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Article 395 (2 more) in alt.bbs: From: judy@moray.UUCP (Judy Scheltema) Newsgroups: alt.bbs,tx.general Subject: Transcript of PUC hearing of SW Bell complaint (long) Message-ID: <4286@moray.UUCP> Date: 14 Jan 89 18:25:43 GMT Reply-To: judy@moray.UUCP (Judy Scheltema) Distribution: usa Organization: Houston, Tx Bbslist Headquarters Lines: 886 TRANSCRIPT OF PROCEEDINGS BEFORE THE PUBLIC UTILITY COMMISSION OF TEXAS AUSTIN, TEXAS IN THE MATTER OF THE APPLICATION OF R.A. HIRSCH AGAINST DOCKET NO 8387 SOUTHWESTERN BELL TELEPHONE CO. PREHEARING CONFERENCE BE IT REMEMBERED THAT at 10:00 a.m., on Wednesday, the 14th day of December 1988, the above-entitled matter came on for hearing at the Offices of the Public Utility Commission of Texas, Hearing Room D, 7800 Shoal Creek Boulevard, Austin, Texas 78757, before RICHARD O'CONNELL, Hearings Examiner; and the following proceedings were reported by Cindy Mercer, a Certified Shorthand Reporter of: KENNEDY REPORTING SERVICE a record of excellence 7800 Shoal Creek Blvd. - 114-W Austin, Texas 78757 - 512-458-3297 APPEARANCES MR. L. KIRK KRIDNER, 1616 Guadalupe, Room 600, Austin, Texas 78701, appearing on behalf of SOUTHWESTERN BELL. MR. REGINALD HIRSCH, 1980 Post Oak Blvd., #1780, Houston, Texas 77056 appearing on behalf of REGINALD HIRSCH. FOR THE COMMISSION STAFF MR. MARTIN WILSON, Office of the General Council, 7800 Shoal Creek Boulevard, suite 450-North, Austin, Texas 78757, appearing on behalf of the PUBLIC INTEREST. P R O C E E D I N G S THURSDAY, DECEMBER 14, 1988 EXAMINER O'CONNELL: Good morning everybody. My name is Richard O'Connell. I am the Hearings Examiner in this Docket No. 8387. This is the petition of Robert Hirsch against Southwestern Bell Telephone Company.The controversy concerns the reclassification of a bulletin board, computer bulletin board, system in Houston from residential rate to business rate.The first matter is I would ask the parties to identify themselves. MR. HIRSCH: It's Reginald Hirsch, Your Honor. EXAMINER O'CONNELL: Excuse me. For Southwestern Bell? MR. KRIDNER: Kirk Kridner, appearing on behalf of Southwestern Bell Telephone Company. EXAMINER O'CONNELL: I ask that the parties not rise. MR. KRIDNER: Thank you, Your Honor. I appreciate it. EXAMINER O'CONNELL: It is an informal conference. MR. KRIDNER: Great. EXAMINER O'CONNELL: General Counsel. MR. WILSON: Martin Wilson, representing the Public interest and with me is Marty Schell from the Telephone Division. EXAMINER O'CONNELL: All right. This is my plan for this morning. First of all, I am going to ask the parties to state their particular -- their own positions concerning the status of the negotiations between the parties. Second, I am going to ask the parties to discuss settlement. Third, I am going to ask the parties to explain their positions concerning the issues enumerated in the Examiner's Order No. 1 plus several other issues. And finally at the end of the prehearing conference, I am going to ask the parties to set or propose a schedule leading to a hearing in this proceeding. So, let's begin with the first matter. First of all I am going to ask the parties for this particular question to go Southwestern Bell, Mr. Hirsch and then General Counsel -- to briefly explain the status of negotiations in this case. Mr. Kridner. MR. KRIDNER: Thank you, Your Honor. Let me inquire. Did you see the statement of position that we filed at the end of last week? EXAMINER O'CONNELL: Yes. MR. KRIDNER: Okay. Thank you, Your Honor. As outlined in the statement of position, Southwestern Bell became aware of this situation that exists with respect to the computer bulletin board services and their operators, and we adopted a position of reclassifying it business under the current tariffs. Subsequent to the controversy that arose, we came with up an interim position that's outlined in the statement of position. We have implemented that. We have inquired of all bulletin board service operators, a BBS operators, who work in bulletin board business, whether they are a business pursuant to that definition, and we have completed the process of converting the BBS operators back to residential rates including Mr. Hirsch. He has been converted back to a residential rate. As to the status of negotiations, it's the feeling of my company that the interim position resolves all the issues raised by this complaint and that there is no further negotiations or settlement to be held. EXAMINER O'CONNELL: How long will your interim position remain? MR. KRIDNER: There is no set time period on the interim position. Obviously, this question will ultimately have to be addressed by the Commission, and if we are incorrect about our interpretation of the definition of business which is in our current tariff which, as I noted, we have employed since 1920 then obviously we will have to file something with the Commission to have a new definition. We have no plans to file a new definition at this time. And this issue well could be raised in a future rate case where it would be a rate design question. EXAMINER O'CONNELL: All right. MR. KRIDNER: So in answer to your response my company has no plans to change the interim position; however, we do not want to give any of the BBS operators or the Commission the idea that this is our final position with respect to this issue. EXAMINER O'CONNELL: Okay. Mr. Hirsch. MR. HIRSCH: Your Honor, I am looking in the response to see -- well, if I could characterize it this way. Your Honor, the initial complaint which was filed, I believe, in the latter of part of October entailed a number of issues, but on October 3rd I received a letter from Southwestern Bell basically reclassifying me at business rate and filed a complaint. A definition was circulated -- actually, let me retract that. Southwestern Bell subsequently retracted and stated it was reclassifying all bulletin boards from business to residential rates. That was an interim position, so that was our first interim position. Secondly, they then proceeded to come up with a working definition -- an attempt to come up with a working definition for classification purposes BBS under a business categorization. Said definition was, I believe, adopted probably in the latter part of November of 1988. And said definition was a result of some negotiations that went on between the parties. The definition itself is not, from what I remember of the restatement of position or statement of position, included in Southwestern Bell's motion or statement of position; but nevertheless I received by letter November 17th the following interim policy declaration which qualifies business nature as defined as being any provision of BBS for which the BBS operator or operation receives or requests any compensation which includes any form of income revenue payment or gain. EXAMINER O'CONNELL: Right. How do you feel about that? MR. HIRSCH: I feel like -- I would not be here if I felt that was an appropriate resolution of this matter, Your Honor. I object to it on a number of grounds, but not the least of which if we look at the original tariff -- at least what I thought was the original tariff which was provided to me by Southwestern Bell, nowhere in here do I think you can make the quantum leap from Section 23, Sheet 2 of the general tariff to this current definition and apply this rate and claim notice or any other attributes to BBS operators. I will verify that Mr. Kridner is correct. On November 30th I received a letter indicating that I had been rolled back to a residential rate. EXAMINER O'CONNELL: All right. Do you have any hope for negotiations with Southwestern Bell? MR. HIRSCH: Based on their statement, they don't want to negotiate, Your Honor. They say this concludes it. My concerns for like situated individuals and myself is this is an interim position. I know of three interim portions in the last 90 days. I have a genuine concern as to what the next interim is and when it will occur. And I think I have a justiciable issue before the Commission. I would like it to be considered. But let me say this: I will never preclude negotiations. I am in favor of them as a way to resolve things. I think Mr. Kridner knows what my postiion is. EXAMINER O'CONNELL: Mr. Wilson. MR. WILSON: Your Honor, it strikes -- it strikes me that there are two aspects that we have addressed. One is the underlying -- one was Mr. Hirsch's original complaint which he had been reclassified and was being charged a different rate, and that reclassification was the result of a unilateral action by Bell, that he wanted this Commission to review. It seems to me that element of Mr. Hirsch's complaint has disappeared when the Company reclassified him back to the residential rate. It strikes me that complaint is now moot. Mr. Hirsch, now seems -- wants to assert another element of his complaint which is that Southwestern Bell has the ability to unilaterally decide what's a business or what's a residence or as Mr. Kridner characterized -- Southwestern Bell characterizes it whether Southwestern Bell can interpret its own tariff. It's the position of General Counsel that within certain parameters Southwestern Bell does have that perogative to initially interpret its own tariff, and if a customer is adversly affected by that interpretation they have Mr. Hirsch's oiginal remedy in this case which is to bring it to the Commission for resolution. But since it at this point Southwestern Bell is not adversely applying it -- the changed definition to Mr. Hirsch. It's General Counsel's position that this particular complaint is moot. If there is anyone out there who has been reclassified as a business under the new definition, the new interpretation that the tariff language that Southwestern Bell is offering is abiding by at this point then that person seems could have a complaint to require us to examine. EXAMINER O'CONNELL: Mr. Wilson, if Southwestern Bell wanted to change their interim position, how could they go about it? Would they have to file -- could it only be done through a general rate case? MR. WILSON: No, they could do it in a number of was. The initial -- as a matter of fact, some of what we have heard about the transaction which has occurred -- I initially -- I have been following this case largely from the newspapers. Southwestern Bell has not been filing these reinterpretations of its tariff with us because they are not required to. And so one way that Southwestern Bell can change its interim position is to do what they have done which is simply say, "We are interpreting our tariff language this way now." They can also seek to change it just in a separate tariff filing which they seek to change the underlying language of the tariff, or they could do it in the context of a -- seek that change in the context of a rate case. EXAMINER O'CONNELL: Okay. What is your evaluation of Mr. Hirsch's fear that it could be reinterpreted at any time? MR. WILSON: It could be reinterpreted at any time, but, again, I don't -- it could also -- we could have a rate case walk in the door at any time. I think that we have to -- and frankly to my mind the case is moot as to Mr. Hirsch at this point. The underlying theory he has that the Company may change its position -- while granted, you know, the Company may change its position, I still believe that until the Company does change its position this complaint is moot. MR. HIRSCH: May I respond just in general. Your Honor, the return of me from business to residential rate was done without communication with me. Southwestern Bell