Document:

Exhibit # 10.17

                        CLEC License approval Letter - CA

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Decision 99-12-048 December 16,1999

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Order Instituting Rulemaking on the
Commission's Own Motion into Competition for

Local Exchange Service-

Order Instituting Investigation on the
Commission's Own Motion into Competition for
Local Exchange Service.

                                  0 P I N I 0 N

         By this  decision,  we grant the petitions for  certificates  of public
convenience and necessity  (CPCN) as competitive  local carriers (CLCs) to offer
resold local exchange services within the territories of Pacific Bell (Pacific),
GTE California  Incorporated (G TEC),  Roseville  Telephone Company (RTC.),  and
Citizens Telephone Company (CTC), for those petitioners as set forth in Appendix
B of this decision, subject to the terms and conditions included herein. We also
t  petitioners'  request  intrastate   interLocal  Access  and  Transport  Areas
(interLATA)  and  intraLATA  authority  on a statewide  basis as  designated  in
Appendix B. We defer granting full facilities-based  local exchange authority at
this time pending  resolution of environmental  issues as, discussed 'in Section
II below.  In this  order,  we grant only  limited  facilities-based  authority,
restricted  to  the  use  of  equipment  located  within   previously   existing
structures.

1. Background

         We initially established rules for entry of facilities-based CLCs in
Decision (D.) 95-07-054. Under those procedures, we processed a group of
candidates that

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filed petitions for CPCNs by September 1, 1995, and granted 'authority effective
January 1, 1996, for  qualifying  CLCs to provide  facilities-based  competitive
local  exchange  service in the  territories  of Pacific and GTEC. We authorized
CLCs seeking to provide  resale-based  services to beg-in operations on March 1,
1996.   We  further   advised   prospective   entrants  that  any  filings  from
non-qualifying  CLCs,  and any filing  for CLC  operating  authority  made after
September 1, 1995,  would be treated as standard  applications  and processed in
the normal course of the Commission's business.

         By  D.96-12-020,  effective  January 1, 1997, we  instituted  quarterly
processing cycles for granting CPCN authority for facilities-based CLCs in order
to streamline the approval process for these particular  carriers.  Since we had
been  processing the  environmental  impact review required under the California
Environmental  Quality  Act  (CEQA)  on  a  consolidated  basis  for  groups  of
qualifying  facilities-based  CLCs, we concluded in D.96-12-020 that it would be
more  efficient and  consistent to process other aspects of the CLC filings on a
consolidated basis, as well. Accordingly,  we directed that any CLC filing on or
after  January 1, 1997,  for  facilities-based  CPCN  authority  was to make its
filing in the form of a petition to be docketed in Investigation  (I.) 95-04-044
that would be processed  quarterly on a  consolidated  basis.  CLCs seeking only
resale authority continued to file individual applications.

         On September 24, 1997, we adopted D.97--09-115 in which we extended the
coverage  of our adopted  rules for local  exchange  competition  to include the
service  territories  of  California's  two mid-sized  local  exchange  carriers
(MSLECs),  RTC and CTC. In that decision,  we also authorized candidates seeking
CLC CPCN authority  within the NSLECs'  territories to immediately  begin making
filings  following the applicable entry rules previously  adopted in D.95-07-054
and subsequent decisions. Specifically, requests for CLC CPCN

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authority  for  facilities-based  service  were  to be  filed  in the  form of a
petition docketed in I.95-04-044. In D.98.01-055, we approved the first group of
petitions for facilities-based  CPCNs to offer local exchange service within the
MSLEC territories.

         In this decision,  we approve limited CPCN authority as set forth below
for those CLCs  identified in Appendix B that filed  petitions  during the third
quarter  of 1999  and  satisfied  all  applicable  rules  for  certification  as
established in Rulemaking (R-) 95-04-043. The petitioners identified in Appendix
B will be  authorized  to  begin  offering  service  upon  the  approval  of the
Telecommunications  Division (TD) staff of filed tariffs and in compliance  with
the terms and conditions set forth in this order.

11. CEQA Issues

         In accordance  with CEQA  provisions,  the  Commission  must assess the
potential  environmental  impact  of a CLC's  proposed  operation  in  order  to
determine that adverse effects are avoided,  alternatives are investigated,  and
environmental quality is restored or enhanced to the fullest extent possible. To
achieve  this  objective,  Rule  17.1 of the  Rules of  Practice  and  Procedure
requires the proponent of any project subject to Commission  approval to submit-
with the  petition  for  approval of such  project a  Proponent's  Environmental
Assessment  (PEA).  The PEA is used by the Commission to focus on any impacts of
the project  which may be of concern,  and to prepare the  Commission's  Initial
Study to  determine  whether  the  project  needs a Negative  Declaration  or an
Environ mental Impact Report.

Through  the second  quarter of 1999,  the  Commission  staffs  practice  was to
prepare  a  negative   declaration  covering  all  CLC  petitioners  filing  for
facilities-based  CPCN authority  during the previous  quarter.  The most recent
negative

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declaration  prepared  by the  Commission  staff  for  CLC  petitioners  covered
Petitions 141-153,  which were filed during the second quarter of 1999. Based on
its  assessment  of the  facilities-based  petitions  and PEAs filed  during the
second quarter of 1999, the Commission  staffs Negative  Declaration and Initial
Study generally described the facilities-based  petitioners'  projects and their
potential environmental effects

          On July 30, 1999, the Negative  Declaration and Initial Study covering
Petitions  141-153 were sent to various city and county  planning  agencies,  as
well as to public  libraries  throughout  the state,  for review and  comment by
August 30,1999. The Commission staff prepared a public notice that announced the
preparation  of the  draft  negative  declaration,  the  locations  where it was
available for review,  and the deadline for written comments.  The public notice
was   advertised  in  newspapers   throughout  the  state-  The  draft  Negative
Declaration  was  also  submitted  to the  Governor's  Office  of  Planning  and
Research,  where it was  circulated  to affected  state  agencies for review and
comment.

          Comments on the Negative  Declaration were filed by various agencies.'
The comments identified a number of issues regarding claimed deficiencies in the
Negative  Declaration.  The issues include questions  concerning the adequacy of
petitioners'  project  descriptions,  the  claimed  "piecemeal"  nature  of  the
projects presented, and other related concerns. Based on a preliminary review of
the claimed deficiencies identified in comments, we concluded in

          1. Comments were received from the following state agencies:
          department of justice, Parks and Recreation Resources Management
          Division, Business, Transportation and Housing Agency, Department of
          Transportation; and the Department of Fish and Game.

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that  additional  time would be  required to  adequately  review,  address,  and
resolve the various issues raised.

         Until these issues are resolved, the July 30, 1999 Negative Declaration
cannot  be  finalized  and the  previously  requested  authorizations  for  full
facilities-based CPCNs considered in D.99-10-025 cannot be approved.

         In  D.99-10-025,   we  noted  that  various  CLC  petitioners  did  not
anticipate  undertaking any new construction at least for their initial start-up
operations.  Instead,  they intended to collocate their network equipment within
the  existing  structure  of the  central  offices of the ILECs,  and to provide
service by  purchasing  an ILEC's  existing  local loop as an unbundled
network
element (LINE) under federal law. Because UNEs are considered "facilities" under
federal law, a  facilities-based  CPCN is still  necessary  for a CLC to operate
utilizing  collocation UNEs. The CLCs argue that the deficiencies  identified in
the negative  declaration  should not prevent the Commission  from granting such
limited  facilities-based  authority  at this  time  where  no  construction  is
involved.

