NOTICE ********************************************************* NOTICE ********************************************************* This document was originally prepared in Word Perfect. If the original document contained-- * Footnotes * Boldface & Italics --this information is missing in this version The document format (spacing, margins, tabs, etc.) is changed too. If you need the complete document, download the Word Perfect version. For information about downloading documents (FTP) see file pnmc5021. File pnmc5021 (.txt & .wp) is in directory \pub\Public_Notices\Miscellaneous. ***************************************************************** ******** $// 0 Complaint MO&O, Bill Correc. v. Pac. Bell, E-92-100, DA 95- 342//$ $/ 300.208 Complaints/$ $/ 300.201 Practices/$ $/ 300.202 Discrimination/$ ///newjob/// $///DA 95-342,2/27/95///$ DA 95-342 Before the FEDERAL COMMUNICATIONS COMMISSION Washington, D.C. 20554 In the Matter of ) ) BILL CORRECTORS, INC. AND, ) APOLLO SYSTEMS, INC., ) Complainants, ) ) v. ) File No. E-92-100 ) PACIFIC BELL, ) ) Defendant. ) MEMORANDUM OPINION AND ORDER Adopted: February 21, 1995 Released: March 3, 1995 By the Chief, Common Carrier Bureau: I. INTRODUCTION 1. We have before us a complaint filed by Bill Correctors, Inc. and Apollo Systems, Inc. (together "Complainants") against Pacific Bell ("Pacific"). Complainants contend that Pacific has violated Sections 201(b) and 202(a) of the Communications Act, 47 U.S.C.  201(b) and 202(a), by improperly applying an End User Common Line (EUCL) charge on certain foreign exchange (FX) lines used by Pacific to connect a Centrex serving office to a Class 5 central office serving certain end user customers on whose behalf Complainants filed the instant complaints. Complainants contend that the charge was in addition to the normal EUCL charge assessed for the local loop between an end users' premises and a Class 5 central office. Complainants seek an order directing Pacific to cease and desist assessing the improper EUCL charge and to refund all amounts paid by Complainants' customers for the wrongful EUCL charge. Pacific has denied the allegations and has moved to dismiss the complaint. As discussed below, we will grant the complaint in part and deny it in part. II. PROCEDURAL ISSUES A. Standing To Bring Action 1. Contentions 2. Pacific contends that Complainants are not the real parties in interest and, therefore, do not have standing to file the subject complaint. Pacific argues that Complainants have not established that the customers on whose behalf Complainants filed claims understood or intended that a complaint would be filed with the Commission. Pacific asserts that the letters confirming contractual relationships submitted by Complainants are not assignments or powers of attorney but simply letters of agency. It contends that the "agency evidenced in the letters is quite limited and does not authorize representation in legal proceedings." 3. In addition, Pacific points out that nine of the customer letters submitted by Complainants as evidence of authority to file the complaints appoint a communications consultant other than the Complainants to address issues pertaining to the disputed EUCL charges. Pacific contends that these letters generally authorize the communications consultant to obtain records, review and make inquiries concerning billing information, negotiate adjustments for incorrect billings or overcharges and receive refund checks and do not evidence an intention to authorize the consultant either to file a complaint with the Commission or to assign that right to the Complainants. Pacific argues that the complaint should be dismissed because it include claims on behalf of the customers who did not authorize Complainants to pursue claims on their behalf. 4. Finally, Pacific asserts that the lack of authorization in the letters submitted as evidence by Complainants places it in an untenable position because it would not be shielded from later lawsuits filed by the customers in their own names. This, according to Pacific, is the problem the real party in interest rule is designed to prevent. Therefore, Pacific argues, the Commission should dismiss the complaint to the extent it was filed by consultants who are not the real parties in interest. 5. In responsive pleadings, Complainants contend that Pacific is asking the Commission to impose a standard of agency that goes beyond what is required by the Commission's rules and the Communications Act. They point out that Section 208 of the Act permits any person to bring a complaint to the Commission and provides that no complaint shall be dismissed because there was no direct damage to the complainant. Complainants maintain that the letters of agency they submitted with the complaint clearly establish that the authority conveyed by the letters is "expansive rather than limiting." They point to the letter written by Access America Telemanagement, which authorizes Delphi Associates to pursue the EUCL charge issue "until it is resolved to [American Telemanagement's] satisfaction." Complainants argue that Pacific is attempting to distract and confuse the issue by asserting that Complainants must be attorneys-in-fact to bring this action. 6. Complainants further state that any danger that Pacific might be subject to future suits by the same customers can be eliminated by structuring the damages award to preclude double or duplicate claims. Complainants contend that the complaint simply requests that the Commission determine whether payments are due Complainants' clients who have made refund demands of Pacific for the inappropriate EUCL charges at issue and do not expect that the Commission to order refunds to be made payable to Complainants. Moreover, Complainants represent that they intend to cooperate fully with Pacific in assessing overpayment claims and will provide documentation supporting any claimed overpayments. 