4. Evaluation of the Settlement Agreement

The proposed settlement agreement is an uncontested "all-party" settlement. The Commission applies two complementary standards to evaluate such agreements. The first standard, set forth in Rule 51.1(e) of the Commission's Rules of Practice and Procedure and applicable to both contested and uncontested agreements, requires that the "settlement is reasonable in light of the whole record, consistent with law, and in the public interest." The second standard applies to all-party settlements, and requires that all active parties support the proposed settlement, the parties fairly represent all affected interests, no settlement term contravenes statutory provisions or prior Commission decisions, and settlement documentation provides the Commission with sufficient information to permit it to discharge its future regulatory obligations. San Diego Gas & Electric, 46 CPUC 2d 538 (1992).

We turn first to the Rule 51.1(e) standards. The settlement agreement is reasonable in light of the whole record because it specifically addresses and resolves each factual and legal allegation made by CPSD. The settlement agreement brings Vycera into compliance with applicable regulations, includes an investigation and analysis of the need for restitution, requires a three-year probation period, and provides for a substantial fine.

The settlement agreement is consistent with law because it will require Vycera to comply with applicable law and regulation. The settlement agreement provides for enhanced CPSD oversight and financial penalties to ensure Vycera's continued compliance.

The settlement agreement is in the public interest because it will allow consumers' access to a provider of competitive local telecommunications services that is in full compliance with applicable law and regulations. Consequently, we conclude that the settlement agreement meets the Rule 51.1 standards.

The standards for all-party settlements are also met. CPSD and Vycera are the only parties to this proceeding. CPSD represents the interests of consumers and the regulatory process, while Vycera represents its own interests. As noted, above, the settlement is consistent with the law and the high-quality settlement documentation provides the Commission with sufficient information to permit it to discharge its future regulatory obligations.

The settlement agreement reflects a painstaking and aggressive investigation and analysis by CPSD. It also shows Vycera's willingness to reform and comply with law and Commission regulation. The settlement agreement also sets clear standards for future operations with continued enhanced oversight and financial incentives for compliance.

Therefore, the settlement agreement satisfies the Commission's requirements for settlements under Rule 51 and the all-party settlement standards. Accordingly, we will approve it.