BULLSEYE TELECOM, INC., Petitioner, v. CALIFORNIA PUBLIC UTILITIES COMMISSION, Respondent, QWEST COMMUNICATIONS COMPANY, LLC, Real Party in Interest. [and consolidated cases]
A160729 (Cal. PUC Decision Nos. 19-05-023 & 20-07-035); A160908 (Cal. PUC Decision Nos. 19-05-023 & 20-07-035); A160937 (Cal. PUC Decision Nos. 19-05-023 & 20-07-035)
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA FIRST APPELLATE DISTRICT DIVISION 5
Filed 7/6/21
CERTIFIED FOR PUBLICATION
In its complaint to the Public Utilities Commission (“PUC” or “Commission“), Qwest alleged, among other things, that the petitioners discriminated against it by providing AT&T and Sprint with discounted rates for switched access services. Qwest concedes it was not charged more than the rates set forth in petitioners’ tariffs filed with the Commission. Qwest sought a refund of amounts it paid to petitioners in excess of the rates charged to AT&T and Sprint.
Petitioners seek writ review of the Commission‘s 2019 decision in Qwest‘s favor. The Commission concluded Qwest showed that it was similarly situated to AT&T and Sprint and that there was no rational basis for treating Qwest differently with respect to the rates charged for switched access services.
In this writ proceeding, petitioners briefly argue the Commission erred in its legal approach to Qwest‘s discrimination claims, but they devote most of their briefing to three procedural claims and a claim that the Commission‘s remedy, an award of reparations to Qwest (in an amount yet to be determined), is unlawful. Petitioners’ claims are described at the outset of the Discussion section below.
BACKGROUND2
As explained by the Commission, “Intrastate switched access is a service provided by the Defendant [local carriers] that allows [long-distance carriers] such as AT&T, Sprint, and Qwest to use . . . local exchange network[s] . . . to originate and terminate long distance calls to the vast majority of California residential and business customers. Intrastate switched access is necessary for the provision of long-distance service . . . in California.” (Fn. omitted.) (See also AT&T Corp. v. F.C.C., supra, 292 F.3d at p. 809; United States v. W. Elec. Co. (D.D.C. 1986) 627 F.Supp. 1090, 1095; Iowa Network Services v. AT&T Corp. (D.N.J, Oct., 2, 2019, Civ A. No. 3:14-cv-3439) 2019 U.S.Dist. LEXIS 170792, *3–*4.) It is undisputed that long-distance carriers have no control over which local carrier will provide switched access services on either end of the call and that, as the Commission stated below, long-distance carriers “have no choice but to use this service provided by the individual [local carriers] since there is no other way . . . to reach the retail subscribers who are making the underlying long distance call.” Each of the petitioners has an intrastate switched access service tariff on file with the Commission. It is undisputed the petitioners did not file with the Commission the individual agreements with AT&T and Sprint providing for discounted rates.
In April 2009, Qwest filed a First Amended Complaint (“Complaint“) with the Commission against 24 California local carriers, including the present petitioners.3 In the first cause of action, Qwest alleged the local carriers engaged in rate discrimination in violation of
In 2010, the Commission dismissed the Complaint on the ground that Qwest had failed to state a claim (Decision 10-07-030) (the “2010 Decision“). In 2011, the Commission granted Qwest‘s request for rehearing (Decision 11-07-058) (the “2011 Decision“). The 2011 Decision stated that a discrimination complainant, like Qwest, would “have to show that it was similarly situated and that there was no rational basis for such different treatment. A showing that rates lack uniformity is by itself insufficient to establish that they are unreasonable and hence unlawful. . . . [Citation.] Numerous characteristics of a particular customer -- volume, calling patterns, cost of negotiation, etc. -- could be sufficient to distinguish one customer from another.” (Id. at 128.) Further, the complainant must have been “willing to enter into a contract with the same terms and conditions of service.”
