Background

When D.85-03-017 imposed the CCCS requirement on the seven largest local phone companies, the evidence showed that $160 million per year was lost from the one percent of customers who did not pay their bills. The Commission noted that there were two basic types of customers in this category: (1) the customer who is financially distressed and simply cannot pay, ultimately leading to disconnection of service, and (2) the "fraudulent customer" who engages in one, and possibly more, of the following: charging toll calls to others' billing numbers, skipping out without leaving a forwarding address, and disconnecting without paying the final bill then reconnecting through another name at the same location. Under the CCCS system, the phone companies participating in the trial could collect an additional deposit from customers found to owe a balance to a previous CCCS participating utility.

The CCCS trial ordered in D.85-11-039 was to last a minimum of two years (later revised to three years). We made clear in 1993 that the program was not required to be permanent, when we stated in response to such a claim that "it was the choice of the local exchange carriers (LECs) to continue the program after the successful experiment pursuant to D.85-03-017 and Investigation
(I.) 86-08-088."¹ While this language in D.93-03-072 might be read to allow LECs to drop out of the program without Commission input, Verizon has filed this application because of our requirement in D.89-11-039 that LECs seek our permission to withdraw from the program: "A telephone utility wanting to withdraw from the CCCS shall file an application requesting authority to withdraw from the program. . . ."²

¹ D.93-03-072, 48 CPUC2d 543 (1993), 1993 Cal PUC LEXIS 181, at *4.

² D.89-11-039, Appendix A, paragraph 2(b), 1989 Cal. PUC LEXIS 886, at *8.