C. Discussion

1. Commission Authority To Act

Applicants assert we would violate their due process rights if we took any steps to address the evidence adduced in this proceeding. They state that the merger is dead, the proceeding is moot, and the case should be dismissed summarily.

Were we early in the case, Applicants might be correct that a summary dismissal is all that is warranted. However, even where a case is mooted by circumstances, we can - and occasionally do - assert our authority to enforce the law by deciding issues of continuing importance or preserving the record for future proceedings.⁵ Such a stance is not confined to this Commission: a court may properly resolve a moot point if it presents "an issue of continuing public interest that is likely to recur in other cases . . . . [S]uch resolution is particularly appropriate when it is likely to affect the future rights of the parties before [the court]."⁶ Likewise, a court may rule on "a question which is of broad public interest, is likely to recur, and should receive uniform resolution throughout the state" even if the specific controversy before it has been rendered moot.⁷

Our authority to make decisions even after a particular issue - such as Applicants' merger - becomes moot is based on our independent obligation to enforce the law regardless of whether an outside complainant brings forward a claim.⁸ In this sense, we are not simply a court which only adjudicates controversies that outside parties bring to it, with no law enforcement obligations.

Moreover, Applicants' motives in withdrawing the merger application are not relevant to whether we should take steps to preserve the record for future proceedings. Thus, we need not address Greenlining/LIF's arguments that Applicants should have withdrawn the application before the end of hearings, or moved for suspension of this proceeding pending their negotiations with the U.S. Justice Department and the European Union. Even if it was entirely appropriate for Applicants to wait to seek withdrawal of their application until after the hearings concluded, we still retain power to pass on matters that came up during those hearings.

Thus, we have authority to rule on matters of continuing policy interest even if the underlying controversy has been mooted. Whether we choose to exercise this authority is a different matter. For the reasons we recite here, we choose not to find Applicants in violation of law in this decision, but set up several other means of redressing Intervenors' claims.

2. Use of Documents in Record in Future Proceedings

Intervenors seek to have the Commission allow for the future use of confidential documents contained in the hearing record. During the course of discovery, Applicants requested, and Intervenors signed, a Non-Disclosure and Protective Agreement (Confidentiality Agreement or Agreement) governing the treatment of documents Applicants produced in discovery. The Agreement provided, in pertinent part, that "Any Confidential Information produced, revealed, or disclosed by the producing party in this Proceeding shall be used exclusively for purposes of participating in this proceeding and shall not otherwise be used or disclosed for any other purpose."⁹ The Administrative Law Judge (ALJ) did not issue a ruling adopting the contents of the Agreement; the Agreement was strictly a private matter among the parties. Thus, the Agreement in no way binds the Commission.

Applicants are concerned that if we allow Intervenors to use confidential documents from this proceeding in future cases, we will be allowing Intervenors to abrogate the Confidentiality Agreement. However, the Commission possesses its own authority - not hampered by the Agreement - to receive in evidence in a proceeding documents from prior proceedings that are "on file in the public record." Applicants concede that Rule 72 confers such power on the Commission: "Rule 72 . . . allows the Commission to accept into evidence documents on file as public records, without the need for the actual production of the document as an exhibit."¹⁰ Commission General Order (GO) 66-C clarifies that a document received in evidence under seal is still a "public record"; it is simply a "public record not open to inspection."¹¹ Applicants likewise concede this point: "[T]he record in this proceeding might be a public record (some of which is maintained under seal and not available for public inspection). . . ."¹²

Thus, Rule 72 empowers the Commission to order evidence from prior proceedings to be included in the record of a later proceeding. Therefore, there is nothing preventing the Commission from ordering the entire record of this proceeding - including documents under seal - to be available for use in future proceedings.

Those documents marked Confidential shall bear the same designation in other proceedings, and shall be kept under seal unless and until the presiding officer in a later proceeding rules that they are no longer deserving of protection. Thus, none of Applicants' confidential documents will be made available for public inspection without action to remove the confidentiality designation.

So that parties in future proceedings are aware of our desire that the Commission invoke Rule 72, we will order that Applicants disclose the existence of the record here, and of this decision, in future proceedings initiated within two years of the effective date of this decision. Specifically, Applicants shall make such disclosure in any future proceeding in which they seek Commission approval of a transaction under § 854 or are alleged to be in violation of law because of failure accurately to disclose prices, to provide adequate customer service, to serve low volume or low income customers or communities, or adequately to train customer service employees. In close cases, Applicants should err on the side of disclosure.¹³

If an Intervenor bound by the Confidentiality Agreement initiates a case before the Commission and desires to introduce confidential documents from this proceeding into the record, that Intervenor need simply bring this decision to the attention of the presiding officer in that proceeding. It will then be within the presiding officer's discretion to receive such documents into evidence pursuant to Rule 72 - and that presiding officer will not be constrained by the Confidentiality Agreement.