In October 2012, the Commissioner assigned to the matter issued a “scoping memo” for the proceeding pursuant to
Thereafter, following what the Commission described as “extensive discovery,” an Administrative Law Judge (“ALJ“) conducted evidentiary hearings in 2013 that included testimony and the submission of “approximately 800 exhibits.” In 2015, the ALJ issued a decision denying the Complaint. In Decision 16-02-020 (the “2016 Decision“), the Commission agreed and dismissed the Complaint. The 2016 Decision found Qwest was not similarly situated to the Contracting Carriers, there was a rational basis for the discount provided to the Contracting Carriers, and Qwest was not willing to enter into the terms of the individual agreements with those carriers.
Petitioners sought rehearing.8 (
The present petitions for writ of review under
Petitioners present various claims of error. They claim the Commission violated
We reject petitioners’ claims.
I. Writ Review Under Section 1756
The Commission ” ‘is a state agency of constitutional origin with far-reaching duties, functions and powers. (Cal. Const., Art. XII, §§ 1–6.) The Constitution confers broad authority on the [C]ommission to regulate utilities, including the power to fix rates, establish rules, hold various types of hearings, award reparation, and establish its own procedures. (Id., §§ 2, 4, 6.)’ ” (San Diego Gas & Electric Co. v. Superior Court (1996) 13 Cal.4th 893, 914–915; accord Davis v. Southern California Edison Co. (2015) 236 Cal.App.4th 619, 636.) Additionally, the Public Utilities Act (
Our role in reviewing the Commission‘s decisions is “limited.” (City and County of San Francisco v. Public Utilities Com. (1985) 39 Cal.3d 523, 530.) “In a complaint or enforcement proceeding, . . . the review by the court shall not extend further than to determine, on the basis of the entire record which shall be certified by the [C]ommission, whether any of the following occurred: [¶] (1) The [C]ommission acted without, or in excess of, its powers or jurisdiction. [¶] (2) The [C]ommission has not proceeded in the manner required by law. [¶] (3) The decision of the [C]ommission is not supported by the findings. [¶] (4) The findings in the decision of the [C]ommission are not supported by substantial evidence in light of the whole record. [¶] (5) The order or decision of the [C]ommission was procured by fraud or was an abuse of discretion. [¶] (6) The order or decision of the [C]ommission violates any right of the petitioner under the Constitution of the United States or the California Constitution.” (
“[W]hen no constitutional issue is presented, a PUC decision has the same standing as a judgment of the superior court: it is presumed correct, and any party challenging the decision has the burden of proving that it suffers from prejudicial error.” (Pacific Gas & Electric Co. v. Public Utilities Com. (2015) 237 Cal.App.4th 812, 838.) “Generally, we give presumptive value to a public agency‘s interpretation of a statute within its administrative jurisdiction because the agency may have ‘special familiarity with satellite legal and regulatory issues,’ leading to expertise expressed in its interpretation of the statute. [Citation.] Therefore, ‘the PUC‘s “interpretation of the Public Utilities Code should not be disturbed unless it fails to bear a reasonable relation to statutory purposes and language. . . .” [Citation.] However, “the general rule of deference to interpretations of statutes subject to the regulatory jurisdiction of agencies does not apply when the issue is the scope of the agency‘s jurisdiction.” [Citation.] Even in cases not questioning the jurisdiction of an agency, the interpretation of statutes is a question of law subject to independent judicial review.’ ” ( Pacific Bell Wireless, LLC v. Public Utilities Com. (2006) 140 Cal.App.4th 718, 729 (Pacific Bell Wireless); see also Southern California Edison Co. v. Peevey (2003) 31 Cal.4th 781, 796 (Peevey); New Cingular Wireless PCS, LLC v. Public Utilities Com. (2016) 246 Cal.App.4th 784, 806–807 (New Cingular); PG&E Corp., supra, 118 Cal.App.4th at pp. 1194–1195.)
