Discussion

In D.00-06-073 (pp. 11-12) we stated our policy for granting new PSC authorities:

"Section 1031 requires every PSC to obtain from this Commission a certificate of public convenience and necessity (CPCN) declaring that public convenience and necessity require its operation before it may initiate service over any public highway in California. If a carrier already possesses a CPCN but desires to expand its authority to include a new type of service, it must also obtain our authority to do so. Under Section 1032(a), we may grant the authority as requested, refuse to issue it, or issue it to allow partial exercise of the requested authority. We may also attach terms and conditions to its exercise that, in our judgment, public convenience and necessity require. Section 1032 (b) places an ostensible limitation upon the issuance of a CPCN where a territory is already served by a certificated PSC. In such circumstances the statute requires that we only issue the CPCN when we find, after a hearing, that the carrier serving the territory will not provide service to our satisfaction. However, two decades ago the Commission declared that monopoly service in the face of an application by an aspiring competitor is not satisfactory to us as a matter of policy (American Buslines, Inc., 3 CPUC2d 246 (1980).) The underlying basis for this policy, which has the effect of prospectively rendering service by a sole carrier unsatisfactory per se whenever confronted by a competing application, is our perception that the introduction of reasonable competition tends to keep for regulatory oversight is greatly diminished, because it is replaced by the introduction of consumer choice.

We would add the qualification, suggested by dicta in American Buslines, that the market must also reasonably appear to be able to support one or more new competitors before we consider the service of the incumbent to be unsatisfactory. With this sole exception, however, we have made our preference for competitive markets clear"

As further discussed in D.00-06-073,¹¹ we stated that differentiation of services offered by competitors gives customers choices they would otherwise lack if only one carrier operated a particular franchise. Furthermore, a PSC carrier has its own equipment and facilities, and uses public streets and highways, and therefore is not faced with any impediment to direct customer access. Allowing competition among these transportation carriers presents no open access issue.

Finally, the evolution of our present policy as discussed in Re Regulation of Passenger Carrier Services, 33 CPUC2d 5 (1989) is a recognition that ground transportation markets have opened up to new entrants in the past three decades, and competition has developed between similar and alternative services. These changes are responsive to the demands of the public for new modes of transportation. We do not anticipate that this policy will change or return to the monopoly service provided by tightly regulated passenger stage carriers.

Silverado's proposed single passenger one-way fares range between $36 and $68. It requests authority to establish a ZORF of $8 above and $10 below the proposed fares. Silverado will compete with other PSCs, taxicabs, limousines, public transit, and private automobiles in its service area. This highly competitive environment should result in Silverado pricing its services at a reasonable level. Many other PSCs have been granted ZORFs. The requested ZORF is generally consistent with the ZORFs held by other PSCs.

¹¹ See, pp. 13-15.