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March 29, 1994


Petition of Review of Order of the Illinois Commerce Commission in Docket No. 87-0238.

McCORMICK, DiVito, Hartman

The opinion of the court was delivered by: Mccormick

Justice McCORMICK delivered the opinion of the court:

The petitioners, Illinois Telephone Corporation and Darryl Henry, one of its officers (collectively, ITC), petition for review of an order of the Illinois Commerce Commission (the Commission), which found that ITC failed to prove, by a preponderance of the evidence, that certain direct-dialed international calls were not made through its pay telephones but rather, as ITC alleged, through an illegal tap on respondent Illinois Bell's (Bell) telephone lines. On review of the Commission's decision, ITC argues (1) that the Commission erred in allowing Bell to disconnect local phone service to ITC when ITC had a genuine dispute with AT&T Communications of Illinois (AT&T) about the international charges; (2) that the Commission erred in its application of the burden of proof; (3) that the Commission erred in dismissing AT&T as a party to the action for lack of subject matter jurisdiction; and (4) that the Commission's decision was against the manifest weight of the evidence. We affirm the order of the Commission.

In September 1986, ITC installed two customer-owned pay telephones at a service station on South Halsted Street in Chicago. ITC introduced a series of bills for service to the two lines covering a period from September 1, 1986, through May 1, 1987. The November 1, 1986, bill charged ITC for several direct-dialed international calls, made during the preceding month on 29 separate occasions to Mexico, Israel and Jordan. This calling pattern continued for a period of five months, with the most frequent calling occurring during the daytime or early evening. The calls ceased after January 1987.

On May 18, 1987, Darryl Henry, on behalf of ITC, filed a complaint with the Commission against AT&T. In February of 1988, ITC was granted leave to join Bell as a party. The complaint alleged that the direct-dialed international calls, totalling approximately $2,211, were improperly charged to the ITC pay telephones. The long-distance charges were billed to ITC by Bell as billing agent for AT&T.

A hearing on ITC's complaint was held on February 3, 1988. Henry testified that his company purchased the pay telephones from TOTALCOMMUNICATION Services, Inc., (TOTALCOM). Accordingto TOTALCOM's distributor, Martin Segal, the telephones included software that was designed to prevent direct-dialed international telephone calls. Henry first contacted AT&T in November about the fraudulent international calls and was told he would be issued credit for the calls. The credit, however, was not issued. Henry also informed Bell about the fraudulent calls. Bell sent an inspector to check on its equipment; he found no evidence of tampering. Henry, himself, also went to the site at 3047 South Halsted to inspect the telephones, Bell's access lines and interface boxes during the period of fraudulent calling. He, too, found no evidence of tampering. The software circuitry in these pay telephones was not tested during the months of fraudulent calling.

Segal, vice-president of TOTALCOM, the distributor of the telephones used by ITC, testified that the telephones installed at the service station were Intellical Model 2001, equipped with version 159 software. According to Segal, that version 159 software was designed to block direct-dialed international calls. Segal surmised that an individual could make direct-dialed international calls by gaining access to Bell's interface.

Segal also testified that he inspected the telephones in October 1987, several months after the fraudulent calls ceased. At the time Segal inspected the pay telephones, the software system had been upgraded to software version 160. The upgraded software was also designed to block direct-dialed international calls. Segal testified that previous pay telephones equipped with the version 159 software might have been "more susceptible" to direct-dialed international calls.

Jim Welter, director to technical services for TOTALCOM, also testified that the version 159 software installed in the pay telephones at the time of the fraudulent calling was incapable of completing direct-dialed international calls. This fact notwithstanding, Welter stated that such software was not foolproof.

Fred Gewalt, computer operations manager and security representative for Bell, testified that he found no evidence of tampering when he examined Bell's equipment. His examination included Bell's wiring and interface boxes. However, Gewalt, like Segal, conducted his investigation in October of 1987, several months after the fraudulent calling ceased. An employee of Bell since 1959, Gewalt stated that in his experience as an investigator for Bell, every case of alleged tampering was accompanied by some evidence of tampering with Bell's lines or interface boxes. In this case, Gewalt testified, he found none.

Gewalt also explained that an individual could gain access toBell's network and place a direct-dialed international call by accessing Bell's interface boxes. However, the interface boxes connected to the pay telephones in question were located 10 feet above the ground at the intersection of a busy street. Any type of access to the interface boxes would require the use of a ladder. Gewalt further explained that if the calls had been made daily for several months during the winter, he would expect to see scratch marks or other physical evidence of repeated opening and closing of the interface boxes.

The Commission dismissed the complaint with respect to AT&T, finding that it lacked jurisdiction to adjudicate the validity of the international toll charges because such disputes were under the authority of the Federal Communications Commission (FCC). The Commission determined that its jurisdictional basis to review ITC's complaint was limited to the issues involving Bell's local exchange services and the security of Bell's exchange system.

The Commission determined that while the evidence suggested that the fraudulent calls were not completed on ITC's telephones the evidence also showed that there was no tampering with Illinois Bell's equipment. Thus, the Commission concluded that the probable source of the international calls was indeterminate and found that ITC failed to establish, by a preponderance of the evidence, that the fraudulent international calls attributed to ITC's ...

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