§ 63.325. Commission approval of a pro forma transaction subject to 66 Pa.C.S. § § 1102(a)(3) and 1103.
(a) Pro forma transactions. The following transactions of an applicant not involving a change in conditions of service or rates that seek Commission approval for acquisition, merger, stock sales or transfers, transfer of assets or transfer of control of an applicant require notification to the Commission and approval by the Commission as a pro forma transaction:
(1) A transaction resulting in the transfer of less than 20% of the assets of an applicant.
(2) A transaction resulting in the transfer of less than 20% of the direct or indirect control of an applicant.
(3) A transaction requiring a certificate of public convenience issued under 66 Pa.C.S. § 1102(a) (relating to enumeration of acts requiring certificate).
(4) A transaction subject to evaluation under the statement of policy on transfer of control, § 69.901 (relating to utility stock transfer under 66 Pa.C.S. § 1102(a)(3)).
(5) A transaction that transfers the customer base of an applicant and does not involve a change in conditions of service or rates.
(6) A transaction subjected to this subchapter by decision of the Commission, including a pro forma transaction no longer classified as a pro forma transaction by the Commission.
(b) Reclassification of a pro forma transaction. When an applicant seeks review and approval of a transaction as a pro forma transaction and the Commission reclassifies the pro forma transaction, the Commission will notify the applicant of the reclassification by notice published in the Pennsylvania Bulletin. An applicant may file a challenge to the reclassification during the protest period established by the notice. If a formal protest or complaint to the transaction is filed, the challenge will be reviewed as part of a traditional rule review proceeding. If no formal protest or complaint to the transaction is filed, the challenge will be reviewed by the Commission as part of the review of the transaction.
(c) Notification requirements for pro forma transactions. Notification of a pro forma transaction shall be filed with the Commission on the date of filing with a Federal regulatory agency seeking Federal approval of a pro forma transaction or no later than 30 days prior to the closing of a pro forma transaction subject to this subchapter, whichever is longer. The applicant filing the notification shall comply with the Commission’s rules of practice and procedure governing applications. The applicant shall clearly state that the application is a pro forma transaction and provide a copy of the application to the Commission and the statutory advocates. An applicant shall provide an updated copy of any subsequent filings to the Commission and the statutory advocates in the following circumstances:
(1) Filing with the Federal Communications Commission (FCC) of an application seeking approval of the transaction (FCC application).
(2) Filing of a notice with the United States Department of Justice (U.S. DOJ) pursuant to the Hart-Scott-Rodino Antitrust Improvements Act (15 U.S.C.A. § § 15c—15h, 18a and 66) (HSR Filing).
(3) Filing by an applicant of a pleading responding to a formal or informal complaint, investigation, or proceeding undertaken by the FCC or the U.S. DOJ or other State or Federal regulatory agency involving the transaction.
(4) Filing required by the Commission from an applicant in response to a notification by the Commission that simultaneous notification is appropriate to protect the public interest.
(5) Filing required by the Commission from an applicant in response to a request by any of the following:
(i) A request by a statutory advocate.
(ii) A request by a carrier with a certificate of public convenience obtained under 66 Pa.C.S. § 1102(a) for a copy.
(iii) A request by the Commission or staff for a copy.
(iv) A request by a person or party for a copy.
(d) Content of notification for pro forma transactions. In addition to the information required under § 5.12 (relating to contents of applications) of the Commission’s rules of practice and procedure, a pro forma transaction must contain the following information:
(1) The name, address and telephone number of each party or applicant to the transaction.
(2) The government, state or territory under the laws of which each corporate or partnership applicant to the transaction is organized.
(3) The name, title, post office address and telephone number of the officer or contact point, including Pennsylvania legal counsel in this Commonwealth, to whom correspondence concerning the transaction is to be addressed.
(4) The name, address, citizenship and principal place of business of any person, party or entity that directly or indirectly owns more than 20% of the equity of the applicant, and the percentage of equity owned by each of those entities (to the nearest 1%).
