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On December 20, 2012 the California Public Utilities Commission held its last regularly-scheduled agenda meeting of the year.  This was Commissioner Simon’s last meeting.  Most significantly, the Commission finally adopted a decision revising the definition of basic service.  The Commission also denied Kerman’s joint motion for an all-party settlement agreement.  The Commission again held Draft Resolution L-436, which would enact new regulations governing public access to Commission records and utility records held by the Commission as well as the Proposed Decision designed to enhance customer awareness of Enhanced 9-1-1 PBX/MLTS safety issues.  These and other items of interest on the Commission’s agenda are discussed below.

REGULAR AND CONSENT AGENDA ITEM

Revisions to Basic Telephone Service Definition Adopted (Items 59, adopted 5-0 as modified) – This Decision adopts revisions to the definition of basic telephone service that would be applied to carriers wishing to offer basic residential telephone service throughout California.  This definition defines eligibility for LifeLine subsidies as well as Carrier of Last Resort status and accompanying eligibility for high-cost funds.  The basic service elements do not impose an obligation to provide basic service upon a carrier where no such obligation currently exists.  
 
The Decision updates the basic service definition to recognize increasing diversity of choices among communications technologies while preserving essential consumer protections.  In summary, the updated basic service elements include: (1) the ability to place and receive voice-grade calls over all distances utilizing Public Switched Telephone Network (“PSTN”); (2) free access to 911/Enhanced 911 service; (3) flat rate options for unlimited incoming and outgoing calls; (4) access to directory assistance and options for listed or unlisted directory listings; (5) access to 800 and 8YY toll-free services; (6) access to customer service information about Lifeline, service activation, termination, and repair, and billing inquiries; (7) one-time free blocking for information services and one-time billing adjustments for charges incurred inadvertently, mistakenly, or without authorization; and (8) access to operator services. 
 
Commissioner Florio declined to move his previously circulated Alternate Proposed Decision.  At the last Commission meeting, the Commissioners unanimously agreed that the Proposed Decision and the Alternate had converged on the major issues and it was suggested that President Peevey and Commissioner Florio take some further time to resolve the remaining issues.  When introducing the item, President Peevey explained that the Decision adopted additional concepts derived from the Alternate and reflected a successful compromise between he and Commissioner Florio.
 
Commissioner Sandoval provided last-minute revisions to the Proposed Decision during the meeting.  The revisions were then incorporated by President Peevey prior to offering the item up for a vote.  Sandoval’s changes to the Proposed Decision included:  (1) expanding the application of the basic service definition to PSTN or a successor network to a PSTN; (2) requiring non-traditional wireline providers of basic service file a Tier 3 Advice Letter that demonstrates its capability to provide minimum 911/E911 services comparable to that offered by the existing COLR; (3) reiterating that the intention of the redefinition is to maintain essential services and avoid degrading existing basic services or standards; and (4) adding language to clarify that the redefinition is not intended to degrade existing levels of service. 
 
A copy of the final Decision underlying this item is available at the following link.
 
Kerman’s All-Party Settlement Agreement to Resolve its GRC Denied (Item 4, approved on consent agenda) –  This Decision denies a joint motion between Kerman Telephone Company (“Kerman”) and the DRA to adopt an all-party settlement agreement.  
  
A copy of the Proposed Decision underlying this item is available at the following link.
 
Pac-West v. AT&T Complaint Dismissed as Moot (Item 10, approved on consent agenda) – By this item, the Commission renders as moot a petition for modification brought by Pac-West Telecomm, Inc. (“Pac-West”) to require AT&T Communications of California, Inc. and its three affiliates, Teleport Communications Group of San Francisco, Teleport Communications Group of Los Angeles, and Teleport Communications Group of San Diego (collectively, “AT&T”) to pay interest and late charges on sums awarded by the Ninth Circuit Court of Appeal.  The underlying complaint case involved a traffic compensation dispute between Pac-West and AT&T.  Pac-West filed a complaint against AT&T, alleging that AT&T refused to pay Pac-West the charges due for calls that AT&T originates for its local exchange customers and routes to Pac-West through the tandem switches of the two principal California incumbent local exchange carriers, Pacific Bell Telephone Company and Verizon California Inc.
 
