19990608Decision Memo.doc

DECISION MEMORANDUM

TO: COMMISSIONER HANSEN
COMMISSIONER SMITH
COMMISSIONER KJELLANDER
MYRNA WALTERS
DON HOWELL
STEPHANIE MILLER
TONYA CLARK
RON LAW
JOE CUSICK
LYNN ANDERSON
BIRDELLE BROWN
DAVID SCOTT
WORKING FILE

FROM:

DATE: June 8, 1999

RE: CASE NO. GNR-T-98-14; APPLICATION OF CCCID, INC. FOR A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY TO PROVIDE LOCAL EXCHANGE TELECOMMUNICATIONS SERVICES

On October 6, 1998, CCCID, Inc. (CCCID; Company) applied for a Certificate of Public Convenience and Necessity to provide local service in U S WEST exchanges. CCCID proposes initially to provide local telecommunications services and exchange services to targeted customers within U S WEST’s Boise area. The Company may obtain other business and residential customers throughout the U S WEST serving area at a later date.
On May 5, 1999, the Commission issued a Notice of Modified Procedure soliciting comments in response to CCCID’s Application. The only party to respond was the Commission Staff.

Staff’s Comments
CCCID is a wholly owned subsidiary of Connect Holding Corporation (CHC). CHC, which does not operate in any jurisdiction and has no independent source of income, has the same ownership and management as Connect Communications Corporation (CCC). CCC has a contract to serve two large multi-state business accounts with extensive telecommunications requirements. CCC intends to implement its contract through affiliate subsidiaries, such as CCCID, in each state. CCC is funding the startup operations and providing management expertise to CCCID until CCCID is able to sustain its own operations.
CCCID will install a switch in Boise through which it will offer a broad variety of local exchange services. It has an approved interconnection agreement with U S WEST for direct connections to its customers. Transmission will be provided by selected toll carriers. CCCID will maintain its own switching facilities.
Initially, CCCID will implement service in the Boise area for its two contracted business accounts and will expand logically from that initial site as business opportunities warrant. It has no immediate plans to serve in any other territories and projects that it will be at least six (6) months before CCCID obtains other customers in Idaho. The company has no plans to offer service initially via bundled resale, and therefore, will not be likely to serve residential customers. Still, the Company wants to have broad enough authority to do so in the future.
Inasmuch as CCCID was created solely to provide service to CCCID’s Idaho customers, it has not established a financial history and relies upon the financial resources of CCC. However, CCC has only been in existence for a short time and could only provide financial data for the 1998 year because that is the only complete year it has been in existence. CCCID proposes that the company clearly has assets that can sustain the relatively modest investments required of CCCID. Its owners will finance its operations through to profitability. CCCID believes it has a very low risk associated with its operations. Staff observes that with only two large business customers, to start, there is little risk to Idaho consumers. However, CCCID has indicated a willingness to post a reasonable surety bond to alleviate any concerns on the part of the Commission, and indeed, Staff recommends a $50,000 bond to be carried for two years in lieu of evidence of financial stability.
CCCID has completed its revisions to its illustrative tariff so that it conforms to Idaho law and the IPUC rules. Staff recommends that the Commission approve CCCID’s application
for a Certificate of Public Convenience and Necessity, contingent upon the Company's securing a $50,000 bond to be carried for two years.

Commission Decision
Does the Commission wish to grant CCCID’s Application? With or without a $50,000, two year bond?

vld/M:GNR-T-98-14_bp2.doc

DECISION MEMORANDUM 2