2. Procedural History
We issued the above-captioned Order Instituting Investigation (OII) into the operations and practices of Telmatch to determine whether Telmatch improperly billed California consumers for telecommunications services. The OII contained allegations made by Consumer Services Division (CSD) that Telmatch, through its billing agents, had been "cramming," that is, had imposed unauthorized charges on consumers' telephone bills. The OII found that good cause existed to believe that a high portion of Telmatch's revenues came from recurring monthly charges for a calling card that consumers did not authorize.
The OII ordered an accounting of Telmatch's revenue from local exchange carriers (LECs) and billing agents. On September 27, 1999, we held an initial evidentiary hearing for the purpose of allowing Telmatch, billing agents, CSD, and the two large LECs (Pacific Bell and GTE California Incorporated2) to present evidence on whether Telmatch had sufficient financial solvency to assure compliance with any future order to provide reparations to the allegedly crammed consumers.
On October 22, 1999, we issued an Interim Decision (D.) 99-10-069, which ordered billing agents and LECs to submit to the Commission's fiscal office funds collected on behalf of Telmatch. On November 12, 1999, Telmatch filed a "Petition for Clarification" of D.99-10-069 on whether the amount that the LECs should submit to the Commission should exclude those amounts held back for the LECs' and billing agents' "...fees, reserves, customer refunds and the like... ." On the same day Telmatch also filed a Request for En Banc Hearing. In response to D.99-10-069, the Commission has received funds from several sources. 3
On October 12, 13, and 14, 1999, a second evidentiary hearing was held to determine whether Telmatch violated the Pub. Util. Code by imposing a recurring monthly charge on consumers' telephone bills in connection with the company's calling card; whether Telmatch should be fined $500 or up to $20,000 per violation; and whether Telmatch should be ordered to pay reparations for charges for service that consumers did not authorize.
2 GTE California Incorporated has since changed its name to Verizon California. 3 Verizon California, Pacific Bell, and Clearworld Communications submitted checks for $53,311, $4,690.27, and $4,690.27, respectively.
