X. ORDERING PARAGRAPHS

Good cause appearing, IT IS THEREFORE ORDERED that:

1. An Investigation on the Commission's own motion is instituted into the fitness of Clear World, its officers, directors, and shareholders James, Michael, and Joseph Mancuso, to operate a telephone utility in California.

2. Staff is directed to develop and present all available evidence relating to all such fitness issues, including but not limited to whether and to what extent:

(a) DLD and the Mancusos sold long-distance service without a CPCN, in violation of P.U. Code §§ 1001 and 1013, inter alia;

(b) Clear World and the Mancusos misrepresented and concealed such sales and related facts, in violation of P.U. Code § 2114 and the Commission's Rule 1, inter alia;

(c) Clear World and the Mancusos operated telecommunications companies which slammed customers and engaged in other acts of abusive and/or fraudulent marketing, in violation of P.U. Code §§ 451, 2889.5 and 2890, inter alia;

(d) Clear World and the Mancusos concealed the role of Christopher Mancuso in Clear World and related entities in violation of P.U. Code § 2114 and the Commission's Rule 1, inter alia;

(e) Clear World purchased the customers of DLD without Commission approval, in violation of P.U. Code § 854, inter alia;

(f) Clear World and DLD underpaid required surcharges and fees associated with the sales of long distance service, in violation of P.U. Code §§ 405, 739.3, 879, 879.5 and 2881, inter alia;

(g) Clear World and its management failed to comply with Ordering Paragraph 3 of D.03-02-066; and

(h) Clear World and its management failed to properly retain and produce corporate and business records, and otherwise cooperate with Commission Staff, in violation of P.U. Code §§ 311, 314, 581-82, 584 and 701, inter alia.

3. The record in A.01-09-040 shall be incorporated into this proceeding; exhibits admitted in A.01-09-040 shall be considered as admitted here.

4. The Investigation shall determine whether, pursuant to Sections 701, 734, 1013 and 1702 of the Public Utilities Code, inter alia, institution of any or all of the following remedies are warranted:

a. Commission revocation of Clear World's CPCN;

b. Commission approval of any subsequent sale of Clear World's customer base, or adoption of other measures necessary to protect the established customer base;

c. Reparations to slamming victims;

d. Fines or other penalties;

e. Lifetime ban for James, Michael, Christopher, and Joseph Mancuso from participation in the management of, or as a consultant to, any telecommunications utility licensed by this Commission; and/or

f. Further injunctive or other relief as appropriate.

4.1 Pending conclusion of this investigation, Clear World and its management shall not directly or indirectly transfer or sell its customer base, or any part thereof, without notice to and approval from this Commission.

5. MCI WorldCom (U-5011, U-5378, U-5253, U-5275), Amerivision Communications (U-5244), and Ironwood Telecom LLC dba Incomnet (U-5173), as well as the billing agent BCI Acquisition LLC (on behalf of its subsidiaries ACI, BCI, and HBS and their predecessors, as named herein), are included as Respondents in this Investigation, and

these utilities and billing agents60 are directed to cooperate with Staff in providing full disclosure of all facts and documents relevant to the issues raised in this OII.

6. James, Michael, and Joseph Mancuso are also made Respondents in their capacity as individuals, and directed to provide all documents in their individual possession, custody, or control responsive to Staff's requests (see Appendix A).

7. Christopher Mancuso is made a Respondent in his individual capacity. He is ordered to show cause why this Commission should not issue an order barring him from any participation in any public utility operation in California, as suggested by D.03-02-066. Should Christopher Mancuso desire to show such cause in this case, he shall also make available to CPSD Staff copies of the account statements, all cancelled checks, and all deposit documentation for those bank accounts in his name or the name of any company he has owned or controlled from 1994-2004, including but not limited to Communications Consulting Inc. (CCI), International Telecommunications consulting (ITC), World Tech, and Mancuso LLC (see SR I, Appendix A; SR III, Appendix A), into which accounts monies from Clear World, Amerivision, billing agents or aggregators, billing "factors," or local exchange carriers were deposited relating in any way to services marketed or sold by DLD, Worldwide, or Clear World.

8. To facilitate the completion of this investigation, and consistent with the provisions of P.U. Code §§ 311, 314, 581-82, 584, and 701, Respondents are ordered to produce the information and documents listed in Appendix A within 15 days of service of this Order. Respondents are further ordered to provide a response verified by one or more competent document custodians, stating that all responsive documents found after reasonable inquiry and diligent search have been produced, except documents specifically identified as privileged, as further set out in Appendix A.