Pac-West and the Commission initially prevailed at the District Court.  The Ninth Circuit Court of Appeals reversed and remanded to the District Court with directions to the Commission regarding disposition of funds. This petition for modification was pending at the Commission had not been acted upon during the pendency of the Federal appeals.  With the Court of Appeals decision, the petition is now moot and the Decision determines that it is appropriate to dismiss the complaint.  
 
A copy of the Proposed Decision underlying this item is available at the following link.

Blue Casa Designated as an ETC to Provide Federal LifeLine Services  (Item 18, approved on consent agenda) – This Resolution designates Blue Casa Telephone, LLC (“Blue Casa”) as a wireline Eligible Telecommunications Carrier (“ETC”) to provide Federal Lifeline support in the Uniform Regulatory Framework carrier service territories.  The Resolution determines that granting Blue Casa an ETC designation is in the public interest and further finds that Blue Casa meets all applicable environmental, technical, and financial requirements in Resolution T-17002, as well as the ETC rules recently adopted in the Lifeline Reform Order (FCC 12-11).  Additionally, the Resolution finds that Blue Casa’s 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.  Blue Casa will 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.
 
CuraTel Designated as an ETC to Provide Federal Lifeline Service (Item 19, approved on consent agenda) – This Resolution designates CuraTel, LLC (“CuraTel”) as an Eligible Telecommunications Carrier (“ETC”) to provide Federal Lifeline support in connection with wireline services in AT&T and Verizon service territories.  CuraTel’s CPCN was transferred from La Curacao in 2005 and CuraTel currently provides basic residential telephone service and participates in the California LifeLine program.  The Resolution determines that granting CuraTel an ETC designation is in the public interest and further finds that CuraTel meets all applicable environmental, technical and financial requirements in Resolution T-17002, as well as the ETC rules recently adopted by the Lifeline Reform Order (FCC 12-11).  CuraTel will 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.
 
Statutory Deadline Extended in Level 3 v. AT&T Case (Item 43, approved on consent agenda) – This Decision extends the statutory deadline for resolving a dispute between Level 3 Communications, LLC (“Level 3”) and Pacific Bell Telephone Company d/b/a AT&T California (“AT&T”) until December 29, 2013.  This complaint seeks to enforce terms of an interconnection agreement entered into by Level 3 and AT&T.  This Decision determines that an extension is appropriate in light of delays caused by related federal and Commission actions, which have since been resolved and will allow the Commission to move forward with this proceeding. 
 
A copy of the Proposed Decision underlying this item is available at the following link.
 
LCB Communications LLC Granted a CPCN (Item 46, approved on consent agenda) – This Decision grants LCB Communications LLC a Certificate of Public Convenience and Necessity (“CPCN”) to provide limited facilities-based and resold local exchange, IntraLATA and InterLATA interexchange telephone services in all AT&T California, Verizon California, Citizens Telephone, and SureWest Telephone Local exchange areas.  The Decision also clarifies the relationship between LCB and South Valley Internet (“SVI”).  It explains that LCB will act as the competitive local exchange carrier arm of SVI since AT&T and Verizon are planning to cease providing DSL on a wholesale basis.  LCB will collocate DSL equipment in ILEC Central Offices and SVI will purchase network facilities from LCB.  The companies will maintain separate financial records, but SVI and LCB will be run, managed and owned by the same individuals identified in LCB’s Application.  The Decision also determines that LCB meets the environmental, financial, and technical requirements to be granted a CPCN.
 
A copy of the Proposed Decision underlying this item is available at the following link.
 
Internap Connectivity LLC Granted a CPCN (Item 47, approved on consent agenda) – This Decision grants Internap Connectivity LLC (“Internap”) a CPCN to provide limited facilities-based and resold local exchange telecommunications services in the service territories of Pacific Bell Telephone Company d/b/a AT&T California, Verizon California Inc., Citizens Telecommunications Company of California, Inc., and SureWest Communications and interexchange service in California.  Internap intends to provide local exchange service through a combination of its own facilities and unbundled network elements or facilities obtained from incumbent local exchange carriers.  This Decision determines that Internap meets the environmental, financial, and technical requirements to be granted a CPCN.
 
