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On December 19, 2013, the Commission held its last regularly-scheduled agenda meeting for the 2013 calendar year.  There were several important telecommunications items that were addressed in this meeting.  On the regular agenda, in a 4-1 vote, the Commission approved CASF funding for Ponderosa Telephone’s Beasore/Central Camp Project.  The Commission also unanimously voted to approve the Decision modifying the Deaf and Disabled Telecommunications Program (“DDTP”) to include Speech Generating Devices.  On the consent agenda, the Commission approved the 2014 resolution establishing CHCF-A draws for the Small LECs.  In addition, the Commission held several other important telecommunications items, including the Proposed Decision modifying and expanding the LifeLine program to wireless and VoIP technologies and the Draft Resolution that would approve CASF funding for Ponderosa’s Cressman project.  These and other items of interest are discussed in further detail below.   

REGULAR AGENDA

Proposed Decision Modernize and Expand the California LifeLine Program (Item 40, held by Sandoval until 1/16/14) – This Proposed Decision would modify the California LifeLine program to accommodate wireless and VoIP providers.  In addition, the Proposed Decision would extend the existing LifeLine rate freeze at $6.84 for flat-rate local service and at $3.66 for measured-rate local service for another two years through December 31, 2015.  The Proposed Decision would also increase the Set Support Amount to $12.65 from $11.85 on January 1, 2014.

The Proposed Decision would adopt the following specific rules and elements for wireless carriers who choose to participate in the LifeLine program: (1) a two-tiered system for reimbursements, a $5.75 reimbursement per participant for plans that offer 500-999 voice minutes, and a $12.65 reimbursement for plans that offer 1,000 or more voice minutes; (2) for plans that offer 1,000 or more voice minutes, a requirement to provide free, unlimited access to special services N11 numbers that do not count against a participant’s allotted minutes (211, 311, 511, 611, 711, 811, 911); (3) a mandate to provide equivalent rates for purchasing additional voice minutes and equivalent handsets; (4) a requirement to provide voice-grade connection and allow participants to cancel their service within 14 days of service activation without incurring early termination fees; (5) a requirement to permit withdrawal from the LifeLine program upon 30-day notice; and (6) an exemption from the pre-qualification process by pre-paid wireless providers.

VoIP LifeLine program would be similar to the existing LifeLine program with a few specific clarifications, as follows: (1) providers will be required to provide unlimited incoming calls, local calls, N11 calls, and 800 or 800-like toll-free services for no extra charges; (2) providers would be subject to a $6.84 a month rate cap for flat-rate wireline service, which would be consistent with wireline services; and (3) providers would be reimbursed based on the SSA, which is also consistent with wireline services.

The Proposed Decision would also create a “California-only” LifeLine program that would not require LifeLine participants to provide the last four digits of their Social Security Number.  This proposal would be inconsistent with the recent Federal Communications Commission’s (“FCC”) Lifeline Reform Order requiring all federal Lifeline participants to provide the last four digits of their social security number.  The FCC’s stated purpose for collecting this information was to control waste and fraud on the Lifeline program by removing duplicative participants.  The Proposed Decision concludes that the FCC’s goals can be met through other means.  The Proposed Decision does not address the impact of the resulting loss of federal funding by extending LifeLine services to participants that do not meet federal certification and qualification requirements. 

Commissioner Sandoval introduced the item by summarizing the key revisions and changes to the Proposed Decision.  She explained that the Proposed Decision continues to advance the California LifeLine program in a manner that is consistent with the Moore Act.  She noted that the Proposed Decision is ultimately intended to provide high quality service through a range of service offerings, and urged the Commission to move forward with the revisions.
 
Commissioner Sandoval explained that the modifications to Proposed Decision clarify a service provider’s obligation to offer LifeLine service and reinforces the requirement that LifeLine providers obtain a CPCN or a wireless registration before offering these services.  She reiterated that wireless providers seeking to offer LifeLine services would be required to comply with Commission orders and Decisions.  She also clarified that VoIP providers offering VoIP services subject to a tariff would be required to offer VoIP LifeLine. 
 
