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On June 27, 2013, the Commission held its regularly-scheduled agenda meeting.  There were no telecommunications items addressed on the regular agenda, but the Commission held a special meeting to discuss AB 1407, legislation proposing modifications to the LifeLine program rules.  In a 4-1 vote, the Commission adopted an oppose position on AB 1407.  On the consent agenda, the Commission authorized the Staff to file comments with the FCC regarding potential trials to obtain data related to transitions in telecommunications’ networks.  In addition, the Commission granted TURN intervenor compensation fees in the amount of $31,453 in connection with the SureWest acquisition by Consolidated.  These and other items of interest are discussed in further detail below.

SPECIAL MEETING

Proposed Legislation on LifeLine, AB 1407 (Bradford) (Item 67, oppose position approved 4-1) –  A special legislative discussion was convened to evaluate the Commission’s position on AB 1407, a bill that contains broad amendments to the Moore Universal Service Act (“Moore Act”).  This item was not included in the initial agenda for the meeting; however, given that the legislation will be held for a vote on July 8, 2013 and before the next regularly-scheduled meeting, the Commission concluded that special discussion was necessary to address the Commission’s position.  
 
Some of the amendments to the LifeLine program proposed by the bill include: (1) modifications to allow wireless and non-traditional voice service providers to voluntarily offer state LifeLine services in accordance with the FCC’s standards; (2) revisions to the state LifeLine program requirements to conform with the FCC’s Lifeline program; and (3) removal of the CPUC’s authority to set a LifeLine rate by codifying the LifeLine discount at $11.85 (applicable to any voice service) and by capping the reimbursement charge for connection charges at $10.00.
 
This staff recommendation regarding the bill was introduced by the Office of Governmental Affairs (“OGA”), who asked the Commission to adopt an “oppose” position on the bill.  The OGA first noted that AB 1407 would broadly codify solutions that may not be in alignment with the ongoing Commission rulemaking (R.11-03-013) addressing similar issues.  The OGA also noted that the bill would limit the Commission’s authority to modify the set support amounts under the current program by statutorily-setting the discount at $11.85.  
 
Commissioner Sandoval provided a summary of recent events held in the ongoing LifeLine rulemaking proceeding.  She noted that an all-party meeting was held, and also noted the ongoing the public participation hearings held throughout the state of California.   She pledged to issue a proposed decision by early October and for the Commission to adopt a decision before Thanksgiving of this year.   
 
President Peevey opposed the staff’s recommendation to oppose the bill because a “support if amended” would be more productive.  He acknowledged that there is an ongoing rulemaking and recognized that provisions of the bill may be inconsistent with federal and state laws.  However, he encouraged the Commission  the Commission should work cooperatively with the legislature and noted that the author of the Moore Act also supported AB 1407.  President Peevey argued that a better approach would be to work with the legislature on AB 1407.  President’s Peevey also offered a few amendments that he would prefer to pursue in lieu of an oppose position.
 
Commissioner Ferron also noted his concerns with the reductions to consumer protections and agreed with Commissioner Sandoval’s assessment that the ongoing proceeding would achieve modifications to the program before the bill.  He disagreed with President Peevey’s assessment that a clear opposition to the bill would be inappropriate and believes the best approach with AB 1407 would be to take a clear stand that the Commission opposes AB 1407.   
 
Commissioner Florio supported the staff’s recommendation to oppose AB 1407He suggested that the legislature make AB 1407 a two-year bill so that the Commission can move forward with the ongoing rulemaking, and if the legislature is unsatisfied with the Commission’s decision, it can address those issues at a later point.  Commission Florio indicated that he appreciated President Peevey’s proposed amendments, but did not believe they sufficiently addressed his concerns.  He concluded by asserting that he would commit to meeting Commissioner Sandoval’s proposed schedule with regard to the ongoing LifeLine proceeding.
 
