4. Discussion
We deny SureWest's request for exemption from § 851, which requires a utility to request our authority to encumber its assets (in the case of SureWest, all of its assets) to secure indebtedness. We also propose alternatives that SureWest may pursue in order to resolve its concerns regarding compliance with § 851.
SureWest's request is one that affects all URF ILECs, not just itself. SureWest may be smaller than the other URF ILECs and may not operate throughout the country, but it is subject to the same regulation as the other URF ILECs. SureWest's requested exemption is therefore a matter that affects all telecommunications carriers in California that are subject to URF regulation. As such, SureWest should raise its request in a proceeding such as a rulemaking, in which all affected utilities may participate, instead of an individual application. As discussed in Section 2 of this decision, we have considered the exemption of URF ILECs from § 851 in a recent rulemaking. In D.10-05-019, we granted, after considering a full exemption, only a partial exemption from § 851. If SureWest would like us to reconsider our decision in R.09-05-006, a petition for rulemaking would be the appropriate vehicle in which to do so, to modify that decision. By so doing, SureWest could make its request, and that request could be commented on by other URF ILECs and other interested parties that are affected by any change to our regulation of URF ILECs.16
Another alternative for SureWest to resolve its concern that it is not able to quickly react to changes in the credit market because it is required to comply with § 851, is to request such authority prior to entering into negotiations with a lender for new indebtedness.17 By so doing, it will have the authority "on the shelf" and ready to be used. SureWest and its parent would be able to take advantage of any changes in the credit market or offers from a lender, while continuing to comply with § 851.
Lastly, since we granted SureWest authority in D.11-02-022 to encumber all of its assets to secure indebtedness, we find no need to exempt SureWest from a Pub. Util. Code Section that it has complied with at this time.
16 Since it is now more than one year since that decision was issued, SureWest will have to prove why it did not filed such petition sooner.
17 Rule 3.6 of the Commission's Rules of the Practice and Procedure requires, in part, that applications to encumber utility rights (for example, utility assets) pursuant to Sections 851-854, "should be signed by all parties to the proposed transaction, except the lender." Therefore, in the case of a utility requesting Section 851 authority to encumber assets to secure debt, the only signatory to the application is the utility applying for such authority. For example, in D.08-10-013 at page 6, we authorized the encumbrance of utility property pursuant to Section 851 to secure an aggregate amount of Debt Securities - no specific lenders or issuance amounts were identified in the decision.
