2. Background

Kingstone Telecommunications, Inc. is a corporation operating and existing under the laws of the State of California, incorporated on July 11, 2011. Kingstone is a vendor for prepaid phone cards, providing both domestic and international calling services. The official website of Kingstone is www.kingstonetelecom.com. The officers and/or directors of Kingstone are Jesse M. Ahn (President) and Hongjoon Ahn (Vice President). On September 2, 2011, Kingstone Telecommunications, Inc. (Kingstone or Applicant) applied to the California Public Utilities Commission (Commission) for a Registration License as a Non-Dominant Interexchange Carrier to provide limited facilities-based interexchange service statewide in California. In its Application, Kingstone listed Krossland Communications, Inc. (Krossland) as an affiliate. Jesse Ahn was listed as the president of both Kingstone and Krossland, and is the majority shareholder of Krossland. According to the Application, Krossland distributes prepaid calling cards for other entities; it does not provide prepaid calling card services itself.

The Consumer Protection and Safety Division (CPSD) filed a protest on October 7, 2011, alleging two violations of Rule 1.1 of the Commission's Rules of Practice and Procedure (Rules). CPSD's protest alleged that:

(1) contrary to Applicant's assertions made in the Application, Applicant's affiliate, Krossland, violated the Commission's rules and had its operating authority revoked. Therefore, CPSD contended that Applicant's response to question 8 in its Application constituted a false statement in violation of Commission Rule 1.1; and

(2) the California Attorney General, a law enforcement agency, investigated Krossland for prepaid phone card service related issues. Therefore, CPSD contended that Applicant's response to question 9 in the Application constituted a false statement in violation of Rule 1.1.

With permission of the assigned Administrative Law Judge (ALJ) the parties met and conferred in an attempt to resolve the issues raised by the application, protest and reply. On March 13, 2012, CPSD and Applicant moved for adoption of the Settlement Agreement. The motion and the Settlement Agreement state that Applicant has provided satisfactory explanations concerning CPSD's protest and has agreed to pay a penalty of $6,500 to the General Fund, and the terms of the Settlement Agreement satisfactorily address all of CPSD's concerns. The motion further states that CPSD no longer has concerns regarding Applicant's fitness to provide service in California. The motion requests the Commission adopt the Settlement Agreement and issue a certificate of public convenience and necessity (CPCN) to Applicant to operate as a Non-Dominant Interexchange Carrier to provide limited facilities-based interexchange service statewide in California.

Other than CPSD's protest, which will be resolved once the Settlement Agreement is adopted by this decision, no other opposition to this Application was filed.