2. Procedural History

UCAN filed this action against SBC and AOL on July 24, 2002, alleging that many AOL Internet subscribers are being subjected to unauthorized toll charges on their telephone bills as a result of action or inaction of SBC and AOL. Specifically, UCAN alleged that one or both defendant companies reroute telephone calls of their subscribers from local dial-up numbers to toll numbers when customers attempt to connect to AOL. The complaint alleged that toll charges for such dial-up calls often mount to hundreds of dollars before customers receive their phone bills and learn that their Internet dial-up number was not toll-free.

SBC and AOL denied most of the allegations of the complaint. AOL stated that it supplies a list of dial-up numbers to its subscribers and repeatedly cautions subscribers to call their local telephone company to be sure the dial-up numbers they select are toll-free. SBC stated that toll charges for calls to an Internet Service Provider (ISP) like AOL should be borne by customers because customers have exclusive responsibility for selecting the access number to be dialed and the computer equipment that actually dials the number.

AOL on October 21, 2002, moved for a dismissal of the case against it on grounds that the Commission lacks jurisdiction over ISPs. Action on the motion was stayed when SBC announced that it would conduct a study that the parties hoped might lead to settlement. At the request of the parties, the Commission twice extended the statutory deadline for resolution of this case to accommodate the settlement discussions. A prehearing conference was conducted on June 4, 2003, followed by a second prehearing conference on August 12, 2003, at which time the case was scheduled for hearing in April 2004.

On March 26, 2004, UCAN and SBC filed their proposed settlement agreement and jointly moved for Commission approval. AOL did not oppose settlement by the two other parties. Based on this development, the assigned Administrative Law Judge (ALJ) stayed the evidentiary hearing that had been scheduled for April 26-30, 2004, and, in its place, set a hearing on April 27, 2004, to take testimony on the proposed settlement. At the settlement hearing on April 27, AOL and UCAN announced that they too had reached settlement. Both Assigned Commissioner Geoffrey F. Brown and ALJ Glen Walker questioned the parties about their settlements, and the parties agreed to make certain changes and to submit their executed proposed settlement agreements to the Commission within 10 days. Both executed agreements had been received by May 13, 2004, at which time this case was deemed submitted for Commission decision.³