Background and Procedural History

AST currently has Commission authority to operate as a transportation charter-party carrier under TCP 8118 B/S, as well as federal authority under ICC No. MC 256667. The company currently operates charter buses, Amtrak Thruway Bus Service, tour bus, school bus, and school activity charter services. For the past nine years it has operated into Los Angeles International Airport (LAX) on an unscheduled basis.

AST filed this application on May 3, 2000, seeking to establish a new service, consisting of a major north-south oriented service to airports, train stations, and cruise ship terminals in the San Francisco, San Jose, and Los Angeles areas. This service would utilize full-sized motor coaches. In conjunction with this principal service, AST also seeks authority to operate an on-call, door-to-door feeder service at various locations, which would pick up and deliver passengers at any point within San Luis Obispo and northern Santa Barbara Counties, as a tributary (or distributary) adjunct to the trunk route. A single fare would be charged for both components of the service, which would operate 24 hours a day, 365 days a year.

CCSS filed a protest on July 5, which the administrative law judge (ALJ) deemed to be timely at the PHC. CCSS operates a scheduled airport service from fixed locations in Santa Maria and Buellton to LAX, which started operating in July of this year after we granted authority in Decision 00-04-006. At the PHC on September 11, CCSS reported that it was carrying an average of 16 passengers per day on its four round-trips. It is concerned that the advent of head-to-head competition would put it out of business in its nascent stage. Consequently, CCSS's protest is directed at that portion of the application which would permit the initiation of service from Santa Maria, Buellton, Lompoc and Solvang, the communities it presently serves.

From the discussion of the issues at the PHC it appeared to the ALJ that the protestant probably serves a somewhat different market than that proposed to be served by the applicant. Not only is the nature of the protestant's operation as a fixed location pickup different, but it serves a different geographical area from that proposed by the applicant for its on-call service, and has a significantly lower fare structure. In short, it appeared that any perceived competitive threat could be mitigated by imposing reasonable conditions upon the applicant while the protestant's service was getting established. The ALJ encouraged the parties to meet and confer, and invited them to propose conditions for the Commission's consideration.

On October 13, 2000, the parties sent a written agreement to the ALJ setting forth conditions that are mutually acceptable to them for inclusion in our order. These conditions are as follows:

(1) AST will not provide airport service "to and from Buellton (which also encompasses the Lompoc and Solvang areas) and Santa Maria (which also encompasses Guadalupe), on one hand, and [LAX] for a period of three years. [AST] will offer airport service from the communities of Buellton and Santa Maria starting on January 1, 2004."

(2) Should CCSS "sell, transfer, convey, lease, or give" its authority under this order to any other company or service, the parties' agreement becomes null and void.

It is obviously implied that CCSS's protest should be deemed withdrawn if we issue a certificate to AST with these conditions included.