Comments on Draft Decision
The draft decision of ALJ McKenzie in this matter was mailed to the parties in accordance with Pub. Util. Code § 311(d) and Rule 77.1 of the Rules of Practice and Procedure. Comments were filed on _____________ and reply comments were filed on ____________.
1. In early May of 2000, Pacific distributed white pages directories for South and East San Diego County that inadvertently contained listings for Cox customers who had requested unlisted or non-published numbers. These directories have come to be known as "tainted" directories.
2. The tainted directories contained listings for unlisted and non-published numbers because, beginning in August 1999, the software used by Cox to transmit white page listings to Pacific sometimes failed to place a "customer privacy designator" next to the names of Cox customers who had requested unlisted or non-published numbers.
3. According to Cox, it first became aware of the problem on May 4, 2000, when some Cox customers in San Diego who had requested unlisted or non-published numbers began complaining to Cox that the white pages directories they had just received contained listings for them.
4. Cox first informed Pacific of the tainted directory problem on May 5, 2000.
5. Between May 5 and May 12, 2000, personnel at Cox and Pacific discussed how to deal with the tainted directory problem.
6. On May 12, 2000, the tainted directory problem came to the attention of Pacific vice president Cynthia Marshall, who ordered that distribution of the tainted directories should stop immediately.
7. Between May 12 and May 31, 2000, Cox and Pacific continued to negotiate over how to deal with the tainted directory problem.
8. During these negotiations, Pacific took the position that Cox should pay for all the costs of reprinting and redistributing a new white pages directory to take the place of the tainted directory, and that if Cox would not agree to do so, Pacific would have to resume distribution of the tainted directories, because the printing of new white pages directories for other areas of California could not be held up any longer.
9. By the close of business on May 30, 2000, Cox had not agreed to pay all of the costs of reprinting and redistributing a new, corrected directory to take the place of the tainted directories.
10. On the morning of May 31, 2000, counsel for Pacific confirmed to counsel for Cox that Pacific intended to resume distribution of the tainted directories later that day.
11. Distribution of the tainted directories did resume during the morning of May 31, 2000.
12. At about 3:45 p.m. on May 31, 2000, Cox filed with the Commission a motion seeking a preliminary injunction and an order temporarily restraining Pacific from continuing to distribute the tainted directories, as well as a motion requesting mediation of the directory dispute pursuant to Cox's interconnection agreement with Pacific.
13. At about 4:15 p.m. on May 31, 2000, the Chief ALJ telephoned senior officials of Pacific to request that they cease distribution of the tainted directories, pending a ruling on the TRO motion. The Pacific officials agreed, and the Chief ALJ in turn agreed that Pacific could have until noon on June 1, 2000, to file papers responding to Cox's two motions.
14. On June 1, 2000, Pacific filed a response to Cox's motion for a TRO. The response did not dispute the chronology of events set forth in Findings of Fact (FOFs) 1-11.
15. On June 2, 2000, President Lynch issued a President's Ruling Granting Motion for a Temporary Restraining Order (TRO Ruling).
16. Among other things, the TRO Ruling ordered Pacific to cease distribution of the tainted directories until further notice, or until a ruling was issued on Cox's motion for a preliminary injunction. The hearing on the preliminary injunction motion was set for June 12, 2000.
17. On June 8, 2000, Cox and Pacific informed the Commission that they had reached a settlement of their dispute, and filed a stipulation in this docket reflecting the settlement.
18. On June 12, 2000, a hearing was held to receive evidence concerning the steps that Pacific and Cox intended to take to retrieve the tainted directories and to print and distribute new, corrected white page directories for South and East San Diego County.
19. For residential customers, Cox and Pacific proposed to send each customer a letter about the tainted directory problem, along with a special envelope into which the customer could place the tainted directory for pickup. Cox and Pacific also proposed follow-up visits to the homes of residential customers so that as many of the tainted directories could be retrieved as possible prior to the distribution of new, corrected directories.
