Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) Petition of Windstream Services LLC, ) AU Docket No. 20-34 Debtor-In-Possession for Waiver of ) Section 1.21001(d)(4) of the Commission’s ) WC Docket No. 19-126 Rules, as Necessary ) ) WC Docket No. 10-90 WAIVER–EXPEDITED ACTION REQUESTED Windstream Services LLC, Debtor-In-Possession (“Windstream”), by counsel and pursuant to 47 C.F.R. §§ 1.3 and 1.925, hereby respectfully requests the Office of Economics and Analytics (“OEA”) and the Wireless Telecommunications Bureau (“WTB”) grant a waiver on an expedited basis of 47 C.F.R. § 1.21001(d)(4) (the “Major Modification” rule) to allow Windstream to amend its Auction 904 short-form application (FCC Form 183), when and as necessary, to reflect the consummation of Step One and/or implementation of Step Two of its pending FCC application for consent to transfer control of licenses and authorizations held by Windstream and its affiliates, as debtors-in-possession licensees, to the same licensees, with reorganized indirect ownership according to a court-approved plan of reorganization.1 Grant of the waiver would enable Windstream to emerge from bankruptcy at a point during the Auction 904 timeline, without disqualifying it from participating in the auction. As set forth below, good cause exists for granting this waiver request, and the grant will serve the public interest. I. Background Windstream, a Delaware limited liability company, is a wholly-owned direct subsidiary 1 Step One is anticipated to occur in 3Q2020. Step Two will occur after emergence from bankruptcy. See infra page 5. 1 of Windstream Holdings, Inc., Debtor-In-Possession (“Holdings”), a Delaware corporation.2 On February 25, 2019, Holdings and each of its subsidiaries (the “Windstream Entities”) voluntarily filed for Chapter 11 reorganization in the United States Bankruptcy Court for the Southern District of New York.3 Following the filing of the petitions and the securing of $1 billion in debtor-in-possession financing, Windstream continued to provide service to its customers as it negotiated a comprehensive restructuring plan with its creditors. On April 1, 2020, Holdings filed a plan of reorganization with the Bankruptcy Court proposing a restructuring that would allow Holdings, Windstream, and Windstream’s subsidiaries to emerge from bankruptcy with a deleveraged capital structure and sufficient liquidity to fund the post-emergence business plan. The plan of reorganization, as amended (the “Plan”), was approved by the Bankruptcy Court on June 26, 2020. As contemplated by the approved Plan, the interests held by Holdings’ existing stockholders will be canceled and the company will be reorganized. To facilitate Windstream’s prompt emergence from bankruptcy, it has requested Commission permission to complete the transfer of control in two steps (the “Transaction”). In Step One of the Transaction, the interests held by the existing stockholders of Holdings will be canceled, and the creditors who hold the first lien debt of Windstream will 2 Windstream’s operating subsidiaries provide voice, data, and transport services on a local and long-haul fiber network currently spanning approximately 150,000 route miles. Windstream’s consumer and small business segment includes approximately 1.4 million residential and small business customers. In addition, Windstream provides 100 Gbps bandwidth and transport services to wholesale customers, including telecommunications companies, content providers, and cable and other network operators. Windstream’s incumbent local exchange carrier (“LEC”) subsidiaries serve customers in 18 states, while Windstream’s competitive LEC subsidiaries serve primarily enterprise and government customers in all 50 states and the District of Columbia. 3 Windstream Holdings, Inc., Debtors, Chapter 11, Case No. 19-22312-rdd (Bankr. S.D.N.Y. 2019). 2 equitize a portion of their debt claims against Holdings and Windstream and receive repayment or replacement loans for the remaining portion. As a result of equitizing their debt and exercising subscription rights and equity commitments in connection with the reorganization plan, the existing holders of first lien debt of Windstream, as a group, will acquire 100% of the equity of Holdings (“New Windstream”). It is not anticipated that any entity would obtain either de jure or de facto control of New Windstream. The following U.S.