8. The Commission received comments on the duplication reduction or Reasonableness of Requested Compensation

Request of TURN:

TURN requests $146,113.66 as follows:

Advocates' Fees

Paul Stein, Attorney

188.25 hours @ $190/hr. (1999) = $ 35,767.50

34.75 hours @ $200/hr. (2000) = $ 6,950.00

16 hours @ $100/hr. (2000) = $ 1,600.00

Robert Finkelstein, Attorney

147.50 hours @ $265/hr. (1999) = $ 39,087.50

8.25 hours @ $265/hr. (2000) = $ 2,186.25

Consultant's Fees

Terry Murray

77.25 hours @ $300/hr. (1999) = $ 23,175.00

.75 hours @ $300/hour (2000) = $ 225.00

Scott Cratty

194.83 hours @ $175/hr. (1999) = $ 34,095.25

Other Costs

Photocopying = $ 2,140.60

Postage = $ 280.06

Fax = $ 21.70

Phone = $ 15.88

Fed Ex/Other = $ 154.50

On-Line Legal Research = $ 414.42

Request of GL/LIF:

GL/LIF requests $323,919.22 as follows:18

Advocates' Fees

Robert Gnaizda

188.75 hours @ $375/hr. = $ 70,781.25

Susan E. Brown

458.15 hours @ $275/hr. = $125,991.25

Chris Witteman

327.3 hours @ $250/hr. = $ 81,825.00

Consultant/ Expert Fees

John Gamboa

64.85 hours @ $250/hr. = $ 16,212.50

Viola Gonzalez

34.7 hours @ $250/hr. = $ 8,675.00

Paralegal Fees

Jose Hernandez

132.15 hours @ $105/hr. = $ 13,875.75

Other Costs

Postage, photocopies, deliveries, supplies = $ 3,075.30

Postage and copying (see Errata) = $ 642.72

Transportation, phone, parking,

mileage, airfare, etc. = $ 2,840.40

Request of PA:

PA requests $325,649.24 as follows:

Advocates' Fees

Mark Savage

770.69 hours @ $300/hr. = $231,207.00

Maria Andrade

239.30 hours @ $225/hr. = $ 53,842.50

John Affeldt

9.20 hours @ $285/hr. = $ 2,622.00

Consultant's Fees

Thomas Hargadon

40 hours @ $250/hr. = $ 10,000.00

Paralegal Fees

Jennifer Cynn

81 hours @ $110/hr. = $ 8,910.00

Rebecca Yee

66 hours @ $110/hr. = $ 7,260.00

Other Costs

Airfare, copying, messenger service,

phone, etc. = $ 11,807.74

In D.98-04-059, Finding of Fact 42, we indicated that compensation for a customer's participation should be in proportion to the benefit ratepayers receive as a result of that participation. We recognize that putting a dollar value on the benefits accruing to ratepayers as the result of a customer's substantial contribution may be difficult. However, an assessment of whether the requested compensation is in proportion to the benefits achieved helps ensure that ratepayers receive value from compensated intervention, and that only reasonable costs are compensated. (Id., page 73.)

It is not possible to quantify precisely the benefits to ratepayers of TURN's participation in this proceeding, but it is possible to conclude that they substantially exceed the requested award. TURN's participation on the issue of benefits forecast contributed to our decision to adopt a forecast that is $56.4 million (net present value) higher than Applicants' initial estimate. As a result, ratepayers will receive on the order of $28 million more in benefits than they would have received had we adopted Applicants' estimate. TURN's participation also resulted in elements of our decision which provide 1) all GTE ratepayers will see merger related reductions on their bills, and 2) the approximately $19 million allocated to the CCA will be spent, to the extent possible, in GTE's service territories. These are important benefits to GTE ratepayers. We conclude that the benefits to ratepayers of TURN's participation exceed the costs claimed in this Request. An award of $146,113.66 to compensate TURN for its efforts on behalf of ratepayers is reasonable.

We similarly conclude that the awards of compensation to GL/LIF and PA are reasonable, and with adjustments to hourly rates and costs as noted below. The participation of both parties played a role in our decision to adopt the CCA with a statewide goal of achieving 98 percent subscribership in underserved communities, and bringing the "information superhighway" to these communities. The CCA creates a $24 million community technology trust fund to pursue these goals. The benefits to ratepayers of the CCA cannot be precisely quantified, but because so many ratepayers may benefit over the long-term we conclude that the benefit to ratepayers is in proportion to the amount of the awards to GL/LIF and PA.

