4. Discussion
In this case, we must evaluate whether the Settlement Agreement between BRW and CPSD meets Commission requirements for approval. Under Rule 12.1(d), the Commission will not approve stipulations or settlements, whether contested or uncontested, unless the stipulation or settlement is:
· Reasonable in light of the whole record,
· Consistent with the law, and
· In the public interest.
We find that the Settlement Agreement meets the criteria for approval under Rule 12.1(d), as follows:
4.1. The Settlement is Reasonable in Light of the Whole Record.
Under D.00-09-034, a proposed settlement is reasonable if it saves the Commission significant expenses and use of its resources, when compared to the risk, expense, complexity, and likely duration of further proceedings.4 The parties' evaluation should carry material weight in the Commission's review of a settlement.5
Here, the proposed Settlement will save the Commission the further expense and commitment of resources involved in litigating this case to a Commission decision and possibly through the rehearing process. Since BRW has admitted the violations and has agreed that the Settlement Agreement is reasonable, continued litigation of this case is not necessary to resolve disputed issues or to protect the rights of the parties to a full and fair hearing.
Further, the terms of the Settlement Agreement that require BRW to file required reports and pay the fees and surcharges owed for 2008, to file required reports and pay required fees in the future, to pay back fees and surcharges with interest, to pay a reasonable fine to the State General Fund based on the violations, and to file a new application for registration which discloses this Commission's previous revocation of BRW's CPCN and BRW's settlement with the Florida Public Service Commission are reasonable steps to remedy BRW's noncompliance with Commission and legal requirements in the past and to deter future violations. BRW has already complied with the requirement to pay its fees and surcharges owed to the Commission to date for 2008.
The amount of the penalty agreed to in the Settlement Agreement is also reasonable in light of the number and seriousness of the violations committed by BRW. Under Section 405, the Commission may impose a penalty of up to 25% of fees and surcharges owed by a telecommunications carrier, if the carrier is in default of these obligations for 30 days or longer.6 Here, since BRW failed to pay required fees and surcharges to the Commission for approximately eight years, it is reasonable for the Commission to impose the maximum permitted penalty for these violations. The remainder of the $20,000 penalty is reasonable based on BRW's unlawful operations in this state without a CPCN for approximately five years and its violation of Rule 1.1 in this application, and is legally permissible under Section 2107 and 2108.7 BRW is subject to a penalty for its violation of Rule 1.1, even if the violation was inadvertent, as claimed by BRW.8 We note that in a prior decision, the Commission imposed a fine of $10,000 per violation solely for Rule 1.1 violations, which the utility claimed were not intentional.9 The amount of the penalty imposed by the Settlement Agreement is substantial enough to deter future violations by BRW, but, with the permitted installment payments and the ability of BRW to avoid paying interest by making timely payments, is reasonable for a relatively small company, such as BRW.
However, we do not approve CPSD's proposal to withdraw its protest upon Commission approval of the Settlement Agreement, because we believe that CPSD's protest should remain part of the record of this proceeding. We note that upon the approval of this Settlement Agreement, CPSD is no longer objecting to BRW's application for registration, so long as BRW is in full compliance with the Settlement Agreement. BRW does not object to CPSD's protest remaining on file in the proceeding as part of the record.
The remaining provisions of the Settlement Agreement are also consistent with the record as a whole.
4.2. The Settlement is Reasonable in Light of the Whole Record.
The Agreement is consistent with the applicable law because it enforces state laws and Commission Rules and orders that were violated by BRW and imposes reasonable penalties consistent with Sections 405, 2107, and 2108.
BRW has admitted the following violations of state laws, as well Commission Rules and orders:
· Section 1001, which requires telecommunications companies operating in California to obtain and maintain a CPCN,10 and
· Section 702,11 by failing to pay surcharges and fees and to file reports with the Commission, as required by D.01-01-058, and by failing to disclose this Commission's prior revocation of its CPCN and the imposition of sanctions by the Florida Public Service Commission in this application, as required by Commission Rule 1.1.
The penalty imposed on BRW by the Settlement Agreement is authorized by Sections 405 and 2107, as explained above.
Moreover, the Settlement Agreement appears not to violate any other provision of state or federal law.
4.3 The Settlement is in the Public Interest
The Settlement Agreement is in the public interest, because it will resolve the issues raised by the parties without the need for extensive, time-consuming, and costly Commission proceedings and litigation, remedies the violations committed by BRW, and will promote the future compliance of BRW with Commission and legal requirements. BRW's payment of all fees and surcharges owed to the Commission will also benefit the public by increasing the funds available for the Commission's public purpose programs.
Further, the Settlement Agreement's requirement that BRW pay a penalty for its violation of Rule 1.1 and file a new application for registration, which acknowledges the prior revocation of its California CPCN and the sanctions imposed by the Florida Public Service Commission, helps to protect the integrity of the Commission's registration process for telecommunications carriers and thereby benefits the public. The Settlement Agreement also protects the public interest by providing that the Commission may consider this order in considering any future application by BRW for registration or for a CPCN.
In addition to the above criteria applicable to all settlements, we note that the Settlement Agreement fairly represents the affected interests, since BRW represents the interests of its shareholders, and CPSD represents the interests of BRW ratepayers and advocates for all ratepayers in this state and the public. Finally, we note the Settlement Agreement includes sufficient information regarding the rights and obligations of the parties and is adequately clear for the parties and the Commission to understand its terms and for the parties to carry out the agreement.
4 D.00-09-034, 2000 CPUC LEXIS 694, at p. 29.
5 Id. at p. 31.
6 Since BRW owes the Commission $41,264.80 in back penalties and surcharges for the years 2000-2007, a 25% penalty would equal $10,316.20. The Commission could impose an additional penalty for late payment of the fees and surcharges owed for 2008.
7 Section 2107 states: § 2107. Penalty for offenses not otherwise provided.
Any public utility which violates or fails to comply with any provision of the Constitution of this state or of this part, or which fails or neglects to comply with any part or provision of any order, decision, decree, rule, direction, demand, or requirement of the commission, in a case in which a penalty has not otherwise been provided, is subject to a penalty of not less than five hundred dollars ($500), nor more than twenty thousand dollars ($20,000) for each offense.
Further, under Section 2108, each day on which a violation continues to exist may be considered a separate violation.
8 See D.01-08-019.
9 Id.
10 Under Section 1013, the Commission may in some cases exempt telecommunications carriers from the requirement of obtaining a CPCN or may permit telecommunications carriers to undergo registration with the Commission, as an alternative to obtaining a CPCN.
11 Section 702. Compliance with commission's orders and directions:
Every public utility shall obey and comply with every order, decision, direction, or rule made or prescribed by the commission in the matters specified in this part, or any other matter in any way relating to or affecting its business as a public utility, and shall do everything necessary or proper to secure compliance therewith by all of its officers, agents, and employees.