Commissioner Ferron expressed his support for the revisions and noted that the Proposed Decision appropriately requires companies that wish to participate in the program to abide by Commission rules and regulations.  Commissioner Florio noted that he was very troubled by the thought of service providers obtaining all the benefits of being a telephone corporation without the obligations.  Commissioner Peterman noted that the Proposed Decision properly balanced the LifeLine program to retain its user friendly elements while avoiding fraud and abuse.  She appreciated the legal analysis reconciling SB 1161 with the Moore Act, which provided her with the necessary assurances that the Commission has jurisdiction to administer the program.  She noted her concern regarding the numerous issues in the Proposed Decision that are deferred to a later date and asked for clarification regarding the prioritization of these issues.
 
During the public session of the agenda meeting, several speakers spoke out in support of the Proposed Decision.   
A copy of the Proposed Decision underlying this item is available at the following link:  

Ponderosa Granted $1,755,042 In CASF Funding for the Beasore/Central Camp Project (Item 43, approved 4-1) – This Resolution grants $1,755,042 in CASF funding to The Ponderosa Telephone Co. for the Beasore/Central Camp Last Mile Unserved and Underserved Broadband Project (“Beasore/Central Camp Project”).  This project  will extend high-speed internet service to 3.49 square miles covering the Beasore and Central Camp communities of Madera County.  The project will also provide safety-enhancing landline telephone service in an area where there is currently none. 

This project will install fiber-to-the-home connections capable of 50 Mbps downstream throughput and 20 Mbps upstream, and will provide internet, telephone, and potentially video services to an area completely unserved by landlines. 

The Resolution explains that funding the project is reasonable given increased customer demand and as the United States Forest Service officials contacted by the Communications Division’s (“CD”) staff also confirmed that the Central Camp area is permanently populated by at least some year-round residents.  The Resolution further explains that expanding voice and broadband services in the area is critical to ensuring access to emergency 911 services for residents and senior citizens living in Central Camp, particularly because wireline voice service is not currently available.
This item was originally presented by the CD’s Director during the last Commission meeting with a recommendation from CD to adopt the Resolution granting the project.  Director Dulin and President Peevey both noted that the Beasore/Central Camp Project is exactly the type of project that the CASF program is intended to fund.  They explained that the purpose of the CASF program is to encourage the deployment of broadband infrastructure projects in unserved areas, and both recognized that the Beasore/Central Camp Project was consistent with the program’s goal.  Director Dulin and staff also noted the substantial public safety benefits that the Beasore/Central Camp Project  would provide in a remote, rural, and high fire risk area. 

Director Dulin introduced images of the proposed project area.  The images showed sizable infrastructures in the project area.  In addition, he also provided letters written by the United States Forest Service, a resident of the area, the District 2 Supervisor Tom Wheeler, the San Joaquin Valley Regional Broadband Consortium, and the Madera County Economic Development Commission confirming that residents live in the project area and/or supporting the project.
 
Commissioner Ferron explained that he reviewed the costs of the program and did not find the costs to be egregious.  Commissioner Sandoval noted the substantial public safety benefits of the project and that Ponderosa’s commitment to provide backhaul access would help attract services to the area.   
 
The Draft Resolution underlying this item is available at the following link:  
 
DDTP Program Expanded to Allow Speech Generating Devices (Item 41, approved 5-0) – This Decision expands the Deaf and Disabled Telecommunications Program (“DDTP”) by adding:  (1) Speech Language Pathologists (“SLPs”) to the list of agents that can certify individuals as being eligible to receive equipment from the DDTP; and (2) Speech Generating Devices (“SGDs”) to the list of equipment to be offered by the DDTP.  The directives in the Proposed Decision are consistent with AB 136 (2011), which directed the Commission to initiate this proceeding in order to implement and adopt rules to expand the DDTP program. 

The Decision adopts a set of rules governing the distribution of SGDs.  In addition, in order to expand options or provide a substitute for SGDs, the Decision also initiate a trial program and adopt additional rules for distributing supplemental telecommunications equipment.  The trial program is intended to provide alternative equipment for speech-disabled persons who cannot or would rather not receive the services of a SLP and would rather select a telecommunications assistive device for themselves.  The Decision also directs staff to initiate a second phase of the proceeding in order to explore the development of an exemption or an expedited application process for SGD users.
 
A copy of the Proposed Decision underlying this item is available at following link:  

CONSENT AGENDA

CHCF-A Funding Resolution (Item 15, approved on consent) – This Resolution adopts a total of $34.259 million in California High Cost Fund-A (“CHCF-A) support for Calendar Year 2014. 
 