TURN has segregated its hours by activity in accordance with Commission guidelines. We appreciate the effort that TURN has made to clearly allocate hours to specific issues whenever possible. TURN's efforts to make its request as clear as possible helped to facilitate our review, and we appreciate TURN's effort to assist us in determining how many hours would be subject to reduction if we had found that TURN had failed to make a contribution on any given issue. Upon review we find that the hours claimed for specific activities performed by attorneys and consultants appear reasonable, and no reduction in the hours claimed is warranted. We note that the time spent by TURN Staff Attorney Paul Stein devoted to preparation of the intervenor compensation request is charged at one-half of his hourly rate. This is consistent with our direction in D.98-04-059. We conclude the hours billed by TURN are generally reasonable and are fully compensable.

The request of GL/LIF is not presented in a manner that facilitated our review. Problems with the format and information in the request required many hours to be spent sorting through GL/LIF records to confirm numbers and determine the correct rates and amounts to be compensated. GL/LIF is directed to make an effort to present future requests in a form that facilitates our review consistent with our direction in D.98-04-059.19 By not doing so, GL/LIF risks having otherwise allowable expenses disallowed because we simply cannot determine the reasonableness of amounts requested.

While GL/LIF has presented many tables categorizing hours in various ways, the result is an abundance of information that does not readily support the requested award. For example, in the Request, Exhibit D, a breakdown of "professional hours" for each attorney and consultant is provided, but the hourly totals do not match the totals that are utilized in the summary of hours in the Request at page 27. Exhibit D indicates a total of 184.35 hours for Robert Gnaizda, but the summary at page 27 seeks compensation for 188.75 hours. The reason for this discrepancy is not apparent to us. We assume there is some explanation because this type of discrepancy exists in the record of hours for other GL/LIF attorneys and consultants, but we cannot presume that the higher number of hours claimed is reasonable. In the case of Gnaizda, for example, if we assume that he expended the higher number of hours, without knowing what he was doing during those additional 4.4 hours (that evidently were not "professional hours") we do not know at what rate to compensate him. If this time was spent, for example, travelling or in preparation of the fee request, compensation would be at only 1/2 of his allowable hourly rate.

The information that we need may well be somewhere in the documents supporting the request, but after attempting to make these types of determinations, we remain unable to reconcile discrepancies in hours reported. Accordingly, we will only compensate the number of hours for each attorney and consultant that is listed on Exhibit D under "professional hours." We engaged in a similar effort in D.00-04-003, an earlier compensation decision in which we put GL/LIF on notice that more clear breakdowns are needed. If GL/LIF seeks compensation for time spent on travel or fee request preparation in the future, it should identify these hours separately in the request, and clearly indicate that it is seeking the allowable 50% hourly rate. This specification should appear in the summary of hours in the body of the request. Failing to do so may result in disallowance of the hours in question.

We note that on the timesheet of Witteman, which is in a different format from that of the other attorneys, the full hourly rate is charged for travel to Los Angeles on 4/9/99 and for fee petition preparation on 5/2 and 5/3/00. We will compensate a total of 9.9 hours at one half of Witteman's hourly rate because this error was readily ascertained.

Furthermore, GL/LIF does itself and us a disservice by not providing calculations using the hourly rates that we have previously adopted for its attorneys and consultants. We do not have any objection to GL/LIF continuing to assert that they should be paid at a higher hourly rate than we have allowed, and we are happy to receive those calculations as well. However, having made it clear in D.00-04-003 and other decisions that we intend to use the previously adopted rates, unless and until we modify them, GL/LIF's failure to provide calculations using those rates simply delayed the preparation of this compensation decision. Because GL/LIF does not provide calculations using previously adopted rates we had to review records to make a determination of the years during which the work of all attorneys and consultants was performed, the previously adopted rate for those years, and the resultant fees in this proceeding.

Upon review of the materials submitted by GL/LIF, we conclude that the hours claimed for specific activities appear generally reasonable. With the exception of the reduction of the fee for 9.9 of Witteman's hours, and for hours in excess of those in Request, Exh. D, we will compensate GL/LIF for all hours claimed.

