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On August 1, 2019, the California Public Utilities Commission held its regularly scheduled agenda meeting in San Francisco.  The principal item of interest concerned the Commission’s approval of Commission Staff’s late-filing of opening comments in response to the FCC’s Notice of Proposed Rulemaking in its Universal Service Contribution Methodology docket (No. 06-122) to oppose a cap on the interstate Universal Service Fund.  All Legislative items were held to August 15, 2019, without comment.  The significant items addressed during the meeting are summarized below.

REGULAR AND CONSENT AGENDA ITEMS

Staff Request to Comment on FCC’s NPRM Establishing a Cap on the Universal Service Fund Approved. [Item 29, Adopted on Consent Agenda]

The Commission approved the recommendation of Communications Division and Legal Division staff (“Staff”) to submit late-filed comments to the FCC about its Notice of Proposed Rulemaking to implement an overall budget cap on the Universal Service Fund (“USF”).  The Staff report describes USF as providing financial support to four major federal universal service programs: (1) the High-Cost Program (also known as the Connect America Fund), which funds mobile and fixed broad-band capable networks in rural areas; (2) the E-Rate Program, which provides discounts to schools and libraries to ensure affordable access to high-speed broadband service; (3) the federal Lifeline Program, which provides discounts for voice and broadband services to qualifying low-income households; and (4) the Rural Health Care Program, which provides funding to eligible healthcare providers for telecommunications and broadband services necessary to provide healthcare services.  The Commission approved Staff’s recommendation to oppose the proposed overall cap of the USF on the grounds that such a cap would financially burden complementary CPUC public purpose programs like CHCF-A and California LifeLine.  In its FCC comments, the Commission would also propose two alternative means to meet the FCC’s goals of controlling spending and minimizing burden on ratepayers: (1) more accurate targeting of  needed spending in each USF program to prevent waste, and (2) measures to broaden the USF contribution mechanism, including assessing surcharges on broadband Internet access service.

The staff memorandum underlying this agenda item is available here: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M310/K020/310020918.PDF

The FCC Notice of Proposed Rulemaking is available here: https://ecfsapi.fcc.gov/file/05310169808865/FCC-19-46A1.pdf

 

TransPac Telecom, Inc.’s Appeal from Citation CD-2018-11-063 Granted. [Item 8, Adopted on Consent Agenda]\

The Commission dismissed citation CD-2018-11-063 against TransPac Telecom, Incorporated (“TransPac”) for its alleged failure to report intrastate revenues and submit Public Purpose Program (“PPP”) surcharges, as required by Public Utilities Code Sections 702, 2101, and 2107, through Communications Division (“CD”)’s Telecommunications and User Fee Filing System.  CD issued notices to TransPac of its failure since 2016 to report intrastate revenues and submit PPP surcharges on August 9, 2018 (via e-mail) and August 31, 2018 (via US mail) before issuing Citation CD-2018-11-063 on November 8, 2018.  The first two notices did not prompt responses from TransPac, and citation letter was returned to the Commission as undeliverable.  CD staff ultimately reached TransPac by telephone on December 12, 2018 to provide notice of Citation CD-2018-11-063, and TransPac reported intrastate revenue and remitted Public Purpose Program Surcharges within a week of the telephone communication. Following hearings on May 9, 2019 on this matter, the Commission found that TransPac had not received CD’s August 2018 e-mail and letter notifications and that TransPac was first notified of CD’s intent to issue a citation during the December 12 telephone call.  Based on these facts, the Commission dismisses Citation CD-2018-11-063 and relieves TransPac of any fines pursuant to Resolution T-17602.  Notably, the Commission excused TransPac’s failures to update the Commission of its current address.

The latest version of the draft resolution underlying this item is available here: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M310/K067/310067112.PDF

 

7G Network, Inc.’s Citation CD-2018-11-2016 Fine Reduced.  [Item 21, Adopted on Consent Agenda]

The Commission reduced 7G Network, Inc. (“7G”)’s penalty amount in citation CD-2018-11-016 from $1,000 to $500.  Communications Division (“CD”) issued Citation CD-2018-11-063, alleging 7G’s failure to report intrastate revenue and remit Public Purpose Program (“PPP”) surcharges, as required by Public Utilities Code Sections 702, 2101, and 2107.  During its citation appeal hearing on April 30, 2019, 7G admitted that it failed to report intrastate revenues and remit PPP surcharges, but requested the Commission to consider 7G’s dismissal of its prior corporate controller who was responsible for reporting intrastate revenues and remitting PPP surcharges and 7G’s good faith efforts to come into compliance with intrastate revenue reporting and PPP surcharge requirements, and allow 7G to reduce the $1000 fine and/or allow 7G to enter a payment plan.  In this adopted resolution, the Commission considers the “totality of the circumstances” to reduce the fine amount to $500, with the condition that 7G does not violate any Commission rule, regulation or statute for three years.  Any such violation would restore the suspended penalty amount of $500.

The latest version of the draft resolution underlying this item is available here: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M310/K075/310075984.PDF

 

SIGNIFICANT HELD AND WITHDRAWN ITEMS

Q LINK Wireless LLC Granted ETC Designation to Provide Only Federal Lifeline Wireless Service in Territories of T-Mobile and Sprint. [Item 5, Held to 8/15/19 by Staff]

The Commission held a draft resolution that would deny the request of Q LINK Wireless, LLC (“Q LINK”), a wireless reseller carrier, to be designated as an Eligible Telecommunications Carrier (“ETC”) to provide only federal Lifeline wireless service in the wireless coverage areas of T-Mobile and Sprint.  Q LINK is a Delaware limited liability company that does not currently provide any telecommunications services in California, but has a Wireless Identification Registration as a California provider of commercial mobile radio services using the network services of Sprint PCS and T-Mobile.  Q LINK previously applied for ETC designation with the Commission in 2012, but was denied due to a variety of reasons relating to failure to provide full disclosure of key information and inadequacy of technical capability and Lifeline offerings.  Through this draft resolution, the Commission would once again deny Q LINK’s request for ETC status on similar grounds, including:  (1) demonstration of a pattern of providing misleading, incomplete and false information; (2) misrepresentation of information on its CPUC WIR application; and (3) deficiencies in its federal Lifeline enrollment procedures.  This draft resolution further finds that Q LINK’s managing members have shown repeated patterns of providing misleading information and providing inconsistent answers to multiple state Commissions.

The latest version of the draft resolution underlying this item is available here: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M296/K917/296917125.PDF

 

Legislative Items: Assembly Bills and Senate Bills. [Items 27-31 Held until 8/15 by Staff]

Without discussion, the Commission continued its holds on all pending legislative items.

 

COMMISSIONER REPORTS AND PUBLIC COMMENTS

  • Commissioner Guzman Aceves announced three upcoming tribal consultations to discuss the proposed Tribal land transfer policy and the telecommunications needs of some of the tribal communities
    • The first consultation will be in Central California on September 16th, hosted by the Tuolumne Miwok.
    • The second consultation will be in Northern California on September 30th,  hosted by the Blue Lake Rancheria.
    • The third consultation is still being planned for October 2019.

 

 

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