20021125_323.pdf

TO:
FROM:
DATE:
RE:
DECISION MEMORANDUM
CO MMISSI 0 NER KJELLAND ER
COMMISSIONER SMITH
CO MMISSI 0 NER HANSEN
JEAN JEWELL
RON LAW
BILL EASTLAKE
LOU ANN WESTERFIELD
TONY A CLARK
DON HOWELL
RANDY LOBB
JOE CUSICK
CAROLEE HALL
TERRI CARLOCK
BEV BARKER
GENE FADNESS
WORKING FILE
JOHN R. HAMMOND
NOVEMBER 21,2002
KMC DATA LLC'S APPLICATION FORA CERTIFICATE OF PUBLIC
CONVENIENCE AND NECESSITY. CASE NO. GNR-01-11.
On July 30 2001 , KMC DATA LLC filed an Application for a Certificate of Public
Convenience and Necessity ("CPCN"). Later, the Company submitted substantial revisions to its
Application. On November 1 , 2002, the Commission issued Notice of Application and Notice of
Modified Procedure. Order No. 29146. 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, KMC DATA filed
an Application for a Certificate of Public Convenience and Necessity to operate in Idaho as a
competitive local exchange provider on a facilities-based and resale basis, and as an interexchange
service provider on a resale basis. The Company intends to provide these services statewide. The
Company substantially revised its original Application based on consultation with the Commission
Staff. In these revisions the Company made clear that it would not be requiring deposits from its
potential customers. The Company states that granting its revised Application for a CPCN is in the
DECISION MEMORANDUM
public interest because KMC DATA's entry into the local telecommunications services market will
enhance competition in Idaho. KMC DATA is a wholly owned subsidiary of KMC Telecom
Holdings, Inc., a Delaware corporation with its principal office and place of business located in New
Jersey. Because KMC DATA did not have financials, KMC Telecom Holdings demonstrated that it
would provide a financial guaranty for KMC DATA's financial obligations. KMC DATA is also
incorporated in the State of Delaware and represents that it is in good standing under the laws ofthat
State. The Company also represents that it is currently authorized to do business as a foreign
corporation in the State of Idaho. Finally, KMC states that it will adhere to all state laws and all
Commission policies, rules, and orders applicable to competitive local and intrastate interexchange
carriers in the State ofIdaho.
STAFF ANALYSIS AND RECOMMENDATION
Staff reviewed the revised Application submitted by the Company. Staff found that the
Company s Application was in compliance with the Commission s Rules of Procedure and
Commission Order No. 26665. Furthermore, Staff reviewed KMC Telecom Holdings' financials
that showed it was financially sound. Thus, Staff believed that a guaranty from this Company to
meet KMC DATA's financial obligations in Idaho would be adequate to protect Idaho
Consumers. Accordingly, Staff recommended approval ofKMC DATA's Application for a
CPCN and tariff. Staff also recommended that this Commission grant a waiver of the
establishment of an Escrow Account for deposits with the caveat that should the Company
initiate a deposit policy in the future, an Escrow Account would be established and reviewed
prior to such implementation.
COMMISSION DECISION
Does the Commission wish to grant KMC DATA's Application for a Certificate of Public
Convenience and Necessity?
If so, does the Commission wish to waive the escrow account requirement?
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DECISION MEMORANDUM