20040408Motion to Terminate Investigation.pdf

ORIGINAL
DEAN 1. MILLER (ISB No. 1968)
McDEVITT & MILLER LLP
420 WEST BANNOCK STREET
BOISE, ID 83702
Tele: [phone]
Fax: [phone]
Attorneys for aCMe. Inc.
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE STAFF'S PETITION
TO INITIATE A COMMISSION INVESTIGATION
TO DETERMINE IF OCMC, INe. VIOLATED
THE TERMS OF ITS PRICE LIST AND THE
COMMISSION'S OPERATOR SERVICES AND
PAY TELEPHONE RULE 104.04.
) CASE NO. GNR- T -04-
) MOTION TO TERMINATE
INVESTIGATION
COMES NOW the Respondent, OCMC Inc., by and through its counsel of record, and
respectfully moves the Commission to terminate this investigation upon the grounds and for the
reasons set forth in the Memorandum in Support of Motion to Terminate Investigation filed
herewith.
Oral Argument is requested.
Respectfully submitted this day of April, 2004.
OCMC, Inc.
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, Dean Miller
Attorneys for aCMC, Inc.
MOTION TO TERMINATE INVESTIGA TION-
CERTIFICATE OF SERVICE
I certify that the .9r nd seven copies of the foregoing document were
delivered on to:
Jean Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83702
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MOTION TO TERMINATE INVESTIGA TION- 2
OR\G\NAL
DEAN J. MILLER (ISBNo. 1968)
McDEVITT & MILLER LLP
420 WEST BANNOCK STREET
BOISE, ID 83702
Tele: [phone]
Fax: [phone]
Attorneys for aCMe. Inc,
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE STAFF'S PETITION
TO INITIATE A COMMISSION INVESTIGATION
TO DETERMINE IF OCMC, INe. VIOLATED
THE TERMS OF ITS PRICE LIST AND THE
COMMISSION'S OPERATOR SERVICES AND
PAY TELEPHONE RULE 104.04.
Statement of Facts
CASE NO. GNR-04-
MEMORANDUM IN SUPPORT
OF MOTION TO TERMINATE
INVESTIGATION
Staff s Petition to Initiate an Investigation (Staff Petition) alleges two causes of action. In
the first Staff alleges that OCMC failed to comply with the Commission s Operator Service and
Pay Telephone Rule 104.04 which was purportedly adopted in 2002 and which requires certain
disclosures to consumers. The Petition further requests the Commission s attorney, pursuant to
Idaho Code 62-620, be directed to file an action in district court to seek the imposition of
penalties. (Staff Petition pg 10). Second, Staff alleges that OCMC violated the terms of its price
list, claiming that OCMC failed to provide rate quotes on request.
As demonstrated in this Memorandum, the Commission should terminate the
investigation with respect to the first cause of action because Rule 101.4 cannot be enforced
under Idaho Code 62-620. The Commission should terminate the investigation with respect to
the second cause of action because there are not any outstanding consumer complaints regarding
price list non-compliance.
MEMORANDUM IN SUPPORT OF MOTION TO TERMINATE INVESTIGATION-
If this matter is fully litigated through evidentiary hearing, OCMC believes the evidence
would show, among other things, that OCMC's alleged non-compliance was inadvertent; that
upon being notified of an apparent violation OCMC promptly, and voluntarily, came into
compliance with Rule 104.04; that OCMC has provided all information requested by Staff and
has fully cooperated with Staffs informal investigation. As a factual matter, OCMC believes the
evidence would not justify efforts to impose any substantial penalty.
As more fully set forth below, in this Memorandum in Support of Motion to Terminate
Investigation, OCMC, with all due respect to the Commission, raises more fundamental
questions. They are: Was the purported adoption of Rule 104.04 within the Commission s legal
authority and may it be enforced pursuant to Idaho Code 62-620, and may the Commission
exercise dispute resolution authority when there is not an outstanding subscriber complaint?