         We  concluded  in  D.99-10-025  that under the  limited  definition  of
facilities-based  service utilizing  equipment  installed in previously existing
structures,  no material  adverse  environmental  impacts  would result since no
external   construction  would  be  involved.   Accordingly,   for  purposes  of
D-99-10-025, we granted limited "facilities -based" authority in this restricted
manner to each of the  Petitioners  141-153.  We shall  grant a similar  limited
authority to the current group of petitioners identified in Appendix B.

         Under the limited  authority  granted  herein,  the CLC petitioners are
prohibited  from engaging in any  construction of buildings,  towers,  conduits,
poles, or trenches.  For those carriers seeking authorization for more extensive
facilities-based  authority  involving actual  construction,  such authorization
shall be deferred  pending  resolution  of further CEQA review.  If a petitioner
does not

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seek full  facilities-based  authority  requiring a negative  declaration in its
current filing, that petitioner shall be required to file a new application at a
later date when or if expanded facilities-based authority is sought.

         In the meantime, we will grant the third-quarter  petitioners' requests
for  authority to provide  interexchange  services and local  exchange  services
utilizing resale of other carriers' services and/or utilizing  unbundled network
elements and/or equipment  installed solely on or within existing  buildings and
structures.

III. Review of CPCN Petitions

                  A. Overview

         The  CLC  petitions  have  been  reviewed  for   compliance   with  the
certification-and-entry  rules (Certification Rules) adopted in Appendices A and
B of D.95-07-054 and subsequent decisions in R.95-04-043/1.95-04-044, Consistent
with our goal of promoting a competitive  market as rapidly as possible,  we are
granting  authority  to all of the CLCs that filed  during the third  quarter of
1999 and met the  Certification  Rules as set forth in prior  decisions  in this
docket.  The  Certification  Rules are  intended to protect  the public  against
unqualified or  unscrupulous  carriers,  while also  encouraging  and easing the
entry of CLC providers to promote the rapid growth of competition.

         Petitioners  had to  demonstrate  that  they  possessed  the  requisite
managerial  qualifications,  technical  competence,  and financial  resources to
provide facilities-based local exchange service.  Petitioners were also required
to submit proposed  tariffs which conform to the consumer  protection  rules set
forth

         2 Subject to the restrictions deferring full facilities-based authority
         as set forth in Section 11.

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in Appendix B of  D.95-07-054.  The  Commission TD shall notify each  petitioner
within  10  days  of this  order  as to  outstanding  tariff  deficiencies-  All
outstanding  tariff  deficiencies  must be  corrected  before a  petitioner  may
otherwise begin to offer service.

         As   prescribed   in    Certification    Rule   4.B.(I),    prospective
facilities-based  CLCs must also show that they possess a minimum of $100,000 in
cash or cash equivalent resources. In order to demonstrate that they possess the
requisite financial resources,  petitioners submitted copies of recent financial
statements  because the  financial  statements  contain  commercially  sensitive
information,  the  petitioners  filed  motions  for  limited  protective  orders
pursuant to General  Order 66-C.  we grant those  motions as  prescribed  in our
order below.

         Based upon our review,  except for the  unresolved  CEQA  issues  noted
above,  we conclude  that each of the  petitioners  identified in Appendix B has
satisfactorily  complied  with  our  certification   requirements,   subject  to
correcting any tariff  deficiencies to be identified by TD staff, and satisfying
the  additional   conditions  set  forth  in  the  ordering   paragraphs  below.
Accordingly,  we grant  these  petitioners  authority  to offer  local  exchange
service  utilizing  resale of other  carriers'  services  or  unbundled  network
elements and equipment  located  solely within  existing  structures  within the
territories  of Pacific and GTEC and,  where  requested,  within the CTC and RTC
territories.  We also grant the  statewide  inter- and  intraLATA  authority  as
requested.  With respect to full facilities-based local authority,  petitioners'
requests shall be defer-red pending resolution or' outstanding CEQA issues.

         Pursuant to D.97-09-115,  CLC resale  authority  within the RTC and CTC
territories was authorized to become  effective on or after April 1, 1998. As we
stated in D-97-09-115 until the time that tariffed  wholesale discount rates are
adopted for RTC and CTC, individual CLCs certificated to resell local service

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within the  CTC/RTC  territories  may enter into  negotiations  with each of the
MSLECs to seek agreement on an interim  wholesale  discount rate.  Disputes over
the  terms  of  resale  arrangements  may be  submitted  to the  Commission  for
arbitration   pursuant  to  the   provisions   of  Section   252(b)(1)   of  the
Telecommunication Act of 1996 and Commission Resolution ALJ-174.

                  B. Sempra Communications (Sempra)

         A response was filed on November  18, 1999,  by the Office of Ratepayer
Advocates  (ORA) to the petition of Sempra.  (3) OR A raises  various  questions
about the petition.

         Sempra's  petition  is the  second of its type in  California,  bearing
significant  similarities  to Petition 117 filed by Southern  California  Edison
Company (SCE or Edison) in August 1998.  Although  Edison is a regulated  energy
company and Sempra is not, Sempra's planned  utilization of the facilities owned
by its regulated affiliates,  Southern California Gas Company (SoCalGas) and San
Diego Gas & Electric  Company (SDG&E),  raises issues of affiliate  transactions
and the potential for cross-subsidies  that were present in the Edison petition,
but which  are not  typically  raised by  similar  petitions  filed by  entities
unaffiliated with regulated energy  companies.  ORA prefers Sempra's petition to
SCE's  insofar as Sempra has chosen to create a separate  affiliate to enter the
telecommunications  market.  Moreover,  because Sempra's  business plan is still
being developed, other types of issues are raised. ORA -has recently begun

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         3 Sempra's  petition was filed in the  Commission's San Diego office on
         September  29,  1999,  but  the  filing  fee was  not  received  in the
         Commission's  San Francisco Docket Office until October 1, 1999. In any
         event,  Sempra's petition is being included for consideration  with all
         other third-quarter petitions

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discovery with Sempra. Although Sempra so fax has been cooperative, ORA
nonetheless foresees the need for further discovery.

         Sempra's  petition  does not provide any details  about the  particular
facilities,  currently owned by SoCalGas and SDG&E, which Sempra may use for its
telecommunications  services.  Nor does the petition address the manner in which
it will use them.  There is no mention of whether  assets will be transferred to
Sempra or whether  assets  will be leased by Sempra.  Sempra  does not  describe
plans for filing  applications  pursuant to Section 851 of the Public  Utilities
Code to request  authority to transfer or encumber  regulated  assets.  Sempra's
plans need to be described in more specific terms before the  Commission  grants
the  CPCN.  Specifically,  the  plans  for its  Section  851  application  and a
description of assets to be used need to be detailed. The blending of energy and
telecommunications services that potentially would be provided in part by assets
owned by regulated monopolies within the holding company elevates the importance
of Sempra's  facilities-based  entry.  Such entry may or may not be accomplished
through  utilization of fiber or other  facilities  owned by SoCalGas and SDG&E.
The petition does not indicate  which  specific  facilities,  rights of ways, or
other assets of its  regulated  affiliates  Sempra  intends to use.  Rather,  it
simply  indicates  that it  plans to  provide  its  telecommunications  services
"through a  combination  of its own  facilities  and  facilities to be leased or
obtained from a variety of existing  carries and other entities." (See Petition,
p. 3.)

