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 in which a person or 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. Therefore, since Telava does not hold a CPCN to provide telecommunications services in California, it must meet the requirements for issuance of a CPCN because it is acquiring control of IBFA.
The Commission has established two major criteria for determining whether a CPCN should be granted. An applicant who desires to operate as a limited 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.
The application includes financial documents and other evidence that demonstrates that Telava has access to sufficient resources to meet our financial requirements. Since IBFA is expected to continue to operate under the same day-to-day management, we find that our requirement for technical expertise is satisfied, for the purposes of this transaction only.3 The transaction will improve IBFA's access to additional capital and the management experience of Televa's management team. In addition, this transaction will be transparent to customers. Therefore, the proposed transaction is in the public interest.
Therefore, we will grant the application pursuant to Section 854.
3 We made no determination that Telava would otherwise meet the technical and managerial requirements for authorization to provide telecommunications services in this state.
