Discussion

Whether to Approve A.03-10-033

Since WTC possesses a CPCN to provide facilities-based and resold interexchange telecommunications services within California, we will apply the requirements for such authority to Leucadia.

WTC provided a copy of Leucadia's most recent SEC Form 10-Q that demonstrates that Leucadia has sufficient resources to meet our financial requirements. Since there will be no change in WTC's management due to the proposed transaction, our requirement for technical expertise is satisfied.

In addition to satisfying the above requirements, there will be no change to WTC's rates, terms or conditions of service as a result of the transaction. Thus, WTC's customers and the public will not be not harmed, and the public may benefit to the extent the transaction enhances WTC's ability to compete due to improved access to capital. Also, there were no protests to A.03-10-033. For all of the above reasons, we find that the transaction is not adverse to the public interest, and conclude that it is reasonable to grant A.03-10-033 on a prospective basis. However, as discussed for A.03-10-032, we deny A.03-10-033 to the extent it requests retroactive authority for the transfer of control. Here too, the transfer of control is void under § 854(a) for the period of time prior to the effective date of this decision. WTC, new WCG, and Leucadia are at risk for any adverse consequences that may result from having implemented the transfer of control without Commission authority.

Whether to Penalize WTC for
Failure to Comply with § 854(a)

The circumstances of this violation are similar to those for A.03-10-032, except that there was no order of the Bankruptcy Court involved.¹² Its only explanation is that it wished to move forward with other transactions for business reasons. We find no mitigation in this explanation. This makes it more similar to D.00-12-053 and D.03-05-033 where $5,000 fines were imposed. In D.03-09-069, the fine was reduced by $2,500, compared to that imposed in D.00-12-053 and D.03-05-033, in recognition of the need to implement a bankruptcy court's order. In this instance, since there is no such mitigation, and this is WTC's second violation of §854(a), a correspondingly higher fine is appropriate. As a result, it is appropriate to increase the otherwise applicable fine by $2,500. Therefore, we will impose a fine of $7,500.