Reasonableness of Requested Compensation

All claimants have submitted time logs to support the hours claimed by their professionals. Those logs typically note the names, dates, number of hours charged, and the issues and/or activities in which each was engaged. Each claimant has adequately detailed the hours for which it is claiming compensation, and its other expenses. We tabulate their claims in this section, and evaluate each claim. Later we retabulate the results to show how we derive their awards. Where claimants have made adjustments, arithmetic errors or other errors in their submittals that make the tables appear inconsistent, their figures are retained here and corrected in our subsequent retabulations.

UCAN's Claim

TURN's Claim

WCA's Claim

CSBRT's Claim

LIF's Claim

NCLC's Claim

The components of each request must constitute reasonable fees and costs of that claimant's preparation for and participation in the proceeding. Only those fees and costs associated with the claimant's work that the Commission concludes made a substantial contribution are reasonable and eligible for compensation.

To assist in determining the reasonableness of the compensation requested, the Commission in D.98-04-059 directed claimants to demonstrate productivity by assigning a dollar value to the ratepayer benefits of their participation. We then evaluate whether the costs of each claimant's participation bear a reasonable relationship to the benefits realized from it. In this case, no claimant attempted to assign a dollar value to either the ratepayer benefits of the Commission's order overall, or to the benefits resulting from their contribution to it.¹⁵ That is to be expected. While the Commission itself found, "The rules we adopt in this order will provide numerous benefits to telecommunications consumers in California, including substantial economic benefits,"¹⁶ it also agreed that the benefits were not easily reducible to dollar terms. To make that point, the Commission quoted from an NCLC, UCAN, TURN and Consumers Union filing that became part of the record:

It is often the case that regulations that protect the public health, safety and welfare impose significant costs on the regulated industry that can be estimated, even if imprecisely, while providing benefits that cannot easily be reduced to dollar terms. Examples include virtually all pollution control regulations, where the regulated industries can incur substantial engineering, design, construction and equipment purchase costs while the public receives much harder-to-quantify reductions in illness and intangible increases in enjoyment of air, water and land resources; consumer protection and disclosure rules that address fraudulent and deceptive practices, where regulated parties may face increased printing, marketing, advertising, or call center costs while the public avoids an unquantifiable number of deceptive practices; and the Federal Communications Commission's ("FCC") number portability rules, where the industry must invest millions of dollars in the technology that allows for number portability while consumers gain the hard-to-quantify benefit of being able to switch carriers more easily.¹⁷

The Commission went on to say, "We agree with these comments," and proceeded to list some of the difficult-to-quantify benefits the General Order 168 consumer protection rules would provide.

We conclude that the overall benefits to ratepayers of the new consumer protection rules are substantial, and they would not have been achieved without the participation of these intervenors to complement and balance the efforts of the telecommunications industry. We need not quantify the benefits to know that they will exceed the aggregate amount of all of the intervenor compensation claims by a wide margin.

The various consumer groups were notably efficient in that they frequently participated in coordinated groups. Throughout the proceeding, consumer representatives were outnumbered by an industry that frequently filed a large number of comment sets carrier by carrier.¹⁸ TURN, UCAN, and NCLC often partnered with others to submit a single set of combined comments (as did the Attorney General's office and ORA). That helped avoid duplication of effort and reduced the burden on the Commission of reviewing multiple, overlapping sets. Under the circumstances, we find that all of the claimants' efforts have been productive.

We next assess whether the hours charged for each claimant's efforts that resulted in substantial contributions to the Commission's decision are reasonable. Then we determine whether the compensation rates claimed are commensurate with market rates for similar services from comparably qualified persons.

