UCAN's Request for Sanctions

On February 25, 2000, UCAN filed brief on the issue of whether the Commission should impose sanctions and penalties on MCI Metro. UCAN requested that the Commission impose a fine of no less than $250,000 on MCI Metro.⁵ UCAN stated that MCI Metro was properly considered a relatively large and experienced entrant in the local phone market, and that MCI Metro had or should have the resources and experience to adequately and lawfully compete in this market. UCAN contended that should the Commission fail to impose a fine on a company of this size, smaller companies would not be deterred from making similar billing errors.

UCAN observed that the Commission has adopted guidelines for exercise its discretion in setting fines within the statutory range.⁶ A primary factor under these guidelines is the severity of the offense. UCAN quantified the severity of MCI Metro's offenses by looking at the amount of money MCI Metro improperly collected, $617,227, and the number of customer errors that occurred, 74,815. Some customers may have been affected by more than one error. UCAN pointed out that these errors also have a negative impact on competition. Customers who left their incumbent local exchange carrier and encountered a series of billing errors with MCI Metro will be less likely, in UCAN's view, to seek out other competitive opportunities.

The next factor in the guidelines UCAN addressed is the conduct of the utility. While UCAN views MCI Metro's billing errors caused by human error, as less egregious UCAN sharply criticized MCI Metro for its failure to notify all affected customers of its rate increase. MCI Metro had initially alleged that no law or regulation required such notice. UCAN argued that MCI Metro should have been familiar with the rules and that its disregard of these rules warrants a penalty.

UCAN also painted out that MCI Metro is restitution efforts have not been exemplary. UCAN concluded that MCI Metro repeatedly under-assessed the number of affected

customers and made other errors that resulted in customer refunds being delayed up to two years.

With respect to the financial resources of MCI Metro, another factor to consider in determining the amount of a fine, UCAN pointed out that MCI Metro's parent company, MCI WorldCom had cash revenue of $5.1 billion for 1999.

Another factor under the guidelines is furtherance of the public interest. UCAN stated that the Commission has the responsibility to prevent further abuses to MCI Metro's customers and to deter similar violations by other carriers.

The final factor is the role of precedent. UCAN cited several Commission decisions that UCAN concluded supported fines ranging between 50% and 100% of the customer harm.

Based on all these factors, UCAN recommended a fine of $250,000.