9. Respondents are ordered to preserve until further order by the Commission all information and documents, regardless of age, which might relate to this action, including but not limited to correspondence with consumers and third parties, inter-

office memoranda, inter-office email, disk drives, company websites including archived sites, bank account and other financial records, and complaints (i.e., all expressions of dissatisfaction) from California consumers. Respondents are ordered to cooperate with Staff in its investigation, and provide information, documents and witnesses as requested.

10. Confidentiality of OII, Staff Reports, Attachments to Staff Reports, and Supporting Documents: This OII and Staff's Reports rely on, and the Staff Reports contain as Attachments, substantial material originally designated as "confidential" by the producing party, including documents from MCI WorldCom, Amerivision, Clear World and other telecommunications utilities as well as from third party billing companies. The Commission finds that none of the information contained in, or language excerpted in, this OII and accompanying Staff Reports (apart from the Attachments) is so trade sensitive as to outweigh the public interest in the OII and Staff Reports being released in their entirety, and their release is hereby authorized. Moreover, the Commission finds that documents older than four years, i.e., which date from before the year 2000, do not generally remain so trade sensitive as to outweigh the public interest in their disclosure, and such disclosure is hereby conditionally authorized (subject to objection as set forth in paragraph 11 below).

10.1 Definitions:

* "Supporting Documents," as used herein, means those documents, including but not limited to Attachments, on which Staff has relied in preparing its report.

* "Confidential" documents, as used herein, means those documents the producing party designates as so trade sensitive as to outweigh the public interest in disclosure, absent a ruling or Commission Order to the contrary (and the Commission hereby authorizes the presiding officer to make such determinations in this case).

* "Attorneys-eyes-only" documents, as used herein, means confidential documents the producing party designates as so trade sensitive as to preclude their viewing by respondents herein, such that only legal counsel for a Respondent may view them (except that attorney James Mancuso, a principal of Clear World and a Respondent himself, may not view "attorneys-eyes-only" documents). While legal counsel may generally discuss the "attorneys-eyes-only" documents with his or her client, he may do so only to the extent necessary to prepare the client's response or defense to this OII, and may not disclose specific economic or technological data (prices, identification of switches, etc.) to his/her client except with leave from the presiding officer on a showing of necessity. These strictures do not apply where the Respondent client is also the producing party, i.e., where Respondent produced the document.

* "Producing party," as used herein, means those entities which have produced documents labeled as "confidential," and includes Respondents Clear World, MCI WorldCom, Amerivision, and BCI Acquisition (and subsidiaries ACI, BCI, HBS, etc.), as well as non-Respondents Qwest and SBC (who will be served with a copy of this OII, per paragraph 21 below).

* "Respondents," as used herein, means Clear World, James Mancuso, Michael Mancuso, Christopher Mancuso, MCI WorldCom, Amerivision, Ironwood Telecom LLC dba Incomnet, and BCI Acquisition, LLC (and subsidiaries).

* "Mancuso Respondents," as used herein, means Clear World, James Mancuso, Michael Mancuso, and Christopher Mancuso.

10.2 Meet and Confer: Staff and Respondents are directed to meet and confer with the several producing parties in order to establish which Attachments and Supporting Documents may be released as unrestricted, which Attachments and Supporting documents may only be produced to Respondents herein as "confidential," which Attachments and Supporting Documents may only be produced to Respondents as "attorneys-eyes-only" confidential, and whether some of the Attachments and Supporting Documents may be redacted or other accommodations reached in order to avoid a "confidential" or "attorneys-eyes-only" designation. Such meet and confer sessions shall include an attempt to devise a confidentiality agreement that protects the confidentiality concerns of the entity that produced the documents while allowing submission of the documents expeditiously to Clear World and the Mancusos. Sample confidentiality orders appear in the Manual for Complex Litigation,§ 41.35 (Federal Judicial Center, West Publishing, 1995), available at http://classaction.findlaw.com/research/mcl.pdf. The parties who produced the documents may find these samples useful, but are not obligated to use them. Such meet and confer obligations generally extend to documents ordered produced in Attachment A or otherwise produced in discovery herein. All Respondents are requested to designate documents as "confidential" and "attorneys-eyes-only" only where clearly required to maintain "trade secrets," as used in the context of General Order 66-C and P.U.Code § 583.

