Discussion
Whether to Approve A.03-10-033
Since WTC possesses a CPCN to provide limited facilities-based and resold local exchange telecommunications services within California, we will apply the requirements for such authority to Leucadia.
WTC provided a copy of Leucadia's most recent SEC Form 10-Q that demonstrates that Leucadia has sufficient resources to meet our financial requirements. Since there will be no change in WTC's management due to the proposed transaction, our requirement for technical expertise is satisfied.
In addition to satisfying the above requirements, there will be no change to WTC's rates, terms or conditions of service as a result of the proposed transaction. Thus, WTC's customers and the public will not be not harmed. However, as previously noted, we must also determine whether the transaction will serve the public interest. The record reveals that, the transfer of control associated with the transaction will provide WTC increased access to capital and thereby allow it to better compete in the market.18 We therefore conclude that WilTel has satisfied the applicable requirements and it is therefore reasonable to grant A.03-10-032 to the extent it requests prospective authority under § 854(a) for the transfer of control of WTC from old WCG to new WCG.
However, as discussed for A.03-10-032, we deny A.03-10-033 to the extent it requests retroactive authority for the transfer of control. Here too, the transfer of control is void under § 854(a) for the period of time prior to the effective date of this decision. WTC, new WCG, and Leucadia are at risk for any adverse consequences that may result from having implemented the transfer of control without Commission authority.
Whether to Penalize WTC for
Failure to Comply with § 854(a)
The circumstances of this violation are similar to those for A.03-10-032, except that WTC does not argue that it acted pursuant to an order of the Bankruptcy Court.19 WCG's only explanation is that it wished to move forward with other transactions. We find no mitigation in this explanation. In this instance, since there is no mitigation, and this is WCG's second violation of §854(a), a correspondingly higher fine is appropriate. Therefore, we will impose a fine of $10,000.
18 Application of Wiltel Local Network LLC For Approval Of An Indirect Transfer of Control And Request For Expedited Ex Parte Relief, pp.4-5. 19 Leucadia has total current assets in excess of $900 million, and revenues of approximately $144 million for the first six months of 2003. In contrast to new WCG, it did not show a loss for the same period.
