On June 15, 2017, the California Public Utilities Commission held its most recent agenda meeting. Consistent with the Commission’s commitment to conduct its business in alternative locations, the meeting was held in Sacramento, at the State Personnel Appeals Board building. The meeting addressed two significant telecommunications items: (1) the “Light Saber” project under the California Advanced Services (CASF) program; and (2) a request from the Commission’s Legal Division to file comments in Federal Communications Commission (FCC) dockets involving pole attachments, “copper retirement” and the “IP transition.” Both items produced significant discussion, and both resulted in a split of views from the Commissions. The agenda also featured items by which the Commission would take positions on a wide variety of public utility bills before the Legislature, but this item was held. A rulemaking to consider the inclusion of “text messaging” in the funding base for the public policy programs was also held. These and other items of interest addressed during the Commission meeting are summarized below.
REGULAR AND CONSENT AGENDA ITEMS
“Light Saber” CASF Project Narrowly Approved, Bringing Broadband to Paradise Valley in Santa Clara County (Item 19, Adopted 3-2 on Regular Agenda) – While this item was originally slotted for the consent agenda, the “Light Saber” project engendered a full Commission discussion, and accounted for a significant portion of the Commission’s overall meeting. Ultimately, it was approved, with President Picker and Commissioner Guzman-Aceves dissenting.
The Light Saber project is designed to serve a small, rural, middle-income community in the Santa Cruz Mountains, to the west side of the valley near Morgan Hill. The total project value is just over $1 million, and it is designed to provide last mile and middle mile facilities to 150 underserved households, at a cost of just over $7,000 per household. The Resolution approving the project notes that it would provide access to e-health services and “online economic opportunities.” The applicant was “LCB Communications, LLC” (LCB), an affiliate of “South Valley Internet Inc.” (SVI). LCB is a Competitive Local Exchange Carrier (CLEC) in the area, and SVI is an Internet Service Provider (ISP).
LCB/SVI’s original funding request was for $2.8 million, for a total project cost of $4.6 million. Following the application, Communications Division received a dispute from RazzoLink, a Wireless ISP, claiming that it served a significant portion of the project area. Communications Division also reviewed information indicating that the middle mile facilities that would be part of the project would traverse areas served by Charter, AT&T, and Frontier. Both of these challenges resulted in reductions to the project amount, fueled by skepticism from President Picker and others at the Commission meeting at which the project was first considered, in February 2017.
Communications Division Director, Cynthia Walker, introduced the item, noting that the applicant had met all of the criteria under the program, and observing that substantive changes had been made in response to Commissioner concerns during the original consideration of the matter. Ms. Walker also noted that the Communications Division is separately trying to address what some have suggested is as a lack of “vision” in the CASF program, which has led in part to the preparation of a prioritization “white paper” and a list of “high impact areas.” Ms. Walker emphasized that the real difficulty under the program is to “attract more applicants.” This would allow priority areas to be addressed and for cost comparisons to take place based on market considerations.
An extensive conversation amongst the Commissioners ensued. The conversation was led by President Picker, who expressed concern that the CASF program is a “reactive program” without any “true vision.” As to the specific project, he took issue with the “burying” of 11 miles of fiber, which he views as a responsiveness problem if there is an outage. He argued that we should not “isolate” infrastructure in this way. He also suggested that with the trend toward “5G,” this was not the right kind of project to be supporting.
Commissioner Randolph responded next, arguing that the applicant has “done everything they were supposed to” and “meets the current objectives of the program.” Commissioner Peterman echoed these views, clarifying that, to the extent the Legislative wants to give different direction, “I look forward to that direction,” but that is not a reason to question this project. She elaborated that if the Legislature wants the Commission to “not just be focused on closing the digital divide,” but be focused on doing so “in a certain way,” that should be an issue for future consideration.
Commissioners Guzman-Aceves and Rechtschaffen closed out the conversation. Guzman-Aceves stated that “given where we are with the program and the pending legislation, I am uncomfortable with where this project lies with the vision of the program.” . She asked for a hold, and Commissioner Rechtschaffen followed up by remarking that he would support the project, but would entertain a hold. Commissioner Randolph indicated that she would prefer to vote, and a vote occurred.