20. On June 19, 2000, Pacific and Cox filed the first of a series of weekly status reports summarizing the steps they had taken in the previous week to retrieve the tainted directories and to distribute new, corrected directories.
21. On June 21, 2000, Cox filed Advice Letter No. 50-A, which together with Advice Letter No. 50, set forth two basic option packages for Cox's customers whose listings had inadvertently appeared in the tainted directories. In addition to these two basic packages, Cox proposed to offer "escalation measures" to customers (such as judges and law enforcement officials) who had reasonable concerns about their safety as a result of the inadvertent publication of their unlisted or non-published numbers in the tainted directories.
22. As part of their program to retrieve the tainted directories and distribute new, corrected directories, Pacific and Cox caused to be destroyed, all copies of the tainted directories that they either had on hand or had retrieved.
23. By mid-August of 2000, only 28% of the tainted directories had been retrieved through the program described at the June 12 hearing, even though the Pacific-Cox retrieval plan had been well-publicized, and the distribution of new, corrected directories had been completed.
24. On August 18, 2000, Pacific and Cox requested permission from Assigned Commissioner Bilas to conduct a survey that the two companies hoped would demonstrate that the actual percentage of tainted directories taken out of circulation by customers was significantly higher than 28%.
25. On September 8, 2000, Pacific and Cox submitted a formal proposal for a survey along the lines described on August 18. The survey was to be conducted by Field Research. Cox and Pacific also proposed that pending receipt of the survey results, they should not be required to undertake additional measures to retrieve more tainted directories.
26. On September 27, 2000, Assigned Commissioner Bilas sent Cox and Pacific a letter approving their survey proposal with minor modifications, and agreeing that until the survey results had been reviewed, Pacific and Cox should not be required to undertake additional measures to retrieve more tainted directories.
27. The survey proposed by Pacific and Cox was conducted by Field Research during October of 2000.
28. On October 19, 2000, the Commission issued Resolution T-16432, which approved with modifications the proposals in Cox Advice Letter Nos. 50 and 50-A.
29. On November 20, 2000, Cox and Pacific submitted the results of the Field Research survey along with their final weekly status report.
30. Based upon a sampling size allowing for a 95% level of confidence, the survey results indicated that of the 338,244 tainted directories distributed to residential customers, 73% had been removed from circulation as a result of either the formal retrieval efforts of Cox and Pacific, self-help by survey respondents, or the inability of the survey respondents to locate their copies of the tainted directory.
31. Based on the results of the Field Research survey, it is unlikely that the number of tainted directories that would be recovered through a telephone contact similar to the survey would exceed 12,400. This number represents 3.7% of the total number of tainted directories distributed to residences.
32. On November 20, 2000, the assigned ALJ issued a ruling that, among other things, relieved Cox and Pacific of the obligation to continue filing weekly status reports about their efforts to retrieve tainted directories.
33. Awareness of the tainted directory issue has faded for San Diego residents, and ordering additional retrieval measures at this time might serve only to reawaken public anxiety about the issue.
34. If the Commission were to order Pacific and Cox to go door-to-door in an attempt to retrieve additional tainted directories, it is likely that the personnel doing this work would encounter a hostile response in some cases.
35. If the Commission were to order Pacific and Cox to make payments to customers who agreed to return their tainted directories, it is unlikely that such a new program would lead to the retrieval of significantly more directories, since the public was told during the retrieval efforts in the summer of 2000 that a charitable contribution would be made for each directory returned.
36. If the Commission were to order Cox and Pacific to send all customers an explanatory letter and prepaid envelope for return of the tainted directory, it is unlikely that such a new program would lead to the retrieval of significantly more directories, since customers who were not motivated to return tainted directories by using the special pickup bags distributed to homes during the summer of 2000 would also be unlikely to take the time to return the tainted directory by mail.
37. Cox has been able to contact 10,778 of the customers who had requested unlisted or non-published numbers and whose listings appeared in the tainted directory, which represents 94% of the total number of customers whose listings were inadvertently published.