10.3. Production of Attachments and Other Supporting Documents to Mancuso Respondents: Notwithstanding the "meet and confer" responsibilities set out above or the previous confidentiality designations of the parties, after service (as set forth below) and within three days of the Mancuso Respondents' designation of counsel (and Clear World's designation of outside counsel), Staff is directed to make available to such counsel and outside counsel for the Mancuso Respondent(s) all documents, including but not limited to the Attachments, on which Staff has relied in preparing its report ("Supporting Documents"), for the purpose of allowing counsel to prepare a response, if any, to this OII. As to documents originally produced by parties other than Clear World as "confidential," counsel for the Mancuso Respondents shall hold such documents as "attorneys eyes only" confidential, and shall not show or give them to Clear World's principals (Clear World General Counsel James Mancuso and Clear World President Michael Mancuso), to Christopher Mancuso, or to any of the Mancuso Respondents' non-attorney personnel until either permission can be obtained from the producing parties for the production of their respective documents to the Mancuso Respondents, or a ruling or Commission Order permits such disclosure.

10.4 Production of Attachments and Supporting Documents to Other Respondents: The Attachments may be provided to legal counsel for other Respondents, provided they are then held as "attorneys-eyes-only" confidential until further agreement or ruling. If Respondents other than the Mancuso Respondents request Supporting Documents other than the Attachments, and to the extent not resolved after the process outlined in paragraph 11 below, the producing party shall similarly meet and confer with the requesting party and - if such consultations are unavailing -- move for protection within ten days of such a request.

11. Designation and Objection: After the "meet and confer" process outlined above, and within fifteen days of service of this Order on a producing party (as described below), that producing party shall serve on CPSD and all Respondents herein written permission for the Mancuso Respondents (and other Respondents if possible) to receive documents produced by that party (with or without specified conditions), or a designation of such Attachments and other documents produced by that party for which that party demands "confidential" or "attorneys' eyes only" treatment, or both. Counsel for the parties shall then again promptly "meet and confer" so that producing parties' counsel may explain such "confidential" or "attorneys-eyes-only" confidential designations. If CPSD or Respondents still object to such designation of a document, it/they shall inform the producing party within two business days of such "meet and confer" session. The producing party shall move within ten days of such objection before the Assigned Administrative Law Judge or other designated Administrative Law Judge for an order determining the proper treatment of the document. Resolution ALJ-164 (Sept. 16, 1992) applies to the resolution of these disagreements. Only documents remaining as "attorneys eyes only" after this process shall be withheld from Clear World or other parties' principals and personnel. Documents remaining "confidential" after this process may be provided to the Respondents and their principals on request, but shall be withheld from public disclosure until further ruling or Commission Order.

11.1 Related Law and Motion: As multi-lateral discovery, document management, and confidentiality issues may bring to the fore problems not anticipated by these Ordering Paragraphs, the Assigned Administrative Law Judge, the Assigned Commissioner, or the Law and Motion ALJ may modify the procedures set forth in paragraphs 10-11 on his/her own motion, on the motion of CPSD, or on the motion of any respondent or third party who produced the documents described in those paragraphs.

12. Respondents' Testimony: Within 60 days of service of this Order as set out below, Respondents shall serve prepared testimony, if any, rebutting, explaining, or expanding on Staff's report herein. Clear World in particular shall show cause in such testimony why its CPCN should not be revoked, and the Mancusos shall show cause why they should not be barred for life from participation in public utility management or operation in California. At the time that Respondents serve such testimony, they shall serve all documents supporting, negating, or otherwise relevant to the testimony served, including all workpapers, relevant contracts, and relevant electronically stored information.

12.1 When OII served on different dates: To the extent service of the OII pursuant to paragraphs 19-20 below occurs on different respondents on different days, the Assigned Administrative Law Judge shall fix a single date for service of Respondents' testimony, and for the doing of any other thing required by this OII to be done within a time certain after such service.

13. Reply Testimony. Within 30 days of service of Respondents' testimony, or at such other time as the Assigned Administrative Law Judge may order, Staff shall file any prepared reply testimony. During this time, Staff requests for information concerning Respondents' testimony shall be responded to within 3 business days, unless agreed otherwise by the parties or ordered otherwise by the Assigned Administrative Law Judge. Respondents' objections to production of documents or information relating to such reply testimony shall be promptly ruled on by the presiding officer or other designated Administrative Law Judge, in order to enable Staff to file its prepared reply testimony in a timely fashion.

14. As soon as practicable after service of reply testimony, a hearing on the allegations set forth in this OII, Staff's accompanying Reports, additional prepared testimony and on any additional information material to the issues in the proceeding, shall occur on a date or dates to be set by the Assigned Administrative Law Judge, and held at the Commission's hearing rooms.

15. Staff shall be subject only to discovery relating to the specific allegations contained in this order, or those added by subsequent motion and order.