Argument
First Cause of Action
The Adoption Of Rule 104.04 Was Outside The Commission s Authority And It Cannot Be
Enforced Under Idaho Code 62-620.
Idaho Code 62-620 provides in relevant part:
CIVIL PENALTY FOR VIOLATION. Any telephone corporation who violates
or fails to comply with any final order, decision, rule or regulation duly issued by
the commission pursuant to this chapter shall be subject to a civil penalty of not
to exceed two thousand dollars ($2 000) for each day that the violation continues.
(emphasis added).
The language of seetion 62-620, requiring that a rule be "duly issued by the commission pursuant
to this chapter " neeessitates an examination of Chapter 6 of Title 62, Idaho Code, to determine if
promulgation of Rule 104.04 was within the Commission s legal authority.
As the Commission is well aware, Chapter 6, known as the Telecommunications Act of
1988 (as amended) created a new framework for the regulation of telecommunications carriers in
Idaho. Local exchange carriers were given the option of remaining fully regulated pursuant to
MEMORANDUM IN SUPPORT OF MOTION TO TERMINATE INVESTIGA TION- 2
Title 61 or of electing to remove all service other than basic local exchange from traditional
regulation. Idaho Code 62-605(1). If a local exchange carrier exercised its election, the
Commission retained
, "
... continuing authority to review the quality of such service, its general
availability, and the terms and conditions under which it is offered." Idaho Code 62-605(5), 62-
616.
Carriers other than local exchange carriers (now referred to as "Title 62" companies)
were given broader freedoms. Their rates were de-regulated, subject only to a requirement for
filing of price lists. Idaho Code 62-606. More importantly, for purposes of this case, the
Commission s authority to regulate quality of service and terms and conditions of service was
cut back when compared to local exchange companies. Idaho Code 62-616 is the remaining
source of Commission authority. It provides:
COMMISSION AUTHORITY TO RESOLVE SUBSCRIBER COMPLAINTS. The
commission shall have the authority to investigate and resolve complaints made
by subscribers to telecommunication services which are subject to the provisions
of this chapter which concern the quality and availability of local exchange
service, or whether price and conditions of service are in conformance with filed
tariffs or price lists, deposit requirements for such service or disconnection of
such service by telephone corporations subject to the provisions of this chapter.
The same distinction is set forth in Idaho Code 62-605(5) wherein quality of service
regulation is preserved for local exchange companies exercising the Title 62 election, but not for
other Title 62 companies. Pursuant to these sections the Commission s authority is limited to a
determination of whether conditions of service are in conformance with filed tariffs or price lists.
The Commission does not have authority to prescribe, by rule or otherwise, conditions of service
for Title 62 companies that are not local exchange companies. Its authority is limited to
determining whether the conditions of service conform with such conditions as a Title 62
company may include in its price lists.
Rule 104.04 requires that companies:
MEMORANDUM IN SUPPORT OF MOTION TO TERMINATE INVESTIGATION-
Disclose, audibly and distinctly to the consumer (caller for non-collect calls
called party for collect calls), at no charge, and before connecting any intrastate
operator service call, how to obtain the total cost of the call, including any
aggregator surcharge, or the maximum possible total cost of the call, including
any aggregator surcharge, before providing further oral advice to the consumer on
how to proceed to make the call. The oral disclosure required in Rule 104.04 shall
instruct consumers that they may obtain applicable rate and surcharge quotations
either, at the option of the provider of operator services, by dialing no more than
two (2) digits or by remaining on the line.
The rule is clearly an attempt to impose conditions of service. Because Rule 104.04 is an attempt
to prescribe a condition of service it was promulgated without Commission authority. It was not
duly issued by the commission pursuant to this chapter " as required by Idaho Code 62-620.
Accordingly, Rule 104.04 may not be enforced through a civil action for penalties under Idaho
Code 62-620.
