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On February 13, 2013, the Commission held its regularly-scheduled agenda meeting.  On the regular agenda, the Commission adopted Resolution L-436, which authorizes the limited disclosure of certain safety-related documents and directs the staff to initiate a rulemaking to review  confidentiality issues.  On the consent agenda, the Commission adopted a one-year freeze in the CHCF-A rate case schedule and waterfall mechanism.  In addition, the Commission continued its hold on the Proposed Decision modifying requirements for CPCN and WIR holders or applicants.  These and other items of interest on the Commission’s agenda are discussed in further detail below.
 
REGULAR AGENDA ITEMS
 
Draft Resolution Adopted Authorizing Commission Staff to Disclose Certain Safety-Related Documents and Directing Initiation of Comprehensive Rulemaking to Examine Confidentiality Standards at the Commission (Item 28, adopted 5-0) – This Resolution authorizes the Commission to disclose, without requiring a vote of the Commission or an Administrative Law Judge ruling, the following safety-related records: (1) CPUC-generated reports, summaries, and correspondence regarding completed CPUC safety-related inspections, audits, and investigations; and (2) annual reports that gas operators file with the United States Department of Transportation Pipeline and Hazardous materials Safety Administration.  These records will be posted on the CPUC’s online “safety portal.”  The Resolution also directs Commission staff to draft an Order Instituting Rulemaking (“OIR”) to address the broader issue of evaluating current regulations governing requests for confidentiality and public access to Commission records and utility records held by the Commission. 

The Resolution was introduced by the Legal Division. General Counsel Frank Lindh noted that the Resolution and anticipated rulemaking reflects an effort to reach a balance between two competing statutes that push the Commission into two directions: (1) the CPRA, which the encourages full disclosure with narrow exceptions, and (2) Section 583, which imposes an obligation on the Commission and employees to maintain certain utility-submitted documents as confidential under penalty of criminal misdemeanor.  He further explained that this impetus for this evaluation was criticism by the press for the Commission’s tendency to designate records as confidential under Section 583.  General Counsel Lindh acknowledged that both statutes apply to the Commission and that the Commission is obligated to strike a balance between the two statutes. 

Commissioner Ferron noted that the Resolution is a sensible approach to address issues directly related to public safety.  Commissioner Sandoval supported the Resolution, noting that it appropriately strikes a balance between the competing legal mandates and statutes that must be considered by the Commission.  She stated that she appreciates the narrowing of the Resolution and believes that the subsequent rulemaking will give an opportunity for further consideration in a manner that balances and protects the interest of the public and all the parties that participate in the Commission’s processes. 
 
Commissioner Florio expressed his support for the Resolution and recognized that regulated entities provide the Commission with significantly more information than private businesses, and that the information could place the regulated entities at a disadvantage where they compete against parties that are not obligated to provide such information. 
A copy of the Draft Resolution underlying this item is available at the following link

 
CONSENT AGENDA ITEMS
A One-Year Freeze in the California High Cost Fund A General Rate Case Schedule and Waterfall Provisions Adopted for the Independent Small LECs (Item 9, adopted on consent agenda) – This Interim Decision implements a one-year freeze until December 31, 2013 in the general rate case schedules and waterfall provisions for California High Cost Fund-A recipients.  The Interim Decision properly excludes Kerman Telephone Co. from this stay, as these issues will be separately considered in Kerman’s rate case. 
 
A copy of the Draft Interim Decision underlying this item is available at the following link
 
Surcharge Rate for the CASF Fund Increased to 0.164% ( Item 12, adopted on consent agenda) – This Resolution adopts a revised surcharge rate of 0.164% from 0.14% for the California Advanced Services Fund (“CASF”).  The  surcharge will be on revenues collected from end-users for intrastate telecommunications services and will become effective on April 1, 2013.  The Resolution also orders AT&T to file an Advice Letter on or before February 28, 2013, modifying the surcharge rate for the CASF to the revised surcharge rate of 0.164%, effective April 1, 2013. 
 
The CASF program was established to provide funding for broadband infrastructure projects and to further the deployment of broadband infrastructure in unserved and underserved areas in California.  In September 2010, Senate Bill 1040 extended the program and allocated an additional $125 million in funding.  The $125 million was to be collected through surcharges on end-users, at no more than $25 million per year.  In September 2011, a 0.14% surcharge rate was adopted based on an estimated billing base of $20.90 billion.  However, this Resolution determines that the actual billing base is at an estimated $15.8 billion in FY 2012-13 and FY 2013-14 and the previously approved surcharge rate is under-collecting.  The Resolution finds that the increase surcharge is necessary to remedy the under collections and to meet the program’s overall collection of $125 million. 
 
A copy of the Draft Resolution underlying this item is available at the following link
 
Impulse’s CPCN Modified to Provide Full Facilities-Based Local Exchange Services (Item 18, adopted on consent agenda) – This Decision authorizes Impulse Telecom LLC dba Impulse Advanced Communications (“Impulse”)’s application to expand its existing certificate of public convenience and necessity (“CPCN”).  Impulse was granted a CPCN to provide limited facilities-based and resold local exchange and interexchange telecommunications services in California in 2009.  This Decision grants Impulse’s application to provide full facilities-based local exchange and interexchange telecommunications services in Uniform Regulatory Framework company territories.. 
 
