On July 26, 2018, the California Public Utilities Commission held its regularly scheduled agenda meeting in Sacramento. The principal items of interest were the Commission’s imposition of General Order (“G.O.”) 133-D fines against AT&T, Frontier, Foresthill, and Volcano, the Commission’s approval of a supplemental California Advanced Services Fund (“CASF”) grant to Cal.net’s broadband project in North El Dorado County and the Commission’s approval of the fiscal year 2018-19 budgets for the Commission’s six telecommunications public purpose programs. All Legislative items on the agenda were held until future meetings. We provide further information below regarding the agenda items and others of interest to telecommunications providers that were addressed during the meeting
REGULAR AND CONSENT AGENDA ITEMS
General Order 133-D Fines Adopted Against AT&T, Frontier, Foresthill, and Volcano (Item 5, Adopted on Consent Agenda)
The Commission approved administrative fines for 2017 totaling $13,061 from AT&T, Frontier Communications of the Southwest, Foresthill Telephone Co., and Volcano Telephone Company for failure to meet certain standards under G.O. 133-D. G.O. 133-D added possible fines to the established reporting requirements for communications providers, referred to as “Minimum Standard Reporting Levels,” in the areas of installation interval, installation commitments, customer trouble report, out of service repair interval, and answer time. When the performance of a carrier subject to the reporting requirement falls below the Minimum Standard Reporting Levels for three consecutive months, a schedule of fines adjusted for the relative size of the carrier and the length of the time service falls below the reporting standard. The Commission found that certain companies met the Customer Trouble Reports, Installation Interval, and Installation Commitments standards in 2017, but failed to meet the standards for Out of Service Repair Intervals, and, in some cases, Answer Time requirements. Consequently, this resolution orders the payment of fines of $7,875 from AT&T; $3,636 from Frontier; $500 from Foresthill; and $1,050 from Volcano for their failure to meet the standards.
The Adopted Resolution (T-17607) is available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M220/K090/220090666.PDF
California Teleconnect Fund Program Surcharge Rate of 0.78% Approved, Effective September 1, 2018 (Item 11, Adopted on Consent Agenda)
The Commission updated the California Teleconnect Fund (“CTF”) program surcharge rate to 0.78% effective September 1, 2018, until further revised by the Commission. This surcharge rate is reduced from the prior rate of 1.08%, which was established via Resolution T-17471 on March 26, 2015, based on forecasted CTF budget requirements. The CTF program provides discounted rates for advanced telecommunications services for qualifying schools, libraries, government-owned health care providers, and community based organizations. This program is funded by a surcharge assessed on revenues collected from end-users for intrastate telecommunications services.
The adopted resolution (Res. T-17606) is available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M220/K069/220069616.PDF
FY 2018-2019 Budgets for California Telecommunications Public Purpose Programs Approved (Item 12, Adopted on Consent Agenda)
The Commission approved the Fiscal Year 2018-19 budgets for the six Commission-administered telecommunications public purpose programs: the California Advanced Services Fund ($81,023,000); the California High Cost Fund-A ($49,256,000); the California High Cost Fund-B ($22,333,000); the California LifeLine Program ($389,956,000); the California Teleconnect Fund ($128,041,000); and the Deaf and Disabled Telecommunications Program ($64,403,000).
The adopted resolution (Res. T-17615) is available at: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M220/K105/220105885.PDF
Cal.net’s Supplemental CASF Grant in northern El Dorado County Approved (Item 14, Adopted on Consent Agenda)
The Commission approved a supplemental $98,795 CASF grant to Cal.net, Inc. (“Cal.net”) to reimburse Cal.net for 60 percent of the CEQA review cost overage for its El Dorado North Broadband Project. On January 14, 2016, the Commission approved a $1,139,755 CASF grant to build Cal.net’s last-mile fixed wireless infrastructure to deliver broadband services to underserve rural communities in northern El Dorado County. Cal.net requested additional CASF funds from Communications Division to cover the shortfall of $98,795 resulting from the economic boom in recent years, which increased the cost to complete CEQA review and elevated the project budget from $258,500 to $423,159. The Commission approved this request following CPUC Staff’s confirmation that Cal.net’s request is consistent with directives set forth in Resolution T-17497, which approved a CASF grant of $1,139,755 to Cal.net to build the El Dorado project.
