BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION In the Matter of the Application and Petition of GLOBAL TIME, INC., For Registration as a Telecommunications Company and Classification as a Competitive Telecommunications Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) ) ) ) ) ) ) ) ) ) ) DOCKET UT-991826 ORDER AUTHORIZING REGISTRATION AND GRANTING PETITION FOR COMPETITIVE CLASSIFICATION AND APPROVING PRICE LIST BACKGROUND By petition filed November 24, 1999, in Docket UT-991826, Global Time, Inc., (Global Time) 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. Global Time has also submitted a petition requesting a waiver of the bond/trust requirement in WAC 480-120-058 Protection of Customer Prepayments. Global Time requested an extension of time from the Commission by letter dated December 14, 1999, to finalize its application and petitions. The application for registration, competitive classification petition, initial price list, and petition for waiver of the bond/trust requirement were brought before the Commission at the regularly scheduled open public meeting of December 29, 1999. DISCUSSION Global Time proposes to register with the Commission as a telecommunications company to offer the services specified in Exhibit A of its application, and will collect advance payments from customers of those services. 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, Global Time asserts that its services compete with other interexchange carriers telecommunications services. Global Time states that customers have readily available, equivalent alternatives and that there are no captive customers of the Company’s services. Global Time is a Delaware corporation, headquartered in Burlingame, California, and is owned by its parent corporation, Pacific Gateway Exchange, Inc. (PGE). Rates, terms, and conditions set forth in the proposed price list are structured similarly to rates filed by other interexchange carriers for calls placed in the relevant market. Global Time has provided information showing that it meets the requirements of RCW 80.36.350. Global Time petitioned for waiver of the bond/trust requirement in WAC 480-120-058, which requires telecommunications companies that collect advance payments to obtain a performance bond or federally insured trust account. Global Time projects that their year 2000 revenue from prepaid calling cards will be approximately $5000. Their request for waiver is based on DOCKET UT-991826 PAGE 2 their access to financial resources sufficient to provide prepaid services to consumers from its parent company PGE. PGE has executed a notarized guaranty ensuring the financial obligations of Global Time. Staff’s review of PGE’s balance sheet and income statement established that PGE does have the financial resources to cover Global Time’s liability. PGE reported operating income of $27,147,000 and net income of $19,936,000 for 1998. Within 31 days after December 31, 2000, and each calendar year thereafter, Global Time will be required to submit to the Commission a report containing the following information specific to its state of Washington operations: (a) total outstanding balance of prepayments at the beginning of the reporting period; (b) dollar amount of prepaid services sold during the reporting period; (c) depleted usage of prepaid services during the reporting period; and (d) total outstanding prepaid services balance at the end of the reporting period. Statements shall continue to be filed within 31 days after each 12-month period thereafter until the applicant is notified in writing by the Commission that such reports are no longer required. Based on this information, Global Time will adjust the amount of the bond to ensure compliance with WAC 480-120-058. In addition, Commission Staff may request current company financial information. After one year’s administration of the bond agreement, the reporting requirement may be modified to a semi-annual level, upon request by Global Time and authorization by the Commission, if the company demonstrates that it has maintained adequate levels in the bond agreement during the previous 12-month period. Global Time shall state an unconditional, money-back guarantee on the debit card or in supplemental materials provided at the time the debit card is purchased, and include a statement warning customers to safeguard their cards. If Global Time ceases its operations, it must provide refund information to its customers through the company’s “800" phone number for a minimum of six months after ceasing operations. Global Time will provide a free call detail report to customers upon request. Applicant does not propose to provide alternate operator services, or local exchange 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) DOCKET UT-991826 PAGE 3 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, WAC 480-120-025, and WAC 480-120-058. Statutes invoked include RCW 80.36.320, and RCW 80.36.350. The ultimate issues are whether Global Time 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 require- ments to which it would otherwise be subject. Based on the entire record and the file in this matter, the Commission makes the following findings of fact and conclusions of law. FINDINGS OF FACT 1. Global Time 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 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 Global Time as a telecommunications company is not inconsistent with the public interest. 4. Global Time has requested a waiver of the requirement to maintain a performance bond or federally insured trust account sufficient to cover all customer prepayments in accordance with WAC 480-120-058. 5. The request by Global Time for waiver of the requirement to maintain a performance bond or federally insured trust account sufficient to cover all customer prepayments is not inconsistent with the public interest. DOCKET UT-991826 PAGE 4 6. In this proceeding, the Commission in no way endorses the financial viability of applicant nor the investment quality of any securities it may issue. 7. Alternative providers of service to that of Global Time include, but are not limited to, Ameritech Communications International, Inc., Transcommunications, Inc., GTE Northwest Incorporated, MCIWorldCom, Inc., and Sprint Communications Company L.P. All services are fully available from alternative providers in the relevant market. 8. The relevant market is the state of Washington. 9. Global Time has no captive customer base. 10. The services offered are subject to effective competition. 11. Global Time should be permitted to provide services under its proposed price list. 12. Global Time 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 registration application and classification petition and Global Time. 2. Global Time 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. Global Time should be permitted to provide services under price lists promulgated under RCW 80.36.320 (2). These services shall not include providing alternate operator services, or local exchange services. 4. Global Time should be granted waivers of the laws and rules listed in Appendix A. 5. The request by Global Time for waiver of the requirement to maintain a performance bond or federally insured trust account sufficient to cover all customer prepayments is not inconsistent with the public interest and should therefore be granted. DOCKET UT-991826 PAGE 5 ORDER THE COMMISSION ORDERS: 1. Effective on the date of this Order and subject to any conditions imposed, the Commission approves the application of Global Time, 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 Global Time, 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 Global Time, Inc., for rates and services. 4. Global Time, Inc., is granted a waiver of the requirement to maintain a performance bond or federally insured trust account sufficient to cover all customer prepayments effective on the date of this Order and subject to any conditions imposed. 5. Registration of Global Time, 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. 6. As a telecommunications company providing service to the public in this state, Global Time, 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. 7. Global Time, 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, Global Time, 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. 8. Global Time, Inc., is not authorized to provide alternate operator services or local exchange services. 9. Within 31 days after December 31, 2000, Global Time, Inc., will be required to submit to the Commission a report for the twelve months ending December 31, 2000. The report shall contain the following information specific to its state of Washington operations: (a) total outstanding balance of prepayments at the beginning of the reporting period; (b) dollar amount of prepaid services sold during the reporting period; (c) depleted usage of prepaid services during the reporting period; and (d) total outstanding prepaid services balance at the end of the reporting DOCKET UT-991826 PAGE 6 period. The company shall continue to file statements within 31 days after each 12-month period thereafter until Commission staff informs applicant such reports are no longer required. 10. Global Time, Inc., shall state an unconditional money-back guarantee on the face of the debit card or on supplemental material that must be provided at the time the debit card is purchased with a statement warning customers to safeguard their cards. 11. In the event the Company ceases operations, Global Time, Inc., must provide refund information to its customers on the company’s “800" phone number for a minimum of six months. 12. Global Time, Inc., shall provide a free call-detail report to customers upon request. 13. Global Time, Inc., is not authorized to provide alternate operator services or local exchange services. 14. 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 29th day of December, 1999. WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION CAROLE J. WASHBURN, Secretary DOCKET UT-991826 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