3. Description of Transaction

OSLD and Network One have entered into an agreement to pool assets, liabilities and operations. OneStar will become the new company with OSLD owning 80% and Network One the remaining 20%. The final step in the transaction, including the ultimate transfer of control, is conditioned upon receipt of required regulatory approvals, including the approval of this Commission. After the transfer, the entire stock of OneStar will consist of the contributions of OSLD and Network One. OneStar will henceforth provide all the services of OSLD and Network One in the State of California.

After the transfer of ownership and control, OneStar will continue to operate using the OneStar Communications, LLC name and Network One's and OSLD's operating authority. The applicants seek to transfer OSLDs' and Network One's operating authority in connection with this transaction to OneStar.

Applicants state that although the transaction will result in a change in control, it will not involve any change in the manner in which services are provided to their respective customers. OneStar will operate under the OneStar Communications, LLC name, providing its own tariffs. Applicants state that the transfer of control will be transparent to customers and will have no adverse impact upon them. In fact, applicants claim that the efficiencies, technological enhancement, and capital infusion that will follow, as a result of the transfer of assets, will allow OneStar to provide better service to its California customers.

Exhibits attached to the application describe the transaction in more detail and provide the data that indicates OneStar will have the financial and technical qualifications necessary to continue OSLD's and Network One's operations in California.