HomeMy WebLinkAbout28336.docBEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF DOLPHIN USA, INC.’S FAILURE TO REMIT THE COMMISSIONS 1998 AND 1999 REGULATORY FEE PURSUANT TO IDAHO CODE §§ 61-1001 AND 62-611.
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CASE NO. GNR-U-00-2
ORDER NO. 28336
IN THE MATTER OF LD NETWORK SERVICE, INC.’S FAILURE TO REMIT THE COMMISSIONS 1999 REGULATORY FEE PURSUANT TO IDAHO CODE §§ 61-1001 AND 62-611.
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) IN THE MATTER OF NORTH AMERICAN COMMUNICATION GROUP, INC.’S FAILURE TO REMIT THE COMMISSIONS 1998 AND 1999 REGULATORY FEE PURSUANT TO IDAHO CODE §§ 61-1001 AND 62-611.
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) IN THE MATTER OF PARTNERS IN COMMUNICATION’S FAILURE TO REMIT THE COMMISSIONS 1999 REGULATORY FEE PURSUANT TO IDAHO CODE §§ 61-1001 AND 62-611. )
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On January 28, 2000, the Commission issued Order No. 28274 directing Dolphin USA, LD Network Services, North American Communication Group, and Partners in Communication to show cause why they failed to report their 1998 gross intrastate revenues and failed to pay their 1999 regulatory fees as required by Idaho Code §§ 61-1003, 61-1005 and 62-611. In addition, the Order also alleged that Dolphin USA and North American Communication failed to pay their regulatory fees for 1998. Although the four companies were ordered to appear before the Commission’s Hearing Officer on February 22, 2000, the companies did not appear at the hearing.
Having reviewed the evidence presented at the Show Cause hearing and the Hearing Officer’s recommendations, we order these companies to cease conducting business in Idaho and that other Idaho local exchange companies (LECs) are directed to not carry the four companies’ telecommunications traffic. The four companies’ tariffs/price lists shall be cancelled and returned unless their delinquent regulatory fees are paid within 21 days of the service date of this Order.
BACKGROUND
The Commission’s Regulatory Fee
Idaho Code §§ 61-1001 and 62-611 provide that each public utility subject to the Commission’s Title 61 or Title 62 jurisdiction shall pay to the Commission a special regulatory fee “to defray the amount to be expended by the commission for expenses in supervising and regulating the public utilities.” On or before April 1st of each year, each public utility is required to report its gross operating revenue from intrastate business in Idaho for the preceding calendar year. Idaho Code § 61-1003. Based upon all the utilities’ gross intrastate revenues and the Commission’s annual appropriation from the Legislature, the Commission then calculates the proportional assessment to be paid by each utility. Thereafter, each utility pays its regulatory assessment to the Commission in two equal semi-annual installments on or before May 15th and November 15th of each year. Idaho Code § 61-1005. “Upon failure, refusal or neglect of any public utility or railroad corporation to pay such fee the attorney general shall commence an action in the name of the state to collect the same.” Id. This section further provides that installments not paid in a timely fashion shall bear interest at the rate of 6% until such time as the full amount of the installment or annual fee is paid. Idaho Code § 61-1004(3) sets the minimum annual regulatory fee at $50.00.
In this case, the Commission Staff alleged that the four Title 62 companies failed to report their gross intrastate revenues for calendar year 1998 and failed to pay their 1999 regulatory fees. Order No. 28274 at 2-3. In addition, the Staff also alleged that Dolphin USA and North Communications Group failed to pay their regulatory fees for 1998. Tr. at 21. The Staff presented the prefile testimony of its Financial Support Technician, Christine Maschmann. She testified concerning the assessment procedures and the Staff’s efforts to obtain the 1998 gross revenues and to collect the regulatory assessments from the companies.
THE SHOW CAUSE HEARING
A. Designating Persons to Receive Service and Mail Issued
by the Commission Secretary
Ms. Maschmann first testified that Idaho Code § 62-619 provides that the Commission’s Rules of Procedure apply to the processing of Title 62 matters. She stated that the Commission’s Procedural Rule 16 provides that the Commission Secretary shall serve all Orders by mail. IDAPA 31.01.01.16.01. Tr. at 11. This Rule requires that all “utilities must maintain on file with the Commission Secretary a designation of such a person. Summonses and complaints directed to regulated utilities . . . may be served by registered or certified mail.” Tr. at 11-12 citing IDAPA 31.01.01.16.02.