A copy of the Proposed Decision underlying this item is available at the following link.
 
Wildfire Expense Banking Account Denied (Item 49, approved by a 5-0 vote) – This Decision denies San Diego Gas & Electric Company (“SDG&E) and Southern California Gas Company (SoCal Gas)’s request for a Wildfire Expense Balancing Account (“WEBA”) and based on a last-minute revision by Commission Ferron at the meeting, allows the applicants to retain a Wildfire Expense Memorandum Account (“WEMA”).  The application by SDG&E and SoCal Gas requested Commission authorization to establish a balancing account to allow each utility to recover from ratepayers “all amounts paid by utility arising from wildfires.”  In addition to the application for the WEBA, the applicants were authorized in Resolution E-4311 to establish a WEMA to record certain categories of wildfire costs in their memorandum accounts. 
 
An Alternate Proposed Decision of Commissioner Simon would have authorized a balancing account mechanism that ensured that already recorded amounts would be recoverable without being not subject to further review.  These amounts would include payments booked into the current WEMA account, including costs associated with the 2007 wildfires.  Commissioners Simon, Florio and Sandoval raised concerns with allowing the 2007 wildfire costs to be recoverable.  Specifically, Commissioners Florio and Sandoval argued that the Alternate would trigger an unlawful form of retroactive ratemaking.  This Alternate was not moved for a vote by Commissioner Simon subject to adoption of the Proposed Decision incorporating Commissioner Ferron’s last minute revisions to keep the WEMA accounts open.      
 
A copy of the Proposed Decision underlying this item is available at the following link.
 
A copy of the Alternate Proposed Decision is available at the following link.

SIGNIFICANT HELD ITEMS
 
Draft Resolution L-436 Modifying Confidentiality Standards Applicable to Documents Held by the Commission (Item 61, held by Staff until 1/10/2013) – This Draft Resolution would propose new regulations governing public access to Commission records and utility records held by the Commission.   The new regulations would be embodied ina new G.O. 66-D, which would be adopted following additional workshops.  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 website.  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.

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

Public Safety Concerns Related to 9-1-1 Emergency Response to Multi-Line or Large Business Locations (Item 3, held by Sandoval until 1/10/13) – This Proposed Decision would address public safety concerns related to California’s 9-1-1 emergency response system for Private Branch Exchanges (“PBX”)/Multi-Line Telephone Systems (“MLTS”) locations.  The Proposed Decision would impose customer education requirements on telecommunications carriers and direct Commission Staff to facilitate awareness of inaccurate caller locations received from PBX/MLTS locations in emergency situations. 
 
RTIGP Funding for the Channel Islands Project (Item 17, held by Florio until 1/10/13) – This Draft Resolution would authorize a Rural Telecommunications Infrastructure Grant Program (pursuant to AB 140) (“RTIGP”) grant in the amount of $2,693,000 to the Channel Islands Telephone Company (“CITC”) for the construction of the Channel Islands Telephone Company Grant Project (“Channel Islands Project”).  CITC currently has a limited-facility-based certificate of public convenience and necessity; however, it will need a full-facilities-based CPCN for this grant to become effective and this application is pending before the Commission (A.10-02-009).  The Channel Islands Project proposes to provide telephone service to four of the eight Channel Islands, San Miguel, Santa Barbara, Santa Cruz, and Santa Rosa.  The Draft Resolution would include a $10,000 allotment intended to supplement funds previously allocated under Resolution T-17151 to complete a CEQA review.  Additionally, the Draft Resolution would also authorize the Commission’s Executive Director to enter into a contract with the County of Ventura to act as a fiscal agent for the Channel Islands Project. 
  
A copy of the Draft Resolution underlying this item is available at the following link.

