NOTICES
Rescission Order
[33 Pa.B. 4765] Public Meeting held
September 5, 2003Commissioners Present: Terrance J. Fitzpatrick, Chairperson; Robert K. Bloom, Vice Chairperson; Aaron Wilson, Jr., statement follows; Glen R. Thomas; Kim Pizzingrilli
Pennsylvania Public Utility Commission Law Bureau Prosecutory Staff (2003.0034) v. Allegheny Coin Company, Inc.; Doc. No. C-20039886; A-310296
Rescission Order By the Commission:
On June 27, 2003, the Commission entered a Default Order at C-20039886 and A-310296 against Allegheny Coin Company, Inc. (Allegheny Coin or Respondent), an interexchange reseller, for failure to pay its monthly Universal Service Fund (USF) assessments in violation of 52 Pa. Code §§ 63.161--63.171 and 66 Pa.C.S. §§ 3001--3009. The Respondent filed a Petition for Rescission on July 8, 2003, under 66 Pa.C.S. § 703(f) and (g) and 52 Pa. Code § 5.572, informing the Commission that it had paid the entire amount owed, $2,975.78, as well as its USF assessment for July 2003, and late fees. Respondent also pledged to make all future USF assessment payments in a timely and responsible fashion. The Default Order was published in the Pennsylvania Bulletin on July 12, 2002, at 33 Pa.B. 3453, and specifically recognized that the Commission may impose a penalty if Respondent seeks relief from the Default Order. Id. We shall grant the subject Petition for Rescission contingent upon the payment of a civil penalty.
Background
The Respondent's history of compliance with regulatory requirements is abysmal. Law Bureau Prosecutory Staff (Prosecutory Staff) has repeatedly been forced to take action against Allegheny Coin to bring the Respondent into compliance with the Public Utility Code and Commission regulations. On April 7, 1999, Prosecutory Staff filed a complaint at C-00992315 in response to Respondent's failure to pay its General Assessment for Fiscal Year 1996-1997 in the amount of $4,624 and its General Assessment for Fiscal Year 1998-1999 in the amount of $1,987, both amounts which Respondent subsequently paid by check on June 24, 1999. On January 16, 2001, Prosecutory Staff filed a complaint at C-00014690 for the Respondent's failure to pay its General Assessment for Fiscal Year 2000-2001 in the amount of $4,277, which the Respondent subsequently paid by several checks received by the Commission from November 28, 2000, through May 5, 2001. On May 23, 2002, Prosecutory Staff filed a complaint at C-20027846 for Respondent's failure to file its 2000 Annual Report, which was subsequently filed on June 26, 2002. On January 17, 2003, Prosecutory Staff filed a complaint at C-20039304 for Respondent's failure to file its 2001 Annual Report, which the Respondent subsequently filed on February 3, 2003, accompanied by the $250 civil penalty for late filing.
On April 3, 2003, Prosecutory Staff instituted the current proceeding by filing a complaint against Allegheny Coin alleging that Respondent's monthly USF assessments were more than 90 days past due. The complaint charged that the Respondent's failure to pay these assessments violates 52 Pa. Code §§ 63.161--63.171 and 66 Pa.C.S. §§ 3001--3009. Prosecutory Staff's complaint sought an order from the Commission canceling the Respondent's certificate of public convenience for failure to pay its USF assessments. The complaint was sent by certified mail by the Secretary's Bureau on April 22, 2003, and, according to the postal return receipt, service was perfected on April 24, 2003. Since no answer to the complaint was filed, the Commission issued a Default Order on June 27, 2003.
Discussion
Section 3301(a) and (b) of the Public Utility Code, 66 Pa.C.S. § 3301(a) and (b), authorizes the Commission to impose a maximum civil penalty of $1,000 per day for violations of the statute, regulations and orders. In addition, the Commission has adopted certain standards that must be applied when imposing a civil penalty for violations of the Commission's orders and regulations. Joseph A. Rosi v. Bell Atlantic-Pennsylvania, Inc. and Sprint Communications Company (Rosi), C-00992409 (March 16, 2000). In Rosi, the Commission adopted standards to be applied to determine the amount of the civil penalty in litigated slamming cases. These standards, however, have also been considered when evaluating settlement agreements in nonlitigated slamming cases. Pennsylvania Public Utility Commission v. PEPCO Energy Services, M-00001432 (November 9, 2000). Furthermore, the Commission has determined that the Rosi factors are generic in nature and are applicable in determining the amount of a civil penalty for all violations of the Public Utility Code and Commission regulations. Pennsylvania Public Utility Commission v. NCIC Operator Services, M-00001440 (December 21, 2000). Therefore, the Rosi standards must be used in all cases when determining the appropriate amount of a civil penalty for all types of violations for all categories of public utilities. Id.
