5. Discussion

5.1. Elements of an Impermissible Ex Parte Communication

Pursuant to Section 1701.1(c)(4) and Rule 5(e), an ex parte communication involves any written or oral communication, between a decisionmaker and "interested person" in a matter before the Commission regarding a substantive (not procedural) issue that does not occur in a public hearing, workshop, other public setting, or on the record of the formal proceeding. Further, Section 1701.2(b) and Rule 7(b) prohibit any ex parte communication in an adjudicatory proceeding, such as the pending complaint proceedings involved here.

Consistent with these parameters, there is no dispute that the defendants' meetings with the personal advisors (Holland did not attend either meeting), using a PowerPoint presentation as a basis of discussion, constituted both oral and written communications. There is no dispute that the two complaints and the Local Competition Docket are formal proceedings pending before the Commission, that defendants are "interested persons" as defined under the statute and our rules,²² and that advisors are considered decisionmakers for purposes of communications involving adjudicatory proceedings.²³ Finally, there is no dispute that these meetings took place privately rather than in a public setting, and outside the official record.

The only remaining element to be determined as to finding a violation of the ex parte rules is whether the communications with the advisors involved substantive issues at issue in the adjudicatory proceeding.

5.2. Substantive Issues

Neither the statute nor the Commission's rules attempt to enumerate every type of communication that may be considered substantive. However, consistent with its statutory authority, the Commission has defined types of communications that are considered procedural, i.e., nonsubstantive and not subject to the ex parte restrictions and reporting requirements. These are defined as inquiries regarding schedule, location or format for hearings, filing dates, identity of parties, and other such nonsubstantive information. (Rule 5(e).) The rules also specify that issues concerning category of a proceeding are substantive rather than procedural. (Rule 5(g).)²⁴

We find that Defendants' conduct, both on the record and in the private, off-the-record communications at issue here, challenged the appropriateness of the forum in which the Commission was reviewing Section 2883 implementation and compliance issues and effectively acted to challenge the category of the complaint proceedings.

The selection of a forum, embodied in the categorization provisions of Section 1701.1, is consequential. Forum selection significantly impacts the nature, extent, and scope of the Commission's decision making inquiry, and its remedial consequences. An adjudicatory proceeding, such as the complaints, is retrospective and can trigger remedies that address violation of statute, rule, or law. In contrast, a quasi-legislative proceeding is prospective and more policy oriented. In mandating the reporting of ex parte communications relating to category, the Commission implicitly recognizes these significant consequences as substantive matters.

AT&T and Cox, both individually and jointly, pursued an aggressive legal strategy designed to secure the commencement of a rulemaking with the hope that the complaints would ultimately be stayed or dismissed.²⁵ Their pleading strategy was completely consistent with this overall goal. As the assigned ALJ noted in ruling on the January 27 motion to dismiss, essentially defendants refused to accept the initial categorization of this matter as adjudicatory, although the time for challenging the Commission's determination had passed. Thereafter defendants attempted through a variety of motions to change the nature and scope of the forum in which the Commission would formally review the issues related to their implementation of Section 2883, as raised by UCAN.

There is nothing inherently wrong with such formal advocacy to achieve a desired outcome, assuming it is done forthrightly. Here defendants pursued a convoluted course, seeking to inject the issue in an older outstanding rulemaking. Indeed defendants took all but the most obvious and direct approach: to file a Petition for Rulemaking under Section 1708.5 in order to develop more clearly defined rules, policies, and practices for broader industry-wide implementation of Section 2883 - while allowing the initially filed complaints to be resolved independently.

Even assuming such collateral pleading challenges were permissible, a clear violation occurred when -- within weeks of the scheduled evidentiary hearings on the complaints -- defendants opted to pursue the issues in private meetings with the advisors outside the formal record. As noted, forum selection was a substantive issue in these adjudicatory proceedings. Defendants violated Section 1701.2(6) when they held unnoticed private meetings with advisors to discuss this identical forum selection issue under color of a quasi-legislative docket.²⁶

We take this opportunity to clarify any potential uncertainty as between the implementing provisions of our rules and the statute. Specifically, Rule 7(f) states that ex parte communications regarding categorization are allowed, if reported (Rule 7.1(b)). This language is not in the statute, which strictly proscribes ex parte communications in adjudicatory proceedings. We do not view the implementing language of Rule 7(f) as applicable to, or creating an exception to, the adjudicatory prohibition. That said, even if it did act as an exception, it is of no import here because defendants failed to report the ex parte communications. As discussed in Section 7 of this Order, these actions further amounted to a violation of UCAN's due process rights because they enabled defendants to engage, without UCAN's knowledge, in ex parte communications having a potential detrimental impact on UCAN's adjudicatory claims as well as the integrity of the adjudicatory process.