Complaint Against Verizon Business Services (Item 5, held by Staff until 1/10/13) – This item would grant MCI Communications Services, Inc. d/b/a Verizon Business Services (“Verizon”)’s Motion to Dismiss Cinderella Hair Inc. (“Cinderella”)’s Complaint.  Cinderella’s complaint alleged that the T-1 system installed by Verizon caused it to lose an entire day of business.  Cinderella demanded reimbursement for its daily loss of business, a local point of contact, and a replacement of copper lines as backup at no charge.  The Proposed Decision would grant the Motion to Dismiss on the basis that Verizon Business Service Agreement contains a mandatory arbitration clause.  Additionally, the Proposed Decision notes that the facts were undisputed and as a matter of law, the Commission would have to rule in the moving party’s favor.  Finally, the Proposed Decision also indicates that the Commission lacks the jurisdiction to award the relief requested by Cinderella. 
 
A copy of the Proposed Decision underlying this item is available at the following link.
  
NOTES AND COMMISSIONER REPORTS

Multiple speakers spoke out in favor of President Peevey’s Proposed Decision on the redefinition of basic service.  These speakers emphasized the need to modernize and update the basic service definition to recognize that broadband and mobile technology are a necessity. 
 
Representatives of the single residence occupancy hotel community clarified their position on the basic service definition in response to criticism expressed during the last Commission meeting that these representatives had misrepresented the issues in the proceeding.  These representatives explained that their focus was to ensure low-cost reliable service that would be accessible in every room of a residence, regardless of technology.  These speakers emphasized that they were not against technology as long as the basic service definition ensured reliable phone service.  
 
The Consumer Protection and Safety Division announced that that it will change its name, effective January 1, 2013 to the Safety and Enforcement Division.  The Division will be comprised of three major offices, the Office Rail Safety, the Office of Utility Safety and Reliability, and the Office of Utility and Transportation Enforcement.  The CPSD notes that name change marks the dawn of a new era in the Commission’s approach to public safety. 
 
Commissioners Sandoval expressed her appreciation that President Peevey accepted the changes she made in the basic service Decision, noting that it was momentous for all the Commissioners to unanimously approve the Decision.  She also noted her participation at the NARUC President’s Taskforce of Federalism and Telecommunications.  She indicated that it was an extremely productive meeting that highlighted the fundamental mission of the telecommunications industry to meet essential basic needs.  She also observed that the FCC recently established a taskforce on telecommunications transitions in telephone networks and the FCC specifically noted that the taskforce would coordinate with NARUC.  She looks forward to coordinating with the FCC to ensure that the public continues to have safe reliable telecommunication at just and reasonable rates.  She also highlighted that in tragic circumstances like Hurricane Sandy and the Sandy Hook incident that access to emergency 911 calls is vital. 
 
Commissioner Florio announced that evidentiary hearings will take place in January regarding the Commission’s investigation into TracFone Wireless, Inc. to collect and remit public purpose program surcharges and user fees on revenue from its sale of intrastate telephone service to California consumers. 
 
Commissioner Simon ended his final meeting with an extended and emotional Commissioner report.  He noted his attendance at the Advanced Communication Law and Policy Institute’s Advanced Telecom Summit 2012 organized by former Florida Commission President, Chuck Davidson.  He noted a panel he attended on the switch to mobility and urged the Commission to let go of “legacy thinking” and understand that technologies are in transition, in particular toward mobile technology.  He further urged the Commission to educate seniors on the internet and technology in order to move forward.  Finally, he participated on a panel on financial and economic issues in advanced communications sectors on how state and federal regulations of broadband ecosystem impact business decisions and competition in innovation.
 
The Commissioners each expressed their gratitude and admiration for Commissioner Simon and shared their reflections regarding his time with the Commission.  They highlighted his enthusiastic support and commitment to diversity and noted the intensity and deep-seeded passion he brought to every issue at the Commission.  The Commissioners recognized Commissioner Simon’s many contributions during his appointment and noted that he would leave a tremendous legacy at the CPUC.  During his own remarks, Commissioner Simon extensively thanked members of his family, fellow Commissioners, Commission staff, and many others for their continued support during his time at the CPUC.  He highlighted his successes during his appointment and expressed hope that the Commission will continue to focus on safety.  He reminded the Commission that safety should remain a core value that extends beyond being a priority. 


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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