38. Cox states that of the 10,778 affected customers, 71% of them accepted one of the special offerings approved in Resolution T-16432.
39. Cox states that of the 10,778 affected customers, 3082 (or nearly 27%) declined as unnecessary any of the special offerings approved in Resolution T-16432.
40. Cox states that of the 10,778 affected customers, 132 accepted one of the special escalated offerings approved in Resolution T-16432 for customers with reasonable concerns about their safety as a result of the inadvertent publication of their listing information.
41. On April 17, 2001, Cox filed its Advice Letter No. 75, which requested an extension of the time authorized in Resolution T-16432 for deviation by Cox from its tariffs, so that the basic option packages approved in Resolution T-16432 (but not the escalation procedures) could be included in the settlement of a class action pending against Cox.
1. If Pacific and Cox were ordered to make payments to customers who agreed to return their tainted directories now, such an order would raise serious questions of equity, in view of the fact that customers who returned their tainted directories during the summer of 2000 did not receive such payments.
2. In view of Field Research's conclusion that 73% of the tainted directories distributed to residences have been removed from circulation, and the likelihood that ordering additional retrieval measures would not result in the recovery of significantly more tainted directories for the reasons set forth in FOFs 34-36, Pacific and Cox should not be ordered to undertake additional retrieval measures at this time.
3. By failing to check adequately the directory information that it transmitted to Pacific from August 1999 to May 2000 to ensure that such information did not include listings for customers who had requested unlisted or nonpublished service, Cox appears not to have used ordinary care in fulfilling its responsibilities as a CLEC.
4. By knowingly resuming the distribution of tainted directories on the morning of May 31, 2000, and by continuing such distribution until it was asked not to do so by the Chief ALJ later the same day, Pacific appears to have violated Section 2891.1(a) of the Public Utilities Code.
5. In view of the requirement of D.92860 that carriers must make nonpublished service available to all residential customers who request and pay for it, the incorporation of this requirement into Pacific's tariffs, and the rule adopted in D.96-10-066 that all ILECs and CLECs must offer their residential customers a "free" white pages telephone directory, Pacific was obliged under the orders and rules of the Commission to exclude from its white pages directories the name, address, and telephone number of any customer who had ordered nonpublished service.
6. Pacific's distribution of tainted directories on May 31, 2000 appears to have violated the requirement of Section 451 of the Public Utilities Code that each public utility must furnish such service as is necessary to promote the safety of its patrons and the public.
7. A new phase of this proceeding should be commenced to determine what penalties, if any, should be imposed on Pacific and Cox pursuant to Sections 2107 and 2109 of the Public Utilities Code on account of the apparent violations of law described in Conclusions of Law (COLs) 3-6.
IT IS ORDERED that:
1. The temporary restraining order issued by President Lynch in this docket on June 2, 2000, which was confirmed and ratified by the Commission in Decision 00-06-042, is hereby dissolved.
2. A new phase of this proceeding is hereby opened for the purpose of determining the amount of the penalty that should be imposed on Pacific Bell Telephone Company (Pacific) due to its decision to resume distribution of tainted directories (as defined in Finding of Fact 1) on May 31, 2000, and the amount of the penalty that should be imposed on Cox California Telcom., L.L.C. (Cox) due to its apparent negligence in checking the directory information that it transmitted to Pacific from August 1999 until May 2000.
3. The Consumer Services Division (CSD) shall prosecute the penalty phase described in Ordering Paragraph (OP) 2 on behalf of the Commission.
4. Within 60 days after the effective date of this order, the Assigned Commissioner and the assigned Administrative Law Judge shall convene a prehearing conference for the purposes of (a) setting a hearing schedule for the penalty issues described in OP 2, (b) establishing a discovery cut-off date for the penalty phase of this proceeding described in OP 2, (c) receiving status reports on whether it appears possible to resolve the issues in the penalty phase without a hearing, and (d) considering any other issues related to the penalty phase that the parties may wish to raise.
This order is effective today.
Dated , at San Francisco, California.