         ORA does no t oppose  Sempra's  petition  but  files  its  comments  to
highlight key issues which the Commission should evaluate prior to granting 'the
CPCN.  Sempra  has  the  opportunity  to  provide  additional  support  for  its
application.  ORA  believes  the most  important  question  is how to apply  the
telecommunications affiliate transaction rules to Sempra.

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         Sempra  filed a reply to ORA's  response  on November  29,1999.  Sempra
echoes ORA's call for prompt  consideration  of its petition,  and agrees that a
prehearing  conference,  scheduled at the Commission's earliest convenience,  is
appropriate for establishing relevant issues.  -Sempra also agrees with ORA that
hearings should not be necessary.

         We agree that the questions identified by ORA should be resolved before
any facilities-based  authority is granted to Sempra. We shall limit the granted
authority  to resale at this time and defer the  remainder  of the petition to a
subsequent decision.

III. Section 311 (g)(2) - Uncontested/decision grants relief requested

         This is an uncontested  matter in which the decision  grants the relief
requested.  Accordingly,  pursuant to Pub- Util. Code ss.311(g)(2) the otherwise
applicable 30-day period for public review and comment is being waived.

Findings of Fact

         1.  Fourteen  petitioners  filed  requests in the third quarter of 1999
seeking  a  CPCN,  to  provide   competitive  local  exchange  services  in  the
territories  of  various   California   incumbent  local  exchange  carriers  as
identified in Appendix B.

         2. ORA filed a response to the petition of Sempra raising various
issues concerning Sempra's planned utilization of facilities owned by its
regulated energy utility affiliates

         3. In response to the Negative  Declaration  sent for public comment on
July 30,  1999,  covering  Petitions  141-153,  various  public  agencies  filed
comments challenging the Negative Declaration.

         4. In D.99-10-025, the Commission found that further inquiry was
required to resolve the CEQA issues raised by the filed comments of public
agencies

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before full facilities-based authority could be considered for pending CLC
petitions.

         5. Prior  Commission  decisions  authorized  com  petition in providing
local  exchange  telecommunications  service  within the service  territories of
Pacific, GTEC, RTC, and CTC for carriers meeting specified criteria.

         6. The petitioners listed in Appendix B have demonstrated that each Or'
them has a minimum of $100,000 in cash or cash equivalent  reasonably liquid and
readily avail-able to meet its start-up expenses.

         7. Petitioners' technical experience is demonstrated by supporting
documentation which provides summary biographies of key management personnel

         8. By D.97-06-107, petitioners or applicants for CLC authority are
exempt from Rule 18~b).

         9. Exemption from the provisions of Pub. Util. Codess.ss.816-830 has
been granted to other nondonminant carriers- (See, e.g., D-86-10-007
and D.88-12-076.)

         10. The transfer or encumbrance of property of nondominant carriers has
been exempted from the requirements of Pub. Util. Codess.851 whenever such
transfer or encumbrance serves to secure debt(See D.85-11-044.)

         11.  The  provision  of local  exchange  telecommunications  service by
resale  or by  the  utilization  of  existing  unbundled  loops  and  electronic
equipment located within or on existing  buildings and structures would not have
a significant effect on the environment.

Conclusions of Law

1. Each of the  petitioners  listed in Appendix B has the  financial  ability to
provide the proposed  services,  and has made a reasonable  showing of technical
expertise in telecommunications.

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         2. Public  convenience  and  necessity  require the  competitive  local
exchange services to be offered by petitioners subject to the terms, conditions,
and restrictions set forth below.

         3.  Petitioners  must each  submit a  complete  draft of their  initial
tariff that complies with the  requirements  established by the Commission  that
corrects any  deficiencies  identified by the TD and including  prohibitions  on
unreasonable deposit requirements.

         4. Each petitioner is subject to:

a.                The current 0.5097'0 surcharge applicable to all intrastate
services except for those excluded by D.94-09-065, as modified by D-95-02-050,
to fund the Universal Lifeline Telephone Service (Pub. Util. Codess. 879;
Resolution T-16366, December 2,1999);

b. The current 0.192% surcharge applicable to all intrastate services Except for
those  excluded  by  D.94-09-065,  as  modified  by  D.95-02-050,  to  fund  the
California  Relay Service and  Communications  Devices Fund (Pub. Util- Code ss.
2881; Resolution T-16234; D.98-12-073, December 17, 1998);

c.           The user fee provided in Pub. Util. Codess.ss.431-435, which is
0.11% of gross intrastate revenue for the 1999-2000 fiscal year
(Resolution M-4796);

d.            The current surcharge applicable to all intrastate services except
for those excluded by D.94-09-065, as modified by D.95-02-050, to fund the
California High Cost Fund-A (Pub. Util. Codess.1739.30; D.96-10-066, pp. 3-4,
Aspp. B, Rule I.C; Resolution T-16242 at 0.0% for 1999, December 3,1998);

e.           The current 2.4% surcharge applicable to all intrastate services
except for those excluded by D.94-09-065, as modified by D.95-02-050, to fund
the California High Cost Fund-B, Resolution T-16365, December 2, 1999); and,

f.             The current 0.05% surcharge applicable to all intrastate services
except for those excluded by D-94-09-065, as modified by D.95-02-050, to fund

                                                        -12

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the California Teleconnect Fund (D.96-1.0-066, p. 88, App. B, Rule S.G,
Resolution T-16165; August 1, 1998).

         5. In the case of Sempra,  its grant of authority  should be limited to
resale only at this time pending  further  inquiry  into issues  raised in ORA's
comments concerning facilities-based authority.

         6. Petitioners should be exempted from Rule 18(b).

         7. Petitioners should be exempted from Pub. Util. Code $$ 816-830.

         8. Petitioners should be exempted from Pub. Util. Code 851 when the
transfer or encumbrance serves to Secure debt.

         9. A Negative Declaration covering Full facilities-based  authority for
the  petitioners  in  Appendix  B  cannot  be  finalized  at  this  time  due to
outstanding  challenges  previously  made by public  agencies which remain to be
resolved

         10. Any petitioner seeking full  facilities-based  authority must agree
to, and is required to, carry out any specific  mitigation  measures  adopted in
any  subsequent  environmental  review  of  petitioner's  project  conducted  in
compliance with CEQA.

11. The Petitioners  should be granted CPCNs for interexchange  set-vice and for
local exchange service utilizing resale oil other carriers' service or unbundled
network  elements  a-rid  equipment  installed  within  existing  structures  as
identified in Appendix B subject to the terms,  conditions and  restrictions set
forth  in the  order  below.  Petitioners'  request  for  full  facilities-based
authority  should be deferred  pending  resolution of outstanding  environmental
issues  identified in connection  with the alleged  deficiencies in the previous
Negative Declaration issued on July 30, 1999

         12. Any CLC which does not comply with our rules for local exchange
competition adopted in R.95-04-043 shall be Subject to sanctions including, but
not limited to, revocation of its CLC certificate

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                              0 R D E R

IT IS ORDERED that.

