BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION, Complainant, v. A C S TEL COM, INC. Respondent. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) ) ) ) ) ) ) ) ) ) ) ) DOCKET NO. UT-000139 COMPLAINT AND NOTICE OF BRIEF ADJUDICATION SETTING SCHEDULE FOR SUBMISSION OF WRITTEN STATEMENTS; FOR SUBMISSION OF DOCUMENTARY EVIDENCE; FOR RESPONSES, AND SETTING TIME FOR ORAL STATEMENTS (March 16, 2000) The Washington Utilities and Transportation Commission (Commission) on its own motion, and through its Staff, alleges as follows: I. PARTIES 1. The Commission is an agency of the State of Washington, authorized by state law to regulate the rates, practices, accounts, and services of public service companies, including telecommunications companies, under the provisions of Title 80 RCW. 2. Respondent A C S TEL COM INC. (A C S) is a telecommunications company subject to regulation by the Commission pursuant to RCW 80.01.040(3), and is registered to offer resold direct dialed long distance and debit card services to the public. II. JURISDICTION 3. The Commission has jurisdiction in this matter pursuant to RCW 80.01.040, RCW 80.04.080, RCW 80.04.110, RCW 80.24.010, and RCW 80.36.350. III. STATEMENT OF FACTS 4. On November 7, 1997, A C S filed with the Commission an application for registration as a telecommunications company pursuant to RCW 80.36.350. 5. The Commission issued an order in Docket No. UT-971616 effective February 11, 1998, approving A C S’s application for registration as a telecommunications company. 6. The Commission’s order approving A C S’s application for registration stated: Pursuant to statutes and rules governing registration applications and advance payment proposals, A C S has proposed a satisfactory bond agreement for protection of those advance payments. Initially, the bond agreement will be for $5,000 and will increase proportionally as customer base increases. 7. Elsewhere in its order approving A C S’s registration, the Commission stipulated as follows: Within 15 days after June 30, 1998, and quarterly thereafter, A C S TEL COM, INC. shall submit to the Commission a report containing the following information specific to State of Washington operations: (a) total outstanding debit card balance at the beginning of the reporting period (b) dollar amount of debit cards sold during the reporting period (c) depleted usage of debit cards during the reporting period and (d) total outstanding debit card balance at the end of the reporting period. Statements shall continue to be filed within 15 days after each 3-month period until Commission staff informs applicant such reports are no longer required. 8. A C S failed to submit quarterly reports for the 3rd and 4th quarters of 1999 despite repeated telephone calls and letters from Commission Staff and a September 2, 1999, letter from the Office of the Attorney General explaining the need to file such reports. 9. A C S also failed to file a 1998 annual report with the Commission and to pay its regulatory fee for the same year. 10. On January 18, 2000, the Commission received notice from Reliance Insurance Company that A C S’s indemnity bond, required by Commission rule and referred to in the Commission’s order as a condition of registration, is canceled effective on February 13, 2000. IV. FIRST CLAIM FOR RELIEF (Failure to Submit Quarterly Reports) 11. The Commission, through its Staff, realleges paragraphs 1-10 above. 12. WAC 480-121-060 provides: “The commission may revoke a registration, after hearing, for good cause. Good cause includes, but is not limited to, failure to . . . (3) Comply with the requirements of WAC 480-120-058 . . .” 13. WAC 480-120-058(2)(a) provides: a) Each company collecting customer prepayments must submit to the commission a report within fifteen days after the end of each calendar quarter. The report must contain the following information specific to state of Washington operations: (i) Total outstanding balance of customer prepayments at the beginning of the reporting period; (ii) Dollar amount of prepaid services sold during the reporting period; (iii) Depleted usage of prepaid services during the reporting period; and (iv) Total outstanding prepaid service balances at the end of the reporting period. 14. Because A C S has failed to file the quarterly reports as required by WAC 480-120-058(2)(a), and as reiterated by the order approving A C S’s registration, good cause exists to revoke A C S’s registration as a telecommunications company pursuant to WAC 480-121-060. V. SECOND CLAIM FOR RELIEF (Failure to Maintain Bond Required by WAC 480-120-058) 15. The Commission, through its Staff, realleges paragraphs 1-10 above. 16. WAC 480-121-060 provides: “The commission may revoke a registration, after hearing, for good cause. Good cause includes, but is not limited to, failure to . . . (3) Comply with the requirements of WAC 480-120-058 . . .” 17. WAC 480-120-058(1) requires any company that intends to collect customer prepayments to demonstrate to the Commission either (1) that it meets certain bond rating levels, (2) that it has a sufficiently large performance bond to cover customer prepayments, or (3) that it deposits customer prepayments in a trust account. The rule states that the Commission may require either bond, trust account, or escrow as a condition of approval. 18. In its order approving A C S’s registration, the Commission required A C S to post a performance bond. Because that bond has been canceled, effective February 13, 2000, good cause exists to revoke A C S’s registration pursuant to WAC 480-121-060. VI. THIRD CLAIM FOR RELIEF (Failure to File an Annual Report) 19. The Commission, through its Staff, realleges the allegations contained in paragraphs 1-10 above. 20. WAC 480-121-060 provides: “The commission may revoke a registration, after hearing, for good cause. Good cause includes, but is not limited to, failure to: (1) File an annual report . . .” 21. RCW 80.04.080 requires every public service company, including telecommunication companies like A C S, to make out under oath and file with the Commission a detailed annual report of finances. The information required in the annual report is more extensive than what is required quarterly for protection of customer prepayments by WAC 480-120-058(2)(a). 