proposes to, as stated in their position, a self-declared test, and then there are three prongs to it. None of those tests were asked of me. But instead I was rolled back into a residential rate. They just -- they just took me back to residential without what is -- what I was informed of I would be contacted and asked some acid test questions seeing if I solicit funds. So the position of the counsel, both counsels here, is that I have been mooted, I need to point out to the Commission that I am still subject to being rolled into business since I have never had the test that they have proposed in their letter to me of November 17th requested of me. My point on that is I don't think the self-declared test is consistent with the tariff. I think that's the justiciable interest that I have, and, Your Honor, as I understand from a prior ruling and precedent the proper test is whether the movent has a justiciable interest, a interest which would justify the relief which is sought by me and whether movent seeks with the Commission, seeks relief within the Commission power to grant what I am seeking. This is found in Docket No. 4782, 4783, 4784, 9 PUC Bulletin 169, June 1, 1983 Application of Dallas Power and Light Company. And I believe that is the test, whether I have a justiciable interest in this matter not whether I am moot by virtue of unilateral action by Southwestern Bell. It is pretty clear to me why I think that was done. But the point is, Your Honor, under the current test if I receive a contribution, a nickel from somebody out there -- and I apologize, Judge, because I know you are not feeling well -- but if I could quickly make this point. If I receive a nickel unsolicited I become a business. I am subject to a business rate. I think that is an inappropriate test. I don't think that's contemplated by the tariff. MR. KRIDNER: I would like to briefly respond to a couple of issues. First I agree with Mr. Wilson that Mr. Hirsch's complaint is mooted out. He does not have justiciable interest, and I would make a motion that his complaint be dismissed at this time. But secondly with respect to Mr. Hirsch's position that he does not feel that the interim definition, that being the receipt of compensation is appropriate for BBS's, Your Honor, must understand that the issue here is not solely BBS's as to the definition of business and residences. There are lots of businesses out there that are nonprofit that -- there are other businesses that will be affected by a decision on how the BBS's are treated, and PURA requires that we not be discriminatory in our treatment. I think what Mr. Hirsch is seeking is separate and distinct treatment for a class known as BBS operators. We simply can't do that. So we feel that there is a bigger issue involved relating to all business and all residential customers than simply the BBS operators. Now the third issue I would like to respond to directly with respect to Mr. Hirsch's comment that it was unilateral action on the part of Southwestern Bell in moving him back to a residential rate. I take serious exception to that. First off from the telephone conversations with Mr. Hirsch he told me that he was not receiving compensation. In fact, in the time frame of mid November when I sent him a letter defining what we considered gain to be, and secondly my client attempted to contact Mr. Hirsch, left messages at his office. I attempted to contact Mr. Hirsch and left messages at his office. It was only after we failed to contact Mr. Hirsch that we rolled him back We did send him a letter, but I would also point out additionally that we didn't contact Mr. Hirsch by telephone to begin with and ask him if he wanted to be moved to the business rate. We made the determination that BBS's were a business, and we sent them a letter advising them they were a business. By the same token, when we allowed them the opportunity to self-declare, those that did not return phone calls -- Mr. Hirsch was not the only one -- if they did not bother to return the phone calls of our service representatives to tell us if they are a business or a residence, we went ahead just as we did with the initial moving them to business and moved that group back to residence. Now if we later learn that Mr. Hirsch is receiving compensation as we define it, as we define business, then we will move him to a business rate. But there is no other way other than some type of self-declaration. When we go to a customer and say, "Are you a business," and they say, "What is a business," we read them the definition that we have come up with in this interim position. We don't send auditors out. We have to rely on their word, and they have the say -- self-declare, "Yes, I am a business," or, "No, I am not a business." And that's basically our position in a nutshell. EXAMINER O'CONNELL: The second issue I want to discuss is is settlement possible, additional settlement discussions possible. I gather that the parties aren't too close on this, but I would like to ask some comments from Mr. Hirsch and Mr. Kridner and then Mr. Wilson. Mr. Hirsch, do you see any use, since right now your position has been taken by Southwestern Bell, you are now a part of the -- you are now charged the residential rate. Do you see -- I don't understand why you see use in pursuing this now until Southwestern Bell -- prior to when Southwestern reinterprets that as you suspect. MR. HIRSCH: Well, of course, my issue is their ability to reinterpret consistent with the tariff. I mean I think my complaint speaks pretty eloquently -- although it's probably mistyped -- is proper. I think the Public Utility Commission has that authority and only that authority. I vehemently object to it. The point is, Your Honor, is that I brought this on behalf of myself and other