(5) A summary description of the transaction.
(6) A summary of the services and the service territories in this Commonwealth that will be affected by the transaction.
(7) A verified statement as to how the transaction fits into one or more of the categories subject to the pro forma rule.
(8) Identification of other transactions related to the transaction.
(9) A verified statement whether the transaction warrants special consideration because either party to the transaction is facing imminent business failure.
(10) Identification of a separately filed waiver request sought in conjunction with the transaction.
(11) A verified statement of facts and allegations establishing:
(i) For a merger or similar transaction, how the transaction will affirmatively promote the service, accommodation, convenience, or safety of the public in some substantial way as required by State law.
(ii) Findings that approval for a transaction subject to 66 Pa.C.S. § 1103(a) (relating to procedure to obtain certificates of public convenience) is necessary or proper for the service, accommodation, convenience, or safety of the public.
(iii) The impact of the transaction on competition.
(12) A verified statement affirming that the applicant is in compliance with Commission obligations and filings and a listing of all State and Federal proceedings when:
(i) Within the 3-year period prior to filing the application, the applicant was found to have violated either State or Federal requirements.
(ii) Within the 3-year period prior to filing the application, the applicant is alleged to have violated either State or Federal requirements.
(13) A verified statement affirming that customers received prior notice. Notice shall be accomplished using a notice approved by the Commission’s Bureau of Consumer Services (BCS). Any disagreement between the applicant and BCS shall be addressed by an appeal from an action of staff mirroring § 5.44 (relating to petitions for appeal from actions of the staff) of the Commission’s rules of practice and procedure.
(14) A verified statement containing a copy of any Commonwealth utility certificates held by the applicant.
(15) A verified statement on the effect of the transaction on existing Commonwealth tariffs. If applicable or in response to a request from staff, an applicant shall provide a red-line document identifying changes in existing Commonwealth tariffs before and after the transaction for which the applicant seeks approval from the Commission.
(16) A verified statement on the transaction’s effect on the existing affiliate interest agreements of the applicant.
(17) A verified statement establishing that no State or Federal regulatory agency is expected to undertake an informal or formal investigation, complaint or proceeding relating to the transaction.
(18) Organizational charts showing the effect on the applicant’s organization before and after the transaction.
(19) A copy of the application filed at the FCC or a notice filed with the U.S. DOJ, if any, including the electronic location on the agency’s web site.
(20) A verified statement setting forth the expected public effect of the transaction on the capital structure of the applicant over the next 5 years.
(21) For an applicant subject to a broadband deployment commitment under Federal or State law, a verified statement affirming that the applicant is in compliance with that commitment.
(22) For an applicant with eligible telecommunications carrier status under Federal and State law, a verified statement affirming that the applicant is in compliance with the law and that the applicant will continue to be in compliance with the law.
(23) A verified statement affirming that the transaction complies with the prohibition against cross-subsidization imposed under Federal and State law.
(e) Continuing obligations for notification of pro forma transactions. When a Commission or Federal proceeding related to a transaction that is the subject of the pro forma transaction is pending, the applicant seeking approval of a pro forma transaction shall file with the Commission and provide to the statutory advocates copies of all procedural motions, public responses to discovery, and orders or other actions addressing or terminating the proceeding. The applicant shall supplement the application with any FCC or U.S. DOJ public notice issued concerning the transaction.
(f) Commission publication and reclassification of pro forma transactions.
(1) The Secretary will publish notice of a pro forma transaction in the Pennsylvania Bulletin. The Secretary may post notice of the pro forma transaction on the Commission’s web site.
(2) A notice will contain a 15-day formal protest period established under § 5.14(d) (relating to applications requiring notice) of the Commission’s rules of practice and procedure. A formal protest or complaint shall constitute a formal protest under § 5.14 of the Commission’s rules of practice and procedure and shall subject the transaction to traditional rule review.
