Discussion

Pub. Util. Code § 851 requires Commission authorization before a public utility may "sell, lease, assign or otherwise dispose of ...property necessary or useful in the performance of its duties to the public..." 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 assets, including 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 being acquired. Since Old Teleglobe possesses a CPCN to operate as a limited facilities-based and resale provider of interexchange telecommunications services within California, we will apply the requirements for such authority to New Teleglobe, as it will exist after its acquisition by TLGB.

The Commission has established two major criteria for determining whether a CPCN should be granted. An applicant who desires to operate as a facilities-based and resale provider of interexchange service 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. If the applicant will be required to provide deposits to other telecommunications carriers in order to provide interexchange services, it must demonstrate that it has sufficient additional cash or cash equivalent to do so. In addition, the applicant is required to make a reasonable showing of technical expertise in telecommunications or a related business.

The applicants provided a guarantee by TLGB that demonstrates that New Teleglobe, as it will exist after its acquisition by TLGB, will have sufficient resources to meet our financial requirements. Since New Teleglobe will continue to operate under much of the same management, we find that our requirement for technical expertise is satisfied.

The transaction will provide New Teleglobe with improved access to capital. In addition, it will be transparent to customers. The proposed transaction provides net benefits to the public and is, therefore, in the public interest.

As discussed above, the applicants have demonstrated that New Teleglobe, as it will exist after its acquisition by TLGB, meets our financial and experience requirements, and the proposed transaction is in the public interest. Therefore, we will grant the application.