situated bulletin boards. In the city of Houston, five bulletin boards have gone down as a result of this switching back and forth. If we're looking for precedence in this case, on October 25th I received a letter saying Southwestern Bell was rolling back all bulletin boards as a stated position to residential rates. Now some have been rolled back into business. I am sorry. Am I not being responsive to your question? EXAMINER O'CONNELL: I don't understand what you just said. MR. HIRSCH: What I am saying is, Your Honor, if we look at -- if we look at the precedent, we first had everybody going into business rates. Then we had everybody rolled back to residential rates. Now we have hybrid position by Southwestern Bell. Some are business and some are residential. There is nothing -- they have not responded to the question is how long is this interim policy going to hold? The precedent is within 90 days we have had three positions by Southwestern Bell. Just because it's December 14, 1988 and they have announced a position. I don't think I am mooted out because I have been rolled back into residential rates. EXAMINER O'CONNELL: Is yourself and the people that you represent are they all currently Class 5 by Southwestern Bell as residential? MR. HIRSCH: We don't know, Your Honor, due to the fact that my letter was postmarked December 10 -- I'm sorry -- November 30th and received, I think, last week sometime. The letters as far as I know have just gone out. So I can't even respond to that at this point. I do know that we still have five bulletin boards down in the City of Houston. EXAMINER O'CONNELL: All right. Mr. Kridner, do you see any use in further settlement discussions? MR. KRIDNER: Your Honor, the problem I have with your question and Mr. Hirsch's comments -- as stated in my motion to have him clarify his position, the fourth point; that is, what relief he is seeking. And in order to know if there is room for any further settlement discussions, I need to know what he is asking that this Commission do. And I don't know if they want to be declared as a separate category, a unique class of service. I don't know if they want all BBS's to be charged residential rates regardless if they make money or charge or whatever. I feel that my client has adopted a reasonable position, and I would also add that in discussions with Mr. Hirsch -- and I think he will verify this with executives of this company -- that we advised Mr. Hirsch that in the event we change the interim policy or at such time we do seek to change it we will give the BBS community notice of that change, advance notice, before we do it. So in response to your question, I don't know what they want. EXAMINER O'CONNELL: Mr. Wilson. MR. WILSON: It strikes me that the only issue that I have identified that Mr. Hirsch still has alive and the case if it is alive is the ability of Southwestern Bell to interpret its own tariff, and in that case it strikes me that the relief that he is asking is an advisory opinion of this Commission whether Southwestern Bell has the authority to interpret its own tariff. It strikes me that although Mr. Hirsch cited some precedent earlier relating to Justiciable interest -- EXAMINER O'CONNELL: Excuse me, Mr. Wilson. And what is wrong with that? MR. WILSON: What is wrong with that? What is wrong with that is the Commission doesn't have the authority to issue advisory opinions. The Commission can only issue opinions in the context of a controverted case. Since we don't have a controverted case in this instance because it's not only a matter of standing of justiciable interest on Mr. Hirsch's part it's a matter of is there a controverted case. In this case there is not. Also Mr. Hirsch maintains that he filed his application on behalf of all the bulletin services in Houston. We don't know who those people are. We don't know if he has been authorized to represent those people. So right now I am looking at it as Mr. Hirsch's complaint. EXAMINER O'CONNELL: All right. MR. KRIDNER: Let me add one additional comment, Your Honor, with respect to Mr. Hirsch's comment on our ability to interpret our tariffs. I don't think my company is willing to negotiate with Mr. Hirsch whether that -- whether the Commission should review all decisions we make or whether the Commission should make all decisions for us. That is simply -- we are not willing to discuss that in terms of settlement of this docket. Let me also add that I don't think Mr. Wilson or Mr. Schell or the rest of the Commission staff would really want us to come in on a daily basis with our operational decisions that we're making when we have to look at our tariffs and say, "Now, how does this situation apply," and call them up on a continuous basis and ask them, "What should we do?" I simply don't think that it's appropriate that the Commission get into that type of activity with the Company's business. EXAMINER O'CONNELL: All right. Mr. Hirsch, do you understand that all utilities interpret their own tariffs? MR. HIRSCH: Do I understand that all utilities interpret their own tariffs? From an enforcement standpoint, Your Honor? EXAMINER O'CONNELL: No. I mean from day to day operations. MR. HIRSCH: Yes, I understand that. EXAMINER O'CONNELL: All right. Then we will go to the third issue I would like to discuss. Once again I ask the parties to be brief. I have four issues -- excuse me -- six issues that I enumerated in Examiner's Order No. 1. about this case. And I have a few other ones that I would have the like the parties to just briefly give their position on, and I intend to require the parties to submit briefs after the prehearing conference and put their positions in writing. First of all, you have the issues in an Order No. 1 and then other questions are, first of all, the status of the