The Decision also finds that an expedited 21-day process for a CEQA review by Environment Division Staff of potentially CEQA-exempt construction projects is appropriate since Impulse is not currently aware of specific construction projects or specific locations of customers that it may serve.  Impulse indicated that it eventually intends to install facilities, including fiber optic cable and related equipment in existing conduits and other existing buildings and infrastructure.  Impulse may also undertake outside plant constructions involving installation of underground conduits, utility poles, equipment shelters, or other above-ground support structures.  Impulse notes that any construction will generally be small in scale in existing roadways or other previously-disturbed or developed rights-of-way.  The Decision finds that a 21-day process for Staff to determine whether proposed construction projects are exempt from CEQA would also be consistent with Commission precedent. 
 
A copy of the Proposed Decision underlying this item is available at the following link
 
Change of Control of First Communications LLC, Globalcom, Inc. and Xtension Services, Inc. (Item 19, adopted on consent agenda) – This Decision authorizes First Communications, Inc. (“FCI”) to transfer its 100% ownership interest of First Communications, LLC (“FCL”),  Globalcom, Inc. (“Globalcom”), and Xtension Services, Inc. (“Xtension”) to Summit Data Services, Inc. (“Summit”).  FCL and Globalcom are separately authorized in California to provide facilities-based and resold local exchange and resold interexchange telecommunications services.  Xtension is authorized to provide resold interexchange telecommunications service in California. 
 
Summit is an Ohio corporation that was newly formed for the purposes of this transaction.  Summit will acquire full control of FCL, Globalcom, and Xtension from FCI as wholly owned subsidiaries.  No transfer of FCL, Globalcom, or Xtension’s CPCN, assets, or customers will occur with this transaction.  This Decision determines that the transaction should be approved because it will not be adverse to the public interest and the acquiring company possesses the same technical and financial capability required of existing CPCN holders.  Moreover, this transaction will not affect the daily management of the parties, and after the transaction is complete, the parties will continue to provide service at current rates, terms and conditions.  Finally, the this Decision finds that the transaction will not eliminate existing or potential competitors and will enhance the parties ability to compete to the ultimate benefit of the consumers. 
 
A copy of the Proposed Decision underlying this item is available at the following link
 
LEGISLATIVE ITEMS
 
Proposed Legislation on the Deaf and Disabled Telecommunications Program, SB 129 (Wright)   (Item 31, support position approved on consent agenda) – This bill would extend the sunset provision for the collection of the Deaf and Disabled Telecommunications Program (“DDTP”) surcharge from January 1, 2014 to January 1, 2024.  The DDTP provides Californians who are deaf or disabled with specialized telecommunications equipment and relay services.  The program is funded through surcharges applied to a subscriber’s intrastate telecommunications service, the current surcharge rate is 0.20%.   This bill would also extend the requirement that the CPUC prepare and submit a report of the fiscal status of the DDTP program to the legislature, on or before December 31 of each year, until January 1, 2025.  The Commission supports this bill as the sponsor. 
 
A copy of the Legislative Memo underlying this item is available at the following link
 
Proposed Legislation on Excavation Penalties, AB 1514 (Item 32, held by Staff until 2/28/13) – This bill would: (1) cap existing civil penalty amounts for negligent violations at $100,000 and for knowing and willful violations at $250,000; (2) classify failures to notify one-call centers as knowing and willful violations; (3) impose requirements on excavation incident investigation reports; (4) apportion penalty amounts among the prosecuting agencies engaged in the enforcement action; (5) not provide the Commission with additional legal authority or ability to receive reports from violators, one-call centers, or entities non-jurisdictional to the Commission; and (6) not provide the Commission with additional compensation for costs related to excavation incident investigations or the preparation of costs.  The purpose of this bill is to address inadequate enforcement of excavation violations by providing incentive and ability for other entities to prosecute these violations.  The Legislative subcommittee recommendation is for the Commission to support this bill.
 
A copy of the Legislative Memo underlying this item is available at the following link
 
SIGNIFICANT HELD ITEMS
 
Revisions to the Certification Processes for Telephone Corporations Seeking or Holding CPCNs and WIRs (Item 27, held by Ferron until 2/28/13)– This Proposed Decision would adopt revisions to the certification process for telephone corporations seeking or holding Certificates of Public Convenience and Necessity (“CPCN”) and wireless carriers seeking or holding Wireless Identification Registration (“WIR”).  The changes to the certification processes are intended to increase accountability for carriers, reduce the need for enforcement actions to be brought, and improve the Commission’s ability to collect fines, penalties, and bring restitution.  The Proposed Decision would establish a Phase II of the proceeding to determine performance bond requirements, as discussed below.
 
