Discussion
Under Section 852, no public utility, and no subsidiary, affiliate of, or corporation holding a controlling interest in, a public utility, shall purchase or acquire, take or hold, any part of the capital stock of any other public utility, organized or existing under the laws of this state, without prior Commission authorization. Section 854 further requires Commission authorization before a company may "merge, acquire, or control . . . any public utility organized and doing business in this state . . . ". The purpose of these and related sections is to enable the Commission, before any transfer of a public utility is consummated, to review the situation and to take such action, as a condition of the transfer, as the public interest may require. (San Jose Water Co. (1916) 10 CRC 56.)
In a situation where a company that does not possess a CPCN desires to acquire control of a company that does possess a CPCN, we will apply the same requirements as in the case of an applicant seeking a CPCN to exercise the type of authority held by the company being acquired. Although Aspen - Series A does not hold a CPCN, TSI has a CPCN to operate as a local exchange and interexchange carrier. We therefore apply the requirements for such authority to Aspen - Series A.
The Commission has established two major criteria for determining whether a CPCN should be granted. An applicant who desires to operate as a facilities-based and resale provider of local exchange and interexchange service must demonstrate that it has a minimum of $100,000 in cash or cash equivalent, reasonably liquid and readily available to meet the firm's start-up costs. In addition, the applicant is required to make a reasonable showing of technical expertise in telecommunications or a related business.
Aspen - Series A has provided financial statements and other evidence that demonstrates that it has sufficient resources to meet our financial requirements. Since TSI is expected to continue to operate under the same management, and Teligent and TSI have significant experience in the telecommunications field,4 we find that our requirement for technical expertise is satisfied, for the purposes of this transaction only.5 The transaction will improve TSI's access to capital, which should improve TSI's financial position and ability to serve customers in this state.6 In addition, it will be transparent to customers. Therefore, the proposed transaction is in the public interest.
Therefore, we will grant the application pursuant to Sections 852 and 854.
4 In D.97-12-078, we found that Teligent met our requirements for technical and/or managerial expertise to offer telecommunications services in this state. TSI will remain a subsidiary of Teligent after this transaction is completed. 5 We made no determination that Aspen - Series A would otherwise meet the technical and managerial requirements for authorization to provide telecommunications services in this state. 6 We note that TSI previously discontinued service to business customers in the San Francisco and Sacramento areas because TSI did not have sufficient financial resources to continue to serve these customers. See D.01-10-062.
