4. Discussion
The Applicants request Commission authorization pursuant to § 854 for the transfer of control of eKit to JTG. Section 854 states, in relevant part, as follows:
No person or corporation...shall merge, acquire, or control either directly or indirectly any public utility organized and doing business in this state without first securing authorization to do so from the commission...Any merger, acquisition, or control without that prior authorization shall be void and of no effect.
The purpose of § 854 is to enable the Commission to review a proposed transaction, before it takes place, in order to take such action as the public interest may require. The Commission has broad discretion under § 854 to approve or reject a proposed transaction. If necessary and appropriate, the Commission may attach conditions to a transaction in order to protect and promote the public interest.2
When 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 the type of CPCN held by the company being acquired. An applicant who desires to operate as a provider of limited facilities-based interexchange services must demonstrate that it has a minimum of $100,000 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 to the application, Applicants have provided financial statements which demonstrate that JTG meets the Commission's financial requirements for the issuance of a CPCN authorizing the provision of limited facilities-based services. Since, after the merger, eKit's day- to-day management will remain the same, and JTG has experience in providing telecommunications services through its regional subsidiaries in the State of Jersey, United Kingdom, Applicants have met the Commission's requirement for a showing of technical expertise in telecommunications.
This transaction will provide eKit with increased access to capital and with the business expertise of JTG, which will allow eKit to become a stronger competitor in California's telecommunications marketplace. The transaction will be transparent to customers, and will not harm the public. In addition, the application is unopposed.
We therefore find that the transaction is in the public interest and grant the application pursuant to §§ 854.
2 D.01-06-007, 2001 Cal. PUC LEXIS 390, *24.
