We're ready. Okay. Alright. Let's go ahead and go on the record. Good morning, everyone. This is the time set for the hearing and public comment in the matter of the application of Impact Telecom LLC for certificate of convenience and necessity to provide resold long distance telecommunication services and wholesale services to telecommunication carriers in Arizona. Docket number T21294A250052. I'm administrative law judge Elizabeth Beatty, and I've been assigned to preside over this matter. We'll go ahead and take appearances on the record from the parties,
and we'll go ahead and begin with the company. Yes. Good morning, your honor. Jennifer Cranston of the law firm of Gallagher and Kennedy on behalf of the applicant Impact Telecom LLC, appearing on behalf of the applicant. Thank you. And for staff? You like all of staff attorney. Thank you. And before we move to the public comment portion, I know we kinda had some discussion a little bit earlier. Are there any other procedural issues that need to be addressed? Not not on our end. Thank you, your honor. Same here, your honor. Okay. Then with that being said, we'll go ahead and move to the public comment portion. This is the time for public,
to come forward and make any comments regarding the application in this matter. Is there anybody online or in person that would like to make a, comment? Alright. Seeing nobody in the room and seeing nobody online, let the record reflect that nobody has required requested to speak in this matter. Alright. So we'll go ahead and move on to the opening statements. Would the company like to make an opening statement in this matter? Your honor, I had planned to waive opening statement, but I'll just make a few short preliminary remarks in light of the conversation we had before we went on the record.
In preparing for, today's hearing, we conferred with staff about a few just, verbal amendments to staff's recommendations and specifically conditions and a clarification, which I'm happy to clarify once we get to staff's testimony. So thank you. K. Great. And, does staff have an opening statement? Staff will waive as well, and we're on the same page as company as far as, those those issues that were raised. Okay. Great. With that being said, we'll go ahead and move on to the evidence portion of the hearing. Is the company ready to call its first witness? Yes,
your honor. We call Daniel Howard. Mister Howard, as you're online, we'll have our court reporters swear you in. Of course. Sir, if you could please raise your right hand for me. Do you solemnly swear or affirm that the testimony you're about to give at this time and place will be the truth, the whole truth, and nothing but the truth? I do. I thank you very much. Good morning, mister Howard. Can you please state your name for the record? Daniel Howard. And can you please provide your business address? It's 1503 East 19th Street, Edmond, Oklahoma 73013. Thank you. And what is your position with the applicant Impact Telecom LLC?
I am general counsel for Impact Telecom. Can you please provide a brief overview of your educational and professional background? Yes. I have a undergraduate in computer science and MBA and a law degree, from Oklahoma City University, and I have been involved in the telecom field for a little over a decade now, with my partner. Great. So you should have before you six exhibits that have been pre marked, as applicants' exhibits. It should be a one through a six. Do you have those documents? I do.
And we'll walk through them. Exhibit a one should be, captioned an application and request for limited waiver of contract filing requirements, which was filed by Impact on March 4 I'm sorry, 03/14/2025. Is that correct? Correct. K. Yes. Thank you. And exhibits a two, a three, and a four should be applicants' responses to staff's first, second, and third sets of data requests, which were filed on June 6,
July 9, and 09/08/2025, respectively. Is that correct? Yes. Exhibit a five is an amended tariff that was filed by, by the applicant, to address a provision regarding individual case based arrange basis arrangements. Is that correct? Yes. And then finally, the last exhibit a six, should be a filing that was confirming that Impact is seeking, authorization to provide resold long distance telecommunications as well as wholesale services.
Is that correct? Yes. And for clarification, is it correct that some of the exhibits, and some of the information in the exhibits modify, Impact's initial application, which is exhibit a one? Yes. K. So for example, exhibit a five, which includes an updated version of the tariff, modifies the tariff that was submitted with the original application. Correct? That's the our intent. Yes. And then exhibit a six clarifies that although the original application only listed resold, long distance telecommunications, exhibit a six clarifies the addition of wholesale services.