Commissioner Peterman expressed her appreciation toward the public speakers who spoke about LifeLine, and thanked the group for providing the feedback.  She indicated that she appreciated AB 1407’s efforts at expanding the LifeLine program.  She also expressed her appreciation for President Peevey’s proffered efforts to clarify the bill’s language, but concluded that those modifications did not resolve her concerns with the bill.  She supported the oppose recommendation of the staff, but also indicated her support for Commissioner Florio’s proposal for a two-year bill that would delay reviewing the issue until the regulatory process has played out. 
 
During the public session, there were numerous speakers who addressed AB 1407.  The majority of the parties supporting the staff’s proposed “oppose” position emphasized the importance and value of allowing the public to participate in the modification of the LifeLine process. 
 
 
A copy of the memorandum underlying this item is available at the following link
 
A copy of the most recently updated bill is available at the following link
 
CONSENT AGENDA ITEMS

Staff Authorized to Prepare Comments to FCC Regarding Potential Technological Trials Related to Internet Protocol Transition (Item 52, approved on consent) – This item authorizes Commission staff to file comments in response to the FCC’s Technology Transitions Policy Task Force’s (“Task Force”) Public Notice requesting comments regarding the ongoing transition from copper to fiber, to wireline to wireless, and from a traditional wireline (“TDM-based technology”) telecommunications network to an internet-protocol (“IP-based technology”).  The goal of the Task Force is to develop real-world trials or pilot programs that would allow the FCC to gather a factual record to help determine what policies are appropriate to promote investment and innovation while protecting consumers, promoting competition, and ensuring that emerging all-Internet Protocol (“IP”) networks remain resilient. 
 
Staff recommends that the CPUC file comments recognizing the value of trials, but state that trials should take place after the FCC addresses “long-standing” legal questions for the purposes of the trial.  Specifically, the comments will: (1) ask the FCC to address the status of VoIP and other IP-enabled technologies; (2) ask the FCC to address the FCC’s jurisdiction to resolve issues that it raises in the Public Notice; (3) assert that any trial affecting service offered by a state franchisee or Certificate of Public Convenience and Necessity holder must respect state law; (4) assert that the Commission be allowed to approve any withdrawal of service contemplated or proposed by any trial involving the closing of a central office or the cessation or suspension of a service to California customers; (5) ask the FCC to share all trial data with states; and (6) ask the FCC to clarify that participation in the trials is voluntary and not pursuant to an FCC mandate. 
 
Comments were due on July 8, 2013. 
 
The Staff memorandum underlying this item is available at the following link
 
The Public Notice underlying this item is also available at the following link
 
Intervenor Compensation Awarded to TURN in the SureWest/Consolidated Transaction (Item 42, adopted on consent) – This Decision awards The Utility Reform Network (“TURN”) $31,453.32 for intervenor compensation for “substantial contributions” to Decision (D.) 12-06-004, approving an application filed by Consolidated Communications Holdings, Inc., Consolidated Communications Inc., WH Acquisition II Corp. (collectively, “Consolidated”), and SureWest Communications, SureWest Telephone, SureWest Long Distance and SureWest TeleVideo (collectively, “SureWest”) for the approval of the sale of SureWest to Consolidated.  The Proposed Decision was modified at the last minute to correct a calculation error of approximately $2,000. 
 
TURN’s application for intervenor compensation claimed $30,600.82, but the final amount awarded includes a cost-of-living adjustment increase of 2.2% in accordance with Resolution ALJ-281.  The Decision finds that TURN made a substantial contribution by filing a Joint Protest with the Division of Ratepayer Advocates (“DRA”) because the issues raised in the Joint Protest were addressed in a subsequent Settlement Agreement approved by D.12-06-004.  The Decision further concludes that the claimed fees and costs are comparable to market rates paid to experts and advocates having comparable training, experience and offering similar services.
 
A copy of the Proposed Decision underlying this item is available at the following link
 
A copy of the late-revised Proposed Decision is attached to this email.
 
