STATE OF CALIFORNIA ARNOLD SCHWARZENEGGER , Governor

PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

November 4, 2005 Agenda ID #5080

Alternate to Agenda ID #5026

TO: PARTIES OF RECORD IN APPLICATION 05-02-027

This is the alternate proposed decision of Commissioner Brown. It will be on the Commission's agenda at the meeting on November 18, 2005. The Commission may act then, or it may postpone action until later. This is an alternate to the proposed decision of Administrative Law Judge Pulsifer and the alternate proposed decision of Commissioners Kennedy and Peevey made available to parties on October 19, 2005.

When the Commission acts on the alternate proposed decision, it may adopt all or part of it as written, amend or modify it, or set it aside and prepare its own decision. Only when the Commission acts does the decision become binding on the parties.

Pursuant to Rule 77.7(6)(d) of the Commission's Rules of Practice and Procedure, comments on the alternate proposed decision must be filed at least seven days before the Commission meeting of November 18, 2005 and no reply comments will be accepted. Because day seven falls on a holiday, comments may be filed on or before Monday, November 14, 2005.

Comments must be filed with the Commission's Docket Office. Comments should be served on parties to this proceeding in accordance with Rules 2.3 and 2.3.1. Electronic copies of comments should be sent to Commissioner Brown's Advisor Peter Hanson at pgh@cpuc.ca.gov and ALJ Glen Walker at gew@cpuc.ca.gov. All parties must serve hard copies on ALJ Walker and Commissioner Brown, and for that purpose I suggest hand delivery, overnight mail or other expeditious methods of service. The current service list for this proceeding is available on the Commission's web site, www.cpuc.ca.gov.

/s/ ANGELA K. MINKIN by LTC

Angela K. Minkin, Chief

Administrative Law Judge

ANG:sid

Attachment

COM/GFB/sid DRAFT Agenda ID #5080

Ratesetting

Alternate to Agenda ID #5026

Decision ALTERNATE PROPOSED DECISION OF
COMMISSIONER BROWN (Mailed 11/4/2005)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Joint Application of SBC Communications Inc. ("SBC") and AT&T Corp. ("AT&T") for Authorization to Transfer Control of AT&T Communications of California (U-5002), TCG Los Angeles, Inc. (U-5462), TCG San Diego (U-5389), and TCG San Francisco (U-5454) to SBC, Which Will Occur Indirectly as a Result of AT&T's Merger With a Wholly-Owned Subsidiary of SBC, Tau Merger Sub Corporation.

Application 05-02-027 (Filed February 28, 2005)

ALTERNATE OPINION REMANDING THIS APPLICATION

FOR FURTHER PROCEEDINGS CONSISTENT WITH THIS ORDER

1. Summary

We find that all provisions of Section 854 of the Public Utilities Code apply to the application of SBC Communications Inc. (SBC) and AT&T Corp. (AT&T) (collectively, Applicants) to transfer control of AT&T's California utility subsidiaries to SBC. We also find that merger conditions proposed by the Federal Communications Commission (FCC) on October 31, 2005, may or may not affect any conditions that we might impose on this merger. The FCC has issued a press outlining what its proposed decision is intended to say, but the actual decision has not been released. Accordingly, we remand this proceeding to the Assigned Commissioner and the assigned Administrative Law Judge (ALJ) for further consideration and findings not inconsistent with this order.