II. The Commission Did Not Fail to Conduct a Rehearing
Petitioners contend the Commission failed to conduct a “rehearing” as required by
In the present case, Qwest requested rehearing of the 2016 Decision, and petitioners filed a response. In the 2019 Decision, the Commission granted the request for a rehearing on specified issues. In the same decision, the Commission explained, “we will not order further proceedings on these issues. Instead, based on the record evidence and the law, we will reverse our determinations in [the 2016 Decision], and find that Qwest was similarly situated to the [C]ontracting [C]arriers and there was no rational basis for treating Qwest differently. Thus, we determine that Defendant [local carriers] have violated section 453 and 532 by discriminating against Qwest. Further, and contrary to our conclusion in [the 2016 Decision], we determine that the Defendants failed to comply with the Commission‘s requirements to file (or otherwise make publicly available) off-tariff agreements. [¶] Thus, we will supersede those portions of [the 2016 Decision] which are inconsistent with today‘s decision. Further, we will open a Phase II to consider the issue regarding refunds.” Subsequently, petitioners filed their own application for rehearing. The 2020 Decision modified the 2019 Decision in various respects and stated, “Rehearing of [the 2019 Decision], as modified, is denied as no legal error has been demonstrated.”
It is undisputed the regular “hearing” procedures require the taking of evidence.
and the corporation or person complained of, and such corporations or persons as the [C]ommission allows to intervene, shall be entitled to be heard and to introduce evidence.”
Petitioners point out that the rehearing provisions (
In support of their position that any rehearing requires compliance with the regular hearing procedures in
Petitioners argue that “[i]n
The conclusion that a rehearing does not require additional evidentiary hearings is also supported by comparing the procedures in
1708, “[t]he procedure applicable to hearings on complaints filed by the [C]ommission on its own motion, as occurred here, is prescribed in sections 1701–1706.
Petitioner Cox points to
County Metropolitan Transportation Authority v. Alameda Produce Market, LLC (2011) 52 Cal.4th 1100, 1108.)13
We observe that
Petitioners contend the Commission never “reheard” the matter because the Commission “granted a rehearing of the 2016 Decision and then reversed it in the same order.” However, the record shows the petitioners responded to Qwest‘s rehearing petition and subsequently presented their own rehearing application, resulting in the Rehearing Decision on review. Petitioners present no reasoning or authority why the Commission‘s consideration of the parties’ briefs and reconsideration of the facts and law in preparing the Rehearing Decision does not constitute the “rehearing” contemplated by
Finally, our conclusion that the Commission did not err in issuing the Rehearing Decision without conducting an additional evidentiary hearing is supported by the proposition that “[o]n judicial review, the [Commission‘s] decisions historically have been generally presumed valid, not to be disturbed absent a manifest abuse of discretion or unreasonable interpretation of the relevant statute, particularly on matters of procedure.” (New Cingular, supra, 246 Cal.App.4th at p. 806; see also Peevey, supra, 31 Cal.4th at p. 796, quoting Greyhound Lines, Inc. v. Public Utilities Com. (1968) 68 Cal.2d 406, 410–411 [“PUC‘s interpretation of the Public Utility Code ‘should not be disturbed unless it fails to bear a reasonable
and language‘“].) As explained above, the Commission‘s interpretation is the most reasonable interpretation of the statutory scheme.15
III. The Monopoly Bottleneck Service Determination
Petitioner Cox contends that prior to the Rehearing Decision the Commission had never decided that switched access is a monopoly bottleneck service, “and, in so doing, adopted and applied a new regulation retroactively in violation of its procedural rules.” Cox has not shown the Commission failed to proceed in the manner required by law.
We agree with the assertion in the Rehearing Decision that “[t]he Commission has long recognized that switched access is a monopoly bottleneck service.” Over 25 years ago, before the
need for [long-distance carriers] to purchase access services from the [monopoly local carrier]. Without access from [the local carrier‘s] point of presence to the end-user, the [long-distance carrier] would be cut off from the bulk of its actual and potential customers and would be unable to deliver calls to the intended recipients.” (In re Alternative Regulatory Frameworks for Local Exchange Carriers (1994) 56 Cal. P.U.C.2d 117, 227 (ARF Decision).)
