Assignment of Proceeding

Michael R. Peevey is the assigned Commissioner and Jacqueline A. Reed is the assigned ALJ in this proceeding.

Findings of Fact

1. In D.93-11-011, the Commission ordered a compliance report of the Telesis separation transaction by an independent auditor.

2. Telesis selected the independent auditing firm of Frederick & Warinner with the Commission's approval.

3. The Communications Division administered the contract.

4. Frederick & Warinner submitted its report on November 7, 1994.

5. No further action took place following submission of the report.

6. On June 3, 2004, the assigned ALJ issued a ruling soliciting comments on concluding the instant proceeding.

7. AT&T California and DRA filed comments on June 17, 2004; no other party filed comments.

8. The PacTel Corporation companies that were the subject of the spin-off have since merged with other entities or ceased to exist.

9. The extent of the Commission's regulation of wireless companies has changed since 1994.

10. 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.

Conclusions of Law

1. Reopening any portion of the spin-off transaction at this juncture not only would present practical difficulties, but also would conflict with the regulatory certainty the Commission sought to achieve when it ordered the audit to be undertaken immediately and be completed as soon as reasonably possible.

2. Whether or not AT&T California's New Regulatory Framework start-up rates contained any pension costs should not be an open question.

3. If the risk of cost recovery and changes in pension costs were borne by shareholders, and not by customers, the auditors' concern and
1994 recommendation has grown moot.

4. There are pragmatic and public policy difficulties in pursuing an investigation of this nature so many years after the fact.

5. I.93-02-028 should be closed.

ORDER

IT IS ORDERED that Investigation 93-02-028 is closed.

This order is effective today.

Dated January 21, 2010, at San Francisco, California.

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