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On February 12, 2015, the Commission held its regularly-scheduled agenda meeting.  On the regular agenda, the Commission authorized the staff to submit comments to the FCC on the proceeding addressing TDM-to-IP transition issues, and specifically on proposals regarding backup power and copper retirement requirements.  During management reports, Commissioner Randolph and Commissioner Sandoval presented their proposal for establishing Commissioner subcommittees to address and modernize processes for Commissioners to become involved in developing additional oversight and governance of issues including staff delegation, finance and administration, and transparency and ex parte rules.  These and other items of interest are discussed in further detail below.

REGULAR AGENDA

Staff Authorized to Submit Comments to the FCC on IP Transition Issues (Item 27, approved 5-0) – This item authorizes staff to submit comments on behalf of the Commission in response to a Notice of Proposed Rulemaking issued by the FCC regarding proposed rules to facilitate the TDM-to-IP transition.  The FCC’s proposals would establish rules to: (1) address back-up power issues for consumers of IP-based voice and data services across networks that provide residential fixed services that substitute for and improve upon the kind of traditional telephony used by consumers to dial 911; (2) protect consumers by ensuring that they are informed about their choices and services provided when carriers retire legacy facilities like copper networks and seek to discontinue legacy services such as basic voice services; and (3) to protect competition so that changes in network facility or the discontinuation of a legacy service do not deprive small and medium-sized businesses, schools, libraries, and other enterprises of the ability to choose the kinds of innovative services that best suit their needs.  A summary of the Commission’s comments on each of these issues is provided as follows:

Backup Power for Consumers of IP-based Services and Batter Backup Power for CPE

            The comments would support the following items: (1) applying consumer premises equipment (“CPE”) backup power requirements to facilities-based fixed voice services, such as interconnected VoIP, that are not line-powered by the provider; (2) requiring providers to ensure that a customer’s backup power is capable of powering eight hours of “standby time;”(3) requiring providers to provide a free back-up power battery to consumers; (4) allowing consumers to opt-out of battery maintenance plans and replacements to avoid associated charges, but only if notice and information regarding the importance of battery maintenance and implications for voice services during power interruptions is provided to opt-out customers; (5) requiring service providers to offer spare batteries at reasonable costs; (6) recommending to the FCC that it should develop and implement consumer education plans regarding the availability of CPE backup power, but that these requirements should not preempt consistent state requirements for notification and education regarding backup power; and (7) recommendations that the FCC should address the issue of standardizing batteries, power systems, and interfaces.

Redefining “Copper Retirement.” 

            With regard to “copper retirement,” the comments would support defining:  (1) “copper” to include copper loops, subloops, and feeder portions of the loop;  (2) “copper retirement” as the physical removal of the copper; and (3) “disabling” to include instances where the disabled copper line is intended to be long term or permanent, so as to avoid designating certain lines as “disabled” during instances of inoperability in the event that the service provider intends to repair the copper facilities.

Expanding Notice Requirements. 

            CLECs.  The comments would provide support and/or recommendations as follows: (1) support expanded notice requirements by mandating ILECs to provide a description of the expected impact of planned changes with copper facilities, including changes in price, terms, or conditions that will accompany the planned changes; (2) clarification that an ILEC must provide direct notification of planned copper retirement to each telephone exchange service provider that interconnects with the ILEC’s network; (3) requiring ILECs to file a certificate of service of such a notification with the FCC; (4) requiring ILECs to make annual forecasts of expected copper retirements and submit those forecasts to the FCC, state commission, and affected competitors; and (5) requiring a six month notification (as opposed to the FCC’s proposed 90-day notification).  

            Retail Customers.  The comments would also provide the following support and/or recommendations with regard to retail customers: (1) require direct notification of all potential retail customers that may be affected in the same manner that the ILEC bills the customer; (2) for customers who do not subscribe to VoIP services when the copper is retired, these customers must be informed about the need for backup power; (3) developing minimum requirements for content of notices to subscribers; (4) ensure that providers provide notice in the same language in which it marketed the service to the customer, and ensure that notices and public education programs include special materials for disabled consumers; (5) provide customers with six-month notice of the proposed copper retirement; (6) support the ability of ILECs to provide customers with a neutral statement of various choices in services that would be available for retail customers affected by copper retirement, but only if the customer initiates the inquiry; and (7) expand the FCC’s rules to allow the public, including retail customers and industry participants, with the opportunity to comment publicly on planned network changes. 

