State of Illinois Before the Illinois Commerce Commission
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STATE OF ILLINOIS BEFORE THE ILLINOIS COMMERCE COMMISSION GTE NORTH INCORPORATED GTE SOUTH INCORPORATED CITIZENS TELECOMMUNICATIONS COMPANY OF ILLINOIS Joint Petition for the Approval of Purchase and Sale of Assets, and Related Agreements Pursuant to $$7-102 of the Public Utilities Act; the Issuance of Certificates of Interexchange Service, Service, and Exchange Service Authority Pursuant to §§I 3-403, 13-404, and 13-405 to Citizens Telecommunications Company of Illinois; the Discontinuance by GTE North Incorporated and Docket No, m-0197 GTE South Incorporated of Service Pursuant to §I 3-406 of the Public Utilities Act; the Issuance of an Order Approving Designation of Citizens Telecommunications Company of Illinois as an Eligible Telecommunications Carrier Covering the Service Area Consisting of the Exchanges to be Acquired from GTE North Incorporated and GTE South Incorporated Upon the Closing of this Purchase and Sale of Assets; the Issuance Of a Letter of Non-Opposition to Waiver of Study Areas; the Authorization of Citizens Telecommunications Company of Illinois to Maintain its Books and Records Outside of the State of Illinois; and the Granting of All Other Necessary and Appropriate Relief. VERIFIED JOINT PETITION J. William Roberts Lee Ann Conti Rendi Mann-Stadt Associate General Counsel HINSHAW & CULBERTSON CITIZENS UTILITIES COMPANY 400 South Ninth Street, Suite 200 1000 lnternationale Parkway Springfield, IL 62701 Woodridge, IL 60517 (217) 526-7375 (630) 739-8868 Attorneys for Sellers Attorney for Buyer GTE NORTH INCORPORATED CITIZENS GTE SOUTH INCORPORATED TELECOMMUNICATIONS COMPANY OF ILLINOIS TABLE OF CONTENTS I. DESCRIPTION OF THE JOINT PETITIONERS .._.....................,..,.,............ 3 A. The Sellers-GTE North and GTE South . ..__.......................,,.............. 3 B. The Buyer-Citizens Illinois . 4 2. DESCRIPTION OF THE PROPOSED TRANSACTION . .._.__............. 7 3. NOTICES .,..,.,,..,..,.....,,.,,.......,.........,,..,,..,.............,..,................,..,.,,............ 8 4. REQUEST OF CITIZENS ILLINOIS FOR CERTIFICATES OF INTEREXCHANGE SERVICE AUTHORITY, SERVICE AUTHORITY, AND EXCHANGE SERVICE AUTHORITY PURSUANT TO §§13-403,13-404 AND 13-405 OF THE PUBLIC UTILITIES ACT . ..___........................ 8 5. REQUEST OF GTE NORTH AND GTE SOUTH FOR AUTHORITY TO DISCONTINUE ITS SERVICES IN THE RELEVANT SERVICE AREA PURSUANT TO $j13-406 OF THE ACT _....................................................... 9 6. REQUEST FOR ORDER APPROVING DESIGNATION OF CITIZENS ILLINOIS AS AN ETC FOR THE SERVICE AREA COVERING THOSE EXCHANGES IT WILL ACQUIRE UPON THE CLOSING OF THE PURCHASE AND SALE OF ASSETS, EFFECTIVE UPON THE CLOSING OF THE TRANSACTION .,,..,...,,..,...,...,...,..,,.,.........,...................,,............. 10 7. REQUEST FOR A LETTER FROM THIS COMMISSION TO THE FCC INDICATING NON-OPPOSITION FORASTUDY AREA WAIVER............ 10 8. REQUEST FOR APPROVAL FOR CITIZENS ILLINOIS TO MAINTAIN ITS BOOKS AND RECORDS OUTSIDE OF THE STATE OF ILLINOIS PURSUANT TO 83 ILLINOIS ADMINISTRATIVE CODE PART 250.......... 11 LIST OF EXHIBITS... ..__.... 14 STATE OF ILLINOIS BEFORE THE ILLINOIS COMMERCE COMMISSION GTE NORTH INCORPORATED GTE SOUTH INCORPORATED CITIZENS TELECOMMUNICATIONS COMPANY OF ILLINOIS Joint Petition for the Approval of Purchase and Sale of Assets, and Related Agreements Pursuant to §7-102 of the Public Utilities Act: the Issuance of Certificates of Interexchange Service, Service, and Exchange Service Authority Pursuant to $$13-403, 13-404, and 13-405 to Citizens Telecommunications Company of Illinois; the Discontinuance by GTE North Incorporated and Docket No. GTE South Incorporated of Service Pursuant to 313-406 of the Public Utilities Act; the Issuance of an Order Approving Designation of Citizens Telecommunications Company of Illinois asan Eligible Telecommunications Carrier Covering the Service Area Consisting of the Exchanges to be Acquired from GTE North Incorporated and GTE South Incorporated Upon the Closing of this Purchase and Sale of Assets; the Issuance Of a Letter of Non-Opposition to Waiver of Study Areas; the Authorization of Citizens Telecommunications Company of Illinois to Maintain its Books and Records Outside of the State of Illinois; and the Granting of All Other Necessary and Appropriate Relief. VERIFIED JOINT PETITION OF GTE NORTH INCORPORATED, GTE SOUTH INCORPORATED AND CITIZENS TELECOMMUNICATIONS COMPANY OF ILLINOIS Pursuant to 220 ILCS 5/7-102 of the Public Utilities Act (“Act”), GTE North Incorporated (“GTE North”), GTE South Incorporated (“GTE South”) and Citizens Telecommunications Company of Illinois (“Citizens Illinois”) (jointly, “Petitioners”) request that the Illinois Commerce Commission (“Commission”) approve the sale by GTE North and GTE South, and the purchase by Citizens Illinois, of certain 1 telephone properties and related assets used in the provision of telecommunications service in the State of Illinois. A complete list of the exchanges subject to the proposed transaction (“Transaction”) is attached as Exhibit 23. In addition to approving GTE North and GTE South’s sale, and Citizens Illinois’s purchase, of the aforementioned assets, in accordance with the Asset Purchase Agreement (“Agreement”) filed separately as proprietary Exhibit 4, and such transition agreements contained therein, Petitioners also request that the Commission: a) grant Citizens Illinois a Certificate of Exchange Service Authority, pursuant to §13-405 of the Act, for the service area consisting of the exchanges to be acquired from GTE North and GTE South upon the closing of this purchase and sale of assets; b) grant Citizens Illinois statewide Certificates of Interexchange Service Authority and Service Authority pursuant to @13-403 and 13-404 of the Act; c) designate Citizens Illinois, for the purposes of subsequent application to the Federal Communications Commission (“FCC”), as an eligible telecommunications carrier (“ETC”) for the service area consisting of the exchanges to be acquired from GTE North and GTE South upon the closing of this purchase and sale of assets, effective upon the closing of the purchase and sale of said exchanges; d) authorize GTE North and GTE South to discontinue their respective provision of non-competitive local exchange services under 513-406 of 2 the Act in the service area consisting of the exchanges to be sold to Citizens Illinois upon the closing of this purchase and sale of assets; e) issue a letter of non-opposition to the FCC regarding Petitioners’ request for a study area waiver pursuant to 47 CFR §36; and f) authorize Citizens Illinois to maintain its books and records outside of the State of Illinois pursuant to 83 Illinois Administrative Code, Part 250. 1. DESCRIPTION OF THE JOINT PETITIONERS A. The Sellers-GTE North and GTE South GTE North and GTE South are both wholly owned subsidiaries of GTE Corporation (“GTE”), a corporation created and existing under the laws of the state of New York. Through its various subsidiaries, GTE provides customers with a wide variety of communications services on a regulated and unregulated basis throughout the United States and in several foreign countries. GTE’s local telephone subsidiaries serve 26.1 million access lines in twenty-eight states, including Illinois. In 1998 GTE had revenues of more than $25 billion. GTE has a strong balance sheet and investment-grade credit rating. GTE’s Annual Report, Form IOK, and Form IOQ are attached as Exhibits 14, 15 and 18. GTE North is a Wisconsin corporation and GTE South is a Virginia corporation. GTE North and GTE South supply local exchange telephone service, access service, and intraLATA toll service throughout the State of Illinois. GTE North and GTE South provide both regulated and competitive 3 communication services to residential, business, and wholesale customers, Together, GTE North and GTE South currently serve approximately 900,000 customer access lines in Illinois. The proposed Transaction that is the subject of this Joint Petition is the final sale of wireline properties that GTE identified in its repositioning initiative in November 1998. GTE has reached agreement to sell slightly more than 1.6 million telephone lines in thirteen states to seven different purchasers. Along with the proceeds from the divestiture of GTE’s Government Systems businesses, proceeds of the repositioning initiative will be used for investment in other GTE strategic initiatives, such as the recently completed acquisition of Ameritech wireless properties in Illinois and Missouri and other data and Internet business opportunities. After closing of this Transaction, GTE North and GTE South will continue to own and operate more than 800,000 customer access lines in Illinois. GTE’s offering of long distance and Internet services to customers in Illinois will not be affected by the proposed Transaction with Citizens Illinois. B. The Buver-Citizens Illinois Citizens Illinois was incorporated in Illinois on February 2, 2000 for the purpose of acquiring and operating the access lines and associated property to be acquired from GTE North and GTE South. Upon issuance of the requested Certificates of Service and Interexchange and Exchange Service Authority by the Commission and the closing of the Transaction, Citizens Illinois will become a telecommunications carrier in the State of Illinois. 4 Citizens Illinois is a wholly owned subsidiary of Citizens Utilities Company (“Citizens”), a diversified utility which, through its various operating divisions or subsidiaries, presently provides