V. Beginning Point for True-Up
Parties indicate conflicting interpretations concerning the point in time when the true up of DA rates is to take effect. We disagree with Verizon that once a true up is ultimately made, it should only apply to revenues collected subsequent to January 1998, the issuance date of D.98-01-042. Verizon claims that rates in effect at the time that D.97-01-042 was issued in January 1997 are "presumptively reasonable" and cannot be subject to refund now. Yet, in D.97-01-042, we provided no basis to infer that then-existing DA rates were deemed presumptively reasonable. Instead, we noted that the Association of Directory Publishers (ADP) had raised questions concerning the reasonableness of Pacific's tariffed rate for directory access. We expressly stated that by permitting Pacific's tariff to become effective, we had not ruled out the opportunity for to pursue any remaining reasonableness issues over the tariff. We then provided an opportunity for parties to file comments on this issue. The fact that the actual decision adopting memorandum accounting was not issued until January 1998 did not resolve the reasonableness issues that had previously been raised by ADP. In OP 4, of D.98-01-042, we authorized the memorandum accounts to apply retroactively to the effective date of Pacific's directory access tariffs.
In D.98-06-027, the Commission modified OP 4 of D.98-01-042, to state that memorandum accounts should retroactively reflect revenue billed since the effective date of the 1996 Telecommunications Act rather than the effective date of carriers' tariffs. Pacific further interprets D.98-06-027 as holding that D.98-01-042 was not intended to authorize a retroactive true up. Pacific cites language from OP 4 of D.98-01-042 which states:
"At the present time, we have simply ordered the establishment of memorandum accounts to record billings to third party vendors.... We have not issued any order regarding rates or the disposition of the money tracked in the accounts."
Pacific claims that nothing in D.98-01-042 authorizes the Commission to apply new rates retroactively. INFONXX disputes Pacific's interpretation, arguing that the ILECs never had the unilateral right to set rates, much less nonrefundable rates, for DA database access at any time following the date that D.97-01-042 was issued. LSSI likewise argues that Pacific ignores the fact that a true up is the exact function for which the memorandum account was established. LSSI claims that D.98-01-022 effectively provided notice to Pacific that the funds were subject to true up, and that a determination that existing rates are improper and unreasonable appropriately triggers the need for true-up.
We find that the language in D.98-06-027 is clear that DA rates were to be retroactively trued up to the effective date of the Act. The modification made in OP 1 of D.98-06-027 did not delete the language in D.98-01-022 indicating that DA charges would be subject to retroactive true up, but simply revised the starting point for the true up to begin with the effective date of the Act. Nothing in D.98-01-022 otherwise reversed or disturbed our previous findings in D.97-01-042 that the function of the memorandum account was to provide for a retroactive true up once final DA rates were determined. The fact that D.98-06-027 indicated that an order had not yet been issued regarding our disposition of the DA funds did not negate our prior holding in D.98-01-022 that that DA charges would be subject to true up once any such final disposition was made.
Accordingly, Pacific shall be required to perform a true up of the amounts it has previously charged for DA access retroactive to the effective date of the Act, and to rebate DA providers for any overcharges relating to the five-cents per query charge that we disallow pursuant to today's order.
1. In D.98-01-022, the Commission required that memorandum accounts be established to track revenues billed for directory access services rendered to third-party competitors in order to permit a later true up and refund of any overcharges once final rates were established in the OANAD proceeding.
2. Over three years have passed since the memorandum accounting requirement was adopted, and final rates have yet to be adopted in the OANAD proceeding.
3. The original reasons the Commission relied upon as a basis to establish the memorandum accounts and provisional rates have not changed.
4. The passage of three years since D.98-01-022 was adopted has not lessened the uncertainty as to what the level of final rates will be or when those rates will be adopted in OANAD.
5. The interim arrangement adopted in D.98-01-022 does not treat DA providers in a discriminatory manner, since provision is made for a true up and refund of any overcharges to DA providers once final rates are established in OANAD.
6. Petitioners' proposed modification to D.98-01-022 ignores the legal requirement to link lower rates to other "legitimately related" terms contained in the pertinent agreements with CLECs prescribing those rates.
7. In OP 4, of D.98-01-042, the Commission expressly authorized the true up of amounts booked in the memorandum accounts to apply retroactively to the effective date of Pacific's directory access tariffs.
8. As noted in the arbitrator's report in A.00-01-022, Pacific's DALIS tariff calls for a charge of five cents per listing each time the provider gives out a listing to one of its customers through its own DA service.
9. As found in the A.00-01-022 arbitration proceeding, AT&T had no mechanism in place to track the number of times that it gave out DA information from a listing provided through Pacific's DALIS tariff.
10. If Pacific is unable to independently enforce the per-query charge in the case of AT&T, there is no reason to believe that Pacific could independently track per-query transactions of other DA providers utilizing listings under the terms of Pacific's DALIS tariff.
11. It is not reasonable to include a provision in the DALIS tariff for a five-cents-per-query charge that is not subject to independent tracking or enforcement by Pacific.
12. Although Pacific was provided the opportunity to file comments as to why the per-query charge in its DALIS tariffs should not be eliminated for all purchasers of DA access, Pacific did not do so.
13. The rates found presumptively reasonable by the FCC for purposes of pricing access to ILEC listings for directory publishing vendors are not applicable to the pricing of DA access by third parties.
