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October 12, 2002

PUC missed overbill of phone customers

From: Tri-Valley Hearld, CA
Saturday, October 12, 2002

State hasn't addressed what to do about surcharge, which has been reinstated

By Suzanne Bohan

A recent state audit found an overcharge last year on some telephone customers' bills that slipped by state officials.

For eight months in 2001, an unknown number of customers were charged a state-mandated fee -- collected to aid the hearing impaired and disabled -- even though Gov. Gray Davis had actually vetoed the surcharge in late 2000.

The surcharge, which amounted to small change on most monthly phone bills, added up to more than $1.84 million before Davis reinstated it Sept. 1, 2001.

But by then, the money collected between Jan. 1, 2001, and Aug. 31, 2001, had been sent to the telecommunications program without the government's approval, according to the program's 2001 annual report. The audit of the California Public Utilities Commission was released in July.

The money funds the Deaf and Disabled Telecommunications Program, which was established by the CPUC in 1981. The program gives free phones and devices to those with hearing loss and disabilities, and funds a relay system that provides operators who assist deaf people in communicating with others through phones equipped with text monitors.

"When we found out that it had been collected for that period of time, we were somewhat surprised," said Helen Mickiewicz, deputy general counsel for the CPUC.

Pacific Bell was among the firms that immediately stopped billing customers the surcharge, as did the wireless giant Verizon. But inexplicably, Verizon began charging it again for two months in the summer before the state reinstated it, Mickiewicz said.

"It's kind of erratic," she said, while reviewing records showing which telecommunication firms stopped the surcharge and those that charged it while it was canceled. It was mostly smaller firms that kept charging it, she noted.

The utilities commission hasn't decided what to do about overcharge. It's considered a debt to consumers, but Mickiewicz said most refunds will be small, and the cost of administering the refunds might exceed the amount overcharged.

The commission will be meeting soon to discuss a pending centralization of the Deaf and Disabled Telecommunications Program, and at that time will most likely address the overcharge issue, she said.

During the eight-month period, those customers who were charged paid a 0.28 percent surcharge on their total bill for phone service, extra features and in-state phone calls. (The charge was increased to 0.48 percent after it was reinstated, and this month dropped down to 0.30 percent.) If those charges totaled $40, the extra fee would amount to 11 cents. The surcharge is on phone bills under the heading "CA Relay Service and Communications Devices Fund."

A CPUC memo dated Dec. 22, 2000, was sent to more the more than 1,000 telecommunications firms certified to operate in California, notifying them to cancel the surcharge as of Jan. 1, 2001, according to John Leutza, the director of the CPUC's telecommunications division.

When asked why the commission didn't notice that some firms were still charging consumers the fee, Mickiewicz said CPUC staff is stretched too thin to check the monthly statements that every telecommunications company operating in the state sends to consumers.

"We don't have the staff to check bills like that," she said.

The audit's findings "served as a warning bell," Mickiewicz added. "It told us that we need to be more prudent and cautious. It's a good thing that it was a small amount."

Contact Suzanne Bohan at .

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