IX. Qwest's Lack of Compliance With D.00-06-079

In D.00-06-079, the Commission approved Qwest's acquisition of US West and its affiliates, conditioned upon specific mitigation measures designed to address the Office of Ratepayer Advocate's (ORA) objections to the merger because of the merger's effect on service quality. ORA was specifically concerned because of a large number of slamming and cramming complaints against Qwest's subsidiaries, the FCC Notice of Apparent Liability for Forfeiture against Qwest for slamming, and the potential impact on the service quality for US West California affiliates being acquired by Qwest.

Relevant to this proceeding, D.00-06-079 required Qwest to:

Categorize each complaint against itself or any of its affiliates as either a slamming, cramming, or other complaint, tracking the slamming complaints by PIC code, tracking the cramming complaints by product or service ordered but not billed; and tracking "other" complaints by a general description of the complaint (Ordering Paragraph 2.a (1), (2) and (3));

Submit to CSD and ORA copies of all California customers' complaints received at the FCC of which Qwest has notice (Ordering Paragraph 2.d); and

Submit quarterly reports to CSD and ORA within 60 days after the end of each quarter (May 30, August 29, November 29 and March 1) for five years following the effective date of the merger decision summarizing the number and type of California complaints. (Ordering Paragraphs 2.e and 2.h.)

Because the instant investigation involves slamming and cramming allegations, and similar concerns served as the basis of the above mitigation measures, the presiding officer requested at an April 26 prehearing conference that Qwest demonstrate its compliance with D.00-06-079 in this investigation.

Notwithstanding the fact that D.00-06-079 required Qwest to submit quarterly reports commencing November 29, 2000³⁹, Qwest submitted its first compliance report to the Commission on May 2, 2001, shortly after the presiding

officer in this proceeding requested a copy of the compliance filing.⁴⁰ Qwest has therefore violated Ordering Paragraphs 2(e) and (h) of D.00-06-079 from November 29, 2000 through at least May 2, 2001, by failing to file the required quarterly reports in a timely manner. Because the Commission issued the OII on November 21, 2000, and Qwest's first compliance report was not due until eight days later, we do not fine Qwest for a particular aspect of its performance which first occurred after the OII issued, and is therefore not specifically addressed in the OII. However, we consider Qwest's conduct concerning this compliance report an aggravating factor in determining the fine for Qwest's slamming and cramming violations.

Although Qwest states it accepts responsibility for its delayed filing of compliance reports, Qwest argues that it will be denied due process if the Commission makes findings or takes any action regarding the report in this proceeding. Qwest argues that the presiding officer first asked Qwest about the compliance reports one week before the evidentiary hearings began, and although its witness Pitchford could speak of the content of the report and Qwest's challenges in preparing them, he was not the person most knowledgeable about their content or the reason for their tardiness. Qwest believes that the Commission should issue a new OII if it wishes to take action on the reports. We disagree and find that the relevant facts permit us to consider Qwest's conduct concerning the compliance report as a factor in determining the amount of the fine for Qwest's slamming and cramming violations.

D.00-06-079, issued on July 3, 2000, clearly ordered Qwest to take certain actions.⁴¹ Furthermore, Qwest received specific notice that the Commission wished to examine its compliance with D.00-06-079 a week before the hearings. Once the presiding officer determined Qwest failed to comply with the timelines set forth in D.00-06-079, Qwest received notice that this issue would be considered in this proceeding, and Qwest was afforded the opportunity to present a witness addressing the filing. At no time during the hearings did Qwest request an extension so that a more knowledgeable witness than Pitchford could testify on this subject. We find that Qwest had ample notice and the opportunity to address the compliance issue at the hearings.

Additionally, CSD questions Qwest's compliance with D.00-06-079 on a substantive basis. Specifically, CSD complains that the report does not provide any categorization of slamming and cramming complaints, but rather categorizes each complaint by an adjustment code (i.e., the reason the customer's telephone bill was adjusted). CSD points out there is no slamming code, Qwest only recently is instituting a cramming code, and customers who have complained but have yet to receive an adjustment will not appear on the quarterly reports. Further, CSD complains that Qwest's tracking of "other" complaints overwhelms the report and makes CSD's tracking and investigation difficult. CSD also points out that the complaint does not contain business complaints.

Qwest believes it has complied with D.00-06-079's categorization requirements. We do not engage in a detailed analysis of the compliance filing here, but recognize that it may have been hastily assembled in light of the presiding officer's request. In order for the compliance filings to provide meaningful information to the Commission, we direct that Qwest meet and confer with representatives from CSD and ORA no later than 30 days after the issuance of this decision in order to refine the format of the compliance report. If the parties thereafter believe that the reporting requirements of D.00-06-079 need to be clarified or supplemented, or if the parties cannot agree on the report's format, they should petition to modify D.00-06-079. For this reason, the Commission's Process Office should also serve a copy of today's decision on the service list of Application 99-09-039 (the merger proceeding in which the Commission issued D.00-06-079).