The Small LECs filed annual CHCF-A advice letters in accordance with D.91-09-042 in September and October 2013.  As it did last year, the Office of Ratepayer Advocates (“ORA”) submitted late-filed protests to eight of the Advice Letters (“AL”) without any reason or explanation for the delay.  Calaveras, Cal-Ore, Ducor, Kerman, Pinnacles, Ponderosa, Sierra, and Siskiyou’s ALs were protested on the basis that the carriers did not provide sufficient details or explanations on how the companies calculated support adjustments and the ALs lacked citations to authorizing decisions or resolutions.  For Ducor and Calaveras, ORA also protested the inclusion of “rate case expenses,” which are figures that relate to amounts at issue in pending and unresolved applications for rehearing, not the costs of  rate cases.  The Resolution concludes that the protests were unpersuasive and reminds ORA to be timely with their protests in the future.    
 
The Communications Division’s (“CD’s”) recommended amounts were determined by: (1) applying the means test, where applicable (Ducor, Pinnacles, Sierra, and Volcano); (2) applying waterfall provisions in funding levels, where applicable (Sierra and Volcano); (3) interstate adjustments for changes in federal Universal Service Fund funding; (4) adjusting for the Connect America Fund and intercarrier compensation; (5) evaluating revenue effect associated with the high cost loop support for capital expenditures and operating expenses resulting from the Connect America Fund; (6) evaluating the revenue effect associated with the California LifeLine Decision D.10-11-003; and (7) considering the revenue effect associated with potential modification to carrier support pending in ongoing Applications for Rehearing. 
 
A copy of the Draft Resolution underlying this item is available at the following link:  

Staff Authorized to File Comments With FCC Regarding Wireless Network Resiliency (Item 45, approved on consent) – This item authorizes the staff to submit brief comments to the Federal Communications Commission (“FCC”) to require mobile telephone or commercial mobile radio services (“CMRS”) providers to submit to the FCC for public disclosure, on a daily basis during and immediately after major disasters, the percentage of cell sites within their networks that are providing CMRS.

The comments are in response to a Notice of Proposed Rulemaking issued by the FCC in response to widespread outages that occurred during Superstorm Sandy.  The NPRM proposes new reporting requirements for CMRS or wireless service providers.  The goal of the NPRM is to address unevenly distributed services among mobile service providers resulting from operational choices and practices, including the deployment of back-up power facilities.
The Commission intends to submit comments generally supporting the FCC’s proposed rules.  The comments will explain that requiring carriers to forward information and data relevant to this issue to the FCC would not increase costs substantially for carriers.  The CPUC will explain that carriers already have very granular data about the performance of their cell sites, including hour-by-hour dropped calls, “system busy” calls for each of their cell sites.  The CPUC also argues that the data will inform consumer choices and drive market efficiency.  The CPUC will also propose that carriers without facilities like TracFone and Virgin should also report on their network efficiency by referencing the underlying facilities-based  carriers they use to offer service. 

Schat Granted a Certificate of Public Convenience and Necessity (Item 32, approved on consent) – This Decision grants Schat Communications, LLC (“Schat”) a certificate of public convenience to provide resold and full facilities-based telecommunications services in the service territories of Pacific Bell Telephone Company d/b/a AT&T California, Verizon California, Citizens Telecommunications Company of California, Inc., Frontier Communications of the Southwest, Inc., and SureWest Communications, and interexchange service throughout the State of California.  Schat proposed to provide local exchange services to business and residential customers via a WiFi System tied to a combined middle mile/wireless connection.  Schat has also filed a California Advanced Services Fund (“CASF”) application to build additional middle mile broadband and backhaul services. 

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

628 Area Code Overlay in the 415 Area Code Area (Item 42, approved on consent) – This Decision approves the North American Numbering Plan Administrator’s (“NANPA”) request for an area code overlay utilizing the 628 area code for the 415 numbering plan area (“NPA) with a 13-month implementation schedule beginning February 2014.  The overlay will provide additional numbering resources to meet the demand for telephone numbers.  After the implementation period, the 628 overlay area code will be available for new telephone number assignments in the same geographic location as the current 415 area code. 

The Decision concludes that a new area code overlay is necessary because the 415 area code is expected to be exhausted in the third quarter of 2015.  The Decision also finds that an overlay is appropriate because an area code split would not comply with the NPA Relief Planning Guidelines.  In a split, one side of the split retains the existing area code, while the other side acquires the new area code.  Here, a split would not be possible because approximately 65% of the 415 numbers are assigned to one rate center and the projected life an area code associated with this rate center would be 23 years.  The remaining geographic area would not need a new area code for an estimated 67 years.  The 44-year difference of the two projected area code lives does not comply with the NPA’s guidelines.

