Discussion

Pub. Util. Code § 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 this and related 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.)

In a situation where a company that does not possess a CPCN desires to acquire the CPCN of a company that does possess a CPCN, we will apply the same requirements as in the case of an applicant seeking a CPCN to exercise the type of authority held by the company whose CPCN is being acquired. Since LGE possesses a CPCN to operate as a limited facilities-based and resale provider of local exchange and interexchange telecommunications services within California, we will apply the requirements for such authority to TSI.

The Commission has established two major criteria for determining whether a CPCN should be granted. An applicant who desires to operate as a limited facilities-based and resale provider of local exchange and interexchange services must demonstrate that it has a minimum of $100,000 in cash or cash equivalent, reasonably liquid and readily available to meet the firm's start-up costs. In addition, it must demonstrate that it has enough cash or cash equivalent to cover any deposits that may be required by other carriers in order to provide the proposed services. The applicant is also required to make a reasonable showing of technical expertise in telecommunications or a related business.

TSI provided a guarantee by its president and chief executive officer that demonstrates that it has sufficient resources to meet our financial requirements. TSI also provided information on its management that demonstrates that it meets our technical expertise requirement.

Since LGE has no current customers, there will be no effect on customers due to the proposed transaction. However, the transaction will provide a more solid financial base for continued operations. In addition, potential customers will be offered service under the same rates, terms, and conditions after the transaction is approved. Therefore, the proposed transaction is in the public interest.

As discussed above, TSI has satisfied our financial and experience requirements, and the proposed transaction is not adverse to the public interest. Therefore, we will grant the application.