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On May 31, 2018, the California Public Utilities Commission held its regularly-scheduled agenda meeting. The principal item of interest was the adoption of the settlement on the revisions to Rule 18 of General Order 95, pertaining to correction of infrastructure non-conformances. The Commission held an item addressing the proposed communications citation program until the June 21, 2018 meeting. The Commission authorized comments on the recent petition by USTA to forbear as to various elements of Sections 251 and 271 of the FCC’s rules. The Legislative items on the agenda were all held until future meetings. Further information these items and others addressed during the meeting is provided below.

REGULAR AND CONSENT AGENDA ITEMS

Commission Adopts Proposed Decision Amending Rule 18 of General Order 95 (Item 44, Adopted on Regular Agenda by 5-0 Vote)

The Commission adopted a Proposed Decision that approves a contested Settlement Agreement that amends Rule 18 of General Order (G.O.) 95. The settlement agreement is attached to the agreement and summarized in Section 2.2 of the decision linked below. The changes to Rule 18 modify or establish time limits for the correction of deviations from the Commission’s infrastructure rules based on the potential impact of the non-conformance on safety and reliability. Non-conformances that pose an immediate risk to safety or reliability with a high probability for significant impact must be corrected immediately. The time to address problems that have a moderate potential impact on safety and reliability is reduced from 59 months to 36 months and a 60 month correction period has been established for issues with a low potential impact on safety and reliability; however, staff can require that problems be addressed sooner in specific cases. There are also changes in nomenclature, outside plant recordkeeping requirements, standards for required plant maintenance programs including the utility’s documentation of the training required for its outside plant personnel, and required notifications to other pole users when problems are discovered with their attachments.

Twenty-five parties signed the Settlement Agreement: the Commission’s Safety and Enforcement Division (SED), Pacific Gas and Electric Company, the Communications Infrastructure Provider (CIP) group, two unions representing utility workers, and several public interest organizations. PacifiCorp opposed two provisions in the Settlement Agreement: the reduced correction timeframes and the requirement for correction of illegible or missing high voltage signs. The California Municipal Utilities Association, the Los Angeles Department of Water and Power, and the Sacramento Municipal Utilities District, opposed provisions in the settlement relating to obstructions of climbing space, the applicability of exceptions to the Settlement Agreement’s 60-month timeframe for correcting Priority Level 3 risks, and the breadth of SED’s new authority. ORA did not sign the Settlement Agreement but supported it in its comments.

The Commissioners’ comments on this item were brief but supportive. President Picker stated that this decision will enhance SED’s ability to enforce G.O. 95 and thereby enhance safety and reliability. Commissioner Guzman Aceves voiced her support of this settlement’s closing of what she characterized as “loopholes.” Commissioner Peterman noted that this settlement will help spotlight needed improvements in distribution infrastructure that is critical to supporting new technologies that the state is targeting. Commissioner Randolph applauded the settlement’s recognition that even if a violation is low priority, “it doesn’t mean that it gets to go unresolved forever.” Commissioner Rechtschaffen was glad that SED brought this matter to the Commission’s attention.

A copy of the decision adopted by the Commission is available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M215/K830/215830213.PDF.

Commission Grants Legal Division Staff Authority to Submit Comments in Response to FCC’s Public Notice Requesting Comment on a Petition for Forbearance Related to Unbundling Requirements and Other Regulations that USTA States are Outdated (Item 54, Adopted on Consent Agenda)

The Commission granted Legal Division authority to submit comments on a forbearance petition submitted by USTA, a national trade association of telecommunications carriers, to the FCC that asks for the end of enforcement of laws and regulations that it considers outdated, such as the requirement in 47 U.S.C. Section 251(c) to provide access to unbundled network elements. In its request, the Legal Division asserted that the Commission has a statutory mandate to file comments and that it seeks to send data requests to every ILEC and CLEC in every metropolitan statistical area in the state to gather information it states it needs to participate meaningfully.

The Legal Division’s Memorandum recommending the preparation and submission of comments is available at: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M215/K380/215380322.PDF

Budget PrePay, Inc.’s Wireless Eligible Telecommunications Carrier Status Voluntarily Removed (Item 7, Adopted on Consent Agenda)

The Commission adopted a Draft Resolution that approves Budget PrePay, Inc.’s (Budget) Advice Letter 20 which requests approval to discontinue its offering of California LifeLine and federal Lifeline wireless services and to relinquish its designation as an Eligible Telecommunications Carrier in California. This request was protested by the CPUC’s Consumer Protection and Enforcement Division (CPED). The dispute was resolved through a negotiated settlement between CPED and Budget. This Commission’s approval of Budget’s Advice Letter 20 was conditioned upon Budget paying the California LifeLine Fund 817,730.00 within thirty days of the effective date of the adopted resolution and complying with the ongoing audit by the State Controller’s Office.