The roll was called, and the project prevailed by a 3-2 vote, Picker and Guzman-Aceves dissenting. The Resolution approved by this vote is available here: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M190/K569/190569407.PDF
CPUC Comments Prepared in FCC Dockets Addressing Copper Retirement, Pole Attachment, and IP Transition(Item 36, Adopted 4-0 on Regular Agenda, Picker Abstaining) – By this item, the Commission’s Legal Division sought authority to comment upon a variety of federal regulatory matters related to the “IP transition,” “copper retirement,” and the Commission’s authority over pole attachments and right-of-way access. The Legal Division, led by Helen Mickiewicz, prepared the attached memorandum describing its recommended approach to these issues: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M190/K280/190280943.PDF
Developments in these FCC dockets are occurring against a backdrop of rapid change at the FCC, as the Trump administration majority moves expeditiously to reconsider the trajectory of many reforms addressed by the prior, Wheeler-led majority. On the specific issues, the FCC is considering relaxing copper retirement justification and notification requirements and removing state authority over pole attachments (reverting to the FCC authority over poles). The federal justification for these proposals is to pave the way for modern infrastructure, including “5G,” and to streamline the treatment of pole attachments across states.
The Legal Division proposes to oppose the suggested FCC proposals in both areas. Regarding copper retirement, the Legal Division Memorandum argues that some telecommunications “functions or services still depend upon copper, and cannot yet transition to IP.” (Memo, p. 3). The Legal Division also suggests that the move away from copper could harm the disabled community and/or senior citizens. The Legal Division memo leverages these arguments as the basis to retain current notice requirements related to the transition away from copper. On the pole attachment subject, the Legal Division advances a clear view that any threat to California jurisdiction should be resisted.
Ms. Mickiewicz led the discussion of this item. She framed her presentation around two components. First, she discussed the comments pertaining to the “IP transition,” which largely involved the Legal Division’s views concerning copper retirement. As she summarized, “the FCC wants to undo the 2016 standards” that accompanied proposals to retire copper. She observed that the rules the Obama-era FCC adopted were the result of an extensive proceeding with an extensive record, whereas the current developments are a set of policy proposals without such support. Second, she explained that California has been operating under a “reverse preemption” authority for approximately two decades. This is permitted under the Telecommunications Act and current FCC policy, and California has staked out its own extensive rules in the pole attachment area. The FCC proposal suggests that this be reconsidered and that the FCC adopt consistent standards for pole attachment.
The Commissioners engaged in significant discussion with Ms. Mickiewicz before voting on the item. Commissioners Peterman and Randolph both expressed general support for the comments, but Randolph suggested that the comments may go too far in implying favoritism of one technology (copper) over another (IP-based technologies). She summarized her concern by noting that she would “like to focus on decision-making ability and less on whether or not we are Luddites.” President Picker stated that he has “many concerns about the language proposed.” Picker expressed concern with the tone of the Legal Division’s proposal, stating that it was “too antagonistic” and that a lighter touch might be sufficient to get the point across. He ultimately abstained from the vote.
The remaining four Commissioners, following Picker’s abstention, voted to support the Legal Division comments, but they indicated that further edits would occur after the meeting to be consistent with the Commissioners’ comments during the meeting. The final product, reflecting these edits, was filed with the FCC, and is available here: https://ecfsapi.fcc.gov/file/10616232699616/Docket%20Nos.%2017-84%2C%2017-79%20Comment.pdf
CuraTel LLC Granted Authority to Discontinue Service and Migrate Customers to URF ILECs(Item 21, Adopted on Consent Agenda) – This Decision approves the request of CuraTel LLC to discontinue service in California, relinquish its LifeLine only Eligible Telecommunications Carrier (ETC) designation in California, and migrate customers who do not select another carrier to either AT&T or Frontier. CuraTel had been an ETC for LifeLine purposes since 2012, and filed its application to exit the market in September 2016. To discontinue service, CuraTel was required to comply with the Commission’s “mass migration” rules, which require the submission of an “exit plan” and an identification of “default carriers” who will inherit customers if they do not choose alternative service providers. Separately, CuraTel identified the combined Charter/Time Warner entity as the “arranged carrier,” which is the carrier who CuraTel prefers as the new provider for its customer base. However, where customers do not take needed steps to assist in the transition, they will be transitioned instead to the ILECs, either Frontier or AT&T, depending on location. The Proposed Decision underlying this Decision is available here: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M189/K821/189821679.PDF