Authority to Provide 2-1-1 Service to Butte County by Tehama Countyby United Way and Help Central (Items 27 and 32, adopted on consent) – These Resolutions grant United Way of Northern County (“United Way”) and Help Central Inc. (“Help Central”) the authority to use the 2-1-1 abbreviated dialing code to provide information and referral (“I&R”) services to all of Tehama County and Butte County, respectively.  Butte 2-1-1 and Tehama 2-1-1 will provide immediate public safety impacts during non-emergencies, emergencies and disasters by providing web-based and call-in information call centers to address public safety (on a 24/7 basis).  Both  Tehama 2-1-1 and Butte 2-1-1 will also work with the Office of Emergency Services to assure that the partnership of 9-1-1 and 2-1-1 is effective.  2-1-1 service is the national abbreviated code to be used to phone non-emergency community I&R providers.  Upon dialing 2-1-1, a caller will be routed to a referral service, and then to an agency that can provide information regarding social services, including housing assistance, programs to assist with utility bills, food assistance and other less urgent situations not addressed by 9-1-1 or 3-1-1 services.  The Resolutions also determine that both 2-1-1 Tehama and Butte 2-1-1 will provide services that promote and have an immediate public safety impact during emergencies and disasters.
 
Resolution T-17393, granting United Way the authority provide 2-1-1 service to Tehama County, noted that thirty-four agencies submitted letters in support of United Way as the designated 2-1-1 Service provider in Tehama County.  In addition, Tehama Together and 211 Shasta has worked with United Way for three years to bring a viable plan to launch this effort to bring 2-1-1 service to Tehama County.  The Resolution determines that United Way: (1) has internal protocols to ensure calls are handled consistent with developed guidelines, including call handling, database development, and maintenance and disaster response and preparedness; (2) has agreed that it does not and will not receive fees from referred organizations for referrals and that it will not charge fees to providers listed in the database; (3) has contracted with other organizations to provide I&R services in English and Spanish; (4) demonstrated an understanding, and has agreed to adhere to the established standards for delivery of established I&R services; (5) demonstrated its level of community support through letters of endorsements from organizations and agencies from a broad range of different organizations;
 
Resolution T-17394 grants Help Central authority to offer Butte 2-1-1 and notes that it has operated a public information program in Butte County for ten years to help find and access free and low-cost community services.  The Resolution further explains that approval is appropriate because Help Central has: (1) successfully developed strong relationships and partnerships with key stakeholders and funders to launch a centralized comprehensive information and referral service; (2) consistently assisted and provided training to low-income populations; (3) received fifteen letters of support from various agencies in Butte County; (4) demonstrated an understanding, and has agreed to adhere to the established standards for delivery of established I&R services; and (5) agreed that it does not and will not receive fees from referred organizations for referrals and that it will not charge fees to providers listed in the database.
 
Pursuant to D.03-02-029, incumbent local exchange carriers (“ILECs”) must file advice letters to provide the 2-1-1 switch translation services within four months of the filing of a letter by United Way and Help Central.  The services must be available no later than six months from the filing of the advice letter. 
 
The Draft Resolution underlying the item regarding 2-1-1 service in Tehama County is available at the following link
 
The Draft Resolution underlying the item regarding 2-1-1 service in Butte County is available at the following link
 
SIGNIFICANT HELD AGENDA ITEMS

Verizon’s Proposed Deviation from Public Utilities Code Section 320 (Item 3, held until 7/25/13) –This Draft Resolution would approve Verizon California Inc.’s (“Verizon”) deviation from Public Utilities Code Section 320 for overhead distribution facilities installed without Commission approval in 2004 for a limited term of two years, with conditions.  Section 320 requires, where feasible, the undergrounding of all electric and communication distribution facilities to be erected in proximity to any highway designated as a state scenic highway.  Utilities may request authority for deviation through an advice letter process. 
 
In 2009, the Communications Division (“CD”) was notified of a possible Section 320 violation through a letter from a resident of Mono County, which resulted in inquiries by CD Staff to Verizon.  In response to the inquiries, Verizon conducted an analysis and filed Advice Letters requesting deviation from Section 320 for the overhead distribution facilities installed in 2004 along State Route 395 in Mono County from Mile Marker 76.8 to Mile Marker 104.8. 
 
