BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION In the Matter of the Application and Petition of CityNet Telecom, Inc., For Registration as a Telecommunications Company and Classification as a Competitive Telecommunications Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ))))))))) DOCKET UT-010565 ORDER AUTHORIZING REGISTRATION AND GRANTING PETITION FOR COMPETITIVE CLASSIFICATION BACKGROUND By petition filed April 23, 2001, in Docket UT-010565, CityNet Telecom, Inc., (CityNet) seeks registration as a telecommunications company and classification as a competitive telecommunications company pursuant to RCW 80.36.350 and 80.36.320. CityNet also filed an initial price list. DISCUSSION CityNet 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, CityNet asserts that its services compete with other interexchange and local exchange carriers telecommunication services. CityNet states that customers have readily available equivalent alternatives and that there are no captive customers of the Company=s services. CityNet is a Delaware corporation, headquartered in Silver Spring, Maryland. Rates, terms, and conditions set forth in the initial price list are structured similarly to rates filed by other interexchange and local exchange carriers for calls placed in the relevant market. CityNet has provided information showing that it meets the requirements of RCW 80.36.350. Applicant does not propose to provide alternate operator services, or 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 CityNet should be registered as a telecommunications company, whether it should be classified as a competitive telecommunications company, and the extent to which it should be relieved of regulatory requirements to which it would otherwise be subject. This matter was brought before the Commission at its regularly scheduled open meeting on May 9, 2001. The Commissioners, having been fully advised in the matter, and having determined the following order to be consistent with the public interest, directed the Secretary to enter the following order and related provisions. FINDINGS OF FACT 1. CityNet 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 CityNet 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 CityNet include, but are not limited to, Qwest Corporation, Verizon Northwest, Inc., MCI WorldCom Communications, Inc., and Sprint Communications Company L.P. All services are fully available from alternative providers in the relevant market. 6. The relevant market is the state of Washington. 7. CityNet has no captive customer base. 8. CityNet should be permitted to provide services under price list. 9. CityNet 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 registration application and classification petition and CityNet. 2. The services offered are subject to effective competition. 3. CityNet 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). 4. CityNet should be permitted to provide services under price lists promulgated under RCW 80.36.320 (2). These services shall not include alternate operator services, or prepaid calling services. 5. CityNet 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 CityNet Telecom, 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 CityNet Telecom, Inc., for classification as a competitive telecommunications company; and grants a waiver of the laws and rules listed in the attached Appendix A. 3. CityNet Telecom, Inc., shall be permitted to provide services under price list. 4. Registration of CityNet Telecom, 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, CityNet Telecom, 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. CityNet Telecom, Inc., is authorized to offer rates and services pursuant to the price list in the format prescribed by the Commission. 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. Any price list filed by CityNet Telecom, Inc., and subsequent changes to these price lists, shall 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, CityNet Telecom, 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. CityNet Telecom, Inc., is not authorized to provide alternate operator services, or prepaid calling services. 8. The Commission retains jurisdiction over the subject matter and the parties to effectuate the terms of this Order. DATED at Olympia, Washington, and effective this 9th day of May, 2001. WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION CAROLE J. WASHBURN, Secretary 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