Assignment of Proceeding

Geoffrey Brown is the Assigned Commissioner and Janice Grau is the assigned ALJ in this proceeding.

Findings of Fact

1. Titan filed its application for CPCN with the Commission on July 19, 1999, pursuant to the Commission's registration process. The Commission granted that application in D.99-08-049 issued on August 23, 1999, and authorized Titan to operate as a switchless reseller of interLATA and intraLATA services.

2. Question 7 of the CPCN application asks the applicant to respond "true" or "not true" to the statement that no officer, director, general partner, or owner of applicant had acted in that capacity with an interexchange carrier that 1) filed for bankruptcy; 2) had a judgment or verdict involving a violation of Bus. & Prof. Code § 17000 et seq. or consumer misrepresentation; or 3) is under investigation for similar violations.

3. Respondents answered "true" in response to Question 7.

4. The Arizona Attorney General's 1998 complaint against ACI was brought under the Arizona Consumer Fraud Act and alleged that ACI and Bucci had violated that act.

5. On July 22, 1998, the New Jersey Division of Consumer Affairs-Office of Consumer Protection served a subpoena on ACI to appear by August 6, 1998, and produce documents related to ACI's customer solicitation process, customer complaints, evidence of agreement to switch to ACI for specific customers, etc. under the authority granted by the New Jersey Consumer Fraud Act.

6. Question 8 of the CPCN application asks the applicant to answer "true" or "not true" to the statement that to the best of applicant's knowledge, neither applicant, any affiliate, officer, director, partner, nor owner of more than 10% of applicant, or any person acting in such a capacity whether or not formally appointed, has been sanctioned by the Federal Communications Commission or any state regulatory agency for failure to comply with any regulatory statute, rule or order.

7. Respondents answered "true" in response to Question 8.

8. On February 26, 1999, the Michigan Commission issued a show cause order that required ACI to respond within 21 days. Because ACI did not respond, the Michigan Commission fined ACI $940,000 and prohibited ACI and its directors, officers, principals, and agents from engaging in the telecommunications business in Michigan until the fine was paid. Both the order to show cause and the order fining ACI were publicly noticed.

9. Prior to the filing of Titan's application, the Texas Public Utilities Commission issued a notice of intent to assess an administrative penalty against ACI for slamming (June 23, 1998) and the Idaho Attorney General notified Bucci that it had commenced an investigation of ACI's business practices (March 30, 1999).

10. On June 24, 1999, the Commission opened an investigation into the operations, practices, and conduct of ACI and Larry Cornwell, in his capacity as receiver for ACI, to determine whether ACI had violated Pub. Util. Code § 2889.5 by switching subscribers' long distance provider without the subscribers' authorization.

11. CPSD's attempts to mail the ACI OII and investigative report to Bucci were unsuccessful; they were returned unopened.

12. The Commission revoked ACI's CPCN and ordered ACI to pay $200,000 restitution in D.00-04-012, issued on April 6, 2000.

13. The $35,000 fine is established by assessing a fine of $500 per day for two offenses, for a total of 35 days, the time from filing of Titan's registration application and issuance of the decision granting that application.

14. CPSD's appeal has not shown the POD failed to make required findings or committed legal error but CPSD's recommendations concerning future applications for authority are reasonable.

Conclusions of Law

1. Rule 1 of the Commission's Rules of Practice and Procedure provides that any person who transacts business with the Commission agrees never to mislead the Commission or its staff by an artifice or false statement of fact or law. Titan and Bucci misled the Commission and violated Rule 1 by answering "true" to Question 7 of the CPCN application when ACI was under investigation in Arizona and New Jersey for consumer fraud.

2. Respondents misled the Commission and violated Rule 1 in answering "true" to Question 8 of the CPCN application when the Michigan Commission had sanctioned Bucci by precluding his engaging in the telecommunications business following ACI's failure to pay the assessed fine.

3. It is reasonable to revoke Titan's operating authority, because Titan was not eligible to use the registration process and had numerous technical violations of Commission rules, and because Bucci's prior experience with ACI resulted in numerous investigations and sanctions for slamming.

4. Bucci and Titan are entitled to due process and the opportunity to respond to the allegations that ACI operated unlawfully.

5. To hold Bucci and Titan liable for the restitution the Commission ordered ACI to pay in D.00-04-012 would violate their due process rights.

6. Pub. Util. Code § 2107 provides for a penalty between $500 and $20,000 for each offense of a public utility.

7. Titan should be assessed a penalty of $35,000 for violating Rule 1 after applying the criteria adopted in D.98-12-075.

8. Titan and Bucci were not eligible to use the registration process to apply for a CPCN, and the authority we granted in D.99-08-049 is invalid and should be revoked.

9. CPSD's recommended revisions concerning any future application for authority are adopted; otherwise, the appeal lacks merit and is denied.

10. Today's order should be made effective immediately to provide conduct guidance generally and to resolve the status of the Respondents.

ORDER

IT IS ORDERED that:

1. The certificate of public convenience and necessity of Titan Telecommunications, Inc. (Titan) issued in Decision 99-08-049 is revoked.

2. Titan shall pay a fine of $35,000 for the Rule 1 violations, payable to the State of California General Fund and tendered to the Commission's Fiscal Office within 20 days from the effective date of this order.

3. Titan shall make any future request to this Commission for operating authority by formal application; such request shall refer to this proceeding by number and subject matter, and shall be served on the director of the Consumer Protection and Safety Division (or its successor).

4. Titan and its directors, officers, partners, owners, and agents shall not apply for a certificate of public convenience and necessity for Titan or any other telecommunications carrier until Titan has paid the fine ordered herein.

5. Any future request to this Commission for operating authority by Christopher Bucci, or by any entity in which Christopher Bucci is a director, officer, partner, principal, or agent, shall be made by formal application, shall refer to this proceeding by number and subject matter, and shall be served on the director of the Consumer Protection and Safety Division (or its successor).

6. Investigation 01-03-021 is closed.

This order is effective today.

Dated January 30, 2003, at San Francisco, California.

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