The adopted resolution (Res. T-17626) available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M220/K105/220105885.PDF
Vesta Solutions, Inc.’s CPCN to Offer 911 Emergency Services Approved (Item 17, Adopted on Consent Agenda)
The Commission approved Vesta Solutions, Inc.’s application to provide resold and partial facilities-based competitive local exchange service in the territories of Pacific Bell Telephone Company, Frontier California Inc., Consolidated Communications of California Company, and Citizens Telecommunications Company of California Inc. and resold interexchange services on a statewide basis,in order to offer 911 emergency services to government and quasi-governmental Public Safety Answering Points (“PSAPs”). Vesta may also provide other local exchange telecommunications services and interexchange telecommunications services including business resold and facilities-based local, interexchange, bundled interexchange, and wholesale and carrier-to-carrier Next Generation 911 services, including bundles of data, voice and/or wireless services in support of Next Generation 911 service.
The adopted decision (D. 18-07-030) is available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M220/K430/220430703.PDF
Atos Public Safety, LLC’s CPCN to Offer 911 Emergency Services Approved (Item 18, Adopted on Consent Agenda)
The Commission approved Atos Public Safety, LLC’s application to provide resold and limited facilities-based competitive local exchange service in the territories of Pacific Bell Telephone Company, Frontier California Inc., Consolidated Communications of California Company, and Citizens Telecommunications Company of California Inc. and resold interexchange services on a statewide basis, in order to offer 911 emergency services to government and quasi-governmental PSAPs. Atos may also provide other local exchange telecommunications services and interexchange telecommunications services including business resold and limited facilities-based local, interexchange, bundled interexchange, and wholesale or carrier-to-carrier Next Generation 911 services, including bundles of data, voice and/or wireless services in support of Next Generation 911 service.
The adopted decision (D. 18-07-031) is available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M220/K432/220432674.PDF
NGA 911, LLC’s CPCN to Offer 911 Emergency Services Approved (Item 19, Adopted on Consent Agenda)
The Commission approved NGA 911, LLC’s application to provide resold and limited facilities-based competitive local exchange service in the territories of Pacific Bell Telephone Company, Frontier California Inc., Consolidated Communications of California Company, and Citizens Telecommunications Company of California Inc. and resold interexchange services on a statewide basis in order to offer emergency call routing, transport and related functionalities to state and municipal governmentalal agencies to support PSAP operations.
The adopted decision (D. 18-07-032) is available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M220/K448/220448124.PDF
SIGNIFICANT HELD AND WITHDRAWN ITEMS
Proposed Decision to Dismiss California Cable & Telecommunications Association (“CCTA”)’s Complaint Against San Diego Gas & Electric Company (“SDG&E”) Concerning Their Pole Attachment Fee Dispute (Item 4, Held to August 9, 2018, by Commission Staff)
The Commission for a third time held a Presiding Officer’s Decision (“POD”) that would dismiss California Cable & Telecommunications Association (“CCTA”)’s complaint against San Diego Gas & Electric Company (“SDG&E”) seeking Commission resolution of their dispute regarding pole attachment fees because the complaint process is an improper vehicle for resolving such dispute. CCTA and SDG&E entered into a settlement agreement that established a pole rate schedule for the years 2009-2016 that culminated in a 2016 attachment rate of $16.35. On September 16, 2016, SDG&E notified CCTA of a rate increase to $30.58. The parties could not agree on a 2017 attachment rate, and CCTA brought this complaint, pursuant to Section 767.5(c) to resolve the impasse. The POD would grant SDG&E’s motion to dismiss on the basis that the ROW decision’s expedited dispute resolution procedure, which resolves disputes relating to access to public utility right of way, rather than a complaint, is the appropriate vehicle to resolve this dispute.
