoma, including Taloga, Leedey, Cheyenne, Erick, Reydon, Camargo, Roger Mills, Vici, McLoud, Newalla, Sweetwater and Stella. Dobson Telephone Company receives Alternative Connect America Cost Model universal service support.[5]
Dobson Technologies – Transport and Telecom Solutions, LLC – a CLEC that provides fiber-based CLEC services in Oklahoma and offers a full range of data connectivity and voice solutions to its customers.
Lavaca Telephone Company, Inc. – an ILEC that provides local exchange and exchange access services (approximately 1,800 access lines) through the Lavaca exchange in rural western Arkansas and the Panama/Shady Point exchange in rural eastern Oklahoma. Lavaca receives cost-based CAF-BLS universal service support.[6]
Pinnacle Telecom L.L.C. – a competitive provider that is authorized to provide telecommunications services, including local exchange and toll services, throughout the State of Arkansas in areas where it is a party to various interconnection agreements and the State of Oklahoma, which is limited to the service territories of Southwestern Bell Telephone Company, d/b/a AT&T Oklahoma, and Valor Communications of Texas, LP d/b/a Windstream Communications Southwest.
Vantage Telecom, LLC – a competitive carrier that provides interstate interexchange and exchange access services as a CLEC in the states of Arkansas and Oklahoma pursuant to a blanket Domestic Section 214 authorization.
Mesa Telecoms
Mesa Telecoms is a newly formed Delaware limited liability company created as a holding entity for the transaction, and is an indirect subsidiary of Mesa Telecoms Holdings, L.P., a Delaware limited partnership. Ultimately, Mesa Telecoms is an indirect subsidiary of iCON Infrastructure Partners V, L.P. and iCON Infrastructure Partners V-B, L.P, which make up the iCON V Fund, “an infrastructure investment fund established in March 2020, focused on acquiring and managing a diversified range of infrastructure assets in Europe and North America.”
The Transaction
In February 2022, DLP and Mesa Telecoms entered into a stock purchase agreement and related agreements whereby Mesa Telecoms will acquire 100% of the direct ownership interests in Dobson Fiber, and indirectly, Dobson Fiber’s wholly-owned subsidiaries. The applicants “fully anticipate that Dobson Fiber’s existing management team will largely remain in place, and coupled with the financial resources and management and operational expertise of Transferee, will bring substantial benefits to customers.” Following consummation of the agreement, DLP will continue to participate in the ownership of Dobson Fiber through an indirect minority interest in Mesa Telecoms.
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[1] Domestic Section 214 Application Filed For The Transfer Of Control Of Dobson Technologies, Inc. D/B/A Dobson Fiber And Its Subsidiaries To Mesa Telecoms Investments, LLC; Non-Streamlined Pleading Cycle Established, WC Docket No. 22-110, Public Notice, DA 22-299 (Mar. 21, 2022), https://docs.fcc.gov/public/attachments/DA-22-299A1.pdf.
[2] See Dobson CC Limited Partnership, Transferor, And Mesa Telecoms Investments, LLC, Transferee, WC Docket No. 22-110, Joint Application (Mar. 4, 2022) (Application), https://ecfsapi.fcc.gov/file/10304084120074/Dobson%20FCC%20214%20Transfer%20Application.pdf; Dobson CC Limited Partnership, Transferor, And Mesa Telecoms Investments, LLC, Transferee, WC Docket No. 22-110, Supplement To Joint Application (Mar. 15, 2022), https://ecfsapi.fcc.gov/file/10315911701439/Dobson%20Fiber%20-%20FCC%20Supplemental%20Filing%20(03.15.22).pdf.
[3] Application at footnote 16.
[4] “Dobson Fiber was originally incorporated in 1997 as Dobson Wireline Company, although it traces its operational origins to 1936, when the Dobson Telephone Company began operating as an Oklahoma telephone exchange.” Application at p. 4.
[5] Application at Exhibit A, Licensees’ Universal Service Fund Summary.
[6] Application at Exhibit A, Licensees’ Universal Service Fund Summary.