UCAN

UCAN detailed the number of hours each advocate worked by date and activity. UCAN's claim suffered from numerous small errors in the arithmetic and in carrying figures forward from the underlying worksheets to successive summaries, but the underlying time and expense detail sheets allow us to reconstruct what it is actually seeking. Given the length and scope of the proceeding, the number of parties actively participating, the number of filings each intervenor was required to review in preparing its own comments and replies, and the number of filings UCAN made, we agree that UCAN's hours and expenses are commensurate with its contributions in the proceeding. We therefore find them reasonable. The only adjustments we will make to its hours and expense charges are corrections for the arithmetic and carrying errors and a small decrease (0.75 hours) to one timesheet entry to reflect charging one-half the hourly rate for compensation-related work.

The rates UCAN seeks¹⁹ for attorney Michael Shames, its Executive Director, are the same as those we previously approved for 2000 through 2004.²⁰ Similarly, we have approved all of the rates UCAN seeks here for policy experts Jordana Beebe and Beth Givens, and for attorney Charles Carbone.²¹

UCAN also engaged the consulting services of Peter Navarro during 2003 and 2004 to provide economic and policy expertise to UCAN and the other consumer groups with which it collaborated, to analyze industry's submittals on the economic effects of our new rules, and to prepare for UCAN an independent report on the economic effects of the rules, which report became part of our record. In addition to his undergraduate degree, Navarro holds a Masters of Public Administration and a PhD in Economics. During the ten years before receiving his doctorate in 1986, Navarro was a policy analyst for, in turn, a Washington-based consulting firm, the Massachusetts Energy Office, and the Department of Energy; a Research Associate at Harvard; and a University of California at San Diego lecturer. He was an Assistant Professor of Economics at UC San Diego from 1986 through 1988, and has been an Associate Professor of Economics and Public Policy at the University of California at Irvine for the past 16 years. His resume lists six books and some 57 book chapters, electronic texts, journal articles and other publications, many or most having to do with the policy and economics of regulation, utilities, and the energy industry. UCAN paid Navarro on a project basis with a $25,000 cap on his total billings and proposes to pass that amount through without markup here. We last adopted a $135 rate for Navarro's work in 1995.²² UCAN seeks a $300 hourly rate for Navarro's 2003 and 2004 work, a rate UCAN says reflects a substantial discount from his normal consulting fee and is comparable to the expert fees the Commission has granted to similarly qualified experts.²³ UCAN cites, for example, the $300 hourly rate we granted to Terry Murray for work done in 1999,²⁴ and believes Navarro's advanced degrees, publishing history and very high level knowledge of regulatory economics would justify for him a 2003/2004 hourly rate well above Murray's from 1999. We agree that the information UCAN submitted supports a $300 rate for Navarro's work in 2003 and 2004, and adopt the $25,000 capped amount Navarro billed UCAN.

TURN

We have reviewed the breakdown TURN provided of its advocates' working hours by advocate and date, listing the activity, the issue area, and the number of hours, and a breakdown of its other expenses. TURN has reduced by one-half its time charged for intervenor compensation-related efforts and travel, consistent with our policies.²⁵ TURN earlier received an interim award in this proceeding and has properly excluded those hours and expenses from its claim here.²⁶ Given the length and scope of the proceeding, the number of parties actively participating, the number of filings each intervenor was required to review in preparing its own comments and replies, and the number of filings TURN made, we agree that TURN's hours and expenses are commensurate with its contributions in the proceeding. We therefore find them reasonable.

We have accepted in past proceedings all of the hourly rates TURN shows for its 2000, 2001 and 2002 participants (attorneys Mailloux, Stein and Finkelstein, policy expert Costa, and paralegal Goodson).

Attorney Mailloux was previously awarded the $250 and $275 hourly rates TURN now seeks for 2001 and 2002.²⁷ TURN has requested $300 and $325 hourly rates for Mailloux in 2003 and 2004, stating that this is the first request for her substantive work in those years. In D.03-07-014, we granted Mailloux a $275 rate in recognition of her 2003 responsibilities as lead attorney in that case, in this proceeding before us today, and in one other. Her previous 2003 rate, however, represented no increase over 2002. TURN cites the substantial expertise Mailloux has gained during her past 10 years as an attorney in the telecommunications and consumer protection areas that are at the heart of this proceeding, and the lead role she has taken in a number of telecommunications proceedings before this Commission. Our experience with her work here, TURN's summary of her accomplishments in other proceedings, and a review of market information for attorneys with similar training and experience, persuade us that the 2003 increase it seeks for her is warranted. The $325 rate for 2004 is consistent with the 8% increase considered reasonable under Resolution ALJ-184, and we approve it.

