BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION In the Matter of the Application and Petition of NetFone of Washington, Inc., For Registration as a Telecommunications Company and Classification as a Competitive Telecommunications Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) ) ) ) ) ) ) ) ) DOCKET UT-000132 ORDER AUTHORIZING REGISTRATION; GRANTING PETITION FOR COMPETITIVE CLASSIFICATION; AND APPROVING PRICE LIST BACKGROUND By petition filed February 2, 2000, in Docket UT-000132, NetFone of Washington, Inc., (NetFone) 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. The registration application, competitive classification petition, and initial price list were brought before the Commission at its regularly scheduled open public meeting of February 23, 2000. DISCUSSION NetFone proposes to register with the Commission as a telecommunications company to offer the services specified in Exhibit A of its application. Services specified in Exhibit A but not included in its initial price list may not be offered until applicant amends its price list to include the description of service with rates and charges. In support of its petition, NetFone asserts that its services compete with other interexchange and local exchange carriers’ telecommunication services. NetFone states that customers have readily available equivalent alternatives and that there are no captive customers of the Company’s services. NetFone is a Delaware corporation, headquartered in Roseville, California, and is owned by NetFone, Inc. Rates, terms, and conditions set forth in the proposed price list are structured similarly to rates filed by other interexchange and local exchange carriers for calls placed in the relevant market. NetFone has provided information showing that it meets the requirements of RCW 80.36.350. Applicant does not propose to collect deposits from customers, or provide prepaid calling services. In conjunction with classification, the Company is 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 interests, transfer of property WAC 480-120-046 Services offered WAC 480-120-131 Reports of accidents Rules invoked include WAC 480-120-022, WAC 480-120-023, WAC 480-120-024, and WAC 480-120-025. Statutes invoked include RCW 80.36.320, and RCW 80.36.350. The ultimate issues are whether NetFone should be registered as a telecommunications company, whether it should be classified as a competitive telecommunications company, whether 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. NetFone filed an application for registration as a telecommunications company and a petition for classification as a competitive telecommunications company pursuant to the provisions of RCW 80.36.350 and 80.36.320, to provide the services specified in Exhibit A of its application. 2. As to form, the application and petition meet the requirements of RCW 80.36.350 and 80.36.320, and comply with the Commission’s rules and regulations. 3. The registration of NetFone 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. 5. Alternative providers of service to that of NetFone include, but are not limited to, U S WEST Communications, Inc., GTE Northwest Incorporated, MCIWorldCom, 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. NetFone has no captive customer base. 8. The services offered are subject to effective competition. 9. NetFone should be permitted to provide services under its proposed price list. 10. NetFone requested waivers of certain laws and rules relating to telecommunications services. The laws and rules for which waivers should be granted are listed in 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 NetFone. 2. NetFone should be registered as a telecommunications company pursuant to RCW 80.36.350 and classified as a competitive telecommunications company pursuant to RCW 80.36.320(1). 3. NetFone should be permitted to provide services under price lists promulgated under RCW 80.36.320 (2). These services shall not include collecting deposits or providing prepaid calling services. 4. NetFone should be granted waivers of the laws and rules listed in Appendix A. ORDER THE COMMISSION ORDERS: 1. Effective on the date of this Order and subject to any conditions imposed, the Commission approves the application of NetFone of Washington, Inc., requesting an order authorizing registration as a telecommunications company to provide service to the public in this state. 2. The Commission approves the petition of NetFone of Washington, Inc., for classification as a competitive telecommunications company; and grants a waiver of the laws and rules listed in the attached Appendix A. 3. The Commission approves the proposed price list of NetFone of Washington, Inc., for rates and services. 4. Registration of NetFone of Washington, Inc., as a telecommunications company shall not be construed as an endorsement of financial viability or of the investment quality of any securities it may issue. 5. As a telecommunications company providing service to the public in this state, NetFone of Washington, 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. NetFone of Washington, Inc., is authorized to offer rates and services pursuant to the 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 that do not have rate impact, personal notice to customers is not required. To comply with the statutory notice requirement, NetFone of Washington, Inc., may publish notice of price reductions or changes in terms and conditions of service that do not have rate impact by a display advertisement in such newspaper(s) as are geographically situated to be circulated over the Company's service area. 7. NetFone of Washington, Inc., must comply as specified, with the requirements of WAC 480-120-141, operator service providers rules. 8. NetFone of Washington, Inc., is not authorized to collect deposits from customers, or prepaid calling services. 9. The Commission retains jurisdiction over the subject matter and the Company to effectuate the terms of this Order. DATED at Olympia, Washington, and effective this 23rd day of February, 2000. WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION CAROLE J. WASHBURN, Secretary DOCKET UT- 000132 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 interests, transfer of property WAC 480-120-046 Services offered WAC 480-120-131 Reports of accidents