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On June 9, 2016, the Commission held its regularly scheduled meeting.  The Commission discussed the next steps in the CHCF-A proceeding, which came in the context of a decision extending the statutory deadline for resolution of the proceeding.  The Commission also approved CASF grant funding for broadband infrastructure projects in public housing that is already “wired.”  These and other items of interest are more fully described below.
 
REGULAR AND CONSENT AGENDA
 
The Statutory Deadline for the CHCF-A Proceeding (R.11-11-007) Extended  (ItemNo. 40, adopted unanimously during regular agenda) –  In the order, the Commission articulates its desire for a detailed review of the CHCF-A program “to respond to market, regulatory, and technological changes since the CHCF-A program was first established.”  The Commission intends to address the following issues in Phase II of this proceeding: (1) the applicability of rate of return as a regulatory framework for California’s small rural Incumbent Local Exchange Carriers (“LECs”) and the operation of the A-Fund; (2) alternative forms of regulation, including whether to introduce incentive based regulation; (3) whether to continue the GRC process for the small LECs; (4) whether an evaluation of the presence of competition should include all technologies; and (5) proposals to disqualify non-CHCF-A recipients from CHCF-A eligibility.  This extension was necessary to provide time for the Commission to issue the scoping memo for Phase II.
 
In discussing this Item from the dais, Commissioner Sandoval acknowledged the currently pending rate cases of some small LECs. She stated: “I have had the opportunity to visit to many of these telephone companies and appreciate the service.”  Commissioner Sandoval articulated that the Commission has already “begun the process of [commissioning a] study” and has already propounded some data requests related to competition and broadband issues in these areas.  In addition, there seemed to be some desire expressed during the discussion amongst the Commissioners to hold a workshop regarding the “competition and broadband study” that is being performed by Communications Division (“CD”). 
 
A copy of this decision is available at the following link.
 
Public Housing Developments Receive Grant Funding from Advanced Service Fund  (ItemNo. 13, adopted 4-1 during regular agenda, with President Picker voting against its adoption) –  This resolution approved grant funding in the amount of $239,793 from the California Advanced Service Fund (“CASF”) from the Broadband Public Housing Account (“BPHA”) in response to public housing infrastructure grant applications for a total of 12 projects from the Housing Authority of the County of San Bernardino, Community Housing Works, and Eden Housing, Inc., in communities throughout the state that include San Bernardino, Pasadena, Hayward, Novato, Morgan Hill, Gilroy, and Hollister.
 
Charter opposed the draft resolution underlying this item on the basis that the properties are neither unserved or underserved and therefore the properties are ineligible for CASF funding.  Charter further objected to the draft resolution on the grounds that the proposed funding goes to a location that is already served by existing broadband providers and violates the statute and intent of the CASF program.  The resolution rejected Charter’s arguments and approved grants for public housing projects to allow them to offer their residents limited broadband services at no charge, despite the existing availability of commercial services within the building units.  Finally, the Commission delegated authority to the CD staff to approve the applications through expedited review for properties that are wired.
 
President Picker was the only Commissioner who voted against the adoption of this resolution.  President Picker suggested that he would like evidence of the “effectiveness” of the program and expressed his belief that it is important to have “effective programs” in providing ”high quality broadband services,” he also expressed his concern that these projects possibly create “redundancy.”  Ultimately, the Commissioners favored this grant funding because it would provide broadband access options for people who would otherwise not be able to afford access to the Internet.
 
A copy of this resolution is available at the following link
 
Vertex Granted a CPCN  (ItemNo. 10, adopted on consent) –  The Commission approved the settlement agreement between the Safety and Enforcement Division (“SED”) and Vertex Telecommunications, Inc. (“Vertex”), relating to Vertex’s application to expand its existing interexchange and local exchange carrier certificates of public convenience and necessity (“CPCNs”) to include authority to provide facilities-based services.  SED protested Vertex’s application alleging that Vertex violated Rule 1.1 by misleading the Commission about its history of violations in other states.  As a part of the settlement with SED, Vertex agreed to pay a $17,500 penalty as acknowledgment of this violation. 
 
A copy of this decision is available at the following link:

 
iBasis Retail, Inc. granted a CPCN  (ItemNo. 15, adopted on consent) –  The Commission granted iBasis Retail, Inc. (“iBasis”) a CPCN to provide resold interexchange telecommunications service in California.  iBasis previously held such a CPCN but it was revoked for failure to remit user fees and to file intrastate revenue reports for purposes of public purpose surcharge payments. iBasis is ordered to pay retroactive user fees in the amount of $1,063.02.
 
A copy of this decision is available at the following link

thinkQ, Inc. granted a CPCN  (ItemNo. 24, adopted on consent) –  The Commission granted thinQ Communications, Inc. (“thinQ”) a CPCN to provide resold and limited facilities-based competitive local exchange service in the territories of AT&T California, Frontier California, Inc., Frontier Communications of California, and Consolidated Communications of California Company, and interexchange telecommunications services within the State of California.
 
A copy of this decision is available at the following link.

Silicon Business System Granted a CPCN  (ItemNo. 25, adopted on consent) –  The Commission approved the settlement agreement between SED and Silicon Business Systems (“SBS”), and granted SBS’ application for a CPCN to provide limited facilities-based and resold local exchange service in the service territories of AT&T California, Frontier California, Inc., Frontier Communications of California, and Consolidated Communications of California Company, and interexchange telecommunications services within the State of California.  SED protested SBS’ application alleging that SBS sold pre-paid phone cards without legal authority since March 2008.  The parties reached a settlement, which resolves all factual and legal issues raised by SED, imposes a $20,000 penalty, and requires SBS to make payment of past due user fees. 
 
A copy of the proposed decision underlying this decision is available at the following link.
 
SIGNIFICANT HELD ITEMS
 
Proposed Decision for Kerman Telephone Co.’s General Rate Case (Item No. 38. held by Randolph until June 23, 2016) –  The proposed decision remains held following a ratesetting deliberative meeting held on Wednesday, June 8th.  According to the agenda for the ratesetting deliberative meeting at which the matter was to be considered, the proposed decision would authorize (a) an intrastate revenue requirement for Kerman Telephone Co. of $6,826,853; (b) a rate of return of 8.97%; and (c) California High Cost Fund-A support of $1.8 million.  In addition, the proposed decision would adopt a basic residential rate of $30 monthly and basic business service rate of $36.30 monthly (inclusive of Extended Area Service Charges and Access Recovery charges), and would adopt affiliate transaction requirements proposed by the Office of Ratepayer Advocates.

A copy of the redlined version of the current proposed decision is available at the following link

COMMISSIONER REPORTS
 
Commissioner Sandoval reported on her and President Picker’s attendance at workshops held in Long Beach on June 1, 2016, discussing the transition of telecommunications services in California from Verizon California to Frontier Communications including call completion issues and residential rate design issues. 
 
 
 
 

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