Discussion

Pursuant to Section 532,⁷ all utilities must charge for their services in accord with their tariff schedules on file with the Commission. All amounts collected other than in accord with the tariff schedules are unlawful, unreasonable and subject to an order of reparations pursuant to Section 734. Every public utility must also "obey and comply with every order, decision, direction, or rule made or prescribed by the Commission." Section 702. The Commission may impose a fine of not less than $500 nor more than $20,000 for each violation of the California Constitution, Public Utilities Code or order of the Commission, Section 2107, and each day of a continuing violation constitutes a separate violation, Section 2108. The Commission does not exempt new market entrants from compliance with these standards:

We do not condone some sort of "learning period" for new long distance service providers, or any public utility. When we grant a CPCN, we are not necessarily authorizing a research and development effort or a learning opportunity; rather, we are granting authority to the carrier to provide "adequate, efficient, just, and reasonable service . . . as [is] necessary to promote the safety, health, comfort, and convenience of its patrons, employees, and the public." (Pub. Util. Code § 451.) We expect all certificated public utilities to comply with all applicable requirements at all times.

Communications TeleSystems International, (1997) 72 CPUC2d 621, 629 (D.97-05-089).

MCI Metro has conceded its billing errors.⁸ UCAN calculates a fine of $250,000 based on our guidelines for setting fines. We agree with UCAN.

Although unintentional, billing errors have serious negative consequences for a utility's customers. As the record in this proceeding shows, even with the most cooperative utility, billing errors are difficult to comprehensively detect and correct. Returning all mistakenly collected amounts to the customers is also a

daunting task. The record in this case shows that MCI Metro could not in all instances (1) identify affected customers, (2) precisely calculate the refund owed, and (3) locate the customers. In recognition of these deficiencies, MCI Metro credited all outstanding balances, including those referred to outside collection agencies, as of the customers' January 2000 invoices for all 32,387 customers affected by these billing errors. The total amount credited was $3,515,291. While this action has the important effect of forcing MCI Metro to disgorge all benefits of the erroneous billings, the amount outstanding on an individual customer's January bill may or may not correlate with the amount which resulted from the erroneous billing. Hence, individual customers may have been under- or over-compensated.

Our goal is accurate refunds. Where perfect accuracy is not feasible, however, our equitable authority allows us to utilize the concept of fluid recovery to distribute the funds. See D.00-04-027, mimeo. at pp. 5-10. Thus, we approve the form of credit used by MCI Metro to accomplish these refunds.

Because it is so difficult to correct billing errors, prevention of billing errors must be a high priority for all utilities. The expense and inconvenience of correcting billing errors provides a serious practical incentive to utilities to do everything in their power to prevent such errors. When such errors occur, however, particularly on the scale present here, the public interest requires that the Commission use its powers to provide further disincentives.

For these reasons, we find that the fine requested by UCAN of $250,000 is supported by the facts of this proceeding.

In mitigation, however, we find that MCI Metro has been generally cooperative and forthright in comprehensively addressing the billing errors brought to light through this complaint and the resulting investigations. Recognizing the critical importance of such cooperation to correcting future billing errors by this and other utilities, we will not impose the fine requested by UCAN.