5. Discussion

NTIC seeks approval of the proposed transfer of control pursuant to Section 854(a) which states, in relevant part, as follows:

No person or corporation...shall merge, acquire, or control...any public utility...doing business in this state without first securing authorization to do so from the commission...Any merger, acquisition, or control without that prior authorization shall be void and of no effect.

The Commission has broad discretion to determine if a transaction should be authorized pursuant to Section 854(a). The primary standard used by the Commission is whether the transaction will adversely affect the public interest. The Commission may also consider if the transaction will serve the public interest. Where necessary and appropriate, the Commission may attach conditions to a transaction in order to protect and promote the public interest.⁵

Northwest represents that the transfer of control is in the public interest and should be approved because it will ensure that NTIC has access to the additional resources and cash it needs to continue to provide telecommunications service to its customers. Financial statements of Northwest at December 31, 2004 showed that Northwest had approximately $208,000 in cash, a one to one current asset to current liability ratio,⁶ and approximately $27,000 in equity.

With regard to management of NTIC (Highspeed), NTIC shares the executive management team of Northwest. That management team is comprised of a chief executive officer and chief operations officer with prior Cellular-One experience in the North Central Washington area, and a chief financial officer with over twenty years corporate finance experience. NTIC does not currently employ any individuals. Under that management team, Northwest represents it has demonstrated an exemplary record of regulatory compliance in the states of Washington and Idaho. Northwest intends to facilitate the commencement of intraLATA and interLATA service to rural California.

For the following reasons, we conclude that it is reasonable to grant the requested transfer of control to the extent it requests prospective authority for the reorganization under Section 854(a). First, there is no opposition to the Application. Second, Northwest has taken appropriate steps to update the tariffs of Highspeed and to provide timely user fee reports and payments, as detailed in the supplement to the application. Third, no informal or formal complaints have been filed against Highspeed during the past year. Fourth, it does not appear that the public will be harmed by the transaction. Fifth, the public may benefit

from the transfer of control to the extent the transaction enhances Highspeed's ability to provide intraLATA and interLATA service to rural California. Finally, California derives enormous benefits from the services provided by public utilities. Thus it is in the public interest to foster a business climate in California that is hospitable to utilities. Accordingly, ordinary business transactions that are subject to Section 854(a), like the one before us here, should be approved to the extent it does not adversely affect the public interest. No such reason has been alleged or shown in the instant proceeding.

The purpose of Section 854(a) is to enable the Commission to review a proposed transaction, before it takes place, in order to take such action as the public interest may require.⁷ Granting this application on a retroactive basis would thwart the purpose of Section 854(a). We deny Application 05-02-028 to the extent it requests retroactive authority for the reorganization under Section 854(a). Since we do not grant retroactive authority, the transfer of control is void under Section 854(a) for the period of time prior to the effective date of today's decision. The parties are at risk for any adverse consequences that may result from their having consummated the transfer of control without Commission authorization.