-based entities will hold a 10% or greater equity or voting interest in New Windstream after the completion of Step One: Nexus Aggregator, L.P. (estimated 49.9% voting and equity interest) and Franklin Resources, Inc. (estimated 30.3% voting and equity interest). Nexus Aggregator, L.P. is an investment vehicle affiliated with Elliott Management Corporation and its affiliated investment entities, including Elliott Investment Management L.P. (collectively “Elliott”). While Elliott does not itself provide communications services, it anticipates that, at the time of Windstream’s emergency from bankruptcy, it will hold a disclosable minority interest in LogMeIn, Inc. (LogMeIn), which has wholly-owned subsidiaries that hold telecommunications authorizations. Furthermore, as outlined in the Notice of Filing of Third Amended Plan Support Agreement, filed with the Bankruptcy Court on June 22, 2020,4 Windstream will be constituting a new board upon satisfaction of all conditions, including applicable federal and state regulatory approvals, for emergence. In connection with the reorganization, on May 21, 2020, the Windstream Entities filed with the Commission an application for consent to transfer control of licenses and authorizations held by Windstream and its subsidiaries to effect this two-step transaction (the “214 4 Notice of Filing of Third Amended Plan Supplement, In re Windstream Holdings, Inc., et al., Chapter 11, Case No. 19-22312, (Bankr. S.D.N.Y. entered June 22, 2020). 3 Application”). The Wireline Competition, International, and Wireless Telecommunications Bureaus jointly issued a public notice regarding the application on June 25, 2020, describing the transaction and establishing the pleading cycle.5 No parties filed any opposition to, or indeed any other comments regarding, the Transaction. To facilitate prompt emergence from bankruptcy, Windstream requested that the Commission approve the pending transfer of control applications as part of Step One. Windstream will emerge with aggregate foreign ownership below the 25% statutory benchmark set forth in section 310(b)(4) of the Act and with no foreign investor holding 10% or more of New Windstream’s stock. To achieve the necessary levels of foreign ownership, certain prospective foreign investors would hold upon closing Special Warrants entitling them to obtain indirect equity interests in New Windstream, but they could not exercise such Special Warrants until the Commission approves a higher level of foreign investment in “Step Two” of the Transaction. With respect to Step Two, within 30 days of emergence from bankruptcy, Windstream would file a Petition for Declaratory Ruling requesting Commission approval to permit the exercise of the Special Warrants by foreign entities of indirect interests in New Windstream at levels that would require disclosure or specific approval in some cases, and in the aggregate greater than 25%. 5 Applications Filed for the Transfer of Control of Windstream Holdings, Inc., Debtor-in- Possession, to Windstream Holdings, Inc., WC Docket No. 20-151, Public Notice, DA 20- 675 (rel. June 25, 2020). The 214 Application provides extensive information about the Windstream transaction. Also pending at the Wireline Competition Bureau is an application requesting approval for certain entities known as the Windstream Licensees to transfer certain fiber optic assets to Uniti Group Finance Inc. and Uniti National LLC. See Joint Application of Windstream Licensees and Uniti Group Finance Inc. and Uniti National LLC for Grant of Authority Pursuant to Section 214 of the Communications Act of 1934, as Amended, and Section 63.04 of the Commission’s Rules, WC Docket No. 20-161 (filed June 3, 2020). The transaction, which is the subject of the Windstream-Uniti application, does not implicate the transfer of control of Holdings and Windstream discussed herein. 4 Upon emergence from bankruptcy, and pursuant to a grant of the pending applications, New Windstream will continue to be Windstream’s parent, and the ultimate parent of Windstream’s operating subsidiaries, and will indirectly hold all licenses and authorizations held by Windstream and its subsidiaries. These changes will not affect the form or organization of any subsidiaries below Windstream. Step One is anticipated to occur in 3Q2020, subject to receipt of all necessary regulatory approvals from the FCC and state agencies and New Windstream’s subsequent emergence from bankruptcy (other federal regulatory approvals in the form of early termination under the Hart- Scott-Rodino Act have been received). Step Two will occur after emergence from bankruptcy and, as noted above, Windstream will be required to file a Petition for Declaratory Ruling to implement Step Two within 30 days after emerging from bankruptcy requesting the FCC’s approval for it to be up to 100% foreign-owned and for specific approval of certain foreign investors. The two-step process will allow Windstream and the subsidiaries to avoid the adverse consequences that could result from a delay in implementing the reorganization plan. Operating as a debtor-in-possession