We have previously approved the rates for attorneys Stein and Finkelstein that TURN uses in this proceeding.²⁸ TURN has charged paralegal Hayley Goodson's work in 2000 at $80 per hour, the same year 2000 rate we approved in D.03-10-080. This is reasonable.

We previously approved hourly rates for policy expert Regina Costa of $180 (2001) and $200 (2002 and 2003).²⁹ TURN now seeks $215 for 2003 and $230 for 2004. TURN provides a thorough description of Costa's education and background from graduation in 1984 until she joined TURN's staff in 1993, and her intensive focus on state and federal telecommunications regulatory matters since. It then compares her hourly rate with those of two others to demonstrate market comparability. TURN's seeks annual increases of approximately 7% from 2002 to 2003 and 2004, escalation within the range we consider reasonable given Costa's increased experience over that period and market rates for others with her training and experience.

TURN initially claimed $150 per hour for Mark Barmore's work and later amended the rate to $125. TURN engaged Barmore specifically to prepare its compensation requests for this and other proceedings. According to TURN, the Commission approved a $140 hourly rate for Barmore's work as an attorney in 1990.³⁰ As TURN points out, that earlier determination is now 14 years out of date, Barmore has not formally practiced law since 2001, he worked exclusively here on preparing TURN's compensation request, and we typically determine that compensation request preparation does not require attorney qualifications. Taking these facts together, TURN believes it would not be appropriate for the Commission to apply the typical 50% reduction to the relatively low $125 rate it now seeks for Barmore. We have awarded at most $125 per hour (at the full hourly rate) for new attorneys for compensation-related work. We will award the requested $125 rate here and apply it without reduction for his 2004 work.

TURN requests an hourly rate of $340 for William Nusbaum's work in 2003. Nusbaum joined TURN in 2003 as senior telecommunications attorney with more than 25 years of telecommunications experience. He is a former assistant general counsel for the National Association of Regulatory Utility Commissioners, was a communications policy specialist at the National Telecommunications and Information Administration, and held several senior level positions at Pacific Telesis (now SBC) for 13 years. Nusbaum's training and experience are comparable to those of attorney Finkelstein, who was awarded $340 for work in 2002, so we find Nusbaum's requested 2003 rate reasonable.

TURN has supported each of the hourly rates it seeks for its individual participants, and we grant them without modification.

WCA

WCA submitted an invoice detailing attorney Carl Hilliard's hours and activities, and its expenses. After review, we have reduced Hilliard's time by four hours to reflect our longstanding policy of allowing time related to intervenor compensation requests at one-half the otherwise applicable rate. Given the length and scope of the proceeding, the number of parties actively participating, the number of filings each intervenor was required to review in preparing its own comments and replies, and the number of filings WCA made, we agree that WCA's hours (as adjusted) and expenses are commensurate with its contributions in the proceeding. We therefore find them reasonable.

This is our first hourly rate evaluation for Carl Hilliard, founder and President of WCA. Hilliard received his law degree in 1963 and for the next 15 years specialized in communications law, representing clients before the FCC,

this Commission, and the commissions of several other states. In 1978, he founded, and in 1984 sold, a company that owned and operated television, microwave transmission and paging facilities throughout the United States. In 1984, Hillliard joined the faculty of California Western School of Law and was director of the Simon Center for the Study of Communications Law. He was also a visiting associate professor at George Mason School of Law and University of California at San Diego. In 1992, he left academia for international negotiation engagements involving communications satellite acquisitions and frequency coordination agreements. Hilliard founded WCA as a non-profit consumer advocacy group in 1995. He cites successful consumer protection actions he and WCA have pursued before the FCC and the courts involving wireless carriers, in one of which the court awarded him attorney's fees of $250,000 based on a $550 hourly rate.

