X. Approval of the Acquisition

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 control 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. As discussed above, Applicant is qualified to operate as a limited facilities-based and resale provider of local exchange and interexchange telecommunications services within California. Except for fulfilling the requirements of CEQA, the requirements for a CPCN to provide limited facilities-based services are the same as those to provide full facilities-based services. Therefore, Applicant is qualified to acquire the assets of Altrio.

Applicant represents that, as a result of the transaction, customers continued to receive service under the same rates, terms, and conditions as before the transaction. Since the transaction avoided discontinuance of service to customers, and resulted in no change in rates, terms, or conditions of service, the transaction was not adverse to the public interest. Therefore, we will approve the transaction prospectively. Applicant is at risk for any consequences that may arise from its acquisition of Altrio prior to obtaining this Commission's approval.

This transaction occurred at a time when Altrio was shutting down and discontinuing service to its customers. Therefore, Applicant's prompt acquisition of Altrio's assets avoided discontinuance of service to Altrio's remaining customers, and preserved the jobs of approximately 25 employees. The record demonstrates that there was not sufficient time for Applicant to obtain approval of the transaction before it was consummated. In addition, Applicant made contact with the Commission within days of closing the transaction in order to find out how to obtain the necessary approvals, and subsequently filed this application. Therefore, while Applicant violated § 854, the violation was unintentional. The fact that the transaction avoided termination of service to customers, and preserved employee jobs mitigates the violation. For these reasons, we find that imposing a fine for violation of § 854 would serve no useful purpose, and we will not do so.