I. PROCEEDINGS THAT OCCURRED PRIOR TO THIS ORDER

In November, 2005, the Utility Consumers' Action Network (UCAN) filed this complaint case against SBC Communications Inc., which currently does business in California as AT&T California ("AT&T"). The complaint alleged that AT&T had not complied with Public Utilities Code¹ section 2883, which contains, among other things, the following mandate: "All local telephone corporations ... shall, to the extent permitted by existing technology and facilities, provide every existing and newly installed residential telephone connection with access to `911' emergency service regardless of whether an account has been established." The service required by section 2883, referred to here as "warm line" service, allows a party to call 911 from a residential telephone even though no other services are being provided at that time.² (E.g., Decision at p. 22, quoting AT&T's tariff, Schedule Cal PUC No. A.2.2.1.2.I..)

UCAN asserted that AT&T's conduct did not comply with section 2883 because the carrier had placed a 180-day limit on the amount of time that warm line service was provided at residences where billed telephone service had been discontinued, even though section 2883, subdivision (a), does not allow carriers to place limits on the amount of time that warm line service is available. (Post-Hearing Brief in Support of UCAN's Complaint, August 24, 2006 ("UCAN's Opening Brief") at pp. 7-8, 37.) UCAN further alleged that AT&T did not provide any warm line service at newly constructed residences. (UCAN's Opening Brief at p. 23.) Instead, AT&T waited until a customer ordered billed telephone service before it provided any service at newly constructed residences. UCAN also alleged that AT&T's practices contravened section 2883, subdivision (c), which requires carriers to inform customers of the availability of warm line service. (UCAN's Opening Brief at pp. 48-51.) The complaint sought penalties in the amount of $62 million, asked for reparations to AT&T's customers, and for disgorgement of $191 million in corporate profits allegedly earned as a result of AT&T's warm line policy. (UCAN's Opening Brief at p. 57.)

AT&T contested UCAN's assertion that its conduct contravened section 2883. AT&T did not dispute that it followed a policy of discontinuing warm line service after approximately 180 days. Nor did AT&T disagree with the claim that it failed to provide any warm line service at newly constructed residences until a customer ordered billed service. (E.g., Opening Brief of Pacific Bell Telephone Company, filed August 25, 2006 ("AT&T's Opening Brief") at pp. 1, 3.) There was also little significant dispute about the types of notice AT&T provided regarding warm line service. (Decision at p. 22.) Instead of contesting the underlying facts, AT&T mostly asserted that its conduct was permissible, under certain readings of section 2883. Thus the main questions in this proceeding concerned not whether AT&T had engaged in certain conduct, but whether that conduct complied with section 2883's requirements.

AT&T asserted that its policy of discontinuing warm line service was permissible under section 2883 because of a short supply of telephone numbers. According to AT&T, numbering concerns allowed it to terminate warm line service after approximately 180 days because "technology and facilities" did not exist to provide service indefinitely, and because providing warm line service might interfere with its ability to serve to other subscribers. (AT&T's Opening Brief at pp. 9-11.)

AT&T further claimed that it was not required to provide warm line service at newly constructed residences because the statute was written in such a way that there was no time period during which that requirement came into force. According to AT&T, a "telephone connection" did not exist at a new residence until a customer ordered billed service, and section 2883 only requires warm line service to be provided once a telephone connection is established. (AT&T's Opening Brief, at pp. 4-6.) Finally, AT&T claimed that the language of the statute did not require it to provide any notice to customers over and above the notice it was providing. (E.g., Appeal of Presiding Officer's Decision, November 9, 2007, at pp. 21-24.)

The early phases of the proceedings in this case were coordinated with C.05-11-012, a substantially similar complaint UCAN had filed against Cox Communications ("Cox"), but the two proceedings were not formally consolidated. After the parties in these two proceedings contested motions to dismiss and completed discovery, UCAN and Cox reached an agreement allowing for the dismissal of C.05-11-012, which was authorized by the Commission in D.07-07-020.³ Before the commencement of scheduled hearings in this proceeding, both AT&T and UCAN stipulated that the merits of this case would be submitted to the Presiding Officer solely on the basis of prepared testimony, exhibits, and briefing. (Decision at p. 4.)

After establishing the extent of the record and receiving briefs and replies, the Presiding Officer reviewed the record and issued a Presiding Officer's Decision, or "POD," finding all aspects of AT&T's warm line policy violated section 2883. The POD imposed a penalty of approximately $1.7 million based on the amount of time AT&T had kept its policy in place, and required AT&T to conform its warm line practices to those required by the statute. (Decision at p. 58.) The POD did not require reparations or disgorgement, but it did conclude that AT&T should not be able to shield itself from liability in any civil court proceedings resulting from its actions. (Decision at pp. 34-35.)

Pursuant to section 1701.2, subdivision (a), AT&T made an appeal of the POD to the full Commission. The POD was modified to address the issues contained in AT&T's appeal. These modifications further explained the Decision's approach but did not alter the relief adopted in the POD. We adopted the modified POD as our decision in this case, D.08-08-017.

AT&T filed a timely application for rehearing of the Decision to which UCAN did not respond. The rehearing application disputes many of the Decision's findings, asserting that these findings were "unlawful and not supported by the record." (Rehg. App. at pp. 11, 11-32.) The rehearing application also claims that certain of the Presiding Officer's determinations on the admissibility of evidence constitute prejudicial error. (Rehg. App. at pp. 36-39.) Additionally, the rehearing outlines a number of legal principles that it claims prevent the Commission from ruling against AT&T, including: burden of proof, statutes of limitation, due process, and an alleged "safe harbor" that AT&T claims insulates it from liability. (E.g., Rehg. App. at pp. 3-6, 35, 39-40.)

Although these claims of error are numerous and wide-ranging, they generally fall into one of two categories.⁴ The first category contains disputes about the record, and the inferences we drew from the record. In the second category are claims that rely on legal theories and principles to assert that we are required to reach conclusions that favor AT&T's position, or are legally barred from penalizing AT&T for violating section 2883. These two categories of claims are discussed below, beginning with the rehearing application's evidentiary claims.

¹ In this document section references are to the Public Utilities Code, unless otherwise specified.

² Warm line service is also referred to as "warm dialtone" and "quick dialtone" ("QDT"). For convenience, the term "warm line service" is used here, although other terms appear in quotations. Warm line service is contrasted with "billed service," which residential customers order and pay for.

³ In D.07-07-020 the Commission also determined that AT&T and Cox had made impermissible ex parte contacts with Commission decisionmakers and imposed a fine of $40,000 each against AT&T and Cox.

⁴ AT&T's rehearing application itself categorizes its claims as involving either: (i) a lack of evidentiary support or inconsistencies within the decision or with previous decisions, or (ii) "purely legal" issues. (Rehg. App. at p. 2.)