IV. Is Injunctive Relief Warranted?

First, I will address the authority of an ALJ to grant a temporary restraining order or preliminary injunction. In D.04-09-056, the Commission ruled:

An individual assigned Commissioner or ALJ may issue a temporary restraining order or preliminary injunction in order to preserve the status quo, subject to its ratification or reversal by the full Commission. (See the California Constitution, Article XII, Section 2 ["Any commissioner as designated by the commission may hold a hearing or investigation or issue an order subject to commission approval."]; see also Pub Util. Code § 310; Systems Analysis and Integration, Inc. d/b/a Systems Integrated v. Southern California Edison Company, D.96-12-023, 69 CPUC2d 516, 522...14

Based on the decision cited above, I find that I have the authority to issue a temporary injunction to preserve the status quo, subject to its ratification or reversal by the full Commission.

The CLECs point out that the Commission set out the standard for the issuance of a preliminary injunction in AT&T Communications of California, Inc. et al., v Verizon California Inc., 2004 Cal. PUC LEXIS 478 (2004) at *16-*17 as follows:

The Commission uses the same test for temporary restraining orders that it uses for preliminary injunctions. (See Westcom Long Distance, Inc. v. Pacific Bell et al., D.94-04-082, 54 CPUC2d 244, 259; see also Re Standards of Conduct Governing Relationships Between Energy Utilities and Their Affiliates, D.98-12-075, 84 CPUC2d 155, 169.) To obtain a temporary restraining [*19] order, the moving party must show (1) a likelihood of prevailing on the merits; (2) irreparable injury to the moving party without the order; (3) no substantial harm to other interested parties; and (4) no harm to the public interest.

AT&T states that under the dispute resolution provisions of their respective agreements, the CLECs must establish that they are entitled to injunctive relief in order to gain any relief at all on their motion.

AT&T asserts that the CLECs have not demonstrated the requisite elements for an injunction. I will examine each element in turn.

The first element is whether the moving party has demonstrated the likelihood of prevailing on the merits. As I have shown above, I believe that the CLECs are correct that AT&T's assumptions are not all appropriate. I have made two adjustments to AT&T's assumptions: first I have eliminated the $23.99 for unlimited local calling and replaced it with $2.70, based on 500 minutes of use. I have also determined that it is inappropriate to include access charges. Using the model developed by AT&T, those two adjustments reduced the rate from the $37.24 rate proposed by AT&T to $25.19. Therefore, I find that the CLECs have met the requirement that they would prevail, at least in part, on the merits. I find that the revised proxy rate is closer to what the Commission envisioned in D.06-01-043 when it ruled that customers that had not been transitioned from UNE-P by March 11, 2006 would be billed at the resale rate, rather than the LWC rate found in AT&T's commercial agreements. As the CLECs state, AT&T's proposed proxy rate is remarkably similar to the LWC rate, which the Commission rejected in D.06-01-043.

The second element for injunctive relief relates to whether the moving party will sustain irreparable injury without the order. According to AT&T, the CLECs' claim of irreparable harm is based on the assertion that paying the difference between AT&T's proxy resale rate and what they believe to be a true resale rate threatens them with bankruptcy. In other words, the CLECs are alleging monetary loss. AT&T points out that the Commission has held, "monetary loss alone is not an adequate showing of irreparable harm,"15 AT&T acknowledges that the Commission has made an exception where the monetary loss in question cannot later be recovered,16 but AT&T asserts that that exception does not apply here. According to AT&T, if the Commission ultimately agrees with the CLECs on the merits on their claims, the CLECs could simply seek a refund. AT&T finds the CLECs' claims that AT&T proxy rate could push the CLECs close or into bankruptcy as incredible on its face. According to AT&T, the CLECs themselves can relieve any perceived financial distress simply by completing the UNE-P transition process by converting their lines to resale. I disagree with AT&T's conclusions on two grounds. First, a monetary loss cannot later be recovered if the company goes into bankruptcy. Therefore, I find that the Commission's determination that monetary loss alone is an adequate showing of irreparable harm applies in this case, since the monetary loss in question may not be later recovered.

Also, AT&T suggests that the CLECs should just complete the process to convert their lines to resale. However, in their motion, the CLECs indicate that "most of the Movant CLECs are not moving to resale arrangements, but are attempting to deploy their own switching and transport so that they can provide facilities-based service to their customers..."17 Therefore, AT&T's suggestion that the CLECs should just convert their remaining lines to resale, so as to avoid the application of AT&T's proxy rate is without merit. It does not address the needs of a carrier that is attempting to transition to UNE-L.

