3. Procedural Background

3.1. Prehearing Conference Through Oral Argument

The assigned Commissioner and assigned Administrative Law Judge held a prehearing conference on September 10, 1997. Following the PHC, they issued a comprehensive ruling which:

· invited parties, particularly consumer advocacy groups, to provide information on whether customers are being served by their carrier of choice,

· set out a plan to assess current industry practice on obtaining customer authorizations,

· sought input from the parties on the extent of inaccurate and fraudulent charges in bills and requested comment on proposals to diminish inaccurate and fraudulent billing, and

· stated their intention to consider prohibiting local exchange carriers from disconnecting customers' local service for nonpayment of long distance charges.

To evaluate these issues, the parties filed written comments and responses to other parties' comments. Following the written submissions, Commission Staff convened a workshop to informally address the issues.

To obtain detailed information on carrier compliance with the statutory requirement for independent third party verification of customer transfers, the Commission issued Decision (D.) 98-02-009 which required all carriers to respond to a detailed survey on their verification practices.

On July 3, 1998, the assigned Commissioner issued a ruling which distributed "Workshop and Third Party Compliance Survey Report and Staff Recommendations to the Assigned Commissioner on Unauthorized Transfer of Service and Billing" (Staff Report) which summarized the March 30, 1998, workshop, contained the results of the third party verification compliance audit, and stated Staff's recommendations.

In response to the assigned Commissioner's ruling, the following parties submitted comments: Office of Ratepayer Advocates (ORA), Cox California Telcom II, L.L.C. dba Cox Communications (Cox), California Small Business Association (CSBA), Telecommunications Resellers Association/California Association of Competitive Telecommunications Companies (Resellers/CALTEL), AT&T Communications of California (AT&T), Pacific Bell, GTE California Incorporated (GTE), The Utility Reform Network (TURN), Telephone Connection/Los Angeles, Inc., MCI Telecommunications Corp. (MCI), and the Greenlining Institute/Latino Issues Forum (Greenlining).

On February 3, 1999, the draft decision of the assigned Administrative Law Judge was mailed to all parties. The parties filed initial and reply comments on the draft decision. Many of the comments addressed the local disconnect issue and included requests for an additional opportunity to be heard on this topic. The resolution of that request, as well as the evidence received, is set out below. To the extent the comments addressed other issues, those comments were addressed through revisions to the draft decision.

On April 7, the parties presented oral argument to the Commission en banc. Parties presenting oral argument were ORA, Resellers/CALTEL, AT&T, Pacific Bell, GTE, TURN, Cox, MCI, Greenlining, Citizens Communications Company (Citizens).

3.2. CALTEL's Request for a Hearing

On April 7, 1999, the parties presented oral argument before all Commissioners. Counsel for CALTEL reiterated their request for evidentiary hearings in this proceeding stating that their evidence would show that there is no connection between the perception among consumers that their local service will be disconnected for nonpayment of disputed long distance charges and slamming and cramming. Counsel for Citizens Communications joined in the request for a hearing and, although disavowing any desire to cross examine the authors of the staff report upon which the decision is based, stated a desire to test the "report as evidence."

On April 13, 1999, the assigned Administrative Law Judge issued her "Ruling Setting Additional Opportunity to be Heard and Present Evidence." The ruling allowed parties to "file and serve all additional evidence, including legal argument and factual assertions in the form of declarations." Parties were also granted an opportunity to file and serve responses to the evidence.

On May 5, 1999, CALTEL filed its Motion of the California Association of Competitive Telecommunications Companies and the Telecommunications Resellers Association for a Prehearing Conference and Hearing. In the motion, CALTEL contended that the opportunity to make written submissions, as provided in the ALJ ruling, did not constitute the hearing required by California Trucking Assoc. v. PUC, 19 Cal. 3d 240 (1977).

Pursuant to the ALJ's ruling, other parties filed their written comments and evidentiary declarations on May 14, 1999, and responses on May 28, 1999. CALTEL made no such filings.

On May 20, 1999, GTE-California, MCI and AT&T, and Citizens Telecommunications Companies filed their responses to CALTEL's motion which generally supported the request.

ORA and TURN also filed responses to CALTEL's motion. TURN noted that the Commission need only hold hearings if the parties bring disputed facts to the Commission's attention, and the Commission deemed those facts to be material. TURN stated that no such facts exist in this proceeding because the Commission's justification for allowing local exchange carriers to disconnect local service for nonpayment of long distance was to enhance the revenue those carriers would obtain from billing and collection contracts with long distance carriers. Under then-existing ratemaking practices, the increased revenue would be used to offset cost increases that ratepayers would otherwise pay. TURN argued that under current ratemaking practices such revenue is no longer credited towards costs ratepayers would otherwise bear and consequently the objective of the disconnect policy is no longer being met. TURN concluded that these facts are not in dispute and thus there are no disputed issues of material facts upon which the Commission must hold hearings.

