3. Financial Qualifications
To be granted a CPCN for authority to provide facilities-based local exchange service, the applicant must demonstrate that it has $100,000 cash or cash equivalent to meet the firm's start-up expenses. Pacific Lightwave must also demonstrate that it has sufficient additional resources to cover all deposits required by other telecommunications carriers in order to provide service in California.1
In Exhibits B, D, and E to the application, as well as in its Responses to ALJ Requests2 (Responses), Pacific Lightwave provided actual and forecasted financial information, as well as a letter affirming that it has an unsecured revolving line of credit for an amount sufficient to cover start-up expenses, that is reasonably liquid and available.3 Pacific Lightwave also plans to fund initial operation through the existing equity in the company, issuance of common stock in the corporation, and by future revenues generated by its provision of services. Based on the actual and forecasted financial information in Exhibits B and D to the application, Pacific Lightwave is financially qualified to offer the telecommunications services for which authority is sought.
Pacific Lightwave proposed to initially interconnect with two other telecommunications carriers, Verizon and TelePacific Communications (TelePacific). Only Verizon requires a deposit, of $10,000. Pacific Lightwave has demonstrated that it has sufficient funds to pay this deposit, based on its actual and forecasted financial information and revolving line of credit, Exhibits B, D, and E to the application, and its Responses.
1 The financial standards for certification to operate as a competitive local carrier are set forth in Decision (D.) 95-12-056, Appendix C, Rule 4.B.
2 Filed September 25, 2009, October 26, 2009, and November 9, 2009.
3 Application (A.) 09-07-017 at Exhibit E and Response to ALJ Request filed September 25, 2009.