            In addition to the above, staff recommended that the Commission provide the FCC with information regarding incidences of “forced migration” in California, including information from the Commission’s investigations into customer allegations that carriers are migrating customer voice service to VoIP without the customer’s knowledge and/or refused to restore copper TDM service once changed. 

Additional Notices and Certifications.  

The comments would also support proposals to require notices of planned copper retirement to the public utility commission of the relevant state, the Governor of the state in which retirement is planned, and to the U.S. Secretary of Defense.  Further, the comments would support proposals to require ILECs to annually certify to the FCC that the ILEC is in compliance with any new rules adopted at the conclusion of the NPRM. 

Sale of Copper Facilities That Otherwise Would Be Retired.

The comments would also support expanding a state commission’s role in encouraging the sale or auction of copper that an ILEC intends to retire, and to allow state requirements to govern this practice if the regulations exist or are adopted subsequent to issuance of an FCC order in this docket. 

This item was introduced by Assistant General Counsel Helen Mickiewicz, who provided background information on the proceeding and summarized some of the staff’s recommendations.  She explained that five years ago, the FCC adopted the National Broadband Plan, which established the FCC’s policy of transitioning the telecommunications network from a traditional wireline protocol to an internet protocol, or the TDM-to-IP transition.  She explained that this docket was opened by the FCC to request comments on a variety of issues related to this transition.  She explained that there are two major issues.  First, the issue of backup power and what should be done about ensuring that customers know that they need backup power for services delivered over non-copper facilities.  Second, the FCC’s proceeding raises the issue of what should be done about retiring copper facilities and the responsibilities and requirements that should apply to a provider who retires facilities.

She began with the backup power issue, explaining that today, customers with a traditional wireline phone are unaffected by power outages because the phone is “line powered.”  Ms. Mickiewicz stated that since IP-based services are not “line powered,” voice services based on IP-technology are affected by power outages.  Given this historical change, she continued, there are concerns regarding the impact on consumers, including raising awareness and providing consumer education.  She then summarized some of the FCC’s proposals and the staff’s corresponding recommendations.

She then moved to the copper retirement issue, which included proposals about redefining what constitutes “copper retirement.”  She noted that the FCC’s proposal was to expand the definition of copper retirement from copper loops and subloops to now include the feeder portion of the loop.

She then noted that the CPUC staff memo inadvertently excluded the issue related to “de facto retirement,” which occurs when a service provider does not maintain facilities adequately, and in essence the copper becomes retired because it becomes unusable because it is not maintained properly.  She highlighted that the FCC asked for examples of these incidents, and noted that the Commission has received information from California communities alleging that their copper is not maintained and that service repeatedly goes out for extensive periods of time.

Commissioner Sandoval expressed appreciation for the comprehensiveness of the staff memo and Ms. Mickiewicz’s presentation.  She underscored the importance of power backup, noting that even in a complete fiber transition, there will always be central offices and that central offices also require backup power.  She then emphasized that copper facilities continue to exist in California, and that any changes made to copper retirement rules need to be consistent with the basic service and carrier of last resort rules adopted by the Commission recently.

Commissioner Randolph noted that she particularly appreciated the recommendation about providing information from vendors of deaf and disabled equipment to the FCC regarding the impact of the transition on the deaf and disabled community.

President Picker addressed the issue of central office backup and safety.  He gave an example to make the point that there is no perfect system to address the various things that can happen in a catastrophic incident.  For instance, in the recent Napa earthquake, the telephone company in the area had its central office badly damaged and blocked off for inspection by building officials.  He explained that the generators were damaged and the batteries were running out, so the public safety officials had to force entry into the building to repair the system to allow copper system to work.  He indicated that the Commission itself probably could not address these broad issues, but that it should work with the Office of Emergency Services to develop processes to ensure safety, including models that allow for distributive power sources.  He stated that he believes that it merits a closer and longer evaluation, but acknowledged that the Commission may not have all the answers.

