2. Background

DeltaCom is a wholly owned subsidiary of Interstate FiberNet, Inc. (IFN) which in turn is wholly owned by ITC, a corporation with its headquarters at 1791 O.G. Skinner Drive, West Point, Georgia 31833. DeltaCom is an Alabama corporation authorized to do business in the State of California. Its principal place of business is 4092 South Memorial Parkway, Huntsville, Alabama 35802. We granted DeltaCom a Certificate of Public Convenience and Necessity (CPCN) to resell inter-Local Access and Transport Area (LATA) and intra-LATA services in the State of California in Decision (D.) 97-05-026, dated May 6, 1997.

Welsh Carson is a private equity investment firm and limited partnership with managerial and financial expertise in the field of telecommunications. Welsh Carson presently owns 49.3% of the outstanding common shares of ITC, representing 40.1% of the voting interest in ITC common stock outstanding on a fully diluted basis, assuming the conversion or exercise of all preferred stock, warrants, options, and other rights to acquire ITC's common stock. Following the transaction, Welsh Carson will own shares representing 59% of the voting interest in ITC common stock on a fully diluted basis.