         1. A certificate of public  convenience and necessity (CPCN),  shall be
granted to each of the  petitioners  listed  -in  Appendix  B  (petitioners)  to
provide competitive local exchange  telecommunications services utilizing resale
of  other  carriers'  services  or  unbundled  network  elements  and  equipment
installed  solely  within or on existing  buildings  and  structures  within the
service  territories  as noted in  Appendix B and,  as a  statewide  nondominant
interexchange  carrier (NDIEC), as noted in Appendix B, contingent on compliance
with the terms identified in this order. Authorization for full facilities-based
authority involving  construction work will require the filing a new application
in conformance  with California  Environmental  Quality Act (CEQA)  requirements
pursuant to comments on the Negative Declaration.

         2. Each petitioner  shall file a written  acceptance of the certificate
granted in this proceeding prior to commencing service.

3. The  commission's  Division (TD) shall notify  Petitioners of any outstanding
tariff deficiencies within 10 days of this Order.

         4. a. The  petitioners  are  authorized  to file with  this  Commission
tariff Schedules  (-incorporating  corrections of TD staff) for the provision of
competitive local exchange, intraLATA (Local Access--, Transport Area) toll, and
intrastate  interLATA  services,  as applicable.  The  petitioners may not offer
these services until tariffs are on file, and until any applicable  deficiencies
as identified by the commission's TD Division have been corrected.  Petitioners'
initial  filing  shall  be made in  accordance  with  General  Order  (GO)  96-A
excluding Sections IV, V,

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and VI, and shall be effective not less than one day after approval by the
Telecommunications Division.

         b.  The  petitioners  -are  competitive  local  carriers  (CLCs).   The
effectiveness  of each of their future  tariffs is subject to the  schedules set
forth in Decision Q.) 95-07-054, Appendix A, 4E:

         A. "E. CLCs shall be subject to the following tariff and
contract-filing revision and service-pricing standards:

"(1) Uniform rate reductions for existing tariff services shall become effective
on five (5) working days' notice to the Commission. Customer notification is not
required for rate decreases.

"(2) Uniform major rate  increases  for existing  tariff  services  shall become
effective on thirty (30) days' notice to the  Commission  and shall require bill
inserts or a message on the bill itself, or first class mail notice to customers
at least 30 days in advance of the pending rate-increase.

"(3)  Uniform  minor rate  increases,  as defined in  D-95-07-054,  shall become
effective  on not less than five (5)  working  days'  notice to the  Commission.
Customer notification is not required for such minor rate increases.

"(4)  Advice,  letter  filing for new services and for all other types of tariff
revisions,  except changes in text not affecting rates or relocations of text in
the tariff  schedules,  shall become effective on forty (40) days' notice to the
Commission

"(5) Advice letter  filings  revising the text or location of material  which do
not result in an increase in any rate or charge  shall  become  effective on not
less than five (5) days' notice to the Commission.

"(6)  Contracts  shall  be  subject  to  GO  106-A  rules  for  NDIECs,   except
interconnection contracts.

"(7)  CLCs shall file tariffs in- accordance with Public Utilities (Pub. Util.)
 Code Section 876.

<PAGE>

         5. The petitioners may deviate from the following provisions of
GO 96-A:

(a)  Paragraph  ll.C.(1)(b),  which  requires  Consecutive  sheet  numbering and
prohibits the reuse of sheet numbers, and (b) paragraph II.C.(4), which requires
that a  "separate  a sheet or series of sheets,  should be used for each  rule."
Tariff filings in incorporate  these deviations shall be subject to the approval
of the Commission's  Telecommunications  Division.  Tariff filings shall reflect
all fees and  surcharges  to which  petitioners  are  subject,  as  described in
Conclusion of Law 3. Petitioners are also exempt from GO 96-A section  III.G.(1)
and (2),  which  require  service of advice  letters on  competing  and adjacent
utilities, unless such utilities have specifically requested such service.

         6. Each petitioner shall file as part of its initial tariffs, after the
effective  date of this order  a-rid  consistent  with  Ordering  Paragraph  I a
service area map.

         7. Prior to  initiating  service,  each  Petitioner  shall  provide the
Commission's Consumer Services Division with the petitioner's designated contact
persons for  purposes of resolving  consumer  complaints  and the  corresponding
telephone  numbers.  This information  shall be updated if the name or telephone
numbers change or at least annually.

         8. Where  applicable,  each petitioner  shall notify this Commission in
writing  of the date local  exchange  service  is first  rendered  to the public
within five days service  begins.  The same procedure  shall be followed for the
authorized intraLATA and interLATA services, where applicable.

         9. Each petitioner shall keep it's books and records in accordance with
generally accepted accounting principles.

         10.  Petitioners,  shall each file an annual report, in compliance with
GO 104-A on a calendar-year basis using the  information-request  form developed
by the Commission Staff and contained in Appendix A.

<PAGE>

         11. Petitioners shall ensure that its employees comply with the
provisions of Pub. Util. Code ~281219.5 regarding solicitation of customers.
         12. The certificate  granted and the authority- to render service under
the rates charges,  and rules  authorized will expire if not exercised within 12
months after the effective date of this order.

         13. The corporate  identification number assigned to each Petitioner as
set forth in  Append;  3, shall be  include"'  in the  caption  of all  original
filings  with this  Commission,  and in the titles of other  pleadings  filed in
existing cases

         14. Within 60 days of the effective date of this order, each Petitioner
shall comply with Pub. Util. Codess.708, Employee Identification Cards,
reflecting its> authority, and notify the Director of the Telecommunication
Division in writing of its compliance.

         15. Each petitioner is exempted from the provisions of Pub. Util.
Codess.ss.816-830.

         16. Each petitioner is exempted from Pub. Until. Codess.851 for the
transfer or encumbrance of property, whenever such transfer or encumbrance
serves to secure debt.

         17.  If any  petitioner  is 90 days or more  late in  filing  an annual
report  or  in  remitting   the  fees  listed  in   Conclusion  of  Law  4,  the
Telecommunications   Division  shall  Prepare  for  Commission  consideration  a
resolution  that revokes that  petitioner's  CPCN,  unless that  petitioner  has
received written permission from the  telecommunication a Division file or remit
late.

         18.  It  can  be  seen  with   certainty   that  no  material   adverse
environmental  impacts will result from the limited CPCN authority granted under
this order.

         19. Any additional  environmental  review found necessary under the for
approval of hill  facilities-based  CPCN authority for any of the petitioners in
Appendix B shall be finalized and resolved by subsequent order.

<PAGE>

        20. Petitioners shall comply with the consumer protection rules set
forth in Appendix B of D.9-5-07-054.

        21.  Petitioners  snail  comply  with the  commission's  rules for local
exchange  competition  in  California  that  are  set  forth  in  Appendix  C of
D.95-12-056,  including the requirement that CLCs shall place customer  deposits
in protected, segregated,  Interest-bearing escrow account subject to Commission
oversight.

      22. Petitioners shall comply with the customer  notification and education
rules adopted in D.96-04-049 regarding the passage of calling party number.

      23. Petitioners' respective motions for a limited protective order keeping
designated  documents  containing  financial  and  other  operating  information
confidential  are granted.  Such  documents will remain under seal for two years
from  today  unless  a  petitioner  makes a  timely  request  for  extension  of
confidential  treatment of its  documents by filing a separate  motion with good
cause shown.

