BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION In the Matter of the Application and Petition of Convergence Technologies, Inc., For Registration as a Telecommunications Company and Classification as a Competitive Telecommunications Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) ) ) ) ) ) ) ) ) ) DOCKET UT-990159 ORDER AUTHORIZING REGISTRATION AND GRANTING PETITION FOR COMPETITIVE CLASSIFICATION AND APPROVING PRICE LIST By petition filed February 11, 1999, in Docket UT-990159, Convergence Technologies, Inc., (Convergence) seeks registration as a telecommunications company, classification as a competitive telecommunications company, and approval of its proposed price list pursuant to RCW 80.36.350 and 80.36.320. Convergence proposes to register with the Commission as a telecommunications company to offer switched intraexchange and interexchange and access telecommunication services to the public. In support of its petition, Convergence alleges inter alia that its services compete with other local exchange and access provider’s telecommunication services. Convergence states that customers have readily available, equivalent, alternatives and that there are no captive customers of the company’s services. Convergence is a Washington corporation, headquartered in Bremerton, Washington, and is wholly owned by John Stockwell and Ross Allanson. Rates, terms, and conditions set forth in the proposed price list are structured similarly to rates filed by other local exchange carriers for calls placed in the relevant market. Convergence has provided information showing that it meets the requirements of RCW 80.36.350. Convergence will collect deposits or advance payments from customers in accordance with WAC 480-121-040. Pursuant to statutes and rules governing registration applications and deposit or advance payment proposals, Convergence has proposed a satisfactory escrow agreement for protection of those deposits or advance payments. If Convergence ceases operations, it will provide the bank and the Commission lists of outstanding account numbers and balances within 48 hours. Convergence shall maintain adequate levels in the escrow agreement to assure compliance with WAC 480-121-040. If Convergence goes out of business, it will provide refund information on the company’s “800" phone number for its customers. Docket UT-990159 Page 1 The company filed written testimony in support of competitive classification, which accompanied its petition. In conjunction with classification, the company is seeking waiver of the requirements of various provisions of chapter 80.36 RCW and chapter 480-120 WAC. The company is also seeking waiver of: RCW 80.04.300 Budgets to be filed by companies--Supplementary budgets RCW 80.04.310 Commission’s control over expenditures RCW 80.04.320 Budget rules RCW 80.04.330 Effect of unauthorized expenditure--Emergencies RCW 80.04.360 Earnings in excess of reasonable rate--Consideration in fixing rates RCW 80.04.460 Investigation of accidents RCW 80.04.520 Lease of utility facilities RCW 80.36.100 Tariff schedules to be filed and open to public RCW 80.36.110 Tariff changes--Statutory notice--Exception Chapter 80.08 RCW Securities (except RCW 80.08.140) Chapter 80.12 RCW Transfers of Property Chapter 80.16 RCW Affiliated interests Chapter 480-80 WAC Tariffs Chapter 480-140 WAC Budgets Chapter 480-143 WAC Transfers of Property Chapter 480-146 WAC Securities and affiliated interests WAC 480-120-026 Tariffs WAC 480-120-031 Accounting WAC 480-120-032 Accounting-Political information and political education activities WAC 480-120-036 Finance--Securities, affiliated interest, transfer of property WAC 480-120-046 Services offered WAC 480-120-131 Reports of accidents Rules invoked include those within chapters 480-09 and 480-120 WAC, specifically WAC 480-09-520 and WAC 480-120-022, WAC 480-120-023, WAC 480-120-024, and WAC 480-120-025. Statutes invoked include RCW 80.36.145, 80.36.320, and RCW 80.36.350. The ultimate issues are whether Convergence should be registered as a telecommunications company, classified as a competitive telecom- munications company, its proposed price list should be approved, and the extent to which it should be relieved of regulatory requirements to which it would otherwise be subject. FINDINGS OF FACT 1. Convergence filed an application for registration as a telecommunications company and a petition for classification as a competitive telecom- munications company pursuant to the provisions of RCW 80.36.350 and 80.36.320, to provide switched intraexchange and interexchange and access telecommunication services to the public. 2. As to form, the application and petition filed herein, meets the requirements of RCW 80.36.350 and 80.36.320, and the Commission’s rules and regulations. 3. The registration of Convergence as a telecommunications com-pany 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. 5. Alternative providers of service to that of Convergence include, but are not limited to, AT&T Communications of the Pacific Northwest, Inc., U S WEST Communications, Inc., MCI Communications Corporation, and Sprint Communications Company. All services are fully available from alternative providers in the relevant market. 