4. Discussion

A. Requirement of Pub. Util. Code 852 and 854

As a preliminary matter, we note that Applicants styled their application as one pursuant to Pub. Util. Code § 852 rather than § 854. Because Section 852 relates only to public utility to public utility transactions, and we do not know the extent to which all acquiring companies are public utilities, we will deem the application to also seek approval pursuant to § 854. Both provisions require Commission authorization for transfers of stock or control affecting Commission-certificated telecommunications companies. Section 852 requires such approval when a public utility proposes to acquire stock of another public utility. Section 854 requires Commission approval before a company, whether or not incorporated in California, may "merge, acquire, or control . . . any public utility organized and doing business in this state. . . ."

The purpose of these 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.⁸ Because the public interest test applies to both Sections 852 and 854, and we find Applicants meet this test, we will not require Applicants to amend their application to refer to the latter section. Rather, we will deem the application to seek approval pursuant to both statutes.

We are satisfied that the proposed merger will benefit TVCI/SCI's California customers. Applicants represent that the combined company will have total invested and committed capital of $800 million, far more than TVCI/SCI have individually. TVCI/SCI will benefit from new management as a result of the combined Gabriel/TVCI/SCI management team that will be created as a consequence of the merger. Nor does the merger appear to have adverse consequences for TVCI/SCI's California customers. To these customers, the change will be transparent. Customers may use the same toll-free number to obtain service and report complaints, and may procure the same products and services. We are not granting TVCI/SCI authority to provide any new services in addition to those it already offers.

B. Motion for Protective Order

Applicants seek a protective order as to the following documents identified in two motions, filed on July 27, 2000 and August 29, 2000:

1. Agreement and Plan of Merger by and Among Gabriel Communications, Inc., Triangle Acquisition, Inc. and State Communications, Inc. dated as of June 9, 2000 (Application, Attachment E);

2. Gabriel Communications, Inc. and Subsidiaries Audited Financial Statements, December 31, 1999 and 1988 (Application, Attachment G); and

3. Schedules 2.7 and 3.7 to Agreement and Plan of Merger, disclosing pending TVCI and Gabriel litigation (Compliance Filing, Appendix D).

Applicants allege that the documents contain information about Applicants' finances and business plans that, if made public, likely would result in direct and immediate harm to them. They assert they will compete for customers with other telecommunications companies operating within California. Disclosure of the proprietary financial and marketing information would provide Applicants' competitors with valuable information relating to Applicants' financial condition and business plans. Applicants allege they have kept the documents secret and that because they are not publicly traded companies, the documents are not publicly available. On the basis of Applicants' allegations, we grant the motion.

C. Motion for Exemption from Rule 16(a)

Applicants seek exemption for Gabriel and Triangle from Commission Rule 16(a)'s requirements that applicants that are not domestic corporations shall file a copy of their certificate to transact business in California certified by the California Secretary of State. They allege that because Gabriel and Triangle are mere holding companies, with TVCI/SCI the only entity doing business in this state, they need not comply as to Gabriel and Triangle. In D.94-12-062, we granted a similar waiver to a holding company.⁹ We do have TVCI's certificate of qualification to do business in California. Nonetheless, we will require Gabriel and Triangle to file a statement, within 30 days of mailing of this decision, certifying, under oath, the following:

1. That they will not contest this Commission's jurisdiction to consider any matter relating to TVCI/SCI, their parents, holding companies, successors or subsidiaries by virtue of Gabriel and Triangle's lack of qualification to do business in California, and

2. That Gabriel and Triangle will be responsible for the actions of TVCI/SCI and their successors to the same extent as they would be had they complied with Section 16(a) and not received a waiver of that rule.

Provided Gabriel and Triangle timely make the foregoing filing, we will waive the Section 16(a) requirement as to them. If they fail to make the filing, Gabriel and Triangle shall, within 60 days of mailing of this order, comply with Rule 16(a).

D. Category and Need for Hearings

In Resolution ALJ 176-3044, dated August 3, 2000, the Commission preliminarily categorized this proceeding as ratesetting, and determined that hearings were not necessary. We uphold these preliminary determinations.

The application is granted, subject to the terms and conditions set forth below.