D. Assignment of Proceeding

Rachelle B. Chong is the assigned Commissioner and A. Kirk McKenzie is the assigned ALJ in this proceeding.

Findings of Fact

1. The joint application herein is unopposed.

2. Owing to the recent dissolution of his marriage, Delug currently owns 25% of the shares of NOS and ANI, and a 25% interest in Blue Ridge. In addition, Delug owns a 24.75% limited partnership interest in NOSVA, and 25% of the shares of NOS Virginia, the general partner of NOSVA.

3. Lichtenstein currently owns 50% of the shares of NOS and ANI and a 50% interest in Blue Ridge. In addition, Lichtenstein owns a 49.75% limited partnership interest in NOSVA, and 50% of the shares of NOS Virginia, the general partner of NOSVA.

4. According to the joint application, Delug effectively controls the management of the applicant companies, Lichtenstein has been a passive investor in them for many years, and Delug wishes to increase his ownership interest in a manner commensurate with his actual role in the management of the applicant companies.

5. If the proposed change of control receives all necessary regulatory approvals, Delug plans to purchase all of Lichtenstein's interests in the applicant companies, so that Delug would own 75% of the shares of NOS and ANI and a 75% interest in Blue Ridge. In addition, after the proposed change of control, Delug would own a 74.25% limited partnership interest in NOSVA, as well as a 75% interest in NOS Virginia, the general partner of NOSVA.

6. The above-noted purchases would be made pursuant to a stock purchase agreement and related agreements that comprise Exhibit A to the joint application. Applicants have filed these agreements under seal and have requested that they be treated as confidential pursuant to Pub. Util. Code § 583 and General Order (GO) 66-C.

7. In addition to the documents described in the preceding Finding of Fact (FOF), applicants have also filed under seal combined financial statements for NOS and its affiliates (Exhibit B), as well as a financial summary for Delug (Exhibit C).

8. In the joint application, applicants have disclosed the existence of a new FCC inquiry into (a) calls allegedly made by persons acting on behalf of NOS to numbers listed on the National Do Not Call Registry, and (b) other marketing practices. This new FCC inquiry has been assigned file number EB-05-TC-055.

9. The FCC has not decided whether to take enforcement action against NOS based on the conduct at issue in the new inquiry.

10. In A.05-12-007 and A.05-12-008, CPSD has entered into settlements with NOS and ANI that, if approved, would result in CPSD dropping its objections to the withdrawal of the two applications, which NOS and ANI have contended are unnecessary.

11. The statements in the application about the ownership interests of Delug and Lichtenstein in NOS, ANI, Blue Ridge and NOSVA are consistent with the testimony of Joseph Koppy, NOS's president, in A.01-12-013.

Conclusions of Law

1. A hearing is not necessary in this matter.

2. In view of this Commission's powers to impose appropriate penalties if any of the applicant companies are found to have engaged in unlawful marketing practices, the pendency of the new FCC inquiry into the marketing practices of NOS (file number EB-05-TC-055) is not a reason to delay or disapprove the change of control sought in the joint application.

3. The pendency of the settlements in A.05-12-007 and A.05-12-008, in which CPSD has agreed to drop its objection to the withdrawal of the two applications, and NOS and ANI have agreed to (a) stipulate that their failure to make certain disclosures in the applications constituted a Rule 1 violation, and (b) pay a $10,000 fine (all but $500 of which will be waived), is not a reason to delay or disapprove the change of control sought in the joint application.

4. The authority sought in the joint application should be granted, subject to the conditions set forth in this opinion.

5. The motion to file under seal Exhibits A, B and C to the joint application, pursuant to Pub. Util. Code § 583 and GO 66-C, should be granted to the extent set forth herein.

6. As a condition of granting the authority sought herein, the joint applicants should be required to abide by all of the terms and conditions set forth in the Commission decisions granting CPCNs to them, as well as by all terms and conditions set forth in the tariffs filed pursuant to such decisions.

7. This order should be effective immediately.

ORDER

IT IS ORDERED that:

1. The joint application of NOS Communications, Inc. (NOS), Blue Ridge Telecomm Systems LLC (Blue Ridge), Affinity Networks Incorporated (ANI), NOSVA Limited Partnership (NOSVA), and Samuel P. Delug (Delug), for authorization to allow Delug to purchase the interests of Robert A. Lichtenstein (Lichtenstein) in NOS, Blue Ridge, ANI, and NOSVA, pursuant to the purchase agreement filed as part of Exhibit A to the joint application, is approved pursuant to Pub. Util. Code § 854, subject to the terms and conditions set forth in the following Ordering Paragraphs (OPs).

2. The joint applicants shall be bound by all of the terms and conditions set forth in Commission decisions that have granted certificates of public convenience and necessity (CPCNs) to NOS, Blue Ridge, ANI, or NOSVA. Joint applicants shall also be bound by all other Commission decisions, rules, and General Orders that have modified or amended the requirements set forth in such decisions, including those arising out of Rulemaking (R.) 95-04-043/ Investigation (I.) 95-04-044 and R.00-02-004.

3. The joint applicants shall also be bound by the terms and conditions of all tariffs filed pursuant to the decisions referenced in OP 2.

4. The change of ownership approved herein qualifies for an exemption from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines § 15061(b)(3), so additional environmental review is not required.

5. The joint applicants' Motion for A Protective Order with respect to confidential material filed under seal as Exhibits A, B, and C to the Joint Application, which motion is dated June 22, 2006, is granted. The aforesaid materials should be placed under seal for a period of two years from the effective date of this decision, through and including December 1, 2008, and during that period the material so protected shall not be made accessible or disclosed to anyone other than Commission staff except upon the further order or ruling of the Commission, the assigned Commissioner, the assigned Administrative Law Judge (ALJ), or the ALJ then designated as Law and Motion Judge. If the joint applicants believe that further protection of the aforesaid materials is needed after December 1, 2008, any one or more of them may file a motion stating the justification for further withholding of these materials from public inspection, or for such other relief as the Commission's rules may then provide. Such a motion shall explain with specificity why the designated materials still need protection in light of the passage of time involved, and shall attach a clearly-identified copy of the ordering paragraphs of this decision to the motion. Such a motion shall be filed at least 30 days before expiration of the protective order set forth in this paragraph.

6. Application 06-06-022 is closed.

This order is effective today.

Dated November 30, 2006, at San Francisco, California.

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