ALJ/MCK/eap DRAFT Agenda ID # 711

6/27/2002

Decision DRAFT DECISION OF ALJ MCKENZIE
(Mailed 5/28/2002)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Investigation into Long Distance Charges, Inc., Least Cost Routing, Inc., National Telecommunications, Inc., Future Telecommunications, Inc., and Tel-Save, Inc., and Ned Gershenson and Doris Fisher In Their Individual And Controlling Officer And/Or Shareholder Capacities, Respondents.

Investigation 00-01-018 (Filed January 20, 2000)

FINAL OPINION APPROVING SETTLEMENT AGREEMENT

Summary

In this decision, we approve a settlement agreement entered into between the Commission's Consumer Services Division (CSD) and the various respondents in this proceeding. The settlement agreement was filed on August 28, 2001, and is attached hereto as Appendix A.

Under the agreement, the respondents will make various payments totaling $340,000. Of this sum, $152,000 is for customer restitution, $136,000 represents a penalty, $22,000 is for notifying customers that they must choose a new long-distance or toll service provider (and to reimburse the customers for the costs of making this change), and $30,000 is for hiring an independent legal claims administrator, Gilardi & Co. LLC (Gilardi), that will handle the actual notification of customers, payment of restitution and reimbursement for the costs of connecting with new providers.

The settlement agreement also requires the corporate respondents except Tel-Save, Inc. (Tel-Save) to surrender the certificates of public convenience and necessity (CPCNs) that they hold from this Commission, and not to offer any type of telephone service in California for a period of five years.¹ The two individuals who control the companies surrendering their CPCNs, Ned Gershenson and Doris Fisher -- who, along with these companies, are collectively referred to hereinafter as the Gershenson Group -- also agree that neither they nor any "telephone corporation" they control (as defined in the agreement) will apply to the Commission for operating authority during the same five-year period. If they do apply for such authority after the end of the five years, they will disclose the existence of this proceeding and any subsequent legal complaints that may have been filed against them.

Applying the standards of Rule 51.1(e) of our Rules of Practice and Procedure, we find the settlement agreement is reasonable in light of the whole record, consistent with law and in the public interest. We therefore approve it.