3. The Settlement Agreement

In the Settlement Agreement, NOS/ANI admit that they violated Rule 1, "even if inadvertently." Rule 1 states in relevant part:

Any person who signs a pleading or... transacts business with the Commission, by such act... agrees to... never... mislead the Commission or its staff by an artifice or false statement of fact or law.

As part of the settlement, NOS/ANI agree to pay a fine of $10,000 for their violation. However, $9,500 of this amount will be suspended and then waived in the event there are no further violations of Rule 1 by NOS or ANI during a two-year period. The two-year period began on May 3, 2006, the date the settlement agreement was filed at the Commission.⁵ Upon approval of the settlement agreement, NOS/ANI will remit $500 to the Commission. CPSD also agrees to the withdrawal of A.05-12-007 and A.05-12-008.⁶

The Settling Parties contend that the negotiated fine of $10,000 is consistent with Commission precedent. They state that it is appropriate to suspend $9,500 of the fine, and to waive this amount after two years if there are no additional violations of Rule 1, because the Commission and its staff have not had to expend substantial effort on this matter. CPSD adds that it believes it is appropriate to waive all but $500 of the fine because CPSD has no basis to question the claimed inadvertence, because of NOS/ANI's misunderstanding about the need to file the applications in the first instance, and because of the cooperation of NOS/ANI in resolving this matter.

⁵ Email from NOS/ANI counsel sent on April 30, 2007.

⁶ Settlement Motions, p. 7.