U.S. Securities & Exchange Commission
SEC Seal
Home | Previous Page
U.S. Securities and Exchange Commission

Investment Company Act of 1940 — Section 7(d)
Xplornet Communications Inc.

January 11, 2012

Our Ref. No. 20121111225

Based on the facts and representations provided in your letter, we would not recommend enforcement action to the Securities and Exchange Commission (the “Commission”) against Xplornet Communications Inc. (“XCI”) under Section 7(d) of the Investment Company Act of 1940 (“1940 Act”) if XCI operates in the manner described in your letter without registering with the Commission as an investment company under the 1940 Act. Our position is based particularly on your representations that: (i) XCI is primarily engaged in the business of providing broadband Internet access to households and small and medium-sized enterprises in sparsely populated areas across Canada under the auspices of a Canadian federal government program; (ii) XCI’s loans to Xplornet Broadband Inc. (“XBI”) enable XCI to access XBI’s spectrum and terrestrial transmission facilities so that XCI can provide Internet access to customers; (iii) XCI is required under Canadian GAAP to prepare its financial statements on a consolidated basis as if XBI were a wholly or majority owned subsidiary of XCI; (iv) XCI’s cash management investments are limited to Canadian government securities and other Canadian highly liquid, short-term, high quality bank issued or money market securities and are intended to ensure that XCI will be able to meet its obligations to fund its operations and finance the acquisition of spectrum licenses and network equipment; (v) XCI will not invest or trade in securities for short-term speculative purposes; (vi) XCI’s income is predominately derived from its non-investment operations; and (vii) XCI intends to access the U.S. capital markets through private placements, including but not limited to placements pursuant to rule 144A under the Securities Act of 1933.

Our response expresses our views on enforcement action only, and does not express any conclusions with respect to the legal issues presented. You should note that any different facts or representations may require different conclusions.

Holly Hunter-Ceci
Senior Counsel

Incoming Letter

The Incoming Letter is in Acrobat format.



Modified: 01/11/2012