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On February 5, 2014, the Commission held its regularly-scheduled agenda meeting.  The Commission addressed several important telecommunications items, including the decision adopting significant new regulations addressing pole loading, pole construction, and safety factors applied in assessing pole safety.  The Commission also granted Golden Bear Broadband a CPCN to provide full-facilities based and resold competitive local exchange service in the URF service territories.  In addition, the Commission held the proposed decision that would modify the eligibility requirements in the California Advanced Services Fund (“CASF”) program to establish standards for non-telephone corporations to apply for CASF funding.  The Commission also continued its hold on the proposed decision that would grant CASF funding to Ponderosa for its Cressman project.  These and other items of interest on the Commission’s agenda are discussed in further detail below.
 
REGULAR AGENDA
 
Regulations in Overhead Facilities (Item 28, adopted 4-0, Commissioner Picker abstained) – This item adopts new regulations and pole safety standards, to be reflected in adjustments to General Order 95.  The Decision includes a variety of consensus rules, adopted following workshops in which the parties agreed to certain improvements in the applicable standards.  In addition, it adopts several contested proposals to adopt additional pole loading and record retention rules.  Significantly, the Decision also retains the controversial “will not fail” language in Rule 48 of G.O. 95, despite arguments that this results in an impossible standard for applying the safety factors to loads on overhead structures, particularly as applied to safety factors to account for high winds. 
 
Commissioner Florio introduced this item by explaining that the Decision is intended to reduce fire hazards associated with overhead electrical and aerial communications facilities. 
Florio then gave a summary of the procedural background underlying the Decision, which included the participation of over 30 parties in self-directed technical panels and a series of workshops.  He also explained that the next stage of the proceeding involved the development of statewide fire threat maps detailing out areas where power line fires are likely to start.  He urged the parties to develop these maps quickly so that fire safety standards can be implemented. 
 
Commissioner Peterman supported the Decision explaining that it will enhance safety standards by revising General Order 95 and incorporating new rules for reducing fire hazards.  She noted that she was aware of parties’ concerns regarding the requirements surrounding the planning standards for wind speeds, and that she looked forward to working on these issues as the proceeding moved forward.  Commissioner Sandoval also supported the Decision and stressed the importance of meeting an appropriate balance between allowing utilities to gain access in order to serve ratepayers and ensuring that it is done in a manner that is safe.  She expressed appreciation that the Decision takes steps in reviewing modern construction efforts, wind speeds, and making sure that poles can support the weight of workers.  She ended with a reminder that Section 451 of the Public Utilities Code requires the Commission to ensure “just and reasonable service . . . as necessary to promote the safety, health, comfort, and convenience of . . . the public.”  Sandoval emphasized that this duty is paramount and that it should be the primary mission of the Commission and the utilities.
 
Commissioner Picker abstained on the item, explaining his previous service on the Sacramento Municipal Utility District board created a conflict of interest since SMUD is a party to the proceeding.  
 
This Decision marks the conclusion of Tracks 1 and 2 of Phase 3 of the pole safety proceeding (R.08-11-005), but significant additional matters remain, including the consideration of additional fire safety regulations and the development of a “fire threat” map to determine the applicability of any such rules. 
 
A copy of the Proposed Decision underlying this item is available at the following link:  
 
CONSENT AGENDA
 
Golden Bear Broadband Granted a Certificate of Public Convenience and Necessity (Item 5, approved on consent) – This Decision grants Golden Bear Broadband, LLC (“GBB”) a certificate of public convenience and necessity (“CPCN”) to provide full-facilities based and resold competitive local exchange service in the service territories of Pacific Bell Telephone Company d/b/a AT&T California (“AT&T”), Verizon California Inc. (“Verizon”), Citizens Telecommunications Company of California, Inc. d/b/a Frontier Communications of California (“Frontier”), Frontier Communications of the Southwest, Inc. (“Frontier Southwest”) and SureWest Telephone (“SureWest”).

GBB proposes to provide dedicated private line special access services to business customers and carriers by using the facilities of other providers and the limited development of its own facilities in Northern California. 

The Decision also concludes that GBB meets the environmental, technical, and financial requirements to be granted a CPCN.  In addition, the Decision explains that GBB will be subject to all applicable Commission rules, decisions, General Orders, and statutes that pertain to California public utilities. 

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

GTG Granted a Certificate of Public Convenience and Necessity (Item 20, approved on consent) –This Decision approves a settlement agreement by which Global Telco Group Inc. (“GTG”) is granted a certificate of public convenience and necessity (“CPCN”) to provide resold and limited facilities-based interexchange service in California.  GTG began selling prepaid phone cards providing international calling services in California on April 2, 2009, despite not having authority to operate in California. 
 
In August 2012, the Commission’s Safety and Enforcement Division (“SED”) staff found two GTG prepaid phone cards available for sale at a convenience store.  After verifying that GTG did not have Commission authority to operate in California, the Communications Division sent a cease and desist letter to GTG.  Accordingly, in April 2013, GTG filed an application for CPCN authority to provide limited facilities-based, resold interexchange telecommunications services in California.  SED filed a protest to the application, alleging that GTG violated Public Utilities Code Sections 885-886 by operating without authority and Rule 1.1 for failing to disclose the fact in its application. 
 
GTG and SED ultimately reached a settlement that fully resolved all issues that SED’s protest raised.  In the settlement agreement, GTG acknowledged that it failed to obtain the required authority from the Commission prior to its prepaid calling cards being sold to California customers, and that it will pay $12,500 to the State of California General Fund within 30 calendar days of this Decision’s approval. 
 
