7. Waiver of the Comment Period
This is an uncontested matter in which the Commission's decision grants the relief requested. Therefore, the otherwise applicable 30-day period for public review and comment is waived pursuant to § 311(g)(2) and Rule 14.6(c)(2).
1. The uncontested Settlement Agreement requires NOS/ANI to pay a fine of $10,000 for violating Rule 1, $9,500 of which will be suspended and then waived provided there are no further Rule 1 violations by either NOS or ANI during the two-year period that began on May 3, 2006.
2. NOS and ANI request that they be allowed to withdraw A.05-12-007 and A.05-12-008, and in light of the settlement approved herein, CPSD supports this request.
3. A.05-12-007 and A.05-12-008 should be consolidated into one proceeding for the purpose of addressing the Settlement Agreement that was submitted in both dockets.
4. The Settlement Agreement is reasonable in light of the whole record, consistent with the law, and in the public interest.
5. The Motions in A.05-12-007 and A.05-12-008 to adopt the Settlement Agreement should be granted.
6. A fine of $10,000 for violating Rule 1 should be imposed, of which $9,500 should be suspended and then waived provided there are no further Rule 1 violations by either NOS or ANI during the two-year period that began on May 3, 2006.
7. NOS/ANI should pay $500 to the Commission's Fiscal Office within 10 days from the effective date of this Order.
8. The request of NOS and ANI to withdraw A.05-12-007 and A.05-12-008 should be approved.
9. The following order should be effective immediately so that the Settlement Agreement adopted herein can be implemented expeditiously.
IT IS ORDERED that:
10. Applications (A.) 05-12-007 and A.05-12-008 are consolidated for the purpose of addressing the Settlement Agreement that was submitted in both dockets.
11. The Motions to adopt the Settlement Agreement set forth in Appendix B to this Order are granted. Pursuant to this adopted Settlement Agreement, NOS Communications, Inc. (NOS) and Affinity Networks Incorporated (ANI) shall pay a fine of $10,000 for violating Rule 1 of the Commission's Rules of Practice and Procedures. Of this amount, $9,500 is suspended and shall be waived if there are no further violations of Rule 1 by NOS or ANI during the two-year period that began on May 3, 2006.
12. Within 10 days from the effective date of this Order, NOS and/or ANI shall submit to the Commission's Fiscal Office at 505 Van Ness Avenue, Room 3000, San Francisco, CA 94102, a check for $500 made payable to the State of California's General Fund. The decision number of this Order shall be shown on the face of the check.
13. The request of NOS and ANI to withdraw A.05-12-007 and A.05-12-008, respectively, is granted.
14. A.05-12-007 and A.05-12-008 are closed.
This Order is effective today.
Dated May 24, 2007, at San Francisco, California.
MICHAEL R. PEEVEY
President
DIAN M. GRUENEICH
JOHN A. BOHN
RACHELLE B. CHONG
TIMOTHY ALAN SIMON
Commissioners
Appendix A:
List of Appearances
APPENDIX A
************ SERVICE LIST ***********
Last Update on 10-APR-2007 by: CPL
A0512007, A0512008 LIST
************ APPEARANCES ************ |
(END OF APPENDIX A)
Appendix B:
Settlement Agreement in A.05-12-007 and A.05-12-008
Note: The signed copy of the Settlement Agreement was entered into on April 25, 2006, and is in the Formal File for this proceeding. Appendix B of today's Opinion is a copy of the Settlement Agreement that does not show the date the Settlement was entered into or the parties' signatures.
SETTLEMENT AGREEMENT
This Settlement Agreement is made and entered into as of this ____ day of April, 2006 (the "Effective Date"), by and between NOS Communications Inc. ("NOS") and Affinity Networks Inc. ("ANI") (sometimes collectively, "NOS/ANI"), and the Consumer Protection and Safety Division of the California Public Utilities Commission ("CPSD") (NOS/ANI and CPSD, each individually a "Party" and, collectively, the "Parties").
