RE: January 9, Electronic Service Only. Marc Weintraub, Esq. Counsel, Applicants Bailey & Glasser, LLP 209 Capitol Street Charleston, WV 25301

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1 c IC 201 Brooks Street, P.O. Box 812 Phone: (304) Charleston, West Virginia Fax: (304) Electronic Service Only Marc Weintraub, Esq. Counsel, Applicants Bailey & Glasser, LLP 209 Capitol Street Charleston, WV January 9,20 19 RE: Case No T-PC Citynet Stratuswave, LLC ank Citynet West Virginia, LLC Dear Mr. Weintraub: The Staff Memorandum issued today was served via on the above-listed parties. Any responses must be submitted to the Executive Secretary s Office in writing within 10 days of this date, unless directed otherwise. You will not receive a copy of the Staff Memorandum by regular mail. Your failure to respond in writing to the utility s answer, Staffs recommendations, or other documents may result in a decision in your case based on your original filing and the other documents in the case file, without further hearing or notice. When you provide an address, you will automatically receive electronic docket notifications as documents are filed in this proceeding. The notifications allow recipients to view a document within an hour from the time the filing is processed. If you have not done so, you are encouraged to file the Electronic Mail Agreement, previously mailed to you, which allows the Commission to serve all orders issued in this matter via electronic docket notification. Please note - the Public Service Commission does not accept electronic filings. Sincerely, IF/tg Enc. - Memo Executive Secretary Division

2 INITIAL AND FINAL JOINT STAFF MEMORGNDUM TO: INGRID FERRELL Executive Secretary DATE: JANUARY 9,2019 FROM: CHRIS HOWARD [ Staff Attorney RE: CASE NO T-PC CITYNET STRATUSWAVE, LLC AND CITYNET WEST VIRGINIA Staff notes the Commission does not have jurisdiction over this internal transaction pursuant to W.Va. Code (f). On December 13, , Citynet Stratuswave LLC and Citynet West Virginia (Petitioners) submitted a filing before the West Virginia Public Service Commission (Commission), where Citynet Stratuswave, LLC will merge into Citynet West Virginia. The merger will result in the assets of Citynet Stratuswave, LLC becoming the assets of Citynet West Virginia. Citynet Stratuswave, LLC has been a wholly owned subsidiary since its formation and the impact of this transaction will have no impact on the customers. Initial and Final Recommendation of the Commission s Utilities Division Staff On January 7, 2019, David Kennedy, Utilities Analyst for the Commission s Utilities Division (Technical Staff) issued an Initial and Final Recommendation. Technical Staff believes the Commission does not have jurisdiction over this internal transaction pursuant to W.Va. Code l(f). Initial and Final Recommendation of the Commission s Legal Division Staff Legal Staff has reviewed the filings including the Petition and the Initial and Final Recommendation of Technical Staff. Legal Staff agrees with the findings and recommendations of Technical Staff. The Commission does not have jurisdiction over this internal transaction pursuant to W.Va. Code (f). CLH/cs Attachment cws &XI, H:\choward\word\l T-PC (Citynet Stratuswave, LLC. and Citynet West Virginia)UNITIAL AND FINAL JOINT STAFF MEMORANDUM.doc

3 PUBLIC SERVICE COMMISSION OF WEST VIRGINIA UTILITIES DIVISION INITIAL AND FINAL RECOMMENDATION DATE: January 7,2019 FROM: & David Kennedy, Utilities Analyst Utilities Division Re: Case No T-PC Citynet Statuswave, LLC and Citynet West Virginia Joint Petition for Advanced Consent for Corporate Merger On December 13, 2018, Citynet StratusWave, LLC (Citynet SW) and Citynet West Virginia, LLC (Citvnet WV) (collectively, Petitioners) jointly petitioned the Commission under W. Va. Code for consent and approval to a proposed merger of Citynet sw into Citynet.' Prior and Pending Cornmission Action Involving the Petitioners On July 26, 201 8, in Case No T-PC Gateway Telecom, LLC, DBA Stratuswave Communications, LLC, and Citynet Stratuswave, LLC (Petitioners) filed a Petition for consent and approval for Citynet Stratuswave, LLC to acquire certain assets of Gateway Telecom, LLC through a mutually negotiated asset purchase agreement, This case is currently pending before the Commission. On March 17, 2004, in Case No T-CN the Commission granted Citynet West Virginia, LLC a Certificate of Convenience and Necessity (CN) to provide facilities-based and resold local exchange and interchange services throughout West Virginia, I West Virginia Code slates what acts may nor be done without consent in advance ojthe Commission including mergers.

4 Page 2 Case No T-PC Utility Division Staff Memorandum On August 4, 2000, in Case No T-CN the Commission granted Gateway Telecom, LLC DBA Stratuswave Communications, LLC a certificate of Convenience and Necessity to provide resold interexchange telecommunications services in the State of West Virginia. However, that authority was limited in that it only related to resold interexchange telecommunications service and did not include authority to provide local service. CITYNET WV Description of the Petitioners Citynet WV is a West Virginia limited liability authorized to provide local exchange and interchange telecommunications services to both businesses and residential customers in West Virginia. In case No T-CN (Final Order April 6, 2004), the Commission granted Citynet WV a certificate of convenience and necessity to provide resale and facilities-based interexchange and local exchange services throughout West Virginia. CITYNET SW Citynet SW is a West Virginia limited liability company. Citynet SW was formed in 2017 to provide the same services provided by Citynet WV to customers located in the Wheeling, West Virginia area. Description of the Transaction Citynet WV and Citynet SW desire to enter into a merger agreement whereby Citynet SW will merge into Citynet WV. Once the merger becomes effective, all of the assets and liabilities of Citynet SW will become those of Citynet WV, and Citynet SW will cease to exist. Afier the Transaction, Citynet WV will continue to operate under the Citynet License. The assets formerly owned by Citynet SW will also be covered by the Citynet License.

5 Page 3 Case No T-PC Utility Division Staff Memorandum Staffs Initial and Final Recommendation West Virginia Code l(f) states that notwithstanding any other provisions of this article, the commission shall not have jurisdiction to review or approve any transaction involving a telephone company otherwise subject to sections twelve and twelve-a, article two, chapter twenty-four of this code if all entities involved in the transaction are under common ownership. Staff notes that since its formation, Citynet SW has been wholly owned and controlled by Citynet WV and no independent third party is involved in the Transaction. In Addition, the Transaction will not result in any impact on any Citynet customers or the public. Staff therefore concludes that pursuant to the aforementioned statute the Commission lacks jurisdiction in this case. Accordingly, Staff recommends that this case be dismissed. DTK:s a8