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On April 11, 2013, the Commission held its regularly-scheduled meeting.  There were no telecommunication items discussed on the regular agenda and the Commission continued to hold the Proposed Decision modifying requirements for CPCN and WIR holders or applicants.  On the consent agenda, the Commission approved oppose positions for the proposed legislations on mobile telephony surcharges and the reduction of the CPUC president’s authority.  In addition, the Commission authorized Hornitos to discontinue three multi-party line services due to lack of customers.  These and other items of interest are discussed in further detail below.

CONSENT AGENDA ITEMS
 
Hornitos Authorized to Discontinue Two-Party, Four-Party and Suburban Ten-Party Lines. (Item 13, adopted on consent) – This Resolution approves Hornitos Telephone Company’s (“Hornitos”) request to: (1) discontinue Two-Party and Four-Party Line residential services; (2) discontinue Suburban Ten-Party Line Flat Rate service for business customers; (3) allow existing customers of Suburban Ten-Party Line Flat Rate service to keep the service until they make changes to their service status; and (4) modify its tariffs to reflect these changes. 
 
Hornitos filed its Advice Letter (“AL”) No. 309 on December 27, 2012.  Hornitos explained that it had no customers subscribing to its Two-Party and Four-Party Line residential service offerings, which allows two or more customers to be connected to and share the same telephone line.  Hornitos also explained that its Suburban Ten-Party Line Flat Rate services had no business customers and only two residential customers subscribing to this service.  The two residential customers currently subscribing to this service would be permitted to stay on the service as long as they do not make changes to their service status.  Any service changes would automatically switch the customers to Individual Line service.  Changes triggering the transfer to an Individual Line service would include: (1) transferring service to a different name or location; (2) requesting a change in service such as an activation of a custom calling feature; and (3) disconnection for non-payment of their telephone bill. 
 
A copy of the Draft Resolution underlying this item is available at the following link:  
 
$28,839.92 to be Returned to the Welk Group (Item 11, adopted on consent) –
This Decision orders $28,839.92 to be returned to The Welk Group, Inc. (“Welk Group”).  In 1993, the Welk Group filed a complaint against AT&T Communications of California, Inc. (“AT&T”) and General Telephone of California, Inc. (“GTEC”).  When the Complaint was filed, the Welk Group deposited $24,221.50 with the Commission.
 
The Complaint involved a disagreement over long distance charges that were billed to the telephone account of Heartland Music and the threatened disconnection of the Welk Group’s telephone service.  The Welk Group claimed that it was merely a partner of Heartland Music, which was a separate and distinct entity, and asserted that it was therefore not liable for Heartland Music’s debts or account.  The Welk Group also alleged that the long distance charges billed to Heartland Music were the result of toll fraud, and that AT&T failed to do anything to rectify the toll fraud.     
 
Commission action on the Welk Group’s Complaint was deferred because the Welk Group expressed an intent to file a related complaint before the FCC.  Over the course of three years, the assigned ALJ issued three rulings to inquire about the status of the FCC complaint.  The Welk Group did not submit additional information to the Commission and the Complaint was eventually dismissed for lack of prosecution. The Decision dismissing the Complaint did not address the disposition of the funds deposited by the Welk Group. 
 
The Commission reopened the proceeding on its own motion after determining that the Commission’s Fiscal Office continues to hold the deposited funds.  Neither the Welk Group, AT&T, nor GTEC requested the Commission to return funds deposited by the Welk Group.  As of May 17, 2012, the balance with interest, was $28,839.92, and this Decision directs the Fiscal Office to prepare a check made payable to the Welk Group in that amount.    
 
A copy of the Proposed Decision underlying this item is available at the following link
 
LEGISLATIVE ITEMS
 
Proposed Legislation Prepaid Mobile Telephony Services, AB 300 (Perea) (Item 32, oppose position approved on consent) –  This bill would establish a mobile telephony service surcharge to be paid by customers purchasing prepaid mobile telephone service.  The surcharge would consist of a state and local component, including a prepaid MTS surcharge, an emergency telephone users surcharge, and other PUC surcharges. 
 
The Commission determines that this bill is unnecessary as carriers are currently collecting and remitting the required fees and surcharges that are required by law.  Moreover, the Commission finds that the bill would create additional processes and associated costs that would result in higher universal service contributions for consumers. 
 
A copy of the Legislative Memo underlying this item is available at the following link
 
A copy of the bill is available at the following link
 
Proposed Legislation on the Authority of the CPUC President, SB 611 (Hill) (Item 40, oppose position approved on consent) – This bill would remove the CPUC President’s ability to direct the executive director, attorney, or other staff of the CPUC.  The bill would also require the CPUC to adopt procedures on the disqualification of commissioners due to bias or prejudice.  Moreover, an officer, employee, or agent of the CPUC assigned to assist in the prosecution of, or to testify in, an adjudication case would be prohibited from participating in the decision of the case or any factually related proceeding. 
 
