II. Issues at the TRO Hearing

The TRO hearing in this case was held on January 30, 2003. As indicated above, the first question posed by the revised TRO request was whether SBC California and SBC ASI should be enjoined "from marketing via telephone, mail, or email to former DirecTV DSL subscribers who have chosen to migrate their DSL services to Complainants." Complainants argued that the marketing of SBC Yahoo service being done by the defendants to customers that complainants had picked up from DIRECTV needed to be enjoined because the marketing was both abusive and deceptive. The marketing was abusive, complainants argued, because it was directed at new Sonic and DSLExtreme subscribers who were either waiting to have their new DSL service activated, or for whom it had recently been activated. (Complainants' January 23 Response, p. 6.) Complainants contended that the marketing was deceptive because it promised a monthly rate of $29.95 for SBC Yahoo service, even though a careful examination of defendants' advertisements made clear that this price was available only to customers who also agreed to accept an expensive package of local telephone services from SBC. (Id. at 7.)

Leaving aside the defendants' various jurisdictional objections to this requested relief, the ALJ concluded that the evidence presented at the TRO hearing did not support complainants' allegations on the merits. SBC ASI witness Becky De La Cruz testified that under the Federal Communications Commission (FCC) rules governing her company's operations, SBC ASI was not permitted to tell its own affiliated ISP which ISP, if any, a former customer of DIRECTV had chosen. Thus, according to Ms. De La Cruz, it would not be permissible for defendants to devise a "do not call" list that would insulate complainants' new DSL customers from attempts by SBC Yahoo to market its DSL service to them. (Ex. 9, pp. 4, 17.) During their cross-examination of Ms. De La Cruz, complainants did not undermine her testimony on these FCC rules or SBC ASI's compliance with them. In denying the TRO, the ALJ stated, among other things, that he was not inclined to issue a ruling that would have the effect of requiring SBC ASI not to comply with FCC rules. (January 30 Transcript, pp.127-28.)

On the issue of allegedly misleading advertising, complainants introduced into the record a print advertisement from an SBC marketing campaign that they contended was deceptive.6 However, the ALJ concluded that when read with reasonable care and considered as a whole, this advertisement was not misleading. (Id. at 132-36.) The advertisement clearly stated in the body of the ad that SBC Yahoo service was available for "as low as $29.95 a month for the first year, depending on the package you choose." (Emphasis added.) The fine print in the advertisement stated that the "$29.95 rate applies to customers subscribing to an SBC Total Connections or SBC Solutions Package," and it also contained several other disclaimers. The ALJ concluded that although the clarity of this ad could have been improved,7 it was sufficiently clear so that a reasonable DSL consumer would not believe, contrary to the assertion of one of complainants' witnesses, that "publishing a $29.95 price implies that your bill will be $29.95. And in this case, the bill will [really] be $90.00. And I'm concerned that that leaves the customer misled." (Tr. 51.)

Complainants' second claim in their January 23 Response was that in at least one instance, an SBC ASI technician who had been sent out on a "trouble ticket" to the home of a new DSLExtreme subscriber had disparaged DSLExtreme's service to the customer and suggested that SBC Yahoo's DSL service was superior. Complainants attached e-mail discussion from BroadbandReports.com in support of this claim, and requested that the alleged disparagement be enjoined. (Complainants' January 23 Response, pp. 7-8.)

However, at the January 30 hearing, complainants did not offer the testimony of either the customer who had allegedly heard the disparagement or of any other customer who had heard similar disparagement. Moreover, SBC ASI's witness testified that the company has a strong policy against disparagement of non-affiliated ISPs, and that it has enforced this policy. Belle Guice testified that the anti-disparagement policy was adopted by SBC ASI in July 2000, and that after a search of the relevant records, she could find only three cases in which technicians had been disciplined for violating the policy. (Tr. 85-86.)8 Ms. Guice also testified that SBC ASI had investigated the disparagement incident described in complainants' January 23 response, but had tentatively concluded the alleged incident had not occurred.

