Discussion

We find several of AT&T California's arguments to be persuasive. The New Regulatory Framework had been in existence for a couple of years by the time the spin-off had occurred. Consequently, whether or not AT&T California's New Regulatory Framework start-up rates contained any pension costs should not be an open question at this point. Further, if the risk of cost recovery and changes in pension costs were borne by shareholders, and not by customers, the auditors' concern and recommendation has grown moot. Today, the public policy considerations have deepened. After more than 15 years, evidence very likely may have become lost or destroyed; memories have continued to fade, and witnesses able to address the 1994 audit report are apt to be unavailable.

We find DRA's assertions that the Commission: (1) retained jurisdiction over PacTel's successors to enforce the conditions of the spin-off; and thus,
(2) should require the production of further information necessary to resolve the pension question to be thinly supported by legal authority and impractical. Moreover, DRA's comments focused on and reiterated its 1994 recommendations and comments.

It appears unlikely that a strong case could be made for the funding required for a new consultant to study any further issues in this proceeding. DRA has indicated that even if a new study were undertaken, its active participation would principally be through filing comments. Further, DRA's comments neither addressed nor rebutted the contention that AT&T California's shareholders bore the risk of cost recovery and changes in pension costs. The comments also were silent on the practical and public policy difficulties of pursuing an investigation of this nature so many years after the fact.

It appears well past the time to close this aged proceeding. We find the auditors' concern and recommendation to have grown moot. Moreover, we have not been presented with a strong argument why we should subject this matter to further uncertainty and challenge more than 15 years after the audit report was submitted. Accordingly, Investigation (I.) 93-02-028 is closed.