WCA seeks $385 per hour for Hilliard's work between 2000 and 2004, and claims his usual rate is $750 per hour. Hilliard has training and experience similar to that of attorney Robert Gnaizda of the Greenlining Institute who received his law degree in 1961. The $385 rate sought for Hilliard for work between 2000 and 2004 is lower than the rate awarded to Gnaizda in each of these years. We accept Hilliard's rate.

CSBRT

We have reviewed CSBRT's tabulation of its advocates' time and expenses. We note that CSBRT has properly reduced by one-half its rate for preparing its compensation request (it had no travel-related time), and has excluded from its claim here its hours and expenses associated with an interim award already received in this proceeding.³¹ Given the length and scope of the proceeding, the number of parties actively participating, the number of filings each intervenor was required to review in preparing its own comments and replies, and the number of filings CSBRT made, we agree that CSBRT's hours and expenses are commensurate with its contributions in the proceeding. We therefore find them reasonable.

At the time CSBRT filed its compensation claim, we had not yet issued decisions addressing several applications for rehearing and motions to stay D.04-05-057 in which CSBRT was participating. CSBRT has therefore not reflected in this compensation claim the hours and expenses associated with that effort. We subsequently issued two orders, D.04-08-056 and D.04-10-013, addressing those topics. On November 12, 2004, CSBRT followed up with a supplemental compensation request that we will address after the parties have had had their opportunity to respond as permitted under § 1804(c).

CSBRT seeks $310 per hour for attorney Oshiro's work in 2004. We have previously awarded $265 per hour for Oshiro's work in 1999, 2000, and 2001, including for his work during the latter two years under CSBRT's interim claim in this proceeding. CSBRT cites two independent attorney fee surveys that support a $310 rate for comparably qualified attorneys in 2004. ³² A 17% increase in Oshiro's rate from 1999 to 2004 is slightly more than 3% per year and is reasonable.

Attorney McCormick holds a Bachelor of Arts and an MBA, and in 2000 received a Juris Doctor. She was admitted to the California bar in January 2003. From 1997 to 2001 she served in various capacities at the FCC, in the Common Carrier Bureau, the Wireless Bureau, and the Chairman's office. The rates CSBRT seeks for McCormick ($200 in 2002, $185 in 2003, and $225 in 2004) are the Altman Weil survey's beginning-of-year upper quartile rates for attorneys in California with under two years of experience for 2002, 2003 and 2004.³³ At the time she began her legal career, McCormick had several years of experience in the communications arena. As such, she is comparable to TURN attorney Matthew Freedman, who had several years of energy experience when he began his legal career. We approved a 2001 a rate for Freedman of $180. We find that a rate of $180 for work in 2002 is reasonable given McCormick's prior experience, and given that she had not yet been admitted to the California bar at the time, $195 and $210 are reasonable for her work in 2003 and 2004 (consistent with Resolution ALJ-184).

LIF

LIF provided timesheets showing each advocate's hours by date, activity and issue, and properly reduced hours associated with travel and compensation by one-half. As we noted earlier in this order, for purposes of evaluating LIF's claim, we treat it as the claim of the joint entity Greenlining/LIF that was found eligible in the ALJ's ruling. Therefore, we evaluate here the reasonableness of the hours claimed for participation through filings made both by LIF alone and by LIF/Greenlining together. Given the length and scope of the proceeding, the number of parties actively participating, the number of filings each intervenor was required to review in preparing its own comments and replies on others' comments, and the number of filings LIF made, we find the hours LIF claims to be commensurate with its contributions to the proceeding, and its other expenses reasonable.

