3. Background
In response to data requests submitted by CPSD following filing of the application, Skynet stated that it carried almost exclusively international traffic, very little domestic interstate traffic, and no intrastate traffic. In its first motion for leave to withdraw the application, Skynet stated again that it carries no California intrastate traffic and asserted that the application was improvidently filed because the Commission has no jurisdiction over interstate calls. Later, in its September 8, 2008 amended motion for leave to withdraw the application, Skynet stated that based on data provided by an underlying carrier, it had determined that a small amount of its traffic is intrastate traffic.
3.1. Position of Skynet
Skynet explains that following a review of data provided by its underlying carrier, it learned that a minuscule amount of its traffic (about 1/20 of 1% or .0005) is between points in California. According to Skynet, neither Skynet nor its marketing agents (1) market to any significant degree outside the international market or (2) set rates remotely intended to foster penetration of the California intrastate market. Skynet presumes that the de minimus amount of revenue derived from intrastate calls each month (about $125 out of $250,000) is generated by visitors to the state who simply find use of an international phonecard a matter of convenience. Skynet says it may be able to block those few calls although to do so will result in some inconvenience and confusion to a card user (who may well not be a resident of the state). Skynet believes it makes little sense to bear the expense of maintaining state certification in California for $125/month in revenues.
Accordingly, Skynet reaffirms its request to withdraw its application. Skynet believes that, if the issue arose in another context, the Commission would conclude that the receipt of revenues from intrastate calling that are so infinitesimal both in dollars ($125/month) and as a percentage of traffic (1/20 of 1% or .0005) does not constitute activity governed by § 1001. Skynet argues that such a determination would plainly be one that "bear(s) a reasonable relation to statutory purposes and language," citing Southern California Edison v. Peevey, 31 Cal. 4th 786 (2003); Southern California Edison v. Public Utilities Comm, 117 Cal. App. 4th 1039 (2004); Greyhound Lines, Inc. v. Public Utilities Comm, 68 Cal.2d 406, 410-411 (1968).
3.2. Position of CPSD
In its September 17, 2008 response to Skynet's motions, CPSD argues that withdrawal of the application is inappropriate because: (1) Skynet has
violated Rule 1.12 of the Commission's Rules of Practice and Procedure by providing false information to the Commission; and (2) Skynet is operating as a phonecard provider, if not a telecommunications carrier, in California and therefore is required to be registered by this Commission.
Further, CPSD states that the preliminary results of its investigation have established that: (1) Skynet's principal, and probably sole, line of business in California is phonecards; (2) notwithstanding Skynet's disavowal of intrastate service in communications with this Commission, at least some Skynet phonecards are specifically marketed as providing intrastate and other domestic services; and, (3) the Commission Staff was able to make intrastate calls on all but one of 10 Skynet cards tested.
CPSD recommends that Skynet be fined for a Rule 1.1 violation. CPSD points out that although Skynet ultimately corrected the record, it persisted in asserting that it carried no intrastate traffic, when its own distributor's website suggested otherwise.
2 Rule 1.1 states in relevant part:
Any person who signs a pleading or . . . transacts business with the Commission,
by such act . . . agrees to . . . never . . . mislead the Commission or its staff by an
artifice or false statement of fact or law.
