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On August 28, 2014, the Commission held its regularly-scheduled agenda meeting.  On the regular agenda, the Commission unanimously adopted a Decision amending the DIVCA renewal process.  On the consent agenda, staff was authorized to file two sets of comments with the FCC.  One set of comments will be informational, and will provide information and data to the FCC regarding the state of California’s mobile broadband service based on data collected and analyzed by the Commission.  The second set of comments will offer support the proposal to provide incentives that would leverage non-Federal funding to support Internet deployment in unserved high cost areas of the nation.  These and other items of interest are discussed in further detail below.

REGULAR AGENDA

Amendments to Franchise Renewal Provisions of DIVCA (Item 37, adopted 5-0) – This Decision amends General Order (“G.O.”) 169 and adopts procedures for implementing the franchise renewal provisions of the Digital Infrastructure and Video Competition Act of 2006 (“DIVCA”).  DIVCA was enacted by the Legislature to create a new state video franchising process on the basis that “increasing competition for video and broadband services is a matter of statewide concern.”

The Decision explains that the procedures and criteria for renewing a state-issued video franchise are set forth in Public Utilities Code Section 5850(a)-(d), which provides that the criteria and process described in Section 5840 shall apply to a renewal registration and that the Commission shall not impose additional or different criteria.  The two exceptions under Section 5850 require the renewal process to be consistent with federal laws and regulations and provide that the Commission shall not renew a franchise if the video service provider is in violation of any final non-appealable court order.  Accordingly, the Decision concludes that the process for renewing state-issued franchises must be identical to the original application process set forth under Section 5840, subject to the two exceptions.
The Decision also concludes that the process outlined in Section 5850 is consistent with the federal informal process, except that it does not provide an opportunity for notice and comment.  Accordingly, the Decision modifies G.O. 169 to include an opportunity for notice and comments for all franchise renewal requests.  The scope of comments will be limited to the narrow grounds under which a franchise renewal could be denied.  The Decision also requires an expedited renewal application may not be submitted more than six months before the existing franchise expires in order to prevent early applications filed in anticipation of violating a final non-appealable court order. 
 
The Decision also provides that a California franchise renewal applicant that wishes to invoke the federal formal application process provided in 47 U.S.C. § 546 will be required to file and serve an application as provided in Article 2 of the Commission’s Rules of Practice and Procedure.  Under the Commission’s Rules, an Administrative Law Judge will be assigned to the proceeding and a specific procedural schedule will be adopted for the issues presented in the renewal application.  The Decision further concludes that this portion of the California video franchise renewal process is also consistent with the federal formal process.  

In order to ensure that the Commission does not renew a video franchise if a video service provider is in violation of any final non-appealable court order issued pursuant to the California video franchise law, the Decision requires applicants to attest that no such violations are occurring or are alleged to be occurring.  In addition, the Decision clarifies that renewal applications are subject to public comments regarding violations of a final non-appealable order.  If a violation has been found, the applicant must submit an order or ruling showing that the violations have been cured.  The Decision further clarifies that ORA is also be permitted to submit comments that allows it to “advocate on behalf of video subscribers regarding renewal of a state-issued franchise,” and to submit information regarding an applicant’s compliance with statutory obligations. 

For applicants that the Commission deems ineligible for franchise renewal based on the limited DIVCA criteria, the Commission’s Executive Director will be required to send a letter to the applicant within 30 days from the submission of the application, which will toll the 44-day application clock.  Following this notice from the Executive Director, the Commission will issue a decision or resolution denying the application, which will provide the applicant with a vehicle to seek an appeal of the decision. 

The Decision rejects all other remaining recommendations from parties on the basis that they seek a broader scope and expansive procedural steps for the franchise renewal process than is permissible under applicable law.
This item was introduced by President Peevey, who explained that the California Legislature clearly intended to make the initial and renewal application process ministerial.  As a result, the Decision is intended to implement the DIVCA legislation and established a streamlined renewal process much like the initial application.  He explained that this approach is consistent with the informal process outlined in Federal law.  He noted that the Federal law requires notice and comment, but to be consistent with the initial application process, the notice and opportunity to comment is limited to whether there is a violation of a non-appealable order on any section of DIVCA.  He then explained that while ORA is tasked with certain duties on behalf of ratepayers, the Decision places no bounds on ORA’s duties and its ability to comment.  However, he stressed that incomplete applications of violations of final non-appealable court orders are the only grounds for rejecting an application.

Commissioner Peterman supported the Decision, and noted that she was sympathetic to concerns by stakeholders and local governments that the Decision did not allow for an opportunity to comment on applications.  She encouraged stakeholders to use existing proper channels to raise concerns with providers and to make the effort to keep the Commission informed regarding these concerns.

Commissioner Florio provided his “somewhat reluctant” support on the Decision, and he expressed significant sympathy regarding concerns that have been raised about the limited scope of the comment opportunity.  He indicated that he did not “like” the legislation because it constrains the Commission’s ability to consider anything related to the applications.  However, he also recognized that the Commission must “live” with it. 

