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PUBLIC SERVICE COMMISSION
OF WEST VIRGINIA
CHARLESTON
At a session of the PUBLIC SERVICE COMMISSION OF WEST VIRGINIA in the
City of Charleston on the lothday of April, 2006.
CASE NO. 05- 1518-T-C
CITYNET WEST VIRGINIA, LLC, Bridgeport, Harrison County,
Complainant,
V.
FIBERNET, LLC, a corporation, Charleston, Kanawha County,
Defendant.
CASE NO. 06-0222-T-PC
FIBERNET, LLC, a corporation, Charleston, Kanawha County.
Joint petition filed by Citynet West Virginia, LLC, Ntelos of West
Virginia, Inc., the State of West Virginia ex rel. Darrell V. McGraw,
Jr. and Commission Staff for the Commission to initiate a General
Investigation into the automatic renewal provisions of FiberNet’s
tariff and telecommunications service agreements.
COMMISSION ORDER
The Commission requires a response to a proposal to resolve these cases.
FINDINGS OF FACT
Case No. 05-I51 8-T-C
1.
On October 13,2005, CityNet West Virginia, LLC complained that FiberNet,
LLC customers who wanted to switch to Citynet “have been unable to do so because
FiberNet would charge them severe penalties pursuant to the automatic renewal provisions
Public Service Commission
of West Virginia
Charleston
of FiberNet’s telecommunication service agreements.”
2.
Thereafter, responsive pleadings were filed and the case was referred to the
Division of Administrative Law Judges for further proceedings. Comm’n Referral Order p.
1.
3,
On February 8,2006, the ALJ recommended that the case be dismissed because
the automatic renewal provision appears in FiberNet’s tariff and the ALJ could not require
a revision of FiberNet’s Commission-approved tariff.’ Although the parties suggested that
the Commission consider in a rulemaking whether automatic contract renewal provisions
violate public policy, the ALJ noted that the ALJ Division is not authorized to conduct such
a proceeding.
On February 10,2006, the Attorney General petitioned to intervene, agreeing
4.
with Citynet that the automatic renewal provisions restrict competition. The AG also advised
that since 2005, the State has received 12 complaints about FiberNet, which allege the
potential for violations of the West Virginia Consumer Credit and Protection Act and the
antitrust statutes.
On February 21, 2006, FiberNet excepted, arguing that the use of rollover
provisions was proper and therefore the Recommended Decision was correct in dismissing
the complaint. However, to address the concerns raised and to resolve the case without
further proceedings, FiberNet proposed, among other things, to voluntarily revise its
contracts to a 12-month rollover period and to limit any early cancellation charge to a
maximum of 12-month estimated monthly charges.
5.
6.
On February 23, 2006, Citynet excepted, noting the AG’s allegation that
FiberNet’s practice may have violated the Consumer Protection Act and West Virginia’s
antitrust statutes. Recognizing that FiberNet agreed to make certain concessions, Citynet also
pointed out that FiberNet did not agree to stop using automatic renewal provisions and did
not offer relief “to the many, many customers that already have had their service agreements
renewed unbeknownst to them.”
On March 6, 2006, FiberNet responded, arguing that automatic renewal
7.
provisions benefit customers by providing a convenience which affords uninterrupted service
and price stability, FiberNet also said its current tariff complies with PSC standards.
See FiberNet, LLC, Comm’n Order pp. 1-2, Case No. 99-0282-T-T (Mar. 25,
1999).
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Public Service Commission
of West Virginia
Charleston
FiberNet argued that the AG’s request to intervene was untimely and should be denied.
FiberNet said that its settlement proposal adequately addressed the concerns raised in this
case and demonstrated FiberNet’s willingness to work cooperatively with the Commission
to resolve this matter without further proceedings.
On March 24,2006, FiberNet advised that the Legislature passed House Bill
8.
4536 on March 11, 2006, which addresses automatic renewal provisions in landline
telephone service agreements. Ltr. p. 1. Although the legislation will not become effective
until June 9,2006, FiberNet advised that it would voluntarily implement the bill’s provisions.
Accordingly, “current customers with auto renewed [contracts] wishing to migrate service
to an alternative provider may be assessed an early termination penalty that is no greater than
the charges for two months’ service as is provided for in the legislation,” FiberNet wrote.
Id. FiberNet asserted that the legislation made the issue moot and the case should be
dismissed from the Commission’s docket. Id.
Case No. 06-0222-T-PC
On February 23, 2006, Citynet, Ntelos of West Virginia, Inc., the AG and
9.
Commission Staff asked the Commission to conduct a general investigation into the
automatic renewal provisions of FiberNet ’s tariff and telecommunications service
agreements. They asserted that the automatic rollover provisions, and the significant penalty
clauses for terminating an agreement following an automatic renewal, violate Commission
policy and State public policy. Petition pp. 1-5.
10. On March 6, 2006, FiberNet asked the Commission to hold the petition in
abeyance, asserting that it would be duplicative and inefficient to move forward in the
petition case while exceptions were pending in the complaint case, Case Number 05-1 5 18-TC. Ltr. pp. 1-2. FiberNet also advised that two pieces of legislation had been introduced
regarding automatic renewal provisions in landline service agreements. FiberNet indicated
that it would be premature for the Commission to act until the legislative initiatives played
out. Id.
11. On March 9, 2006, Technical Staff opposed FiberNet’s request to hold the
petition in abeyance, arguing that the issues are very time sensitive. Utilities Division Initial
Recommendation p. 1, attached to Initial Joint Staff Memorandum. “Staff has been
contacted by numerous FiberNet business subscribers for whom it is not feasible to save
money each month by switching to another telephone company because of what it will cost
them, under current strictures, to leave FiberNet prior to expiration of automatically renewed
service contracts,” Staff wrote. Id. “The longer it takes to resolve this problem, the greater
i
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Public Service Commission
d West Virginia
Charleston
will be the financial losses to the malaffected businesses.’’
12. On March 24, 2006, FiberNet asserted that House Bill 4536 made the issue
moot and the petition case also should be dismissed from the Commission’s docket. Id. (See
Finding of Fact No. 8).
CONCLUSION OF LAW
To date, there has been no response to FiberNet’s proposal to resolve these matters.
Before deciding whether to dismiss these proceedings, the Commission should require
responses.
ORDER
IT IS THEREFORE ORDERED that, within 10 days of the date of this order, written
responses shall be filed to FiberNet’s March 24, 2006, proposal to settle these matters.
IT IS FURTHER ORDERED that the Commission’sExecutive Secretary serve a copy
of this order upon all parties of record by United States First Class Mail and upon
Commission Staff by hand delivery.
Chairman McKinney is recused from this case.
A True Copy, Teste:
Sandra Squire
Executive Secretary
CLWisek
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Public Service Commission
d West Virginia
Charleston