5. Pub. Util. Code § 311(g)
This is an uncontested matter in which (1) the decision grants the relief requested, and (2) there is no opposition to the $500 penalty imposed by the decision.3 Accordingly, pursuant to Pub. Util. Code § 311(g)(2), the otherwise applicable 30-day period for public review and comment is waived.
1. On August 8, 1999, StormTel and CCC Merger jointly filed A.99-08-052 for authority to merge CCC merger into StormTel.
2. The result of the merger might be a transfer of control of StormTel to CCC Merger's parent, Progressive Telecommunications Corporation.
3. The transfer of control of StormTel to CCC Merger was completed without Commission authorization prior to A.99-08-052 being filed.
4. On March 10 and May 23, 2000, StormTel and CCC Merger amended A.99-08-052 to request nunc pro tunc authority for the previously completed transfer of control of StormTel to CCC Merger.
5. CCC Merger is a subsidiary of Progressive. Progressive provides internet yellow pages, business-to-business e-commerce, telecommunications services, and computer telephony. Progressive's common stock is publicly traded on the NASDAQ stock exchange.
6. Applicants state that there will be will be no change in the name or operations of StormTel as a result of the transfer of StormTel to CCC Merger.
7. There were no protests to A.99-08-052.
8. Applicants explained their decision to seek retroactive approval of their merger only by indicating it was "in advertent".
9. This Commission appears to be developing a practice of routinely approving already completed transactions as a matter of course.
10. Applicants are seeking such a routine approval in this proceeding.
11. If this Commission continues to engage in after-the-fact review, it will create an exception to be pre-approval requirements that will be available to numerous applicants.
12. In Resolution ALJ 176-3023, the Commission preliminarily determined that this proceeding should be categorized as ratesetting, and that hearings were not necessary. There was no opposition to the Commission's preliminary determinations regarding category and need for hearings.
1. This is a ratesetting proceeding.
2. No hearing is necessary.
3. Section 854, subdivision (a) prohibits any corporation from acquiring control or merging with a California-regulated utility unless that corporation has received advance approval from us.
4. Section 851 prohibits utilities from disposing of or merging their facilities with any other company unless the Commission has given advance approval.
5. Any merger or transfer of control without advance Commission authorization is void under these statutes.
6. Applicants' transaction is void because it occurred without advance Commission authorization.
7. The language of neither section 851 nor 854 provides a legal basis for approving a merger that has already been completed, so there is no basis to grant applicants' request for nunc pro tunc approval.
8. Section 853 gives the Commission authority to determine that certain transactions or types of transactions need not be subject to any form of review at all.
9. In order to grant an exemption under section 853, the Commission must determine that the public interest is not served by even commencing review of particular transactions.
10. Section 853 cannot be relied upon as a legal basis for approving transactions that are void simply because the parties to those transactions chose not to comply with sections 851 and 854.
11. This Commission's practice has been to invoke section 853 only to address significant practical difficulties created when transactions have been voided in extraordinary circumstances.
12. We cannot rely on section 853 to exempt from review a category of transactions the defining characteristic of which is they simply fail to meet pre-approval requirements of section 851 or 854 as a result of oversight or a decision to seek retroactive approval.
13. A review of the filings in this application indicate this Commission has begun a practice of routinely using section 853 or some other pretext to approve transactions that sections 851 and 854 render void.
14. Regular reliance on section 853 would create an exception that swallowed the rule. Such a practice is not legally supported by any part of Section 853.
15. There is no basis on which this Commission can approve the transaction described in this application.
16. Pursuant to the clear terms of sections 851 and 854, applicants' merger transaction is void.
17. This Commission is compelled to deny this application.
IT IS ORDERED that:
1. Application (A.) 99-08-052, as amended, for authority under Pub. Util. Code § 854(a) to transfer control of StormTel, Inc. (StormTel), to CCC Merger Corporation (CCC Merger) is denied.
2. The merger of StormTel's parent and CCC Merger is declared void, and of no legal force or effect.
3. StormTel and CCC Merger are ordered to take all steps necessary to accommodate the fact that this merger transaction is void, thereby unwinding their illegal transaction, including but not limited to: a dissolution of any stock transactions, the reimbursement of any consideration paid, and the return of physical property to StromTel. The merged company may assign any contracts it has entered into to StormTel.
4. Within 10 days of the effective date of this proceeding, StormTel and CCC Merger shall notify the Director of the Commission's Telecommunications Division of the final date, not to exceed 75 days from the effective date of this decision, on which the unwinding of their merger will be complete.
5. StormTel and CCC Merger shall notify the Director of the Commission's Telecommunications Division in writing of the unwinding of their merger transaction within 5 days of the date of that event. A true copy of the legal documents effecting the unwinding of the merger shall be attached to the notification.
6. StormTel, CCC Merger, and Progressive shall notify all other appropriate regulatory authorities, including the California Secretary of State, and state, federal and foreign securities regulators that their merger is illegal and void within 5 business days of the effective date of this decision.
7. StormTel and CCC Merger shall provide to this Commission copies of all opinions of counsel rendered in connection with their merger transaction.
8. This docket will remain open to allow the filing of these documents.
This order is effective today.
Dated , at San Francisco, California.
3 On June 29, 2000, Applicants submitted written notification that they do not oppose a fine in the amount of $500.