Petitioner Cox asserts the Commission has never determined the issue in the context of local carriers, like petitioners, admitted into the market by the Telecommunications Act. Cox asserts that the pre-Act incumbent local exchange carriers and the post-Act competitive local carriers “are two different types of carriers that were subject to very different regulatory frameworks during the time period at issue.” However, even assuming that is true, Cox
Petitioner Cox also contends a 2007 decision, Order Instituting Rulemaking to Review Policies Concerning Intrastate Carrier Access Charges (2007) 2007 Cal. PUC LEXIS 609 (Intrastate Carrier Access Charges), supports its position that the switched access services it provides have not
been treated as monopoly bottleneck services. We disagree. At the outset, we note that question was not before the Commission, which decided in that proceeding to cap competitive local carrier access charges in response to a petition by a long-distance carrier seeking a reduction in such charges. (Id. at *2.) The decision does not use the phrase “monopoly bottleneck service,” but it does acknowledge the monopoly nature of the service, stating “The record shows allegations of competitive [local] carriers imposing excessive intrastate access charges, and that the purchasing [long-distance] carriers are unable to seek alternatives to terminating the call traffic.” (Id. at *23.) The Commission referenced an FCC decision imposing a different cap on competitive local carrier rates due to similar concerns. (Intrastate Carrier Access Charges, at *23.)16 That FCC decision expressly acknowledged switched access services are monopoly bottleneck services, stating that “the terminating and the originating access markets” consist “of a series of bottleneck monopolies over access to each individual end user.” (In re Access Charge Reform, supra, 16 F.C.C. Rec. at p. 9935; see also AT&T Corp. v. F.C.C., supra, 292 F.3d at pp. 809-810.) Accordingly, the Commission‘s Intrastate Carrier Access Charges decision implicitly treats switched access services provided by carriers like Cox as monopoly bottleneck services even if the decision does not use that phrase.
Petitioner Cox also focuses on a statement in the 2007 decision that “Existing contracts between carriers that specify intrastate access charges are not affected by this decision. Carriers may voluntarily contract with each other to pay intrastate access charges different from those adopted in today‘s decision.” (Intrastate Carrier Access Charges, supra, 2007 Cal. PUC LEXIS 609 at *25.) Cox appears to construe that sentence to mean that its
We also reject petitioner Cox‘s assertion that the Commission‘s decision in Intrastate Carrier Access Charges “to impose a rate cap instead of requiring rates to be cost-based means that it did not consider the service to be a monopoly bottleneck.” In fact, the Commission emphasized the general principle that “To the extent practical, intrastate access charges should be cost-based and competitive carriers should charge only for functions provided to transport a call.” (Intrastate Carrier Access Charges, supra, 2007 Cal. PUC LEXIS 609 at *32.) The Commission noted that it had previously “eliminated the non-cost-based component of [AT&T and Verizon‘s] access charges,” and that it was “extend[ing] the policy [in that prior decision] to mid-sized, small, and [competitive local carriers] but tailor[ing] the specific implementation requirements to fit the unique characteristics of each carrier group.” (Id. at *19-*20.) Cox fails to explain why the Commission‘s analysis is inconsistent with a recognition that switched access is a monopoly bottleneck service.
In sum, petitioner Cox has failed to show the Rehearing Decision made a novel determination in treating switched access services as monopoly bottleneck services in its analysis of Qwest‘s discrimination claim.18
IV. The Commission Did Not Err with Respect to the Scoping Memo
Petitioners Bullseye and Arrival et al. summarize petitioners’ next claim of error as follows: “[T]he Commission did not adhere to the Scoping Memo
A. Legal Background
Section
Qwest brought its discrimination complaint under section
The California Supreme Court provided some guidance regarding rate discrimination in Hansen v. City of San Buenaventura (1986) 42 Cal.3d 1172 (Hansen), although the decision makes no reference to sections
B. The Commission‘s Treatment of the “Willing and Able” and “Rational Basis“/“Similarly Situated” Issues
1. The “Willing and Able” Issue
Petitioners contend the Rehearing Decision did not address whether Qwest was willing and able to enter into the full agreements the Contracting Carriers entered into. Petitioners point out that the Commission‘s prior decisions in the proceeding emphasized the importance of that issue. Thus, the 2011 Decision, which vacated dismissal of Qwest‘s complaint, quoted a prior Commission decision for the proposition that ” ‘[C]ontracting with individual customers at rates that deviate from those available under the tariffs raises the issue of whether such contracts violate the nondiscrimination provisions of [section]
Although the 2019 Decision addressed the issue in a footnote, the Rehearing Decision included a separate heading, “Willingness to accept the same contract terms and conditions.” The Rehearing Decision proceeded to reject