In its response to CALTEL's motion, ORA stated that CALTEL has waited over a year to ask for hearings, and that during that year the parties participated in workshops, filed briefs and comments, and presented oral argument before the Commission. ORA stated that the current record in this proceeding is clear that the facts and circumstances which justified the local disconnect policy no longer exist and that CALTEL has declined to present facts which might provide some new justification for this policy.

The substantive issues raised in the filings are addressed separately in this decision. Here, we address the procedural issues raised by CALTEL's request for a hearing.

We begin with the proposition that to "rescind, alter, or amend" a previous decision, § 1708¹ requires us to afford parties to an earlier proceeding an "opportunity to be heard as provided in the case of complaints." As noted by CALTEL in its motion, the rulings and draft decision in this proceeding disclose a clear intent to alter the outcome of an earlier decision. Specifically, D.85-01-010 authorizes local exchange carriers to disconnect local service for nonpayment of long distance charges. The draft decision would prohibit such disconnections. Thus, the Commission must afford parties an opportunity to be heard as in the case of complaints.²

The parties were given notice of the Assigned Commissioner's intention to consider altering this policy in a ruling dated February 11, 1998. Over a year later, and after a workshop, lengthy staff report, rounds of written comments, and just before oral argument before the entire Commission, CALTEL requested a hearing. CALTEL stated that it wished to produce evidence for the Commission's consideration. When the ALJ's ruling provided an opportunity to produce such evidence, however, CALTEL rejected it and offered no evidence for the Commission.

To date in this proceeding, the parties have been afforded the opportunity to participate in workshops, file written comments, present oral argument, comment on a draft decision, and to offer sworn testimony of qualified expert witnesses. The only procedural components of an evidentiary hearing process that the parties have not been offered is cross examination of witnesses before a Commissioner or ALJ. Thus, CALTEL's motion appears to contend that it has an absolute right to cross examine witnesses before a Commissioner or Administrative Law Judge pursuant to California Trucking Assoc. v. PUC, 19 Cal. 3d. 240 (1977). The decision and the statutes, upon which it is based, do not create such an absolute right.

When the Commission considers changing a previous decision, it must allow parties to that decision a hearing as in the case of complaints. Complainants, however, have no absolute right to an evidentiary hearing at all, much less the particular type of hearing procedure CALTEL appears to desire here:

Applicant contends that due process was denied because the complaint was dismissed without an evidentiary hearing. If the Applicant were correct, there would be no provision in the law for demurrers, summary judgments, or dismissals prior to trial or an evidentiary hearing. Complaints, of course, may be dismissed not only by the courts, but by this Commission when a complainant fails to establish the facts, applicable law, and jurisdiction justifying a hearing. (See Rule 56, and section 1701.) A hearing can be justified if the matters proven are understood, if there is a sufficient and comprehensible indication that the allegations are based on fact, not mere conclusory accusations, and if the allegations are sustainable under some theory of law. When those conditions are not met, a hearing is wasteful of the resources of the parties and the decisionmaker, and therefore not required. California Alliance for Utility Safety and Education, v. San Diego Gas & Electric Co., D.97-08-072, 1997 Cal. PUC LEXIS 696, *7-*8.

In this proceeding, CALTEL has failed to justify the expenditure of the parties' and the Commission's resources for cross examination before a Commissioner or ALJ. CALTEL has completely failed in its obligation to present evidence which would support holding cross examination after the workshop, staff report, voluminous filed comments, and oral argument before the Commission. In addition to the earlier opportunities to be heard, CALTEL, at its request, was presented with another opportunity to present evidence to the Commission. CALTEL ignored this opportunity and presented no evidence whatsoever, let alone evidence of a material disputed fact.³

Moreover, the purpose of evidentiary hearings is to resolve disputed facts. Here, no such facts are in dispute. Our decision to end local disconnect for third party long distance charges is not based solely or even principally on whether or not slamming or cramming depends on customers' perceptions of losing service. Even if we accepted CALTEL's contention that there is no connection, such a view would have no bearing on the simple fact that the justification for the local disconnect rule has expired. Thus, we see no requirement for additional hearing procedure either under the statute or as a matter of common sense. In this instance, additional process would be wasteful of the parties' and the Commission's resources. CALTEL's request for a Prehearing Conference and Hearing is therefore denied.