      24.  The petitions listed in Appendix 6 are granted only as -set forth
above.

This order is effective today.

Dated December 16, 1999, in Sap, Francisco, California.

                                     RICHARD A. BILAS
                                            President
                                     HENRY A DUQUE
                                     JOSIAH L. NEEPER
                                     JOEL Z. HYATT
                                     CARL W. WOOD
                                        Commissioners

<PAGE>

                                APPENDIX A
                               Page 1 of 2

TO:      ALL COMPETITIVE LOCAL CARRIERS AND INTEREXHCHANGE TELEPHONE UTILITIES

Article 5 of the Public Utilities Code grants authority to the California Public
Utilities  Commission  to require all public u doing  business in  California to
file  reports  as  specified  by the  Commission  on the  utilities'  California
operations.

A specific  annual report form has not yet been  prescribed  for the  California
interexchange telephone utilities. However, you are hereby directed to submit an
original and two copies of the  information  requested in  Attachment A no later
than March 31st of the year  following  the  calendar  year for which the annual
report is submitted.

Address your report to:

California Public Utilities Commission
Auditing and Compliance Branch, Room 3251
503 Van Ness Avenue

San Francisco, CA 94102-3298

Failure to file this information on time may result in a penalty as provided for
in 2107 and 2108 of the Public Utilities Code.

If you have any question concerning this matter, please call (415) 703-1961

<PAGE>

                                APPENDIX A
                               Page 2 of 2

Information Requested of California Competitive Local Carriers and Interexchange
Telephone Utilities.

To be filed with the California Public Utilities Commission 505 Van Ness Avenue,
Room 32-51, San Francisco,  CA 94102-3298,  no later than March 31st of the year
following the calendar year for which the annual report is submitted.

1.             Exact legal name and U # of reporting utility

2.            Address.

I             Name,  title,  address,  and telephone  number of the person to be
              contacted concerning the reported information.

4.            Name and title of the office having custody of the general books
              of account and the address of the office where such books
              are kept.

5.            Type of organization (e.g., corporation, partnership, sole
              proprietorship, etc.)

If incorporated, specify:
              a. Date of filing articles of incorporation with the Secretary of
              State.
              b. State in which incorporated.

6.            Commission decision number granting operating authority and- the
              date of that decision.

7.            Date operations were begun.

8.       Description of other business activities in which the utility is
              engaged.

9.       A list of all affiliated companies and their relationship to the
             utility.

State if affiliate is a:
             a. Regulated public utility.
             b. Publicly held corporation.

10.           Balance sheet as of December 31st of the year for which
information is submitted

11.           Income statement for California operations for the calendar year
for which information is submitted.

(END OF APPENDIX A),

<PAGE>

                                APPENDIX B
                USING OF PETITIONERS GRANTED CPCN AUTHORITY

                                                Requested Authority
                                                      Granted

                                         Statewide
                                                  Local Exchange

                                         Inter/Intra.
Name of Petitioner                       Petition Utility Facilities-based LATA

                                       No.   U-No.     Resale (1)
1 - ACCESS 21 CORPORATION              154   U-6226-C  X           X
2. Local Gateway Exchange (2)                155       U-6192-C    X
3. GDN Communications Inc. 156               U-6274-C  X           X          X
4. Prism California Operations, LLC                    157         U-6244-C   X
5. Avista Communications of                            X           X
                             J.        158   U-6275-C  X
            California

6. Adelphia Business Solutions               159       U-6248-C    X          X
            Operations
7.          Sentre Communications, LLC 160    U-6260-C X           X          X
8. DPI-TELECONNECT, L.L.C.             161    U-6276-C X           X          X
9.          UNITED CALLING NETWORK     162    U-6277-C X           X          X
            INC.

10. Premiere Network Services, Inc.    163    U-6278-C X           X          X
11. Competitive Conununications,       164    U-6279-C-X           X          X
            Inc.
12, US Optics, Inc.                    16.6   U-6280-C X           X          X
13. Tycho Networks, Inc.               167    U-6281-C X           X          X
14. Sempra Communications (3)          168    U-6282-C             X          X

(1) Local exchange  authority granted herein is limited to local exchange resale
service and local exchange  service  utilizing  unbundled  network  elements and
equipment located solely within existing structures. Unless otherwise indicated,
the  authorized  local  exchange  service  territory of each CLC  petitioner  is
limited to the ILEC service territories of Pacific,  GTEC, RTC, and CTC. Any CLC
seeking an expanded facilities-based  authority involving construction must file
a new application and comply with CEQA.

(2) Local Gateway was granted resale and Inter/intraLATA authority in
D.99-07-036.

(3) Alt facilities-based authority for Sempra is being deferred at this time,
as discussed in II.B. of the decision.

                      (END OF APPENDIX B)

<PAGE>Exhibit # 10.18

                      Convertible Note - T. Baba & addendum

<PAGE>

                          COMPETITIVE COMMUNICATIONS INC.
                            A California Corporation

                                   Addendum I

                                To A Secured Note

The Secured Notes ("Note") dated 2/5/98 and 3/24/98 for the aggregate  amount of
$39,083.67   (inclusive  of  all  accrued  interest  through  11/30/99)  between
COMPETITIVE  COMMUNICATIONS,  INC., now a wholly owned subsidiary of COMPETITIVE
COMPANIES, INC., a Nevada. Corporation (hereinafter referred to as "Maker"), and
T. Baba & Co.  (hereinafter  referred  to as  "Holder")  is hereby  modified  as
follows.

Maker hereby offers and Holder hereby accepts to receive for full  consideration
and payment for the Note, common stock shares of COMPETITIVE COMPANIES,  INC. at
the  price  of  $1.00  per  share.  This is in lieu of all  other  consideration
specified in the Note  including the 40% discount price off the opening price of
the stock.

In such case that the  opening  price per share is less than  $3.00,  Maker will
issue additional shares of common stock to Holder for the difference between the
opening price per share (if less than $3.00) and $3.00.  (As an example:  If the
current  Note is  $10,000.00.  Maker will upon  receipt of this signed  Addendum
immediately issue 10,000 shares to Holder. If the opening price is $2.00,  Maker
will issue Holder an additional 10,000 shares to bring the total value of shares
(at $1.00 per share value) to $3.00 per share.)

It is further agreed that should  COMPETITIVE  COMPANIES,  INC. fail to file its
application  with the SEC to become a publicly  trading company prior to January
1, 1999,  Holder,  at Holder's  sole  discretion,  may nullify this Addendum and
revert to the  original  terms of the Note by  notifying  Maker in writing on or
before January 31, 2000. Should there arise any discrepancy between the Note and
this Addendum, this Addendum shall take precedence.

IN WITNESS  WHEREOF,  the Maker and Holder have  executed this Addendum 1 to the
aforementioned Secured Note on the date first written below.

HOLDER                                        MAKER
T. BABA & CO.                                 COMPETITIVE COMPANIES, INC. &
                                              COMPETITIVE COMMUNICATIONS INC.

-----------------------                       ----------------------------------
(Signature)                                        (Signature)

THOMAS SERA / T. BAGA__& CO__________________David Kline
(Print Name)

_PARTNER__________________________________                     Chairman & CEO
(Title)

11-29-99
(Date)

<PAGE>

<PAGE>

                            COMPETITIVE COMMUNICATIONS INC.

