2. Procedural History

On September 2, 1999, we issued the above-captioned Order Instituting Investigation (OII) into the operations and practices of Telmatch to determine whether it has violated the laws, rules, and regulations governing the manner in which California consumers are billed for telecommunications services.

The OII was based on allegations made by Consumer Services Division (CSD) that Telmatch, through its billing agents, is "cramming," i.e., imposing unauthorized charges on consumers' telephone bills. In the OII, we found that good cause exists to believe that a high portion of revenues remitted to Telmatch through its billing agents results from cramming in the form of 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 Incorporated) 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 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 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. To date the Commission has not received any funds from any source in response to D.99-10-069.

On October 12, 13, and 14, 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.

All statutory references are to the Pub. Util. Code unless stated otherwise.