DOCKET UT-970770 Page 1 BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION In the Matter of the Application ) DOCKET UT-970770 of TELEHUB NETWORK ) SERVICES CORPORATION ) for an Order Authorizing ) AUTHORIZING the Registration of Applicant ) REGISTRATION as a Telecommunications Company ) . . . . . . . . . . . . . . . . . .) On May 7, 1997, TeleHub Network Services Corporation filed an application for registration as a telecommunications company pursuant to RCW 80.36.350. Applicant proposes to offer resold switched and dedicated direct dialed long distance, inbound 800/888, travel card, operator services, and prepaid calling card services to the public. TeleHub Network Services Corporation is an Illinois corporation, headquartered in Gurnee, Illinois. The corporation is wholly-owned by TeleHub Communications Corporation. TeleHub Network Services Corporation has provided information showing that it possesses adequate financial resources, and technical competence to provide debit card long distance service. The nature of the debit card service implies TeleHub Network Services Corporation proposes to collect advance payments from customers. Pursuant to statutes and rules governing registration applications and advance payment proposals, TeleHub Network Services Corporation has proposed a satisfactory bond arrangement for protection of those advance payments. Initially, the bond will be for $1,000 and will increase as customer base increases or if TeleHub Network Services Corporation reports to the Commission that its liability on outstanding balances exceeds the amount secured by bond. If TeleHub Network Services Corporation ceases operations, TeleHub Network Services Corporation will provide the insurer and the Commission lists of outstanding account numbers, names, and balances within 48 hours. TeleHub Network Services Corporation will limit the denomination size of debit cards to not more than $50 to residential customers. TeleHub Network Services Corporation will give the Commission monthly reports listing outstanding debit calling card account balances and current company financial information. Current company financial information shall include and not be limited to, debit cards sold, amount of revenue from debit cards sold, depletion rate of debit cards sold, and total dollar amount of outstanding balances of debit cards sold. TeleHub Network Services Corporation will adjust the amount held in bond based on this data. After one year's administration of the bond agreement, the reporting requirement may be modified to a quarterly level if staff determines the company has maintained adequate levels in the bond agreement during the previous 12-month period. TeleHub Network Services Corporation will state an unconditional money-back guarantee on the debit calling card or on supplemental material that will be provided at the time the debit calling card is purchased with a statement warning customers to safeguard their cards. If TeleHub Network Services Corporation goes out of business, it will provide refund information on the company's 800 phone number for its customers. TeleHub Network Services Corporation will provide a free call detail report to customers upon request. FINDINGS THE COMMISSION FINDS: 1. TeleHub Network Services Corporation filed an application pursuant to the provisions of RCW 80.36.350 and the rules and regulations of the Commission for an order approving its application for registration as a telecommunications company. 2. As to form, the application filed herein, as supplemented and amended, meets the requirements of RCW 80.36.350 and the rules and regulations of the Commission adopted pursuant thereto. 3. The registration of TeleHub Network Services Corporation as a telecommunications company is not inconsistent with the public interest. 4. In this proceeding, the Commission in no way endorses the financial viability of applicant nor the investment quality of any securities it may issue. O R D E R THE COMMISSION ORDERS: 1. After the effective date of this order and subject to the conditions hereof, the application of TeleHub Network Services Corporation filed with the Commission pursuant to the provisions of RCW 80.36.350 requesting an order authorizing registration as a telecommunications company to provide service to the public in this state is approved. 2. The proposed tariff as filed on May 7, 1997, and amended in Exhibit G, attached to the application, is satisfactory. Prior to supplying service to the public as a telecommunications company, TeleHub Network Services Corporation shall file an initial tariff with the Commission identical to the amended Exhibit G of the application. The tariff shall bear an effective date not less than 30 days subsequent to the date of receipt by the Commission. Initial tariff must be filed with the Commission no later than ten days from the date of this order. 3. Prior to the effective date of the initial tariff, TeleHub Network Services Corporation shall submit to the Commission an original bond identical to the document filed as amended Exhibit F. Initially, the bond will be for $1,000 and will increase as customer base increases or if TeleHub Network Services Corporation reports to the Commission that its liability on outstanding balances exceeds the amount secured by bond. As part of the bond arrangement and in the event the company ceases operations, TeleHub Network Services Corporation will within 48 hours provide to the insurer and the Commission lists of outstanding account numbers, names, and balances. 4. TeleHub Network Services Corporation will limit the amount of debit calling cards to be purchased to not more than $50 increments for residential customers. 5. TeleHub Network Services Corporation will submit to the Commission monthly financial data filed by the 15th of each month, commencing on July 15, 1997, listing the total outstanding debit calling card balance and current company financial information determined by the Commission. Current company financial information shall include and not be limited to, debit cards sold, amount of revenue from debit cards sold, depletion rate of debit cards sold, and total dollar amount of outstanding balances of debit cards sold. TeleHub Network Services Corporation will adjust the amount held in bond based on this data by the 15th of the following month. After completion of one year's administration of the bond account, the reporting requirement may be modified to a quarterly level if staff determines that the company has maintained a sufficient level in the bond account during the previous 12-month period. 6. TeleHub Network Services Corporation shall state that there is a money-back guarantee on the debit calling cards and provide a statement warning customers to safeguard their cards. 7. In the event the company ceases operations, TeleHub Network Services Corporation will provide refund information on the company's 800 phone number for its customers for a minimum of six months. 8. TeleHub Network Services Corporation will provide a free call detail report to customers upon request. 9. Registration of TeleHub Network Services Corporation as a telecommunications company shall not be construed as an endorsement of financial viability nor of the investment quality of any securities it may issue. 10. As a telecommunications company providing service to the public in this state, TeleHub Network Services Corporation is subject to the jurisdiction of this Commission under the provisions of Title 80 RCW and all rules and regulations of the Commission adopted pursuant thereto, including but not limited to Chapter 480-120 WAC. DATED at Olympia, Washington, and effective this 28th day of May, 1997. STEVE McLELLAN, Secretary