II. Procedural Background

On August 6, 1998, the Commission issued its Order Instituting Investigation (OII) 98-08-004 into the operations, practices, and conduct of Coral and its officers, Michael Tinari, William Gallo, Devon Porcella, and Neal Deleo. In the OII, the Commission stated that Consumer Services Division (CSD) investigators had submitted declarations showing that Coral might have billed over 300,000 California consumers for telephone calling cards. Coral charged these customers an initial $2.99 set up fee and a $6.99 monthly charge. The OII also stated that Coral had not received a Certificate of Public Convenience and Necessity (CPCN) authorizing it to provide telephone service in California.

On November 13, 1998, and on January 14, 1999, the assigned Administrative Law Judge (ALJ) held prehearing conferences (PHC). Counsel appeared for Coral, Michael Tinari, Devon Porcella, William Gallo, and Neal DeLeo at the first PHC, and appeared again at the second PHC. Counsel indicated Coral's intent to comply with CSD's discovery requests, and provided written testimony on the date set for distribution of prepared testimony to the parties.

On December 3, 1998, the Commission issued Decision (D.) 98-12-010, in which it added Easy Access International (Easy Access), Edward Tinari, and Celestine Spoden as respondents. Counsel representing the three new respondents appeared at the January 14, 1999, PHC.

On April 12, 1999, the date set for the evidentiary hearing, Coral's counsel appeared and stated that he was withdrawing as counsel for Coral, Michael Tinari, Devon Porcella, and William Gallo, but that he would continue to appear on behalf of Neal DeLeo. Coral has not participated in this proceeding since April 12, 1999.

Counsel for Easy Access participated in evidentiary hearings on April 12 and 13, 1999, and Spoden appeared as a witness on behalf of Easy Access. On May 7, 1999, Edward Tinari, the president of Easy Access, informed the assigned ALJ by letter that Easy Access had become insolvent and would no longer participate in the proceeding.

On August 5, 1999, the Commission issued D.99-08-017, in which it noted that Coral and Easy Access had ceased to participate in the proceeding, that Easy Access claimed to be insolvent, and that Coral appeared to be as well. The decision also noted the possibility that Coral's billing agents might have retained reserves to fund customer refunds. The decision added as parties the five known Coral billing agents: International Telemedia Associates (ITA), Telephone Billing Services Inc. (TBS), OAN Services Inc. (OAN), Accutel Communications (Accutel),¹ and Calling Card Plus, Inc. (CCPI). The decision also ordered these billing agents to file complete accountings of their financial relationships with Coral and to remit any retained funds for further disposition by the Commission. As set out below, neither ITA nor CCPI responded to the directives in D.99-08-017, and the Commission subsequently suspended their rights to bill through California LECs. OAN and TBS sought rehearing of D.99-08-017.

TBS and Accutel submitted the accountings in response to D.99-08-017. OAN submitted a statement that it had performed no bills for Coral but that it had performed such services for Accutel. OAN stated that Accutel had informed it that Coral was its sales agent for a portion of the billings OAN did for Accutel. On February 15, 2000, the assigned ALJ issued a ruling directing TBS and Accutel to supplement their accountings, which both did. On April 3, 2000, the assigned ALJ issued a ruling directing OAN to respond to factual representations regarding its involvement with Coral made in Accutel's supplemental accounting. OAN filed an accounting that showed that it had collected $288,690 from California customers. Accutel also supplemented its response and stated that it did not have a written contract with Coral.

On April 20, 2000, the Commission issued D.00-04-067, which stayed the portion of D.99-08-017 directing the billing agents to deposit funds with the Commission. The decision also indicated that the substantive issues raised in OAN's and TBS' rehearing applications would be addressed in a later decision. We address these substantive issues, among other things, in today's decision.

On November 3, 2000, the ALJ issued her Presiding Officer's Decision (POD). OAN filed an appeal of the POD. All issues raised by OAN have been carefully reviewed and considered. Where warranted, changes have been made in the text of the decision.