6. Discussion

As a threshold matter, we find that the Settlement meets each of the all-party guidelines articulated above. Regarding the first guideline, we note UCAN and Pacific are the only parties, no other person or entity has sought to intervene for any purpose, and the executed settlement is unopposed.

With respect to the second, we are persuaded that utility and ratepayer interests have been asserted by and are adequately represented by these parties. Not only do UCAN's Articles of Incorporation authorize the representation of residential customer interests in our proceedings generally, but UCAN filed this complaint after one of its members received Pacific's direct mail letter. UCAN detected the fact that, for some customers, an average of three months' of toll calling charges was not an accurate indicator of whether Saver 60 or Saver Plus would save money. The record reflects that UCAN pursued its claims vigorously.

As for the third guideline, the parties represent that they "expended considerable effort ensuring that the Settlement Agreement comports with statute and precedents" and we are aware of no conflicts. We discuss, below, our conclusion that the Settlement comports with Diablo Canyon. The parties meet the fourth guideline because the detail in the factual stipulations and the detail in the Settlement and its two attachments provide clarity both as to the problem and the parties' solution. Should we need to enforce the Settlement, for example, we have the information necessary to do so.

Diablo Canyon held that a number of factors may contribute to a balanced public interest evaluation. Among them are the extent to which discovery has been completed so that opposing parties can gauge the strength and weakness of their relative positions; the stage of the proceedings; the risk, expense, complexity and likely duration of further litigation; whether the settlement negotiations were at arm's length and without collusion; and whether the major issues are addressed in the settlement.

Here, as the parties represent, settlement has occurred late enough so that the parties have been able to assess the strengths and weaknesses of one another's positions but early enough to avoid the time and expense, for themselves as well as the Commission, associated with evidentiary hearing. Before they entered into settlement negotiations, the parties completed extensive discovery, reached a comprehensive list of stipulated facts, and drafted and distributed prepared testimony. Thus, as the date for evidentiary hearing approached, the issues unresolved between the parties centered on what additional remedies, if any, were warranted. The Settlement resolves these remaining issues and we consider, now, the reasonableness of the parties' negotiated solutions.

The parties have agreed that Pacific will provide notice of its averaging error to the remaining two groups of customers who were advised inaccurately, based on their December 1998 through February 1999 toll charges, that the toll call plans likely would provide them with monetary benefits. Providing customers with notice that the prior assessment was wrong will empower them to make informed choices about whether or not to purchase a toll calling plan in future, and if they have purchased one already, to decide whether it does meet their needs. Accurate information is a powerful consumer safeguard. The opportunity to "choose" among competing service options has little value unless the information provided by a utility and relied upon by customers is trustworthy.

Likewise, the other remedies provide fundamental consumer protection. A telemarketing feedback loop, such as the one detailed in Attachment A of the Settlement, is critical to enable timely referral and resolution of any consumer complaints which arise in connection with marketing activities like this one. We are surprised that Pacific did not already have such a system in place.

For the future, we agree that Pacific should identify which monthly telephone bill is used as the basis for any customer savings calculations and should not use "averages." This aspect of the Settlement, including Attachment B to the Settlement, will avoid the repetition of complaints like this one. As the facts developed in this proceeding demonstrate, an "average" of several months' usage data may not reflect accurately whether an optional, monthly service plan has savings potential.

The Settlement does not propose a penalty for Pacific's error. Under other factual circumstances we might consider one. The facts of this case show that Pacific acknowledged its error, took steps to avoid perpetrating the error (including a self-imposed ban on averaging customers' variable usage data), and promptly processed refunds for those customers disadvantaged by the error. Cooperating with UCAN, Pacific also worked to identify all other residential customers who were sent inaccurate calling profile information, whether or not those customers actually purchased a toll call plan. On balance, we think the Settlement adequately redresses the harm resulting from Pacific's past error and proactively, will reduce the likelihood of future marketing errors.

In conclusion, the Settlement (including Attachments A and B to the Settlement), together with the record in this proceeding, provide sufficient information to permit us to make an informed evaluation that adoption of the Settlement is in the public interest. The remedies proposed in the Settlement have been carefully designed to prevent a repetition of the acts complained of and to achieve compliance with law.