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The Commission held its regularly-scheduled agenda meeting on August 31, 2012.  No telecommunications items were discussed on the regular agenda, but the Commission addressed several significant telecommunications matters on the consent agenda, including the approval of the CHCF-A and CHCF-B fiscal year 2013-14 budget recommendations.  The Commission also granted the Karuk Tribe CLEC application, which was revised to exclude Siskiyou territory.  Several significant telecommunications items were held, including the draft resolution proposing to fundamentally alter the standard for confidential treatment of documents held by the Commission (Draft Resolution L-436).  The proposed decision in the basic service redefinition proceeding was also held.  These and other items of interest on the Commission’s agenda are discussed below.

REGULAR AND CONSENT AGENDA ITEMS

  • CHCF-A Expense Budget Adopted for Fiscal Year 2013-14 (Item 19, adopted on consent agenda) –  This Resolution adopts an expense budget recommendation of $43.803 million for fiscal year 2013-14 for the California High Cost Fund-A (“CHCF-A”) program.  The budget will be reviewed by the Department of Finance and ultimately incorporated into the overall state budget.  The CHCF-A budget for 2013-2014 represents a $5.97 million decrease from the prior fiscal year.  This decrease was primarily due to the elimination of the Rural Telecommunications Infrastructure (AB 140) grant component of the CHCF-A.  That program expires at the end of the year.  Carrier payments for 2013-2014 are estimated at $42.704 million, a decrease of $1.246 million from the prior fiscal year.  Kerman’s forecasted funding increased based on the anticipated results of a recent general rate case, while funding for Sierra and Volcano decreased due to the waterfall reduction requirement.  Committee costs budget remained unchanged at $3,700.  Other costs increased by $276,000 from the prior fiscal year due to an audit budget increase of $200,000, a $89,000 increase in personnel costs, and a $13,000 decrease in pro-rata charges from other state agencies.  A copy of the Draft Resolution underlying this item is available here.
  • CHCF-B Expense Budget Adopted for Fiscal Year 2013-14 (Item 22, adopted on consent agenda)  –  This Resolution adopts an expense budget recommendation of $29.342 million for fiscal year 2013-14 for the California High Cost Fund-B (“CHCF-B”) program.  The adopted budget represents a $6.991 million decrease from the prior fiscal year.  The decrease is driven in part by the phase-out of SureWest’s EAS replacement funds that had been drawn on annual basis from the CHCF-B. A copy of the Draft Resolution underlying this item is available here.
  • Karuk Tribe Granted a Certificate of Public Necessity and Convenience (Item 4, adopted on consent agenda) – This Decision grants the Karuk Tribe a Certificate of Public Convenience and Necessity (“CPCN”) to provide limited facilities-based and resold local exchange service as a competitive local carrier in California in the service territories of Pacific Bell Telephone d/b/a AT&T California (“AT&T”), Verizon California, Inc. (“Verizon”), Citizens Telecommunications Company of California, Inc. (“Citizens”) and SureWest Communications (“SureWest”).  The Proposed Decision has been revised to exclude Siskiyou’s territory from the Karuk Tribe’s CPCN application. 

    The Karuk Tribe’s original CLEC application sought authority to provide local exchange service in Siskiyou Telephone’s service territory, despite the legal restrictions on competition in Small LEC territories and the “rural exemption” on Section 251(c) interconnection.  The item came to light when a Proposed Decision was issued in July 2012.  The revised Decision explains that “Section 251(f) of the Federal Communications Act of 1934 exempts rural telephone companies such as Siskiyou from the requirement to interconnect with competitive local exchange carriers (CLECs) unless a CLEC makes a ‘bona fide request for interconnection, services, or network elements,’ and ‘the State commission determines … that such request is not unduly burdensome…’”  Furthermore, the Decision also points to (D.) 95-07-054, which found that “rules for competitive entry would only apply to services territories of Pacific and Verizon (formerly GTEC), and that rules for entry into the territories of small and mid-sized LECs would be considered in a later phase of the Local Competition Rulemaking.” A copy of the Proposed Decision underlying this item is available here