The Decision concludes that the settlement agreement is in the public interest and is consistent with the Commission’s well-established policy of supporting alternative dispute resolutions.  The Decision also finds that the settlement agreement permits the Commission to avoid the time, expense, and uncertainty of evidentiary hearings and further litigation.
 
A copy of the Proposed Decision underlying this item is available at the following link
 
Statutory Deadline Extended To Permit Recovery Efforts In OSP Cramming Investigation (Item 21, approved on consent) –This Decision extends the statutory deadline in the Commission’s investigation into whether OSP Communications, LLC (“OSP”) and its owner violated Commission rules and regulations by engaging in “cramming” practices.  The investigation was recently resolved through an all-party settlement agreement in September 2013; however, in the decision approving the settlement agreement, the docket was left open to allow the Commission’s Safety and Enforcement Division (“SED”) time to pursue recovery of sums held by third parties for the benefit of consumers that were harmed.  This Decision extends the deadline to January 31, 2015 in order to allow the SED to continue to pursue its recovery efforts.  
 
A copy of the Proposed Decision underlying this item is available at the following link:  
 
Statutory Deadline Extended In Municipal Complaint Against Verizon (Item 18, approved on consent) – This Decision extends the statutory deadline for one year to February 7, 2015 for resolving a complaint filed by the City of San Jacinto against Verizon California, Inc. (“Verizon”). The complaint involved a dispute regarding the interpretation of a tariff that governs the undergrounding of existing telephone communications facilities when a city creates a new underground utility district.  The Decision concludes that additional time is needed to address complex issues and to allow the possibility of mediation to be included in the scheduling.
 
A copy of the Proposed Decision underlying this item is available at the following link:  
 
HELD ITEMS
 
Proposed Modifications toCASF Eligibility Criteria to Permit Non-Telephone Corporation Applicants (Item 10, held until 2/27 by staff) – This Proposed Decision would modify the eligibility criteria for the California Advanced Services Fund (“CASF”) program to establish rules for non-telephone corporations to apply for CASF grants.  The Proposed Decision would be consistent with legislative directives mandated by the passage of SB 740 (Padilla) in October 2013. 
 
The Proposed Decision would grant existing facilities-based providers a “right of first refusal” against a non-telephone corporation proposing to serve an area with CASF funds, allowing these providers with an opportunity to extend or upgrade existing service to the proposed area (with the option of applying for CASF funding).  
 
The Proposed Decision would also impose several requirements for non-telephone corporations who choose to apply for CASF.  First, non-telephone corporations would be required to obtain a performance bond in the full amount of project for the duration of the construction period to ensure that the project is completed in accordance with the approved grant.  Second, the Proposed Decision would decline to adopt a compliance bond post-construction, finding that entities would have substantial difficulties obtaining a compliance bond since the post-construction obligations could not be quantified in any generalizable manner.  However, the Proposed Decision would impose a separate obligation on non-telephone corporations to promptly notify the Commission of any plans to sell or transfer assets would also be imposed on non-telephone corporations.  Third, the Proposed Decision would decline to adopt a liquidity requirement on the basis that a non-telephone corporation’s financial security would be thoroughly vetted through the underwriting process necessary to obtain a performance bond.  Fourth, the Proposed Decision would reiterate that CASF applicants and grantees, whether telephone corporations or non-telephone corporations, would be required to comply with the Commission’s Rule 1.1, which requires applicants to sign under penalty of perjury that to the best of their knowledge all statements and representations made in an application to the Commission are true and correct. 
 
A copy of the Proposed Decision underlying this item is available at the following link
 
Ponderosa’s CressmanCASF Project (Item 4, held by Florio until 2/27) – This Draft Resolution would grant $1,027,380 in CASF funding to Ponderosa Telephone Company (“Ponderosa”) for its Cressman Unserved and 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 over a 3.56 square mile area.  Ponderosa would expand its 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:    
 
WITHDRAWN ITEMS
 
Proposal to Establish a Citation Program the Safety and Enforcement Division Withdrawn (Item 32, withdrawn) – This Draft Resolution would have granted the Safety and Enforcement Division’s (“SED”) staff the ability to issue citations and fine communications and electric utilities for broadly defined “safety violations” related to pole safety and any other Commission order or rule.  This process was mandated by legislation (SB 291) for power utilities, but no such statutory directive exists as to communications utilities. 
 
The proffered premise of the Draft Resolution was to “to help implement SED’s existing authority to require that the violation it identifies is corrected at, or soon after, the time Staff identifies a violation, notwithstanding any existing utility schedule for repairs.”  Some key elements of the proposal would have: (1) included authority to assess the maximum penalty amount of $50,000 for each violation with each day’s continuance as a separate citable offense; (2) required the immediate correction of any “non-conformance” identified by staff; (3) allowed the amount of the penalty to continue to accrue on a daily basis until the violation is corrected;  and (4) established“Self-Identified” reporting requirements that would place the burden of reporting violations within 30 days of self-identification. 
 
A copy of the Draft Resolution underlying this item is available at the following link
 
COMMISSIONER REPORTS
 
Commissioner Sandoval attended the pre-hearing conference in the California High Cost Fund A (“CHCF-A”) proceeding and announced that the Commission was planning on holding hearings in areas of rural California that are served by rate-of-return telecommunications carriers. She also noted her attendance the California Broadband Council meeting chaired by President Peevey, where she discussed the recent expansion of the LifeLine program that would allow discounts to apply to text and data plans. 
 
 

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