7. Settlement Agreement Between AOL and UCAN

The proposed settlement between UCAN and AOL is attached to and made part of this decision as Exhibit 3. Its major elements include the following:

· AOL agrees to use best efforts to implement a program in which new subscribers are asked to give both the area code and first 3 digits of the telephone (the local exchange prefix) that they intend to use for dial-up service. This in turn will enable AOL to provide access numbers more likely to be within a subscriber's toll-free local calling area. New subscribers today are asked to state their 3-digit area code, and the resulting access numbers that are offered include both toll and toll-free numbers within that area code.

· AOL agrees to revise the message on its access screen to more explicitly urge new subscribers to check with their local telephone company to be sure that all of the access numbers they select are toll-free. (New subscribers are asked to select up to three access numbers so that if the first number is busy, the call can be rolled over to the second and third numbers.) AOL will also revise its "Welcome to AOL" message to repeat the warning. In its testimony, AOL asserted that it already delivers such a warning to subscribers at least six different times, but it acknowledged that some subscribers do not take the time to call their local phone company and confirm that their dial-up numbers are toll-free.

· AOL agrees that if it has not implemented a 6-digit sign-up program by the end of 2005, it will deposit $75,000 to a consumer education fund to be approved by the Commission. UCAN reserves the right to refile its complaint if AOL is unable to meet its commitment.

· AOL will make quarterly reports to the Commission on its progress in reducing complaints of dial-up toll charges, and it will promptly share access number information with SBC so that SBC will have a current list of AOL access numbers in California.

In prepared testimony, AOL asserts that it has for months been seeking to overcome technical difficulties to introduce a 6-digit sign-up requirement for new subscribers, and it hopes to have such a program in place soon after the end of this year. UCAN's prepared testimony claimed that another ISP service (SBC Yahoo) that matches its dial-up access numbers to the first 6 digits of a subscriber's telephone number experiences few incidents of toll charge complaints.

For its part in the settlement agreement, UCAN agrees to withdraw its complaint against AOL, without prejudice to later refiling if necessary, and not to assert new claims against AOL related to dial-up access charges. UCAN also withdraws an earlier motion for sanctions against AOL.