On June 21, 2018, the California Public Utilities Commission held its regularly scheduled agenda meeting. The principal item of interest was the Commission’s adoption of a citation program that would allow the Communications Divisions Staff to impose penalties on telecommunications carriers for noncompliance with the Commission’s Resolutions, Decisions, Orders and the Public Utilities Code.
REGULAR AND CONSENT AGENDA ITEMS
Communications Industry Citation Program Initiated (Item 9, Adopted on Consent Agenda)
The Commission approved a Resolution that implements a CPUC staff-administered citation program to enforce the Commission’s resolutions, decisions, orders and the Public Utilities Code. This Resolution, as written and revised, would delegate to Communications Division staff the authority to issue citations and levy penalties in accordance with a schedule set forth in the resolution. During the meeting, Commissioner Rechtschaffen noted the citation program’s potential to respond quickly and efficiently to instances of noncompliance and to increase the alignment of staff’s enforcement authority across the regulated industries.
The Adopted Resolution (T-17601) is available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M216/K795/216795045.PDF.
SIGCA Holdings, LLC’s Withdrawal of CPCN Application (Item 29, Adopted on Consent Agenda)
The Commission adopted a Decision that dismisses SIGCA Holdings, LLC’s Application for a Certificate of Public Convenience and Necessity (“CPCN”) without prejudice, places certain documents under seal, and closes this proceeding. This Decision grants SIGCA Holdings’ motion to withdraw its application for a CPCN to operate as a competitive local exchange carrier in the territories of the URF LECs and as an interexchange carrier throughout California, due to the loss of “key business opportunities in California,” which affected the company’s decision to enter the California telecommunications market. In essence, the Commission moved too slowly in processing SIGCA’s application. This is an example of the Commission not processing an application in a timely manner that had a significant consequence for the applicant and that led the applicant to withdraw its application when the business opportunity on which its filing was based ended.
The adopted decision (D. 18-06-019) is available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M211/K972/211972813.PDF
Programmatic Changes to the California Advanced Services Fund Program Adopted (Item 48, Adopted on Regular Agenda by 5-0 Vote)
This Decision adopts programmatic changes to the California Advanced Services Fund Program, beginning July 1, 2018. These changes include new methods of private-public partnerships, allowing and incentivizing the use of existing infrastructure, establishing various strategies for investing in low-income households and communities for infrastructure and adoption goals as required by Assembly Bill 1665. This Decision follows AB 1665, the state Internet for All Now Act’s initiative to achieve broadband access to 98 percent of California households in each consortia region by the end of 2022. During the meeting, Commissioner Guzman-Aceves highlighted the Decision’s support for non-profit call centers to assist the dissemination of the information about the offerings of service providers, its overall effort to coordinate existing carriers’ low-income offerings, the direction for staff to host a workshop on marketing for providers, and the discussion of statewide adoption barriers like race, income, age and language.
The adopted decision (D. 18-06-032) is available at: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M216/K788/216788828.PDF
Southern California Edison Company’s Sale of Certain Electric Streetlight Facilities Approved (Item 16, Adopted on Consent Agenda)
The Commission approved a Decision authorizing Southern California Edison Company’s sale of certain electric streetlight facilities (7,354 streetlight units, net book value of $4,894,748; proposed sale price of $5,391,409) to the City of Temecula, pursuant to Public Utilities Code Section 851. This item relies on the Redding II decision to determine the gain-on-sale treatment, and thereby directs revenue from this sale to be allocated entirely to shareholders. The Decision justifies its application of the Redding II allocation based on the following factors about the transaction: a) it involves a distribution system of a public utility (i.e., gas, electric, or water utility) to be sold to a municipality or some other public or government entity, such as a special utility district; b) the distribution system consists of part or all of the utility operating system located within a geographically defined area; c) the components of the system are or have been included in the rate base of the utility; and d) the sale of the system is concurrent with the utility being relieved of, and the municipality or other agency assuming, the public utility obligations to the customers within the area served by the system.