We do not believe this arrangement will cause any of the problems Applicants posit. They assert that parties in the future will resist discovery to avoid producing sensitive documents for fear the documents will be used against them in later cases. However, we are entering this order in view of the particular circumstances of this case. Not every case will involve issues of continuing interest to the Commission even after the underlying transaction becomes moot. Indeed, we suspect this will be an unusual occurrence.

Nor, in our view, will parties conduct fishing expeditions in hopes of finding documents of questionable relevance to the case at hand but perhaps germane to later cases. We do not believe Intervenors have the resources to waste on such exercises, or on Applicants' other feared activity: "introduc[ing] into the record massive numbers of documents simply so those documents would be available in subsequent unrelated proceedings."¹⁴ It is not clear what an Intervenor's incentive would be to engage in such activity, given that the Intervenor could obtain the discovery just as easily in the "subsequent unrelated proceedings."

3. Pending Superior Court Case

It may well be that another proceeding will resolve the complaints TURN and Greenlining/LIF raise with regard to WorldCom. On July 20, 2000, this Commission, along with the California Attorney General, filed a civil complaint in San Francisco Superior Court alleging violations of law by WorldCom in connection with its telecommunications services in California.¹⁵ There is substantial overlap between the Civil Case and the allegations Intervenors make here.

For example, both the Civil Case and this proceeding involve allegations that WorldCom does not adequately disclose its long distance rates. The Civil Case complaint, as amended on September 29, 2000, alleges as its first cause of action untrue or misleading statements related to WorldCom's "five cents everyday" calling plans. Plaintiffs allege there, as does TURN here, that WorldCom fails to disclose other aspects of its rates, such as flat plan fees and minimum calling requirements.¹⁶ There, as here, such failure is alleged to violate Public Utilities Code § 2896. Similarly, both the Civil Case and Greenlining/LIF allege problems with continued billing after service termination, slamming, and misleading advertising of "dial-around" services.¹⁷

While there is not absolute overlap between the Civil Case and the TURN/Greenlining/LIF allegations, we would prefer to let the Civil Case run its course so as to avoid duplication of effort and any risk that findings we make here will prejudice or otherwise affect the outcome of the Civil Case. In order to prevent any applicable statute of limitations from running pending the outcome of the Civil Case, we will toll these statutes as outlined in Condition 4D below.

The Commission is an active party to the Civil Case. The existence of the case establishes that we are not, as TURN claims, "ignor[ing] the record and allow[ing] applicants to continue to harm consumers."¹⁸ The Commission retains clear authority to investigate and address the allegations TURN and Greenlining/LIF make should the Civil Case not resolve them. Furthermore, the pleadings and transcripts of this proceeding are public records available to counsel for this Commission in the Civil Case. They may, if they see fit, allege additional violations of law in court.

WorldCom concedes that the Civil Case is a more appropriate place to adjudicate these overlapping matters.¹⁹ In view of this concession, the Commission will resist any attempt by WorldCom to convince the Superior Court to dismiss certain claims in the Civil Case on the ground this Commission has primary jurisdiction over them. WorldCom cannot have it both ways.

Finally, to the extent issues or legal theories raised in this case do not overlap with the Civil Case - for example, where the allegations relate only to Sprint - the parties are free to pursue those issues in complaints before this Commission. Consistent with Rule 72 and our order here, they may ask the presiding officer in those cases to admit evidence used in this proceeding without breaching their Confidentiality Agreement with Applicants. We note, however, that Applicants bore the burden of proof in this proceeding, while a complainant would bear the burden in a complaint proceeding. Thus, parties in subsequent cases may have to adduce additional proof to meet that burden, since they did not bear that burden here. We will leave that decision to the next case.

4. Summary of Conditions on Withdrawal

We agree with Intervenors that this record should not be squandered or their efforts in developing it unrewarded. Therefore, we impose several conditions on our decision granting Applicants' motion for withdrawal:

A. So that parties in future proceeding are aware of our desire that the Commission invoke Rule 72, we will order that Applicants disclose the existence of the record here, and of this decision, in future proceedings initiated within two years of the effective date of this decision. Specifically, Applicants shall make such disclosure in any future proceeding in which they seek Commission approval of a transaction under § 854 or are alleged to be in violation of law because of failure accurately to disclose prices, to provide adequate customer service, to serve low volume or low income customers or communities, or adequately to train customer service employees. In close cases, Applicants should err on the side of disclosure.