A copy of the Staff Memorandum underlying this item is available at the following link:  

A copy of the FCC’s Notice of Proposed Rulemaking is available at the following link:  

Pac-West Complaints Dismissed With Prejudice (Items 13 and 14, approved on consent) – These Decisions dismiss Pac-West Telecomm, Inc.’s complaints against Sprint Spectrum, L.P., Wireless Co. L.P., Sprint Telephony PCS, L.P., Nextel of California, Inc. and jointly d/b/a Sprint PCS (“Sprint”) and Comcast Phone of California, LLC (“Comcast”) for delay in prosecution.  The Decisions explain that in March 2013, Pac-West filed for relief under Chapter 11 of the United States Bankruptcy Code.  As a result, both the complaints were stayed pending action of the bankruptcy court.  Since the bankruptcy petition was filed, the Commission had not received any updates or notices of action by the bankruptcy court.  A ruling was subsequently issued by the assigned Administrative Law Judge(“ALJ”) in each complaint action indicating each ALJ’s intent to dismiss the complaints, absent indication by Pac-West that the actions should remain open.  Pac-West’s counsel of record subsequently responded to the rulings with a request to be removed from all cases involving Pac-West, and stated that Pac-West “filed for bankruptcy, sold its assets in the bankruptcy proceeding, and is no longer an operating entity.”  For these reasons, the Decisions concludes that it is appropriate to dismiss these complaints with prejudice.

A copy of the Final Decision dismissing the Sprint complaint is available at the following link

A copy of the Final Decision dismissing the Comcast complaint is available at the following link

Inyo Networks Expands CPCN to Operate in SureWest’s and Frontier’s Service Territories (Item 15, approved on consent) – This Decision grants Inyo Networks, Inc.’s request to expand its existing certificate of public convenience and necessity (“CPCN”) authority to include full facilities-based telecommunications services and to expand its authority to operate in the service territories of SureWest Telephone and Frontier Communications of California. 

Inyo’ s existing CPCN was previously issued in 2009, and Inyo was authorized to provide limited facilities-based and resold local exchange telecommunications services in AT&T’s and Verizon’s service territories and limited facilities-based resold interexchange telecommunications services in California.  Pursuant to Inyo’s CPCN, Inyo currently offers point-to-point services to wholesale, government, business, and residential customers.  The Decision concludes that Inyo meets the financial, technical, and environmental requirements necessary to expand its CPCN authority to include full facilities-based telecommunications services and to operate in SureWest’s and Frontier’s service areas.
A copy of the Final Decision underlying this item is available at the following link:  

Statutory Deadline Extended to Resolve UBS Complaint Against AT&T  (Item 17, approved on consent) – This Decision extends the statutory deadline to resolve a complaint filed by UBS Financial Services, Inc., UBS Realty Investors, LLC, and UBS Securities LLC (collectively “Complainants”) against Pacific Bell Telephone Company d/b/a AT&T California (“AT&T”).  The Complainants explained that it had purchased certain tariffed and non-tariffed services from AT&T, combined with equipment and services provided by other vendors to form the integrated corporate communications network used for domestic intrastate, interstate, and international communications services.  Complainants also installed and operated PBX switching equipment at various business premises within local service territories of AT&T.  Complainants’ alleged that AT&T improperly invoiced Complainants for a Channel Termination Charge on both ends of the digital transport facility they leased from AT&T.  Complainants did not dispute the charge assessed on the end terminating at each Complainants’ business premise.  However, Complainants’ disputed in this complaint the charge assessed on the end terminating at the AT&T central office service. 

This Decision concludes that it is appropriate to extend the statutory deadline from February 18, 2015 to August 18, 2015 because the parties were engaging in settlement discussions and appeared to have reached an agreement in principle that would resolve the dispute.  The Decision determined that a six-month extension would be appropriate to allow the parties to conclude their settlement negotiations and to provide the Commission time to deliberate and issue its final decision.
 