current payment of bills between Mr. Hirsch and Southwestern Bell, Southwestern Bell's request to list the members of the plaintiff group. I would like to know whether the parties agree whether discovery is necessary, the scope of the discovery and whether the plaintiff seeks interim relief and what type of relief. So I ask Mr. Hirsch to begin. MR. HIRSCH: Your Honor, do you want to enumerate them, and I'll take them one by one? EXAMINER O'CONNELL: I would appreciate it if you went straight down the list my Examiner's Order No. 1. MR. HIRSCH: Okay. Beginning with the scope of the proceedings? EXAMINER O'CONNELL: That's right. MR. HIRSCH: I think that's identified in my complaint, Your Honor, a number of issues of that are raised. In terms of the scope of the proceeding, if I may respond to the interim relief that I seek. Pursuant to the Public Utility Act, I seek -- that the rates for businesses be suspended to bulletin boards for 120 days as called for since there has been no notice as contemplated under the statutes. The scope of the proceeding, Your Honor, I guess I attempt to seek -- to determine with regard to a competitive -- what we believe to be a competitive element in this which is VideoTex and VideoTell. The cooperation and the undertakings between Southwestern Bell and that Particular service, Southwestern Bell is getting ready to expand into the market which I am presently located which is the communication by modem. And that is supposed to take place in March of 1989. And I believe that could be anti -- I believe it to be directly anti-competitive and motivating Southwestern Bell in this issue. So that is one of the issues that I intend to explore. As to my current status, Your Honor, I have received from Bell an attempt to credit my account for thirty-six fifty-two which will appear on my December 9th bill which I have not received yet, Your Honor. They say this will reflect my charges from October 8th to November 30th. I do not know if that is an appropriate adjustment at this point. I'll just have to wait and see on that, so I can't really respond to that. I haven't done the calculations. I just got this letter. As to disclosure of -- if I may speak to the issue of those parties that I represent, Your Honor, I filed this on behalf of myself and like situated individuals. I don't know why he is talking about Houston because there are other individuals throughout the state of Texas that had been rolled into business rates, but I understand the Commission does not allow for class actions. It is my understanding that there may be interventions filed in this matter by those that would probably be qualified. EXAMINER O'CONNELL: Do you object to submitting a list of all plaintiffs? MR. HIRSCH: Your Honor, the only plantiff is myself at this point. EXAMINER O'CONNELL: All right. MR. HIRSCH: I'll respond to that one. I am it. My understanding was -- and I have not reviewed the docket -- perhaps, the Court has seen it -- but I understood there were to be interventions filed. I don't know if any have been filed at this point. So I think that needs to be considered, and the next issue the Court gave to me on the the scope of the proceedings was the type of notice required in this case. Your Honor, since I am seeking to give notice to those individuals and only Southwestern Bell knows who it has rolled from residential to business and back to residential, that will require inquiry by me. I think those individuals are entitled to notice of these proceedings and may wish to partake in it. So if there are any individuals it has put into a business rate classification at present, I think I am entitled to know who they are, and I think it should be the burden on Southwestern Bell to give them notice of this case. No. 3, on burden of proof, Your Honor, I think the burden of proof ought to be with Southwestern Bell because of contract law. I think within the four corners of the document of the tariff I think this document should be construed to see if the interpretation is consistent with it. The scope of permissible discovery and whether it is required, Your Honor, assuming no negotiations are available, I would think that we would -- those issues identified in my complaint would be the areas of inquiry unless the Court feels they lead to irrelevant or immaterial areas. EXAMINER O'CONNELL: So you do suspect you might conduct -- MR. HIRSCH: -- some discovery. Whether the Commission may suspend -- I think this is on the -- on the interim relief, and that's what I requested in my complaint, 120 days, I believe, interim relief suspension and other issues. The only thing I would ask, Your Honor, is Mr. Kridner Telexed to me -- EXAMINER O'CONNELL: First let me stop you. MR. HIRSCH: I am sorry. EXAMINER O'CONNELL: You want interim relief, but the interim position of Southwestern Bell is exactly what you want? MR. HIRSCH: No, it's not. You mean because it's reclassified me as residential? EXAMINER O'CONNELL: No. MR. HIRSCH: No. That's not what -- you know, the fact it is reclassified me is irrelevant to the issue I seek to bring before the Commission. EXAMINER O'CONNELL: Okay, so -- MR. HIRSCH: It's not because of damages if that is what the Court means. That's not the issue for me. The issue for me is their ability to construct a construction different than the tariff, inconsistent with the tariff. EXAMINER O'CONNELL: So the interim relief you seek -- MR. HIRSCH: Is to suspend business rates to all bulletin boards regardless of whatever definition they are imposing and to leave those individuals at residential rates and to require Southwestern Bell to propose a change in tariff. EXAMINER O'CONNELL: All right. MR. HIRSCH: The only thing else I would request, Your Honor, is that in the event that the pretrial docket is to