Staff witness Maschmann also testified that Title 62 Rule 202 requires that each Title 62 corporation provide the Commission with “address of the principal place of business of the telephone corporation, and, if there is a principal place of business in Idaho, the address of the principal place of business in Idaho; [and an] agent in Idaho for service to process by the Commission in the state of Idaho.” IDAPA 31.42.01.202.02(b) and (c). Tr. at 10-11. She also noted that Rule 202.03 provides that “Orders and other documents issued by the Commission may be served by mail on the agent for service of process listed pursuant to Rule 202.01.(c) of this Rule. This service constitutes due and timely notice to the telephone corporation, and no further service is necessary to bind the corporation.” Tr. at 11 citing IDAPA 31.42.01.202.03. Idaho Code § 61-615 allows complaints against utilities to be served by registered mail. All the Orders and correspondence sent to the four companies in this case were sent to the addresses on file with the Commission.
B. The Companies’ Failure to Report Their Gross Revenues
and the Staff’s Efforts to Collect the Regulatory Fees
1. 1998 Fees. Ms. Maschmann outlined the measures taken by the Staff to collect Dolphin and North American’s 1998 regulatory fees. She reported that on April 22, 1998, the Commission Staff forwarded an assessment statement to the two companies advising them that their annual $50.00 regulatory fee of which $25.00 was due and payable no later than May 15, 1998. Exh. Nos. 7 (Sch. I), 9 (Sch. H). When the first installment of their regulatory fees were not received, the Commission’s attorney sent each company a letter (dated July 22, 1998) advising them that the 1998 first installment was not paid and that the company should forward a payment of $25.25. Exh. Nos. 7, 9 (Sch. J). Tr. at 24, 29. Again in October 1998 the two companies were sent a certified letter claiming that the first installments were not received. The letter advised each company that $25.57 was due then or the companies could pay their entire 1998 regulatory fees of $50.57 no later than October 30, 1998. Exh. Nos. 7, 9 (Sch. K’s); Tr. at 24, 29. Their 1998 fees were not paid. Id.
2. 1998 Revenues and 1999 Fees. On February 26, 1999, a letter was mailed to each of the four companies asking them to report their respective 1998 gross intrastate revenues on or before April 1, 1999. Exh. No. 7, 8, 9, 10 (Sch. A’s). The Companies did not respond to this letter nor did they otherwise report their 1998 gross operating revenues as required by Idaho Code §§ 61-1003 and 62-611. Tr. at 22, 25, 27, 30.
On April 23, 1999, each of the four companies was mailed a statement of their 1999 annual fee assessments. Exh. Nos. 7, 8, 9, 10 (Sch. B’s). This statement mentioned that the regulatory fees may be paid in two equal installments, the first due no later than May 15, 1999, and the second due no later than November 15, 1999. Tr. at 22, 25, 27, 30. Included with the fee statement was a separate letter notifying the companies that they had failed to report their gross intrastate revenues. Exh. Nos. 7, 8, 9, 10 (Sch. C’s). In his separate letter, the Deputy Administrator, David Hattaway, stated that
on or before May 15, 1999, you must report your gross intrastate revenues and pay the Regulatory Fee. Should your reported gross intrastate revenues exceed $19,227, your regulatory fee will be greater than [the minimum fee amount of] $50. To calculate your correct assessment multiply the higher amount by .0026 to determine your adjusted fee.
Exh. Nos. 7, 8, 9, 10 (Sch. C’s) (emphasis original) Tr. at 22-23, 25, 27-28, 30.
