19991124Decision Memo.doc

DECISION MEMORANDUM

TO: COMMISSIONER HANSEN
COMMISSIONER SMITH
COMMISSIONER KJELLANDER
MYRNA WALTERS
DON HOWELL
STEPHANIE MILLER
TONYA CLARK
RON LAW
JOE CUSICK
CAROLEE HALL
WORKING FILE

FROM:

DATE: November 24, 1999

RE: CASE NO. GNR-T-99-10; APPLICATION OF JATO OPERATING TWO
CORP. FOR A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY

On June 30, 1999, Jato Operating Two Corp. (Jato) filed an Application for a Certificate of Public Convenience and Necessity to provide facilities-based competitive local telecommunications services in the state of Idaho. The Application states that Jato intends to provide primarily high speed DSL data-based telecommunication services using the incumbent local exchange carrier’s unbundled network elements in conjunction with its own facilities collocated at the incumbent’s central office.
On October 13, 1999, the Commission issued a Notice of Application and Notice of Modified Procedure to process the Application. During the comment period, written comments were filed by the Commission Staff and the Idaho Telephone Association. In their comments, the Idaho Telephone Association noted that Jato has not made a bona fide request to ITA’s members for interconnection, services or network elements. ITA’s comments state that any authority issued to Jato should be subject to the suspension of ITA’s members’ obligations to interconnect and to provide access to network elements, as well as the other duties described in Section 251(c) of the 1996 Telecom Act.
In its written comments, Staff stated that Jato has complied with the filing requirements of the Commission to be issued a Certificate of Operating Authority. However, Staff recommended that the Commission grant the Company a Certificate conditioned upon the Company obtaining a performance bond in the amount of $100,000. Staff noted that Jato is a start-up company and its own revenue projections show that it may not generate a positive cash flow for a period of at least two years. Staff recommended that the performance bond be in place for a period of two years unless the Company requested that the bond requirement be lifted before the period expires. In regard to ITA’s concerns, Staff noted that the ITA member companies have been granted an exemption by the Commission in Case No. GNR-T-97-17, wherein the Commission found that the ITA members met the requirements to be designated as rural telephone companies. The Commission granted rural exemptions to the companies suspending the requirements of Section 251(c) for a period of three years beginning January 1, 1998.
Staff recommends that the Application of Jato Operating Two Corp. for a Certificate of Public Convenience and Necessity be granted, conditioned upon the procurement of a performance bond in the amount of $100,000, to be in place for two years.

Commission Decision
Should the Application of Jato Operating Two Corp. for a Certificate of Public Convenience and Necessity to provide local exchange telecommunication services within the state be granted, subject to the procurement of a $100,000 performance bond by the Company?

vld/M:GNR-T-99-10_ws

DECISION MEMORANDUM 2