6. The relevant market is the state of Washington. 7. Convergence has no captive customer base. 8. The services offered are subject to effective competition. 9. Convergence should be permitted to provide services under its proposed price list. 10. Convergence requested waivers of certain laws and rules relating to telecommunications services. The laws and rules for which waivers should be granted are listed on Appendix A, incorporated by this reference and made a part of this Order. CONCLUSIONS OF LAW 1. The Washington Utilities and Transportation Commission has jurisdiction over the subject matter of this classification proceeding and the parties. 2. Convergence should be registered as a telecommunications company pursuant to RCW 80.36.350 and classified as a competitive telecommunica- tions company pursuant to RCW 80.36.320(1). 3. Convergence should be permitted to provide services under price lists pursuant to RCW 80.36.320 (2). 4. Convergence should be granted waiver of the laws and rules listed in Appendix A; waiver of laws and rules requested that are not included in Appendix A should be denied. O R D E R THE COMMISSION ORDERS: 1. After the effective date of this Order and subject to any conditions imposed, the application of Convergence Technologies, Inc., requesting an Order authorizing registration as a telecommunications company to provide service to the public in this state is approved. 2. The petition of Convergence Technologies, Inc., for classification as a competitive telecommunications company is approved; waiver of the laws and rules listed in the attached Appendix A is granted. 3. The proposed price list of Convergence Technologies, Inc., for rates and services, is approved. 4. Registration of Convergence Technologies, Inc., as a telecommuni-cations company shall not be construed as an endorsement of financial viability nor of the investment quality of any securities it may issue. 5. As a telecommunications company providing service to the public in this state, Convergence Technologies, Inc., is subject to the jurisdiction of this Commission under the provisions of Title 80 RCW and all rules and regulations adopted by the Commission. 6. Convergence Technologies, Inc., is authorized to offer rates and services pursuant to price list in the format prescribed by the Commission; the price list approved in this proceeding, and subsequent changes to that price list, become effective only after ten days notice to the Commission and to customers. In the event of a price list reduction or of a change in terms and conditions which do not have rate impact, personal notice to customers will not be required. Although the Commission does not have authority to waive the statutory notice requirement, Convergence Technologies, Inc., will have the option to publish notice of price reductions or changes in terms and conditions of service which do not have rate impact by a display advertise- ment in such newspaper(s) as are geographically situated to be circulated over the company's service area. 7. Convergence Technologies, Inc., filed with the Commission a satisfactory escrow agreement. As part of the escrow agreement and in the event the company ceases operations, Convergence Technologies, Inc., will within 48 hours provide to the bank and the Commission lists of outstanding account numbers and balances. 8. In the event the company ceases operations, Convergence Technologies, Inc., will provide refund information on the company’s “800" phone number for its customers for a minimum of six months. 9. The Commission retains jurisdiction over the subject matter and the parties to effectuate the terms of this Order. 10. Convergence Technologies, Inc., shall maintain adequate levels in the escrow agreement to assure compliance with WAC 480-121-040 for the protection of customer deposits or advance payments. DATED at Olympia, Washington, and effective this 10th day of March 1999. WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION CAROLE J. WASHBURN, Secretary DOCKET UT-990159 APPENDIX A RCW 80.04.300 Budgets to be filed by companies--Supplementary budgets RCW 80.04.310 Commission’s control over expenditures RCW 80.04.320 Budget rules RCW 80.04.330 Effect of unauthorized expenditure--Emergencies RCW 80.04.360 Earnings in excess of reasonable rate--Consideration in fixing rates RCW 80.04.460 Investigation of accidents RCW 80.04.520 Lease of utility facilities RCW 80.36.100 Tariff schedules to be filed and open to public RCW 80.36.110 Tariff changes--Statutory notice--Exception Chapter 80.08 RCW Securities (except RCW 80.08.140, State not obligated) Chapter 80.12 RCW Transfers of Property Chapter 80.16 RCW Affiliated interests Chapter 480-80 WAC Tariffs Chapter 480-140 WAC Budgets Chapter 480-143 WAC Transfers of Property Chapter 480-146 WAC Securities and affiliated interests WAC 480-120-026 Tariffs WAC 480-120-031 Accounting WAC 480-120-032 Accounting-Political information and political education activities WAC 480-120-036 Finance--Securities, affiliated interest, transfer of property WAC 480-120-046 Services offered WAC 480-120-131 Reports of accidents