Finally, apart from matters related to category, there is no dispute that the topic of the unnoticed and unreported meetings was the interpretation of Section 2883, which is also at the center of the complaints. AT&T and Cox stood accused of violating Section 2883 in the complaint dockets. Table 1 (below) reflects that the communications also involved an inextricable overlap of other substantive legal and policy issues that were central to the adjudicatory proceeding and discussed during the private meetings with advisors.

Table 1: Comparison of Fenikile PowerPoint Slides, Used in Both Meetings, With Disputed Substantive Issues in Pending Adjudications

Power Point Presentation

Disputed Issues in Complaints

Title page, "An Industry-Wide Issue Deserves an Industry-Wide Proceeding" (Ex. No. 3 at 9)

AT&T's Answer & Cox Motion to Dismiss were based, in part, on arguments for industry-wide rulemaking; Presiding Officer rejected this argument.

"Unless the Commission addresses Section 2883 generically in the Local Competition Docket, rules will be fashioned in an ad hoc manner on a carrier-by-carrier basis [and] would create disparate treatment." (Ex. No. 3 at 12)
"Section 2883 imposes industry wide obligations. Industry-wide obligations require industry wide solution." (Ex. No. 3 at 15)

"This argument is flawed because it would permit Cox to escape liability for its past and continuing refusal to comply with the statutory requirements of Section 2883. A rulemaking proceeding only addresses issues on a going forward basis; it does not hold companies such as Cox accountable for past violations of the law." (UCAN Opposition to Motion to Dismiss Complaint 18 (Mar. 8, 2006).

"The Commission has not defined or adopted best practices with respect to (a) technological and facilities limitations in Section 2883(a)." (Ex. No. 3 at 12)

"Existing technologies and facilities permit [AT&T and Cox] to provide "warm line" 911 services to every residential unit in California." (UCAN, First Amended Complaint against AT&T ¶ 15; Complaint against Cox at ¶ 16)
"[T]he statute carves out certain circumstances under which a LEC has no obligation to provide warm line service, including when doing so is not `permitted by existing technologies or facilities' . . . ." (AT&T, Motion to Dismiss Complaint 6)

"The Commission has not defined or adopted best practices with respect to . . . (b) a carrier not providing access to 911 because doing so would preclude it from providing service to subscribers of residential telephone service under Section 2883(e)." (Ex. No. 3 at 12)

"[T]he statute carves out certain circumstances under which a LEC has no obligation to provide warm line service, including when doing so "would preclude providing service to subscribers of residential telephone service." (AT&T, Motion to Dismiss Complaint 6)

"Number shortages exist throughout the State" (Ex. No. 3 at 14)

AT&T "does not need to re-assign such numbers, nor is it required by law to do so." (UCAN, First Amended Complaint against AT&T ¶ 17)

"The Commission has not determined or specifically defined what exclusions would apply in providing access to 911 emergency service." (Ex. No. 3 at 12)

"[T]hese actions do not constitute automatic violations of Section 2883, as UCAN contends. Again, the statute carves out certain circumstances under which a LEC has no obligation to provide warm line service...." (AT&T Motion to Dismiss 6)

5.3. Local Competition Docket v. Adjudicatory Proceeding

Defendants who participated in the off the record meetings seek to cordon off their discussions, in an effort to draw a distinction between issues discussed regarding the Local Competition Docket where ex parte communications are permissible, and issues contested in the adjudicatory proceeding where discussion would be prohibited. As Fenikile indicates in his declaration, he cautioned attendees at both meetings that "the purpose of the meeting was to discuss the joint AT&T California/Cox request set forth in the Rules Motion for a generic rulemaking regarding Section 2883 . . . in the Local Competition Docket. I cautioned all in attendance that we were not there to, and could not discuss substantive issues of UCAN's complaint proceedings . . . ." (Emphasis added.)

In our view, this is an artificial distinction. As indicated by Table 1, regardless of how carefully one might attempt to characterize the issues discussed, it is impossible to avoid the fact that defendants' request in the Rules Motion was inextricably interrelated with the categorization, legal, and policy issues at issue in the complaint proceedings. The Rules Motion itself contained many references to the pending complaint proceedings, as delineated on pages 8 - 9. For instance, in the adjudications, the Presiding Officer had rejected defendants' efforts to dismiss the complaints in favor of a rulemaking; one of the PowerPoint slides used in the meetings with the personal advisors indicates that the subject "deserves an Industry-Wide Proceeding." The complainant in the adjudications had alleged that the defendants have the necessary technology and facilities to provide "warm line" 911 services to all California residential units; another slide argued that the Commission had not adopted "best practices with respect to . . . technological and facilities limitations." UCAN had argued that AT&T did not need to reassign telephone numbers to meet the Section 2883 obligation; Fenikile's slide stated, "Number shortages exist throughout the State." His personal notes from the meeting also include the name of the Presiding Officer in the adjudications.²⁷

²² See also Section 1701.1(c)(4). Consistent with § 1701.1(c)(4)(A) and (B), Cox and AT&T were parties to the complaint proceeding and had a potential financial interest in the outcome of the proceedings.

