BEFORE THE PUBLIC UTILITIES COMMISSION

OF THE STATE OF CALIFORNIA

Investigation on the Commission's own motion into the fitness of the officers, directors, owners and affiliates of Clear World Communications Corporation, U-6039, including individual officers, directors and shareholders James, Michael, and Joseph Mancuso, and into the conduct of other utilities, entities, or individuals (including Christopher Mancuso) who or that may have facilitated the Mancusos' apparent unlicensed sale of telecommunications services.

FILED PUBLIC UTILITIES COMMISSION JUNE 9, 2004 SAN FRANCISCO OFFICE I.04-06-008

ORDER INSTITUTING INVESTIGATION INTO THE FITNESS OF THE OFFICERS, DIRECTORS, OWNERS, AND AFFILIATES OF CLEAR WORLD COMMUNICATIONS CORPORATION, U-6039.

I.

TABLE OF CONTENTS

Page

I. INTRODUCTION 1

II. FACTUAL BACKGROUND 2

A. Clear World 2

B. The Mancusos 3

1. James Mancuso 4

2. Michael Mancuso 4

3. Joseph Mancuso 4

4. Christopher Mancuso 5

C. The Mancusos' Four Applications to this Commission. 6

III. PROCEDURAL BACKGROUND AND SUMMARY OF STAFF'S REVIEW. 7

IV. CLEAR WORLD/MANCUSO CONDUCT SINCE D.03-02-066. 10

A. Slamming 10

1. CAB Complaints, Clear World Denials, and TPV Tapes. 10

2. Testimony of Former Clear World Employees. 11

3. LEC PIC Dispute Reports Showing Hundreds of Slamming Complaints Each Week; Other Evidence. 12

B. Failed Audit -- Omissions in Compliance Filing, and Failure to
Comply with D.03-02-066. 14

V. NEWLY DISCOVERED EVIDENCE OF PAST CONDUCT. 16

A. Mancusos' Operation of DLD as a Telephone Company
Without Certificate of Public Convenience and Necessity. 16

1. DLD's Participation as a "Separate Entity" in the "Consortium Buying Arrangement." 16

2. Contractual Agreements between DLD and Amerivision; and
Clear World and WorldCom. 17

3. Mancusos' Unlicensed Sale of Long Distance Service through another Company, Worldwide Telecommunications Corporation. 18

B. New Evidence of Christopher Mancuso's Significant Control Over the Mancuso Utilities, Including DLD and Clear World. 19

C. New Evidence Showing Failure to Pay Required Surcharges and
Usage Fees. 20

D. New Evidence of Failure to Retain and Produce Documents,
and Cooperate with Staff. 21

VI. MANCUSOS' ALLEGED MISREPRESENTATIONS IN
APPLICATIONS, FILINGS, AND TESTIMONY TO AND
BEFORE THIS COMMISSION. 22

A. Omissions and Misrepresentations in Applications. 22

B. Mancusos' Misrepresentations in Sworn Testimony. 22

VII. LEGAL ANALYSIS 23

A. The Short Form Registration Process. 23

B. Misrepresentations by Management Are Relevant to
Whether Management Is Fit to Operate a Utility. 24

C. Past Regulatory Performance Is Relevant to Whether Management
is Fit to Operate a Utility. 25

D. Slamming Violations are also Relevant to Fitness Analysis. 26

E. Misrepresentations, Contempt, Rule 1 Violations Generally. 27

F. Agency. 28

VIII. ROLE OF WORLDCOM, NTC, AMERIVISION, AND
CERTAIN BILLING AGGREGATORS IN FACILITATING
MANCUSOS' CONDUCT. 30

A. MCI WorldCom and the Mancusos. 30

B. NTC 31

C. Amerivision 31

D. Billing Agents or Aggregators 32

IX. ORDERING PARAGRAPHS 33