ALJ/TIM/avs Mailed 9/9/2004

Decision 04-09-005 September 2, 2004

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Application of Reduced Rate Long Distance, LLC for Authority to Transfer Membership Interest. (U-6549-C).

Application 04-05-034 (Filed May 18, 2004)

OPINION AUTHORIZING TRANSFER OF CONTROL AND IMPOSING A FINE

TABLE OF CONTENTS

Title Page

OPINION 2

1. Summary 2

2. Parties to the Transaction 2

3. The Application 3

4. The Amendment to the Application 3

5. Regulatory Information Regarding the Parties to the Transaction 5

6. Discussion 5

A. Approval Pursuant to Section 854(a) 5

B. Penalty for Violating Section 854(a) 9

i. Severity of the Offense 10

ii. Conduct of the Utility 11

iii. Financial Resources Available to the Utility 12

iv. Totality of the Circumstances 13

v. The Role of Precedent 14

vi. Conclusion 14

7. California Environmental Quality Act 14

8. Category and Need for Hearing 15

9. Pub. Util. Code § 311(g) 15

10. Assignment of Proceeding 15

Findings of Fact 16

Conclusions of Law 18

ORDER 19

OPINION

1. Summary

This opinion grants Application (A.) 04-05-034 to the extent it requests prospective authority under Pub. Util. Code § 854(a)¹ to transfer indirect control of Reduced Rate Long Distance, LLC (RRLD) from David Butler and the BSM Family Limited Partnership (BSM) to the Dominion Business Group, Inc. (Dominion). The Application is denied to the extent it requests retroactive authority for the transfer. This opinion also requires RRLD to pay a fine of $5,000 for violating Section 854(a).