The latest version of the this Draft POD is available here: http://docs.cpuc.ca.gov/PublishedDocs/Efile/g000/M212/K177/212177369.PDF
Request to Approve Transfer of Control of Bandwidth.com CLEC, LLC to David A. Morken (Item 8, Held to August 9, 2018, by Commission Staff)
This Proposed Decision (“PD”), if adopted, would deny the request for approval for transfer of control of Bandwidth CLEC to David A. Morken. Bandwidth CLEC was issued a certificate of public convenience and necessity to provide limited facilities-based and resold competitive local exchange and interexchange services. Bandwidth CLEC is solely owned and managed by Bandwidth Incorporated (“Bandwidth”), whose co-founder, CEO, and chairman is David A. Morken. On August 16, 2017, Bandwidth filed a registration statement on Form S-1 with the Securities and Exchange Commission for Bandwidth’s initial public offering, which would restructure Bandwidth’s stock and grant David A. Morken a controlling share in Bandwidth, and as result, indirect control of Bandwidth CLEC
The latest version of the Proposed Decision is available here: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M224/K258/224258016.pdf
Legislative Items: Assembly Bills and Senate Bills (Items 53-58, Held Until August 9, 2018 Meeting by Staff)
Commission Staff held all legislative items on the July 26 agenda. Notable items include:
- AB 1553 (Quirk-Silva, requiring utilities with gross annual revenues exceeding $25 million to pay an undisputed invoice by its required payment date, and penalties for failure to do so);
- AB 1959 (Wood, extension of CHCF-A and CHCF-B program requirements to January 1, 2023);
- AB 1999 (Chau, prohibiting a local agency authorized to provide broadband Internet access service in the state from taking certain actions regarding the access of Internet content by end users);
- AB 2104 (Lackey, California Advanced Services Fund); AB 2148 (Chavez, extending the public review and comment period for CPUC decisions and resolutions from 30 days to 45 days); AB 2431 (Weber, intervenor compensation to small school districts for participating in the GRCs of electrical or gas corporations);
- AB 2537 (Carillo, repealing language creating the Universal Lifeline Telephone Service Trust Administrative Committee and establishing in its place the Lifeline Oversight Board to advise the CPUC on the effective development, implementation, and administration of the lifeline program);
- AB 2652 (Quirk, pushing back the Commission’s deadline to adopt a portability freeze rule for the lifeline program from January 15, 2017 to January 15, 2019, and to require the Commission to adopt a rule by June 30, 2019 to improve the cost-effectiveness of delivering the lifeline program);
- AB 2910 (Wood, requiring the Commission to submit an annual natural disaster report on telecommunications service systems);
- AB 2962 (Nazarian, nonsubstantive changes to the provision specifying conditions for renewal of a franchise under the Digital Infrastructure and Video Competition Act of 2006);
- AB 3003 (Irwin, nonsubstantive revision of the definition of “broadband” in the Digital Infrastructure and Video Competition Act of 2006);
- AB 3111 (Garcia; bar from lifeline service eligibility any member of a group of individuals who are living together with a lifeline subscriber at the same address and as one economic unit; allow multiple lifeline subscribers to maintain the same principal place of residence);
- SB 460 (De Leon, prohibit specified actions by an Internet service provider that provides broadband Internet access service, and make a violation of those prohibition subject to remedies available pursuant to the act; prohibit a state agency from contracting with an Internet service provider for the provision of broadband Internet access service unless that provider certifies under penalty of perjury that it will not engage in specified activities);
- SB 822 (Wiener, prohibit an Internet service provider from offering different levels of quality of service to end users as part of broadband Internet service unless specified conditions are met);
- SB 1028 (Hill, require the Commission to evaluate the full effect of the enactment of federal House Resolution 1 upon the expenses and tax liabilities incurred by public utilities for payment of federal taxes; direct the Commission to adjust the rates of the utility to reflect the changes in projected expenses and tax liabilities, if material impact is found);
- SB 1410 (Morrell, authorize the Commission to inspect and audit the books and records of utilities in accordance with the Commission authorized general rate case cycle, if that cycle provides for a rate case once every five years or less.
Order on Rehearing of Decision 16-12-066 on Rural Call Completion Issues, Other Call Completion Issues, and Call Initiation Issues Including Lack of 911 Access and Dial Tone
After the public portion of the meeting, the Commission adopted Decision 18-07-045 in the rural call completion matter. The decision addressed the rehearing application filed by a coalition of communications providers including the California Cable and Telecommunications Association, Charter Fiberlink, Comcast, Cox Communications, CTIA, MCImetro Access Transmission Services, Time Warner Cable, Consolidated Communications of California Company, and the Small LECs.
The decision on rehearing eliminates a portion of the directive in Ordering Paragraph (“OP”) 20 in D.16-02-066, that respondent carriers provide concurrent notice to specified public agencies of outages reported pursuant to the standing data request to be issued by the Communications Division (“CD”), modifies text in D.16-12-066 to align with the intent and language of OP 20, replaces the term “carriers” with “respondents” in OPs 2, 5, 6, 7, and 15, and denies the rehearing of D.16-12-070, as modified, in all other respects.
The order on rehearing, issued on July 31, 2018, is available here: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M217/K968/217968281.PDF