4. Discussion
4.1. Settlement
We review this uncontested settlement pursuant to Rule 12.1(d) of the Commission's Rules of Practice and Procedure,1 which provides that, prior to approval, the Commission must find a settlement "reasonable in light of the whole record, consistent with the law, and in the public interest." We have historically favored settlements that are fair and reasonable in light of the record as a whole.
CPSD and Krush are the only parties to A.10-05-021, and represent the only affected interests. Nothing in the Settlement Agreement contravenes any statutory provisions or prior Commission decisions. Krush's application, the Protest and Motion, and the Settlement Agreement, provide sufficient information for the Commission to assess the reasonableness of the Settlement Agreement. Nothing in the settlement contravenes the law, Krush accepts the authority of the Commission, and agrees that it will meet its regulatory and legal obligations and responsibilities in California. Although Krush maintains that its failure to comply with our regulations was inadvertent, it acknowledges that it did fail to comply, and as a result, it will pay a fine to the General Fund.
The Settlement Agreement resolves a potentially time-consuming and disruptive dispute and avoids ensuing litigation. The benefits to the public, including the payment to the General Fund, and avoidance of litigation, clearly outweigh the costs of continued litigation with its associated expense and uncertainty of outcome.
We conclude that the Settlement Agreement is reasonable in light of the record as a whole, consistent with law, and in the public interest. Accordingly, we adopt the Settlement Agreement, and Krush is granted a registration license as a prepaid phone card provider and interexchange carrier on a detariffed basis, consistent with the terms and conditions set forth in the Settlement Agreement and the order herein.
On September 2, 2010, the Commission adopted D.10-09-017 which established new criteria for applicants who seek authority through the registration process to provide communications services as a non-dominant interexchange carrier. For example, D.10-09-017, Ordering Paragraph 5 requires that:
New registration license applicants applying for the first time which have not previously reported revenues or submitted surcharges to the Commission must obtain a performance bond in the amount of $25,000 for the first year. In the affidavit included in its application, the registration applicant must attest to the amount of the bond that will be obtained and that the required performance bond will be executed within five business days after the effective date of the issuance of a registration license. The performance bond must be a continuous bond (i.e., there is no termination date on the bond) issued by a corporate surety company authorized to transact surety business in California, and the Commission must be listed as the obligee on the bond.
In addition, Ordering Paragraph 15 requires:
A minimum annual user fee for registration license holders is established and set at $100. Registration license holders must pay an annual user fee based on the Commission-established rate in effect at the time (currently 0.18% of gross intrastate revenue) or $100, whichever is greater.
Because Krush sought its authority through the registration process, these criteria also apply to Krush and are incorporated herein.
4.2. Requirements for Registration
4.2.1. Financial Qualifications
To be granted an application for registration, an applicant for authority to provide resold interexchange services must demonstrate that it has a minimum of $25,000 of cash or cash equivalent to meet the firm's start-up expenses.2 An applicant must also demonstrate that it has sufficient additional resources to cover all deposits required by local exchange carriers (LECs) and/or interexchange carriers (IECs) in order to provide the proposed service.3 Applicant provided a bank statement and balance sheet, demonstrating that it has sufficient cash to satisfy the financial requirement.
4.2.2. Technical Qualifications
Applicants for NDIEC authority are required to make a reasonable showing of technical expertise in telecommunications or a related business. Applicant submitted biographical information on its management that demonstrates that it possesses sufficient experience and knowledge to operate as a telecommunications provider.
Except as noted below, Krush represents that no one associated with or employed by Applicant as an affiliate, officer, director, partner, or owner of more than 10% of Applicant was previously associated with any telecommunications carrier that filed for bankruptcy, or was sanctioned by the Federal Communications Commission or any state regulatory agency for failure to comply with any regulatory statute, rule, or order.
In its application, Krush disclosed that the Florida Public Service Commission (FPSC) opened a proceeding against it and other registered IECs related to non-payment and/or delinquent payment of selected state regulatory assessment fees.4 The FPSC closed the proceeding on July 22, 2009 as it pertained to Krush, and found that Krush had paid all applicable fines. Since the issue before the FPSC has been resolved, we find that Krush is in compliance with the requirements for registration as a NDIEC.
4.2.3. Detariffed Rates
Krush intends to provide services on a detariffed basis. Krush must comply with all General Order 96-B - Telecommunications Industry Rules (Telecommunications Rules)5 in regards to the provision of detariffed services, including but not limited to: 1) the posting of all detariffed rates, terms, and conditions of service on an internet site pursuant to Rule 5.2 of the Telecommunications Rules; and 2) the notification of affected customers for any service not provided under tariff, of higher rates or charges, more restrictive terms or conditions, withdrawal of service, or transfer of ownership or customer base, pursuant to Rule 5.3 of the Telecommunications Rules.
4.2.4. California Environmental Quality Act (CEQA)
CEQA requires the Commission as the designated lead agency to assess the potential environmental impact of a project in order that adverse effects are avoided, alternatives are investigated, and environmental quality is restored or enhanced to the fullest extent possible. Applicant will not be constructing any facilities for the purpose of providing services. Therefore, it can be seen with certainty that there is no possibility that granting this application will have an adverse effect upon the environment.
1 All statutory references are to the Commission's Rules of Practice and Procedure unless otherwise noted.
2 The financial requirement for non-dominant interexchange carriers (NDIEC) is contained in D.91-10-041.
3 For NDIECs, the requirement is found in D.93-05-010.
4 FPSC Proceeding Number 090300-TI.
5 Authorized in D.07-09-019.
