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On December 5, 2013 the Commission held its regularly-scheduled agenda meeting.  On the regular agenda, the Commissioners discussed the Draft Resolution that would grant CASF funding to Ponderosa for its Beasore/Central Camp Project, where it was noted that the project would provide extensive public safety benefits to a currently unserved area.  On the consent agenda, the Commission reduced the CHCF-B surcharge rate from 0.30% to 0.00%, effective February 1, 2014.  In addition, the Commission held several important telecommunications items, including the Proposed Decision modifying and expanding the LifeLine program to wireless and VoIP technologies and the Proposed Decision to extend the Deaf and Disabled Telecommunications Program to provide Speech Generating Devices.  Finally, the Commission continued to hold the Proposed Decision and Alternate addressing a possible rulemaking to evaluate privacy compliance practices for telecommunications carriers.  These and other items of interest are discussed in further detail below.  

REGULAR AGENDA

Ponderosa’s Application for CASF Funding for the Beasore/Central Camp Project (Item 3, held by Florio until 12/19/13) – This Draft Resolution would grant $1,755,042 in CASF funding to Ponderosa for the Beasore/Central Camp Last Mile Unserved and Underserved Broadband Project (“Beasore/Central Camp Project”).  This project would extend high-speed internet service to 3.49 square miles covering the Beasore and Central Camp communities of Madera County.  The project would also provide safety-enhancing landline telephone service in an area where there is currently none. 

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

The Draft Resolution 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 introduced by Communications Division Director Ryan Dulin.  Director Dulin explained that the CASF program was authorized to encourage the deployment of broadband infrastructure projects in unserved and underserved areas of the state.  He then highlighted that the Beasore/Central Camp Project area is very remote and isolated, and is currently completely unserved.  He commended the project for proposing to provide high-quality advanced services at 50mbps downstream/20mbps upstream, which is well beyond the Commission’s baseline requirement of 6mbps downstream/1.5mbps upstream.  He also noted that for project proposals in completely unserved areas like the Beasore/Central Camp Project, the applicant may request reimbursements of up to 70% of project costs.  He then explained that Ponderosa only sought reimbursements of 61% of the project costs. 
President Peevey initiated discussions by noting that the very purpose of the CASF program is to fund these types of projects.  Commissioner Sandoval noted the public safety benefit of providing service in this area, explaining that her research revealed a general store in the area that specifically sold fuel to members of the public heading up to the mountains. 

The Draft Resolution underlying this item is available at the following link:

CONSENT AGENDA

CHCF-B Surcharge Rate Reduced From 0.30% to 0.00% Effective February 1, 2014 (Item 17, approved on consent) – This Resolution reduces the California High Cost Fund-B (“CHCF-B”) surcharge rate from 0.30% to 0.00%.  Telecommunications carriers are required to revise the CHCF-A surcharge rate assessed on revenues collected from end users for intrastate telecommunications as of February 1, 2014.  Since the CD will continue to monitor the CHCF-B fund to provide for sufficient funds to meet future obligations, carriers will be required to maintain the programming in their billings by continuing to itemize CHCF-B Fund surcharges with a “0.00%” surcharge rate printed on all end user bills.  The Resolution further orders AT&T to file an advice letter reflecting this surcharge modification by January 10, 2014.

The Resolution determines that a surcharge reduction is reasonable because the existing surcharge rate of 0.30% will result in a surplus reserve.  If the surcharge rate remained at 0.30%, approximately $59 million in funding would be collected, resulting in a net growth of the CHCF-B fund from approximately $43.2 million as of August 31, 2013 to approximately $66.6 million by January 1, 2015.  Despite the reduction in the surcharge rate, the current funds available in the reserve, will allow CD to meet forecasted expenditures through January 1, 2015.

A copy of the Draft Resolution underlying this item is available at the following link
  
Consumer Complaint Against Verizon and AT&T Dismissed For Lack of Jurisdiction (Item 18, approved on consent) – This Decision dismisses consumer complaint filed against Verizon California Inc. (“Verizon”) for allegedly terminating the customer’s Digital Subscriber Line (“DSL”) Internet service and refunding to the customer all payments previously made by the customer for such service.  Verizon explained that it ceased providing DSL service because of location of the customer’s property relative to Verizon’s network made it impossible for Verizon to provide consistently reliable service.  The customer then sought to obtain DSL service from Pacific Bell Telephone Company (“AT&T”), which AT&T declined.  The customer filed this action, asking the Commission to direct AT&T to provide DSL service to the customer’s home. 

