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STATE OF CALIFORNIA ARNOLD SCHWARZENEGGER, Governor

PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

January 12, 2004 Agenda ID #3174

TO: PARTIES OF RECORD IN APPLICATIONS (A.) 03-10-034 AND A.03-10-035

Enclosed is the draft decision of Administrative Law Judge O'Donnell. The decision will not appear on the Commission's agenda for at least 30 days after the date it is mailed. The Commission may act then, or it may postpone action until later.

When the Commission acts on the draft decision, it may adopt all or part of it as written, amend or modify it, or set it aside and prepare its own decision. Only when the Commission acts does the decision become binding on the parties.

Parties to the proceeding may file comments on the draft decision as provided in Article 19 of the Commission's "Rules of Practice and Procedure." These rules are accessible on the Commission's website at http://www.cpuc.ca.gov. Pursuant to Rule 77.3 opening comments shall not exceed 15 pages. Finally, comments must be served separately on the ALJ and the assigned Commissioner, and for that purpose I suggest hand delivery, overnight mail, or other expeditious method of service.

/s/ Angela K. Minkin

Angela K. Minkin, Chief

Administrative Law Judge

ANG: avs

ALJ/JPO/avs DRAFT Agenda ID #3174

Decision DRAFT DECISION OF ALJ O'DONNELL (Mailed 1/12/2004)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In Re Application of WilTel Local Network, LLC (U-6316-C) Pursuant to Public Utilities Code Section 854 for Expedited Ex Parte Approval of a Transfer of Control.

Application 03-10-034

(Filed October 6, 2003)

In Re Application of WilTel Local Network, LLC (U-6316-C) Pursuant to Public Utilities Code Section 854 for Expedited Ex Parte Approval of a Transfer of Control.

Application 03-10-035

(Filed October 6, 2003)

DECISION AUTHORIZING TRANSFER OF
CONTROL AND IMPOSING A FINE

Summary

This decision grants Application (A.) 03-10-034 of WilTel Local Network, LLC (U-6316-C) (WLN), formerly known as Williams Local Network, LLC, for approval of the transfer of control of WLN from Williams Communications Group, Inc. (old WCG) to WilTel Communications Group, Inc. (new WCG). In addition, we grant WLN's A.03-10-035 for approval of the acquisition of a controlling interest in new WCG, resulting in a controlling interest in WLN, by Leucadia National Corporation (Leucadia). In both cases the approvals are prospective in nature. Also, we impose fines totaling of $10,000 for failure to obtain advance approvals of the two transfers.

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