2. The “Rational Basis“/“Similarly Situated” Issue20
Petitioners next assert the Rehearing Decision improperly “departed from the [S]coping [M]emo” by narrowing the grounds that could constitute a rational basis for offering different rates to different long-distance carriers. The Commission first addressed the issue in this proceeding in the 2011 Decision vacating dismissal of the Complaint. The 2011 Decision did not specify the error it found in the 2010 Decision, but it did summarize the showing required for a discrimination claim, stating “To prove discrimination, a carrier will have to show that it was similarly situated and that there was no rational basis for such different treatment. [Citation.] ‘A showing that rates lack uniformity is by itself insufficient to establish that they are unreasonable and hence unlawful. . . .’ [Citation.] ‘Numerous characteristics of a particular customer -- volume, calling patterns, cost of negotiation, etc. -- could be sufficient to distinguish one customer from another.’ ” Contrary to petitioners’ suggestion, the 2011 Decision does not purport to provide a conclusive or comprehensive list of factors that might constitute a rational basis for different treatment of long-distance carriers by local carriers.
The 2012 Scoping Memo followed and identified as issue (d) for determination: “[w]hether different treatment was lawful because Qwest was not similarly situated or there was a rational basis for different treatment.” We observe the Scoping Memo does not specify what can constitute a rational basis, and it does not limit the range of factors regarding which the parties could present evidence. It is also significant that, in this proceeding, Qwest had previously taken the position that, because switched access is a monopoly bottleneck service, only a difference in the cost of providing the service could justify different rates. Thus, for example, the 2010 Decision summarized Quest‘s argument as follows: “In its opening brief, Qwest explained that the Commission‘s 2007 decision reinforces the bottleneck nature of access
Following the 2013 evidentiary hearings, the 2016 Decision found the evidence showed the local carriers “were required to make a rational, economics-based business decision to grant discounts to the [C]ontracting [C]arriers rather than run the risk of not being paid.” The decision did not address whether the different treatment could be based on a difference in the cost of providing the services. The decision stated there was “no evidence provided at [the] hearing by either party which revealed the actual cost that the [local carriers] incurred to route intrastate switched access service within California.” Therefore, it concluded, “the underlying cost to provide switched access service to Qwest versus to the [C]ontracting [C]arriers cannot be considered here for purposes of deciding whether Qwest and the contracting carrier were similarly situated.” Although the 2016 Decision did not reach the cost issue, it implicitly rejected the proposition that the rate difference could only be supported by a showing of a difference in the cost of providing services.
The Rehearing Decision rejected the 2016 Decision‘s understanding of the record and its reasoning. The Rehearing Decision concluded Qwest had shown it was similarly situated to the Contracting Carriers vis-à-vis the cost of providing switched access services. The decision explained, “The evidence in the record supports the conclusion that the functionality and service elements used by the Defendant [local carriers] to provide . . . switched access to Qwest and to the [C]ontracting [C]arriers were/are identical, as were/are the facilities they were/are provided over. . . . The Defendant [local carriers] enjoy monopoly bottleneck control over switched access services provided to their end user customers without regard to the identity of the [long distance carrier] or the volume of calls completed. . . . Thus, on a call-by-call basis, every [long distance carrier] is similarly situated.” The Commission agreed the issue was whether there was a difference in the cost of providing the services, not the actual cost of providing the services. ” ‘Whether it cost the Defendant [local carrier] one cent or five cents per minute to provide AT&T switched access is not relevant to the inquiry. What is critical is whether it cost that [local carrier] any more or less to provide the identical service to Qwest as it did to AT&T.’ ”
The Rehearing Decision also rejected the proposition that the withholding of payments by the Contracting Carriers was sufficient justification for the
C. Analysis of Petitioners’ Claims of Error
1. Petitioners Have Not Shown the Commission Erred on the Merits
The focus of petitioners’ briefing is that the Commission committed procedural errors in promulgating the Rehearing Decision, not that the Rehearing Decision‘s substantive analysis of Qwest‘s discrimination claims is contrary to law. Nevertheless, we recognize petitioner Cox asserts in support of its petition that the 2016 Decision‘s analysis was correct, and all petitioners make brief claims of substantive error on reply.