The standards for developing a civil penalty that are set forth in Rosi are as follows:
1. Whether the violation was intentional or negligent. If the violation is intentional, the Commission should start with the presumption that the penalty will be in the range of $500 to $1,000 per day. If the violation is negligent, the Commission should start with the presumption that the penalty will be in the range of zero dollars to $500 per day. The precise penalty amount per day will be arrived at by applying the following additional standards, while recognizing that the Commission retains broad discretion in determining a total civil penalty amount that is reasonable on an individual case basis.
2. Whether the regulated entity promptly and voluntarily took steps to return the customer to the appropriate carrier and credited the customer's account.
3. Whether the regulated entity initiated procedures to prevent future slamming.
4. The number of customers affected and the duration of the violation.
5. Whether the penalty arises from a settlement or a litigated proceeding.
6. The compliance history of the regulated entity which committed the violation.
7. Whether the regulated entity cooperated with the Commission.
8. The amount necessary to deter future violations.
9. Past Commission decisions in similar situations.
10. Other relevant factors.
In this case, the following Rosi factors are applicable for determining the appropriate amount of the civil penalty to impose on Allegheny Coin: the nature of the violation (intentional or negligent), whether the penalty arises from a settlement or litigated proceeding, the extent of cooperation by the regulated entity and the compliance history of the utility.
The first standard raises the question as to whether Respondent's disregard of its USF assessment was intentional or negligent. Since Respondent ignored the Commission's dunning efforts and Formal Complaint, we must assume the action was intentional, although attributable perhaps to financial difficulties.
The next standard we shall consider is the nature of the proceeding, that is, whether the penalty arises from a settlement or litigated proceeding. Unfortunately, the Respondent has again wasted the Commission's resources through its repeated failure to make monthly USF payments in a timely manner, which in turn has required Prosecutory Staff to take formal action.
The remaining standards we shall consider are Respondent's cooperation and compliance history. The Respondent ignored its USF obligation until the Default Order was issued, indicating a complete lack of cooperation. Furthermore, Allegheny Coin has not been forthcoming about any reasons for neglecting its USF financial obligation. Finally, given the Respondent's previous history of noncompliance, detailed herein, the reason expressed by Allegheny Coin for why the Commission should grant its petition, payment of past due and current assessments, is particularly unpersuasive.
Based on our review of these specific Rosi standards, we conclude that the failure to pay its contribution in a timely manner is intentional, that this is a litigated proceeding, Respondent has not cooperated with Prosecutory Staff, and its compliance history is poor. Clearly, the presumption is that the penalty will be in the range of $500 to $1,000 per day and that there are no mitigating factors to warrant a penalty at the lower end of the range. However, the Commission retains broad discretion in determining a total civil penalty amount that is reasonable on an individual case basis. Rosi at 10.
The Commission's Universal Service regulations have a built-in penalty provision under 52 Pa. Code § 63.167(4) that provides for the assessment of late-payment charges (1.5%) on contributions that are 30 days or more past due. In addition, the regulation requires the Administrator to refer all accounts more than 90 days past due to the Commission for enforcement. 52 Pa. Code § 63.167(b). The enforcement contemplated by the Universal Service regulations for failure to pay in a timely manner is prohibition against providing service and other penalties as are authorized under law. 52 Pa. Code § 63.171.
Accordingly, we will assess a civil penalty in the amount of $1,000 for generally failing to pay the USF assessments in a timely manner rather than calculate the penalty as a continuous violation. Respondent has already paid a late-payment penalty and this amount is four times the amount in civil penalties the Respondent was assessed in response to its annual report violation in February 2003, and within the range contemplated by the standard. We hope that this amount is large enough to deter future violations of these regulations by Allegheny Coin given the following warning: if the Respondent again fails to comply with Commission regulations, we will not be so favorably disposed and will revoke the Respondent's certificate of public convenience, absent extreme extenuating circumstances; Therefore,
It Is Ordered That:
1. The Petition to Rescind the Commission's June 27, 2003, Default Order is granted, consistent with this Rescission Order.
2. The Default Order entered June 27, 2003, is hereby rescinded subject to the Respondent's compliance with Ordering Paragraph No. 4, within 20 days.
3. A copy of this Rescission Order be published in the Pennsylvania Bulletin, and served on the Office of Trial Staff, the Office of Consumer Advocate, the Office of Small Business Advocate, the Department of General Services, the Department of Corrections and the Attorney General's Bureau of Consumer Protection.
4. Allegheny Coin Company, Inc. is ordered to pay a civil penalty in the amount of $1,000, under sections 3301 and 3315 of the Public Utility Code, 66 Pa.C.S. §§ 3301 and 3315, by sending a certified check or money order within 20 days after entry of this Order to Pennsylvania Public Utility Commission, Secretary's Bureau, P. O. Box 3265, Harrisburg, PA 17105-3265. The docket numbers for this Order should be referenced in the check or money order.
JAMES J. MCNULTY,
Secretary
[Pa.B. Doc. No. 03-1882. Filed for public inspection September 19, 2003, 9:00 a.m.]
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