²³ See Rule 5(f) of the Commission's Rules of Practice and Procedure.

²⁴ Rule 5(g), effective in June 2006, provided: "'Ex parte communication concerning categorization' means a written or oral communication on the category of any proceeding, between an interested person and any Commissioner, any Commissioner's personal advisor, the Chief Administrative Law Judge, any Assistant Chief Administrative Law Judge, or the assigned Administrative Law Judge that does not occur in a public hearing, workshop, or other public setting, or on the record of the proceeding."

²⁵ For example, when asked what she expected to happen to the complaint proceedings in the face of these motions, Holland testified that "we sought for the complaint cases to be stayed . . . . Stayed at least pending the Commission's determination as to whether or not it would establish a rulemaking, and then, from there, we would see if the Commission would then at that point think it was worth going forward with the complaint proceeding, or continuing to stay the complaint proceeding, or perhaps dismiss it, given that a rulemaking would be occurring on the same-on a similar subject." 1 RT 25:20-26:2 (Holland); see also 1 RT 27:11-16 (Holland), 1 RT 21:23-22.5 (Holland), and 1 RT 25:20-26:2 (Holland). "Q: So one of the possible outcomes would be a possible dismissal of the complaints. A. Yes." Id. at 26:3-5.

²⁶ Ex parte communications are unrestricted in quasi-legislative proceedings, which are governed by Section 1701.4(b) and Rule 7(d).

²⁷ 1 RT 33:27-34 (Fenikile).

Power Point Presentation	Disputed Issues in Complaints
Title page, "An Industry-Wide Issue Deserves an Industry-Wide Proceeding" (Ex. No. 3 at 9)	AT&T's Answer & Cox Motion to Dismiss were based, in part, on arguments for industry-wide rulemaking; Presiding Officer rejected this argument.
"Unless the Commission addresses Section 2883 generically in the Local Competition Docket, rules will be fashioned in an ad hoc manner on a carrier-by-carrier basis [and] would create disparate treatment." (Ex. No. 3 at 12) "Section 2883 imposes industry wide obligations. Industry-wide obligations require industry wide solution." (Ex. No. 3 at 15)	"This argument is flawed because it would permit Cox to escape liability for its past and continuing refusal to comply with the statutory requirements of Section 2883. A rulemaking proceeding only addresses issues on a going forward basis; it does not hold companies such as Cox accountable for past violations of the law." (UCAN Opposition to Motion to Dismiss Complaint 18 (Mar. 8, 2006).
"The Commission has not defined or adopted best practices with respect to (a) technological and facilities limitations in Section 2883(a)." (Ex. No. 3 at 12)	"Existing technologies and facilities permit [AT&T and Cox] to provide "warm line" 911 services to every residential unit in California." (UCAN, First Amended Complaint against AT&T ¶ 15; Complaint against Cox at ¶ 16) "[T]he statute carves out certain circumstances under which a LEC has no obligation to provide warm line service, including when doing so is not `permitted by existing technologies or facilities' . . . ." (AT&T, Motion to Dismiss Complaint 6)
"The Commission has not defined or adopted best practices with respect to . . . (b) a carrier not providing access to 911 because doing so would preclude it from providing service to subscribers of residential telephone service under Section 2883(e)." (Ex. No. 3 at 12)	"[T]he statute carves out certain circumstances under which a LEC has no obligation to provide warm line service, including when doing so "would preclude providing service to subscribers of residential telephone service." (AT&T, Motion to Dismiss Complaint 6)
"Number shortages exist throughout the State" (Ex. No. 3 at 14)	AT&T "does not need to re-assign such numbers, nor is it required by law to do so." (UCAN, First Amended Complaint against AT&T ¶ 17)
"The Commission has not determined or specifically defined what exclusions would apply in providing access to 911 emergency service." (Ex. No. 3 at 12)	"[T]hese actions do not constitute automatic violations of Section 2883, as UCAN contends. Again, the statute carves out certain circumstances under which a LEC has no obligation to provide warm line service...." (AT&T Motion to Dismiss 6)