5. Discussion
Pub. Util. Code §§ 851-854 require Commission authorization before a company may "merge, acquire, or control...any public utility organized and doing business in this state...." The purpose of these sections is to enable the Commission, before any transfer of public utility property 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.)
The proposed transfer of control here promises improved services for California consumers. No changes in the existing services of OSLD or Network One are proposed.
We authorize OneStar's request to consummate the proposed transaction. Where a company such as OneStar, which does not possess a CPCN, seeks to acquire control of companies that do possess a CPCN, we apply the same requirements as in the case of an applicant seeking a CPCN to exercise the type of authority held by the companies being acquired. (Joint application of Empire One Telecommunications, Inc. and EOT Acquisition Corporation, D.99-12-022, mimeo, p.2.) Since OSLD possesses a CPCN to act as a provider of intrastate local exchange and long distance telephone services, we will apply the requirements for such authority to the new OneStar.
The Commission has established two major criteria for the issuance of a CPCN to act as a facilities-based provider of telecommunications services. An applicant that desires to act as such must demonstrate that it has a minimum of $100,000 cash or cash equivalent,1 reasonably liquid and readily available to meet the firm's startup expenses. An applicant that desires to act as a switchless reseller must demonstrate that it has a minimum of $25,000 in cash or cash equivalent, reasonably liquid and readily available to meet startup expenses. OneStar as a prospective facilities-based carrier must meet the $100,000 test. OneStar exceeds the $100,000 minimum, as shown in its financial data provided as Exhibit F to this application.
A new entrant must also make a reasonable showing of technical or managerial expertise in telecommunications or a related business. While OneStar is technically a new company, all of its operating personnel, managerial and technical personnel come from OSLD and Network One. OneStar's managerial, technical and operational team's experience is extensive. Its seven key officers have, in the aggregate, over 75 years of combined telecommunications and financial experience. The new OneStar meets the Commission's managerial, technical and financial criteria.
There are no protests, and the contemplated transfer of control appears to be noncontroversial. In Resolution ALJ 176-3068, dated August 2, 2001, the Commission preliminarily categorized this proceeding as ratesetting, and preliminarily determined that hearings were not necessary. Based on the record, we conclude that a public hearing is not necessary, nor is it necessary to alter the preliminary determinations in Resolution ALJ 176-3068.
The application is granted, subject to the terms and conditions set forth below.
This is an uncontested matter in which the decision grants the relief requested. Accordingly, pursuant to Pub. Util. Code § 311(g)(2), the otherwise applicable 30-day period for public review and comment is being waived.
1. Notice of this application appeared in the Commission's Daily Calendar of August 21, 2001.
2. OneStar meets the technical and financial requirements for a new telecommunications entrant. The existing customers of OSLD and Network One should see better service from the claimed efficiencies and from the infusion of new capital into OneStar.
3. OSLD and Network One gave customers notice of the proposed change in control; no customers objected.
4. Applicants seek approval pursuant to Pub. Util. Code §§ 851-854 of a transaction that will transfer control of OSLD and Network One to OneStar Communications LLC.
5. There will be no change in name, current services or rates provided by OneStar Communications, LLC as a result of the transfer of control.
6. The proposed transfer of control is in the public interest as customers of the new company should see increased product offerings and cost effective telecommunications solutions to their telecommunications needs.
1. This proceeding is designated a ratesetting proceeding; no protests have been received; no hearing is necessary.
2. The application should be granted and the transfer of control approved as in the public interest.
IT IS ORDERED that:
1. OneStar Communications, LLC, OneStar Long Distance, Inc. (OSLD) and CRG International, Inc, d/b/a Network One (collectively, applicants) are authorized pursuant to Pub. Util. Code §§ 851-854 to enter into the transaction, as more fully described in the application and its exhibits, by which OneStar Communications, LLC will acquire and control OSLD and CRG International, Inc. d/b/a Network One.
2. Applicants shall notify the Director of the Commission's Telecommunications Division in writing of the transfer of authority, as authorized herein, within 10 days of the date of consummation of such transfer. A true copy of the instruments of transfer shall be attached to the notification.
3. OSLD and Network One shall make all books and records available for review and inspection upon Commission staff request.
4. The authority granted herein shall expire if not exercised within one year of the date of this order.
5. Application 01-07-021 is closed.
This order is effective today.
Dated February 21, 2002, at San Francisco, California.
LORETTA M. LYNCH
President
HENRY M. DUQUE
RICHARD A. BILAS
CARL W. WOOD
GEOFFREY F. BROWN
Commissioners