When the 1998 revenue reports and the May 1999 payments were not received, the Commission’s attorney forwarded a letter on September 9, 1999, to Dolphin USA, LD Network Services and Partners Communication advising them that the Commission had not received the May payments and that each company owed $25.50. Tr. at 23, 25-26, 31. In North American Communication’s case, the letter stated that the company owed $79.31 (for the 1998 fee and the first installment of 1999) or $104.31 (for both 1998 and the entire 1999 year). Exh. No. 9 (Sch. D). The September letter further stated that the first three companies “may remit the entire 1999 fee of $50.50 (including the calculated interest).” Exh. Nos. 7, 8, 9, 10 (Sch. D’s). Id. Each company was further advised that failure to remit this amount may result in legal action including the assessment of a civil penalty up to $2,000 each day that the violation continued. Id.
After receiving no responses to the September 9 letter, a subsequent letter (dated December 10, 1999) was sent by certified mail from the Commission’s attorney advising each company that the Commission had not received the first or second installments of the 1999 regulatory fee. The December letter advised LD Network and Partners in Communication that their 1999 regulatory fees (plus interest) were [then] $51.03 and must be paid no later than December 23. Exh. Nos. 8, 10 (Sch. E’s). The December letter advised Dolphin USA and North American that they each owed $105.06 that must be paid to avoid legal action. Exh. Nos. 7, 9 (Sch. E’s). In addition, each December letter included a “tear-off” reply section so that the companies could advise the Commission if they were no longer in business and could request that their tariffs/price lists be removed from the Commission’s files. Tr. at 23, 26, 28, 31.
Staff witness Maschmann testified that the returned certified mail receipts for the three companies (except Partners) showed that the December letter was delivered and received by each company. Tr. at 23, 26, 28; Exh. Nos. 7, 8, 9 (Sch. F’s). The mail receipts for Partners were never returned by the post office. Tr. at 31.
Ms. Maschmann next stated that each company was served a copy of Show Cause Order No. 28274 by certified mail. Tr. 24, 26-27, 29, 32. Exh. Nos. 7, 8, 9, 10 (Sch. G’s). The post office’s mail receipts show that the companies did receive copies of the Commission’s Show Cause Order No. 28274. Id.
None of the four companies appeared at the Show Cause hearing. Tr. at 83. Ms. Maschmann recommended that the Hearing Officer enter default judgments against these companies if they failed to report their 1998 intrastate gross revenues, to pay their regulatory fees, or to appear at the Show Cause hearing. Tr. at 32-33. She further recommended that the Commission order these companies to cease operating in Idaho until they have come into compliance. In addition, she suggested that local exchange companies should be ordered to deny or prohibit the carriage of traffic for these companies. Finally, she recommended that if the companies failed to pay their delinquent regulatory fees, that their price lists be cancelled and returned. Id.
At the hearing, the Staff Attorney assured the Hearing Officer that the Staff had cross-checked the addresses on file at the Commission with those addresses maintained by the Secretary of State for the registration of corporations. Tr. at 82. He also noted that the December 10 letters sent by certified mail were also served on the agent for service at addresses both maintained by the Commission and the Secretary of State. Id.
C. The Hearing Officer’s Recommendations
Having reviewed the testimony filed by Staff witness Maschmann and her exhibits, the Hearing Officer found that appropriate service by regular and certified mail had been made on all four companies and that service of the fee statements, collection letters, and the Show Cause Order were valid. Tr. at 83. He found that no parties appeared at the Show Cause hearing. Id. He also noted that it was appropriate to enter default judgments against Dolphin USA, LD Network Services, North American Communication Group, and Partners in Communication for failure to report their 1998 gross intrastate revenues and failure to pay their respective 1999 regulatory fees. Tr. at 84. He also found that Dolphin USA and North American Communication Group had failed to pay their respective 1998 regulatory fees. Id.
The Hearing Officer recommended and the Staff agreed that between the time of the hearing and the Commission taking this matter up at its decision meeting, that the Staff should consider entering into a consent agreement with any of the four companies if they offered to pay their fees. Tr. at 78-79, 88, 89. As of the date that this Order was prepared, none of the four companies have contacted the Staff regarding payment of their regulatory fees.
