III. Financial Qualifications

To be granted a CPCN, an applicant for authority to provide facilities-based and resold local exchange must demonstrate that it has a minimum of $100,000 of cash or cash equivalent to meet the firm's start-up expenses.2 An applicant must also demonstrate that it has sufficient additional resources to cover all deposits required by local exchange carriers (LECs) in order to provide the proposed service.3 Applicant, a newly created telecommunications carrier, provided a guaranty by its affiliate, Mpower Communications Corp. In addition, Applicant included Mpower Communications Corp.'s December 31, 2004 audited financial statements, presented on a consolidated basis for Mpower Communications Corp. and its affiliates. Applicant states the cash resources shown on the consolidated balance sheet are fairly representative of the actual cash resources held by Mpower Communications Corp., as the collective cash holdings of all other affiliates do not comprise a significant portion of the amounts shown. Applicant will not be required to pay deposits to any underlying carriers in order to carry out the proposed operations. The balance sheets demonstrate sufficient cash to satisfy the financial requirements.

2 The financial requirement for CLCs is contained in Decision (D.) 95-12-056, Appendix C. The financial requirement for NDIECs is contained in D.91-10-041.

3 The requirement for CLC applicants to demonstrate that they have additional financial resources to meet any deposits required by underlying LECs and/or IECs is set forth in D.95-12-056, Appendix C. For NDIECs, the requirement is found in D.93-05-010.

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