3. Additional Financial Information
Based on allegations from CSD, the Commission issued this OII which contains serious allegations concerning Quest's alleged violation of the laws governing how California consumers are switched from one long distance telephone carrier to another, and how they are billed for long distance telephone services. If CSD's allegations are proven to be true, some California consumers may be entitled to reparations for such violations. (The allegations, if proven, may also support some form of penalties, but this section does not discuss the issue of penalties.)
Quest Filing
In order to facilitate this investigation and in an attempt to provide a reasonable means of assuring that there are adequate funds to provide reparations to California consumers who may have been improperly switched by Quest, or billed for services which they did not legally consent to, Quest is directed, no later than January 3, 2001, to file and serve on the temporary service list the following information.
A. Financial Statement:
Quest shall file a financial statement showing that it currently has sufficient unencumbered funds or assets to provide for prompt reparations to consumers in the amount of at least $ 5 million. 1 The use of the term unencumbered funds or assets in this ruling means funds or assets which have no prior legal claims by creditors or others.
B. Potential Outstanding Liabilities in Other Forums:
The OII alleges that Quest has been the subject of civil and administrative actions for slamming in Minnesota, Texas, Tennessee, Oregon, Oklahoma, New York, Michigan, and Florida. The OII also states that the Federal Communications Commission has found Quest to be in violation of the Telecommunications Act of 1996 and it issued a Notice of Apparent of Liability and Forfeiture against Quest. (OII at p. 6.) In its filing, Quest shall set forth the amount of liability which is alleged by each of the above jurisdictions, and, if no amount is alleged, Quest's best estimate of the maximum potential liability assuming the allegations in each of the above jurisdictions are true. Quest shall also state whether or not it intends to satisfy any potential judgments in these jurisdiction with the unencumbered funds identified in its response to question A above.2
CSD
CSD is directed in its PHC statement (see below) to state its best estimate at this time of a range of the amount of reparations at issue in this OII. This is only a request for more information concerning the amount of reparations, and not penalties, that are at issue in this proceeding.
1 This is a number based on a very conservative reading of the OII. With respect to the slamming allegations, the OII alleges 40,000 interLATA and intraLATA primary interexchange carrier disputes from January through May 2000. (OII at p. 5.) Assuming $50 per violation, this amounts to $2 million. This number is then multiplied by 2. Because the OII spans a much longer period much longer than from January through May 2000, this is a conservative estimate. Additionally, the OII alleges that respondents made unauthorized charges on subscribers' telephone bills. The OII alleges that Pacific Bell received 6,080 cramming complaints against Quest, with a total of 4,225 for 1999 and 1,855 between January and August 2000. The OII also alleges that Pacific Bell reported that the most common complaint California customers registered against Quest was that the company billed them for two services at $10.95 per month without customer authorization. (OII at p. 6.) This would amount to about $ 800,000. (6080 complaints x $131.40 ($10.95/month x12.)) This figure is used for purposes of an estimate because some complainants may have allegedly been improperly billed for two years, but others for less than one year. 2 If Quest believes that a part of this requested information is confidential, it should file both a redacted and unredacted version of its document, with the redacted version omitting the allegedly confidential material. The unredacted version shall be placed in a sealed envelope with the name of the case and title of the document identified on the envelope. Each page of the allegedly confidential material shall be stamped confidential. This filing shall be accompanied by a motion requesting confidential treatment of specifically designated material, indicating the reason therefore with specificity. Please note that CSD is to receive any allegedly confidential material in unredacted form pursuant to Pub. Util. Code § 583.