2. Discussion 7. Clearly, Complainants have standing to file a complaint alleging that Pacific has violated provisions of the Communications Act or any Commission rule or Order. Section 208 provides that "any person" may file a complaint alleging that a common carrier has violated the Act and that "[n]o complaint shall at any time be dismissed because of the absence of direct damage to the complainant." Therefore, the complaint cannot be dismissed because it was filed by communications consultants on behalf of specific end-user customers rather than by the customers themselves. 8. The question we must decide is whether Complainants were properly authorized to pursue claims for damages on behalf of the customers identified in their amended complaint. We believe that a reasonable interpretation of the letters relied upon by Complainants is that the authority granted Complainants by the named customers is broad enough to encompass the filing of damages claims. We note, for example, that the letters prepared by Access America Telemanagement and Business Telemanagement specifically authorize Delphi Associates, Inc., to represent them in connection with their EUCL dispute "until it is resolved to [their] satisfaction." Pacific's claim that the letters merely give the Complainants the right to represent the end- user customers in network access matters, not to prosecute damages claims, is unavailing. Pacific has presented no evidence to support its allegation that some of the customers were unaware of the complaint filed on their behalf. In addition, it appears that Complainants' clients identified by Pacific as not taking the service at issue here had at one time taken the service. In view of the foregoing, we will deny this aspect of Pacific's motion to dismiss. B. Statute of Limitations 1. Contentions 9. Pacific has also moved to dismiss the complaint to the extent it seeks damages beyond the two year limitations period contained in Section 415 of the Act. It states that although the body of the amended complaint appears to allege actions occurring within the two- year statute of limitations, two of the exhibits show that customers on whose behalf Complainants filed their complaints received bills for the disputed service more than two years before the complaint was filed with the Commission. Pacific contends that the Commission must reject Complainants' request that the Commission extend the statute of limitations beyond two years for customers with demand letters on file "to send a strong policy message to Pacific." Pacific asserts that it is settled law that the statute of limitations bars not only the remedy but also extinguishes the liability and may not be extended for punitive purposes. 10. Complainants state that their amended complaint properly encompasses claims for the two year period preceding the date they filed their informal and formal complaints with the Commission. Complainants also contend that since Pacific never formally disavowed certain other claims submitted to it in writing by several of their clients on or before October 18, 1991, the Commission should award damages to these customers for the period dating back two years prior to the date of the customers' demand letters. Complainants argue that by refusing to respond to the demand letters, Pacific engaged in a pattern of conduct deliberately designed to avoid the exception to the statutory period contained in Section 415(c) of the Act. 2. Discussion 11. Initially, we note that Pacific does not dispute the Complainants' claim that certain customers on whose behalf Complainants filed the instant complaint had submitted written demands for the return of alleged overcharges on or before October 18, 1991. Nor does Pacific persuasively counter the Complainants' assertion that it failed to disavow these claims prior to its filing its answer to complaints filed with the Commission on behalf of various customers on March 29, 1992. Under these circumstances, the application of Section 415(c) of the Act is clear. The two year limitations period can be extended for up to two years from the time a carrier disavows a customer's written claim for overcharges if the customer had transmitted that claim to the carrier within two years from the time the cause of action accrued. We conclude, therefore, that to the extent Complainants' customers covered by the complaint had written demand letters on file with Pacific for the overcharges at issue, the statute of limitations began to run on March 29, 1992, the date Pacific filed its answer disavowing the overcharge claims. This disavowal would cause the statute to expire on March 28, 1994, a period that clearly encompasses the claims set forth in the amended complaint in this matter. III. SUBSTANTIVE CLAIMS A. Contentions 12. Complainants contend that Pacific's application of EUCL charges to their clients' FX lines between central offices violates both the letter and intent of 47 C.F.R.  69.104(a) and, therefore, is unjust and unreasonable under Section 201(b) of the Act and unreasonably discriminatory under Section 202(a) of the Act. They contend that the FX line between the two central offices at issue here does not fit the definition of a non-traffic sensitive (NTS) common line to which the EUCL charge would apply because it does not connect directly to the end user's premises or serve as that customer's access point to the system. Complainants contend that the language of Section 69.104 of the rules clearly establishes that if the line does not terminate at an end user premises, the EUCL charge does not apply. 13. Furthermore, Complainants contend that the language in Section 4.6(c) of Pacific's Tariff F.C.C. No. 128 contradicts Pacific's position. Complainants claim that the tariff specifically describes Centrex as a service that: (1) uses a portion of a telephone company's switch located at the telephone company central office to meet the customer's internal needs, and serves as the customer's interface with the local loop and interexchange network; and (2) links the customer's main stations to the telephone company switch with subscriber loops. Complainants contend that the FX lines in question are not subscriber local loops. They point out that Pacific, itself, does not contend that a Centrex central office qualifies as a customer's premises since Pacific has openly opposed co-location in the past. Complainants cite to testimony submitted by Pacific to the California Public Utility Commission in which Pacific represented that FX services are network services, not local access services. 