Lynch Ruling Determining the Category, Scope, Schedule, Need for Hearing, and The Principal Hearing Officer for the Proceeding

II. Background

On September 6, 2001, the Commission issued Order Instituting Rulemaking 01-09-001 and Order Instituting Investigation 01-09-002 (collectively, the "Order"). The purpose of the proceeding established by the Order is to assess and revise the New Regulatory Framework (NRF) for Pacific Bell Telephone Company (Pacific) and Verizon California Incorporated (Verizon). Appendix A of the Order described the scope of the proceeding, and Appendix B provided a preliminary schedule for the proceeding.

The Order divided the proceeding into three Phases. Phase 1 will address factual issues related to the audit of Verizon that was conducted by the Office of Ratepayer Advocates (ORA). Phase 2 will address factual issues related to (1) the audit of Pacific that is currently being conducted by the Telecommunications Division (TD), and (2) the quality of service provided by Pacific and Verizon. Phase 3 will review and revise, as necessary, those elements of NRF identified in Appendix A of the Order. The Order stated that the exact scope of each Phase will be determined in one or more rulings issued by the assigned Commissioner.

The Order preliminarily determined that this is a "ratesetting" proceeding, and that evidentiary hearings are needed. The Order stated that the time, place, and scope of the evidentiary hearings will be set in one or more rulings issued by the assigned Commissioner or the assigned Administrative Law Judge (ALJ). The Order also stated that because of the number and complexity of the issues in this proceeding, the assigned Commissioner and the assigned ALJ may revise the schedule as the proceeding progresses.

The Order directed parties to submit opening comments regarding Phase 1 issues no later than 30 days after the effective date of the Order, and reply comments no later than 45 days after the effective date of the Order. Parties were directed to include in their opening comments any objections they had regarding (1) the categorization of this proceeding as "ratesetting," (2) the preliminary determination that evidentiary hearings are needed, and (3) the scope and schedule for the proceeding. Any parties that believed evidentiary hearings were necessary for Phase 1 issues were directed to file motions requesting hearings no later than 50 days after the effective date of the Order.

Opening comments regarding the previously described matters were filed by ORA, Pacific, The Utility Reform Network (TURN), and Verizon. Reply comments were filed by these same parties and by WorldCom, Inc. ORA, TURN, and Verizon filed motions requesting evidentiary hearings regarding Phase 1 issues. TURN and Verizon filed replies to the motions.