We need not and do not address petitioners’ arguments in detail, because petitioners fail to provide reasoned argument with citations to authority that the Commission was obligated to adopt the 2016 Decision‘s analysis of Qwest‘s discrimination claims, where the service at issue is a monopoly bottleneck service. This new legal determination drove the Rehearing Decision‘s reconsideration of the facts. For example, the Decision stated, “we did not intend for the distinguishing characteristics we discussed in [the 2011 Decision], such as call volume and costs of negotiation, to apply to customers of a monopoly bottleneck service.” Similarly, the Rehearing Decision reasoned on the willing and able issue, “If we were to require Qwest or any other [long distance carrier] to have to accept the exact same terms and conditions in contracts that include a monopoly bottleneck service along with other dedicated or non-jurisdictional services, we would defeat the purpose of our statutory obligation to prevent discrimination under section[s]
Petitioner Cox primarily relies on the decision in Hansen, supra, 42 Cal.3d 1172. That case, in which nonresidents paid higher water rates than residents, stated, “the fact that nonresident users of public utility service are subject to a higher rate than those customers residing within city limits does not alone prove the rate unreasonable and hence invalid. Rather, nonresidents must show that the discrimination is not based on ‘cost of service or some other reasonable basis.’ ” (Id. at p. 1181.) Hansen held the rate differential could reasonably be based on the circumstance that city residents, unlike nonresidents, supported the water system through payment of taxes and water bond liens. (Id. at p. 1184.) Nothing in Hansen precluded the Commission from concluding that certain non-cost-related bases are unreasonable in the context of the switched access monopoly bottleneck service.
We also reject as unfounded petitioners’ assertion that the Rehearing Decision imposed on them the burden of showing a rational basis for the rate differential. The Commission stated that Qwest‘s “evidence supports the conclusion that the costs of providing . . . switched access to Qwest was (is) the same as providing it to the [C]ontracting [C]arriers because tandem switching and transport elements are priced on a per-minute of use basis regardless of volume or the identity of the [long distance carrier].” Petitioners have not shown insufficient evidence supports that finding.22
Accordingly, the remainder of this court‘s analysis proceeds on the basis that the Commission did not err in concluding that requiring Qwest to accept all the terms and conditions in the agreements with the Contracting Carriers would undermine the Commission‘s ability to prevent discrimination in pricing a monopoly bottleneck service and that the differential treatment of
2. Petitioners Have Not Shown the Commission Departed From the Scoping Memo to Their Prejudice
More significantly, petitioners argue the Commission improperly deviated from the Scoping Memo in resolving Qwest‘s discrimination claim. In particular, the Scoping Memo identified Qwest‘s willingness to accept the complete terms of the Contracting Carriers’ agreements as an issue relevant to Qwest‘s discrimination claim, and the Scoping Memo did not suggest that one factor, the comparative cost of providing service, would be a key consideration in resolving the discrimination claim. Petitioners have not shown the Commission prejudicially departed from the Scoping Memo.
Petitioners rely on the language in section
We agree the 2011 Decision and the Scoping Memo gave petitioners reason to believe Qwest‘s discrimination claim would fail if Qwest were not willing
Further, petitioners have not shown they were prejudiced by any departure from the legal framework expressed in the 2011 Decision and Scoping Memo. Petitioners identify no evidence they could have or would have presented had they been aware the Commission would ultimately conclude the exemplary factors briefly referenced in the 2011 Decision (” ‘volume, calling patterns, cost of negotiation, etc.’ “) did not constitute a rational basis for different treatment in light of the record developed in the evidentiary hearings and the monopoly bottleneck nature of switched access services. Importantly, the petitioners knew prior to the evidentiary hearings that Qwest‘s position was, as described in the 2010 Decision, that different rates could be justified only ” ‘where the provider . . . establishes that the relevant economic cost . . . varies between customers.’ ” Nothing in the Scoping Memo prevented or discouraged petitioners from presenting evidence that their different treatment of Qwest could be justified by a difference in the cost of providing switched access services. And petitioners have identified nothing that prevented them from countering Qwest‘s evidence that there was no cost difference with their own evidence of any such difference.
