On April 9, 2015, the Commission held its regularly scheduled agenda meeting.  On the consent agenda, the Commission adopted a Resolution resolving remaining issues from Ducor’s 2009 rate case and increasing its CHCF-A draw by $48,892 annually, effective January 1, 2009.  This and other items of interest are discussed in further detail below.


Ducor’s 2009 Rate Case Resolved and CHCF-A Draw Increased by $48,892 (Item 11, approved on consent) – This Resolution resolves five rehearing issues related to Ducor’s 2009 rate case, increasing Ducor’s CHCF-A support by $48,892 from $2,514,516 to $2,561,408.

Following the resolution of Ducor’s 2009 rate case, Ducor filed an Application for Rehearing, asserting that some of the adjustments adopted were improper and unsupported by the record.  In May 2010, the Commission adopted D.10-05-022, which denied rehearing on all issues, with the exception of five capital expenditure issues related to Ducor’s: (1) work vehicles; (2) two fiber projects in Rancho Tehama; (3) two digital loop carrier projects in the Ducor Exchange; (4) a construction project related to a weather station in the Ducor Exchange; and (5) office furniture related to its Kennedy Meadows exchange.

The Resolution explains that the Communications Division reviewed additional information and data supplied by Ducor, and concluded that rate base adjustments are appropriate for expenses related to Ducor’s work vehicles ($80,715) and the two digital loop carrier projects in the Ducor Exchange ($183,000).  Based on these adjustments to Ducor’s rate base, the Resolution authorizes an annual $48,892 CHCF-A adjustment, effective January 1, 2009.

A copy of the Draft Resolution is available at the following link.

Five9 Granted CPCN to Provide Interexchange Service (Item 15, approved on consent) – This Decision approves a settlement agreement between Five9, Inc. (“Five9”) and the Commission’s Safety and Enforcement Division (“SED”), which authorizes Five9 to provide limited facilities-based and resold interexchange service within California.

Five9 filed an application for a CPCN in August 2014, which was protested by the SED on the grounds that Five9 operated in California without prior authorization since 2003.  In response, Five9 explained that it provides what might be considered resold telecommunication services incidental to its core business, specifically a cloud-based software services through a “virtual contact center.”  Five9 asserted that the cloud-based contact center software supporting inbound and outbound contact center services allows Five9’s clients to interact with their customers, and that the customer calls use the Public Switched Telephone Network and are delivered through circuits leased from telecommunications carriers.  Although Five9 initially contended that it was not subject to the FCC and Commission’s jurisdiction because it did not believe that it was a telecommunications provider, in 2012 Five9 determined that it might be subject to FCC jurisdiction and began the registration process with the FCC and the Commission.  As part of the registration process for the Commission, Five9 collected data to determine the amount of taxable revenue subject to California’s jurisdiction, calculated California surcharges owed, and proposed to pay $148,021 to cover surcharges from 2003 through the present.

In accordance with the settlement agreement, Five9 will pay: (1) $10,000 penalty for operating in California without authorization; (2) $148,021 in retroactive surcharges and user fees based on Five9’s intrastate telecommunication revenue from 2003 to 2013; and (3) $14,000 in interest for retroactive surcharge remittances at an interest rate of 10%.

A copy of the Proposed Decision is available at the following link.


Proposed Decision to Expand the Scope of the Rural Call Completion Investigation(Item 16, held until 5/7/15) –This Proposed Decision would expand the scope of the Rural Call Completion investigation proceeding to incorporate public safety issues related to 911 service.  Specifically, the Proposed Decision explains that based on recent 911 outages, including the FCC’s inquiry into a multi-state 911 outage in April 2014 and the recent 911 outage in the Napa area following the recent earthquake, that it would be appropriate to review of 911 call completion issues in California.  The Proposed Decision would also add additional respondents to the investigation and direct all respondents to respond to questions related to rural call completion issues and 911 call completion failures.

A copy of the Proposed Decision underlying this item is available at the following link.

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If you have any questions about the above items or the underlying proceedings in which they arose, please do not hesitate to contact us.

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