Statement of Stipulated Facts
a. On May 2, 2002, the California Public Utilities Commission ("Commission") issued Order Instituting Investigation 02-05-001 into allegations that NOS/ANI had violated Section 2889.5 of the Public Utilities Code.1 This matter was initially settled by settlement approved by Commission Decision 04-06-017, which required NOS/ANI to:
in any application filed by any of the respondents herein or their affiliates pursuant to Pub. Util. Code §§ 851-854, 1001, or 1013, ... disclose (a) the fact that this proceeding was filed, (b) the fact that this proceeding was settled pursuant to the settlement agreement approved herein, and (c) the relationship between the applicant and this proceeding.
b. Because NOS/ANI objected to some of the language in D.04-06-017 (but not to the above paragraph), the settlement approved by D. 04-06-017 was rescinded. A subsequent settlement agreement between the parties, however, was executed in January, 2005, pursuant to which NOS/ANI agreed to withdraw its application for rehearing of D.04-06-017. The January 2005 settlement was approved by Commission Decision 05-06-032.
c. On December 6, 2005, NOS/ANI filed Application Nos. 05-12-007 and 05-12-008 for expansion of their operating authority under the Commission's expedited application procedures for non-dominant inter-exchange carriers (NDIECs). At the time these applications were filed, NOS/ANI did not contemporaneously disclose the existence of the investigation and settlement in I.02-05-001, as required by the Commission's Order in D.04-06-017 and by the settlement approved by Commission Decision 05-06-032. In response to short form registration question no. 8, NOS/ANI also did not disclose the revocation of their certifications in the State of Wisconsin for violation of that State's regulatory rules. NOS/ANI asserts that, in both instances, the non-disclosure was inadvertent. NOS/ANI also contends that subsequent review of Commission authorities revealed that it did not need to file the Applications in the first instance in order to provide facilities-based service.
d. On January 12, 2006, CPSD filed Protests in both Applications 05-12-007 and 05-12-008, objecting to Applicant's failure to make the disclosures described above.
e. On February 10, 2006, Applicants NOS and ANI filed what they styled as a "Withdrawal of Application" in each of the two application proceedings. CPSD has objected that these purported withdrawals are not self-executing, that the Commission must approve any withdrawal of an application, and that in doing so the Commission should find that NOS/ANI violated Rule 1 by failure to make the disclosures set out above.
f. After discussions and negotiations concerning the specific facts and circumstances at issue between the Parties, and mindful of the fact that litigating the matters at issue could be costly, time consuming and uncertain, the Parties have determined that they wish to resolve any disputes relating to Application Nos. A05-12-007 and A05-12-008 voluntarily through a settlement without the need for litigation.
Further Stipulations of the Parties
g. The Commission has previously found that the failure to make accurate disclosures on the Commission's short Form of Registration (used by non-dominant carriers pursuant to Public Utility Code § 1013 and Decision 97-06-107 and related rulings) constitutes a Rule 1 disclosure. See D.03-01-079. The Commission has also found that the question of the inadvertence of non-disclosures goes to the amount of any fine assessed for a Rule 1 violation, and has assessed a $10,000/representation penalty for Rule 1 violations even where inadvertence was claimed. See D.01-08-019.
h. Because CPSD has no basis to question the claimed inadvertence in this case, because of Applicants' apparent misunderstanding of its need to file the subject applications in the first instance, and because of Applicants' cooperation in resolving these issues, CPSD believes that it is appropriate to waive all but $500 of any penalty assessed for a Rule 1 violation in this case.
NOW, THEREFORE, in consideration of the mutual promises and agreements set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties, each on its own behalf and on behalf of its respective successors and assigns, hereby agree as follows:
1. Terms and Conditions
1.1 NOS and ANI admit that they violated, even if inadvertently, Rule 1 of the Commission's Rules of Practice and Procedure. NOS/ANI will pay a fine of $10,000 to the California Public Utilities Commission ("Commission"), of which $9,500 is suspended and will be waived upon NOS/ANI's completion of two years without further Rule 1 violations. Such a reduction is justified for the reasons set out above, and in recognition of the fact that the Commission and its staff have not had to expend substantial efforts in connection with this matter. NOS/ANI and CPSD agree to request that the Commission render a Decision in this matter which incorporates the stipulations above. On approval of the settlement, NOS/ANI will pay the Commission the sum of $500.
2. No Admission.
2.1 NOS/ANI admit that they violated Rule 1 as described in recitation c. supra, and paragraph 1.1 above. Except as so admitted, nothing in this Settlement shall constitute, or be considered as, an admission of liability or wrongdoing by NOS or ANI, or agreement by NOS or ANI as to the validity of any of the positions advanced by CPSD in connection with or relating to applications A05-12-007 and A05-12-008, and (except as so limited) neither this Settlement nor any part of it may be used in any way against NOS or ANI in any legal, equitable, or administrative action or arbitration except in an action to enforce, or seek damages for the breach of, this Settlement.
3. Enforcement
3.1 Each material breach of this Settlement will constitute a separate violation and will entitle the Commission to take any necessary action to enforce its orders.
