Decision

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

The Utility Consumers' Action Network (UCAN), Complainant, vs. MCI Metro Access Transmission Services (MCI Metro), Inc., Defendant.

Case 98-06-016 (Filed June 2, 1998)

OPINION

This decision grants the Utility Consumers' Action Network (UCAN) an award of $16,009.49 for its contribution to Decision (D.) 99-04-053.¹

1. Background

On June 2, 1998, UCAN filed a complaint against MCI Metro Access Transmission Services (MCI). The complaint alleged that MCI had made billing errors and engaged in unlawful practices, including:

· Failing to disclose to customers that a $.04 per minute flat rate for intraLATA local toll calls ("intraLATA calls"), which took effect on June 4, 1997, was promotional only and would end on a specific date.

· Failing to give local service customers timely or adequate notice of a major increase in the flat rate for intraLATA calls from $0.04 per minute to $0.10 per minute during peak hours.

· Billing "Zone 3" calls, at rates solely applicable to intraLATA calls.²

· Failing to apply the $0.04 per minute flat rate to intraLATA calls.

· Billing customers at two-minute increments for Zone 3 and intraLATA calls, when such calls were purported to be billed at one-minute increments, resulting in a one-minute overbilling per call ("the one minute overbilling problem").

· Incorrectly billing customers who paid their MCI bills through electronic debits from their credit cards and requesting that such customers provide complete credit billing records in order to show proof of payment.

· "Slamming" customers who had switched their local service to MCI into MCI long distance service.

· Requiring customers of local residential phone service to provide a social security number in order to access their billing and account records.

MCI filed its answer on July 29, 1998. In its answer, MCI denied most of the allegations of the complaint but admitted the following:

· MCI had not disclosed to customers that its $0.04 per minute flat rate for intraLATA calls was promotional only and would end on a definite date.

· MCI had notified only some of its customers of the increase in the flat rate for intraLATA calls from $0.04 per minute to $0.10 per minute.

· Some MCI customers received notices of the rate increase for intraLATA calls which did not describe the new rates.

· A number of customers who made calls within the 17 mile and beyond mileage band applicable to intraLATA toll calls were not charged the $0.04 per minute rate because their accounts were miscoded in MCI's system. MCI affirmatively alleged that it had previously identified and corrected this problem, was making restitution to customers, and had informed UCAN of its plans to refund customers before the filing of the complaint.

· Due to an error in MCI's billing system, some customers were unlawfully billed at two-minute increments for local calls within Zone 3 and intraLATA toll calls when these calls were purported to be billed in one-minute increments ("the one minute overbilling problem"). MCI Metro affirmatively alleged that it had corrected the error in the billing system, was issuing refunds as it completed an ongoing assessment of customers entitled to refunds, and had told UCAN that it had corrected the error and was refunding customers.

· One customer had experienced billing problems related to his credit card and MCI Metro had issued a full credit for the amounts in dispute.

· MCI customer service representatives require a social security number or another form of identification to verify that the customer service representative is speaking with the account owner and to protect the customer's private account information, but do not affirmatively require customers to disclose their social security numbers to access their own account and billing records.

· MCI Metro had agreed with UCAN to issue credits to all customers negatively impacted by the billing errors raised in the complaint before the filing of the complaint.

A prehearing conference (PHC) was held on September 28, 1998, at which UCAN stated that MCI had conceded several of the billing problems and was making restitution to customers. However, UCAN requested an independent audit of MCI's practices to verify that the billing errors had been corrected and all affected customers had been refunded. MCI acknowledged that a significant number of customers had not received notice of the rate increase and that human and computer errors had caused billing problems. MCI denied that it had engaged in the slamming of customers into MCI long distance service, required customers to disclose their social security numbers in order to access their own account records, or improperly billed Zone 3 calls. MCI proposed that Commission staff review its records to verify that MCI had corrected the billing problems and made full restitution to customers.

On November 23, 1998, the assigned Administrative Law Judge (ALJ) issued a ruling which assigned Commission CSD staff to work with the parties to verify MCI's statements that it had corrected all notice and billing errors, had identified all affected customers, and had refunded or credited affected customers.

On February 19, 1999, CSD filed a report regarding its review of MCI's efforts to correct billing problems and to credit or refund customers. The CSD report stated that MCI had not corrected all billing errors, had not identified all affected customers, and had not made full restitution to customers. The CSD report noted the following deficiencies in MCI's restitution efforts:

· The methodology used to calculate credits and refunds to customers may not have been appropriate. CSD recommended that MCI calculate the refund or credit owed to each affected customer individually.

· A significant number of customers affected by the one minute overbilling problem were not identified and therefore had not received credits or refunds.

· A number of customers may not have received their refund checks.

· Some refund checks reported to CSD by MCI were never issued or were issued in a different amount from that reported.

· A significant number of customers were being billed by MCI for local service after they disconnected their service with MCI. Since MCI's system showed these customers' accounts as active, MCI would credit the customers' closed accounts rather than mailing a refund check.³

· MCI was not refunding or crediting customers for taxes and surcharges paid on overbilled amounts.

· MCI was not reducing the balances owed by non-paying customers to remove charges for overbilled amounts.

The CSD report stated that CSD had not found evidence that MCI had billed Zone 3 calls at rates applicable to intraLATA calls or that MCI had systemic billing problems affecting customers who paid their bills by automatic debits to a credit card.⁴

A second PHC was held on February 23, 1999. The ALJ directed the parties to continue to work with CSD to resolve all billing problems and to complete the identification of affected customers and the payment of restitution within the next nine months. UCAN withdrew its causes of action related to slamming and privacy violations as moot, in view of MCI's representation that it was no longer offering local telephone service in California.

On April 22, 1999, the Commission issued D.99-04-053. The decision found that MCI had acknowledged the billing errors and had committed to correct them and to make restitution to all affected customers. The decision stated that the CSD report had found that while MCI may have previously attempted to make restitution, some customers and former customers had not received full refunds or credits. The decision noted that parties had agreed that the there were no material issues of fact which required a hearing and that the best procedural course would be for the parties to continue to work with CSD to correct the billing problems and ensure that affected customers receive full restitution. UCAN filed its Request for Award of Compensation on May 24, 1999.