VI. Pub. Util. Code § 311(g)(1)
The draft decision of ALJ Kenney was mailed to the parties in accordance with § 311(g)(1) and Rule 77.7. Choctaw filed comments on the proposed decision on April 9, 2001. There were no reply comments. Choctaw's comments have been reflected, as appropriate, in the final decision adopted by the Commission.
1. UCAN alleged in its complaint that Choctaw does not offer several types of services required by D.96-10-066, including MRS.
2. Choctaw claims that it is not required by D.96-10-066 to offer MRS.
3. Choctaw's tariffs show that it currently offers MRS to its ULTS customers, but not to its other customers.
4. UCAN and Choctaw filed a Settlement that purports to resolve UCAN's complaint. To resolve the MRS issue raised in UCAN's complaint, the Settlement recommends that the Commission open a proceeding to consider whether and how prepaid providers of local service should comply with D.96-10-066.
5. It is feasible for Choctaw to offer MRS by (i) charging a deposit for the service that customers would forfeit upon nonpayment of MRS rates and charges; and (ii) adjusting the price of MRS to reflect bad-debt costs associated with the service.
6. There is no evidence that Choctaw's failure to offer MRS has caused any physical or economic harm to Choctaw's customers or others.
7. There is no evidence that Choctaw has significantly benefited from its failure to offer MRS.
1. Choctaw is required by D.96-10-066 to offer MRS to all of its customers.
2. Choctaw's failure to offer MRS to all of its customers violates D.96-10-066.
3. Pursuant to § 2107, Choctaw may be fined for violating D.96-10-066.
4. The Commission has discretion to devise a monetary penalty that advances the public interest. The Commission may decline to assess a fine for each day of a continuing violation if doing so advances the public interest.
5. It is necessary and reasonable to fine Choctaw for violating D.96-10-066 in order to deter future violations of Commission decisions by Choctaw and others. The amount of the fine should be based on the criteria set forth in D.98-12-075.
6. The application of the criteria in D.98-12-075 to the facts of this case indicates that it is reasonable to fine Choctaw $5,000 for its failure to offer MRS to all of its customers as required by D.96-10-066.
7. The Settlement's resolution of the MRS issue contravenes D.96-10-066, which requires Choctaw to offer MRS to all of its residential customers.
8. The Commission has broad, plenary power to modify a settlement to ensure that it is in the public interest and consistent with the law.
9. To ensure that the Settlement is consistent with the law, it should be modified to require Choctaw to file an advice letter to offer MRS. The advice letter should be filed no later than 30 days after the effective date of this decision.
10. To ensure that the Settlement is in the public interest, it should be modified to require Choctaw to pay a fine of $5,000 for its failure to offer MRS to all of its customers as required by D.96-10-066.
11. The Settlement, with the modifications described in the two previous Conclusions of Law, is reasonable in light of the whole record, consistent with law, and in the public interest.
12. The Settlement, as modified by this decision, should be approved.
13. No evidentiary hearing is required in this matter.
14. This decision should be effective immediately, so that the modified Settlement may be implemented expeditiously.
IT IS ORDERED that:
1. The Settlement Agreement contained in Appendix A of this decision is adopted with the following two modifications:
a. Choctaw Communications, Inc., d/b/a Smoke Signal Communications (Choctaw), shall file an advice letter to offer measured rate local telephone service (MRS) as required by Decision (D.) 96-10-066. Choctaw shall file the advice letter no later than 30 days after the effective date of this decision.
b. Pursuant to Pub. Util. Code § 2107, Choctaw shall pay a fine of $5,000 for its failure to offer MRS to all of its customers as required by D.96-10-066. Choctaw shall pay the fine by tendering to the Commission's Fiscal Office a check for $5,000 made payable to the State of California General Fund.
2. Case 00-04-039 is closed.
This order is effective today.
Dated April 19, 2001, at San Francisco, California.