  • CASF Revolving Loan Program Application Fees Set  (Item 23, adopted on consent agenda) –  This Resolution sets the application and borrower fees associated with the California Advance Services Fund (“CASF”) Broadband Infrastructure Revolving Loan program.  The CASF program promotes the deployment of broadband infrastructure in unserved and underserved areas by providing grants to fund the capital costs of eligible broadband infrastructure projects.  The Broadband Infrastructure Revolving Loan program (“Loan Program”) finances the capital costs of broadband facilities not otherwise funded by CASF.   This Resolution sets fees to cover processing costs associated with a loan application, including a loan application fee ($250), a loan documentation fee ($250), a loan documentation amendment ($150) and other fees as applicable.  A copy of the Draft Resolution underlying this item is available here.
  • Section 851 Pilot Program Made Permanent (Item 3, adopted on consent agenda) – This Resolution makes the Section 851 pilot program permanent.  The pilot program was originally created in 2005 as a streamlined alternative mechanism for utilities to obtain Commission pre-approval for non-controversial lower-value transactions not subject to review under the California Environmental Quality Act that would otherwise be subject to the full application process to comply with the requirements of Public Utilities Code Section 851 for the disposition of assets necessary or useful in the provision of public utility service to the public.  In 2005, the Legislature adopted AB 736, thereby providing for approval of transactions of $5 million or less through the advice letter process.  The pilot program has been continued and refined over the following years to reflect the requirements of AB 736 and modifications to the advice letter process adopted as part of General Order 96-B.  Under the current process, the Executive Director can now issue orders approving such advice letters.  By this Resolution, Commission adopts a new General Order to implement the Section 851 advice letter program.  The Resolution also orders workshops to be held to consider the need to clarify the scope of General Order 69-C, which authorizes utilities to enter into transactions involving the transfer of minor, revocable interests in utility property, such as easements, licenses, or permits, without prior Commission approval.  Finally, the Resolution authorizes an exemption for PacifiCorp, a multi-jurisdictional utility, from the need to obtain Commission approval for certain transactions involving assets located outside of California. A copy of the Draft Resolution underlying this item is available here.
  • Section 851 Pilot Program Extended (Item 16, adopted on consent agenda) – This Draft Resolution extends the Section 851 pilot program until a further Order is issued by the Commission.  Without the extension, the pilot program would have expired on August 23, 2012.  The extension was intended to provide additional time for Commission deliberations regarding whether the pilot program should be made permanent and potential modifications to the pilot program.  However, as indicated above in Item 3, the Commission adopted the draft resolution making the Section 851 pilot program permanent, so this extension of the program is essentially moot. A copy of the Draft Resolution underlying this item is available here.
  • Disclosure of Records Authorized in Connection with Investigation of Electrical and Railroad Incidents (Items 10, 14, 34, adopted on consent agenda) – These Draft Resolutions authorize the disclosure of the Commission’s records concerning its investigation into three separate incidents.  Resolution L-439 authorizes the disclosure of investigation records of an electric incident on October 4, 2008 in Thousand Oaks, California.  Resolution L-440 authorizes the disclosure of investigation records of incidents at a railroad grade crossing at Road 60 in Tulare County.  Resolution L-442 authorizes the disclosure of records concerning a San Francisco Municipal Transit Authority incident that occurred on February 8, 2009 at the intersection of 2nd and King Streets in San Francisco, California.  Each of the records in question have been requested pursuant to the California Public Records Act (“CPRA”). Copies of the Draft Resolutions underlying these items are available here, here, and here
  • Telespan Communications Granted Certificate of Public Convenience and Necessity (Item 35, adopted on consent agenda) –  This Decision grants TeleSpan Communications, LLC a Certificate of Public Convenience and Necessity (“CPCN”) to provide full facilities-based and resold competitive local exchange service in URF company territories and access and interexchange service throughout the state.  This Decision also implements a 21-day expedited environmental review as a prerequisite to full-facilities-based construction activities.  A copy of the Proposed Decision underlying this item is available here
  • Verizon CASF Project in Crowley Lake Area Granted CASF Funding (Item 6, adopted on consent agenda) – The Draft Resolution grants $268,398.45 from the California Advanced Services Fund (“CASF”) to Verizon California, Inc. for its Crowley Lake Project. This award represents 34.82% of the total project cost.  The project will extend high-speed Internet service to the Crowley Lake and Swall Meadows communities in Mono County.  A copy of the Draft Resolution underlying this item is available here
  • Commission’s Investigation into the Proposed Merger of AT&T Wireless and T-Mobile USA Dismissed (Item 2, adopted on consent agenda) – This Proposed Decision dismisses as moot the Commission’s investigation into the proposed merger of AT&T Wireless and T-Mobile USA due to the abandonment of the planned merger.  Based on input from some of the interested parties, the Proposed Decision declines to adopt a requirement to preserve the record for future use.  Despite AT&T and T-Mobile’s objections, the Proposed Decision provides that parties otherwise eligible for intervenor compensation may request compensation. A copy of the Proposed Decision underlying this item is available here. 
  • Order Extending Privacy Protections for Customer Usage Data in Smart Grid Systems (Item 47, adopted 5-0) – This Decision extends the privacy protections concerning customer usage data adopted in D.11-07-056 to customers of gas corporations, community choice aggregators, and to residential and small business customers of electric service providers.  D.11-07-056 adopted  privacy rules to protect the usage data of customers of electric corporations generated by Advance Metering Infrastructure (“AMI”) for Pacific Gas and Electric Company, Southern California Gas Company, and San Diego Gas & Electric Company.  This Decision finds that the extension is consistent with Section 8380 of the Pub. Util. Code which “adopted privacy protections for customer data produced by AMI and held by both electrical and gas corporations.”  Furthermore, the “information on usage generated by AMI is more granular than that produced by traditional metering systems.” 

