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DECISION MEMORANDUM TO: COMMISSIONER KJELLANDER COMMISSIONER SMITH COMMISSIONER HANSEN JEAN JEWELL RON LAW LOU ANN WESTERFIELD DON HOWELL RANDY LOBB TERRI CARLOCK JOE CUSICK WAYNE HART BEV BARKER TONYA CLARK GENE FADNESS WORKING FILE FROM: JOHN R. HAMMOND DATE: JUNE 20, 2002 RE: IN THE MATTER OF THE APPLICATION OF TELECENTS COMMUNICATIONS, INC. FOR A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY TO PROVIDE LOCAL EXCHANGE SERVICES IN IDAHO. CASE NO. GNR-T-01-14. On July 31, 2001, TeleCents Communications, Inc. filed an Application for a Certificate of Public Convenience and Necessity to provide resold and facilities-based local exchange services throughout Idaho in Qwest's and Verizon's service territories. TeleCents also intends to provide all forms of interexchange telecommunications services. On May 13, 2002, the Commission issued a Notice of Application and Notice of Modified Procedure. Order No. 29021. In response to this Order the Commission Staff submitted written comments and was the only party to do so. BACKGROUND As stated above, in compliance with Commission Rules of Procedure, TeleCents filed an Application for a Certificate of Public Convenience and Necessity. TeleCents is incorporated in Michigan and represents that it is in good standing under the laws of that state. TeleCents also states that it is currently authorized to do business as a foreign corporation in the State of Idaho. STAFF RECOMMENDATION Staff has reviewed the Application and financials submitted by the Company. Staff finds that the Company's Application is in compliance with the Commission's Rules of Procedure and Commission Order No. 26665. However, despite the Company's low debt level, because it is fairly new in existence, has no history in Idaho and is entering what has proven to be a high-risk field it should be required to post and maintain a bond or other form of financial security. Staff recommended that the bond be initially established at the $5,000 level and be maintained at a level that exceeds $50 per residential and small business basic local exchange service customer for a period of not less than two years of operation within Idaho. After this time period Staff recommended that the Company should be allowed to petition the Commission to eliminate the financial security requirement. Based upon this condition, Staff recommended approval of TeleCents' Application. COMMISSION DECISION Does the Commission wish to approve TeleCents' Application for a Certificate of Public Convenience and Necessity? Does the Commission wish to approve this Application subject to the Company posting a bond at the level recommended by Staff? If the Commission requires a bond may the Company petition after a period of two years for the elimination of this requirement? John R. Hammond Staff: Wayne Hart M:GNRT0114_jh