4. Financial Qualifications

Pursuant to Rule 4.B of Decision (D.) 95-12-056, an applicant for a CPCN for authority to provide resold local exchange and interexchange service must demonstrate that it has $25,000 cash or cash equivalent to meet the firm's start-up expenses. Applicant must also demonstrate that it has sufficient additional resources to cover all deposits required by other telecommunications carriers in order to provide service in California.

At Exhibit G (confidential) to the application the Applicant has provided financial statements that demonstrate that it has access to well over $25,000 cash or cash equivalent. This amount is sufficient to cover start-up expenses and is reasonably liquid and available.

Applicant proposes to offer service within the territories of AT&T, Verizon, Frontier, and SureWest. In its application, 5LINX indicates that it does not currently have any resale or deposit agreements with carriers but anticipates that any deposit (if required) would be no more than $5,000. In its response to the ALJ's Ruling, Applicant provided a declaration from Jerabeck, its President and Chief Executive Officer. Jerabeck's declaration states that any carrier that the Applicant might purchase resale service from would require a deposit of not more than $5,000 and that the total deposit required by AT&T, Verizon, Frontier and SureWest would not exceed $25,000. The declaration states that Applicant has sufficient unencumbered cash funds in its bank account to cover the $25,000 deposit. Thus, Applicant satisfies our financial qualifications requirements.