4. The Settlement

The Settlement resolves all issues pending between UCAN and Pacific in this proceeding. It focuses on remedies, acknowledging the remedial action Pacific has already undertaken (i.e., refunds to 1,552 customers and a ban on the averaging of customers' variable usage data) and obligating Pacific (1) to provide broader notice of its averaging error and (2) to implement specified consumer safeguards in connection with telephone marketing.

The Settlement's "Summary of Material Facts" provides the factual information unavailable in the Stipulated Facts. Specifically: "The contents and claim of the [toll call plan] mailing did not apply accurately to 68,793 residential customers." This number comprises the total number of customers who were advised by direct mail, erroneously, about their savings prospects under a toll call plan - that is, all of these customers fit the MacFarlane profile. The "Summary of Material Facts" also establishes that 65,133 of these customers did not purchase a toll call plan; 1,108 customers purchased a plan and then did save money.

Under the terms of the Settlement, Pacific must notify both of these additional categories of residential customers about the three-month averaging error in the direct mail solicitation. Upon request, Pacific will offer those who purchased a toll call plan a refund of the monthly service fee, including taxes and surcharges, for no less than three months, and will rescind the plan.

In addition, the Settlement requires Pacific to establish a two-way "feed back mechanism" when Pacific telemarkets services like these toll call plans, whether using its own employees, SBC's telemarketers, or independent contractors. The Settlement states: "Pacific must ensure that those placing or receiving calls on behalf of Pacific have an established method to identify and communicate customer feedback and/or complaints encountered when calling on behalf of Pacific Bell." Attachment A to the Settlement provides the details of this feedback mechanism, which requires the parallel referral of problems to the marketing manager for a given product/service (i.e., the Specific Segment Marketing Manager) and to a contact in the Teleservices staff, with coordinated reporting of follow up and resolution.

With respect to future sales of toll calling plans, whether as a result of in-bound or out-bound contacts, the Settlement also obligates Pacific to identify which monthly telephone bill is being used as a basis for calculating whether the plan could yield savings for that customer. A new sales script, Attachment B to the Settlement, supplies important details. Though the script permits examination of more than one month, each month must be assessed separately i.e., Pacific cannot average toll call usage for more than one month.