Although Ms. Guice acknowledged that she had not investigated the notes kept by repair crews that might describe incidents of disparagement not considered aggravating enough to justify formal discipline (January 30 Tr. at 87), the ALJ concluded from her testimony that any instances of disparagement of non-affiliated ISPs had been few, and had been dealt with promptly when they did occur. Accordingly, the ALJ ruled there were no grounds for issuing a TRO prohibiting SBC ASI technicians from disparaging complainants' DSL service. (Id. at 128-30.)

Complainants' third request for relief in their January 23 response was that SBC ASI and/or SBC California be required to notify DIRECTV customers (1) that their DIRECTV DSL service would remain available through February 28, 2003, and (2) that SBC ASI would endeavor to transfer the customer to a new ISP of the customer's choice with a maximum of five days downtime.

In their January 27 responsive papers and in the prepared testimony of their witnesses, both SBC ASI and SBC California raised numerous objections to this proposal. For example, Becky De La Cruz of SBC ASI set forth four reasons based on notions of privacy and customer relations why the requested relief should be denied:

"First, ASI does not have a business relationship with DirecTV's subscribers and it makes no sense to require ASI to communicate with them. Second, ASI has no authority from DirecTV or any other of its ISP customers to communicate with the ISP's subscribers concerning the business plans of the ISP. Third, ASI treats the ISP's subscriber information as proprietary to the ISP, and does not share such information with other ISPs unless authorized to do so by the ISP that owns the information. Finally, there is a substantial risk that such a message would actually mislead subscribers into believing that their internet access service will continue to a particular date and cause them to be stranded if and when DirecTV takes down its network at an earlier date." (Ex. 9, p. 14.)

In addition to these reasons, Ms. De La Cruz pointed out that transitioning DIRECTV customers to a new ISP with a maximum of five days downtime, as complainants sought, was not technically feasible at the time of the TRO hearing. Ms. De La Cruz stated that even with the special "stacking" procedure that SBC ASI had put in place to allow the disconnect order from DIRECTV and the new connect order from the successor ISP to be processed together, downtime for DSL customers transitioning from DIRECTV to a new ISP was still averaging about seven days (Id. at 6-7, 11-12.)

At the January 30 hearing, complainants acknowledged that the final factor cited by Ms. De La Cruz in opposing the proposed notice was no longer relevant, because SBC ASI had induced DIRECTV to post a notice on its website informing customers that "the last day any portion of the DIRECTV Broadband network will be operational in your area is Friday, February 28, 2003." A copy of this notice was admitted into evidence as Exhibit 10.9 (January 30 Tr. at 108-112.)

Since complainants conceded this website notice had mooted their request for a notice to customers concerning DIRECTV's shut-down date, the remaining issue was whether defendants should be required to inform DIRECTV customers about how much downtime they should expect during the transition process.

Ms. De La Cruz's testimony was also relevant on this issue. In response to questioning from the ALJ, she noted that SBC ASI, like VADI, had investigated whether a special "cut-over" procedure could be used to shorten downtime for customers transitioning from DIRECTV to a new ISP. She stated that while SBC ASI had determined that such a procedure was technically feasible, the procedure had been rejected because it was manual and would have been extremely time-consuming and expensive for both SBC ASI and the new ISP. (Tr. 103.)

Based on this testimony and argument by counsel, the ALJ concluded that complainants had not met the burden of showing that the notice about downtime sought by complainants was justified.10 First, the ALJ agreed with SBC ASI that, since it did not have a direct business relationship with DIRECTV customers, it would not be appropriate to require SBC ASI to communicate with the DIRECTV customers. (January 30 Tr., p. 132.)