A copy of the Legislative Memo underlying this item is currently unavailable, however a copy of the bill is available at the following link
 
HELD AGENDA ITEMS

Revisions to the Certification Processes for Telephone Corporations Seeking or Holding CPCNs and WIRs (Item 45, held by Staff until 4/18/13) – This Proposed Decision would adopt revisions to the certification process for telephone corporations seeking or holding Certificates of Public Convenience and Necessity (“CPCN”) and wireless carriers seeking or holding Wireless Identification Registration (“WIR”).  The changes to the certification processes are intended to increase accountability for carriers, reduce the need for enforcement actions to be brought, and improve the Commission’s ability to collect fines, penalties, and bring restitution.  The Proposed Decision would establish a Phase II of the proceeding to determine performance bond requirements, as discussed below.
 
The Proposed Decision would require all applicants seeking or holding a CPCN or WIR to post a bond to facilitate the collection of fines, fees, surcharges, taxes, penalties, and restitution.  ILECs are specifically exempted from the bond requirement.  The bond amount for applicants seeking or holding a CPCN or a WIR would be initially set at $25,000.  In Phase II of the rulemaking, the Commission will determine, starting with input in workshops, a reasonable performance bond amount based on intrastate revenue and/or consumer protection considerations.  The bond amount for new applicants granted a CPCN or WIR that have not reported annual intrastate revenues to the Commission would be $25,000. 
 
The Proposed Decision would also: (1) require CPCN applicants and wireless registrants to provide the Commission with resumes and detailed information on key officers, directors, and certain owners; (2) require applicants seeking to transfer licenses or registrations to verify compliance with Commission reporting, fee, and surcharge transmittals; (3) increase the application fee for new and transferred CPCN authority from $75 to $500, subject to legislative approval; (4) require wireless registrants to pay a $250 fee for new and transferred registration; (5) establish a minimum annual user fee of the Commission-established rate in effect at the time or $100, whichever is greater; and (5) require a new verification with specified language that certain key officers, directors, and owners were never associated with a telecommunications carrier that filed for bankruptcy, was sanctioned by the FCC or state regulatory agency, or was ever found civilly or criminally liable by a court.
 
This Proposed Decision was placed on the Commission Meeting agenda on November 29, 2012 and this is the sixth hold on the item.  Commissioner Sandoval and President Peevey each held this item for two meetings (Commissioner Sandoval on November 29, 2012 and December 20, 2012 and President Peevey on January 10, 2013 and January 24, 2013).  Commissioner Ferron placed a hold for one meeting on February 13, 2013.  The Staff has held this item for the last two meetings and continues its hold until at least the next Commission meeting.  It has not been made clear why this item continues to be held. 
 
A copy of the Proposed Decision underlying this item is available at the following link
 
Channel Islands Telephone Company’s Application to Expand CPCN Authority (Item 30, held by Staff until 4/18/13) – This Proposed Decision would grant Channel Islands Telephone Company (“CITC”) a Certificate of Public Convenience and Necessity (“CPCN”) to provide facilities-based local exchange and interexchange service to five of the Channel Islands.  The CITC was previously granted a CPCN to provide limited facilities-based local exchange and interexchange services in California.  However, a full-facilities based CPCN is required when a telecommunications provider wishes to perform non-minor construction.  The CITC project proposal would involve installation of cellular telecommunication infrastructure at 15 project locations on Anacapa Island, San Miguel Island, Santa Barbara Island, Santa Cruz Island, and Santa Rosa Island.  CITC included a Proponent’s Environmental Assessment in its application and an Initial Study and Mitigated Negative Declaration (“ISMND”) was prepared pursuant to CEQA requirements.  The ISMND concluded that the project would not have a significant adverse effect on the environment with the required mitigation and identified a number of project elements to be addressed as conditions of approval. 
 
The Proposed Decision would also open a Phase 2 to the proceeding to determine wither the CITC violated Rule 1.1 of the Commission’s Rules of Practice and Procedure for failing to inform the Commission that the California Secretary of State suspended the CITC’s authority to conduct business in California for failing to comply with Franchise Tax obligations.
 
A copy of the Proposed Decision underlying this item is available at the following link
 
NOTES AND COMMISSIONER REPORTS
 
During the public session, speakers spoke out against the negative health impacts of smart meters.  These speakers urged the Commission to implement a no-fee opt out process for customers who do not wish to use these meters.
 
Commissioner Sandoval mentioned that she attended a Women’s History Month event honoring her and Commissioner Peterman.  The event was hosted by the CCPUC.  She also noted her attendance at ongoing meetings with the NARUC’s Federalism and Telecom Task Force.  
 
Executive Director Clanon announced the appointment of Ryan Dulin as the Communications Division Director.  He noted Director Dulin’s strong focus on technology and public services as the former Deputy Director for California’s 9-1-1 Emergency Communications Division at the California Technology Agency.   Executive Director Clanon also thanked Michael Amato for his service this past year as the Interim Director, as well as President Peevey, Commissioner Sandoval, and Carol Brown for their input and participation in the final decision making process of selecting the permanent director. 
 
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If you have questions regarding any of the above items, or the underlying proceedings in which they arose, please feel free to contact us.
 

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