VI. Assignment of Proceeding

Susan P. Kennedy is the Assigned Commissioner and Sarah R. Thomas is the assigned ALJ in these proceedings.

Findings of Fact

1. Two of Inflexion's senior executives founded Ntegrity, which furnished telecommunications services in Pennsylvania.

2. In 2003, the Pennsylvania Commission fined Ntegrity $400,550 for slamming and failure to cooperate with regulatory staff.

3. Ntegrity did not pay the Pennsylvania fine, and has furnished no evidence that it has appealed the fine or that the fine is procedurally improper.

4. The New Jersey Commission investigated Ntegrity for slamming, but closed the case without taking further action.

5. Ntegrity incurred, but did not pay, a large debt to Verizon in New Jersey, which was settled without admission of liability. The New Jersey Commission permitted Verizon to discontinue service to Ntegrity.

6. Stickdog's CEO was a current Inflexion executive. Stickdog incurred, but did not pay, a large debt to Verizon in Virginia. The Virginia Commission permitted Verizon to discontinue service to Stickdog.

Conclusions of Law

1. The applications should be denied because they are not in the public interest.

2. Inflexion or its successors in interest may reapply for a CPCN no earlier than two years from the effective date of this decision.

3. In Resolution ALJ 176-3123 dated November 14, 2003, the Commission preliminarily categorized this application as ratesetting, and preliminarily determined that hearings were necessary. While a hearing on Inflexion's TRO motion occurred, we may resolve the application on its merits without an evidentiary hearing. Thus, we reverse the preliminary determination and find that no hearing is necessary on A.03-11-011.

ORDER

IT IS ORDERED that:

1. Pursuant to Pub. Util. Code § 854, the joint application of Inflexion California Communications Corp. (Inflexion) and In Touch Communications, Inc. (In Touch), Application (A.) 03-11-011, is denied.

2. Pursuant to Article 1 of Chapter 15 of the Pub. Util. Code, Inflexion's and In Touch's application for a Certificate of Public Convenience and Necessity (CPCN), A.03-11-013, is denied without prejudice.

3. Inflexion's temporary arrangements serving In Touch's former customers must cease. Inflexion, In Touch or EZ Phone shall communicate with all of their California customers, inform them of their right to change service to another carrier and otherwise comply with Decision 97-06-096, which sets forth procedures for carriers discontinuing service.

4. Inflexion or its successors in interest may not reapply for a CPCN earlier than two years from the effective date of this decision. If they should choose to do so, they shall provide evidence that we need no longer be concerned with our ability to effectively regulate the company's actions. A record of no further investigations, unpaid fines, or of problems concerning cooperation with regulators in other contexts, will be of assistance at that time.

5. In Resolution ALJ 176-3123 dated November 14, 2003, the Commission preliminarily categorized this application as ratesetting, and preliminarily determined that hearings were necessary. While a hearing on Inflexion's TRO motion occurred, we may resolve the application on its merits without an evidentiary hearing. Thus, we reverse the preliminary determination and find that no hearing is necessary on A.03-11-011.

6. These proceedings are closed.

This order is effective today.

Dated _____________, 2004, at San Francisco, California.