    President Peevey introduced this item.  He noted that the availability of granular energy consumption and metering data offers new tools for customers by informing customers about their energy use, which in turn encourages monetary savings.  He feels strongly that this decision will adequately protect privacy in response to increased information that is now being made available.   

    Commissioner Florio expressed his support for the proposed decision and noted that the decision extends the principles adopted last year in D.11-07-056.  Commissioner Simon drew on his financial and banking background to present a cautious view of overprotection of customer data, which typically protects the incumbent.  He also warned that economic advantages and opportunities may be lost when access to data and information is limited.  He concluded with his  tr support of the Decision, and reiterated his belief that the Commission must balance privacy protections against the use of data in a way that would benefit society by creating more choice and competition.  Commissioner Sandoval expressed her support of the decision, which she believes creates the appropriate balance between the benefits of data and the need for privacy protection.  Commissioner Ferron also noted that increased access to data can be beneficial.  He believes that there will be many uses for the data, for instance, the increased awareness of individual energy use through technology would provide a better deployment for energy efficiency. 

    A copy of the Proposed Decision underlying this item is available here.

SIGNIFICANT HELD ITEMS

  • Draft Resolution L-436 Modifying Confidentiality Standards Applicable to Documents (Item 53, held by Sandoval until 9/13/12) – This Draft Resolution would adopt new regulations governing public access to Commission records and utility records held by the Commission.  The Resolution would repeal the long-standing  procedures for obtaining information and records from the Commission, embodied in G.O. 66-C.  These rules would be replaced with a new G.O. 66-D.  G.O. 66-D would eliminate the current protections for documents which, if revealed, would create an “unfair business disadvantage.”  It would also shift the burden of proving confidential designation of utility information and data to the utility at the point of submission.  The Resolution directs the Staff to develop a publicly accessible index of information on the confidentiality presumptions applicable to broad classes of records and, where applicable, establish the legal basis for withholding records from the public. 

    The Draft Resolution would also increase public access to safety-related documents and records by ordering the creation of a safety information portal on the CPUC’s internet site.  Under the Draft Resolution, the Staff would be directed to maintain a publicly accessible index or database of safety related records and information in the custody of the CPUC.  The index or database would provide links to such safety-related records. 

    The Draft Resolution was first released in March 2012.  In June 2012, the Commission held an informal workshop to address concerns raised by party comments.  The workshop was attended by representatives from the communications, water, and energy industries.  A Revised Draft Resolution was issued in July 2012 with minor revisions, including the adoption of a process for the Commission to approve staff determinations regarding confidentiality through Public Records Office Resolutions that will be addressed at Commission agenda meetings going forward.   

