3. Discussion
The CPCN currently held by ANPI will be transferred to ANPI LLC. The CPCN currently held by Zone will be transferred to Zone Telecom, LLC. The Commission has established two major criteria for determining whether a CPCN should be granted, or transferred. An applicant who desires to operate as a provider of non-dominant resale local exchange and interexchange services must demonstrate that it has a minimum of $25,000 in cash or cash equivalent for operations of the company plus the costs of deposits to be paid to other carriers. In addition, the applicant is required to make a reasonable showing of technical expertise in telecommunications or a related business. In confidential Exhibits F and G to the application, the Applicants have provided financial statements that demonstrate that both operating companies have access to well over $25,000 cash or cash equivalent, which is reasonably liquid and available. This amount is sufficient to cover operating expenses and any deposits third party carriers may require.
Both companies currently provide telecommunications services in California and will retain sufficient experience and expertise for their continued operations post transfer of control. In addition, the ultimate ownership of the two companies will remain the same. This transaction will provide ANPI and Zone increased access to financial resources and allow both companies to become stronger competitors in California's telecommunications marketplace. The transaction will be transparent to customers and shareholders. Therefore, the proposed transaction is in the public interest. We find the respective transfers of CPCNs to meet the Commission's requirements; therefore, we authorize these transfers.
Where a company that does not possess a CPCN desires to acquire control of a company or companies that do possess a CPCN, the Commission will apply the same requirements, to the acquiring company, as would be applied to an initial applicant seeking a CPCN. In this case, ANZ will be an intermediate owner of ANPI and Zone with ultimate ownership of the operating companies residing with ANZ's parent companies, ANPI Holding and Zone USA. Therefore, these three companies, in addition to the operating companies, should meet the criteria for issuance of a CPCN.
The instant application includes financial statements2 and other evidence that demonstrates that ANZ, through its joint ownership by ANPI Holding and Zone USA, has sufficient resources to meet the Commission's financial requirements. Applicants have indicated that they will retain ANPI's and Zone's current management.
Pursuant to Pub. Util. Code § 852, 3 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. In addition, § 854 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.)
For the above reasons, the transaction is in the public interest and we will grant the application pursuant to §§ 852 and 854.
2 A.10-10-018, Exhibits D, E, F, G, & I (Confidential).
3 All Code references are to the Public Utilities Code, unless otherwise stated.