16. Staff shall continue to investigate the operations of Respondent Clear World and its management, and the conduct of related third parties. Staff shall monitor consumer complaints made against Clear World. We expect Staff to bring additional evidence, if any, of any alleged harmful business practices by Clear World, its management, or related third parties to our attention. If necessary, Staff may propose to amend the OII to add additional allegations or affiliated respondents. Any such proposal shall be presented by motion to the Assigned Commissioner or Assigned Administrative Law Judge in the form of a motion to amend the OII and shall be accompanied by a Staff declaration supporting the proposed amendments.

17. These ordering paragraphs suffice for the "preliminary scoping memo" required by Rule 6 (c) of the Commission's Rules of Practice and Procedure. This proceeding is categorized as an adjudicatory proceeding. A prehearing conference shall be scheduled for the purpose of setting a schedule for this proceeding consistent with the parameters set out above.

18. This order, as to categorization of this proceeding, can be appealed under the procedures in Rule 6.4. Any person filing a response to this order instituting investigation shall state in the response any objections to the order regarding the need for hearings, issues to be considered, or proposed schedule. However, objections must be confined to jurisdictional issues that could nullify any eventual Commission decision on the merits of the alleged violations, and not consist of factual assertions that are more properly the subject of evidentiary hearings.

19. Service of this order on Respondents Clear World and the Mancusos shall be effected by service of a copy of this Order and Staff's Reports on the following Respondents, personally if possible (cf. CCP §§ 415.10, 416.10), or otherwise at their designated place of business (cf. CCP §415.20), or - if such efforts are not successful -- elsewhere as they may be found and in such other manner

reasonably calculated to provide Respondents with notice:

To the extent James or Michael Mancuso are aware of any other address where their brother Christopher Mancuso may more readily be found, they shall promptly notify Staff of that address. Although service shall be complete on delivery of this OII and accompanying staff reports without Attachments, Attachments shall be delivered promptly to outside counsel as soon as such counsel is designated by the Mancuso Respondents.

20. Service of this Order and the three Staff Reports (the Attachments may also be served on MCI WorldCom's and Billing Services Group's counsel as identified below, as well as counsel designated by Ironwood and Amerivision, provided such counsel agrees to keep the Attachments marked "confidential" as "attorneys'-eyes only" pending further resolution of the documents' status, as set out above) shall be effected on Respondents MCI WorldCom, Ironwood Telecom LLC, Amerivision Communications, and Billing Services Group by hand service, Federal

Express, Express Mail, or certified mail, of this Order to such parties at the following addresses:

21. A copy of this OII and a list of Attachments to the Staff Reports shall be mailed to non-respondent producing parties Qwest and SBC/Pacific Bell, in order to facilitate their designation of documents for which they demand "confidential" or "attorneys-eyes-only" treatment, as set forth above.

This order is effective today.

Dated June 9, 2004, San Francisco, California.

MICHAEL R. PEEVEY

President

CARL W. WOOD

LORETTA M. LYNCH

GEOFFREY F. BROWN

SUSAN P. KENNEDY

APPENDIX A - DATA REQUESTS OF RESPONDENTS

The indicated Respondent is directed to provide the following information and documents within fifteen (15) days from service of this Order, and to provide a verified response from the most knowledgeable employee(s) or custodian(s) of records stating in response to each request that all non-privileged responsive documents have been produced, and identifying those documents by number range or other identifier. In the case of those documents requested of Clear World and its management, as identified under the first heading below, the response should also be verified by James and Michael Mancuso as individuals, to the best of their knowledge. If documents are withheld on the grounds of privilege, a privilege log shall be provided, naming the document and listing author, addressees, persons copied, date, and privilege or other legal protection claimed to shield such document from production.

Clear World Communications Corp. (U-6039), including documents and information in the possession, custody, or control of Clear World's officers and directors Michael and James Mancuso or their father Joseph Mancuso:

1. State clearly the total number of customers (defined by BTNs) and lines (defined by WTNs) Clear World had on each of the following dates, as well as the total number of such customers with California numbers on such dates: October 2, 1998; January 1, 1999, and October 1 of each of the years 1999-2003 inclusive.

2. For each of the dates in the preceding request, please state the number of California customers direct billed by Clear World, the number billed through the LECs (please specify by LEC), and the number billed by billing agents other than the LECs (please specify by billing agent).

3. For the calendar and Clear World fiscal years 1998 through 2003 (to the extent that fiscal year 2003 is still ongoing, partial information may be provided), please separately state the total dollar amount billed to California BTNs through: (a) LECs or billing agents; (b) Clear World direct billing; and (c) other sources.