LORETTA M. LYNCH
President
RICHARD A. BILAS
CARL W. WOOD
GEOFFREY F. BROWN
Commissioners
Commissioner Henry M. Duque, being
necessarily absent, did not participate.
Appendix A
SETTLEMENT AGREEMENT
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Utility Consumers' Action Network, )
Complainant )
)
v. ) C. 00-04-039
)
Choctaw Communications, Inc. )
D/b/a Smoke Signals Communications )
Defendant )
)
SETTLEMENT AGREEMENT
I. PARTIES
The parties to this Settlement Agreement ("Settlement Agreement") are The Utility Consumers' Action Network ("UCAN") and Choctaw Communications, Inc. ("Choctaw"), hereinafter referred to collectively as the "Settling Parties".
II. RECITALS
A. SCOPE AND DESCRIPTION OF THE AGREEMENT
1. UCAN filed its Complaint ("Complaint") at the California Public Utilities Commission ("Commission") on April 27, 2000, alleging, among other things, that Choctaw Communications was not in compliance with its tariffs that were filed at the CPUC and that the tariffs that were filed did not comport with the law. (All issues raised by UCAN in the Complaint or in its Pre-hearing Conference Statement or in this Settlement Agreement are hereinafter referred to as "Complaint Issues")
2 The Settling Parties agree to resolve the Complaint Issues in the manner set forth below. The resolved issues are interrelated and no issue or term of the Settlement Agreement should be evaluated in isolation from the remainder of the settlement. (See Section III.G, Indivisibility, below). Each Settling Party urges the Commission to approve this Settlement Agreement as a fair and reasonable resolution of the Complaint Issues. Each Settling Party hereby declares and represents that it has reached this determination, and is executing this Settlement Agreement, after consultation with its own legal counsel. The undersigned parties recommend that the Commission adopt the terms of the agreement set forth below.
B. UCAN'S PRESENTATION
UCAN is a San Diego-based ratepayer advocacy group that represents over 40,000 members, some of whom were Smoke Signals customers. UCAN reviewed the tariffs of Choctaw Communications, it spoke to customers of Choctaw and conducted pretext phone calls to document the representations made by Choctaw's customer service representatives. It has conducted formal discovery and provided its view of the evidence to Choctaw.
C. CHOCTAW'S PRESENTATION
Choctaw Communications Inc. does business as Smoke Signals Communications®. It responded to UCAN's complaint, provided numerous documents to UCAN in response to discovery requests, and provided its view of the evidence to UCAN.
D. SETTLEMENT NEGOTIATION PROCESS
Shortly after the September 15th, prehearing conference, the Settling Parties met and developed a set of factual agreements which led to the settlement attached below.
III. AGREEMENT
For the purposes of settlement, the Settling Parties agree as follows:
A. EFFECTIVE DATE
This Settlement Agreement shall become effective as of the date ("Effective Date") that the Commission's decision approving this Agreement becomes final and non-appealable.
B. RECITALS INCORPORATED INTO AGREEMENT
The Recitals set forth above are an integral part of this Settlement Agreement and are incorporated herein as part of the Agreement.
C. GENERAL AGREEMENT
To avoid substantial litigation and discovery costs and without admission of liability, the Settling Parties have compared their data and arrived at findings that permit settlement. The details of this settlement are set forth in Appendix "A".
D. OBLIGATION TO PROMOTE APPROVAL
1. The Settling Parties agree to use their best efforts to propose, support and advocate approval and adoption of this Settlement Agreement by the Commission. The Settling Parties agree to perform diligently, and in good faith, all actions required or implied hereunder, including, but not necessarily limited to, the execution of any other documents required to effectuate the terms of this Settlement Agreement, and the preparation of exhibits for, and presentation of witnesses at, any required hearings to obtain the approval and adoption of this Settlement Agreement by the Commission. No party to this Settlement Agreement will contest any aspect of this Settlement Agreement in any proceeding or in any other forum, by contact or communication, whether written or oral (including ex parte communications whether or not reportable under the Commission's Rule of Practice and Procedure) or in any other manner before this Commission.
