Discussion

AST is an experienced operator and going concern with an existing fleet of buses and substantial charter business. It is a contractor for Amtrak Thruway, an extensive system of feeder buses that connect with Amtrak's passenger trains on its Coast Route between the San Francisco Bay Area and Los Angeles. AST is operationally fit to operate the service proposed in its application.

AST's balance sheet dated December 31, 1999, shows that it had total assets of $866,718. Its current assets as of that date were $193,929, the majority of which were cash and receivables. Its pro forma for the first year of the proposed operation shows gross receipts of $180,000 for the new service, and projected expenses of $160,850. Even if it does not realize the full amount of projected revenues, AST is financially fit to operate the service without risk of service interruption or harm to the public.

The suggested conditions are reasonable. The affected area is relatively lightly populated, and would be unlikely to support the simultaneous inception of similar services by two competing operators. The conditions suggested by the parties would provide a reasonable opportunity for CCSS's service to become established before AST, a substantially bigger and more established company, presents the specter of competition in this limited geographical area.

AST's application includes a request for authority under Pub. Util. Code § 454.2 to establish a ZORF, whereby AST would be permitted to establish fares up to $20 above or below those filed with the application, in minimum increments (or decrements) of $5 per adult passenger for this service. Under Section 454.2 the Commission may establish a ZORF for any passenger stage transportation service which is operating in competition with other passenger transportation service from any means of transportation, if the competition together with the ZORF will result in reasonable rates and charges for the passenger state transportation service.

AST's showing generally supports its request for a ZORF, but lacks sufficient detail to enable us to determine the appropriate extent. Consequently, AST must provide additional information to ensure that we can adequately define and monitor the ZORF. We need a showing that there is competitive passenger service for the affected territory, and assurance that the rates and charges pertaining thereto are reasonable. Particularly in light of our concern about the possibility of harming a fledgling competitor on part of the proposed route, we will require AST to file additional support for the ZORF specifying the competition that exists for the same route(s) or service area(s), and the reasonableness of its rates in comparison to those of common carrier transportation alternatives.

We will approve the application subject to the proposed conditions and compliance requirements.