The Decision also adopts a Public Education Program (“PEP”) for the implementation of the 415 overlay.  The PEP will be required to achieve at least 70% customer awareness and understanding of the change in dialing patterns across all major customer groups.  The PEP shall also develop and provide educational, outreach, and advertising material to reach the 70% customer awareness goals.  Funding for the PEP will be collected from service providers holding thousand-blocks of telephone numbers in the 415 area code as of the effective date of the Decision.

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

TURN Granted $490,927.31 in Intervenor Compensation (Item 33, approved on consent) – This Decision grants The Utility Reform Network (“TURN”) intervenor compensation in the amount of $490,927.31 for their contribution to D.12-12-038 (Basic Service), D.09-07-020 (CASF), D.08-09-042 (Price Cap), D. 07-12-054 (CASF), and Resolution T-17143.  The Decision finds that TURN provided recommendations on these Decisions and Resolutions warranting intervenor compensation.  The Decision orders an award to be paid from the CPUC’s Intervenor Compensation Fund within 30 days of the effective date of the Decision. 

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

Statutory Deadline Extended To Resolve XL Fire Protection’s Complaint Against WTI Communications (Item 29, approved on consent) – This Decision extends the statutory deadline to resolve a complaint filed by XL Fire Protection against WTI Communications (“WTI”) for services not received and for overbilling.  The Public Utilities Code provides that adjudicatory cases must be resolved within a 12-month period.  This complaint was filed on December 27, 2012, thereby establishing a December 27, 2013 deadline for resolution.  The Decision finds that an extension is reasonable because the assigned Administrative Law Judge (“ALJ”) has prepared a decision resolving the complaint, but that the decision may not be issued in advance of the statutory deadline.  Therefore, the Decision concludes that an extension of the statutory deadline to March 27, 2014 will allow the Commission time to fully evaluate and deliberate the proposed decision.  

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

HELD ITEMS

Ponderosa’s Application for $1,027,380 in CASF Funding for its Cressman Project (Item 9, held by staff until 1/16/14) – This Draft Resolution would grant $1,027,380 in CASF funding to Ponderosa Telephone Company (“Ponderosa”) for its Cressman Underserved Broadband Project (“Cressman Project”).  This amount represents 60% of the total project costs, and will supplement Ponderosa’s funding of $684,920.  The project would bring fixed broadband services to the underserved Cressman area of Fresno County. 

The Cressman Project would upgrade an existing system and install new systems and infrastructure to provide high speed Internet service.  Ponderosa would expand their existing network by extending fiber optic backhaul facilities and connecting to multiple Broadband Loop Carrier systems (“BLC”).  The fiber would extend from an upgraded BLC site at Sierra Cedars to two new BLC sites at Lower Cressman and Rush Creek.  The installations would also utilize Ponderosa’s existing copper distribution plants in a fiber-to-the-node configuration and deploy VDSL2 and ADSL2+ technologies to connect end users. 

The Draft Resolution finds that the project would have positive safety impacts by providing telephone and broadband access for emergency services in a remote area threatened by fire and harsh weather conditions.  In addition the Draft Resolution would conclude that connecting the Cressman community’s access to anchor institutions surrounding the Cressman Project area would also be beneficial.

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

Applications for ETC Designation by Q-Link, TAG, Budget, and enTouch  (Item 20, held by staff until 1/16/13) – This Draft Resolution would conditionally designate Q-Link WIRELESS, LLC, (“Q-Link”), TAG Mobile, LLC (“TAG”); Budget PrePay, Inc. (“Budget”); and Boomerang Wireless, LLC dba enTouch Wireless (“enTouch”), collectively (“Applicants”),  as Eligible Telecommunications Carriers (“ETC”) to provide federal Lifeline service in the Uniform Regulatory Framework carrier service territories.  The Draft Resolution would also determine that granting the Applicant’s request for ETC designation is in the public interest and that the Applicants meets all applicable environmental, technical, and financial requirements in Resolution T-17002 and the ETC rules recently adopted in the Lifeline Reform Order (FCC 12-11). 
Additionally, the Draft Resolution would find that the Applicants’ Lifeline service will allow consumers to receive both federal and state subsidized wireline service and will not have an adverse effect on the state LifeLine fund.  The Applicants would 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.  

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