ALJ/MAB-POD/avs

Decision 01-04-036 April 19, 2001

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Investigation of USP&C to Determine Whether it has Violated Public Utilities Code Section 2889.9 by Failing to Provide Commission Staff with Requested Information and Whether the Commission Should Order California Telephone Companies to Cease Providing Billing and Collection Services to USP&C.

Investigation 99-10-024 (File October 21, 1999)

OPINION AND ORDER TO SHOW CAUSE

Sheldon Krantz, Attorney at Law, for Piper, Marbury, Rudnick & Wolfe and Thomas J. MacBride, Jr., Attorney at Law, for Goodin, MacBride, Squeri, Ritchie & Day, for USP&C, respondent.

Stephanie E. Krapf, Attorney at Law, for Pacific
Telesis Group, Susan E. Brown, Attorney at Law, for Latino Issues Forum, and Chris Witteman, Attorney at Law, for The Greenlining Institute, intervenors.

Paul Stein, Attorney at Law, for The Utility Reform Network, interested party.

Travis Foss, Attorney at Law, for Consumer Services Division.

TABLE OF CONTENTS

Title Page

Summary 2

Procedural Background 3

Factual Background 5

1. USP&C's Business Practices 5

2. USP&C's Relationship with Pacific Bell 5

3. USP&C's Relationship with Service Providers 7

Discussion 9

1. Alleged Violations of § 2890(e)(2)(A) - Clear and Concise Description 10

2. Alleged Violations of § 2890(e)(2)(B) - Name, address, and telephone number of the Party Responsible for Generating the Charge and Information for Resolving Disputes 15

3. Alleged Violations of § 2889.9(f) - Failure to Make Timely Response to Commission Data Requests 20

a. Reasonable in Light of the Whole Record 20

b. Consistent with the Law 21

c. In the Public Interest 22

Sanctions 22

Reparations Policy 27

Order to Show Cause - Violation of § 2890(b) 29

Pacific Bell Enforcement of Tariff 32

Pacific Bell's Appeal of POD 33

Findings of Fact 34

ATTACHMENT A

ATTACHMENT B

OPINION AND ORDER TO SHOW CAUSE

Summary

The record in this proceeding shows that from January 1998 to June 1999, respondent, USP&C, Inc. (USP&C), served as the billing agent for $51.5 million of billings to California customers. USP&C presented billings for service providers that conducted business under several different unregistered aliases, and that also used up to four different names for identical services. Of the total amount billed by USP&C during this period, $27 million (52%) was refunded at the customer's request. The remaining $24.5 million, however, was collected by USPC, and was forwarded to the service providers, net of the fees charged by USP&C.

In this decision, the Commission finds that the respondent, USP&C, Inc. (USP&C), violated Public Utilities Code¹ §§ 2890(e)(2)(A) and (B), and imposes a fine of $1,750,000. The Commission also approves a settlement agreement between its Consumer Services Division (CSD) and USP&C that provides for USP&C to pay an additional fine of $43,000. The Commission orders all California Local Exchange Carriers (LECs) to cease permanently providing USP&C billing and collection services. The Commission also orders USP&C to show cause why it (1) should not be required to disgorge all amounts retained from unauthorized billings, and (2) should not be fined for failing to comply with §§ 2889.9 and 2890. The decision also requires Pacific Bell to enforce its Billing and Collections tariff to the letter and in a timely manner.