State regulator staff wants to fine Cox up to $4 million more

Although he didn’t have a chance to testify in Friday’s hearing, Arizona Corporation Commission staff utilities division analyst Armando Fimbres acknowledged he is requesting that Cox Arizona Telcom, LLC be fined up to $4 million for its “willful and deliberate” decision to circumvent an interconnection agreement with Qwest Communications. Cox, which had settled the case with Qwest for $2.2 million, was denied approval for the settlement because ACC staff has raised complaints that the agreement does not go far enough to stop future “unlawful” actions by Cox.

For background on the case, check out the following posts:
Cox settles with Qwest for $2.2 mil, awaiting state regulator approval
Cox disputes Commission staff report, accusations
ACC analyst decries Qwest, Cox settlement

Qwest attorney Thomas Snyder pleaded with Administrative Law Judge Dwight Nodes to separate the potential fines from the entire hearing, thus allowing Qwest to collect  the $2.2 million settlement. Due to the language of the settlement agreement, the entire case must be dismissed before Qwest can collect.

Nodes, while sympathetic to Cox and Qwest, said the ACC staff is party to the agreement and therefor must be allowed to present its case. From Fimbres’ testimony, the ACC staff wants to apply additional punitive and protective penalties on Cox. The total fines range from $80,000 to $4 million.

“We didn’t ask for a fine,” Snyder said. “I don’t think it would be unprecedented to separate the two.”

In 2006, Qwest accused Cox of tapping into existing wiring owned by Qwest at more than 5,000 telephone terminals at multiple tenant environments like apartments and townhouses in order to deploy their telephone service. According to a 1997 interconnection agreement, Cox agreed to notify Qwest when it was using existing wiring and pay for use of these wires.

Fimbres was not allowed to testify Friday because of time constraints. Nodes has given him until May 9 to submit testimony supporting the fines, after which Cox has until June 6 to rebut.

The next hearing on the settlement will be in early July, depending on schedules of the three parties.

Cox, which has denied any wrongdoing in the case, reiterated the settlement should be approved and that the company should not be assessed additional fines.

Nodes cannot dismiss the case from a procedural hearing. He would have to submit a recommendation to an open ACC meeting, which would not likely be approved, he said. In defense of his decision, Nodes said the timeline would have been smaller had Cox and Qwest been more inclusive with its deliberations.

“Had (ACC) staff been more involved in this from the beginning, we would not be where we are right now,” he said. “I’m trying to balance the interest of all the parties.”

Ty can be reached at ty@aztechnews.net.