B. Pursuant to Rule 72, the record of this proceeding shall be available in any complaint or enforcement case brought in the future. If Intervenors (or any other signatory to the Agreement referenced in footnote 9) seek to use information deemed Confidential in a future proceeding, they shall either present such information under seal, or they shall bring a motion in the subsequent proceeding(s) requesting that the confidentiality designation be removed. In accordance with Commission practice related to Commission-ordered protective orders, in no event shall any documents or other information deemed Confidential in this record retain such designation beyond two years from the effective date of this decision.

C. Nothing in this decision shall preclude any party already deemed eligible for intervenor compensation from seeking such compensation in this proceeding, or, to the extent this proceeding's record is used in other proceedings, in those other proceedings, provided there is no duplicate compensation.

D. It may be appropriate for the Commission to open an Investigation into the practices of Applicants as alleged by Intervenors. The record of this proceeding shall be available in that proceeding. Because of the pendency of the Civil Case and the possibility that Intervenors' allegations about WorldCom may be resolved in that proceeding, to which this Commission is a party, we will not commence the Investigation at this time. We will toll the running of any statute of limitations relating to any claim reasonably related to this proceeding that the Commission might raise in such an investigation, or that the Commission's Consumer Services Division or other enforcement division might bring, until entry of a final judgment in the Civil Case. We will not toll the statute of limitations with regard to a privately initiated complaint since Intervenors are free to bring a complaint at this time.

⁵ See, e.g., D.92-04-027, 43 CPUC2d 639, 640-41 (1992) (concurring opinion) (Commission is free to act on "vital questions of general interest," even when underlying application dismissed); D.94-05-024, 54 CPUC2d 456 (imposing conditions on future merger when merger application withdrawn). ⁶ See, e.g., In Re William M. (1970) 3 Cal. 3d 16, 23 ("[I]f a pending case poses an issue of broad public interest that is likely to recur, the court may exercise an inherent discretion to resolve that issue even though an event occurring during its pendency would normally render the matter moot"); Johnson v. Hamilton (1975) 15 Cal. 3d 461, 465 (a case is not mooted from the fact alone that the issue in the case is of no further immediate interest to the person raising it if the case poses an issue of broad public interest that is likely to recur); Lundquist v. Reusser (1994) 7 Cal. 4^th 1193, 1202 n.8 (same); Daly v. Superior Court (1977) 19 Cal. 3d 132, 141 (same). ⁷ Ramirez v. Brown (1973) 9 Cal. 3d 199, 203. ⁸ See, e.g., Cal. Pub. Util. Code §§ 451 (Commission has power to ensure that telephone service is "adequate, efficient, just and reasonable . . . [so as to promote public] safety, health, comfort and convenience") & 701 (Commission authorized to do all things which are necessary and convenient in the exercise of the Commission's power and jurisdiction); California Constitution Article XII (establishing Public Utilities Commission and providing the constitutional basis for regulation of public utilities). ⁹ Agreement, ¶ 2. The Agreement appears as Exhibit A to Applicants' Reply Memorandum Regarding Motion To Withdraw, filed August 28, 2000 (Applicants' Reply). ¹⁰ Applicants' Reply at 13. ¹¹ GO 66-C, Section 2. ¹² Applicants' Reply at 14. ¹³ We made a similar order in D.99-04-048, 1999 Cal. PUC Lexis 185 (Pacific Bell to identify prior action in future proceedings). Applicants agree that such an order is proper: "[T]he most that D.99-04-048 could stand for is that the Commission could establish requirements for a future merger application by Applicants." Applicants' Response at 7. See also D.94-05-024, 54 CPUC2d 456, which Applicants characterize as standing for the same proposition. Applicants' Response at 10. ¹⁴ Id. ¹⁵ People v. WorldCom, Inc. (Case No. 313730, San Francisco Superior Court, filed July 20, 2000) (Civil Case). ¹⁶ Compare Civil Case, First Amended Complaint for Civil Penalties, Injunction and Equitable Relief (First Amended Complaint), ¶ 7(A) with TURN Response, § 2(A), (C) and (D). ¹⁷ Compare Civil Case, First Amended Complaint, ¶¶ 7(C), 10(M)(2) & 12 with Greenlining Response § 5(a). ¹⁸ TURN Response at 9. ¹⁹ Applicants' Reply at 10-11.