Commissioner Sandoval supported the Decision and explained that the Commission must operate consistently with the goals and letters of the statute.  She also emphasized that the DIVCA renewal process does not foreclose other avenues to bring forward concerns about the conduct of any utility or party under the Commission’s jurisdiction.
During the public session, a board member of the Eastern Sierra Connect Regional Broadband Consortium and Kern River Valley Revitalization urged the Commission to continue to hold on this item.  He explained that the California Legislature has provided a clear desire to bring broadband to all Californians and that this item is inextricably linked to the Legislature’s broadband goals and that it is not simply about television and telephone wireless services.  Specifically, he explained that the last mile connection for broadband connection for many Californians is monopolized by the TV and cable franchise and that an uncontrolled monopoly will stray from the interest of the community.  His concern with the Proposed Decision as written was that it eliminated the opportunity for public or governmental comment from the renewal application process.  He urged that the Proposed Decision be modified to create a procedure that aligns with the Legislature’s goal for broadband goals and to provide the public and governmental agencies with a “front row seat” to provide input into the renewal process. 

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

CONSENT ITEMS

Comments to FCC Regarding the Timely Deployment of Advanced Telecommunications Capability (Item 41, approved on consent) – This item authorizes staff to file informational comments with the FCC regarding the state of mobile broadband service in California based on its studies on mobile broadband service.  The Commission has been studying broadband measurement techniques through CalSPEED and has performed semi-annual field testing of broadband service quality in urban, rural, and tribal areas in California.  The informational comments will provide data to assist the FCC’s evaluation of new speed benchmarks to define “advanced telecommunications capability” by providing an analysis of mobile broadband speed data, including estimates of the percentage of California’s population that has access to California’s 6Mbps/1.5Mbps benchmark for “served” broadband.  The comments will also provide the FCC with a technical analysis of the different characteristics of wireless broadband service in comparison to wireline broadband service.   In addition, the comments will contain information on the specific types of data and analyses that the FCC should employ in measuring broadband.  Finally, the report will include analyses of the quantified differences in service quality in urban, rural, and tribal areas. 

A copy of the Staff’s memorandum is available at the following link:

Comments to FCC Regarding Incentives to Leverage Non-Federal Funding to Support Broadband (Item 42, approved on consent) – This item authorizes staff to file comments on behalf of the Commission with the FCC to address incentives to leverage non-Federal funding to support Internet deployment in unserved high cost areas of the nation under the Connect America Fund (“CAF”) high cost support program.  The comments will express strong support for awarding bidding credits to applicants in states that are net donors to the Universal Service Fund.  In addition, the comments will not oppose the proposal to provide bidding credits to entities in the CAF Phase II bidding process that can demonstrate that they will also receive funding from a non-federal source.  However, the comments will urge the FCC to give priority to bidders for projects in net donor states like California in a manner commensurate with the state’s percentage contribution to the total USF.

A copy of the Staff’s memorandum is available at the following link:  

Air Voice Wireless, LLC Designated as an ETC (Item 19, approved on consent) – This Resolution conditionally grants the request of Air Voice Wireless, LLC (“Air Voice”) request to be designated as an Eligible Telecommunications Carrier (“ETC”) to provide federal LifeLine wireless service to qualifying customers in California in the service areas of the Uniform Regulatory Framework (“URF”) carriers, and specifically excluding the Small Local Exchange Carriers (“Small LECs”) service areas. 

This Resolution determines that granting Air Voice’s request for ETC designation is in the public interest and that Air Voice meets all applicable environmental, technical, and financial requirements in Resolution T-17002 and, as applicable, the ETC rules recently adopted in the Lifeline Reform Order (FCC 12-11).  Air Voice will also be required to file annual ETC reports and information with USAC demonstrating the terms and conditions of any voice telephony service plans offered to Lifeline subscribers.  Air Voice will be governed by the certification and verification processes administered by the California LifeLine third-party administrator.

The Resolution further explains that Air Voice’s ETC designation approval shall be contingent upon the following: (1) Air Voice shall submit to the Communications Division’s Director a copy of the information submitted to USAC and a copy of Air Voice’s certification of approval from USAC with 30 days of receipt from USAC of its compliance regarding the federal Lifeline wireless plan; (2) a review by the CPUC California LifeLine staff of Air Voice’s marketing materials and publications prior to distribution; and (3) the requirement that Air Voice include wireless mobility safety language on all distributed federal Lifeline materials and on the company website. 

A copy of the Final Resolution underlying this item is available at the following link

Statutory Deadline Extended for Vaya Telecom v. North County Dispute (Item 27, approved on consent) – This Decision extends the statutory deadline for resolving a dispute between VAYA Telecom, Inc. (“Vaya Telecom”) against North County Communications Corporation (“North County”).  Vaya Telecom filed a complaint regarding the proper compensation scheme for exchanging telecommunications traffic with North County.  Vaya Telecom contends that it properly paid North County reciprocal compensation for traffic terminated by North County, but North County claims that Vaya must pay higher inter-carrier compensation rates pursuant to an intrastate access tariff. 

These same issues were also being litigated in the Superior Court of California, which on July 15, 2014, issued a ruling finding that North County had engaged in access stimulation as defined by the FCC.  Therefore, this Decision concludes that an extension of the statutory deadline is reasonable to allow the Commission to more fully evaluate what actions the Commission should take as a result of the Superior Court’s finding.  In addition, the Decision explains that an extension is necessary to allow the Commission to more fully determine how to proceed with the complaint and to issue a Presiding Officer’s Decision. 

A copy of the Final Decision underlying this item is available at the following link:  
 

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