2. The Settling Parties agree to actively and mutually defend this settlement if its approval or adoption is opposed by any person or entity. The Settling Parties understand and acknowledge that time is of essence in obtaining the Commission's approval of this Settlement Agreement and that each will exercise its best efforts to insure the approval and adoption of this Settlement Agreement.
E. PUBLIC INTEREST
The Settling Parties agree jointly by executing and submitting this Settlement Agreement that the relief requested herein is just, fair and reasonable, and in the public interest. They believe that the Commission can reasonably find that this settlement complies with a public interest test.
F. RESOLUTION OF COMPLAINT ISSUES
This Settlement Agreement resolves all claims arising out of the Complaint Issues. Each Settling Party expressly reserves its right to advocate, in future proceedings, principles, assumptions, arguments and methodologies which may be different than those underlying this Settlement Agreement.
G. INDIVISIBILITY
1. No individual term of this Settlement Agreement is assented to by any party except in consideration of the Settling Parties' assents to all other terms. Thus, the Settlement Agreement is indivisible and each part is interdependent on each and all other parts.
2. Any party may withdraw from this Settlement Agreement if the Commission modifies, deletes from, or adds to the disposition of the matters stipulated herein. The Settling Parties agree, however, to negotiate in good faith with regard to any Commission-ordered changes in order to restore the balance of benefits and burdens, and to exercise the right to withdraw only if such negotiations are unsuccessful.
H. GOVERNING LAW
This Settlement Agreement shall be governed by the laws of the State of California (without regard to conflicts of law principles) as to all matters, including, but not limited to, matters of validity, construction, effect, performance and remedies.
I. NO THIRD-PARTY BENEFICIARIES
Nothing in this Settlement Agreement shall be construed to create rights in, or to grant remedies to, any third party as a beneficiary of this Agreement.
J. INTERPRETATION
The section headings contained in this Settlement Agreement are solely for the purpose of reference, are not part of the agreement of the Settling Parties, and shall not in any way affect the meaning or interpretation of this Settlement Agreement. All references in this Settlement Agreement to Sections are to Sections of this Settlement Agreement unless otherwise indicated. Each of the Settling Parties hereto and their respective counsel have contributed to the preparation of this Settlement Agreement. Accordingly, no provision of this Settlement Agreement shall be construed against any Party because that Party or its counsel drafted the provision.
K. RELATED PARTIES
This Agreement shall be binding upon and inure to the benefit of the parties, their respective assigns, successors, and subsidiaries and their respective officers, directors, employees and agents. Furthermore, the agreement will be binding on and inure to the benefit of any affiliate of Choctaw that offers or in the future offers prepaid local phone service in California. Choctaw currently has no such affiliates operating in California. An "affiliate" is an entity that controls Choctaw, is controlled by Choctaw, or is under common control with Choctaw.
L. NO WAIVER
It is understood and agreed that no failure or delay by any Party hereto in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or future exercise thereof or the exercise of any other right, power or privilege.
M. RELEASE
It is the intent of the parties that this Settlement Agreement resolve not only this proceeding but the underlying Complaint Issues themselves, so as, for example, to preclude the filing by UCAN of a similar suit in court based upon on the Complaint Issues. Accordingly, UCAN hereby releases Choctaw, its assigns, successors, subsidiaries and their respective officers, directors, employees and agents from any and all claims for monetary relief concerning the Complaint Issues. This Release, however, does not preclude UCAN from seeking attorneys' fees and other compensation pursuant to California Public Utility Code Sec. 1801, et seq., nor does it preclude Choctaw from objecting on any ground to a request for such compensation or the amount of compensation requested. The Settling Parties acknowledge that the terms of this Agreement resolve claims for non-monetary relief concerning the Complaint Issues.