(g) Applicant notice to customers.
(1) Pro forma transactions with no change in conditions of service or rates. An applicant shall prepare and distribute prior notice to the customers of a pro forma transaction involving no change in conditions of service or rates with the approval of the BCS. Any disagreement between the applicant and BCS shall be addressed by an appeal from an action of staff mirroring § 5.44 of the Commission’s rules of practice and procedure.
(2) Transfers of customer base subject to the pro forma rule.
(i) A transaction transferring a customer base involving no change in conditions of service or rates shall require prior notice to the customer base prepared with the approval of the BCS. Any disagreement between the applicant and BCS shall be addressed by an appeal from an action of staff mirroring § 5.44 of the Commission’s rules of practice and procedure.
(ii) A timely formal protest or complaint to the transfer of a customer base involving no change in conditions of service or rates shall constitute a formal protest under § 5.14 of the Commission’s rules of practice and procedure.
(h) Commission review of pro forma transactions. The Commission retains the discretion to make inquiries and, after notice and opportunity to be heard, take action to protect the public interest, including:
(1) For a merger or similar transaction, ensuring that the transaction will affirmatively promote the service, accommodation, convenience, or safety of the public in some substantial way as required by State law.
(2) Findings that a transaction subject to 66 Pa.C.S. § 1103(a) is necessary or proper for the service, accommodation, convenience, or safety of the public.
(3) Addressing the impact of the transaction on competition.
(4) The imposition of conditions on approval of the transaction when deemed necessary or proper under 66 Pa.C.S. § 1103.
(i) Formal protests and complaints to a pro forma transaction. A protest filed to a pro forma transaction must comply with the Commission’s rules of practice and procedure.
(j) Reclassification of a transaction. The Commission will reclassify an application for approval of a pro forma transaction in the following circumstances:
(1) The filing of a formal protest or complaint.
(2) The filing involves an acquisition, merger or other transaction that raises novel or important issues.
(3) The Commission determines that reclassification is necessary to protect the public interest.
(k) Commission approval for a pro forma transaction. The Commission will issue a Secretarial letter or order after review of an unprotested transaction subject to this subchapter determining if the application is in the public interest and consistent with 66 Pa.C.S. § § 1102(a) and 1103(a) no later than 30 days after expiration of the protest period established in the public notice in the Pennsylvania Bulletin.
(1) The Commission will determine for a merger or similar transaction whether the transaction affirmatively promotes the service, accommodation, convenience, or safety of the public in some substantial way.
(2) The Commission will make findings whether a transaction subject to 66 Pa.C.S. § 1103(a) is necessary for the service, accommodation, convenience, or safety of the public and state whether the Commission will issue a certificate of public convenience authorizing the transaction under 66 Pa.C.S. § § 1102(a) and 1103.
(3) The Commission will address the impact of the pro forma transaction on competition.
(4) The Commission will determine whether to impose conditions deemed necessary or proper under 66 Pa.C.S. § 1103 in conjunction with a determination to approve a pro forma transaction.
(5) The Commission or staff may extend the consideration period, reject the filing or transaction, remove a transaction from the pro forma rule or take other action deemed appropriate to protect the public interest.
(6) A staff action will be in writing and inform the applicant of the right of appeal. An appeal from an action of staff shall be governed by the procedures governing appeals from an action of staff under § 5.44 of the Commission’s rules of practice and procedure.
(l) Limitations on pro forma transactions.
(1) Bankruptcy proceedings. Pro forma changes related to bankruptcy remain subject to § § 1.61 and 1.62 (relating to matters before other tribunals) of the Commission’s rules of practice and procedure.
(2) Scope on pro forma transactions. A pro forma transaction may not operate to permit an applicant to abandon a condition of service or rate. A pro forma transaction may not operate to permit an applicant to circumvent an obligation by doing or refraining from doing anything that an applicant must do or cannot do.
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