Conclusions of Law

1. A public hearing is not necessary.

2. The Application should be granted to the extent set forth in the order that follows.

3. The money, property, or labor to be procured or paid for by the loan proceeds is to be used solely for the purposes specified on page 7 of this order. The proceeds may not be charged to operating expenses or income.

4. Cal-Ore should pay the fee determined in accordance with § 1904(b) of the PU Code.

5. The following order should be effective on the date of signature.

ORDER

IT IS ORDERED that:

1. On or after the effective date of this order, Cal-Ore Telephone Company (Cal-Ore), upon terms and conditions consistent with those described at pages 2 and 3 of this decision, is authorized to enter into a Telephone Loan Contract Amendment with the Rural Utilities Service (RUS) and the Rural Telephone Bank (RTB) in principal amount not exceeding $6,711,750, and to execute and deliver the Mortgage Note and supplemental mortgages of Cal-Ore's properties.

2. Cal-Ore shall apply the proceeds of the loan for the purposes described at page 7 of this decision.

3. Cal-Ore shall file with the Commission's Telecommunications Division copies of the Telephone Loan Contract Amendment, the Mortgage Note, and supplemental mortgages within thirty (30) days of execution.

4. On or before the 25th day of each month, Cal-Ore shall file the reports required by General Order Series 24.

5. The authority granted by this order shall become effective when Cal-Ore pays $7,712 as required by § 1904(b) of the Public Utilities Code.

6. Application 02-01-005 is granted as set forth above.

7. Application 02-01-005 is closed.

This order is effective today.

Dated June 27, 2002, at San Francisco, California.

LORETTA M. LYNCH

President

HENRY M. DUQUE

CARL W. WOOD

GEOFFREY F. BROWN

MICHAEL R. PEEVEY

Commissioners