A copy of the Final Decision extending the statutory deadline available at the following link:

A copy of the Final Decision dismissing the complaint is available at the following link

HELD ITEMS

Expanding the Utilities Supplier Diversity Program to LGTB Business Enterprises (Item 5, held until 2/26/15) – This Proposed Decision would adopt revisions to General Order (“G.O.”) 156 to comply Assembly Bill 1678 by extending the provisions of the Utilities’ Supplier Diversity Program to business enterprises owned by Lesbian, Gay, Bisexual, and/or Transgender (“LGTB”) business enterprises.  The initial purpose of the Commission’s Supplier Diversity Program was to encourage greater economic opportunity for business enterprises owned by women, minority, and disabled persons.  This Proposed Decision would expand the program to the LGTB community.  The Proposed Decision would also:  (1) adopt the LGTB status qualifiers created by the National and Lesbian Chamber of Commerce; (2) authorize and direct the Executive Director of the Commission to enter into a memorandum of understanding (“MOU”) with the NGLCC to establish general guidelines and an operating framework for the responsibilities and roles of the NGLCC and the Clearinghouse in implementing AB 1678; (3) authorize and direct the Clearinghouse to begin data sharing with NGLCC; (4) authorize and direct the Clearinghouse to implement the amended G.O. 156; (5) direct utilities to take the necessary actions to set the foundations for the Clearinghouse’s implementation of the amended GO 156; (6) authorize and direct the NGLCC to comply with the MOU in implementing the amended GO 156 pursuant to AB 1678 and to conduct verifications/certifications and renewals/re-certifications of the prospective contractors for purposes of the Utilities’ Supplier Diversity Program; and (7) adopt a three-year plan and framework to gather data and experiences to set target goals for the these providers for purposes of the Utilities’ Supplier Diversity Program.
A copy of the Draft Resolution underlying this item is available at the following link:  

COMMISSIONER REPORTS

Report on Establishing Commission Subcommittees (Item 28) – Commissioner Randolph introduced this item, and began by stating that it was an exciting opportunity for the Commissioners to participate in the governance processes of the Commission.  She explained that she coordinated with Commissioner Sandoval and that they focused on two fundamental issues: (1) how to structure the committees; and (2) the subject matter that should be addressed by the committees.  Based on these discussions, they recommend that the committees be fully noticed and subject to Bagley-Keene rules, which would require providing 10-days’ notice with the opportunity for public comment.  She explained that this structure would allow for the most participation and discussion.  She also explained that they recommended three committees to focus on the following three issues: (1)  Finance and Administration; (2) Policy and Governance; and (3) CPUC Modernization.

Commissioner Sandoval elaborated on the intended objectives of the subcommittees and explained that the structure recommended was intended to allow other Commissioners to attend and to participate in committees that they are not officially a part of, stating that this would promote shared governance and improvements in oversight.  The Finance and Administration committee would help review budget administration matters, bring full proposals or opportunities for discussions to the Commission, including a new direction of resources, requests for additional funding, or other big picture items like the analysis necessary to improve CPUC working conditions.  The Policy and Governance subcommittee would focus on the effectiveness of the Commission’s governance, review topics like establishing a Commissioner code of conduct, a code of delegation for Staff, and review ex parte rules.  The CPUC Modernization committee would focus on efforts to assess the Commission’s structure and how it should be modernized to promote accessibility and accountability.  Commissioner Sandoval acknowledged that there appeared to be overlap in the topics, but that this would facilitate the development of roles of the subcommittees and Commissioner participation.

Commissioner Peterman expressed concerns about the  overlap in the subcommittees and wanted to avoid unnatural divisions, particularly between the first and third subcommittee.  She suggested that in developing the subcommittees, that they should continuously ask whether they are helping or if it is making things harder.  She proposed an alternative division of the topics identified in each subcommittee, in the following categories: (1) the Commission’s business processes (i.e., updating IT processes); (2) internal/CPUC employee processes (i.e., accountability, staff training); and (3) external engagement processes (i.e., transparency, ex parte, modernizing the proceeding process).

Commissioner Florio agreed with Commissioner Peterman that the subcommittee topics appeared to have overlaps, except he believed the overlap was the greatest between items 2 and 3.  He also suggested that a subcommittee could also be used to streamline the process for when the Commission acted outside of the agency, including the submission of comments at the FCC. 