The PA request presented us with problems similar to those we have outlined regarding the GL/LIF request. It should not be necessary for us to spend hours sorting through a request trying to find information and verify numbers. This effort delayed the preparation of this compensation decision. By not providing us with calculations for attorney fees using previously adopted rates, we expended unnecessary time digging through exhibits and declarations to determine past rates, the years in which work was performed, etc. The request also appears to incorrectly seek payment for travel time and fee petition preparation at full hourly rates. It appears that these hours are mingled with other hours in the hourly logs. To the extent that we identify these hours we compensate them at 1/2 the hourly rate, and put PA on notice that in the future such hours will simply be disallowed if PA does not break these hours out separately in its fee request. We find a total of 20.8 hours of travel time identified in Savage's declaration that are incorrectly billed at Savage's full hourly rate. We will compensate for this time at one half his hourly rate.

With the exception of the hours that are compensated at 1/2 the hourly rate, we find that the hours claimed for specific activities appear generally reasonable.

TURN seeks compensation for hours worked by attorney Stein in 1999 at $190 per hour, and at $200 per hour for work performed in 2000. The most recent Commission approved rate for Stein is $170.00 per hour for work performed in 1997. (See D.98-08-016.) This is the first case in which TURN has sought an increase in Stein's rate from the 1997 level. Since 1997, Stein has represented TURN in a number of energy and telecommunications proceedings before the Commission. Through this participation Stein has developed an increased level of expertise in the subject matters before us. TURN provides information regarding prevailing market rates for attorneys as identified in the Of Counsel survey for 1999 through 2000. This survey contains information from selected law firms in San Francisco and other major cities. The survey reports a range of associate attorney rates of $110 to $350 per hour. Based upon the information contained in this survey, as well as Stein's level of expertise developed through participation in our proceedings, it is reasonable to increase Stein's rates to the levels requested by TURN. Pub. Util. Code § 1806 provides in part that intervenor compensation awards shall "take into consideration the market rates paid to persons of comparable training and experience who offer similar services." We conclude that henceforth the approved hourly rate for work performed by Stein in 1999 is $190 per hour, and the approved rate for work performed by Stein in 2000 is $200 per hour.

TURN requests compensation for the hours worked by attorney Finkelstein in 1999 and 2000 at $265 per hour. The Commission previously approved this rate for Finkelstein and applied it in D.00-02-008, and D.00-02-038. Accordingly, we apply this rate in this proceeding.

TURN seeks compensation for consultant Scott Cratty at an hourly rate of $175 for work performed in 1999. Cratty is Vice President of Murray & Cratty, LLC. He provided support for TURN's lead witness, consultant Terry Murray. The most recent Commission approved rate for Cratty is $125 per hour for work performed in 1996. (See D.98-04-025.) The requested rate of $175 per hour for 1999 is $50 per hour higher than the 1996 approved rate. TURN argues that this increase is reasonable considering the impact of inflation and the enormous increase in demand in the past few years for telecommunications experts of Cratty's caliber. TURN states that the rate charged by Cratty to TURN is the same rate that he charges all of his business clients. We agree with TURN that the requested rate is reasonable.

The hourly rate claimed by TURN for consultant Murray is $300 for work performed in 1999 and 2000. The last Commission approved rate for Murray is $250 for work performed in 1996. (See D.98-04-025, p. 8.) At that time, $250 was the highest hourly rate approved by the Commission for an expert witness, and the Commission noted Murray's extensive qualifications. As in the case of Cratty, TURN states that Murray charged TURN the same consulting rate she charges all of her business clients, including corporations such as AT&T and MCI. We find that the increase in rates sought for Murray is justified by her experience, inflation, and the overall increase in demand for telecommunications experts. We adopt a rate of $300 per hour for work performed by Murray in 1999 and 2000.

GL/LIF seeks compensation for attorney Gnaizda in 1999 and 2000 at an hourly rate of $375. The most recent adopted rates for Gnaizda are $300 for 1999 and $310 for 2000 (see D.02-07-03). We will use these rates for work performed in 1999 and 2000 in this proceeding.

A rate of $275 per hour is claimed for attorney Brown for work in 1999 and 2000. This rate was previously adopted in D.02-06-038.

