III. Evidentiary Record

A. Evidence of Violations

CPSD's investigative reports (Exhibits 1 and 2) document Miko's history as a telecommunications company in California, its interactions with Commission staff, and the specifics of the claimed violations. Briefly, on September 18, 2001, the Commission issued D.01-09-038 granting Miko a certificate of public convenience and necessity (CPCN) to operate as a switchless reseller of intraLATA and interLATA service within California. Miko is based in Birmingham, Alabama, and is solely owned and operated by its President, Margaret Currie. Miko did business in California in 2002 and 2003, but is no longer conducting business in California.

During Miko's California operations from May 2002 to about August 2003, it used billing agent ILD Communications (ILD) to submit billings through the local exchange carriers (LECs). According to information obtained from ILD, Miko billed consumers $844,575 in 2002, and $2.75 million in 2003. According to ILD, and Commission staff, Miko has not submitted any of the fees and surcharges mandated by law. These fees are required by Attachment A to D.01-09-038, and include Universal Lifeline, High Cost Fund A and B, California Teleconnect Fund, etc.

When Miko first obtained a CPCN, it failed to notify the Commission within 12 months that it had begun operations by filing a tariff with the Commission (as required by D.01-09-038). Therefore, on March 12, 2003, the Telecommunications Division administratively revoked Miko's CPCN. Miko, which had already begun operations, continued to operate without a valid CPCN after March 12. Miko re-applied for a CPCN in April 2003, and received a new CPCN on September 4, 2003.

On March 3, 2003, the Telecommunications Division issued a data request to all interexchange carriers for certain specific information, including when carriers (such as Miko) began operations. Margaret Currie responded that Miko began operations in California in January 2003. However, ILD reported billing activity for Miko in 2002, and SBC Communications, Inc. reported about 27,000 Primary Interexchange Carrier (PIC) changes for Miko in 2002.

During 2002, the Commission's Consumer Affairs Branch (CAB) received 11 slamming complaints against Miko, rising to 176 slamming complaints in 2003. In addition, SBC reports 1,702 PIC disputes against Miko in 2002, rising to 2,869 in 2003. In 2002, of the $844,575 billed to consumers, $166,736 was refunded to consumers, or approximately 20% of all billings for that year. In 2003, of the $2,750,127 billed to consumers, $826,493 was refunded to consumers, or approximately 30% of all billings for that year.

B. CPSD's Recommended Sanctions and Fines

Based on the evidence introduced in this case, CPSD recommends that the Commission:

· permanently revoke respondents' operating authority;

· find that Miko owes the Commission $27,383 for 2002 and $54,019 for 2003 in uncollected fees and surcharges, based on the amount of revenues reported by Miko's billing agent; and

· find that Miko has violated the statutes and rules set forth in Ordering Paragraph 1a-f of the OII, and pursuant to Public Utilities Code Section 2107, impose $10,000 in nominal penalties for those violations.