DOCKET NO. UT-971438 Page 1 BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION In the Matter of ) U.S. Telco, Inc., ) DOCKET NO. UT-971438 for an Order ) Granting ) ORDER GRANTING Registration to ) REGISTRATION Provide Local Exchange ) AND Services and Authorizing ) AUTHORIZING THE Provision of Intraexchange ) PROVISION OF INTRAEXCHANGE Services. ) TELECOMMUNICATIONS ................................... ) SERVICES. On September 24, 1997, U.S. Telco, Inc., filed for authority to provide local exchange telecommunications services in Docket No. UT-971438. U.S. Telco, Inc., is an alternative telephone company primarily furnishing prepaid local dial tone through resale to individuals who have had their telephone disconnected. U.S. Telco, Inc., intends to provide an array of integrated telecommunications services primarily as a resale carrier, using the network switching and transport facilities of other facilities based carriers. U.S. Telco, Inc., is a non facilities based reseller of incumbent local exchange carrier services and contracts with other local exchange carriers for installation. U.S. Telco, Inc., is a Texas corporation headquartered in Irving, Texas and is wholly owned by Ronald Jensen, John Condit, and David Pikoff. U.S. Telco, Inc., has established a toll free 800 number for access to customer service representatives. U.S. Telco, Inc., intends to serve the geographic regions currently served by the following incumbent local exchange companies and incorporates the boundares of the exchanges as the boundaries of the proposed service areas: U S WEST and GTE NW. U.S. Telco, Inc.,’s proposed tariff is satisfactory and will mirror incumbent local exchange company calling areas. U.S. Telco, Inc., has provided the information necessary to demonstrate the company does possess adequate financial resources and technical competence to provide the proposed services. U.S. Telco, Inc., proposes to collect advance payments from customers. Pursuant to statutes and rule governing registration applications and advance payment proposals, U.S. Telco, Inc., has proposed a satisfactory bond arrangement for protection of those advanced payments. Initially, the bond will be for $25,000 and will increase as the customer base increases or if U.S. Telco, Inc., reports to the Commission that its liability on outstanding balances exceeds the amount secured by bond. If U.S. Telco, Inc., ceases operations, U.S. Telco, Inc., will provide the insurer and the Commission lists of outstanding account numbers, names, and balances within 48 hours and provide refund information on the company’s toll free phone number for its customers. U.S. Telco, Inc., will submit to the Commission on a quarterly basis, under Docket UT-971438, the following information: The number of Washington customers in total. The geographic location of those customers (either city or county). The number of Washington customers gained within the reporting period. The amount of advance payment dollars collected during the reporting period. Report the amount of advanced payments currently being held by the company. The number of reconnection fees paid during the reporting period. The amount of revenue generated from reconnection fees during the reporting period. The number of disconnections for nonpayment made during the reporting period. Any changes in either company ownership status and legal or regulatory representative contact for the Commission. The reporting requirements and bond agreement may be modified after one year’s administration by Commission Staff if Staff determines appropriate company compliance during the previous twelve month period. U.S. Telco, Inc., will collect and remit to appropriate administrative agencies relevant excise taxes in support of various social programs, including enhanced 911, telecommunications relay services, and lifeline. FINDINGS THE COMMISSION FINDS: 1. U.S. Telco, Inc., is a public service company subject to the jurisdiction of this Commission under the provisions of chapter 80.36 R.C.W. 2. U.S. Telco, Inc., has provided sufficient information to show that it is financially and technically capable to provide the services proposed. 3. It appears, upon investigation, that the request for authority to provide local exchange telecommunications services should be approved. 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 filing with the Commission of U.S. Telco, Inc., requesting authority for registration to provide intraexchange telecommunications services is hereby granted. 2. This order shall in no way affect the authority of this Commission over rates, service, accounts, valuations, estimates or determination of costs, or any matters whatsoever that may come before it, nor shall anything herein be construed as an acquiescence in any estimate or determination of costs, or any valuation of property claimed or asserted. 3. Prior to supplying local exchange telecommunications services to the public, U.S. Telco, Inc., shall file and receive permission and approval for an initial tariff from the Commission identical to the amended tariff filed in 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 thirty days from the date of this order. 4. U.S. Telco, Inc., shall collect advanced payments and deposits in compliance with WAC 480-120-040. Prior to supplying local exchange telecommunications services to the public, U.S. Telco, Inc., shall submit to the Commission a satisfactory bond arrangement to protect customer monies. Initially, the bond will be for $25,000 and will increase as the customer base increases or if the company reports to the Commission its liability on outstanding balances exceeds the amount secured by bond. 5. In the event the company ceases operations, U.S. Telco, Inc., will within 48 hours provide to the insurer and the Commission lists outstanding account numbers, names, and balances and will provide refund information on the company’ s toll free phone number for its customers for a minimum of six months. 6. U.S. Telco, Inc., will submit to the Commission, commencing on June 30, 1998, the following quarterly financial data: The number of Washington customers in total. The geographic location of those customers (either city or county). The number of Washington customers gained within the reporting period. The amount of advance payment dollars collected during the reporting period. Report the amount of advanced payments currently being held by the company. The number of reconnection fees paid during the reporting period. The amount of revenue generated from reconnection fees during the reporting period. The number of disconnections for nonpayment made during the reporting period. Any changes in either company ownership status and legal or regulatory representative contact for the Commission. 7. In this proceeding, the Commission in no way endorses the financial viability of applicant nor the investment quality of any securities it may issue. 8. As a telecommunications company providing service to the public in this state, U.S. Telco, Inc., 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 11th day of March, 1998. WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION PAUL CURL, Acting Secretary