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News Release
Commission Signs Cease And Desist Order Against Beaver Creek Cooperative Telephone Company For Improper EAS Charges
October 12, 2000 (2000-049)
Contacts: Ron Eachus, Chairman, 503 378-6611; Roger Hamilton, Commissioner, 503 378-6611; Joan H. Smith, Commissioner, 503 378-6611; Bob Valdez, Public Information Officer, 503 378-8962
Salem, OR- The Oregon Public Utility Commission has signed a cease and desist order against Beaver Creek Cooperative Telephone Company for unilaterally changing its tariff and charging customers an unauthorized per minute fee for Extended Area Service (EAS) calls.
Since July of 1999 Beaver Creek had been charging customers who pay a flat $15 rate for EAS an additional "Premium Access Charge" of 0.75 cents per minute for all EAS usage over 3000 minutes a month.
The Commission said the practice violates the requirement that customers be offered a flat rate option for all EAS calls and directed the company to stop charging the fee and to provide refunds to customers.
EAS allows customers to make calls to nearby communities without having to pay long distance charges.
The Beaver Creek Cooperative Telephone Company serves approximately 5,000 customers in an area among Canby, Molalla, Colton and Estacada and has EAS to 31 exchanges in the Portland area.
The only approved tariff on file with the Commission went into effect in December of 1993 and provided a flat rate EAS service for business and residential customers.
The Commission learned of the new per minute charges as a result of complaints from several of the company's customers.
A PUC staff report said it appeared the charge was also designed to steer customers to Beaver Creek's own Internet service. Customers could avoid the charge by signing up for Beaver Creek's ISP.
The Commission does not ordinarily establish the rates and services of cooperatives. However, the Oregon Court of Appeals has ruled the Commission does have authority over "through services" which include EAS and other telephone exchanges.
"Requiring a flat rate option was the result of a carefully considered policy for replacing toll calls with EAS calls," Commission Chairman Ron Eachus said. "The bottom line is the company didn't file a revision of the tariff with the Commission and their pricing violates the conditions under which we were willing to grant extended area service designation in the first place."
Beaver Creek argued the fee was designed to be a fair way to charge customers who spent large amounts of time on the Internet for "data" services instead of increasing costs to all members by adding additional capacity to reach Portland-area exchanges.
The cease and desist order concluded the company violated state statutes and Commission rules in three distinct ways:
First, the Company did not file a copy of the revised tariff sheet with the Commission. In absence of such a filing and Commission review, the preexisting tariff is in full force and effect, and all increases in rates over the preexisting tariff are subject to refund.
Second, the Premium Access Service Charge based upon customer usage is a violation of the terms and conditions set by the Commission requiring a flat rate.
Third, the Company has discriminated against its customers by charging customers other than what is prescribed by its current approved tariff.
The order directs the Company to cease and desist from assessing the charge and to refund in full, within 30 days from the date of the order, all monies collected from customers pursuant to charges for "Premium Access Service."
The Cooperative has 10 days to respond to the Order. The order was signed October 9, 2000. If the cooperative violates the order, the Commission can seek a $10,000 civil penalty.
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