President Picker expressed support for establishing standing informal committees that were subject to Bagley-Keene rules.  He indicated some concerns regarding whether there should be two or three committees, recognizing that it would require one Commissioner to serve on two committees.  He acknowledged that the subcommittee proposal was a work in process and that there are issues that need to be worked through, but that it should be a basis for not moving forward with establishing the subcommittee process.

Commissioner Randolph clarified that goal of the Policy and Governance subcommittee would be to review Commissioner responsibilities and the CPUC Modernization subcommittee would be to review and overall Commission processes.  

The Commissioners agreed on the threshold issues, that meetings should be informal committees subject to Bagley-Keene rules and that there should three subcommittees formed.  Based on these discussions, it is surprising that the Commission did not decide to establish a subcommittee to evaluate the development of these subcommittee.

A copy of the Commissioner Randolph and Commissioner Sandoval’s memorandum underlying this item is available at the following link

INDIVIDUAL COMMISSIONER REPORTS

In opening statements in advance of public speakers, President Picker commented on his conversations throughout the organization about ethics and his perspective on the issue.  He explained that ethical behavior is paramount to everyone in the organization, from top to bottom.  He emphasized that Commissioners and directors have a special ethical responsibility to lead by example and were accountable for upholding ethical behavior in the actions they take and the discussions they make to reach decisions.  

He highlighted a few of the actions that he has undertaken to address these issues, including working with the Executive Director on initiatives to improve the ex parte rules, coordinating with an outside consultant to prepare a report on the Commission’s practices and processes, and enforcing the requirement for reporting communications through the Commission’s ex parte contact log, which he believes has the effect of making the Commission more accountable for ex parte communications that are traditionally only reported by the utility.

He also noted that the Commission recently released over 65,000 emails to the public, and that these emails may not have constituted ex parte violations, but used language and shared information that revealed ethical concerns, or betrayed inappropriate levels of familiarity between the regulated and the regulator.  He explained that the Executive Director is reviewing those emails, and will consider what action may be required, including mandatory training on professional email style or on separating business emails from personal emails. 

During regular Commissioner Reports, Commissioner Peterman thanked President Picker for his comments regarding ethical issues related to Commissioners.  She underscored that the she and other Commissioners were very passionate about their careers and their roles as Commissioners, and that it is important to continuously address concerns related to their ethical practices.  Commissioner Peterman also announced that she and other Commissioners would be attending the NARUC winter meeting. 

Commissioner Sandoval also thanked President Picker for his comments.  Commissioner Sandoval noted that she attended a committee meeting held by the Water-Energy Team of the Climate Action Team (“WET-CAT”) to address waste water issues, and that she was able to obtain support to apply for federal grants for disaster-related efforts related to water.  Specifically, the grant would seek funding for Tuolumne County, which was affected by the Rim Fire in 2013.  She noted that the Commission was able to quickly provide broadband maps to support the grant application, which was possible because the Commission has been working closely with Chico Statute University to develop maps that overlay existing broadband availability maps of California with maps of high fire areas. 

UPDATE ON SAFETY ACTION PLAN

Elizaveta Malashenko of the Safety and Enforcement Division and Marzia Zafar of the Policy and Planning Division gave an update on the Commission’s Safety Action Plan.  Specifically, Ms. Malashenko summarized the major changes, which included additional language that would: (1) delegate authority to the Executive Director to modify the plan on an ongoing basis; (2) direct the Executive Director to give quarterly updates; and (3) additional directives to work with the Office of Emergency Services on emergency response issues.

Commissioner Peterman noted her appreciation for the changes and the acknowledgement that safety issues permeate all regulatory entities in jurisdictional areas, even if they are not specifically addressed in the Safety Action Plan. 

Commissioner Sandoval noted that although the Safety Action Plan highlighted safety issues for video franchises, she was concerned because there was not more of an emphasis on safety in the communications industry.  She then pointed out that there are areas and opportunities to address cross-industry safety-related issues, pointing the pole safety rules as an example. 

President Picker asked that the Commissioners vote that the Safety Action Plan was compliant with earlier directives as a way to acknowledge the staff’s efforts, although the Commission did not actually vote to adopt the plan.
A copy of the updated Safety Action Plan underlying this item is available at the following link:   
 
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If you have any questions about the above items or the underlying proceedings in which they arose, please do not hesitate to contact us. 
 

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