IV. Settlement

On March 8, 2002, CSD and Applicant filed a motion for adoption of a settlement. The settlement is included as Attachment A to this decision. Pursuant to the settlement, Applicant admits that it did the following:

· Applicant sold USRC to Alliance without prior Commission authorization.

· USRC failed to provide USRC customers with notice of the sale of USRC.

· Applicant purchased Choctaw without prior Commission authorization.

· Applicant sold Choctaw to Reconex without prior Commission authorization.

Applicant will pay a fine of $20,000 for each of the above violations, for a total of $80,000. In addition, Applicant will pay restitution of $25 to each of 101 former long distance customers of USRC who alleged unauthorized long distance charges by USRC.

Rule 51.1 (e) of the Commission's Rules of Practice and Procedure says that the Commission will not approve settlements unless they are reasonable in light of the whole record, consistent with law, and in the public interest.

Applicant and CSD jointly sponsor the unopposed settlement. While not determinative of the reasonableness of the settlement, this fact lends support to such a conclusion.

CSD's charge in this proceeding is to protect the interests of ratepayers. Applicant represents its own interests. Therefore, the parties to the settlement are fairly reflective of the affected interests. This fact supports an inference that the settlement is reasonable.

The record contains the results of CSD's investigation as well as information provided by Applicant. The settlement is the result of negotiations between CSD and Applicant, and represents their final recommendation to the Commission. The settlement contains an admission by Applicant to four violations, and Applicant's agreement to pay an $80,000 penalty and $25 restitution to 101 customers. In addition, Applicant has already paid $80,277.88 in restitution to customers, and $9,141.23 in undeliverable restitution to the General fund. Considering these factors, the lack of opposition to the settlement, and the fact that all necessary interests were at the bargaining table, we find that the settlement is reasonable in light of the whole record.

Regarding the lawfulness of the settlement, Applicant and CSD represent that no term of the settlement contravenes any statute or Commission decision. We agree, and find that the settlement is consistent with law.

The settlement provides for the payment of a penalty for four admitted violations, and provides restitution to customers. The penalties send an important message to Applicant and other telecommunications carriers that we will not tolerate such violations. The record contains a full explanation of the parties' positions, and a full explanation of their obligations under the settlement. As a result, the settlement contains sufficient information for the Commission to carry out its future regulatory obligations with respect to the parties and their interests. Therefore, the settlement is in the public interest, and we will approve it.

Rule 51.8 of the Commission's Rules of Practice and Procedure (Rule 51.8) provides that its adoption of a settlement does not establish a precedent unless the Commission expressly provides otherwise. The settlement states that it does not establish a precedent, and we confirm that to be the case.