The Idaho Supreme Court has made clear that the Commission may only adopt
administrative rules that are authorized by the state legislature. In the case of Idaho Power
Idaho Public Utilities Commission 102 Idaho 744, 639 P.2d 442 (1981), the Court considered
the Commission s attempted adoption of rules authorizing grants of intervenor funding.! In
Idaho Power in th~: context of implementing the Public Utility Regulatory Policy Act of 1978
the Commission adopted administrative rules allowing it to award costs of intervention. The
utility companies challenged the Commission s authority to adopt the rules and appealed
arguing that the rules were not authorized by any statute adopted by the legislature.
The Court began its analysis with the well-known general observation that
, "
Because the
Commission was created by statute, the Commission has no jurisdiction other than that which the
legislature has specifically granted to it. The Commission therefore exercises limited
jurisdiction, with nothing presumed in favor of its jurisdiction." 102 Idaho at 750. Quoting from
1 The case arose prior to the enactment of Idaho Code 61-617 A which authorized the Commission to adopt
intervenor funding rules.
MEMORANDUM IN SUPPORT OF MOTION TO TERMINATE INVESTIGATION-
Washington Water Power v. Kootenai Environmental Alliance 99 Idaho 875, 591 P.2d 122
(1979), the Court said:
(a)s a general rule, administrative authorities are tribunals of limited jurisdiction
and their jurisdiction is dependent entirely upon the statutes reposing power in
them and they cannot confer it upon themselves, although they may determine
whether they have it. If the provisions of the statutes are not met and compliance
is not had with the statutes, no jurisdiction exists." (Emphasis in original.) Id.
The Court then examined Title 62 to find a source of legislative authority to adopt the
rules and concluded that its examination "reveals the complete absence of any section
which would empower the Commission to. .. adopt rules governing compensation
consumer intervenors.Id.
The Court also made clear that generalized legislative authorizations will not
do-a specific grant of authority is required. The court rejected arguments that Idaho
Code 61-50e and 61-601 3 provide adequate authority, concluding, ".it would be
inappropriate to construe these provisions to authorize the Commission to compensate
consumer intervenors in the absence of a specific statute to that effect." Id.
F,ederal Statutes and Rules Are Not a Source of Authority.
Staff s Petition to Initiate an Investigation contains a lengthy discussion of federal laws-
The Telecommunications Act of 1996 (TRA) and the Telephone Operator Consumer Service
Improvement Act of 1990 (TOCSIA) along with a discussion of various FCC proceedings
implementing thost: laws. Staff apparently contends that these federal laws, when linked to state
law, create a source of authority for the adoption of Rule 104.04. Specifically, the Petition (pg I)
2 "The public utilities commission is hereby vested with power and jurisdiction to supervise and regulate every
public utility in the state and to do all things necessary to carry out the spirit and intent of the provisions of this act"
All hearings and investigations before the commission or any commissioner shall be governed by this act and by
rules of practice and procedure to be adopted by the commission, and in the conduct thereof neither the commission
nor any commissioner :;hall be bound by the technical rules of evidence.
MEMORANDUM IN SUPPORT OF MOTION TO TERMINATE INVESTIGATION-S
refers to Idaho Code 62-603 (the correct citation is 62-602(5)) which generally directs the
Commission to "administer these statutes with respect to rates and services in accordance with
these policies and applicable federal law." Staff also refers to Idaho Code 62-615 (1) which
provides
, "
The commission shall have full power and authority to implement the federal
telecommunications act of 1996, including, but not limited to, the power to establish unbundled
network element charges in accordance with the act.
There is, however, nothing in either the TRA or TOSCIA that purports to authorize or
direct state commissions to promulgate rules of the nature of Rule 104. With respect to the TRA
the best Staff can do is a reference to 47 US.C. 276, which is part of the act. That section directs
the FCC to promulgate rules for the interstate jurisdiction that:
establish per call compensation
discontinue access charge payphone service elements
prescribe nonstructural safeguards for BOCs
provide for negotiations with location providers
There is nothing in section 276 or the TRA generally authorizing or directing states to
adopt rules on disclosures to customers.