3.2 After payment of the sum described in Paragraph 1.1, this Settlement will release the NOS/ANI from and constitute a final settlement of any and all costs, direct or indirect, presently known or unknown, accruing to or incurred by the Commission during the course of investigation and review in this proceeding.
3.3 The Parties agree that the Commission has primary jurisdiction over any interpretation, enforcement, or remedies pertaining to this Settlement. No Party may bring an action pertaining to this Settlement in any local, State, Federal court or administrative agency, without first having exhausted its administrative remedies at the Commission. This Settlement shall be governed by and interpreted in accordance with the laws of the State of California and Commission rules and regulations.
3.4 The Commission adoption of this Settlement is binding on all Parties to this action. Except as expressly set forth in Paragraph 1.1 herein, Parties agree that pursuant to Rule 51.8, this Settlement shall not constitute approval of, or precedent regarding, any principle or issue in the proceeding or in any future proceeding.
3.5 After the Issuance Date, CPSD will initiate no enforcement action, seek no administrative or other penalties against NOS/ANI based on the evidence of non-disclosure (recited above) in this case. This provision will not apply if NOS/ANI jointly or severally materially breach this Settlement, violate the Commission order approving it. This provision shall not prohibit the Commission from considering this Rule 1 violation in the event it finds Applicants committed violations of Rule 1 or other Commission rules and regulations, or sections of the Public Utilities Code related to Applicants' operations.
3.6 The Parties agree that they will not take any other action that would in any manner be inconsistent with fully supporting this Settlement. The Parties agree to furnish such additional information, documents, and/or testimony as the Commission or DRA may request to implement the Settlement.
3.7 CPSD agrees that it will not protest an application filed by NOS/ANI or any of their affiliates pursuant to Sections 851-854, 1001, or 1013 based on the investigation or allegations of non-disclosure (recited above) in this matter, as long as NOS/ANI do not further violate the Commission's rules, regulations, or sections of the Public Utilities Code related to Applicants' operations.
4. Execution of Settlement
4.1 This Settlement is subject to approval and adoption by the Commission. The Parties agree to execute or furnish any other additional information, documents, and/or testimony, or take any other action, that the Commission or CPSD may request, as necessary to implement the Joint Motion and Settlement.
4.2 This Settlement may be executed in any number of counterparts and by different Parties hereto in separate counterparts, with the same effect as if all Parties had signed the same document. All such counterparts will be deemed an original and will together constitute the same Settlement. This Settlement is the entire agreement among the Parties, which cannot be amended or modified without the express written consent of all the Parties.
4.3 This Settlement is not severable. If pursuant to Rule 51.7 the Commission materially modifies or negates any provision of this Settlement, the Parties must consent to such change. A Party will be deemed to have consented to the Commission modification unless within 15 Days following the date of issuance of the Commission proposed modification(s), (or such longer period as may be directed by the Commission) that Party notifies in writing the other Party and files with the Commission its objection to the modification(s). After the 10th day following the filing of the objection if the objecting Party has not withdrawn, canceled, or modified its objection, the Settlement will be deemed rescinded. If this settlement is rescinded following payment of any sums by Respondents, those sums shall be refunded within 15 days of rescission.
4.4 Each Party represents that it has investigated the facts and law pertaining to the matters described in this Settlement. No Party has relied or presently relies upon any oral or written statement, promise, or representation by any other Party, except as specifically set forth in this Settlement.
4.5 This Settlement will be binding upon the respective Parties, their successors, assignees, executors and administrators.
4.6 The Parties acknowledge and stipulate that this Settlement is fair and not the result of any fraud, duress, or undue influence by any other Party. Each Party hereby states that it has read and fully understands its rights, privileges, and duties under this Settlement. Moreover, each Party has had its respective attorney or other authorized person review the terms of this Settlement. By executing this Settlement each Party declares that the provisions herein are adequate, reasonable, and mutually agreed upon; and that they are entering this Settlement freely and voluntarily.
IN WITNESS WHEREOF, the Parties hereby execute Agreement on the date first set forth opposite their signatures.
Date:
Christopher Witteman
Attorney for the Consumer Protection
and Safety Division
Date:
Thomas J. MacBride, Jr.
Attorney for NOS/ANI
Date:
Richard Clark,
Director of the Consumer Protection
and Safety Division
Date:
Joe Koppy,
President, NOS and ANI
(END OF APPENDIX B)
1 All statutory references herein are to the California Public Utilities Code unless otherwise indicated.