    Additional workshops were scheduled through the month of August to develop industry specific matrixes that would classify specific types of data and information as confidential.  These workshops were rescheduled for a later date.  On August 20th, another Draft Resolution was issued with the revised title “Interim Resolution.”  The Draft Resolution would hold a new G.O. 66-D in “abeyance pending further refinement, after workshops, of new procedures regarding access to CPUC records and regarding the processing of requests for confidential treatment of information submitted to the CPUC.”  In essence, the Draft Resolution would adopt a new G.O. 66-D in advance of workshops intended to refine the same issue.    

    A copy of Draft Resolution underlying this item is available here

  • Proposed Decision and Alternative Proposed Decision to Revise the Definition of Basic Telephone Service (Items 50 and 50a, held by Sandoval until 9/13/12) – This Proposed Decision would adopt revisions to the definition of basic telephone service that would be applied to carriers seeking to receive support from the California High Cost Fund-B and/or the California LifeLine programs.  The current basic telephone service definition was adopted in 1996.  The Commission’s stated goals in reviewing the basic service definition are to (a) consolidate and streamline existing listings of service elements, (b) apply technology-neutral terminology and definitions, and (c) avoid degrading standards necessary to meet essential universal service needs.

    An Alternate Proposed Decision of Commissioner Florio was made available on July 18, 2012.  The Alternative Proposed Decision differs from the Proposed Decision in a number of substantive ways.  A few notable differences include requirements for: (1) providers to maintain tariffs for their basic service offerings; (2) basic service to be offered at monthly rates with no contracts; (3) basic service to be offered as a stand-alone option; (4) basic service providers to provide unlimited incoming calls with no per-minute or per-call charges; (5) all basic service providers to offer a flat rate for unlimited outgoing calls within a specified calling area; and (6) all COLRs, unless exempted, to offer measured rate basic service options.  

    A copy of the Proposed Decision underlying this item is available here.  A copy of the Alternate Proposed Decision is available here.