The Proposed Decision would require all applicants seeking or holding a CPCN or WIR to post a bond to facilitate the collection of fines, fees, surcharges, taxes, penalties, and restitution.  ILECs are specifically exempted from the bond requirement.  The bond amount for applicants seeking or holding a CPCN or a WIR would be initially set at $25,000.  In Phase II of the rulemaking, the Commission will determine, starting with input in workshops, a reasonable performance bond amount based on intrastate revenue and/or consumer protection considerations.  The bond amount for new applicants granted a CPCN or WIR that have not reported annual intrastate  revenues to the Commission would be $25,000. 
 
The Proposed Decision would also: (1) require CPCN applicants and wireless registrants to provide the Commission with resumes and detailed information on key officers, directors, and certain owners; (2) require applicants seeking to transfer licenses or registrations to verify compliance with Commission reporting, fee, and surcharge transmittals; (3) increase the application fee for new and transferred CPCN authority from $75 to $500, subject to legislative approval; (4) require wireless registrants to pay a $250 fee for new and transferred registration; (5) establish a minimum annual user fee of the Commission-established rate in effect at the time or $100, whichever is greater; and (5) require a new verification with specified language that certain key officers, directors, and owners were never associated with a telecommunications carrier that filed for bankruptcy, was sanctioned by the FCC or state regulatory agency, or was ever found civilly or criminally liable by a court.
 
A copy of the Proposed Decision underlying this item is available at the following link
 
WITHDRAWN ITEMS
 
Staff Withdraws Request to File FCC Comments on Areas Eligible for Funding and Election to Make a Statewide Commitment in Phase II of the Connect America Fund (Item 29, withdrawn by Staff) – This item would have authorized Staff to file comments in response to a Public Notice issued by the Federal Communications Commission seeking comments on procedures relating to areas eligible for funding and elections to make a statewide commitment in Phase II of the Connect America fund.  Specifically, to the FCC sought comment to determine what areas are eligible for the Connect America Phase II funding and how carriers may elect to accept or decline a statewide commitment in the Connect America Phase II.
 
A copy of the FCC’s Public Notice is available at the following link:  
 
NOTES AND COMMISSIONER REPORTS
Commissioner Ferron noted his attendance at the Telecommunications Service Quality proceeding workshop on January 31st.  The proceeding was opened by the Commission to review performance of telecom carriers on whether they are meeting or not meeting service quality performance standards in accordance with G.O. 133-C.  The workshop addressed whether the service quality standards and measures should be  modified.  In this proceeding, it is expected that a network consultant will be retained to assist the evaluation of carrier infrastructure and investments.  The workshop addressed the scope of the consultant’s evaluation, which will focus primarily on AT&T and Verizon’s facilities and related investments for preparing and making policies on this issue.  He noted that the workshop was extremely useful and he looks forward to the comments by parties on the workshop.
 
Commissioner Sandoval noted that she conducted an all-party meeting in the LifeLine proceeding.  This all-party meeting was intended as pre-scoping memo meeting to address potential questions for the scoping memo and to receive comments on those questions.  She noted that the Commission received a number of helpful comments during the meeting and through written comments after the meeting.  She expressed her appreciation to all those who participated in the process. 
 
She also noted her attendance at the NARUC conference where she moderated a panel for the Utility Market Access Committee on consumer and utilities in a multimedia and social media world.  She was impressed by the ability of other utilities in making their communications accessible and user friendly.  She suggests that the Commission look closely at applications for low-income programs and think about making them truly mobile friendly.  She reminded the Commission that in low-income households, it is often the English-speaking children who fill out forms for their parents, and that these children often have more access to mobile technologies than to computers.
 
She also mentioned that she had attended a day-long conference at the Federal Communications Commission for the Joint Conference on Advanced Services.  All five FCC Commissioners were in attendance.  She thought the conference was extremely valuable and she learned of different types of models to promote connection to the internet.  She noted that Community Based Organizations really made clear to her that access to internet is not solely dependent on the price, but other factors that include communicating to the community the value of internet access, providing the appropriate training, and ensuring that consumers receive and understand the services they are receiving. 
 
Finally, she thanked her fellow Commissioners for signing a letter of support for the FCC to take action to ensure call completion, noting that there is no more important duty of a telecom company than to carry and complete call.  The FCC has issued a notice of a proposed rulemaking regarding data request relevant to this issue.  She encourages the Commission to do what they can to support this rulemaking and to ensure that every American can make a call and have the call completed, regardless of where they are. 
 
Commissioner Florio noted his attendance at the January 31stTelecommunications Service Quality workshop with Commissioner Ferron.
 
The Administrative Law Judge Division provided a presentation on the Division’s 2012 accomplishments.  The presentation was provided by ALJ Clopton, who first reiterated the judicial responsibilities of all ALJs and the need for each ALJ to make decisions based on impartial and independent decisions based on the record.  She then noted that all proceedings in 2012 were resolved timely and in accordance with statutory timelines. 
 
A copy of the Administrative Law Judge Division’s PowerPoint presentation is available on slides 14-52 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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