The third element for injunctive relief is that it would not result in harm to other interested parties. The CLECs state that "[AT&T] will be made whole by a true-up to usage-based resale rates, once the CLECs complete submission of their transition orders."18 AT&T asserts that a true-up will not recompense AT&T for creating a temporary billing system that will be useless to all other CLECs. AT&T asserts that it would incur substantial costs if it were compelled to bill CLECs on an individual basis as if the bills were generated out of the genuine resale billing system. AT&T's argument is not convincing because, in this case, both AT&T and the CLECs are proposing a proxy rate. The only difference is the amount of that proxy rate.

AT&T also states that the moving parties fail to acknowledge the effect their requested relief - an artificially depressed resale rate available only to CLECs that have failed to complete the transition -- would have on the CLECs in California with whom they compete. This argument is without merit. I do not believe that the proxy rate I have adopted here is an "artificially depressed resale rate." Rather, it is a reasonable approximation of what these CLECs would pay if their customers were on resale service. Those rates should be comparable to the rates paid by other CLECs that are purchasing resale service.

The final element for injunctive relief is whether there is any harm to the public interest. According to AT&T, it would frustrate the Federal Communications Commission's intent if the CLECs that have failed to initiate the transition mandated in the Triennial Review Remand Order were permitted to continue to compete using UNE-P, priced at the artificially depressed rate the CLECs propose. That argument does not have merit since I have already determined that the proxy rate I have adopted is a reasonable proxy for resale rates. It is in the public interest to assure that CLECs' customers continue to receive service from their carrier of choice.

In sum, I find that the CLECs have met their burden for injunctive relief and grant that relief as follows:

IT IS RULED that:

1. The motion of the Movant CLECs is hereby granted in part and denied in part, in accordance with the terms and conditions outlined above.

2. AT&T shall bill those CLECs that have not transitioned their UNE-P customers at a resale proxy rate of $25.19 per month.

3. The Movant CLECs' interconnection agreement provisions requiring them to "pay and dispute" are hereby suspended, but only with regard to payment of charges for UNE-P customers that had not been transitioned as of March 11, 2006.

4. For those CLEC customers that are transitioned to resale service, AT&T shall be permitted to true-up the charges imposed on CLECs to a level based on the first month of measured resale usage and features for each former UNE-P line.

Dated April 13, 2006, at San Francisco, California.

CERTIFICATE OF SERVICE

I certify that I have by mail this day served a true copy of the original attached Administrative Law Judge's Ruling Granting in Part Motion for Enforcement of D.06-01-043 on all parties of record in this proceeding or their attorneys of record.

Dated April 13, 2006, at San Francisco, California.

NOTICE

Parties should notify the Process Office, Public Utilities Commission, 505 Van Ness Avenue, Room 2000, San Francisco, CA 94102, of any change of address to ensure that they continue to receive documents. You must indicate the proceeding number on the service list on which your name appears.

* * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * * *

The Commission's policy is to schedule hearings (meetings, workshops, etc.) in locations that are accessible to people with disabilities. To verify that a particular location is accessible, call: Calendar Clerk (415) 703-1203.

If specialized accommodations for the disabled are needed, e.g., sign language interpreters, those making the arrangements must call the Public Advisor at (415) 703-2074, TTY 1-866-836-7825 or (415) 703-5282 at least three working days in advance of the event.

(END OF APPENDIX A)

14 AT&T Communications of California, Inc. et al., v. Verizon California Inc., 2004 Cal. PUC LEXIS 478 (2004) at *16 - *17.

15 Order Denying Emergency Motion for Stay of Decision 01-09-058, Utility Consumers' Action Network v. Pacific Bell, D.01-11-069, 2001 Cal. PUC LEXIS 1121, at *8 (Cal. PUC Nov. 29, 2001).

16 See e.g., Order Granting Stay of Ordering Paragraphs 2 and 3 of D.94-11-068 and Ordering Paragraphs 14 and 15 of D.94-11-069, Investigation on the Commission's Own Motion Into the Causes of Recent Derailments of Southern Pacific Transportation Company Trains, D.95-02-047, 58 CPUC2d 654, 1995 Cal. PUC LEXIS 98, at *3 (Cal. PUC Feb. 8, 1995).

17 Motion for Enforcement of D.06-01-043 at 10.

18 CLEC motion at 13.

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