Assignment of Proceeding

Susan P. Kennedy is the Assigned Commissioner, and Janice Grau is the assigned Administrative Law Judge in this proceeding.

Findings of Fact

1. By D.02-04-020 and D.02-09-013, VarTec and Excel were granted CPCNs to operate in California as providers of limited facilities-based and resold local exchange services. By D.94-05-053 and D.90-02-028, VarTec and Excel were granted CPCNs to operate in California as providers of resold interLATA services, and by D.95-01-011 and D.97-05-023 to operate as providers of resold intraLATA services. By D.96-02-072 and D.95-10-009, VarTec Solutions was granted CPCNs to operate in California as a provider of resold local exchange services and resold interLATA and intraLATA services under its former name, Dial & Save.

2. As a result of the transaction, Comtel will acquire substantially all of the assets of VarTec, Excel and VarTec Solutions, including all telecommunications equipment, customer accounts and records, business records and licenses and permits.

3. Comtel will retain some of the managers of VarTec, Excel, and VarTec Solutions. Some of Comtel's managers have telecommunications and energy expertise.

4. Customers will continue to receive service under the same rates, terms, and conditions of service after approval of the transaction.

5. Comtel and the VarTec Companies will provide notice to customers of the transfer.

6. Comtel has sufficient financial resources to meet the Commission's requirements to provide facilities-based and resold interexchange services.

7. Comtel possesses the necessary technical expertise required by the Commission.

8. Notice of this application appeared on the Commission's Daily Calendar on October 6, 2005.

9. There were no protests to this application.

10. No hearings are necessary.

11. Due to the confidential and proprietary nature of certain materials contained in the confidential Exhibit F, it is reasonable that they remain under seal for two years unless a request made prior to the expiration of that time demonstrates a need for further protection.

Conclusions of Law

1. The Commission will apply the same requirements to a request for approval of an agreement to acquire the assets, including the CPCN, of a provider of limited facilities-based and resold local exchange and resold intraLATA and interexchange telecommunications services within California as it does to an applicant for authority to provide such services.

2. Comtel meets the Commission's requirements for the issuance of a CPCN to provide limited facilities-based and resold local exchange and resold intraLATA and interLATA telecommunications services.

3. Approval should be conditioned on Comtel and the VarTec Companies' provision of appropriate notice to the VarTec Companies' customers as described in this order.

4. The transaction provides net benefits to the public and is, therefore, in the public interest.

5. In order to avoid delaying this transaction, the approval of the application should be made effective immediately.

ORDER

IT IS ORDERED that:

1. Pursuant to Public Utilities Code Sections 851 and 854, the joint application of Comtel Telcom Assets LP (Comtel) and VarTec Telecom, Inc. (VarTec), Excel Telecommunications, Inc. (Excel) and VarTec Solutions, Inc. (VarTec Solutions) (the VarTec Companies) for approval of the transfer of the assets, customers and certificates of public convenience and necessity of the VarTec Companies to Comtel is approved.

2. Comtel and the VarTec Companies shall comply with D.97-06-096's customer notice requirements.

3. Within 30 days after the transfer of authority authorized herein, Comtel shall notify the Director of the Telecommunications Division in writing of the completion of the transfer.

4. Comtel and the VarTec companies shall make all books and records applicable to the transfer available for review and inspection upon Commission staff request.

5. Comtel and the VarTec Companies' motion for confidential treatment of proprietary information contained in Exhibit F is granted. Exhibit F shall remain under seal and shall not be accessible or disclosed to persons other than the Commission staff absent an order of the Commission, the assigned Commissioner or administrative law judge (ALJ) or the law and motion ALJ, for a period of two years. If protection beyond that date is required, Comtel shall file a motion prior to the expiration of that period, explaining why further protection is needed.

6. Application 05-09-026 is closed.

This order is effective today.

Dated December 15, 2005, at San Francisco, California.

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