grow when we come back in -- I did not get notice of the statement of position, the full statement of position, until Monday. I would like to have an agreement with counsel that we won't come in here at the last minute and file statements of position less than three days notice which I think I am entitled to at a minimum. I think we could probably have that agreement. I would hope. EXAMINER O'CONNELL: I have one comment concerning the relief sought and the issues we just discussed. That has to do with the scope of proceedings. As I just said, I am going to ask the parties to brief these issues afterwards, and I have seen it in the past with complaint cases, and it doesn't make me too happy when somebody says the scope of the proceedings is anything that they care to bring up in their petition. So I want, as far as the scope of the proceedings, concise, legal questions that need to be adjudicated. And, of course, the Commission can only enforce the PURA. We're not going to be hearing anti-trust issues. MR. HIRSCH: Or deceptive trade, I would imagine. EXAMINER O'CONNELL: That is right. Mr. Kridner. It is Kridner, isn't it? MR. KRIDNER: Yes, Your Honor. EXAMINER O'CONNELL: I am sorry. MR. KRIDNER: Thank you. I'll follow the order that Mr. Hirsch used, and let me first say, with respect to the statement of position, I presume what Mr. Hirsch is referring to about receiving the complete statement was that the fact that two issues were left off when I filed on Friday. Now the two exhibits were letters that were sent to Mr. Hirsch back on November 2nd and November 16th. I don't believe there is any issue that Mr. Hirsch did not receive the November 2nd and and November 16th letters. So I do not feel that Mr. Hirsch was in any way unfairly surprised by the fact that what I filed Monday included letters that I had sent to him so that Your Honor and General Counsel would be fully advised of the negotiations between the parties. As to the issues, first, he would like the rates suspended for 120 days, and all BBS's should be paying residential rates. This creates a problem. First off, this isn't a Section 43 case. It's not a Section 42. So the 120-day notice does not apply. 120-day provisions do not apply. Mr. Hirsch is not contesting the 1FB, the business rate, and 1FR, the residential rate, that were approved in the last rate case of Southwestern Bell, Docket 6200. He is contesting the fact whether he should be paying that. As such, he is not contesting the rates. He is contesting a practice of Southwestern Bell or definition Southwestern Bell uses in interpreting its tariffs. Further, some of the BBS's were business before all of this started. So what Mr. Hirsch is asking is that these BBS's that are clearly for profit business entities that are out there that are currently paying business rates now be rolled back to a residential rate. This amounts to a change beyond anything that this docket ever got into. Now so as to his request for interim notice we feel that the -- or that interim relief -- we feel that the interim position that we have adopted for those boards that are purely hobby-type boards accomplishes all the relief. Secondly, as to anything that we might be implementing in Houston in 1989, we feel that is beyond the scope of proceedings, but as I mentioned in my statement of position the scope of the proceedings should be whether BBS's are residential or whether they are providing a service and hence not entitled to use the residential rate which is a residual-priced rate. In the event this hearing does go forward, Southwestern Bell's position is that the scope of the proceedings will be the nature of the BBs operations and whether that is a business within Southwestern Bell's current tariff definition. As to the type of notice, obviously, if this complaint goes forward, we are going to have to notify the bulletin board operators. We do not have any class of service designation that would allow us to identify a bulletin board operator. We have to rely on outside sources. There is a publication that is used by the computer community called "TEXAS COMPUTING" that we have found. It's a free publication. It's distributed at bookstores and computer stores and so forth. This publication also includes a list of some of or maybe all of -- I don't know -- the BBS operators throughout the state with telephone numbers and whatever name they go by. We have investigated what it would cost to insert an ad into that publication, that being a trade publication for the industry involved. And we would propose that notice be given one time in that monthly publication which we feel would be sufficient to advise the industry. Also as, I believe, Mr. Hirsh can tell you because of the particular nature of the industry I think the majority of them know what's going on to begin with simply because they are passing the information back and forth between them. As to who is responsible for the notice, quite frankly I feel that Mr. Hirsch should pay for it, since he is bringing the complaint, but I do recognize the Commission has precedent in requiring that the utility pay for it. So with respect to publishing one time in that particular publication, Southwestern Bell will bear the cost. As to burden of proof, as I mentioned initially, this is not a Section 43. Rates are not an issue. It's not a Section 42 claiming that the rates are unjust and unreasonable. Therefore, Mr. Hirsch has the burden of proof, and specifically his burden is to show that bulletin operators are entitled to a residually-priced residential rate. The scope of the discovery should be into the nature of BBS operations and whether they receive compensation. In that regard, we do intend to discovery, and I would probably depose Mr. Hirsch within the next 30 days as