4. Financial Qualifications
Pursuant to Rule 4.B of Decision (D.) 95-12-056, an applicant for a CPCN for authority to provide limited facilities-based and resold local exchange and interexchange services must demonstrate that it has $100,000 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 C to the application, Applicant has provided a guarantee of its obligations by its parent corporation, XYN Holdings. Attached to the guarantee letter is another letter and bank statement from Wells Fargo Bank. The Wells Fargo letter indicates that XYN Holdings opened an account in the amount of $100,000, approximately two weeks before the application was filed. The documentation provided by XYN Holdings, on behalf of the Applicant, did not demonstrate long term financial viability nor comport with the requirements of D.91-10-041. In its Response to the October 15, 2010 ALJ Ruling, Applicant provided a letter from its president, Shawn Sims, containing additional guarantees of its financial obligations.2 Both the letter and bank statement demonstrate that XYN has access to over $100,000 in cash, which is an amount sufficient to cover start-up expenses and is reasonably liquid and available.
XYN proposes to offer service within the territories of AT&T & Verizon. In its Response, XYN stated that for each incumbent provider in the geographic local exchange area where authority has been requested, it anticipates that the required deposits will not exceed $10,000, each. Applicant has submitted proof that it has a Certificate of Deposit (CD) at Wells Fargo Bank in the amount of $25,000.3 We find, given the $25,000 CD, that XYN has demonstrated that it has sufficient funds to pay deposits, and thus, fulfills the Commission's deposit requirement.
2 Response, Attachments 1 & 2.
3 Id. Attachment 2.
