6. Proposed Settlement Between UCAN and SBC

The proposed settlement between UCAN and SBC is attached to and made part of this decision as Exhibit 1. Its major elements include the following:

· SBC will monitor the more than 500 AOL access numbers in California for toll charges incurred by SBC customers.

· When a customer's toll charges on an AOL access line exceed $50, SBC will on a one-time basis send a letter notifying the customer of the access charges and instructing the customer to correct the access number if it was intended to be toll-free. (A copy of the notice letter is attached to this decision as Exhibit 2.)

· The monitoring and notice program will continue for 18 months, by which time AOL plans to have in place a new procedure intended to better guide subscribers in using toll-free numbers to access the Internet.

At hearing, SBC stated that it had begun the program on April 1, 2004, and between that date and April 26 had already sent 4,748 letters to customers notifying them that their access charges had exceeded $50. The letter urges that if the customer intended these calls to be toll-free, the customer should call an SBC operator to determine if the access number is within the local calling area. If the number is not toll-free, the letter urges customers to change to a different access number either by contacting AOL or by manually changing the number on their computers.

SBC states that it is conducting a computer run on the AOL access numbers approximately every day and a half, and that letters to customers whose use exceeds $50 go out approximately one business day after SBC receives results of each computer run. In this way, customers are advised of the toll charges at a time when the toll charges are still relatively modest, rather than waiting until the monthly telephone bill is mailed, by which time many customers have incurred dial-up charges of several hundreds and even thousands of dollars. The prepared testimony in this case shows at least one customer whose toll charges for use of a dial-up access number totaled $2,800 by the time she received her telephone bill.

Jerry Flynn, state regulatory executive director for SBC, testified that SBC is spending approximately $6,000 a month to conduct the early warning program but that the company expects to reduce that cost through increased automation. He stated that all of SBC's more than 6,000 service representatives have been notified of the program so that they can respond to customer inquiries.

As its part of the settlement agreement, UCAN agrees to dismiss its complaint against SBC and not to bring further legal action against the company based on toll charges incurred by dial-up AOL customers. UCAN also agrees to withdraw an earlier motion for sanctions against SBC.

Our order today approving the settlement requires SBC to notify the Commission and UCAN at least 60 days before discontinuing the early notice program. The Commission at that time, on its own motion, can assess whether further proceedings are necessary.