ALJ/TIM/tcg Mailed 4/28/2006

Decision 06-04-048 April 27, 2006

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Application of New Century Telecom, Inc. (U-5912-C) for Approval of Stock Purchase Agreement and Related Transfer of Control.

Application 02-10-007 (Filed October 8, 2002)

OPINION DENYING THE APPLICATION
AND IMPOSING A FINE

TABLE OF CONTENTS

Title Page

OPINION DENYING THE APPLICATION AND IMPOSING A FINE..............1

1. Summary 2

2. Background 3

A. Initial Issues 3

B. Evidence Submitted by CPSD 6

C. Revocation of CPCN and Regulatory Status 9

D. NCT's Violations in Other Jurisdictions 10

3. Discussion 10

A. Denial of the Application 10

B. Correction of Telephone Company Records 11

C. Collection of Regulatory Fees 11

D. Fines for Violating Statutes, Commission Decisions, and Rule 1 12

i. Summary of the Violations 12

a. Failure to Remit Regulatory Fees 12

b. Violation of § 702 13

c. Violation of § 854(a) 13

d. Violation of D.02-01-038 14

e. Violation of Rule 1 14

f. Alleged Violations of § 2889.5(a) and § 2890(a) 14

ii. Imposition of Fines 15

4. Additional Measures to Protect the Public 19

5. Categorization and Need for Hearing 20

6. Comments on the Draft Decision 20

7. Assignment of Proceeding 20

Findings of Fact 20

Conclusions of Law 22

ORDER 24

Attachment 1

Attachment 2

Attachment 3

1. Summary

Application (A.) 02-10-007 requests authority under Pub. Util. Code § 854(a)¹ to transfer ownership of New Century Telecom, LLC (NCT) from Kathleen Helein to Karyn Bartel. The transaction was consummated without Commission authorization in March 2003. NCT's authority to operate in California was revoked by Resolution T-16962, issued on October 27, 2005, for failure to (i) file an annual report, and (ii) remit regulatory surcharges and fees.

Today's Decision denies A.02-10-007 because NCT is no longer a public utility and, therefore, § 854(a) does not apply. Even if § 854(a) did apply, the Application would be denied because Bartel is unfit to own a public utility. Specifically, since Bartel's unauthorized acquisition of NCT, the company has violated Rule 1 of the Commission's Rules of Practice and Procedure (Rule 1), several Commission decisions, and parts of the Public Utilities Code.

Today's Decision orders NCT to pay a fine of $55,000 for these violations. To protect the public interest, Bartel is barred from owning, operating, or managing a public utility in California until the fine imposed by today's Decision is paid and past due surcharges and fees are remitted.

This Decision also finds that the Helein Law Group violated Rule 1 by providing false information to the Commission. In lieu of a fine, today's Decision requires the Helein Law Group to provide notice in all documents filed at the Commission that the Helein Law Group was found by today's Decision to have violated Rule 1. This requirement shall end after three years.

The participation of the Consumer Protection and Safety Division (CPSD) in this proceeding is appreciated. Without their participation, certain relevant facts might not have come to light.

This proceeding is closed.

¹ All section references are to the Public Utilities Code.