Correct? Yes. Other than the updates that are referenced in the exhibits themselves, do you have any other corrections or updates to the information provided in exhibits a one through a six? The only note I would make is that exhibit a three at the time of application, and in particular, attachment three, that shows a call flow diagram for our network, would be modified today as we have upgraded several our network components to, utilize VoIP technology versus what it was at the original filing. Okay. Thank you.
With that clarification, do you adopt exhibits a one, a two, a three, a four, a five, and a six as part of your sworn testimony here today? Yes. With that, I move for admission of exhibits a one through a six, your honor. Does staff have any objections, to exhibits a one, a two, a three, a four, or a five or excuse me, a five or a six? No, your honor. Alright. Without any objection, exhibits a one, a two, a three, a four, a five, and a six are all hereby admitted.
Thank you, your honor. Mister Howard, can you please turn to exhibit a one? K. I'm there. And that exhibit includes a motion requesting waiver of the commission's contract filing requirements. Is that correct? Correct. And is it your understanding that in providing the services referenced in the tariff exhibit a five, Impact anticipates entering into contracts on an individual case basis? Yes. And do you understand that if the commission grants the motion requested in exhibit a one, Impact, rather than filing copies of of the contracts automatically with the commission,
will be required to provide copies of those contracts upon staff's request? Yes. And is that arrangement agreeable to the company? Yes. Alright. And although it has not yet been entered into evidence, do you have a staff's report in front of you? I do. Okay. And that's a report dated 02/06/2026. Is that correct? Yes. Can you please turn to page seven of the report, which I believe has a Bates number at the bottom right hand corner of STFDash0012?
I am on my page. Okay. And at the top of the page, do you see six numb or I'm sorry, seven numbered, paragraphs that are, no. I'm sorry. It's six numbered paragraphs that are staff's recommendations? I do. And does Impact agree with those six recommendations? Yes. And in the bottom half of the page, there are, four recommended conditions that staff has included. Is that correct? Yes. And is it your understanding that staff has, in response to some questions raised by the company, agreed to make some modifications to those recommend recommended conditions?
Yes. Which we'll address later. But, with those modifications, is the company agreeable to, the recommended conditions one through four? Yes. I'll and and specifically, the the modifications you're understanding are two conditions, one and three. The the modification to condition one will address the, wholesale services that the company intends to provide, and the modification to exhibit three will just clarify that, the application and the tariff have been amended in this proceeding so far. Is that correct?
Yes. Okay. Paragraphs one and three. Alright. Alright. Thank you. I tender the witness for further questioning. Okay. Does Steph have any questions for the witness? I have no questions, your honor. Okay. Good morning, mister Howard. I do actually have a few questions, and let me just get, situated here. Just a moment. Okay. Alright. I wanna go ahead and begin because it looks like, as kinda was stated, the application was originally for resold, services and then, later wholesale was added to that application. So I just wanna ask some questions that are in the application regarding wholesale to make sure that we have those on the record.
Mister Howard, would the company agree to abide by the quality of service standards that were approved by the commission in decision number 59421? Yes. Okay. And, will the company provide all customers with 911 and e 911 services, where available and will coordinate with incumbent local exchange carriers and emergency service providers to provide this service? Yes. Okay. And will the company Switch, be fully equal access capable? Yes. Okay. Just a few more questions here. Alright. So I wanna take a step back. Just a few questions regarding forty six Labs,
and this is just more, my unfamiliarity. Could you please describe the services provided by the parent company, forty six Labs LLC? Yes. Forty six Labs is a cloud based software, provider specializing to tele the telecommunications industry. We developed a proprietary session border controller that could run-in the cloud and began selling that over a dozen years ago and further developed that to help wholesale companies route and rate their traffic as well as to bill for their traffic.
That's how we started in the telecommunications industry. Okay. Understood. And, how do those services relate to the services that Impact Telecom proposes to provide in Arizona? The way the company services relate is we've used some of our intellectual property that we developed on the software side to streamline the operational capabilities of Impact and how it can provide connectivity to other wholesale providers. Okay. Thank you. And then can you briefly describe the experience and qualifications of the company's management team as it relates to the telecommunications services?