Statutory Deadline Extended for Conclusion of LifeLine Proceeding(Item 35, Adopted on Consent Agenda) – This Decision extends the statutory deadline for resolution of the ongoing LifeLine proceeding until August 2017. The current LifeLine proceeding initiated in 2011, and is docketed as R.11-03-013. This item extends the deadline for three months to permit consideration of a proposed decision that the Decision says would be considered at the June 29, 2017 meeting. The Proposed Decision underlying this Decision is available here: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M187/K464/187464573.PDF
Statutory Deadline Extended for Conclusion of Water-Energy-Communications Nexus Proceeding(Item 32, Adopted on Consent Agenda) – This Decision extends the statutory timeframe for consideration of the water-energy-communications nexus proceeding, a proceeding to explore synergies across regulated industries, which was begun in 2013. In this instance, the deadline has been extended to consider a petition for modification of filed by Southern California Edison on March 2, 2017 by which Edison is seeking to eliminate the requirement for it to provide “matinee pricing,” as anticipated in a previous decision. Proposed Decision underlying this Decision is available here: http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M186/K580/186580345.PDF
Commission Resolutions Authorize Release of Information Used in Utility Investigations(Items 3, 5, 10, Adopted on Consent Agenda) – The Commission adopted three parallel Resolutions releasing information related to safety investigations, thereby releasing information that the Commission originally considered confidential during the course of the investigations. Two of these items involved railway safety, and one involved an electrical incident. The Draft Resolutions underlying each item are available at the following links:
Item 3: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M190/K657/190657759.PDF
Item 5: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M190/K658/190658092.PDF
Item 10: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M190/K657/190657916.PDF
SIGNIFICANT HELD ITEMS
Commission Positions on Key Legislation Held(Items 37-41, Held Until 6/29) – Every year, the Commission takes positions on key bills under consideration by the Legislature affecting public utilities, the Commission’s governance, and related matters. A wide variety of bills are on the Commission’s agenda for evaluation, and they will be informed by memoranda from the Commission’s Office of Government Affairs (OGA). Specific information regarding the Commission’s positions will likely be revealed closer to the time that the Commission will have to take positions.
Disposition of Dark Fiber Lease Between Southern California Edison and Verizon Wireless Held (Item 26, Held by Staff Until 7/13) – This item would address a request from Southern California Edison to lease dark fiber to Verizon Wireless. Commission approval of this lease is necessary pursuant to Public Utilities Code Section 851 because public utilities – in this case, Edison – cannot “sell, lease, assign, dispose of, or encumber the whole or part of its line, plant, system or property” if that property is used and useful in providing public utility service. The Proposed Decision associated with this item would grant the request, and thereby approve a “master” agreement whereby future similar leases could be handled. The Proposed Decision is available here: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M187/K104/187104632.PDF
Rulemaking to Consider Inclusion of Text Messaging Services in Scope of Public Policy Surcharges(Item 17, Held by Staff until 6/29) – This proposed rulemaking would consider whether to consider text messaging services “telecommunications services” or “information services,” for the purposes of applying the Commission’s public purpose fund surcharges. This proposed rulemaking was initiated in response to a petition for rulemaking from the CTIA-The Wireless Association. While CTIA presented its petition with arguments to demonstrate that text messages are information services, the proposed rulemaking would evaluate the issue more generally. In comments on the petition for rulemaking, Joint Consumers (including TURN) argued that text messages should be within the Commission’s jurisdiction. The draft order instituting rulemaking is available here: http://docs.cpuc.ca.gov/PublishedDocs/Efile/G000/M186/K580/186580353.PDF
Customer Complaint Against AT&T Held(Held by Staff until 6/29) – This customer complaint involving allegations of non-responsiveness from AT&T is proposed to be resolved by settlement. The Proposed Decision underlying this item is available here: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M190/K065/190065953.PDF
COMMISSIONER AND MANAGEMENT REPORTS
Commissioner Peterman Notes Attendance at Meeting at California Office of Emergency Services (OES) – Commissioner Peterman noted her attendance at a recent meeting with the California Office of Emergency Services (OES). She encouraged the Commission to collaborate more with OES, and remarked that the OES and Commission personnel identified many areas of potential collaboration during the workshop.