TOSCIA, and rules promulgated there under do relate to consumer disclosures. Neither
TOSCIA nor its rules, however, purport to authorize or direct state commissions to adopt
companion rules for the intrastate jurisdictions. Staffs Petition does not point to any portion of
TOSCIA that requires state adoption of rules.
More fundamentally, even ifTRA or TOSCIA were thought somehow to authorize state
activity, that authorization would only be valid if there was pre-existing state authority created
by state legislative authority. Federal law, in the absence of a clear federal intent to pre-empt
state law, cannot expand the jurisdiction of a state commission beyond the jurisdiction conferred
MEMORANDUM IN SUPPORT OF MOTION TO TERMINATE INVESTIGATION-
by the state legislature. This issue was also addressed in Idaho Power. There, the federal
PURP A act contained provisions purporting to authorize state commissions to award costs of
intervention. The Court held that because there was no explicit attempt to preempt state law a
permissive grant of authority was effective only ifthere was "preexisting State authority" to
adopt such rules. 102 Idaho at 753-754.
This Motion Is Not An Impermissible Collateral Attack.
It may be suggested that this Motion constitutes a collateral attack, in violation of
Idaho Code 61-625 , on the adoption of Rule 104 and that Respondent should have
challenged the rule by direct appeal. The Idaho Power case addresses this issue as well.
There, the Court held that the prohibition against collateral attack is not applicable when
the challenge is jurisdictional. "
.. .
an administrative order may generally be collaterally
attacked when the issuing agency lacks jurisdiction over the matter considered." 1
Idaho at 749.
Second Cause of Action
The Commission s Authority Regarding Price List Non-Conformance Is Limited To
Resolution Of Subscriber Complaints.
Staffs second cause of action is premised on OCMC's alleged non-conformance
with its price list on file with the Commission in that OCMC allegedly failed to provide a
rate quote on request. OCMC's price list provides in part
, "
Rate quotes will be provided
on request." Idaho Code 62-616 defines the Commission s authority regarding a carrier
alleged non-conformance with its filed price lists. The section provides in relevant part:
The commission shall have the authority to investigate and resolve complaints
made by subscribers... whether price and conditions of service are in conformance
with filed tariffs or price lists, deposit requirements for such service.
The obvious predicate for commission authority under section 62-616 is the existence of
one or more complaints by subscribers. Staff s Petition does not allege the existence of
MEMORANDUM IN SUPPORT OF MOTION TO TERMINATE INVESTIGATION-7
any unresolved subscriber complaints having to do with providing a rate quote on request
and, in fact, there are none. Section 62-616 gives to the Commission a limited amount of
dispute resolution authority to resolve subscriber complaints. In the absence of a
complaint there is nothing for the Commission to resolve.
Conclusion
Companies subject to the Commission s jurisdiction are understandably reluctant
to challenge the Commission s authority to undertake any particular course of action.
this case, however, Staff is leading the Commission into error and to proceed further with
this investigation would be without a reasonable basis in law. See Idaho Code 12-117(1 ).
Oral Argument Requested
Pursuant to IPUCRP 256, oral argument is requested.
Respectfully submitted this by of April, 2004.
OCMC, Inl~.
DJ ~t~
- Dean . Miller
Attorneys for aCMC, Inc.
4" Unless otherwise provided by statute, in any administrative or civil judicial proceeding involving as adverse
parties a state agency, a city, a county or other taxing district and a person, the court shall award the prevailing party
reasonable attorney s fees, witness fees and reasonable expenses, if the court finds that the party against whom the
judgment is rendered acted without a reasonable basis in fact or law,
MEMORANDUM IN SUPPORT OF MOTION TO TERMINATE INVESTIGATION-
CERTIFICATE OF SERVICE
I certify that t e original and seven copies of the foregoing document were
delivered on to:
Jean Jewell, Secretary
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83702
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MEMORANDUM IN SUPPORT OF MOTION TO TERMINATE INVESTIGA TION-