28599.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF ESCHELON TELECOM, INC. FOR A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY TO PROVIDE LOCAL EXCHANGE TELECOMMUNICATIONS SERVICES.
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ORDER NO. 28599

On July 31, 2000, Eschelon Telecom, Inc. filed an Application for a Certificate of Public Convenience and Necessity to provide local exchange and interexchange services within the state of Idaho. Eschelon expects to begin offering these services in the first quarter of 2001 through a combination of resale and facilities-based operations.
On November 30, 2000, the Commission issued a Notice of Application and Notice of Modified Procedure that required all written comments to be filed by the parties on or before November 1, 2000. Order No. 28572. The Commission Staff was the only party to file written comments and it recommended that the Application be approved.
Based on the comments, the law and the record, the Commission grants the Application.
BACKGROUND
Eschelon (formerly known as Advanced Telecommunications, Inc.) is a privately held corporation incorporated in the state of Delaware on December 13, 1999. It currently maintains its principal place of business in Minneapolis, Minnesota. Two organizations, both investment companies, hold significant interest in Eschelon’s voting securities: Stolberg Partners and Bain Capital, Inc. Eschelon Telecom, Inc. is the parent company of eight statewide telecommunications providers (Arizona, Colorado, Minnesota, Nevada, Oregon, Washington, Utah, and Nebraska, with a pending application in New Mexico.)
In the first quarter of 2001 Eschelon proposes to begin offering services to small and medium size business customers in southwestern Idaho; however, it seeks authorization to provide service throughout the Qwest Communications, Inc. and Verizon Northwest, Inc. serving areas. In the beginning, the Company will provide basic local exchange service through a combination of resale and facilities-based operations, reselling primarily Centrex and 1FB lines, and will provide directory assistance and operator assistance on a resold basis. It will provide the same intraLATA and interLATA toll calling, operator services, directory assistance, directory listings and emergency services as those provided by the underlying carrier. In addition, it will provide high-capacity access lines to help high volume users with 12 or more phone numbers to save on line and feature costs.
Eventually, Eschelon will construct switching facilities in Idaho. Nationwide, it plans to deploy a technologically advanced network using high-capacity Nortel Voice and ATM switches and collocation equipment capable of integrating voice and data traffic. This technology will extend its network to 26 markets in the western United States by the end of 2001.
Eschelon has provided income and profit and loss statements reflecting the 1998 and 1999 calendar year. Although Eschelon reports an operating loss since its inception in 1996, its profit and loss statements show that the Company’s total assets exceed its total liabilities by a ratio of slightly more than two to one. Eschelon anticipates increased capital expenditures that will continue to generate negative cash flows for several years; however, capital resources and equity financing are expected to fund the business plan for a period of time.
Eschelon has promised to comply with Idaho Rules and Laws and has promised to notify the Commission if it begins to require advance deposits by its customers. (Deposits and advance deposits are not included in Eschelon’s tariff.) Staff has worked with Eschelon’s legal representative to produce a tariff, which Eschelon expects to become its first official tariff after this Application is approved.
Based on the above Staff recommended that Eschelon’s Application for a Certificate of Public Convenience and Necessity be granted.
COMMISSION FINDINGS
Based on the comments, the law and the record, the Commission grants the Application.
O R D E R
IT IS HEREBY ORDERED that Eschelon Telecom, Inc. is granted a Certificate of Public Convenience and Necessity to provide basic local exchange services in the state of Idaho.
THIS IS A FINAL ORDER. Any person interested in this Order or in interlocutory Orders previously issued in this Case No. GNR-T-00-23 may petition for reconsideration within twenty-one (21) days of the service date of this Order with regard to any matter decided in this Order or in interlocutory Orders previously issued in this case . Within seven (7) days after any person has petitioned for reconsideration, any other person may cross-petition for reconsideration. See Idaho Code § 61626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of December 2000.

DENNIS S. HANSEN, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

PAUL KJELLANDER, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

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ORDER NO. 28599 1

Office of the Secretary
Service Date
December 21, 2000