Notably, petitioners cite to nothing in the record showing they claimed at any point during the proceedings below that the different rate charged to Qwest was based on or could be justified by a higher cost of providing switched access services to Qwest. Indeed, petitioners specifically argued the lower rate offered to AT&T and Sprint was due to those long-distance carriers withholding payments or agreeing to buy unrelated additional services, not lower costs. Further, the Rehearing Decision observed, “the Defendant [local carriers] did not submit any evidence suggesting that their costs of providing intrastate tandem-routed switched access to the [C]ontracting [C]arriers were
Bullseye and Arrival et al. assert on reply that they “did submit evidence and testimony showing that their costs to serve Qwest versus the other carriers was likely to be significantly higher based on differences in points of interconnection, call routing, and traffic types. . . .” However, they provide no record citation to support that assertion,25 and, as noted previously, petitioners have not shown insufficient evidence supports the Commission‘s finding that Qwest met its burden of showing differences in costs did not justify different treatment. Petitioners argue there was no evidence of the actual cost of service, but they do not show the Commission erred in relying on Qwest‘s expert‘s testimony that the costs were identical because, as explained in the Rehearing Decision, “tandem switching and transport elements are priced on a per minute of use basis regardless of volume or the identity of the [long distance carrier] customer.”
Petitioners cite the decisions in City of Huntington Beach v. Public Utilities Com. (2013) 214 Cal.App.4th 566, and Southern California Edison, supra, 140 Cal.App.4th 1085, to support their assertion that “[t]he Commission may not depart from the scoping memo in a proceeding in a manner that results in prejudice to a party.” Those cases do not hold the Commission may not “depart” from a scoping memo and they do not support a finding of prejudice in the present case. In Huntington Beach, the court of appeal held the Commission “exceeded the scope of the proceedings” by concluding a construction project preempted local ordinances where “[t]hroughout the PUC proceedings, the parties and the [C]ommission emphasized that a court, not the [C]ommission, would adjudicate the validity of the City‘s municipal ordinances.” (Huntington Beach, at p. 570.) Indeed, the court observed, “Importantly, the parties stipulated that the validity of any City ordinance would not be resolved by the [C]ommission,” and the scoping memo in the case said the proceeding would “not adjudicate the legal validity of” the City‘s ordinances. (Id. at pp. 576, 578.) In that context, the court rejected “the notion that the scope of the underlying
In Southern California Edison, supra, 140 Cal.App.4th at page 1091, the court of appeal held the Commission “violated its own procedural rules” in rulemaking regarding the payment of prevailing wages on energy utility construction projects. The scoping memo in the case described the issues in the proceeding as “whether to adopt rules to prohibit ‘bid shopping’ and ‘reverse auctions’ . . . . Neither the preliminary scoping memo nor the scoping memo suggested that the scope of issues to be addressed included consideration of a proposed prevailing wage requirement.” (Id. at pp. 1104-1105.) In that context, the court concluded the Commission “failed to proceed in the manner required by law” by considering prevailing wages, which was “beyond the scope of issues identified in the scoping memo,” and by giving the parties only three business days to address the new issue. (Id. at p. 1106.) In contrast, in the present case, the Rehearing Decision did not resolve issues not encompassed by the Scoping Memo, and petitioners had adequate opportunity to provide evidence on the issues addressed in the Rehearing Decision.