COMMISSION FINDINGS
Having reviewed the evidence presented at the Show Cause hearing and the Hearing Officer’s recommendations, we find that Dolphin USA, LD Network Services, North American Communication Group, and Partners in Communication have failed to report their 1998 gross operating revenues from their intrastate business and have failed to pay their 1999 regulatory fees as required by Idaho Code §§ 61-1003, 61-1005, and 62-611. We further find that Dolphin USA and North American Communication also failed to pay their regulatory fees for 1998. We find that the assessment letters, collection letters, and Order No. 28266 were properly served by regular mail and certified mail to the person(s) designated by these Title 62 companies to receive correspondence, summonses and Orders of the Public Utilities Commission. IDAPA 31.01.01.016; 31.42.01.202. The Commission has jurisdiction over these companies and this matter pursuant to Idaho Code § 62-611 and Chapter 10, Title 61, Idaho Code.
Based upon the recommendation of our Hearing Officer, we further find that it is appropriate to enter default judgments against these companies for their failure to appear at the Show Cause hearing. IDAPA 31.01.01.301. It is unreasonable for these companies to be allowed to operate in Idaho without paying their regulatory fees. Failure to report their gross intrastate operating revenues and failure to pay their regulatory fees unfairly burdens the remaining companies that are in compliance with the Public Utilities Laws. Moreover, the companies’ failure to appear at the Show Cause hearing pursuant to an Order of this Commission calls into question their ability to comply with the Public Utilities Laws and administrative Rules of this Commission. It is evident from the testimony of our Financial Technician that considerable resources and Staff time were expended trying to collect the delinquent regulatory fees.
Finally, we also believe it is reasonable that these companies be directed to cease operating in Idaho and that incumbent and competitive local exchange companies be ordered not to transmit any traffic for these companies. Given the failure of these four companies to pay their regulatory fees as required by law, we also believe it is appropriate to cancel their price lists and return them to the companies. Although we believe that these companies have been given ample opportunity to comply with the regulatory fee statutes, we believe it is appropriate for this Order to become effective 21 days from the service date of this Order. If prior to the effective date of this Order the companies come forward to pay their delinquent regulatory fees, we believe that it would be appropriate for the companies and the Commission Staff to enter into a consent agreement pursuant to Procedural Rule 58, IDAPA 31.01.01.58. As noted in the Rule, “[c]onsent agreements are intended to require compliance with existing law.” Id.
O R D E R
IT IS HEREBY ORDERED that Dolphin USA, LD Network Services, North American Communication Group, and Partners in Communication are in default for failure to report their 1998 gross intrastate revenues and to pay their 1999 regulatory fees pursuant to Idaho Code §§ 61-1001, 61-1003, 61-1005, and 62-611.
IT IS FURTHER ORDERED that Dolphin USA and North American Communication are also in default for failure to pay their 1998 regulatory fees pursuant to Idaho Code §§ 61-1005 and 62-611.
IT IS FURTHER ORDERED that this Order shall become effective 21 days from the service date of this Order. When this Order becomes effective these companies shall cease operating in Idaho.
IT IS FURTHER ORDERED that 25 days after the service date of this Order, that incumbent and competitive local exchange companies shall no longer originate or terminate intrastate traffic for these companies.
IT IS FURTHER ORDERED that upon the effective date of this Order the tariffs and price lists for these companies shall be cancelled and returned to them for failure to pay their 1998 and/or 1999 regulatory fees.
THIS IS A FINAL ORDER. Any person interested in this Order (or in issues finally decided by this Order) or in interlocutory Orders previously issued in this Case No. GNR-U-00-2 may petition for reconsideration within twenty-one (21) days of the service date of this Order with regard to any matter decided in this order or in interlocutory Orders previously issued in this Case No. GNR-U-00-2. Within seven (7) days after any person has petitioned for reconsideration, any other person may cross-petition for reconsideration. See Idaho Code § 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of April 2000.
DENNIS S. HANSEN, PRESIDENT
MARSHA H. SMITH, COMMISSIONER
PAUL KJELLANDER, COMMISSIONER
ATTEST:
Myrna J. Walters
Commission Secretary
vld/O:GNR-U-00-2_dh2
ORDER NO. 28336 1
Office of the Secretary
Service Date
April 10, 2000