8. Remedies

When ex parte violations are found, the Commission has broad authority under the Public Utilities Code to impose such penalties and sanctions, or make any other order, as it deems appropriate to ensure the integrity of the formal record and to protect the public interest. Also, Public Utilities Code Section 2107 provides that any public utility "which fails or neglects to comply with any part or provision of any order, decision, decree, rule, direction, demand, or requirement of the commission" may be penalized for no less than $500 and no more than $20,000 for each offense."

UCAN requests a penalty of $120,000 be assessed against AT&T and a similar penalty against Cox (each penalty calculated as six separate offenses, i.e., two meetings involving three personal advisors). UCAN also asks for attorneys' fees in the amount of $7,500 for its preparation of pleadings and involvement in the hearing pertaining to the ex parte matter.

In D.98-12-075, the Commission identified the severity of the offense, the utility's conduct, the financial resources of the utility, the degree of harm to the public interest, and precedent as factors to be considered in determining the appropriate fine for an ex parte violation. Regardless of the effect on the public interest, the Commission has accorded a high level of severity to conduct that harms the integrity of the regulatory process.

As previously discussed, AT&T and Cox have violated the ex parte provisions of state law and Commission rules. The impermissible conduct was the ex parte communication with the advisors of Commissioners on two separate occasions. The conduct is serious because it had the potential of adversely affecting complainant's substantive rights in adjudicatory proceedings. Such conduct interferes with impartial resolution of complaints based on the record before the decisionmaker. The defendants did not disclose their conduct. Had not a personal advisor disclosed these communications, they may not have come to light. In this instance, the number of personal advisors involved (representing three Commissioners' offices) is also a relevant factor that we have considered.

The Commission has imposed penalties in excess of $20,000 for comparable ex parte violations (see D.02-12-003; penalty against Pacific Bell), and a penalty in that range against these defendants is entirely appropriate. The imposition of a $20,000 penalty against each carrier for each meeting is sufficient in view of the seriousness of the offense. We take official notice, pursuant to California Evidence Code § 452(h), of AT&T, Inc.'s Form 10-K filing with the Securities Exchange Commission indicating shareholders' equity, as stated on the company's consolidated balance sheet, of $54.7 billion at the end of 2005. We take similar official notice of Cox Communications' Form 10-K filing with the SEC indicating shareholder equity, as stated on the company's consolidated balance sheet, of, $5.9 billion at the end of 2005. The defendants have sufficient financial resources to pay these penalties.

Additionally, UCAN's attorneys' fees will be assessed against AT&T and Cox. UCAN was necessarily involved in the ex parte hearing and briefing to understand the circumstances of the ex parte communications, argue for corrective action, and protect the integrity of the adjudications it had filed.

UCAN is conclusively entitled to reasonable attorneys fees and costs for its participation in these ex parte proceedings. UCAN may claim specific amounts, not to exceed $7,500, in its post-proceeding claim for intervenor compensation. The amount will be assessed jointly and severally against AT&T and Cox. The penalties and attorneys' fees are chargeable to shareholders and not to ratepayers.