22. Because A C S failed to file an annual report with the Commission for 1998, good cause exists to revoke A C S’s registration pursuant to WAC 480-121-060. VII. FOURTH CLAIM FOR RELIEF (Failure to Pay Regulatory Fees) 23. The Commission, through its Staff, realleges paragraphs 1-10 above. 24. WAC 480-121-060 provides: “The commission may revoke a registration, after hearing, for good cause. Good cause includes, but is not limited to, failure to . . . (2) pay regulatory fees . . .” 25. RCW 80.24.010 requires every public service company, including telecommunication companies like A C S, to file on the same date as the Commission specifies for filing annual reports “a statement on oath showing its gross operating revenue from intrastate operations for the preceding calendar year.” The company must pay the Commission a fee based on a formula that is applied to that revenue. 26. A C S has failed to submit such calculation and to pay its regulatory fees for 1998. As such, good cause exists to revoke A C S’s registration pursuant to WAC 480-121-060. THEREFORE, the Commission enters into a full and complete investigation into the matters alleged and will commence public hearings pursuant to chapter 34.05 RCW and chapter 480-09 WAC for the following purposes: 1. To determine whether A C S has failed to comply with applicable laws, and the rules and orders of the Commission as set forth in the allegations above; 2. To determine whether the Commission should revoke A C S’s registration as a telecommunications company pursuant to WAC 480-121-060; and 3. To make such other determinations and enter such orders as may be just and reasonable. NOTICE OF BRIEF ADJUDICATION Pursuant to RCW 34.05.482 and WAC 480-09-500, the Commission has determined that a brief adjudicative proceeding is appropriate for resolving the issues raised in this matter. The Commission sets this matter for resolution in a brief adjudication proceeding and an Administrative Law Judge from the Utilities and Transportation Commission’s Administrative Law Section will be designated to preside at the hearing. The Administrative Law Section’s telephone number is (360) 664-1139. The issue in this proceeding is whether A C S’s registration as a telecommunications company should be revoked for failing to comply with applicable laws, rules, and Commission orders. Statutes and rules cited in the complaint include RCW 80.01.040, RCW 80.04.080, RCW 80.04.110, RCW 80.24.010, RCW 80.36.350, WAC 480-120-058, and WAC 480-121-060. In addition to the foregoing, statutes and rules involved include those within chapter 80.04 RCW, chapter 80.36 RCW, chapter 480-120 WAC, chapter 480-121 WAC, and chapter 480-09 WAC. NOTICE SETTING SCHEDULE FOR SUBMISSION OF WRITTEN STATEMENTS; FOR SUBMISSION OF DOCUMENTARY EVIDENCE; AND FOR RESPONSES WAC 480-09-500(2) provides that parties to a brief adjudicative proceeding may file written submissions as provided in the Commission’s notice that it will conduct the brief adjudicative proceeding. The following schedule is hereby established: Submission of Written Statements and February 29, 2000 Evidentiary Documents Submission of Responses March 10, 2000 NOTICE OF OPPORTUNITY TO MAKE ORAL COMMENTS The Commission sets the time and place for oral comments and opportunity to object to evidentiary submissions at 9:30 a.m., on March 16, 2000, in Room 108, Chandler Plaza Building, 1300 S. Evergreen Park Drive S.W., Olympia, Washington, unless changed by letter from the Executive Secretary or presiding officer. If you are unable to attend in person, you may attend via the Commission’s teleconference bridge line. Please contact Jennifer Watsek at (360) 664-1139 not later than March 14, 2000, if you wish to participate via the conference bridge line. If any party or witness needs an interpreter or other assistance, please fill out the form attached to this notice and return it to the Commission. The names and mailing addresses of all parties and their known representatives are as follows: Commission Staff: Washington Utilities and Transportation Commission 1300 S. Evergreen Park Drive S.W. P. O. Box 47250 Olympia, WA 98504-7250 (360) 664-1160 Representative: Jonathan Thompson Assistant Attorney General 1400 S. Evergreen Park Drive S.W. P. O. Box 40128 Olympia, Washington 98504-0128 (360) 664-1225 Respondent: A C S Tel Com, Inc. 100 Merrick Road, Suite 116W P. O. Box 517 Rockville Centre, N.Y. 11570 Representative: Chandler Khurana, President A C S Telcom, Inc. 100 Merrick Road, Suite 116W P. O. Box 517 Rockville Centre, N.Y. 11570 (516) 255-9700 The Commission will provide at its office in Olympia, Washington, current records of the hearing for the use of those who may wish to review them. Notice of any other procedural phase will be given in writing or on the record as the Commission may deem appropriate during the course of the proceeding. DATED at Olympia, Washington, and effective this day of February 2000. WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION MARILYN SHOWALTER, Chairwoman RICHARD HEMSTAD, Commissioner WILLIAM R. GILLIS, Commissioner N O T I C E PLEASE BE ADVISED that the hearing facilities are accessible to interested people with disabilities; that smoking is prohibited; and that if limited English-speaking or hearing impaired parties or witnesses are involved in a hearing and need an interpreter, a qualified interpreter will be appointed at no cost to the party or witness. The information needed to provide an appropriate interpreter or other assistance should be designated below and returned to Washington Utilities and Transportation Commission, Attention: Carole J. Washburn, Secretary, 1300 S. Evergreen Park Drive S.W., P. O. Box 47250, Olympia, WA 98504-7250. (SUPPLY ALL REQUESTED INFORMATION) Docket No.:__________________________________________________________ Case Name:________________________________________________________ Hearing Date:___________________ Hearing Location:________________ Primary Language:_____________________________________________________ Hearing Impaired (Yes)___________________ (No)_____________________ Do you need a certified sign language interpreter: Visual__________________ Tactile__________________ Other type of assistance needed:___________________________________ English-speaking person who can be contacted if there are questions: Name:_______________________________ Address:_____________________________ ____________________________________ Phone No.: (____)_____________________