II. D.05-03-033 and the Petition for Modification

In D.05-03-033, we allowed Almendral to acquire indirect control of Americatel pursuant to Pub. Util. Code § 854. The transaction involved a stock purchase at the parent corporation level, in which the acquirer, Almendral, will remain two steps removed from the company offering resold long distance telephone service in California, Americatel. Americatel will remain a switchless reseller doing business in California.¹

Prior to the transaction, Americatel's parent corporation was a Chilean corporation named Empresa Nacional de Telecomunicaciones, S.A. (ENTEL Chile). Telecom Italia International N.V. held a controlling interest in ENTEL Chile. In the transaction we approved in D.05-03-033, Almendral acquired Telecom Italia's interest in ENTEL Chile, and with it control of Americatel.

Americatel's business and personnel will not change as a result of the transaction. As we stated in D.05-03-033,

Almendral will acquire a 54.76 percent voting interest in ENTEL Chile from Telecom Italia. As a result, Almendral will hold a controlling interest in Americatel. The transaction will occur at the holding company level and will not result in any transfer or assignment of the operating authority held by Americatel, movement of Americatel's customers, or change in Americatel's name, rates, terms or conditions. Americatel's existing management and technical team will continue to manage its own day-to-day operations in the United States. Thus, the change will not be apparent to Americatel's customers

Because Almendral is a Chilean company headquartered in that country, D.05-03-033 imposed a $25,000 deposit requirement to ensure that Almendral demonstrated its financial responsibility in the U.S. Almendral and Americatel filed a Petition for Modification seeking removal of this $25,000 requirement. They assert that because of their extensive cash and assets in Chile, Almendral should be excused from this requirement. They cite administrative burden:

Although the amount of the required deposit is not substantial, the obligation for Almendral, a Chilean corporation, to establish a U.S. bank account and maintain the deposit balance is, nevertheless, an administrative burden.

Petitioners also assert that because Almendral has significant assets in Chile (as described in D.05-03-033), the deposit requirement is unnecessary.