an initial effort to discovery to be followed by Requests for Information from Mr. Hirsch and any other parties that come in as party complainants. I have addressed the issue of interim relief. As to Mr. Hirsch's billing, we have issued the adjustment. If there is a arithmetic error in correcting the amount back to the residential rate, we, of course, will address that, but I do not feel that's the case. I do feel that he should list his parties or anybody who is participating. EXAMINER O'CONNELL: Well, he did that. MR. KRIDNER: To the extent anybody -- he was representing anyone else he should do so. MR. HIRSCH: I agree with that. I so stipulate. MR. KRIDNER: I think that basically covers the list, Your Honor. MR. HIRSCH: Your Honor, could I see the magazine? Just out of curiosity, I would like to see if I am in it. EXAMINER O'CONNELL: Sure. Mr. Wilson, can you help us out? MR. WILSON: I can try, Your Honor. I guess all these of these comments -- and it is understood that everybody's comments or not everyone's -- Mr. Kridner's comments, also, I would assume would be in the context of -- Mr. Kridner has requested a motion to dismiss. Again, that was our position and support that, but if Your Honor rejects that motion and decides to go forward then -- EXAMINER O'CONNELL: Well, Mr. Kridner, if you want to make a motion, I would prefer it to be in writing. MR. KRIDNER: That is fine, Your Honor, I would be happy to submit a written motion to dismiss folloing this prehearing. Of course, all of my comments, as Mr. Wilson noted, are predicated on the denial of such a motion. MR. WILSON: The scope of the proceedings, again, I have some difficulty in the petition identifying what are the issues that this Commission can deal with. Again, it seems to me, as I indicated earlier, that the only real issue that Mr. Hirsch has at this point is the ability of the Company to interpret its own tariff. To the extent that he is seeking any other relief, I don't think that has been specified with particularity in his complaint, so if he wants to amend the complaint to encompass other issues such as to require amendment of the tariff to separately deal with BBS's or something like that, obviously, at that point that could become an issue in the case, but, as of now, I see the issue of the case as the ability to have the utility to interpret its own tariff language. Type of notice, again, I would agree that the notice should be designed to reach bulletin service operators who are the affected parties, and frankly I don't know the effective way to do that. If this publication, "TEXAS COMPUTING", that Mr. Kridner has characterized as an industry magazine, I guess we would like to maybe think about that and address it in our brief as to whether that is the appropriate vehicle for notice. We would agree this is obviously not a Section 43 case or a rate change case, so therefore we are not looking at statewide publication or anything along those lines. I think it would be probably inappropriate unless we could characterize this as a statewide publication. I mean individuals should receive notice. The burden of proof issue, I believe, the complainant has the burden of proof in bringing complaint, and I agree with Mr. Kridner's characterization that what's being challenged here are not rates as such, whether the rate being charged for a business customer is a just and reasonable rate or the rate being charged for a residential customer is a just and reasonable rate. What's being challenged is whether the application of an otherwise just and reasonable rate is just and reasonable. So in that case, we don't have a situation, I think, where PURA shifts the burden of proof to the utility to justify the reasonableness of its rates, and in this case I think it's proper for the plantiff to bear the burden of proof. Obviously, it looks like there will be discovery in this case. Frankly, I don't anticipate that General Counsel would necessarily have a lot of discovery, although that is contigent upon the definition of the scope of the proceeding, I think. And we may, indeed, have some discovery for Southwestern Bell or for Mr. Hirsch relating to business practices. EXAMINER O'CONNELL: I just want to make it clear before -- I hope -- I don't want to forget it. The discovery is not open right now. I want the scope of the discovery defined prior to opening it. MR. HIRSCH: Does that mean, Judge, you will rule on what is -- briefs, right. MR. WILSON: As to the issue of whether the Commission may suspend during the pendancy of this proceeding, that is a difficult issue because in this case what we are we are talking -- if indeed the scope of the proceeding is the Company's ability to interpret its tariff, that is the issue in the case, the only suspension would be the Company's current interpretation of its tariff, and, frankly, I am not sure -- frankly, I am not prepared to address that. I'll have to address that in my brief. EXAMINER O'CONNELL: All right. MR. WILSON: Requirement to list members of plaintiff group, Mr. Hirsch has done that. So I think those are the issues. I am sorry. I wasn't prepared to address some of those, but especially in particular with the suspension, I'll address -- EXAMINER O'CONNELL: All right. MR. HIRSCH: Can I just respond to the notice? EXAMINER O'CONNELL: Sure. MR. HIRSCH: I am not sure what Southwestern Bell is saying. I assume Mr. Kridner is saying perhaps they use this to make the list of individuals they have contacted or contacted in the past. What I contemplate as notice is to those individuals who have been rolled back or forth. I think all of those people are entitled to actual notice of these proceedings as well as what is encompassed here and whatever list or else available to affected ratepayers. We may very well