10. Appeal of Presiding Officer's Decision
On July 13, 2001, CSD appealed the Presiding Officer's Decision, contending that PFL should be fined or otherwise sanctioned. Indeed, CSD asserts that, regardless of the evidence at hearing, the Commission in its order "required" that sanctions be imposed. That assertion is simply incorrect. The Commission instructed the Presiding Officer to determine "whether this Commission should levy fines or other sanctions" and to "investigate whether and the extent to which fines or other sanctions should be imposed." (D.00-01-022, at 12; emphasis added.) The Assigned Commissioner's Scoping Memo was in accord with this instruction.
For the reasons set forth at length in the decision, the Presiding Officer found that mitigating circumstances weighed against additional sanctions. The Commission's stop-work order in July 1999 shut the project down for six months, at a cost that the evidence suggests was $1 million. The Commission's Interim Decision on January 6, 2000, launched an investigation and hearing that placed PFL's project at risk for 18 months. We take official notice that on June 26, 2001, PFL filed for bankruptcy in the United States and in its home country of Canada. We believe that further sanctions now are inappropriate.
CSD cites three transportation decisions in which carriers were fined or suspended despite claims in two of the cases that Commission staff gave them bad advice.2 In each of those cases, however, the carrier was found to have violated well-established rules and policies of the Commission. By contrast, even CSD concedes that the case before us now is one of first impression.3 The evidence is uncontradicted that when PFL sought operating authority in the Spring of 1998, the Commission had no procedure in place for CEQA review of a facilities-based carrier like PFL; it was unknown whether the "batch" process for CEQA review of CLCs could be applied to PFL; and a "paperwork" solution to CEQA review appeared both reasonable and imminent at that time and under those circumstances. This is not a case of what CSD calls "a badly-informed staff member" giving wrong advice.4 This is a case of conscientious staff members working hard with the applicant to fit a square peg into a system that, at the time, dealt only with round pegs.
Alerted in part by its problems with the PFL filing, the Commission itself has recognized the tension between its policy of encouraging competition among telephone companies and the Commission's obligations under CEQA. The Commission has made numerous changes in its CEQA practices in the past three years. Last year, we opened a rulemaking (R.00-02-003) to further explore and improve our CEQA practices in the telecommunications field.
Under Rule 8.2, the purpose of an appeal of a Presiding Officer's Decision "is to alert the Commission to a potential error, so that the error may be corrected expeditiously by the Commission." CSD in its appeal has not shown legal error in the decision. It repeats the same arguments that were dealt with above. It speculates that a failure to impose sanctions is "bad policy" and will send the wrong "signal" to other carriers.5 Such speculation can be given little weight in the appeal process and would be more at home in the pending rulemaking.
CSD has not shown legal error in the Presiding Officer's Decision, nor has it justified imposition of additional sanctions. The appeal is denied.
1. PFL on June 17, 1998, filed for a certificate of public convenience and necessity to operate in California as an NDIEC.
2. PFL planned construction of a fiber optic project between Portland and Sacramento.
3. PFL filed under a simplified registration process that in 1998 was used for carriers filing only as NDIECs.
4. PFL informed the Commission of its plans for installation of a fiber optic system at the time of its registration.
5. PFL was told by Commission staff to use the registration process to register as an NDIEC.
6. The great majority of NDIEC applicants intend to use the facilities of other carriers and are not themselves facilities-based.
7. In its registration, PFL identified itself as a facilities-based NDIEC.
8. Operating authority was granted to PFL in D.98-07-057 on July 20, 1998.
9. PFL did not as part of the registration process seek Commission review for compliance with the Commission's CEQA rules.
10. PFL was advised by Commission staff that the Commission had no procedure in place at that time for CEQA review of NDIEC applications.
11. In October 1998, PFL retained the services of Foster Wheeler Environmental Corporation to establish environmental rules for the planned construction.
12. PFL reviewed its environmental plans and its construction plans with the Commission's CEQA staff.
13. On December 2, 1998, PFL began trenching and installing its fiber optic cable in Yolo County.
14. During construction, PFL called and met with Commission staff on numerous occasions to seek CEQA review by the Commission.
15. The Commission's CEQA staff told PFL to continue the environmental safeguards that PFL had put in place for construction.
16. In April 1999, PFL was told to prepare a Proponent's Environmental Assessment as the first step in formal CEQA review by the Commission.
17. In May 1999, the Commission retained Entrix to conduct an initial study of the PFL project under CEQA guidelines.
18. On June 17, 1999, a project review meeting was conducted at the Commission, and PFL was advised to file a petition to modify its earlier operating authority.
19. On June 25, 1999, the California Department of Fish and Game urged the Commission to issue a stop-work order on the PFL project until CEQA review was complete.
20. A stop-work order was issued by the Commission's Executive Director on July 6, 1999.
21. On August 11, 1999, PFL applied for modification of its operating authority to include compliance with CEQA.
22. The Commission's CEQA staff issued a Final Mitigated Negative Declaration and Initial Study for the PFL project on November 24, 1999.
23. The Commission in D.00-01-022, issued on January 6, 2000, granted modification of applicant's operating authority and lifted the stop-work order.
24. The Commission kept this proceeding open to investigate whether sanctions should be assessed against PFL for starting construction prior to CEQA review.
25. CSD conducted an investigation and recommended that sanctions should be imposed.
26. Five days of hearings were conducted January 8-12, 2001, and final briefs were filed on March 26, 2001.
27. CSD's appeal of the Presiding Officer's Decision does not show legal error or justify imposition of additional sanctions.
1. The evidence does not support a finding that PFL violated Rule 1, Rule 18 or D.97-06-107 in using the registration process instead of an application for its initial filing.
2. PFL began construction of its fiber optic conduit project at a time when it knew or should have known that Commission approval under CEQA was required and had not yet been obtained.
3. PFL violated Rule 17.1 and Pub. Util. Code § 702 in starting construction of its project prior to receiving approval from the Commission under CEQA.
4. Uncorrected environmental damage from the construction has not been shown.
5. Factors in mitigation include PFL's cooperation with Commission staff, its efforts to comply with the substantive requirements of CEQA, and the Commission's own uncertainty in 1998 in dealing with CEQA requirements for an NDIEC applicant.
6. Based on the record as a whole, assessment of sanctions against PFL for the violations noted in Conclusion of Law 3 is not warranted.
7. The scope of this proceeding is set forth in the Scoping Memo dated March 9, 2000; ALJ Walker is the designated as the presiding officer.
8. CSD's appeal of the Presiding Officer's Decision should be denied.
IT IS ORDERED that:
1. The recommendation of Consumer Services Division (CSD) that sanctions be imposed on Pacific Fiber Link, L.L.C. is denied.
2. CSD's appeal of the Presiding Officer's Decision is denied.
3. Application 99-08-021 is closed.
This order is effective today.
Dated , at San Francisco, California.
2 Investigation of Uri Darvish (1997) 70 CPUC2d 558; Investigation of Paradise Movers (1999) D.99-06-090; Airporter, Inc., dba Santa Rosa Airporter (2000) D.00-07-051. 3 CSD Concurrent Opening Brief, February 23, 2001, at 2. 4 CSD Appeal, at 5. 5 CSD Appeal, at 3, 6.