GL/LIF does not direct us to a previously adopted rate for attorney Witteman. An hourly rate of $250 per hour is requested. Based upon a review of his experience and qualifications, we conclude that a rate of $200 per hour is appropriate for work performed in 1999 and 2000. We base this rate upon consideration of his relative lack of experience before the Commission, and the fact that he was working with two other attorneys who are compensated at senior attorney rates. The $200 per hour rate is consistent with the rate paid to Stein of TURN. While Stein has less of years practice than Witteman, he has more experience before the Commission. Both attorneys worked under senior attorneys in this proceeding.

An hourly rate of $250 is claimed for GL staff member Gamboa. We have previously set an hourly rate for Gamboa of $135. (See D.00-04-003.) We find no convincing reason to increase his rate at this time. We will utilize the $135 per hour rate for all work performed in this proceeding. GL/LIF also seeks a $250 per hour rate for staff member Gonzales, Executive Director of LIF. We have not previously adopted an hourly rate for Gonzales. We find it appropriate to utilize the same rate ($135 per hour) applied to Gamboa for work on this proceeding.

An hourly rate of $105 is sought for paralegal Hernandez. GL/LIF does not direct us to previous hourly rates for Hernandez. We will utilize $75 per hour, the paralegal rate we adopted in D.00-04-011. We note that Witteman prepared separate bills for work performed under his supervision, and that $75 is the hourly rate he seeks for paralegal work for GL/LIF.

PA proposed an hourly rate of $300 for attorney Savage. We previously set an hourly rate of $250 for work in 1998 (D.00-02-044) and $275 for work in 1999 and 2000 (D.00-05-033) for Savage. We will use those rates here.

We have not previously set an hourly rate for attorney Andrade, who has been an attorney since 1995, and joined PA in 1998. Based upon her experience and qualifications, we set an hourly rate of $150 for 1998, $160 for 1999, and $170 for 2000.

The requested hourly rate for attorney Affeldt is $285. The previously adopted hourly rate for attorney Affeldt is $175 for work performed in 1997. (See D.00-02-044). We are disturbed that we find no reference to the previously adopted rate in Affeldt's declaration, but only find citations to higher rates adopted in other venues. We find this omission misleading. It also caused us to engage in unnecessary research to determine our previously adopted 1997 rate. We will adopt a rate of $185 for work performed in this proceeding in 1999 and 2000.

The hourly rate sought for law clerks Cynn and Yee is $110 per hour. We will use a $75 per hour rate, which is the same rate awarded to GL/LIF for its paralegal. We find no justification for granting PA's clerks a higher hourly rate.

We have reviewed the request for an hourly rate of $250 for expert Hargadon. The Commission has previously utilized this rate for work performed by Hargadon. (See D.96-06-029 and D.96-12-029.) We adopt the requested rate for this proceeding.

TURN requests $3,027.16 for miscellaneous expenses. The majority of these expenses are for photocopying, mailing of pleadings, and on-line legal research. The expenses are fully itemized in the Request. The expenses appear reasonable and are fully compensable.

GL/LIF request $6,558.42 for miscellaneous expenses. The request is problematic in several ways. In the Errata we note the amount claimed is $642.72, but supporting documentation indicates $572.59. We cannot determine the cause of the discrepancy and will pay the lower amount. While the dollar difference is small, discrepancies of this kind compel us to question the accuracy of all numbers, which results in wasted time spent verifying all numbers.

More troubling is the inclusion of expenses for which there is no explanation. We cannot compensate for expenses where there is no explanation provided. We deduct the following costs from the award:


    · Page 14 of Witteman expense sheet - 10/21/99 airfare for Stewart Kwoh and Giao Bui to attend meeting - $641.50. No explanation is provided regarding this expense;


    · travel expenses for Brown, Gonzales and Hernandez on 4/28, 5/3, 5/10, and 8/16/99 totaling $117.11. We have compared the dates on which these expenses are billed and find no corresponding work activities to indicate a nexus to this case. We disallowed travel expenses to GL/LIF on this same basis in D.00-04-003;


    · $452.00 for airfare for Barbara Perkins and Ronaldo Babiera for meeting 10/22/99, and $339.50 for airfare and taxi for meeting 10/22/99. We can locate no explanation in the request regarding the identity of these individuals, a breakdown of what these expenses cover, and why these expenses should be paid by ratepayers in this proceeding.

The disallowed expenses total $1,550.11.

With the exception of the expenses itemized above, the costs claimed appear reasonable and will be compensated in full.