14. In response, Pacific challenges Complainants' statement that an FX line "is not used to connect two Class 5 offices; rather it is used to extend the local loop to a foreign central office for dial tone." Pacific denies that the common transport access element has any relevance to this complaint because the services at issue are local exchange services and not access services. It further avers that the Class 5 office to which 47 C.F.R.  69.104(a) refers is the central office that provides the dial tone. Pacific argues that because the FX lines at issue are intended only to extend the dial tone to another central office, this dial tone office is the point of access to the public switched telephone network and EUCL charges apply because the FX lines run between the customers' premises and the Class 5 office from which the customers receive access to the network. 15. Pacific argues that if the Complainants' rationale for not applying EUCL charges were accepted, a customer-owned PBX and Centrex service would be assessed the same EUCL charge, a result Pacific claims is contrary to the terms of its tariff and the Commission's rules. Pacific maintains that its action in assessing the EUCL charge at issue is in conformance with it its filed tariff, and in accordance with Commission rules. B. Discussion 16. After careful consideration of the evidence and arguments presented by the parties, we find no support in Pacific's tariff or the Commission's rules for Pacific's imposing a second EUCL charge on the parties for the FX lines at issue. We conclude, therefore, that Pacific violated Section 201(b) of the Act by assessing the improper EUCL charges. 17. In its answer to the original complaint, Pacific asserts that the EUCL charges comply with Section 69.104 of the Commission's rules, which it claims requires that such charges be assessed on any FX line between a customer's premises and the Class 5 office from which dial tone is received. We find no evidence to show, however, that the Class 5 office at which the parties' FX lines terminate can reasonably be defined as customer's premises for purposes of assessing EUCL charges. Pacific's assertion that the FX lines do not interconnect Class 5 offices but rather extends the local loop to a remote central office does not warrant the imposition of a second EUCL for this service configuration. To view this otherwise would logically lead to imposition of multiple EUCLs based upon the number of intermediate central offices through which the link between a customer and its serving office or Centrex offices pass. Moreover, by the clear language of Section 69.104 of the rules, EUCL charges cannot be applied to lines that do not terminate on the end user's premises. This is consistent with the principle that an end user accessing the network once should pay only once for such access. In the service configuration presented by the instant complaint, it is clear that only one access point exists; the access point has simply been linked to the customer's serving office by a regular loop joined to an FX line. IV. DAMAGES 18. In view of the above, we find that Pacific unlawfully charged Complainants' clients additional EUCL charges for the FX lines at issue. The proper measure of damages in the case of overcharges is usually the amount overpaid by the customer plus interest compounded daily from the date the overbilling occurred. Complainants have acknowledged, however, that the record developed thus far does not provide a basis sufficient to determine the precise amount of damages owed to Complainants' end-user customers identified in the amended complaint. We note further that Complainants have expressed a willingness to work cooperatively with Pacific to resolve any disputes over the amounts paid by the affected customers for the improper EUCL charges. In the interest of facilitating the earliest possible resolution of this long standing controversy and avoiding the need for further, costly proceedings, we direct the parties to engage in good faith negotiations consistent with the findings and conclusions of this Memorandum Opinion and Order to resolve the amount of damages and the method of repayment. The parties are further directed to report to the Bureau's Enforcement Division staff within sixty (60) days of the date after the claims have been resubmitted whether agreement on the amount of damages has been reached or, absent such agreement, the need for further action by the Bureau. If the parties are unable to resolve this matter, Complainants will have an additional thirty (30) days in which to file a supplemental complaint for the determination of damages. V. ORDERING CLAUSES 19. Accordingly, IT IS ORDERED, pursuant to Sections 4(i), 201(b), and 208 of the Communications Act of 1934, as amended, 47 U.S.C.  4(i), 201(b), and 208, and the authority delegated by Section 0.291 of the Commission's Rules, 47 C.F.R.  0.291, that the Motion To Dismiss filed by Pacific in the above-referenced matter IS GRANTED consistent with our findings and conclusions in this Memorandum Opinion and Order and IS DENIED in all other respects. 20. IT IS FURTHER ORDERED that the above-referenced complaint IS GRANTED to the extent indicated above and IS DISMISSED or DENIED in all other respects. Pacific is expected to take the action necessary to assure that its charges for service covered by this Memorandum Opinion and Order meet the requirements of Section 201(b) of the Act, Part 69 of the Commission's rules, and the provisions of its applicable tariff. 22. IT IS FURTHER ORDERED that Complainants and Pacific engage in good faith negotiations consistent with the findings and conclusions of this Memorandum Opinion and Order to determine the appropriate amounts owed to Complainants' clients in connection with the overcharges we find in this Memorandum Opinion and Order. FEDERAL COMMUNICATIONS COMMISSION Kathleen M.H. Wallman Chief, Common Carrier Bureau