The Decision concludes that the Commission lacks jurisdiction because DSL services are information services over which the state commissions have no jurisdiction.  Since the complaint relates to an information service, the Commission determined that the complaint must be dismissed.  

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

Statutory Deadline Extended in VAYA Telecom v. AT&T Matter (Item 30, approved on consent) – This Decision extends the statutory deadline for resolving two consolidated complaints between VAYA Telecom, Inc. (“VAYA”) and Pacific Bell Telephone Company d/b/a AT&T California (“AT&T”) to June 18, 2014.  The first complaint was filed by VAYA, seeking resolution of an Interconnection Agreement dispute with AT&T concerning AT&T’s billing for tandem switching elements of its interstate switched access tariff for certain transit traffic, including Voice over Internet Protocol (“VoIP”) traffic.  A second complaint was filed by AT&T against VAYA asserting that VAYA breached the parties’ Interconnection Agreement by delivering InterLATA traffic over Local Interconnection Trunks.  In order to allow parties to proceed with the underlying complaint, the parties entered into an interim Confidential Settlement Agreement that addressed VAYA’s Emergency Motion seeking a temporary restraining order.  In addition the other procedural delays, Commission later determined that the issues in the complaint may be impacted by SB 1161, which had possible implications for the IP-based services at issue in the dispute.  After SB 1161 was adopted, the Commission extended the timeframe for resolution of this case to fully evaluate the impacts of the VoIP jurisdictional prohibition.  The Commission later determined that the legislation was not determinative of the issues raised in this matter. 

On October 8, 2013, VAYA moved to hold the matter in abeyance for another 60 days in order to allow for further settlement discussions.  VAYA asserted that parties were in active settlement discussions and that the parties should have the opportunity to resolve the issues without further Commission involvement.  VAYA’s motion was opposed by AT&T on October 14, 2013.  The Decision denies VAYA’s motion, explaining that a proposed decision addressing the two consolidated complaints has been drafted and will be issued shortly.  Therefore, the Decision concludes that an extension of the statutory deadline is reasonable to allow parties to review the pending proposed decision and provide comments.

The Proposed Decision underlying this item is available at the following link

Statutory Deadline Extended for Commission’s Investigation into Telseven’s Business Practices (Item 33, approved on consent) – This Decision extends the statutory deadline for resolving the Commission’s investigation into the operations, practices and conduct of Telseven, LLC (“Telseven”), Calling 10 LLC d/b/a California Calling 10 (“Calling 10″) and Patrick Hines to determine if any of the named parties violated the laws, rules, and regulations of the State of California in the provision of directory assistance services to California consumers.  The statutory deadline was previously extended due to delays caused by Telseven’s bankruptcy filing and the subsequent withdrawal of Telseven, Calling 10, and Patrick Hines’s counsel on record.  Since the last extension, a Presiding Officer’s Decision (“POD”) has been issued, and additional time is necessary to evaluate the POD.  Therefore, the statutory deadline has been extended to June 16, 2014.
 
A copy of the Proposed Decision underlying this item is available at the following link:  

HELD ITEMS

Proposed Decision Modernize and Expand the California LifeLine Program (Item 49, held by Sandoval until 12/19/13) – 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) 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 mandate to provide unlimited incoming calls, outgoing local calls, a choice between flat or measured rate service, one directory listing annually, white pages telephone directory, directory assistance, and access to 800 or 800-like toll-free services that are not counted toward plan minutes; (6) a requirement to permit withdrawal from the LifeLine program upon 30-day notice; and (7) an exemption from the pre-qualification process by pre-paid wireless providers.
The 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, which 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.  In addition 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. 

During the public session of the agenda meeting, several residents of single room occupancy hotels spoke out in favor of the Proposed Decision.  These speakers also urged the Commission to modify the Proposed Decision to provide broader cancellation policies, to hold carriers accountable for expanding coverage, and to ensure adequate service quality in the home. 