14. The FCC has concluded that the pricing structure of DA access services should remain distinct from that of subscriber list information developed pursuant to the rate methodology set forth in Section 222(e) of the Act.
15. The FCC has concluded that the ILECs continue to maintain a near total control over the vast majority of local directory listings that form a necessary input to the competitive provision of directory assistance.
16. This proceeding has not been designated as the forum in which costing data related to the provision of DA access is to be adjudicated. Thus, the cost data that Pacific has provided under seal has not been tested nor may it be relied upon as a basis for resolving this petition for modification.
17. The language in D.98-06-027 is clear that DA rates were to be trued up retroactive to the effective date of the 1996 Telecommunications Act.
18. Merely because D.98-06-027 indicated that no order had yet been issued regarding the disposition of DA funds, nothing in that decision negated prior holdings in D.98-01-022 that DA charges would be subject to true up once any such final disposition was made.
19. Nothing in D.97-01-042 indicates that then-existing DA rates were deemed presumptively reasonable, particularly since the decision acknowledged that questions had been raised concerning the reasonableness of Pacific's tariffed rate for directory access.
1. Petitioners have satisfied the procedural requirements of Rule 47 relating to petitions for modification.
2. By making the ILECs' directory access rates provisional in D.98-01-022 and subject to subsequent true up, the Commission provided a reasonable safeguard against third-party DA competitors being subject to unfair discrimination in paying for access to DA databases.
3. Although nearly four years have passed without establishing final rates for DA access, there has been no change in the underlying rationale supporting the memorandum accounts as noted in COL 2 above.
4. D.97-01-042 has already adopted rules requiring that all third-party DA providers be granted access to DA data on a nondiscriminatory basis.
5. In the FCC's January 23, 2001 Order, the FCC held that a third-party DA provider who acts as an agent for a CLC is entitled to receive access to DA database listings under the same terms contracted by its CLC principal.
6. The Petitioners' proposed modification would ignore the relationship between the DA provider and its CLC principal, but instead would permit any DA provider to demand whatever rate was offered to any DA provider or CLC, irrespective of whether or not there was an agent-principal relationship.
7. Setting a new interim rate for all DA providers equal to the lowest amounts that were charged to any other provider for DA access during the period since January 1997 would be inconsistent with recent court decisions interpreting the "pick-and-choose" provisions of interconnection agreements.
8. Under recent court decisions, an ILEC is entitled to require a requesting carrier to accept all terms that are "legitimately related" to the desired term, such as prices paid for DA access.
9. Petitioners claim is not supported that the current interim treatment adopted in D.98-01-022 results in discriminatory treatment to DA providers.
10. There is no need to modify D.98-01-022 in order for DA agents to avail themselves of the contract provisions of their CLC principal since the federal rules already independently provide for that.
11. The true-up of rates provided for in D.98-01-022, as modified by D.98-06-027, was intended to be applied retroactively to the date that the 1996 Telecommunications Act went into effect, rather than the effective date of D.98-01-022.
12. Pacific's DALIS tariff should be amended to remove the five cents per query charge in view of the lack of enforceability of this provision of the tariff.
13. Pacific should be required to rebate previously paid access charges to the extent any DA provider can document that it has previously paid Pacific the five-cents-per query charge, retroactive to the effective date of the 1996 Telecommunications Act.
14. On a going forward basis, any interim rates paid to Pacific for DA access should exclude any charge for access based on the number of customer DA queries that were provided through Pacific's DA database.
IT IS ORDERED that:
1. The Petition for Modification of Decision (D.) 98-01-022 filed by Metro One Telecommunications, Inc. and InfoNXX, Inc. is hereby denied in part.
2. A more limited modification to D.98-01-022 shall be made as follows:
a. The following Conclusion of Law (COL) 7 shall be added following COL 6:
Pacific's DALIS tariff should be amended to remove the per-listing charge that is applied each time DA listing information is given out to end-use customers using Pacific's database.
3. Within 30 days from the effective date of today's order modifying D.98-01-022, Pacific shall file an amendment to its DALIS tariff in accordance with General Order 96-A to remove the charge that is required each time DA listing information is given out to end-use customers from Pacific's database.
4. The interim provisional rates charged by Pacific for DA access on a prospective basis shall exclude any per-listing query charge that would otherwise be payable each time that a DA provider gave out DA listing information using Pacific's DA database. These interim provisional rates shall remain in effect pending the establishment of final DA access rates in the OANAD proceeding, and true up of final billing adjustments based upon the OANAD rates.
5. Pacific shall rebate the per-query listing charge to any DA provider that has previously paid to Pacific retroactive to the effective date of the 1996 Telecommunications Act to the extent any DA provider produces documentation to Pacific of the amount that it has paid for such charges. Documentation in the form of copies of past billing records shall be acceptable evidence confirming the amount of such charges. Pacific shall disburse the rebates to qualifying DA providers within 30 days of receipt of documentation confirming the amount of such charges.
6. Pacific's motion dated July 18, 2001, to file confidential cost data under seal is granted. The material shall remain under seal for two years from the date of this ruling unless Pacific files a new motion requesting for good cause to extend the period that the materials remain under seal beyond the two years.
7. The motion of LSSi Corp. to intervene and to become a party is granted.
This order is effective today.
Dated , at San Francisco, California.