                                    Modification. to
                              "A Five Year Secured Note"
                                Subscription Documents

                             Dated December 19, 1997

Warranties and Guarantees  Attached to CCI Secured Note,  page 5,  paragraphs 3a
and 3b are modified as follows as of March 27, 1998, and supercedes and replaces
the  Modifications   dated  February  12,  1998,  and  February  1,  1998.  This
modification  is  retroactive  and offered to all  investors who invested in the
subject Note prior to and after the effective date.

Said paragraphs are replaced in whole by the following:

3. As an additional option and in the case of CCI becoming a public entity or if
CCI is sold to a public company paragraphs 3a and 3b shall apply.  Otherwise, If
CCI is sold to private investors or a private company (non-public  entity):  (1)
Note Holders who receive  monthly  interest  payments will receive an additional
10% of the amount of their note upon  repayment,  or (ii) Note Holders who defer
(accrue)  monthly interest will receive an additional 20% of the amount of their
note upon repayment.

a.       Convert  the Note  plus  accrued  interest  (if  deferment  of  accrued
         interest is  requested  in writing by Holder and agreed to by Maker) to
         an amount of common stock in the Corporation that will be determined as
         follows:

                Amount Discounted off the Offering or Sell Price

<TABLE>
<CAPTION>

Amount of Not

                                    If Monthly Interest                    If Monthly Interest
                                                     Payments Are Taken                     Is Deferred (Accrued)
<S>                                                  <C>                                    <C>

$ 10,000 - S49,999.99                                               10%                                     25%
S50,000 - S99,999.99-                                               20%                                     35%
$100,000.00 - S249,999.99                                           30%                                     45%
$250,000.00 - $499,999.99                                           40%                                     55%
$500,000.00 and over                                                50%                                     65%
</TABLE>

b.       Buy at the above price an additional number of shares, but not more
         than the like number realized by exercising this Option 3.

COMPETITIVE COMMUNICATIONS INC.             INVESTOR(S)

---------------------------------           ------------------------------------
Signature                                                     Signature(s)

_DAVID KLINE, CEO_________________          _THOMAS SERA/T. BABA & CO.      __
Printed Name, Title                                      Printed Name(s)

_____MAY  6, 1998___________________        MAY 7, 1998_________________________
Date                                                          Date(s)

<PAGE>

                           COMPETITIVE COMMUNICATIONS INC.

                                 Modification to

                           "A Five Year Secured Note'

                             Subscription Documents

                             Dated December 19, 1997

Warranties and Guarantees  Attached to CCI Secured Note,  page 5,  paragraphs 3a
and 3b are modified as follows as of February 12, 1998,  and  supersedes  and re
places the Modification dated February 1, 1998. This modification is retroactive
and offered to all  investors  who  invested  in the  subject  Note prior to the
effective date.

Said paragraphs are replaced in whole by the following:

3.        As an additional option and only in the case of CCI becoming a public
          entity.

a.       Convert  the Note  plus  accrued  interest  (if  deferment  of  accrued
         interest is  requested  in writing by Holder and agreed to by Maker) to
         an amount of common stock in the Corporation that will be determined as
         follows:

                                Amount Discounted

                             off the Offering Price

<TABLE>
<CAPTION>

                                                             If Monthly Interest           If Monthly Interest
Amount of Note                                               Payments Are Taken          Is Deferred (Accrued)

<S>                                                          <C>                         <C>

$10,000 - $49,999.99                                                10%                                    25%
$50,000 - $99,999-99                                                20%                                    35%
$100,000.00 - $249,999.99                                           30%                                    45%
$250,000.00 - $499,999.99                                           40%                                    55%
$500,000.00 and over                                                50%                                    65%

</TABLE>

b.       Buy at the above price an additional number of shares, but not more
         than the like number realized by exercising this Option 3.

COMPETITIVE COMMUNICATIONS INC.             INVESTOR(S)

---------------------------------           ------------------------------------
Signature                                                     Signature(s)

_DAVID KILNE, CEO ______________            THOMAS SERA / T BABA & CO__________
Printed Name, Title                                           Printed Name(s)

_MARCH _24, 1998_________________           MARCH 25, 1998______________________
Date                                                          Date(s)

<PAGE>

COMPETITIVE COMMUNICATIONS INC.

LARRY HALSTEAD
INVESTMENT CONSULTANT

April 3, 1998

Mr. Thomas Sera
T. BABA & Co.
3889 Foothill Road
Carpinteria, CA 93013-3014

Dear Mr. Sera:

Per  your  request,  we are  changing  your  First  Secured  Note to  defer  and
accumulate  the interest for the higher  discount off the offering  price.  This
will defer the monthly  interest  payments  per the terms of the Secured Note as
changed by the February 12, 1998, modification.

Please,  initial on page 4 and 5 as indicated and return the original to me. Mr.
Kline has already  initialed.  I have dated the  initialing as March 6, 1998, so
all interest  accumulated from the last payment will be included Men calculating
the total  interest.  Also,  I have  enclosed a copy of page 4 with Mr.  Kline's
initials for you to keep with your records.

Enclosed  is an  AIRBORNE  EXPRESS  envelope  for the  return  of the  initialed
original Subscription Documents for the First Secured Note.

Should you have any questions, please, do not hesitate to call me.

Sincerely,

Encl

<PAGE>

                            COMPETITIVE COMMUNICATIONS INC.

                Secured Note Subscription Agreement Questionnaire

Name(s) as appears on the 5 Year Secured Note: T BABA & CO

The undersigned hereby declares as follows:

I My overall  commitment to investments which are not readily  marketable is not
disproportionate to my net worth and my participation in the Note will not cause
such overall commitments to become excessive.

2. 1 have such knowledge and experience in financial and business matters that I
am capable of intelligently  evaluating the merits and risks of participating in
the purchase of a secured note bearing interest at 15% on an annualized basis.

3. 1 have read the agreement and terms of the Note in its entirety,  and
therefore, I understand  its contents and agree to be bound by all of its terms.

4. 1 understand  this Note is not a security,  and therefore is not afforded the
protection  under the  Securities Act of 1933 or the Securities Act of 1934 (the
"Acts") or certain state  securities  laws, and I do not require the protections
afforded under the Acts.

5. 1 have the net worth and income  indicated in the  following  questionnaire,
and as such, I am deemed to be an accredited investor.

6. As part of the  consideration of this agreement,  it is expressly agreed that
the proper  court for  litigation  on any matter  arising out of this  agreement
shall  be in  Riverside  County,  California,  and  that  all  matters  shall be
controlled by the laws of the State of California

By  executing  where  indicated  below,  I have  become a  secured  note  holder
according to the terms of theNote which I have read and understood.

Total Amount to be Remitted 10,000.00         Social Security Number 95-623-0954

Print Name(s) (Individual/Joint Tenant(if applicable):

THOMAS SERA                                _____________________________________

Signature(s):

---------------------------------------    -------------------------------------

Address:   3883 FOOTHILL ROAD

City, State, Zip:  CARPINTERIA, CA  93013-3014                 Date:  3-23-98
Home Phone:  805-684-3312                                      Work Phone:  SAME

<PAGE>

                            COMPETITIVE COMMUNICATIONS INC.
                     Secured Note Subscription Agreement Questionnaire

                                    Continued

In order to assure that your Account Executive clearly and accurately  portrayed
the purchase  opportunity in the Note to you, CCI requires  everyone to complete
and return this information survey.