Absolutely. I related my own experience in my prior statement. Our founder and CEO, Trevor Francis, has over twenty five years of experience, not only as a a wholesale provider himself at one time, but, of course, as the the key executive that developed the software technology we have and leads our organization strategically now. We also have several associates that have over 20 of experience in wholesale and telecommunications that work for us, including our chief revenue officer, Max Adams, and our chief technology officer,
Ali Mumtaz. Okay. Thank you. And, the record also indicates that the company had, pending applications in several jurisdictions. Could you provide, any update, if any, on the status of any of those applications? Absolutely. Our applications in California and New Mexico have both been approved. The remainder that were pending are still pending. As part of our, acquisition of Impact, there were a couple of filings that were delayed, and so we're seeking to cure those deficiencies. Okay. Thank you. Alright. The company also indicated that it maintains a network operation center and customer service center.
Can you briefly describe how those will be staffed? Yes. We typically staff those with individuals that connect, to our, network, and then calls are routed to those individuals. So we have, 20% of our support staff are located in The US, and probably the remaining 80% are are located overseas for tier one and tier two support. K. And, approximately, how many employees do you have, for the NOC? And then, the same question for, the customer service. Yeah. The our, knock I I haven't looked I actually have just looked recently at it.
Over 60% of our people report to the engineering department. So, and about half of those are related to the support organization. So that would be about 30 personnel that are directly, per part of our, technological support organization. Thank you. Alright. And just, I I believe just a few more questions or one more. The record reflects that the company and its parent, 46 Labs have reported negative equity and operating losses. Could you explain how the company intends to ensure financial stability going forward? Yes. The company,
as part of our post acquisition strategy, has been streamlining of our our operations. And while this application is somewhat dated, we have been, able to be positive on our cash flow and income earnings, as of the beginning of this year and continue to develop and grow that. And that was part of our strategy of our actually in acquiring Impact as we thought we could leverage our technology to lower the costs of, delivering that technology. And we have been able to do that and expect positive EBITDA,
going forward. Okay. Thank you. Those were all of the questions that I had, and I'll turn back to, the company's counsel and see if she has any follow-up. Yes. Thank you, your honor. I did just have a couple quick follow-up clarifications. Mister Howard, judge Beatty asked you some questions about, specific information that's requested in the application. If you turn to exhibit a one, I can direct your attention. It's gonna be the Bates numbers Bates number pages impact nine and ten. Yes, ma'am. Okay. And so as you see on the application, the three questions that, that,
judge Beatty asked you from the application were not filled out, and that's because at the time of the application, we were focused on the re the resold telecommunication services. Is that correct? That's correct. And the these questions fall within the area of facilities based. So I just wanted to clarify that your answers to these questions, which were all affirmative, relate solely to the facilities bay to the extent that Impact would be providing facilities based services. Is that correct? Yep. That is correct. Okay. Thank you. Thank you for that clarification.
Alright. Anything from staff? No, your honor. K. And, miss Granson, does that conclude your, testimony for today? It does, your honor. Thank you. Alright. We'll go ahead and move on to, staff. Are you ready to call your first witness? Yes, your honor. I call Wesley DeMello to the stand. K. Good morning, mister DeMello. If you don't mind raising your, right hand, and we'll have our court reporters swear you in. Hopefully, you can hear me, mister DiVano? I gotcha. Do you solemnly swear or affirm that the testimony you're about to give this time and place will be the truth, the whole truth, and nothing but the truth? I do. Thank you very much.