The decision adopted by the Commission (D. 18-06-021) is available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M216/K997/216997604.PDF
Appeal of California Public Records Request Denied Under G.O. 66-D Rules (Item 12, Adopted on Consent Agenda)
The Commission approved a Resolution that denies an appeal of a document requestor following a denial by the Commission’s Legal Division of a request for records pursuant to the California Public Records Act (“CPRA”). The document requester, Mr. Aguirre, requested documents that the Commission compiled in response to two subpoenas issued by an investigating criminal grand jury convened in San Francisco. The Legal Division initially denied Mr. Aguirre’s request on the grounds that the requested records were exempt from disclosure. Mr. Aguirre appealed his denial, pursuant to General Order (“G.O.) 66-D, which provides for full Commission review of Legal Division of a CPRA request if the requestor seeks an appeal. Through this Resolution, the Commission denies Mr. Aguirre’s appeal because the CPRA does not apply to documents controlled by a state grand jury, and even if it did, the California Penal Code’s limit to the disclosure of grand jury material would exempt these documents from disclosure. The Resolution also reasons that the documents sought are exempt from disclosure because they were compiled for law enforcement purposes.
The adopted resolution (Res. L-565) is available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M216/K798/216798688.PDF
510 Area Code Relief Approved (Item 15, Adopted on Consent Agenda)
The Commission adopted a Decision to approve the North American Numbering Plan Administrator’s application for a new area code to provide relief for the 510 area code servicing the western portion of Alameda and Contra Costa Counties before its projected exhaustion in the second quarter of 2019; adopt a recommended all-services overlay option of a new area code over existing 510 area code, as opposed to split method, whereby a new area code would be created after splitting the current 510 geographic area; and adopt a public education program consistent with Decision 17-05-019 for area code exhaustion. The Commission found that the overlay option is the least inconvenient and most equitable for customers, with the least impact on local services like emergency and government services. The Decision also orders service providers who hold thousand-blocks of telephone numbers in the 510 area code to fund the public education program that will explain to consumers the area code overlay change.
The adopted decision (D. 18-06-013) is available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M217/K063/217063623.PDF
Veritas Prepaid Co., LLC’s Application for Registration as an Interexchange Carrier Telephone Corporation Withdrawn with Conditions (Item 16, Adopted on Consent Agenda)
The Commission adopted a Decision to grant a motion by Veritas Prepaid Phone Co., LLC to withdraw its application for registration as an interexchange carrier telephone corporation pursuant to Public Utilities Code Section 1013 and dismisses the proceeding with the condition that the Applicant or any of its current officers, directors, or owners of more than ten percent of its outstanding shares must reference the present decision, application, the Commission’s Consumer and Enforcement Division (“CPED”)’s and Ibanez Plaintiffs’ protests in any future application that they, together or separately, make to the Commission to provide telecommunications services in California. Veritas moved to withdraw following protests by the CPED and a certified plaintiff class in Ibanez et. Al. v. Touch-Tel U.S.A. LLC et al. CPED asserted that Veritas failed to disclose an affiliation with Touch-Tel USA, LLC, and as well as several enforcement actions, revocations, and settlements involving Touch-Tel. The Ibanez Plaintiffs also alleged that Veritas failed to disclose its affiliate Touch-Tel, a September 2013 settlement agreement in Galvez v. Touch-Tel U.S.A., and other FCC enforcement actions.
The adopted decision (D. 18-06-014) is available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M216/K992/216992216.PDF
Operating Authorization of Entelegent Solutions, Inc., Comtech21, LLC, and Communications Brokers & Consultants Reinstated (Item 21, Adopted on Consent Agenda)
The Commission adopted a Resolution to reinstate the Certificates of Public Convenience and Necessity (“CPCNs”) and/or registration licenses held by three wireless telephone corporations, Entelegent Solutions, Inc, Comtech, 21, LLC, and Communications Brokers & Consultants. The Commission previously revoked these companies’ CPCNs and/or licenses for failures to pay fines imposed in Resolution T-17597 based on one or more of the following CPUC requirements: a) reporting and remittance of California Public Utilities Reimbursement Amount Fee in accordance with Pub. Util. Code Sections 401 through 405; b) reporting and remittance of public purpose programs surcharges in compliance with Pub. Util. Code Sections 275 through 278 and General Order 158 paragraph 11; and/or c) submission of a performance bond as ordered under Decision 10-09-017. Roughly a week following the April 26 payment deadline , Entelegent Solutions and Comtech 21 contacted Staff requesting reconsideration of the revocation and committing to pay the fine; roughly two weeks after the payment deadline, Communications Brokers & Consultants contacted Staff to submit the payment of their fine and request reinstatement of their operating authority. As of May 11, 2018, an extended payment deadline determined by Staff, all three corporations paid the fines. Accordingly, Staff recommended that these carriers should have their operating authorities reinstated.
