COMMUNICATIONS/RSK/KOK/DLW/RHG

Decision 10-12-045 December 16, 2010

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of Calaveras Telephone Company (U1004C) for an Order authorizing it to issue notes in an amount not exceeding $1,226,093, and to execute a related agreement and supplemental security instruments.

Application 10-09-014 (Filed September 22, 2010)

DECISION AUTHORIZING CALAVERAS TELEPHONE COMPANY

TO ISSUE DEBT

TABLE OF CONTENTS

I. Summary 22

II. Background 22

A. Financial Information 44

B. Financing Request 55

C. Current Financing Authority 77

D. Proposed Construction Plans 88

E. Construction Budget 1010

F. Cash Requirements Forecast 1111

G. Poker Flat Project Funding 1111

1. California Advances Services Fund 1212

2. RUS ARRA Grant and Low Cost Loan Award 1616

3. Internal Funds 1717

H. Capital Structure 1717

III. Notice and Protests 1818

IV. Discussion 1818

V. Environmental Impact 2424

VI. Competitive Bidding Rule 2525

VII. Motion to Shorten Protest Period 2525

VIII. Reporting Requirement 2626

IX. Fees 2626

X. Category and Need for Hearings 2626

XI. Assignment of Proceeding 2727

Findings of Fact 27

Conclusions of Law 30

ORDER 32

DECISION AUTHORIZING CALAVERAS TELEPHONE COMPANY

TO ISSUE DEBT

I. Summary

This decision grants Calaveras Telephone Company (CTC) the authority requested in its Application 10-09-014.

CTC requests authority, pursuant to §§ 818 and 851 of the Public Utilities Code, to:¹

1. Enter into a loan agreement with the United States of America, acting through the Rural Utilities Service (RUS),² for the purpose of borrowing $1,226,093 under the Broadband Initiative Program, as authorized by the American Recovery and Reinvestment Act of 2009 (ARRA);³

2. Use the loan proceeds to finance the construction of a broadband infrastructure project in its Copperopolis exchange in Calaveras County, California; and

3. Execute a related agreement and supplemental security instruments in conjunction with the loan.

¹ All statutory references are to the Public Utilities Code unless otherwise indicated.

² RUS is an agency of the United States Department of Agriculture (USDA), charged with providing assistance to public electric, telephone, water, and sewer utilities in rural areas of the United States via public-private partnerships. RUS works closely with two other agencies that are not part of the USDA, the Federal Financing Bank (FFB) and the Rural Telephone Bank (RTB). These banks provide the funds for many of the loan programs administered by the RUS.

³ ARRA which is commonly referred to as the Stimulus or The Recovery Act, is an economic stimulus package enacted by the 111^th United States Congress in February 2009.