PA requests a total of $11,807.74 for miscellaneous expenses. Again, the request is cryptic. We cannot compensate for expenses for which no explanation is provided. In Exhibit 1 travel expenses are claimed for individuals and no explanation is provided regarding the identity of these individuals, what the expense amounts cover, and why ratepayers should pay these expenses in this proceeding. We disallow the following unjustified travel expenses:

We are very concerned about the inclusion of travel expenses for Barbara O'Connor and Jacquelyn Brand. We have reviewed the signature pages to the CCA (which is Attachment C to D.00-03-021). We find that O'Connor signed the CCA as the founder of Alliance for Public Technology, which represented 16 organizations. We find that Brand signed the CCA as Coordinator of Universal Services Alliance, representing 18 organizations. Neither Alliance for Public Technology nor Universal Service Alliance have qualified for or filed for intervenor compensation in this proceeding. It appears that PA inappropriately seeks to reimburse these groups for expenses of participation by means of the intervenor compensation program. This possibility is very disturbing, as it would be an abuse of the intervenor compensation program. We put PA on notice that if we verify inappropriate billing of costs in the future, we will consider imposing sanctions under Rule 1 of the Rules of Practice and Procedure.

The remainder of PA's claimed expenses appear generally reasonable and will be compensated in full.

Award to TURN:

We award $146,113.66 to TURN for contributions to D.00-03-021. The award is calculated as follows:

Advocate Fees = $ 85,591.25

Consultant Fees = $ 57,495.25

Other Costs = $ 3,027.16

Total Compensation Award = $146,113.66

The breakdown of TURN's advocate and consultant fees and other costs is shown in Section 7 of today's decision.

Award to GL/LIF:

We award $268,108.93 to GL/LIF for contributions to D.00-03-021. The award is calculated as follows:

Advocates' Fees:

Robert Gnaizda, Attorney

159 hours @ $300/hr. (1999) = $ 47,700.00

25.3 hours @ $310/hr. (2000) = $ 7,843.00

Susan E. Brown, Attorney

375.5 hours @ $275/hr. (1999) = $ 103,262.50

72.4 hours @ $275/hr. (2000) = $ 19,910.00

Chris Witteman, Attorney

317.4 hours @ $200/hr. ('99-'00) = $ 63,480.00

9.9 hours @ $100/hr. (1/2 rate) = $ 990.00

Consultant/Expert Fees

John Gamboa

63.45 hours @ $135/hr. ('98-'00) = $ 8,565.75

Viola Gonzalez

33.95 hours @ $135/hour ('99-'00) = $ 4,583.25

Paralegal Fees

Jose Hernandez

91.15 hours @ $75/hr ('99-'00) = $ 6,836.25

Other Costs

Total fees and costs = $268,108.93

Award to PA:

We award $279,740.33 to PA for its contributions to D.00-03-021. The award is calculated as follows:

Advocates' Fees

Mark Savage, Attorney

20.5 hours @ $250/hr. ('98) = $ 5,125.00

730 hours @ $275/hr. (`99-'00) = $200,750.00

20 hours @ $137.50 (1/2 hourly rate) = $ 2,750.00

Maria Andrade, Attorney

221.9 hours @ $160 ('99) = $ 35,504.00

17.4 hours @ $170 ('00) = $ 2,958.00

John Affeldt, Attorney

9.2 hours @ $185 (`99-'00) = $ 1,702.00

Consultant's Fees

Thomas Hargadon

40 hours @ $250/hr. = $ 10,000.00

Paralegal Fees

147 hours @ $75/hr = $ 11,025.00

Other Costs

Total Fees and Costs = $279,740.33

Consistent with previous Commission decisions, we will order that interest be paid on the award amounts (calculated at the three-month commercial paper rate) to each intervenor, commencing the 75th day after TURN, GL/LIF, and PA filed their compensation requests and continuing until full payment is made.

As in all intervenor compensation decisions, we put the intervenors on notice that the Commission's staff may audit intervenors' records related to this award. Thus, intervenors must make and retain adequate accounting and other documentation to support their claims for intervenor compensation. The records should identify specific issues for which compensation is requested, the actual time spent by each employee, the applicable hourly rate, fees paid to consultants, and any other costs for which compensation is claimed.

18 This number is the combination of $323,276.50 in the Request and an additional $642.72 in the Errata. 19 We note D.98-04-059 was the culmination of a rulemaking in which we addressed many policy and practical issues in our intervenor compensation program. Both TURN and GL/LIF participated in that rulemaking.

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