N. AMENDMENT; INTEGRATION
This Settlement Agreement sets forth the entire understanding and agreement between the parties with reference to the subject matter hereof, and this Settlement Agreement may not be modified or terminated except by an instrument in writing signed by all Settling Parties hereto. This Settlement Agreement supersedes all prior agreements, negotiations, and understandings among the Settling Parties, both oral and written related to this matter.
O. COUNTERPARTS
This Settlement Agreement may be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
P. APPENDICES
The appendices to the agreement are: Appendix A.
Q. NOTICES
All notices under this Agreement shall be delivered by facsimile or nationally-recognized overnight courier to the following:
If to UCAN: Michael Shames Attorney at Law Utility Consumers' Action Network 1717 Kettner Blvd., Suite 105 San Diego, CA 92101 (619) 696-6966 Fax: (619) 696-7477 |
If to Choctaw Seth Block Senior Vice President Choctaw Communications Inc. 8700 S. Gessner Houston, TX 77074 713 - 779-0692 x3267 Fax: 713 - 541-5980 with copy (which shall not constitute notice) to James U. Troup James H. Lister Suite 4001 K, 1801 K Street, NW Washington, DC 20006 (202) 775-7100 Fax: (202) 857-0172 |
EXECUTION
In witness whereof, intending to be legally bound, the Signatories hereto have duly executed this Settlement Agreement on December _____, 2000, on behalf of the parties they represent.
By: /s/ MICHAEL SHAMES Michael Shames Attorney at Law Utility Consumers' Action Network 1717 Kettner Blvd., Suite 105 San Diego, CA 92101 (619) 696-6966 Fax: (619) 696-7477 |
By: /s/ SETH BLOCK Seth Block Senior Vice President Choctaw Communications Inc. 8700 S. Gessner Houston, TX 77074 713 - 779-0692 x3267 Fax: 713 - 541-5980 |
APPENDIX A
Disputed Issues
UCAN's complaint is predicated upon the upon 68 CPUC 2d 524 (1996) D.96-10-066, (Re Universal Service and Compliance with the Mandates of Assembly Bill 3643) which dictates that carriers providing local exchange residential service shall, at a minimum, provide certain elements of basic service. In its complaint, UCAN alleged, among other things, that Choctaw Communications d/b/a Smoke Signals was not offering the following:
1. Flat and Measured Universal Lifeline Telephone Service
2. Discounted ULTS Installation Charges
3. Access to local directory assistance and local directories
4. Complete access to toll-free 800 service
5. Free billing adjustments
6. Access to telephone relay services.
7. Providing blocking of discretionary services.
8. Terms of service consistent with their filed tariffs.
These eight items, a subset of the Complaint Issues, shall be referred to as the "Disputed Issues".
Resolution of Disputed Issues
The Settling Parties have agreed to the following specific resolution of each of these matters as described below.
1. Flat/Measured Rate Universal Lifeline Telephone Service. Settling Parties agree that a pending decision in R. 98-09-005 will resolve the issue of whether Choctaw is obligated to provide universal lifeline service to its customers. This matter need not be resolved in this case. However, the Parties agree that some of the other matters resolved in this case warrant examination by the Commission, as they may impose undue hardships upon pre-paid service companies. Thus they agree to urge the Commission to initiate a generic Investigation into whether and how Pre-paid Phone service providers are to comply with D.96-10-066.
2. ULTS Installation Charges. UCAN contends that Choctaw has not complied with Public Utilities Code § 874(c). Choctaw disputes this allegation. Settling Parties agree that Choctaw will comply with Public Utilities Code § 874(c) which states that: "The lifeline telephone service installation or connection charge, or both, shall not be more than 50 percent . . . installation or connection charge of the charge for basic residential service installation or connection, or both."
