2. Nature of Application

By application dated April 4, 2000, applicants seek approval of ATC's acquisition of control of CRL through a $42 million stock purchase. Applicants state that the transfer of control occurred on January 5, 2000.

ATC provides Internet technology products and services to mid-sized businesses and entities, including web site design, web hosting and Internet connectivity services. An exhibit attached to the application shows that ATC has $77 million in assets and $38 million in 1999 gross revenues. Its loss from operations in 1999 is listed as $15.3 million.

CRL is a California corporation that operates as a non-dominant interexchange carrier providing interstate and intrastate services. It also has facilities-based competitive local carrier authority, but that authority has not been exercised. Competitive local carrier authority was granted in Decision (D.) 98-03-066, 1998 Cal. PUC LEXIS 181, and interexchange authority was granted in D.98-05-071, 1998 Cal. PUC LEXIS 388. Financial statements attached to the application show that CRL in 1999 had assets totaling $3.9 million. The company showed a net loss of $2.5 million in 1999.

The application states that ATC acquired control of CRL by purchasing 100% of CRL's stock. According to applicants, CRL continues to operate as it has in the past, with no changes in rates, terms or conditions of service. Applicants state that the infusion of capital provided to CRL by ATC has permitted CRL to operate more efficiently.