8. All Public Utility Telephone Corporations,
Including TracFone, Must Pay the User Fees Set
Forth in Pub. Util. Code §§ 401-410, 431-435
Public utility telephone corporations are obligated to pay the user fees set forth in §§ 401-410, 431-435. The statutory law provides, in pertinent part, "The Legislature further finds and declares that funding the commission by means of a reasonable fee imposed upon each common carrier and business related thereto, each public utility that the commission regulates, ...is in the public interest."65
The statutory law contains many other references to confirm this conclusion. For example, § 431 provides that the user fee is "to be paid by every" telephone corporation and other public utility providing service directly to customers.66 Commission decisions and resolutions lend further support to this conclusion.
The Wireless Registration Letter dated July 18, 1997, which authorized TracFone67 to resell cellular service to the public in California states that TracFone "shall comply with PUC Code Section 401, et seq., ...."68 The July 18, 1997 letter further provides that TracFone's failure to remit the fees referenced in the letter, including the §§ 401 et seq. user fees, may result in revocation of TracFone's authority to provide resold wireless services within California.69
In presenting its argument in support of finding TracFone's services subject to §§ 401 et seq., CPSD states that "California law makes it clear that all telephone corporations must pay a small percentage of their intrastate revenue as a user fee to finance the Commission's oversight of all utilities."70 Indeed, TracFone seems to concede that the obligation for an entity to pay the user fee may follow from a determination of that entity's status as a public utility. TracFone states "...the obligation to pay the user fee, unlike the obligation to pay the PPP surcharges, more closely follows from an entity's public utility status."71 Nevertheless, TracFone also suggests that it is unclear whether the user fees apply to its services because, according to TracFone, it does not fit within the definition of a public utility.72
In response to TracFone's suggestion that its obligation to pay is unclear, we revisit our discussion above and the findings in the ALJ's January 26, 2011 ruling. As our discussion above indicates, we find TracFone a public utility telephone corporation in California. In reviewing the application of §§ 401 et seq. to TracFone and its prepaid wireless services, we are guided by a principal rule of statutory construction, that in examining and interpreting the words of a statute, courts are guided by the plain meaning of the statutory language and courts will adopt a literal interpretation unless it is repugnant to the obvious purpose of the statute.73 The plain language of the statute, as quoted above, applies to all telephone corporations. We have found that TracFone operates as a public utility telephone corporation within California. No exceptions to the application of the user fees to public utilities are found in the statute. Furthermore, no exceptions are found in Commission decisions.
Accordingly, we find that TracFone, as a public utility telephone corporation, is obligated to remit the user fees set forth in §§ 401-410, 431-435 and that TracFone is in violation of state law for failure to pay the user fees set forth in §§ 401-410, 431-435.
65 § 401.
66 § 431.
67 Exhibit CPSD-1, Att. A, July 18, 1997 Wireless Registration Letter states that "Topp Telecom, Inc. may begin to resell cellular service to the public in California."
68 CPSD Exhibit-1, Att. A, July 18, 1997 Wireless Registration Letter.
69 Id.
70 CPSD opening brief at 11.
71 TracFone opening brief at 57.
72 Exhibit TR-111 (Pollak) 16:13-15. "In the early years of the company, TracFone did pay user fees to the Commission. In 2003, as part of an overall review of our tax programs, TracFone determined that it should not have paid these fees because it was not a California public utility."
73 &_butType=3&_butStat=2&_butNum=1&_butInline=1&_butinfo=&_fmtstr=FULL&docnum=1&_startdoc=1&wchp=dGLbVzk-zSkAb&_md5=a2d939b12004f96fdbfb4cf5fdfd35fa" target="_top">Lungren v. Deukmejian (1988) 45 Cal.3d 727, 735.