4. Please identify Clear World's five largest direct billed customers (in terms of total billings) with California numbers in calendar years 1998, 1999, 2000, 2001, 2002, and 2003, and the amount billed to each of those customers in those years.

5. Please state for each calendar and Clear World fiscal year, 1998 forward, Clear World's total California revenue (i.e., revenue obtained from all California ANIs and BTNs).

6. Please state for each calendar and Clear World fiscal year, 1998 forward, Clear World's total California billings (i.e., billings for all California ANIs and BTNs, to the extent different than the number stated in 2.5 above), and the total amount of that number which constituted California intrastate billings, as used in the calculation of public interest surcharges and PUCURA user fees (and to the extent your calculation of total billings for purposes of those surcharges and fees are different, provide both numbers). As to the intrastate billings, please provide all backup, workpapers, and supporting source documents in your possession and/or on which Clear World bases its calculation.

6.5 Please provide proof that Clear World, DLD, and Worldwide paid all required public interest surcharges and PUCURA user fees, and provide all backup for such proof.

7. Please produce all account records for Worldwide Telecommunications Corp. bank account # 023760959 at City National Bank (or its predecessors or successors) in Newport Beach, CA, as identified in Clear World's contract with Hold Billing Services as the repository account for proceeds of Clear World's sales, including monthly statements and any cancelled checks, wire transfers, or other memoranda of payments into or out of the stated account.

8. Please produce account records of all accounts used by Clear World to receive the net proceeds from its or Worldwide's sale of telephone service through WorldCom accounts 182806, 112904, 172522, and 186317 services (whether such revenue came from LECs, billing aggregators like BCI, ACI, HBS or ZPDI, or from Worldwide, WorldTel, or other sources) from 1998 through 2003 inclusive. Again, "account records" means all documents including cancelled checks, account statements and other evidence of payments into or out of the account.

9. Please produce account records for all accounts from which Clear World made payments to Christopher Mancuso, for Christopher Mancuso, or to or for business entities in which he had or has a beneficial or controlling interest, including but not limited to CCI, ITC, Mancuso LLC, World Tech, etc., and including but not limited to records of the accounts from which the $5.2 million in payments to Christopher Mancuso's ITC were made. See D.03-02-066.

10. Please produce account records, including copies of checks and other documentation, of those accounts used by Clear World the Mancusos, or their agents to make payments to World Com, its affiliates, or any third party for service on accounts 182806, 186317, 178522 and 112904, 1996 to date. (See previous DR Doc. Request #15).

11. All invoices and correspondence from WorldCom or its subsidiaries or affiliates, in your possession, custody or control, for services rendered under account 182806, 186317, 178522, and 112904, 1996 to date.

12. All documents related to Clear World's purchase of American Electronics Corporation (AEC), an entity apparently owned 100% by Joseph Mancuso, including but not limited to all AEC/DLD tax returns, financial reports, checking and other financial institution account records, customers lists, and any documents describing the assets purchased by Clear World in your possession, custody or control. (See previous DR Doc. Request #16).

13. Clear World Accounts Payable Ledger from 10/2/01 to 10/30/01. (DR Doc. Request #24)

14. Please provide a full explanation and documents supporting such explanation for the difference between the September 2001 ending balance and October 2001 beginning balance of the Clear World Accounts Payable Ledger, including a full description and backup for the fiscal year end final adjustments which Clear World has previously indicated as justification for such difference. (See Id.)

MCI WorldCom

* all documents memorializing, or reflecting in any way the circumstances of, the creation of accounts 182806, 186317, 178522, and 112904 -- and verification that all responsive, non-privileged documents have been produced, and identifying those documents by Bates number.

* Verified responses, per CCP 2031(f) and (g), to the 15 data requests propounded on or about July 15, 2003 , verifying that all responsive, non-privileged documents have been produced, and identifying those documents by Bates number.

Incomnet/Ironwood/NTC

* all extant documents referencing or reflecting the activities of Christopher Mancuso and other members of his family on behalf of the utility NTC or its successors, while they were operating at the utility, and a verification attesting that all such documents found after reasonable inquiry and diligent search have been provided to the Commission.

BCI Acquisition LLC aka BCI, ACI, HBS, etc.

* Verified responses, per CCP 2031(f) and (g), to all data requests propounded in 2003 and 2004 to ACI/HBS and BCI, verifying that all responsive, non-privileged documents have been produced, and identifying those documents by Bates number.

60 See P.U. Code § 2889.9.

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