provide -- although, I don't like to do that -- I hope I don't get in the position of having to do that -- but there may be more extensive lists than the ones that I just saw in here. I think it's appropriate that any individual that may be affected ought to be, and the means of giving notice ought to be the most broad since this affects the entire State of Texas. I am not sure a single limited monthly publication is appropriate. MR. WILSON: Your Honor, if I may just briefly follow up on that a little bit -- EXAMINER O'CONNELL: Sure MR. WILSON: Although Mr. Kridner did say that Southwestern Bell does not have a class of service for bulletin board people and therefore -- obviously, there had been some communication. They raised somebody's rates. They lowered somebody's rates back. Those people -- I would agree with Mr. Hirsch that those particular people -- that Southwestern has already characterized as bulletin board should receive individual notice. MR. KRIDNER: I guess it puts it back in my court. Let me first clarify for the record. I am not saying that we use this publication for purposes of contacting the indiiduals who have been contacted and the rates rolled one way or the other. And I also gather from Mr. Hirsch's comment that there are more bulletin providers than what are indicated in that publication which is in the range of almost 1,000 in the State of Texas. But As to the individuals in Houston, we would agree that we will provide direct notice to those if this docket goes forward plus individuals in any other part of the state whose rates have been changed as a result of this policy. But quite frankly we do not know how to identify them other than have lists provided to us of telephone numbers of bulletin boards and then determine who those individuals are. We simply -- aside from going into a publication like this, do not have the capability to identify all of the bulletin boards in the state. EXAMINER O'CONNELL: All right. I am sure the parties will brief that issue. MR. HIRSCH: Judge, am I to assume that we will also brief the issue of burden of proof, I think since -- let me say this. I feel that that really needs to be resolved fairly quickly because the scope of the discovery obviously falls upon who has the burden in this in case, and I would like to address that first fairly quickly for the courts attention if that seems appropriate. EXAMINER O'CONNELL: It will be in your brief. MR. HIRSCH: All right, sir. EXAMINER O'CONNELL: I am going to set out a procedural schedule and some deadlines. Before we do that, I want to take a 10-minute break. (Off the record) EXAMINER O'CONNELL: We are back on the record after a 10-minute break. This is the schedule I have for the briefs in this docket. I require the Defendant, Southwestern Bell, to file a written motion to dismiss by Friday, 4:00 p.m., January 6th. The Plaintiff, Mr. Hirsch, shall file his brief, as we have discussed, by 4:00 p.m. on Friday, January 13th. He shall also discuss the motion to dismiss. MR. HIRSCH: And responsive brief. EXAMINER O'CONNELL: That's right because it will be filed a week prior. Southwestern Bell is required to file its brief on the remaining issues in Examiner's Order No. 1, as we discussed today, and the other issues by January 20th at 4:00 p.m. It's a Friday. And General Counsel is required to file their brief on the issues including the motion to dismiss by 4:00 p.m., on Friday, January 27th. Are there any other matters? MR. HIRSCH: Yes, sir, about the timetable. I am to brief all issues including a response within one month. Is that basically correct? EXAMINER O'CONNELL: Your brief is due on January 13th. I would like to that brief to discuss the issues enumerated in Examiner's No. 1, the current status of the bills between you and Southwestern Bell. I think we have already had today, here, your statements that you will list the names of any other members of the plaintiff's group. We have already discussed discovery, and we also discussed interim relief -- those issues plus the motion to dismiss. MR. HIRSCH: Plus my response to their motion to dismiss? EXAMINER O'CONNELL: Right. MR. HIRSCH: Then General Counsel is going to file by the 27th. Am I to save an opportunity to respond, a responsive pleading to theirs? EXAMINER O'CONNELL: If you wish, you can file a response by -- MR. HIRSCH: I Would just ask for one week, Your Honor. EXAMINER O'CONNELL: February 3rd. If anybody wants to file an additional brief to comment on General Counsel's, it's due no later than 4:00 p.m. on Friday, February 3, 1989. MR. HIRSCH: That is to be delivered to the Public Utility Commission by then, or should be postmarked? EXAMINER O'CONNELL: No, it has to be filed with the Commission. I don't know if you know where General Counsel's office -- Mr. Wilson can help you out. Are there any other matters that need to be raised today? MR. KRIDNER: Nothing from the Company, Your Honor. EXAMINER O'CONNELL: All right. This prehearing conference adjourned. C E R T I F I C A T E THE STATE OF TEXAS ) COUNTY OF TRAVIS ) I, THE UNDERSIGNED NOTARY PUBLIC in and for the State of Texas do hereby certify that the above-mentioned matter ocurred as hereinbefore set out. I FURTHER CERTIFY THAT the proveedings of such were reported by me, later reduced to typewritten form under my supervision and control and that the foregoing pages are a full, true, and correct transcription of my original notes. GIVEN UNDER MY HAND and the Official Seal of my office at Austin, Texas, this 10th day of December, 1988. ------------------ Cindy Mercer Notary Public in and for the State of Texas CSR No. 2906 My Certification expires: 12-31-89 -- Judy Scheltema | uunet!nuchat!moray!judy Houston, Texas | bellcore!texbell!moray!judy End of article 395 (of 397)--what next? [npq]