Alright. Can you please excuse me. Can you please state your name for the record? Wesley DeMello. And where do you work, and and who do you work for? I work, for the Arizona Corporation Commission. I'm a public utility analyst. Three would be my title. Alright. Thank you. And, how long have you been with the commission? Two years and five months. Okay. And as part of your employment, can you please describe your involvement in this case? Yeah. My primary responsibility is to, review the application and to review the company's financial,
technical, and managerial capabilities to operate within the state of Arizona. Okay. And in front of you, your honor, may I approach the bench and provide an I don't have anything. An example a a copy of a proposed exhibit s one? Yes. Of course. Thank you. Thank you. Have you had a chance to take a look at it? I'll start with a question. Exhibit S1 proposed exhibit S1 is a staff report. Were are you the author of that report? Yes. Correct. And have you thoroughly reviewed the staff report? I have. And I I know at the start of the proceeding,
there was some discussion of, amendments to the recommendations, which I will go into. Yeah. With those well, at this point, your honor, I move for admission of exhibit S1 staff report. Does the company have any objections to the admission of exhibit S1? No objection, your honor. Okay. With no objections, exhibit S1 is hereby admitted. Thank you, your honor. Are you adopting exhibit S-one as part of your exhibit today? Yes, sir. I'm sorry, your testimony today? Yes, sir. Thank you. And I just want to address some of the
some of the oral amendments to Exhibit S-one. Let me see. So can you please turn to Page seven of the staff report, Exhibit S-one? I'm there. Regarding further recommendation number one at the bottom of the staff report, page seven. Mhmm. Do you believe that this recommendation should be amended to state as follows, and I'll read it to you, and point out the new language. If Impact does not provide telecommunications services to end users,
and here's the new language, or sell wholesale services to telecommunications carriers, and the new language ends there, Within three years of the date of the order of this docket, Impact will be required to notify the commission of this fact and request cancellation of its CCNN. Do you approve of that that amendment to condition number further condition number one on page seven? Yeah. The staff does, approve the, the the language addition, correct, to specify wholesale services. I see. And that was because the amendment to the application
added that category the category of wholesale services. Correct? Correct. The amendment, docketed in, on 12/30/2025, stipulated that wholesale services would be in addition to the application, so staff is fine with adding the wholesale services to specify. Great. Thank you. And I'm gonna move on to still on page seven, but further down, regarding further recommendation number three on the bottom of staff report page seven. Do you believe that this recommendation should be amended to state,
as follows? And I won't read the whole thing, but at the end, the last sentence, existing language says, the tariffs submitted shall coincide with the application, and the, oral amendment additional language is after application, comma, as amended. Yes. Steph's fine with that. Okay. Thank you. And this is more of a question regarding staff's view of, again, still on page seven, bottom of page seven to the top of page eight,
Steph's further recommendation number eight. Do you believe that this recommendation is intended to clarify which docket a notice should be filed in if it's required and is not intended to create a new notice filing requirement? Correct. Yeah. There's yeah. No language needs to be, added into here, but, yes, no staff is it's it's a clarification. Yeah. It's just letting you know where where to docket things. Okay. Yeah. But Right. And, your honor, I should just say, this I only asked that question because,
when when I conferred with opposing counsel ahead of time, company was a bit concerned that this might be create a new filing requirement, but, staff agrees that it does not. So that's all. Sorry. Did you have any other questions for your witness? Is there anything else you wanted to add? No. Alright. And, again, you, do you adopt the the, staff report as amended orally amended today as part of your testimony? I do. Thank you. No further questions. Okay. Thank you. Does the company have any cross examination for the witness? Just a few, follow-up questions.
Good morning, mister Della. Thank you for agreeing to make those oral amendments and provide the clarification. I just, for the record, wanted to make sure that that we're all on the same page. So with the re with the oral amendment to condition number one on page seven of staff's report, if Impact provides wholesale services within those three years, even though it hasn't provided, the resold long distance, no filing is required. Is that correct? Correct. Yeah. Just one or the other. Perfect. And then with the, revision to the oral revision to condition number three on page seven of staff's report,
that the compliance filing that impact intends to make at the end of this proceeding would be an updated, dated version of exhibit a five, which was the revised tariff. Is that your understanding? Correct. Thank you. And I appreciate you clarifying, that the language in condition number four is just intended, to direct, the applicant where to file notices in the event that notices are required. Correct. Thank you. No further questions, your honor. Alright. Thank you. Alright. Good morning, mister Damelo. I do have a few questions.