The Draft Resolution would determine that approving the deviation is appropriate because the cost of underground installations would have been twelve times the cost of an aerial installation. It explains that the CD Staff conducted a site inspection of the overhead distribution facilities and identified problematic areas that could be resolved to address safety and aesthetic concerns.  In addition, the Draft Resolution would also impose penalties on Verizon for non-compliance with Commission rules.  Therefore, the Draft Resolution would grant Verizon’s request for waiver of  Section 320 after documented completion of the following conditions:  (1) replacement of all aluminum cable dampers that are less prone to glare; (2) the completion of an inspection of sagging cables by Verizon for compliance with G.O. 95; (3) an attestation by Verizon of Section 320 compliance and a plan to notify government agencies prior to placing facilities along designated state scenic highways; and (4) payment of a $5,000 penalty for failure to comply with Section 320.  These conditions would have to be met within 90 days after this Draft Resolution is approved, except for payment of the penalty, which would be due within 30 days. 
 
A copy of the Draft Resolution underlying this item is available at the following link
 
Petition for Rulemaking on the Privacy Practices of Telecommunications Corporations (Item 8, held by Sandoval until 7/25/13) – This Proposed Decision would deny a Petition for Rulemaking (“Petition”) to modify the privacy practices telecommunications carriers filed on November 8, 2012 by the Consumer Federation of California, The Utility Reform Network, and the Privacy Rights Clearinghouse (“Petitioners”).  The Proposed Decision would find that it is not clear that a review of telecommunications companies’ privacy practices in California are necessary at this time. 
 
The Petitioners requested that the Commission open a new rulemaking to review the privacy practices of telecommunications carriers and to develop wireless privacy standards.  The Petition identifies potential concerns related to the collection and use of personal information by telecommunications corporations, including companies that provide wireless telecommunications services.  The Petition also asks the Commission to develop standards for collecting, handling, and sharing customer information to ensure that customers are aware of what information may be collected and how that information may be used, and to protect the privacy of customer’s information.  The Petition further requests that the Commission extend the proposals identified in the Petition to third parties under contract with telecommunications providers, such as distributors of phone applications or “apps.”  In addition, the Petition suggests that existing laws and policies at the state and federal level fail to offer adequate protection for customer information.
 
The Petition was opposed by CTIA – the Wireless Association (“CTIA”) and Pacific Bell Telephone Company dba AT&T California (“AT&T”), and MetroPCS California Inc. (“MetroPCS”).  The opposing parties argued that the Petition was procedurally and substantively improper.  Specifically, the parties asserted that the Petition failed to state a clear justification for new rules and failed to include any specific language for those rules.  In addition, these parties argued that existing laws and policies already protect the privacy of customer information and additional rules are unnecessary.  The opposing parties also argued that the Petition attempted to reach non-regulated services and providers beyond the Commission’s jurisdiction, such as third-party software developers that create “apps.”
 
The Proposed Decision would recognize the importance of protecting the privacy of customer information, and notes that it is addressing issues related to privacy of energy user data in the ongoing Smart Grid proceeding.  However, the Proposed Decision would find that the Petition fails to provide examples of actual breaches of customer privacy by telecommunications corporations.  The Proposed Decision would also find that current federal and state laws exist to govern the treatment of potentially sensitive customer information held by telecommunications providers, as well as businesses in general.  Finally, the Proposed Decision would conclude that the Petition fails to clearly identify the types of information the petitioners believe are accessible to or collected by telecommunications corporations that are not currently protected by CPNI and other existing privacy protections. 
 
A copy of the Proposed Decision underlying this item is available at the following link
 
Rules Governing the Transfer of Customers From Competitive Local Carriers Existing the Local Telecommunications Market (Item 22, held by Peevey until 7/11/13) – This Proposed Decision would grant the Petition for Modification of Decision (D.) 10-07-024, filed by O1 Communications, Inc. (“O1”) by including clarifying language to affirm that wholesale telecommunications providers shall not disrupt service to an end-user during an ongoing dispute between the retail and wholesale providers.  In D.10-07-024, the Commission established rules to ensure a smooth transition for customers of telecommunications carriers that must exit the market due to serious operational or financial difficulties, including guidelines for involuntarily exits. 
 