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

Petition for Rulemaking on the Privacy Practices of Telecommunications Corporations (Items 48 and 48a, held by President Peevey until 1/16/14) – This item would address the Petition for Rulemaking by a group of consumer groups who are asking the Commission to examine privacy issues for telecommunications carriers.  Commissioner Ferron’s original decision would not open a rulemaking, while Commissioner Sandoval recommends granting the petition in part and initiating a proceeding to examine the issue.
 
In November 2012, the Consumer Federation of California, The Utility Reform Network, and the Privacy Rights Clearinghouse (“Joint Consumers”) filed a Petition for Rulemaking (“Petition”) to modify the privacy practices telecommunications carriers.  The Petitioners requested that the Commission open a new rulemaking to review the privacy practices of telecommunications carriers and to develop wireless privacy standards.  The Petition identifies potential concerns related to the collection and use of personal information by telephone corporations, including companies that provide wireless telecommunications services.  The Petition also asks the Commission to develop standards for collecting, handling, and sharing customer information to ensure that customers are aware of what information may be collected and how that information may be used.  The Petition also seeks to extend the proposals identified in the Petition to third parties under contract with telecommunications providers, such as distributors of phone applications or “apps.”  In addition, the Petition suggests that existing laws and policies at the state and federal level fail to offer adequate protection for customer information.
 
The Petition was opposed by CTIA – the Wireless Association (“CTIA”), Pacific Bell Telephone Company dba AT&T California (“AT&T”), and MetroPCS California Inc. (“MetroPCS”).  The opposing parties argued that the Petition was procedurally and substantively improper.  Specifically, the parties asserted that the Petition failed to state a clear justification for new rules and failed to include any specific language for those rules.  In addition, these parties argued that existing laws and policies already protect the privacy of customer information and additional rules are unnecessary.  The opposing parties also argued that the Petition attempted to reach non-regulated services and providers beyond the Commission’s jurisdiction.
 
The Proposed Decision issued by Commissioner Ferron would deny the Joint Consumers petition and would find that it is not clear that a review of telecommunications companies’ privacy practices in California is necessary at this time.  The Proposed Decision would recognize the importance of protecting the privacy of customer information, and notes that the Commission is addressing issues related to privacy of energy user data in the ongoing Smart Grid proceeding.  However, the Proposed Decision would find that the Petition fails to provide examples of actual breaches of customer privacy by telecommunications corporations.  The Proposed Decision would also conclude that current federal and state laws exist to govern the treatment of potentially sensitive customer information held by telecommunications providers, as well as businesses in general.  Finally, the Proposed Decision would conclude that the Petition fails to clearly identify the types of information the petitioners believe are accessible to or collected by telecommunications corporations that are not currently protected by CPNI and other existing privacy protections. 
 
On October 2nd, Commissioner Sandoval issued an Alternate Proposed Decision granting in part the Joint Consumers’ Petition.  The Alternate would open a rulemaking that focuses on the privacy practices of telephone corporations under its jurisdiction (recognizing that the Commission has no jurisdiction over third parties).  While the Alternate acknowledges that existing federal and state standards already exist to protect consumer information, it nevertheless concludes that gaps exist between federal and state regulations that must be reviewed due to changes in telecommunications technology.  In addition, the Alternate expresses concern that the Commission may not have the ability to enforce existing federal privacy laws. 
 
A copy of the Proposed Decision underlying this item is available at the following link
  
A copy of the Proposed Alternate is available at the following link
 
Modifications of the DDTP Program to Allow Speech Generating Devices (Item 50, held by Sandoval until 12/19/13) – This Proposed Decision would expand 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 Proposed Decision would adopt a set of rules governing the distribution of SGDs.  In addition, in order to expand options or provide a substitute for SGDs, the Proposed Decision would 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 Proposed Decision would also direct 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:  

COMMISSIONER REPORTS
 
Commissioner Sandoval noted her attendance at the TURN 40th Anniversary event where she presented awards to many community organizers who advocate and participate in CPUC proceedings.  She announced that she attended the NARUC conference where the Federalism and Telecommunications Resolution and underlying White Paper was adopted after a year’s worth of collaboration amongst many states.  She also noted that she led a LifeLine all-party meeting to address the Proposed Decision to modify and expand the LifeLine program. 
 
Commissioner Peterman also noted her attendance at the NARUC meeting in Orlando, Florida.
 

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