LIF's was the only compensation claim that drew a response from another party as permitted by § 1804(c). In addition to seeking compensation for its advocates' efforts and for expenses, it seeks a 25% multiplier to be applied to its entire request. It provides as justification the delay in receiving compensation because of the length of the proceeding and the risk it took in participating (particularly in contrast to carriers' attorneys who bore no such delay or risk), and the fact that it directly represented the interest of tens of millions of language minority consumers. In two identical, supporting footnotes, it notes several court decisions regarding multipliers in non-Commission cases and attempts to draw a parallel with its participation here. What it does not note, but Verizon California, Inc. (Verizon) in its response does, is the Commission's previous, consistent reluctance to award multipliers except under exceptional circumstances. ³⁴

We have noted in the past that our standards for applying hourly multipliers to attorney fees are necessarily high. ³⁵ If we did not set and maintain high standards, many attorney fees in compensation requests would include such multipliers, and we would no longer be adopting attorney fees based on market rates for comparable training and experience as required by § 1804.

As we stated in D.98-04-059, we have included hourly rate multipliers when a customer's participation involved skills or duties beyond those normally required, such as when an attorney develops and sponsors technical testimony in addition to his/her work as an attorney. We stated in D.88-02-056 and reiterated in D.00-10-007 that an upward adjustment in base level of compensation depends on many factors. Factors that can be considered in making this determination are:

A. Fee Level

1. The experience, reputation and ability of the attorney

2. The skill required to perform the legal service properly

3. Customary fee

B. Compensable Hours

1. The time and labor required (reasonable number of hours to present the case)

2. Efficiency of presentation

3. Novelty and difficulty of the issues

4. Duplication of effort

C. Degree of Success

1. Dollar amount involved

2. Degree of importance of the issue

3. The result obtained (partial or complete success on the issue)

As we further stated, "Of course, these factors are not to be applied in a rigid manner. Some factors will apply to particular elements at times and at other times the factors will be considered in adjusting the overall award."³⁶

We reject LIF's hourly multiplier. While we have benefited by Greenlining/LIF's participation, that participation was not exceptional in relation to the participation of other consumer representatives, nor has LIF shown that its participation qualified as exceptional under any of the factors we list above.

We have previously approved the $380 hourly rate LIF seeks for attorney Brown for 2000 through 2003. For 2004, LIF has increased her hourly rate to $390 to reflect an additional year of experience and standard market rate inflation, following our guidance in Resolution ALJ-184. Gallardo's $275 rate for 2004 is likewise the $265 we previously approved for 2003, plus escalation.³⁷ We accept the rates claimed for Brown and Gallardo.

LIF seeks a $100 hourly rate for McMurray's work in 2002, $180 in 2003, and $190 in 2004. McMurray received a Bachelor of Arts in 2000 and worked as a law clerk for LIF until she received her Juris Doctor in May 2003. She has worked as an LIF attorney thereafter. McMurray was licensed to practice law in California in December 2003. LIF supports McMurray's $100 rate in for 2002 as reflecting the standard level for law clerks. For McMurray's 2003 and 2004 rates, LIF cites an award we granted TURN that valued 2002 graduate attorney Daniel Edington `s 2003 work at $190.³⁸ We agree that McMurray's proposed rates are reasonable and we adopt them.

NCLC

NCLC also provided timesheets that showed each advocate's hours by date, activity and issue. While travel time was reduced by one-half, attorney Harak's compensation-related time was not. We have made that adjustment by subtracting 5.95 hours in 2001 and 14.1 hours in 2004 in the Awards section below. Given the length and scope of the proceeding, the number of parties actively participating, the number of filings each intervenor was required to review in preparing its own comments and replies, and the number of filings NCLC made, we agree that NCLC's hours (as adjusted) and expenses are commensurate with its contributions in the proceeding. We therefore find them reasonable.

We have not previously established hourly rates for the individuals in NCLC's compensation claim. Boyajian is a second year law student and summer legal intern at NCLC. All of Boyajian's time was for drafting the compensation request, for which NCLC seeks a $100 hourly rate and no 50% reduction. In support, NCLC cites a TURN award based on $95 per hour for TURN's legal intern Goodson in 2002, and a $100 per hour award granted in 2000 for a law clerk assisting in the preparation of a compensation claim.³⁹ NCLC's proposed $100 rate is reasonable, and we adopt it without a reduction.