Alright. My first one is just regarding, the company's management experience or technical capability. Does staff believe, that Impact Telecom possesses the requisite technical and managerial capability? Staff does. Yes. Okay. And let me see here. In evaluating financial capability, did staff have any concerns regarding the company or its parent company's negative equity or operating loss? No. No. It's not an issue. Okay. And, what factors led to, staff's conclusion that the company possesses sufficient financial capability?
Well, Can you ask me again? Yeah. What factors led staff to concluding that the company possesses sufficient financial capability? Yeah. So we review, the the financials of, Impact and as well, mainly of their parent company. So they're gonna be the, the contributing economic factor in Impact's development in the state. So we look mainly at 46 labs, and they are viable. No reason to think that they're not. And 46 labs and ex or I'm sorry. Impact is an extension of that. Also viable. Alright. Thank you.
I believe that concludes all of my questions, and I'll turn back to staff to see if you have any follow-up. No. I don't, your honor. Okay. And if there's anything else from the company? No, your honor. Alright. Thank you, mister Dimelo. I actually do just wanna ask the parties if we can call mister Howard back just to to confirm that his understanding of staff's revisions are reasonable to the company. That's fine, your honor. I call, Daniel Howard back to the virtual stand. Okay. Hi, mister Howard. Hi. And I don't know if you have any questions or if I can just I I do not, your honor. You can take the floor.
Alright. Mister Howard, were were you able to hear mister DeMello's, testimony regarding staff's recommendations and the modifications to them? Yes, your honor. Okay. And does the company have any concerns about those modifications or any objections? No, your honor. Alright. So that was my only question. So I'll go ahead and turn back to the parties to make sure that that concludes everything. Yes. That concludes, mister Howard's testimony for us. Thank you. Agreed, your honor. Thank you, mister Howard. With that being said, I believe that concludes our testimony portion. And I just wanna confirm with both parties that there are no other witnesses. Correct,
your honor. Alright. Thank you. And then before we close testimony, I wanna make sure that we have all the exhibits admitted. So I believe I have exhibits, a one, a two, a three, a four, a five, a six, and s one admitted into, the record. Is that correct? And is there anything else that needs to be addressed? As far as staff's concerned, that's correct, your honor. Okay. Yep. Same for the applicant. Thank you. Thanks. Alright. Then we'll go ahead and move on to closing remarks. Does the company have any, closing statement they would like to make? Yes. Just briefly, your honor. Thank you for your time and attention today. We also thank staff for the cooperation in processing Impact's application.
The applicant Impact Telecom LLC respectfully requests that the commission grant the company a certificate of convenience and necessity to provide both resold long distance telecommunication services as well as wholesale services to other telecommunications providers in Arizona as described in greater detail in the version of the tariff that was filed in this docket on 09/25/2025. We further request that the decision entered in this matter confirm the company's services will
be classified as competitive and include a waiver of R14Dash2Dash1115C3 subject to the condition that Impact Telecom will produce a contract, upon staff request. Finally, pursuant to the testimony provided today, we request that staff's recommendate recommended conditions be approved as modified, specifically to add wholesale services to condition number one and to clarify that the tariff
filing referenced in condition number three would coincide with the applicant with the application as amended through other filings in the docket. Thank you, your honor. Thank you. And does staff have a closing statement? Even more briefly, your honor, staff, is in agreement with the, with the applicants. All the information stated in the applicant's closing statement, we ask that the court approve the application, and thank you for your time and, consideration. Alright. Thank you. And then before, we conclude here, I just wanna go off the record, to ask our court reporter if she has any,
questions or clarifications. No. Thank you. Alright. Thank you. I will go back on the record. And and just to note on the record, no, clarifications from our court reporter. With that being said, I just wanna thank everyone, for taking the time to participate in today's hearing. This matter will be taken under advisement and will be, in a recommended opinion and order will be issued in this matter, and taken under consideration at a future open meeting. Thank you, everyone. Thank you, your honor. Thank you, your honor.