The Adopted Resolution is available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M216/K842/216842755.PDF
Commission Approves Charter Fiberlink, LLC’s Request for a Deviation from Public Utilities Code Section 320 to Construct New Overhead Fiber Facilities (Item 22, Adopted on Consent Agenda)
The Commission approved a Resolution that permitted Charter Fiberlink, LLC’s request for an exemption from Public Utilities Code Section 320, which requires the undergrounding of all future electric and communication distribution facilities that are proposed for installation in proximity to any scenic highway, to construct new overhead fiber cable on existing utility poles along 4.4 miles of a 6.7 mile segment of State Scenic Highway 1, and 8.7 miles of a 13.6 mile segment of State Scenic Highway 68, both in Monterey County. Charter’s Tier 3 Advice Letter (“AL”) requesting an exemption or deviation from Section 320 undergrounding requirements identified several benefits in support of the construction of its overhead fiber facility: 1) broadband infrastructure is essential to attract capital investment, generate jobs and increase economic productivity; 2) high-speed Internet access greatly enhances job opportunities; 3) Monterey County residents will benefit from enhanced access to the Internet; 4) the County’s lack of broadband Internet limits its ability to attract high-tech and research jobs; and 5) high-speed Internet will support Monterey County’s agriculture technology ambitions. Following review of Charter’s AL for project scope, economic feasibility of undergrounding, necessity of the project, the California Environmental Quality Act impacts, and the visual and environmental impact of placing aerial facilities including government or jurisdictional response, Staff recommended Commission approval of Charter’s request for a deviation from Section 320.
The Adopted Resolution is available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M216/K997/216997541.PDF
Mobile Net POSA, Inc. Authorized to Be California LifeLine Provider of Wireless Telephone Services (Item 23, Adopted on Consent Agenda)
The Commission approved a Resolution that authorizes Mobile Net POSA, Inc. (“Mobile Net”), a prepaid wireless service provider that resells the services of Sprint Spectrum L.P. (“Sprint”) and T-Mobile wireless networks, to provide California LifeLine wireless service to qualifying households in wireless service areas of Sprint Spectrum L.P. and T-Mobile under the name “Jolt Mobile.” Mobile Net sought only California LifeLine support, not Federal Lifeline fund support, and did not seek authority to serve Tribal lands.
The Adopted Resolution is available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M217/K061/217061051.PDF
EZ Reach Mobile, LLC, Authorized to Be California Lifeline Provider of Prepaid Wireless Telephone Services (Item 24, Adopted on Consent Agenda)
TThe Commission approved a Resolution that authorizes EZ Reach Mobile, LLC (“EZ Reach”), a wireless reseller that provides wireless services using the sprint PCS and T-Mobile wireless networks, to be a California LifeLine prepaid wireless service provider to offer discounted prepaid wireless telephone services to eligible households in California. EZ Reach sought only California LifeLine support, not Federal Lifeline fund support, and did not seek authority to serve Tribal lands.
The Adopted Resolution is available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M216/K842/216842755.PDF
Statutory Deadline Extended on San Bruno Ex Parte Matter (Item 49, Adopted on Regular Agenda by 5-0 Vote)
The Commission adopted a Decision extending the statutory deadline for the resolution of adjudicatory proceedings, pursuant to Pub. Util. Code Section 1701.2(i), to June 29, 2019. The Commission opened this investigatory proceeding on November 23, 2015 to determine whether Pacific Gas & Electric Company (“PG&E”) violated Rule 1.1 of the Commission’s Rules of Practice and Procedure by failing to timely report ex parte communications and engaging in improper ex parte communications during the course of the San Bruno pipeline explosion investigations and other related proceedings, and to determine the appropriate sanctions. On September 21, 2017, PG&E disclosed additional e-mails that may constitute new violations of the ex parte rules set forth in the Commission’s Rules of Practice and Procedure. On May 22, 2018, the assigned Administrative Law Judge (“ALJ”) issued a ruling that required PG&E, the City of San Bruno, the City of San Carlos, the Office of Ratepayer Advocates, the Safety and Enforcement Decision, and The Utilities Reform Network (collectively, “joint parties”) to meet and confer and file a status report regarding their efforts to reach a further settlement regarding the recently disclosed e-mails. The Decision supports the extension of the statutory deadline because it grants additional time for the parties to file a joint motion in the event of a settlement, or alternatively, if a settlement is not reached, it grants additional time for evidentiary hearings.
The Adopted Decision is available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M217/K074/217074512.PDF
Statutory Deadline Extended for CereTel Inc.’s NDIEC Application (Item 33, Adopted on Consent Agenda)
The Commission approved a Decision that would extend the statutory deadline for the completion of the application proceeding considering CereTel Incorporated’s request for authority to operate as a Non-Dominant Interexchange Telephone Corporation until December 29, 2018. The purpose the extension is to allow the assigned ALJ to address another time-critical proceeding and “thoroughly evaluate and prepare the proposed decision of this proceeding.”
