4. Applicants' Justification for Failure to Comply

Applicants responded to the order to show cause on May 18, 2000. Through affidavits of officers of both corporations, applicants stated that they failed to comply with the Public Utilities Code for business reasons: internet services market is highly competitive, and applicants deemed it necessary for ATC to act quickly in acquiring CRL Applicants also note that their request for approval of the transaction was filed within 60 days of the transaction, on March 2, 2000, but the filing was returned because it did not contain a required verification. The corrected filing was made on April 4, 2000.

The officers' affidavits stated that ATC will realize significant financial and competitive benefits through its acquisition of CRL. In particular, applicants assert the transaction enhances ATC's operational flexibility and efficiency, and gives it the opportunity to strengthen its competitive position. Applicants allege the benefits to ATC will also benefit the public in the form of increased reliability, expedited rollout of new services, and improved customer service.

Applicants' response sought to clarify that the application in fact was being brought pursuant to Sections 852 and 854 of the Code. Applicants noted that this Commission has approved transfers nunc pro tunc, i.e., with the same effect as if done earlier, where its examination of the transfer revealed no prejudice to ratepayers. (E.g. Re HTC Communications, LLC, for Approval Nunc Pro Tunc to Transfer Control to Pointe Communications [D.00-04-014] (2000) __ Cal. P.U.C.2d __, 2000 Cal. P.U.C. LEXIS 192; Winstar Communications [95-05-009] (1995), abstracted at 59 CPUC2d 635.)