3. Access to local directory assistance and timely access to directories. Settling Parties agree that Choctaw is in compliance with the law because access to third party directory assistance is not blocked and this service element (or lack of) was approved by the PUC upon filing of defendants' tariffs. UCAN contends that Choctaw has not ensured that its customers receive telephone books within three months of signing up for service. Choctaw disputes this allegation. Choctaw will take all reasonable steps within its control to ensure that customers receive printed directories within three months after telephone service is initiated, although it cannot guaranty that underlying ILEC whose services Choctaw is reselling will timely distribute the telephone books.
4. Free access to 800 or 800-like toll free services. UCAN contends that Choctaw has imposed a "where available" restriction on access 800 or 800-like toll free services. Choctaw acknowledges that the "where available" language appears in its tariff but disputes any allegation that access to 800 or 800-like toll free services has in fact been limited. Choctaw agrees that it will revise its Tariff Sheet 43-T of May 2000 which states "Where available, place or receive calls to 800 telephone numbers." The "Where available" will be removed to clarify that customers are offered unconditional access to 800 or 800-like toll free services
5. One-time billing adjustment for charges incurred inadvertently, mistakenly, or that were unauthorized. UCAN contends that Choctaw has not always provided one-time billing adjustment for charges incurred inadvertently, mistakenly, or that were unauthorized. Choctaw disputes this allegation, and note that as Choctaw's service is prepaid by the person responsible for paying charges and calls to 1-900 numbers are blocked, there are likely to be few instances in which a customer incurs a charge inadvertently, mistakenly, or without authorization. Choctaw clarifies this matter by committing that it will offer free one-time billing adjustments for charged incurred by customers pursuant to state rules.
6. Whether defendant offers access to telephone relay service as provided for in PU Code Sec. 2881. UCAN contends that Choctaw has not offered TRS services, and Choctaw disputes this allegation. Choctaw commits that it does offer TRS service, and will increase its customer education efforts so as to ensure that customers are properly informed of this fact. Marketing to California consumers contains a specific 1-800 number in order to contact Choctaw. A caller to this number who has a question about TRS is routed to the appropriately trained personnel who can provide specific answers to the inquiry.
7. Providing blocking of discretionary services. Choctaw agrees that it will revise its service initiation processes so as to ensure that customers are given an option to selectively or completely block the transfer of CNIP information, consistent with the Commission's rules on CALLER ID blocking. Because Choctaw is a reseller, this requirement is not intended to set a strict liability standard.
8. Consistency of Defendants' practices with their filed tariffs. As a result of interviews with customers and its pretext calling, UCAN has alleged that there have been several instances in which customer service representatives provided information that did not accurately reflect Choctaw's tariff. Choctaw contends that any such events are isolated incidents. UCAN has provided Choctaw with its findings and the company has committed to conduct further customer service education programs so as to ensure that statements by its employees are accurate and consistent with its tariffs.
NOTICE & OPPORTUNITY TO CURE
The procedure stated in this paragraph shall apply starting 60 days after execution of this agreement, as during that 60 day period Choctaw (if it has not already done so) will take the actions agreed upon in this Agreement. Should UCAN contend that
Choctaw has acted contrary to promises made in this Agreement (whether before or after approval of this Agreement by the Commission), it shall provide Choctaw with a confidential written notice specifying the circumstances and date(s) of the alleged deficiency. Choctaw shall have twenty (20) calendar days to cure the deficiency on a going forward basis and provide a confidential written report describing remedial actions taken. If Choctaw cures the deficiency and provides the report, no further action shall be taken unless, except as stated below. If UCAN is not presented with adequate evidence that the cure has been accomplished (or if UCAN had previously issued two or more notices concerning the same deficiency alleged in the current notice), UCAN shall call a meeting of the parties to be held in person or by teleconference on a mutually agreeable date within ten (10) days of the delivery of the written report describing the cure. During this meeting and for at least ten (10) days thereafter the parties shall negotiate in good faith to resolve the alleged deficiency. This procedure shall be a prerequisite to the filing of any action before any state, local or federal court or administrative agency (or the filing of an enforcement motion or similar request in this proceeding, if it is not yet closed.)
