III. CONCLUSION

Pacific has failed to demonstrate that the Commission committed legal error.

THEREFORE, IT IS ORDERED that:

1. Decision 02-02-025 is modified by deleting at page 33 Conclusion of Law 17 and adding a new Conclusion of Law 17, as follows:

Once the cost of providing access to listings for Directory Assistance has been determined, the assigned ALJ should issue a procedural ruling regarding the calculation and implementation of refunds.

2. Decision 02-02-025 is modified by deleting at page 35 Ordering Paragraph 6 and adding a new Ordering Paragraph 6, as follows:

Once the cost of providing access to listing for Directory Assistance has been determined, the assigned ALJ shall issue a procedural ruling regarding the calculation and implementation of refunds.

3. Pacific's application for rehearing of Decision 02-02-025, as modified, is denied.

This order is effective today.

Dated December 17, 2002, at San Francisco, California.

LORETTA M. LYNCH

President

CARL W. WOOD

GEOFFREY F. BROWN

MICHAEL R. PEEVEY

Commissioners

I will file a written dissent

/s/ HENRY M. DUQUE

Commissioner

I will dissent because of concerns about retroactive ratemaking. As I understand the history of this case, I do not believe the Commission has resolved the central issue, that is, whether charges should be recoverable starting in 1996 (the effective date of the Telecommunications Act) prior to out decision.

The commission's previous orders in this particular case merely ordered carriers to track charges starting oddly from a time past, dating back to the effective date of the Telecommunications Act of 1996. But the decision to track these charges were made in 1998. This approach defies the purpose of memorandum accounts and violates retroactive ratemaking prohibitions. Circumventing retroactive ratemaking restrictions in this case by ordering retroactive tracking of charges and then ruling they are eligible for recovery undermines the basic tenets of the retroactive ratemaking prohibitions and exacerbates regulatory uncertainty.

I dissent for the above reason.

/s/ HENRY M. DUQUE

Henry M. Duque

Commissioner

December 17, 2002

San Francisco, California