NCLC requests $235 per hour for work performed by attorney Wein in 2002. Wein is a 1995 law school graduate and a member of the bar in California, Maryland, and the District of Columbia.⁴⁰ She holds a Bachelor of Arts and a Masters of Education. Since graduating from law school, Wein has held a number of public interest positions, including significant work on telecommunications issues. Since the beginning of 2000, Wein has been a staff attorney at NCLC specializing in energy and utility issues. She is on the board of the National Low-Income Energy Consortium. She is an editor and contributor to NCLC's Energy and Utility Update, a quarterly subscription newsletter mailed to several hundred consumer advocates around the country, and an editor and author of Access to Utility Service, NCLC's major consumer treatise on electric, gas, and telephone issues. She is also familiar with the concerns of telephone consumers through her work in researching and writing a guide for telephone consumers in the state of Washington. We have previously allowed attorneys Berrio and Gallardo, 1997 graduates, $235 per hour for 2002 work, and awarded attorney Armi, also a 1997 graduate, $230. As a 1995 graduate, Wein has two more years of experience than these attorneys. She also has a well-developed specialty in utilities law. In light of her years of experience and her specialization in telecommunications, we adopt a rate of $235 per hour for work Wein completed in 2002 as reasonable.

NCLC requests $350, $385, $435, and $435 hourly rates for Harak's work in 2001, 2002, 2003, and 2004. Harak received his Bachelor of Arts in 1972, his J.D. in 1976, and was admitted to the Massachusetts bar in 1977. He has been an instructor at Boston College Law School (1976 -1977), a staff attorney for the Massachusetts Public Interest Research Group (1978 - 1979), a staff attorney specializing on energy and utility issues at the Massachusetts Law Reform Institute (1979 - 1995), an attorney in the utilities and insurance division of the Office of the Massachusetts Attorney General (1995 - 1998), of counsel with a law firm primarily representing municipal and non-profit clients on utility issues (1998 - 2001), and senior attorney at NCLC's energy and utilities project (2001 - 2004). Harak has represented a range of consumer, environmental and labor organizations in proceedings before five different state commissions, including a prior appearance before this Commission. He has successfully represented low-income clients on energy, utilities, and housing issues in state and federal court at both trial and appellate levels. Harak has litigated telecommunications-related cases in Massachusetts, filed comments in various dockets before the FCC, and advocated before the Massachusetts PUC for mechanisms to automatically enroll lifeline-eligible households. Harak has authored and/or edited a number of newsletters, handbooks and treatises on a broad range of utility and energy issues, and is a frequent presenter at various energy and utility conferences.

The Commission has previously awarded attorneys Randy Wu and Mike Florio $350 hourly for work in 2001. While Wu and Florio have more experience before us, Harak has previously appeared before this Commission⁴¹ and the commissions of four other states in proceedings of all types. He has devoted virtually his entire legal career to representing the interests of low-income consumers on a range of utility issues. Similarly, Harak's $385 rate for 2002 is comparable to that awarded to Wu and Florio for their work in that year,⁴² and to the $380 awarded to LIF for work Susan Brown performed in 2001/2002.⁴³ Finally, NCLC seeks $435 for the work Harak preformed in 2003, with no increase in that hourly rate for 2004. We recently awarded TURN attorney Florio $435 for work in 2003 and included an analysis of current market rates.⁴⁴ Florio and Harak have nearly identical years of experience, and while Harak has not practiced as exclusively in California as Florio, Harak's experience in proceedings and consumer work around the country brings its own unique value to his work in this proceeding.

We find the hourly rates NCLC seeks for Harak reasonable and will allow them: $350 in 2001, $385 in 2002, and $435 in 2003 and 2004.