  • Proposed California LifeLine Program Expense Budget for Fiscal Year 2013-14 – (Item 26, held by Staff until 9/27/12) – This Draft Resolution would adopt a budget of $347.553 million for the Universal Lifeline Telephone Service (“ULTS” or “California LifeLine”) for fiscal year 2013-14.  The California LifeLine program provides discounted basic telephone services available to qualifying households with incomes below 150% of the federal poverty guidelines.  The proposed budget is based on a $12 million projected decrease in carrier claims from $330 million to $318 million, an increase in CPUC staff costs from $1.280 million to $1.393 million, an increase in the California LifeLine administrator contract of $0.355 million, and other costs including auditing, pro-rata interagency, marketing and outreach, banking fees, data processing automation and administrative committee costs.   A copy of the Draft Resolution underlying this item is available here.
  • Proposed CASF Expense Budget for Fiscal Year 2012-13 (Item 18, held by Staff until 9/13/12) – This Draft Resolution would adopt an expense budget of $58,299,386 for fiscal year 2013-14 for the California Advanced Services Fund (“CASF”).  The CASF program promotes the deployments of broadband services in unserved and underserved areas by funding 40% of the project cost through a one-time infrastructure grants.  The proposed expense budget is expected to be allocated to Broadband Infrastructure grants ($51,426,091), Consortia grants ($2,849,413), Broadband Infrastructure loans ($2,800,439), and costs for administering and managing the CASF ($1,223,443).  A copy of the Draft Resolution underlying this item is available here
  • Proposed Deaf and Disabled Telecommunications Program Expense Budget for Fiscal Year 2013-14 (Item 20, held by Staff until 9/27/12) – This Draft Resolution would adopt an expense budget of $76.11 million for fiscal year 2013-14 for the Deaf and Disabled Telecommunications Equipment and Relay Service Program (“DDTP”).  The DDTP provides specialized equipment to the deaf and hard of hearing throughout the State of California.  The proposed budget would be allocated to CPUC staff costs ($99,000), delivery of DDTP services ($29,980,000), DDTP administration expenses ($81,000), California relay services ($18,000,000), equipment purchases ($25,800,000), and other costs ($54,000).  A copy of the Draft Resolution underlying this item is available here.
  • Proposed California Teleconnect Fund Expense Budget for Fiscal Year 2013-14 – (Item 24, held by Staff until 9/27/12) – This Draft Resolution would adopt a supplemental budget for the California Teleconnect Fund (“CTF”) of $1,179,000 for fiscal year 2011-12; a supplemental budget of $4,078,000 for fiscal year 2012-2013; an expense budget of $117,233,000 for fiscal year 2013-14; a $24,999,000 increase to the annual appropriations cap, from $94,243,000 to $117,233,000; and a cap of $11,167,000 on the total discounts available for community colleges for fiscal year 2013-14.  CTF provides discounted rates for a telecommunication services for qualifying schools, libraries, government-owned health care providers, and community based organizations.  A copy of the Draft Resolution underlying this item is available here.
  • Cost-of-Living Adjustment for Work Performed by Intervenors in 2012 – (Item 5, held by Staff until 9/13/12) – This item would deny an hourly rate cost-of-living adjustment for intervenors for calendar year 2012.  Despite an increase in the Consumer Price Index for Urban Wage Earners and Clerical Workers of 3.6%, the Decision would deny a cost-of-living adjustment because the current economic outlook and state budget forecasts indicate that “California is not on stable ground for a ‘healthy’ recovery just yet.”  The Decision also determines that the 5% step increases authorized in D.07-01-009 are reasonable and shall continue in 2012  A copy of the Proposed Decision underlying this item is available here.
  • Decision Approving Partial Settlement in Malibu Canyon Fire Investigation (Item 52, held by Simon until 9/13/12) – This Proposed Decision would resolve the Commission’s 3-year investigation into the 2007 Malibu Canyon Fire.  The Proposed Decision would approve a settlement agreement between the Commission’s Consumer Protection and Safety Division, and AT&T Mobility LLC, Sprint Telephony PCS, L.P., and Verizon Wireless (“Settling Parties”), subject to certain conditions.  Under this proposal, the Settling Parties would pay $12 million divided evenly among them.  Of that $12 million, $6.9 million would be paid into the Commission’s General Fund, and $5.1 million into a new “Enhanced Infrastructure and Inspection Fund (“EIIF”)” established pursuant to this Proposed Decision.  The EIIF money would be used to strengthen utility poles in Malibu Canyon, and to conduct a statistically valid survey of joint-use poles in Southern California Edison Company’s (“SCE”) service territory to determine compliance with G.O. 95 safety factor requirements.  The settlement agreement would not resolve issues regarding SCE and NextG Networks of California, Inc. (“NextG”)’s alleged involvement with the Malibu Canyon Fire.  Although the Settling Parties did not admit liability, the Proposed Decision would find the settlement agreement to be “reasonable in light of the whole record, as it provides a comprehensive remedy for the safety-related issues that were raised in CPSD’s testimony with respect to the Settling Respondents.” A copy of the Proposed Decision underlying this item is available here.

NOTES AND COMMISSIONER REPORTS

  • During the public session, several speakers spoke out in support of President Peevey’s proposed decision on the definition of basic service.  The speakers urged the Commission to support President Peevey’s proposed decision and they highlighted the importance of revising the definition of basic service to include wireless, broadband and alternative technologies like VoIP.  Another speaker offered comments supportive to TURN’s pending proposal to extend the California LifeLine rate freeze. 

    Commissioner Sandoval noted her participation as a speaker at the Conference on Communications Policy held by the Aspen Institute.  She also noted her attendance at the All-Party Meeting on the Basic Service Redefinition on August 22ndCommissioner Simon also noted his participation on the All-Party Meeting on Basic Service Redefinition.  He will also be attending a gala in Pasadena, California on August 24th honoring Gwen Moore for her contributions to the State of California, including the Moore Act which established the California LifeLine program.  President Peevey noted his meeting with Assemblymember Steven Bradford on August 14th to discuss the critical extension of broadband to educational institutions.  

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