6. Category and Need for Hearing
In Resolution ALJ 176-3033, dated February 17, 2000, the Commission preliminarily categorized this proceeding as ratesetting, and preliminarily determined that hearings were not necessary. Based on the record, we affirm that this is a ratesetting proceeding, and that hearings are not necessary.
Comments on Draft Decision
The draft decision of the ALJ in this matter was mailed to the parties in accordance § 311(g)(1) and Rule 77.7. Comments were filed on _______________, and reply comments were filed on ______________.
1. NetMoves is a Delaware corporation authorized to do business in California. NetMoves was granted a CPCN by D.91-09-012 to resell interLATA telecommunications services within California.
2. Mail.com is a Delaware corporation authorized to do business in California. Mail.com provides e-mail services to the public. The stock of Mail.com is traded on the Nasdaq stock exchange.
3. Mail.com acquired NetMoves on February 8, 2000.
4. On February 10, 2000, NetMoves and Mail.com jointly filed A.00-02-014 for authority under § 854(a) for Mail.com to acquire NetMoves. There were no protests or responses to A.00-02-014.
5. On May 8, 2000, the Applicants filed an amendment to A.00-02-014 in which the Applicants requested retroactive authority for Mail.com's acquisition of NetMoves. There were no protests or responses to the amendment.
6. On October 4, 2000, the Applicants filed a second amendment in which they requested that the Commission (i) grant retroactive approval of Mail.com's acquisition of NetMoves pursuant to the Commission's authority under § 853(b), and (ii) forgo penalizing the Applicants for their failure to obtain Commission authorization for Mail.com's acquisition of NetMoves as required by § 854(a). There were no protests or responses to the second amendment.
7. Mail.com has the technical, managerial, and financial qualifications necessary to operate NetMoves.
8. The public interest is not harmed by Mail.com's acquisition of NetMoves.
9. The public interest may benefit from Mail.com's acquisition of NetMoves.
10. Pub. Util. Code § 854(a) requires Commission authorization to transfer control of a public utility. Any transfer of control without Commission authorization is void under the statute.
11. Pub. Util. Code § 2107 provides the Commission with authority to impose a fine of between $500 and $20,000 for violations of the Public Utilities Code.
12. In D.98-12-075, the Commission adopted the following criteria for determining the amount of a fine: (i) the severity of the offense, (ii) the conduct of the utility, (iii) the financial resources of the utility, (iv) the totality of the circumstances, and (v) the role of precedent.
13. Applicants failure to comply with § 854(a) was inadvertent, did not harm others, and did not significantly benefit the Applicants.
14. There is no evidence that the Applicants have previously failed to comply with applicable statutes and regulations.
15. Applicants took steps to report and remedy their violation of § 854(a).
16. Applicants' financial resources are modest and declining.
17. Applicants' revenues regulated by the Commission are insignificant.
18. In at least 24 decisions the Commission has approved, without penalty, transactions that had been consummated without prior Commission authorization in violation of § 854(a).
19. The Commission's lenient treatment of parties that violate § 854(a) has not deterred subsequent violations of § 854(a) by other parties.
20. In Resolution ALJ 176-3033, 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. For the following reasons, A.00-02-014, as amended, should be granted to the extent the application requests prospective authority for Mail.com to acquire NetMoves: (i) Mail.com has the technical, managerial, and financial qualifications necessary to operate NetMoves; (ii) the public interest will not be harmed by the acquisition; (iii) the public interest may benefit from the acquisition; (iv) there were nor protests to the application; and (v) the Commission has authorized similar acquisitions many times in the past.
4. The purpose of § 854(a) is to enable the Commission to review a proposed acquisition of a public utility, before it takes place, in order to take such action as the public interest may require.
5. Application 00-02-014, as amended, should be denied to the extent that it requests retroactive authority for Mail.com to acquire NetMoves, since granting retroactive authority would defeat the purpose of § 854(a).
6. Applicants violated § 854(a) by Mail.com acquiring NetMoves without Commission authorization.
7. Pursuant to § 2107, Applicants may be fined for violating § 854(a).
8. It is necessary and reasonable to fine Applicants for violating § 854(a) in order to deter future violations of § 854(a) by Applicants and others. The amount of the fine should be based on the criteria set forth in D.98-12-075.
9. Applicants' violation of § 854(a), though a serious matter, was not an especially egregious offense.
10. Although Applicants displayed seriously flawed conduct by violating § 854(a), their conduct was not egregious.
11. The public interest was not significantly harmed by Applicants' violation of § 854(a).
12. The application of the criteria in D.98-12-075 to the facts of this case indicates that it is reasonable to fine Applicants $5,000.00 for violating § 854(a).
13. The following order should be effective immediately.
IT IS ORDERED that:
1. Pursuant to Pub. Util. Code § 854(a), Application (A.) 00-02-014, as amended, is granted to the extent A.00-02-014 requests authority effective as of the date of this order for Mail.com Inc. (Mail.com) to acquire Mail.com Business Messaging Services, Inc., formerly known as NetMoves Corporation (NetMoves). A.00-02-014, as amended, is denied to the extent A.00-02-014 requests retroactive authority for Mail.com to acquire NetMoves.
2. Mail.com and NetMoves (Applicants) shall notify the Director of the Commission's Telecommunications Division in writing of the transfer of control, as authorized herein, within 10 days of this order. A true copy of the instrument(s) of transfer shall be attached to the notification.
3. Applicants shall pay a fine of $5,000.00 for violating Pub. Util. Code § 854(a). Applicants shall pay the fine within 20 days from the effective date of this order by tendering to the Commission's Fiscal Office a check in the amount of $5,000.00 made payable to the State of California General Fund.
4. Application 00-02-014 is closed.
This order is effective today.
Dated , at San Francisco, California.
