E. Administrative Law Judge Rulings
We affirm the ALJ's rulings entered during the pendency of the proceeding, as follows:
1. Early in the proceeding, Applicants sought a determination that their proposed merger was exempt from the requirements of Public Utilities Code Section 854(b) and (c). The assigned Administrative Law Judge denied that motion on February 7, 2000. We affirm that ruling.
2. Applicants also sought a determination that this Commission lacked jurisdiction to decide whether the merger would have adverse consequences on the Internet backbone market. The assigned Commissioner and ALJ ruled on April 13, 2000 in their Scoping Memo that the Commission possessed such jurisdiction and that the merger's effects on the backbone market were within the scope of this proceeding. We also affirm this ruling.
3. Finally, the ALJ also made a series of discovery rulings during the course of the proceeding, which she summarized in an omnibus discovery ruling dated August 10, 2000. We affirm this ruling.
Comments on Draft Decision
The draft decision of the ALJ in this matter was mailed to the parties in accordance with Section 311(g)(1) of the Public Utilities Code and Rule 77.7 of the Rules of Practice and Procedure. Comments were filed on ____________, and reply comments were filed on ______________.
Findings of Fact
1. The WorldCom-Sprint merger has been called off, so there is no reason for us to rule on whether the merger is in the public interest.
2. The parties in the proceeding dedicated a great deal of time and effort to developing a record in this proceeding.
3. The record in this proceeding contains evidence related to Applicants' products, services and pricing, especially for low volume callers; handling of customer complaints; and outreach and business in low income communities.
4. A merger inquiry often examines, among other things, the applicants' past business practices in an attempt to predict how they will operate as a combined entity in the future.
5. Both Sprint and WorldCom will continue business operations in California despite the merger's termination.
6. The Commission is not a signatory to the Confidentiality Agreement several parties signed during the course of this proceeding.
7. Allowing for future use of confidential documents produced in this proceeding will not have the negative impacts Applicants posit. The confidential nature of the documents will be preserved unless and until the presiding officer in another proceeding orders otherwise.
8. A pending Superior Court case brought against WorldCom by this Commission and the California Attorney General (Civil Case) raises issues similar to those Intervenors raise here. It is prudent to avoid duplication and inconsistent resolution by allowing the Civil Case to run its course.
9. If the Civil Case does not resolve the claims Intervenors raise against WorldCom, the Commission may institute an Investigation into Applicants' practices.
10. Intervenors are free to initiate complaints related to the allegations they make here, and to seek compensation related to their efforts in this case.
11. It is appropriate to toll the running of any statute of limitation relating to any claim reasonably related to this proceeding that the Commission might raise in 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.
1. Applicants' motion to withdraw their merger application should be granted.
2. The Commission has authority to resolve a moot point if it presents an issue of continuing public interest that is likely to recur in other cases.
3. The Commission is free to act on vital questions of general interest even when the underlying application is dismissed.
4. The Commission may impose conditions on future applications even when the present application is withdrawn.
5. The Commission has an independent obligation to enforce the law regardless of whether an outside complainant brings forward a claim. In this sense, the Commission is different from a court, which only adjudicates controversies that outside parties bring to it, with no law enforcement obligations.
6. Commission Rule 72 empowers the Commission, and not only parties, to order the use of a proceeding record in future proceedings.
7. Applicants' motives in withdrawing their merger application are not relevant to whether the Commission has authority to adjudicate the matters Intervenors allege.
8. Documents introduced into evidence under seal are public records.
9. In no event should documents or other information deemed Confidential in this record retain such designation beyond two years from the effective date of this decision.
10. TURN's motion for an order finding that certain documents do not warrant confidential treatment should be denied.
11. The ALJ's rulings in this case on the applicability of Public Utilities Code Section 854(b) and (c) to the merger, on our jurisdiction over the Internet backbone market, and on discovery should be affirmed.
IT IS ORDERED that:
1. The motion of MCI WorldCom, Inc. and Sprint Corporation to withdraw their merger application is granted.
2. So that parties in future proceeding are aware of our desire that the Commission invoke Rule 72, Applicants shall 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 shall err on the side of disclosure.
3. Pursuant to Rule 72, the record of this proceeding shall be available in any complaint or enforcement case brought in the future. If The Utility Reform Network (TURN) and the Greenlining Institute/Latino Issues Forum (collectively, 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.
4. 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.
5. 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 People v. Worldcom, Inc. (Case No. 313730, San Francisco Superior Court, filed July 20, 2000) (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.
6. TURN's Motion for an Order Finding That Certain Documents Do Not Warrant Confidential Treatment is denied without prejudice.
7. The Administrative Law Judge's rulings on the applicability of Public Utilities Code § 854(a) and (b) to this proceeding, the Commission's jurisdiction over the Internet backbone, and discovery are affirmed.
8. Subject to the conditions imposed above with respect to the preservation of this record for future use, this proceeding is closed.
This order is effective today.
Dated , at San Francisco, California.