Petitioners assert their “evidentiary showing would have been quite different if the Scoping Memo in 2012 reflected the Commission‘s current view that only differences in cost-of-service could provide a ‘rational basis for different rates.’ ” But they fail to show that cost was excluded as an issue by the Scoping Memo and in the evidentiary hearing—especially in light of the legal position taken by Qwest and the evidence it presented. If petitioners had relevant evidence to present on that issue but failed to do so, that was their own strategic decision and they cannot now be heard to complain. Petitioners have not shown the Commission failed to proceed in the manner required by law.26
“One of the [C]ommission‘s express powers is the authority to order public utilities that charge unlawful rates to make reparation to aggrieved ratepayers pursuant to” section
The final argument made by petitioners is that, even if they discriminated against Qwest, the Commission is precluded from awarding reparations to Qwest because any award would be a rate refund prohibited by section
Section
Petitioners cite no authority supporting their interpretations of sections
companies filed complaints seeking reparations on the ground that the defendant had charged unreasonable rates for the shipment of goods over its rail lines. The provision at issue there was, in substance, nearly identical to
(2006) 38 Cal.4th 1020, 1038). In 1951, the Legislature enacted the
Next, in The Mark Hopkins Intercontinental Hotel v. Pacific Gas & Electric Co. (1987) 1987 Cal. PUC LEXIS 564 (Mark Hopkins), the Commission independently reached the same conclusion, and also addressed
Finally, the Fourth District‘s decision in Cellular Plus, Inc. v. Superior Court (1993) 14 Cal.App.4th 1224 (Cellular Plus), is also instructive. That case was an action by individual consumers and corporate sales agents against two licensed providers of cellular telephone service. (Cellular Plus, at p. 1229.) The plaintiffs alleged price fixing under California‘s Cartwright Act, and the court of appeal held the trial court erred in sustaining the defendants’ demurrers. (Cellular Plus, at p. 1229.) As relevant in the present case, the court of appeal rejected the defendants’ argument that a damages award
The Cellular Plus court‘s analysis of the rate discrimination issue is directly applicable to petitioners’ argument under
We reject petitioners’ contention that an award of reparations under
As to
Petitioners argue their interpretation of
The present case is distinguishable from the circumstances underlying Empire West‘s analysis of
Petitioners also contend a refund award in the present proceeding would be inconsistent with the “filed rate doctrine,” but they rely on cases applying federal law and fail to show the doctrine applies under California law. The federal filed rate doctrine prohibits a utility from charging rates other than as set forth in its tariff filed with the federal authorities and “presumes the consumer‘s knowledge of all lawful rates and bars consumer suits for damages arising out of claims involving those rates, on the premise that a consumer who pays the filed rate has suffered no injury and incurred no damage.” (Day v. AT & T Corp. (1998) 63 Cal.App.4th 325, 329; see also Evanns v. AT&T Corp. (9th Cir. 2000) 229 F.3d 837, 840; Gallivan v. AT&T Corp. (2004) 124 Cal.App.4th 1377, 1387; Verizon Delaware, Inc. v. Covad Communications Co. (9th Cir. 2004) 377 F.3d 1081, 1089.) The Commission has previously acknowledged that
Petitioners have not shown that any refund award to Qwest would violate
DISPOSITION
The Commission‘s decision—D.19-05-023, as modified by D.20-07-035—is affirmed. Respondent and the real party in interest shall recover their costs in this proceeding. (
SIMONS, Acting P.J.
We concur.
NEEDHAM, J.
RODRIGUEZ, J.*
(A160729, A160908, A160937)
* Judge of the Alameda County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
Original proceedings; petition for a writ of review of decisions of the California Public Utilities Commission.
Goodin, Macbride, Squeri, and Day, Thomas J. Macbride Jr. and Megan Somogyi; Klein Law Group, Andrew M. Klein, Allen Zoracki for Petitioner Bullseye Telecom Inc.
Goodin, Macbride, Squeri, and Day, Thomas J. Macbride Jr. and Megan Somogyi for Petitioners Arrival Communications, Inc., Mpower Communications Corp, and U.S. TelePacific Corp.
Tobias Law Firm, Margaret L. Tobias; Coblentz, Patch, Duffy, & Bass, Richard R. Patch, Clifford E. Yin, Laura R. Seegal for Petitioner Cox California Telecom, LLC.
Arocles Aquilar, Mary McKenzie, and Maria Bondonno for Respondent.
Law Offices of Leon M. Bloomfield and Leon M. Bloomfield; Perkins Coie, James W. McTarnaghan for Real Party in Interest