4. Financial Qualifications
The Commission has not developed specific financial requirements for applicants for a CPCN to provide incumbent local exchange carrier authority. Pursuant to Rule 4.B of D.95-12-056, an applicant for a CPCN to provide competitive local exchange service must demonstrate that it has $100,000 in cash or cash equivalent to meet the firm's start-up expenses and additional funds to meet all underlying carriers' deposit requirements.
For DTS' application, we use the requirements for applicants for competitive local exchange carrier authority as a starting point. In Attachment I to its application, DTS provided a letter from a financial institution verifying that DTS had $130,000 in an account with the institution. DTS' estimated construction costs contained in Attachment G to its application total $36,088,766, far exceeding the D.95-12-056 requirement of $100,000 and DTS' $130,000 on deposit.
In Attachment H to DTS' application and in its July 17, 2009 response to the ALJ's request, DTS has identified various sources of funds to meet the required start-up expenses. DTS anticipates procuring loans, grants and funds from state and federal universal support mechanisms, as well as equity investments from its parent company, DialToneServices, L.P., (DialToneServices) and private equity investors. Although Communications Division staff has encouraged DTS to apply to the Rural Telecommunications Infrastructure Grant Program which provides up to $5 million to applicants proposing to provide service to unserved areas in the state, to date, DTS has no application pending. Operating authority is not required to apply for Rural Telecommunications Infrastructure Grant Program grant monies and we encourage DTS to apply.
In order to receive federal funding, DTS has applied for waivers of certain Federal Communications Commission (FCC) requirements. The FCC applications are in abeyance pending the outcome of this application. Although the majority of the construction funding sources are speculative and there is no guarantee of state and/or federal funds to support on-going service costs, we find that granting the application is in the public interest as it will bring basic residential service to areas that currently have only wireless and other satellite service providers.
DTS must be providing service to at least one customer within 12 months of the effective date of this decision or risk losing its authority. Given DTS' limited verifiable funding sources for start-up costs, if DTS is not providing service to at least one customer in any LATA5 within 12 months of the effective date of this decision, DTS may seek an extension pursuant to Rule 16.6 of the Commission's Rules of Practice and Procedure. Requesting an extension does not guarantee an extension will be granted.
5 DTS' proposed service territory is comprised of nine LATAs.
