III. Discussion
We deny both applications without prejudice to Inflexion's right to reapply for a CPCN in two years from the effective date of this decision. We are most concerned about the very recent one-year-old Pennsylvania fine, Ntegrity's failure to pay it, the fact that the fine was based in part on Ntegrity's failure to cooperate with regulators, and Machen's direct contact with those regulators. Our ability to ensure that Inflexion acts in the public interest in California is directly related to our ability to levy fines, institute proceedings and require that the company cooperate with our requests. The fact that a company that Inflexion's CEO and Legal Vice President founded and ran flouted the Pennsylvania Commission's authority in this way gives us concern about our ability to protect California consumers.
The other alleged wrongdoing -- the closed New Jersey investigation and the debts (one settled) to Verizon in New Jersey and Virginia - would not, standing alone, cause us to deny the applications. It is the presence of these issues coupled with the Pennsylvania events that cause us to deny the applications at this time. We do so understanding full well that our decision will preclude Inflexion from providing regulated telecommunications service in California. Therefore, we will allow Inflexion to reapply for a CPCN in two years. If it should choose to do so, it shall provide evidence that we need no longer be concerned with our ability to effectively regulate the company's actions. A record of no further investigations, unpaid fines, or of problems concerning cooperation with regulators in other contexts, will be of assistance at that time.
We have the authority to deny a § 8545 or CPCN6 application on the ground that it would be against the public interest to grant the application. Part of our public interest determination includes an examination of the financial and managerial qualifications of the company on both counts, and for the foregoing reasons we find that Inflexion has failed to prove its qualifications at this time.
5 While Inflexion styles A.03-11-011 as one under Pub. Util. Code § 851, which relates to sale of assets by a utility, it is better viewed as a Pub. Util. Code § 854 application since Inflexion is taking over In Touch's business, and we hereby deem it such. Section 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.) 6 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, which is reasonably liquid and readily available to meet the firm's start-up costs, and additional funds for any deposits that other carriers may require. The applicant is also required to make a reasonable showing of technical expertise in telecommunications or a related business.