Were you told that the assets of the Company secure the Note?

X  YES                                     NO

Do you  understand  that CCI intends to either sell the Company or capitalize it
by means of an IPO on or around  December  31, 200 1, at which time the Note may
be called?

X  YES                                     NO

Do you  understand  that if you call the Note as the  result of an IPO,  you may
convert to common stock of the Corporation?  Were the oral  representations  and
statements made by your Account Executive  consistent with the written materials
provided to you?

X YES                                      NO

If "NO" to any of the above, please explain-

Who was your Account Executive?  JERALD L WOODS

Investor Name if Corporate or                 Investor (If Individual or
other Entity                                  Joint Tenants)

T BABA & CO______________________________     __________________________________
Print Name                                    Print Name(s)

PARTNERSHIP______________________________     __________________________________
Type Entity                                   Signature

-------------------------------------------   ----------------------------------
Signature                                     Signature of Joint Tenant

3-23-98______________________________________ __________________________________
Date                                          Date

Approximate Annual Gross Income (including spouse's):  100,000.00

Approximate Net Worth (excluding home, furnishings and
automobiles): _______$ 150,000 ________S250,000_______-S350,000

X_______$500,000 _______________ S 1,000,000 or more

Prior Investments:
Number of years of investing in:  40  Common Stock  30   Bonds______Commodities
  40   Mutual Funds  30

Limited Partnerships  40  General Partnerships ____ Other (specify):____________

Please give a brief description of your business knowledge and experience (use a
separate sheet if you need additional space):

Please indicate the frequency of your investments: X often         occasionally
                                                     seldom        never

<PAGE>

                            COMPETITIVE COMMUNICATIONS INC.
                            A California Corporation

                            A Five Year Secured Note

Amount:  10,000.00
Date:  March 23, 1998

FOR VALUE RECEIVED, COMPETITIVE COMMUNICATIONS INC. (hereinafter referred to as,
"Maker"),   promises   to   pay  to  T   BABA   &   CO.,   an   individual/joint
tenants/corporation  residing in CARPINTERIA (hereinafter the "Holder"), the sum
of  $10,000.00  together with  interest  thereon-at  the rate of 1.25% per month
aggregating to not more than 15% per annum, from the date hereof.

All principal  and interest due hereunder  shall be payable and shall be paid in
lawful  money of the United  States of  America  to the Holder at 3889  FOOTHILL
ROAD, CARPINTERIA,  CA 9313-3014 or at such other place as the Holder shall have
designated to Maker in writing.

Each payment  shall be credited  first on the interest due and the  remainder on
principal; interest shall thereupon cease upon the principal so credited. Should
interest not be paid, it shall thereafter bear like interest,  as the principal,
but such unpaid interest so compounded shall not exceed an amount equal to is le
interest on the unpaid balance at the maximum permitted by law.

Unless Holder otherwise agrees by initialing  below,  Maker is obligated to make
interest only  payments  which shall be made on a monthly basis on the tenth day
of the month commencing thirty calendar days after the receipt of good funds and
continue for sixty  months or until the Note is paid off or is called  according
to provisions contained herein.

At the completion of sixty months or upon the Note's being called, all remaining
principal and interest are due.  Should default of more than thirty days be made
in the payment of any  installment of interest when due and if applicable,  then
at the  option of the  Holder of this  Note,  the  whole  sum of  principal  and
interest shall become immediately due and payable.

This is a full recourse Note. This Note may not be changed orally, but only with
an agreement in writing and signed by the party to be charged therewith.

The attached  Warranties  and  Guarantees are an explicit part of this Note, and
are included in the terms and conditions hereof.

Holder  requests  that the interest  payments  not be paid,  and that the unpaid
interest shall become a part of the principal,  and therefore bear like interest
as the principal.

COMPETITIVE COMMUNICATIONS INC.             INVESTOR(S)

---------------------------------           ------------------------------------
Signature                                                     Signature(s)

_DAVID KILNE, CEO ______________            THOMAS SERA / T BABA & CO__________
Printed Name, Title                                           Printed Name(s)

_MARCH _24, 1998_________________           MARCH 23, 1998______________________
Date                                                          Date(s)

<PAGE>

               Warranties and Guarantees Attached to CCI Secured Note

These  Warranties  and  Guarantees  are an  explicit  part of the Note,  and are
included in the terms and conditions thereof.

CCI  wan-ants  that it  intends,  on a best  efforts  basis,  to either sell the
Corporation or become a public entity on or around December 31, 2001. If at that
time the Note remains  open,  the note holder may exercise one of the  following
options:

1.       Call the Note. at face value plus accrued interest (if applicable); or
2.       Keep the Note to maturity (60) months; or
3.       As an additional option and only in the case of CCI becoming a public
         entity.

         a.       Convert the Note plus  accrued  interest (if  deferment of
                  accrued  interest is requested in writing by Holder and
                  agreed to by Maker) to an amount of common stock in the
                  Corporation  that will be determined by dividing the Note
                  by the offering price, and

         b.       Buy at the  offering  price an  additional  number of shares,
                  but not more  than the like  number realized  by exercising
                  this Option 3.

<PAGE>

                       COMPETITIVE COMMUNICATIONS INC.

               Secured Note Subscription Agreement Questionnaire

Name(s) as appears on the 5 Year Secured Note: T BABA & CO.

The undersigned hereby declares as follows:

I My overall  commitment to investments which are not readily  marketable is not
disproportionate to my net worth and my participation in the Note will not cause
such overall commitments to become excessive.

2. 1 have such knowledge and experience in financial and business matters that I
am capable of intelligently  evaluating the merits and risks of participating in
the purchase of a secured note bearing interest at 15% on an annualized basis.

3. 1 have read the agreement and terms of the Note in its entirety,  and
therefore,  I understand its contents and agree to be bound by all of its terms.

4. 1 understand  this Note is not a security,  and therefore is not afforded the
protection  under the  Securities Act of 1933 or the Securities Act of 1934 (the
"Acts") or certain state  securities  laws, and I do not require the protections
afforded under the Acts.

5. 1 have the net worth and income  indicated in the  following  questionnaire,
and as such, I am deemed to be an accredited investor.

6. As part of the  consideration of this agreement,  it is expressly agreed that
the proper  court for  litigation  on any matter  arising out of this  agreement
shall  be in  Riverside  County,  California,  and  that  all  matters  shall be
controlled by the laws of the State of California

By  executing  where  indicated  below,  I have  become a  secured  note  holder
according to the terms of theNote which I have read and understood.

Total Amount to be Remitted     20,000.00     Social Security Number 95-623-0954

Print Name(s) (Individual/Joint Tenant(if applicable):

THOMAS SERA                                 ____________________________________

Signature(s):

----------------------------------          ------------------------------------

Address:   3889 FOOTHILL ROAD

City, State, Zip:  CARPINTERIA, CA  93013-3014                Date:  1-29-98
Home Phone:  805-684-3312                                     Work Phone:  SAME

<PAGE>

                       COMPETITIVE COMMUNICATIONS INC.
                  Secured Note Subscription Agreement Questionnaire

                                    Continued

In order to assure that your Account Executive clearly and accurately  portrayed
the purchase  opportunity in the Note to you, CCI requires  everyone to complete
and return this information survey.

