Factual Background

1. USP&C's Business Practices

USP&C is a Delaware corporation with its principal place of business in Kansas City, Missouri. USP&C is an aggregator of billings for telecommunications-related services, such as voicemail. USP&C does not provide the telecommunications-related services to end-users; rather, USP&C serves as a billing agent between these service providers and the LEC, such as Pacific Bell, who actually bills the customer. USP&C aggregates billing information from several such service providers, prepares the information in the proper computer format, and submits it to the LEC for inclusion on customers' local telephone bills.

2. USP&C's Relationship with Pacific Bell

The LECs provide billing and collection services to billing agents pursuant to Commission-approved tariffs. Pacific Bell's tariff for its billing and collection customers is Schedule Cal. P.U.C. 175-T. This tariff sets out the terms and conditions under which Pacific Bell will provide billing services, including the following requirements:

For telecommunications related services,

"Section 8.5.5 Obligations of the Customer²

(B) All Transactions submitted by the Customer will be accurate and consistent with the Customer service requested by and provided to the end user."

For Message Toll Service calls,

"Section 8.3.5 Obligations of the Customer

All Messages submitted by the Customer for billing will be accurate and consistent with the Customer service requested by and provided to the end user including the telephone number actually dialed by the end user."

Pacific Bell, Schedule Cal. P.U.C. No. 175-T, Sheet 522 and 484. These provisions place the obligation squarely on USP&C to submit only accurate and authorized charges to Pacific Bell.

In addition to the tariff, Pacific Bell signs a billing and collection services contract with each of its billing and collection customers. The Agreement for the Provision of Billing and Collection Services between Pacific Bell and USP&C, Inc, dated August 11, 1998 (Billing Agreement) is included in the record.³ Among the items set out in the Billing Agreement are customer complaint and refund standards, the violation of which can result in termination of the Billing Agreement. Specifically, section XX of the Billing Agreement provides that the agreement may be terminated if Pacific Bell receives more than one complaint per 30,000 bills rendered, or USP&C's refund rate to customers exceeds 15% of the total amount billed.

The record contains USP&C's customer refund rates from January 1998 to August 1999. USP&C's refund rates always exceeded 15% of the total amount billed, ranging from 36.5% to 69.02%, with an average of 52% for the entire period. In response to Pacific Bell's repeated written and verbal instructions to improve the refund rate, USP&C stated that (1) it was terminating contracts with service providers that exhibited high refund rates, (2) Pacific Bell's refund totals contained duplicate credits, (3) USP&C had a liberal refund policy, and (4) it was attempting to gain new billing customers that provided only "1+" services, which have a lower refund rate, to "dilute" its refund levels. In December 1999, Pacific Bell ceased to provide billing services to USP&C.

3. USP&C's Relationship with Service Providers

As a billing agent, USP&C aggregates the billings from numerous service providers and submits the charges to Pacific Bell. Pacific Bell requires a billing agent, such as USP&C, to obtain a Carrier Identification Codes (CIC) for record-keeping purposes. Pacific Bell does not require each service provider whose billings USP&C aggregates to obtain a CIC. Instead, a service provider may bill under USP&C's CIC; such a service provider is referred to as a sub-CIC.

USP&C's Billing Agreement with Pacific Bell sets up an approval process for sub-CICs. The sub-CIC must complete and submit a Pacific Bell Billing and Collections Customer or Sub-Entity Affidavit in which the sub-CIC states, among other things, that it has engaged in no deceptive practices and that all billings that will be submitted are legally owed by the end-user customer. Along with the affidavit, the sub-CIC must also prepare and submit an Information Form. Some items the form requests are: names, addresses, and phone numbers of all principals in the organization, its billing and regulatory history, including refund percentages, and proof that all fictitious business name statements are registered and filed with the applicable jurisdiction.

For each service the sub-CIC proposes to bill, the sub-CIC must submit to Pacific Bell a "SWB/PB/NB Misc Charge/Enhanced Service Billing Request Form." This form requires the name of the CIC and sub-CIC, the 12-character product name which will appear on the end-user customers' bills, a description of the service, its price, and means of advertising. Copies of all advertising materials must be attached.

Examples of several of USP&C's sub-CICs are set out in the following table:

Company Name	Name On Bill	Service Billed As	Description of Service
Spring Telecom, Inc.	Progressive Technologies	"Call Mgr Plus"	Call Manager Plus is a personal 800 number service with optional electronic voicemail.
Spring Telecom, Inc.	Voiser Telcom	"Dial Plan"	Dial Plan is a personal 800 number service with optional electronic voicemail.
Spring Telecom, Inc.	Voice Processing Systems	"Gateway Svc"	Gateway Service is a personal 800 number service with optional electronic voicemail.
Spring Telecom, Inc.	United Voice	"Call Plan"	Call Plan is a personal 800 number service with optional electronic voicemail.
Benchmark Communications, Inc.	Media Systems	"Network Mgnt"	Network Management is a voicemail service offering unlimited monthly message storage, recording, and message retrieval.
Benchmark Communications, Inc.	United Systems Services	"Plan Mgnt"	Plan Management is a voicemail service offering unlimited monthly message storage, recording, and message retrieval.
Benchmark Communications, Inc.	Voiceflex Services	"Mgtmt Plan"	Management Plan is a voicemail service offering unlimited monthly message storage, recording, and message retrieval.

The "Company Name" is the name of the corporation with whom USP&C has an agreement to provide billing services. The "Name on Bill" is the sub-CIC name that appears on end-user customers' local telephone bills. As the table illustrates, the companies to whom USP&C provided billing services used numerous names. The record shows that these names are not the names of corporate subsidiaries of the corporations to whom USP&C provides billing services, nor are these names registered fictitious business names. The table also shows that in addition to using several different provider names, each corporation also sold the same product under different names. For example, Spring Telecom, Inc., sold 800 number service under four different product names, as well as four different provider names.