This Petition for Modification was filed by O1 to clarify that the involuntary exit rules established by D.10-07-024 were not intended to override or modify state and federal law in a manner that would preclude carriers from disconnection of one another during intercarrier compensation disputes.  Specifically, O1 seeks an order affirming that the involuntary exit process cannot be invoked by a carrier to disconnect another carrier for non-payment of disputed intercarrier compensation charges.  O1 had assumed that disputes over intercarrier compensation would be addressed in accordance with state and federal law, interconnection agreements, and tariffs.  However, in a recent dispute with another carrier, the carrier has asserted that D.10-07-024 provides for disconnection for non-payment of disputed intercarrier compensation charges. 
 
O1’s Petition was not timely filed but O1 explained that it was unaware of the alternative interpretation of the involuntary exit rules set forth in D.10-07-024.  As such, the Proposed Decision would find that the Petition for Modification is timely filed. 
 
The Proposed Decision would conclude that O1’s Petition has merit, noting that the language in D.10-07-024 is ambiguous with respect to a carrier’s rights and obligations surrounding use of the involuntary exit rules to disconnect one another for non-payment of intercarrier termination charges, and that clarification is necessary.  The Proposed Decision would find that allowing a carrier to be placed into involuntary exit procedures over a disputed charge would result in end-users having their service terminated, and would conflict with the requirements of Public Utilities Code Section 558.  Section 558 prohibits a dispute over interconnection charges between carriers to disrupt services.  Given these findings, the Proposed Decision would amends the introductory section of D.10-07-024 to include specific limitations and restrictions clarifying the objectives process surrounding involuntary exits. 
 
A copy of the Proposed Decision underlying this item is available at the following link
 
Comments to FCC Regarding the Numbering Policies for Modern Communications (Item 51, held by staff until 7/11/13) – This item would request authority from the Commission for staff to file comments in response to the Federal Communications Commission’s (“FCC”) Notice of Proposed Rulemaking and Notice of Inquiry seeking comments on proposals to allow VoIP providers to obtain numbers directly from the North American Numbering Plan Administrator.  The proposal evaluates all aspects of the current allocation of numbering resources to telecommunications providers.  The Notice of Inquiry also seeks comments on a range of issues regarding the FCC’s long-term approach to numbering resources. 
 
Comments are due on July 19, 2013.
 
The Staff memorandum underlying this item is not currently available; however, the FCC’s Notice of Inquiry is available at the following link
 
LEGISLATIVE ITEMS
 
Proposed Legislation on Service Interruptions, SB 380 (Padilla) (Item 61, withdrawn) – This bill would require a governmental entity to obtain an order, signed by a judicial officer, before it can interrupt communications services for the purpose of public safety or to prevent the use of communications service for an illegal purpose.  Interruption of communications services must be limited to as long as reasonably necessary or once the danger justifying the interruption has abated. 
 
This bill is intended to address public outcry and free speech concerns over an incident where the Bay Area Rapid Transit (“BART”) agency shut down cellphone service at various stations in order to thwart a second protest in response to a BART police shooting that occurred in 2011.  BART initiated a temporary wireless service interruption and cited to the protest organizers’ plans to disrupt BART service by utilizing mobile devices to coordinate disruptive activities and to communicate the locations of BART police officers.
 
A copy of the most recently amended bill is available at the following link
 
Proposed Legislation on Earthquake Early Warning System, SB 135 (Padilla) (Item 60, withdrawn) – This bill would require the Office of Emergency Services to coordinate with specified state and federal entities to establish an early earthquake warning system in California.  This bill relies on the expansion of the current California Integrated Seismic Network and would require the development of technology to improve the detection of earthquakes. 
 
A copy of the most recently amended bill is available at the following link
 
COMMISSIONER REPORTS
 
Commissioner Peterman announced three additional public participation hearings regarding the ongoing LifeLine proceeding in Fresno, Salinas, and Siskiyou. 
 
Commissioner Sandoval noted that she recently toured Cox’s cable facilities in San Diego, where she was notified that she was the first Commissioner to visit the facilities.  She hopes that Commissioners will visit the facilities in the future. 
 
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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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