Second, the ALJ concluded that because retail ISP customers were still experiencing seven business days of downtime even with SBC ASI's new procedure for bundling disconnect and new connect orders together (Ex. 9, p. 18), it would not be reasonable to require SBC ASI to notify the remaining DIRECTV customers that they could expect only five days of downtime when transitioning to a new ISP. (January 30 Tr., p. 132.)11 The ALJ also noted that this appeared to be a short-term problem, because according to Ms. De La Cruz's testimony, SBC ASI had recently conducted field trials as a result of another matter pending at the Commission, Case 01-07-027, California ISP Association, Inc. v. Pacific Bell Telephone Company, et al. (CISPA), which demonstrated that with various system improvements, significantly reduced downtime for transitioning ISP customers was expected to be the norm in California within about six months.12

6 The advertisement was attached to complainants' January 23, 2003 response as Exhibit 1, and also to the prepared testimony of SBC witness Frank Mona. It is also Exhibit 6 to the Amended Complaint. 7 As the ALJ pointed out in denying the TRO, on first reading there appears to be a conflict between the ad's headline that "DIRECTV is ending its DSL service" and the statement in the body of the ad that the customer should consider SBC Yahoo service "now that DIRECTV Broadband is no longer offering DSL services." (Emphasis added.) The ALJ pointed out it could take some reflection to realize that the latter statement meant that DIRECTV would no longer be offering DSL service to new customers, but would continue to provide it (until its system shut down) to existing customers. (Id. 132-34.) Notwithstanding this possible ambiguity, the ALJ ruled that reasonable consumers of DSL service, who tend to be sophisticated people, were very unlikely to be misled by this aspect of the ad. (Id. at 135-36.) The ALJ also rejected complainants' argument that, based on the language of the ad, reasonable DSL consumers would believe they could purchase SBC Yahoo service for a flat $29.95 per month. (Id. at 49-52.) 8 Redacted versions of the "case summaries" concerning these three technicians were attached to Ms. Guice's prepared testimony. (Ex. 8, pp. 5-6 and Exhibits 1-3.) 9 A similar website notice for DIRECTV customers residing in areas where VADI provided the underlying DSL Transport was admitted into evidence as Exhibit 11. 10 The ALJ also noted that since the requested notice amounted to a mandatory rather than a prohibitory injunction, the proof prerequisites for its issuance were higher. (January 30 Transcript, p. 132.) 11 At an earlier point in the hearing, Dane Jasper, president of complainant Sonic, had stated that in requesting the notice to DIRECTV customers about the amount of downtime they could expect, he was "not seeking a shorter interval" than SBC ASI could currently provide, but he wanted the interval to be defined. (January 30 Tr., p. 44.) 12 On February 10, 2003, the parties in the CISPA case submitted a Revised Settlement Report that included and commented upon the provisions of a Revised Release and Settlement Agreement. In the Revised Settlement Report, the parties gave the following description of their settlement concerning the ISP migration interval issue:
"An issue of importance in this proceeding has been the migration interval when an ISP subscriber attempts to migrate from one ISP to another. CISPA has previously explained why it believes it is technically feasible to substantially shorten the interval currently experienced on [SBC] ASI's system. Recent historic experience has been that subscribers can experience from 7-9 days of downtime in the migration from one ISP to another. ASI agreed to tighten up its commitments in the Settlement Agreement and to implement a substantially shorter migration interval than was previously offered. Specifically, ASI commits to make system enhancements by the end of third quarter of this year that will reduce subscriber downtime to a maximum of one business day when the two ISPs are served in the same DSLAM, and no more than 2-4 days of downtime when they are served in different DSLAMs." (Revised Settlement Report, pp. 8-9.)
In D.03-07-032, the Commission approved a slightly modified and updated version of the Revised Release and Settlement Agreement. In it, SBC ASI states that it is currently working on system enhancements that will enable an ISP to send a single "ISP Change Order" when the ISP acquires a new subscriber from another ISP. The Revised Release and Settlement Agreement continues:
"With the ISP Change Order process, ASI expects to be able to offer, by the end of the Third Quarter of 2003, a standard interval of no more than one business day downtime of its DSL Transport service when the acquiring ISP asks for service in the same ASI DSLAM. For those instances in which the acquiring ISP asks for service in Remote Terminals, or in a different DSLAM in the same Central Office, ASI expects to be able to offer an average interval of no more than one business day downtime of the DSL Transport service in the Fourth Quarter of 2003." (D.03-07-032, Appendix A, p. 5, ¶ 7.)
The Revised Release and Settlement Agreement also states that SBC ASI will advise the Commission and CISPA on the status of these enhancements at the end of the Third Quarter of 2003. (Id.)

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