Were you told that the assets of the Company secure the Note?

X  YES                                     NO

Do you  understand  that CCI intends to either sell the Company or capitalize it
by means of an IPO on or around  December  31, 200 1, at which time the Note may
be called?

X  YES                                     NO

Do you  understand  that if you call the Note as the  result of an IPO,  you may
convert to common stock of the Corporation?  Were the oral  representations  and
statements made by your Account Executive  consistent with the written materials
provided to you?

X YES                                      NO

If "NO" to any of the above, please explain-

Who was your Account Executive?  JERALD L WOODS

Investor Name if Corporate or                     Investor (If Individual or
other Entity                                      Joint Tenants)
T BABA & CO______________________________         ______________________________
Print Name                                        Print Name(s)

PARTNERSHIP______________________________         ______________________________
Type Entity                                       Signature

-------------------------------------------       ------------------------------
Signature                                         Signature of Joint Tenant

1-29-98______________________________________     ______________________________
Date                                              Date

Approximate Annual Gross Income (including spouse's):  100,000.00

Approximate Net Worth (excluding home, furnishings and
automobiles): _______$ 150,000 ________S250,000_______-S350,000

X_______$500,000 _______________ S 1,000,000 or more

Prior Investments:
Number of years of investing in:  40  Common Stock  30   Bonds______Commodities
  40   Mutual Funds  30

Limited Partnerships  40  General Partnerships ____ Other (specify):____________

Please give a brief description of your business knowledge and experience (use a
separate sheet if you need additional space):

Please indicate the frequency of your investments: X often          occasionally
                                                     seldom         never

<PAGE>

                            COMPETITIVE COMMUNICATIONS INC.
                            A California Corporation

                               A Five Year Secured Note

Amount:  20,000.00
Date:  January 29, 1998

FOR VALUE RECEIVED, COMPETITIVE COMMUNICATIONS INC. (hereinafter referred to as,
"Maker"),   promises   to   pay  to  T   BABA   &   CO.,   an   individual/joint
tenants/corporation  residing in CARPINTERIA (hereinafter the "Holder"), the sum
of  $2,000.00  together  with  interest  thereon-at  the rate of 1.25% per month
aggregating to not more than 15% per annum, from the date hereof.

All principal  and interest due hereunder  shall be payable and shall be paid in
lawful  money of the United  States of  America  to the Holder at 3889  FOOTHILL
ROAD, CARPINTERIA,  CA 9313-3014 or at such other place as the Holder shall have
designated to Maker in writing.

Each payment  shall be credited  first on the interest due and the  remainder on
principal; interest shall thereupon cease upon the principal so credited. Should
interest not be paid, it shall thereafter bear like interest,  as the principal,
but such unpaid  interest so compounded  shall not exceed an amount equal to the
interest on the unpaid balance at the maximum permitted by law.

Unless Holder otherwise agrees by initialing  below,  Maker is obligated to make
interest only  payments  which shall be made on a monthly basis on the tenth day
of the month commencing thirty calendar days after the receipt of good funds and
continue for sixty  months or until the Note is paid off or is called  according
to provisions contained herein.

At the completion of sixty months or upon the Note's being called, all remaining
principal and interest are due.  Should default of more than thirty days be made
in the payment of any  installment of interest when due and if applicable,  then
at the  option of the  Holder of this  Note,  the  whole  sum of  principal  and
interest shall become immediately due and payable.

This is a full recourse Note. This Note may not be changed orally, but only with
an agreement in writing and signed by the party to be charged therewith.

The attached  Warranties  and  Guarantees are an explicit part of this Note, and
are included in the terms and conditions hereof.

Holder  requests  that the interest  payments  not be paid,  and that the unpaid
interest shall become a part of the principal,  and therefore bear like interest
as the principal.

COMPETITIVE COMMUNICATIONS INC.             INVESTOR(S)

---------------------------------           ------------------------------------
Signature                                                     Signature(s)

_DAVID KILNE, CEO ______________            THOMAS SERA / T BABA & CO__________
Printed Name, Title                                           Printed Name(s)

_February 5, 1998_________________          January 29, 1998____________________
Date                                                          Date(s)

<PAGE>

               Warranties and Guarantees Attached to CCI Secured Note

These  Warranties  and  Guarantees  are an  explicit  part of the Note,  and are
included in the terms and conditions thereof.

CCI  wan-ants  that it  intends,  on a best  efforts  basis,  to either sell the
Corporation or become a public entity on or around December 31, 2001. If at that
time the Note remains  open,  the note holder may exercise one of the  following
options:

1.       Call the Note. at face value plus accrued interest (if applicable); or
2.       Keep the Note to maturity (60) months; or
3.       As an additional option and only in the case of CCI becoming a public
         entity.

         a.       Convert the Note plus  accrued  interest (if  deferment of
                  accrued  interest is requested in writing by Holder and
                  agreed to by Maker) to an amount of common stock in the
                  Corporation  that will be determined by dividing the Note
                  by the offering price, and

         b.       Buy at the  offering  price an  additional  number  of shares,
                  but not more  than the like  number  realized  by exercising
                  this Option 3.

<PAGE>

                         COMPETITIVE COMMUNICATIONS INC.

                            A California Corporation

                            A FIVE YEAR SECURED NOTE

                             SUBSCRIPTION DOCUMENTS

                                December 19, 1997

                     DO NOT REPRODUCE-STRICTLY CONFIDENTIAL

The information  set forth herein is  confidential  and is intended for those to
whom it is transmitted by the Company.  Any  reproduction  of this material,  in
whole or part, or the  divulgence of any of its contents,  without prior written
consent of the Company is  prohibited.  Neither this  document,  nor any portion
thereof,  is  intended  as an offer to sell,  or to  solicit an offer to buy any
security;  nor is it a prospectus for a proposed  corporation.  It is solely for
information purposes. No other purpose or use whatsoever is implied or intended.

<PAGE>

                        INSTRUCTIONS ON HOW TO SUBSCRIBE

                  PLEASE COMPLETE TWO ORIGINALS OF THE FOLLOWING:

1. COMPLETE and SIGN the Secured Note Subscription Agreement Questionnaire.

2. COMPLETE and SIGN where designated the Five Year Secured Note. (Upon receipt,
   the Company will compete its portion and return an original to you.)

3. INITIAL by all investors on pages which have an "Initial IT ere" space at the
   bottom comer.

4. MAKE your check payable in minimum increments of Ten Thousand Dollars
   ($10,000) as follows:

          COMPETITIVE COMMUNICATIONS INC. - SECURED NOTE

5. RETURN  check and TWO  complete  sets of the  Subscription  Documents  (which
includes the Secured Note Subscription Agreement and the Five Year Secured Note)
via express courier to the following address:

                        COMPETITIVE COMMUNICATIONS INC.
                             ATTN: David Kline, CEO

                         11731 Sterling Avenue, Suite F

                               Riverside, CA 92503

6.       Qualified IRA
If        necessary,  contact your Account Executive for IRA documents.  The IRA
          administrator  will send out the necessary  documents  directly to you
          with the appropriate instructions.

7.        Wire Transfer

          If  necessary,  contact  your  Account  Executive  for  wire  transfer
instructions.

<PAGE>

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