The Adopted Decision is available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M216/K849/216849396.PDF
SIGNIFICANT HELD AND WITHDRAWN ITEMS
Proposed Decision to Grant Southern California Edison Company Lease of Fiber Optic Cables to Verizon Wireless and Allocates Revenues 25/75 to Shareholders/Ratepayers(Held on Consent Agenda, Item 2)
The Commission held a Proposed Decision (“PD”) that would grant authority to Southern California Edison Company (“SCE”) to lease fiber optic cables that it owns, operates and maintains to Verizon Wireless. Although SCE seeks a 90/10 shareholders-to-ratepayers split of the revenue from the Master Lease Agreement of this deal, the Proposed Decision would approve the Master Lease Agreement subject to a 25/75 shareholders-to-ratepayers revenue sharing allocation of revenues. Furthermore, this PD directs SCE to submit Lease Route Orders submitted by Verizon Wireless pursuant to the Master Lease Agreement to the Communications Division by informational letter in order to ensure safety, reliability, and competitive access. This is the sixth time that this PD has been held by the Commission.
The latest version of the Proposed Decision is available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M214/K196/214196733.PDF
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 33, Held by Commissioner Rechtschaffen for Further Review)
The Commission 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
Legislative Items: Assembly Bills and Senate Bills (Items 53-58, Held Until 7/12 Meeting by Staff)
Commission Staff held all legislative items on the May 31st 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.
Commissioner Peterman – Order Instituting Rulemaking on the Affordability of Utility Rates in Commission Proceedings
During the Commissioner Reports segment of the voting meeting, Commissioner Peterman notified the Commission of a recent Order Instituting Rulemaking (“OIR”) on customer affordability across the water, telecommunications, electricity, and gas industries. The purpose of this proceeding is to develop a set of common understanding and tools to assess the impacts of individual commission proceedings and rate cases on affordability from the customer perspective. Commissioner Peterman noted two specific goals of this OIR: (1) to develop the framework and principles to identify and define affordability criteria for all utility services within CPUC jurisdiction; and (2) to develop methodologies, data sources, and processes necessary to comprehensively assess affordability impacts across individual proceedings. This OIR proposes to focus on the residential class in order to manage the caseload of such a comprehensive proceeding; however, Commissioner Peterman anticipates that lessons learned can be applied in the future to affordability for other customer classes.
The latest version of the Draft OIR is available here: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M216/K193/216193257.PDF
Commissioner Guzman-Aceves – LifeLine
Michaela Pangilinan, formerly a Communications Division analyst specializing in LifeLine, is Commissioner Guzman-Aceves’ new interim advisor on communications. She is taking over for Michael Minkus, who is on paternity leave for several months. Michaela is familiar to many of you for her involvement with the LifeLine program.
The LifeLine Program kickoff webinar will be held on July 11. Further details will be published on the CPUC’s LifeLine webpage.
The Internet For All Now Act workshop to discuss infrastructure elements of the Internet For All Now Act program will be held on July 25 in Sacramento. The Act, authorizes additional collection of funds for the California Advanced Services Fund to provide high-speed Internet access to all Californians.
CPED PAYPHONE ENFORCEMENT PROGRAM
Jeff Kasmar, the Program and Project Supervisor of Consumer Protection and Enforcement division’s Utility Enforcement Branch, delivered a detailed presentation on the CPUC’s Payphone Enforcement Program. He delivered a detailed regulatory background of payphones in California, and summarized the current oversight activities of the state’s payphones and their owners. Within his section, three staff members perform risk-based (e.g., fire risk, high usage, low income areas) targeted inspections of approximately 22,000 payphones in the state. These inspectors check payphones for proper signage, physical safety hazards, and connectivity (911, long-distance, toll-free numbers, etc.)
Mr. Kasmar reported that approximately 75% of violations are found to be corrected upon fist inspection, and the rest are largely corrected after subsequent inspections; therefore, his section has not found need to fine, penalize or shut down phones. Mr. Kasmar attributed these high compliance rates to owners’ profit motive from functioning payphones. At this juncture in Mr. Kasmar’s presentation, Commissioner Rechtschaffen raised the idea of extending the citation program to the payphone enforcement process, inspired by the one discussed earlier in the meeting (see Agenda Item 9, above). Commissioner Guzman-Aceves also recommended adding the contact number for the CPUC to the mandatory signage required to be placed on payphones.