3. Requested Authority

On July 8, 2003, Applicants filed this application requesting approval of an indirect transfer of control of DeltaCom to Welsh Carson. The proposed transaction is a private equity financial transaction wherein Welsh Carson will increase its existing ownership interest in DeltaCom's indirect parent, ITC. Pursuant to the proposed transaction, Welsh Carson debt and equity interests in BTI Telecom Inc. (BTI), a wholly owned subsidiary of DeltaCom, will be exchanged for shares of common stock in ITC, and Welsh Carson will invest an additional $35 million in DeltaCom. Because the proposed transaction increases Welsh Carson's ownership interest in DeltaCom to more than 50%, the transaction results in the indirect transfer of control of DeltaCom.

Applicants state that the proposed transaction will enable DeltaCom to access funds that are critically needed to maintain and expand its service and operations. They contend that the transaction will not cause any changes to the current management or operations of DeltaCom and will be seamless and transparent to DeltaCom customers in California. Following the indirect transfer of control of DeltaCom's parent company to Welsh Caron, DeltaCom will continue to offer its current services with no changes in the rates, terms or conditions of service. There were no protests to the application.