The adopted resolution (Res. T-17596)) is available at: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M215/K853/215853834.PDF

Excess Telecom, Inc., Granted Authority to Serve as Prepaid Wireless Service Provider (Item 16, Adopted on Consent Agenda)

The Commission adopted a Draft Resolution that approves Excess Telecom, Inc.’s request to be authorized as a California LifeLine service provider to provide prepaid wireless services to qualifying households where its underlying carrier, Sprint PCS, provides wireless service in California, excluding federally-recognized Tribal lands. This approval follows staff review and a finding that Excess Telecom is compliant with Commission user fee and surcharge obligations, California LifeLine Program requirements, the California LifeLine Administrator’s requirements, and is fit for California LifeLine designation.

The adopted resolution (Res. T-17605) is available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M215/K855/215855049.PDF

CASF Grant of $1,796,070 Approved for Anza Electric Cooperative, Inc. (AEC) to construct the Connect Anza Project, Phase 2 (Item 17, Adopted on Consent Agenda)

The Commission adopted a Draft resolution that approves funding for Phase 2 of the Connect Anza Project, which will extend a fiber-to-the-premises system into the unincorporated communities of Pinyon Pines, Pinyon Crest, Alpine Village and Ribbonwood and into the Santa Rosa Reservation in western Riverside County east of Anza Valley. Phase 2 will extend a FTTP system offering broadband Internet service at symmetrical speeds of 50 Mbps and above to over 400 households spread over 69 square miles in the areas of Pinyon and the Santa Rosa Reservation, at a cost of $4,349 per household in CASF subsidies. At the meeting, Commissioner Guzman Aceves stated that the resolution did not achieve one hundred percent of what she wanted and that she sought greater flexibility from the Legislature in the future, she was thankful to the unincorporated communities involved with this application for their hard work.

The adopted resolution (Res. T-17581) is available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M216/K666/216666060.PDF

Tax Reform Memorandum Account Approved for Pacificorp (Item 30, Adopted on Consent Agenda)

The Commission adopted a Proposed Decision (PD) that approves a tax reform memorandum account (memorandum account) to track the expedited income tax impacts associated with the Tax Cuts and Jobs Act of 2017, which among other things lowers the corporate tax rate from 35 to 21 percent. As an entity impacted by this federal tax law change, PacifiCorp requested, and the Commission granted, authorization to establish a Tax Reform Memorandum Account effective January 1, 2018 to track the full impact of the federal tax law change. ORA did not oppose PacifiCorp’s proposal to establish a Tax Reform Memorandum Account. The PD noted that the memorandum account was consistent with PacifiCorp’s Revised Inter-Jurisdictional Cost Allocation Protocol approved in PacifiCorp’s last general rate case (GRC) and that the memorandum account will be subject to review and inspection in PacifiCorp’s future GRC.

The adopted decision (D. 18-05-030) is available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M215/K788/215788781.PDF

Broadwing Communications, LLC Granted CPCN (Item 31, Adopted on Consent Agenda)

The Commission adopted a Proposed Decision that grants Broadwing Communications, LLC a certificate of public convenience and necessity (CPCN) to provide services using unbundled network elements obtained from incumbent local exchange carriers through interconnection agreements and services or facilities of other competitive carriers. Broadwing is obligated to comply with Public Utilities Code provisions, Commission rules, General Orders, and decisions applicable to telephone corporations providing such services. Furthermore, the order provides that Broadwing is obligated to pay all Commission prescribed user fees and public purpose program surcharges set forth in the decision.

The adopted decision (D. 18-05-031) is available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M215/K454/215454148.PDF

Education Networks of America, Inc.’s Granted Authority to Acquire TeleQuality California (Item 33, Adopted on Consent Agenda)

The Commission adopted a Proposed Decision (PD) that approves Education Networks of America, Inc.’s (ENA’s) acquisition of TeleQuality California’s California assets. On October 13, 2017, four parties, TeleQuality Inc, TQCI Holdco, TQCI Holdings LLC, ENA, and Timothy Koxlien entered into an agreement. As part of the agreement, TeleQuality Inc. will convert to a limited liability company, TeleQuality LLC, and will become a direct subsidiary of ENA. Upon approval by the CPUC for the proposed transfer, TeleQuality California, a Delaware limited liability company owned by TQCI Holdco, will transfer its California assets, including its CPCN and customer contacts, to TeleQuality LLC, a direct subsidiary of ENA. The TeleQuality California corporate entity will continue to be owned by TQCI Holdco, which is ultimately controlled by Timothy Koxlien. The PD found that this transfer of CPCN satisfied the minimum financial ability and management/technical ability requirements and complied with the California Environmental Quality Act.

http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M215/K716/215716625.PDF

SIGNIFICANT HELD AND WITHDRAWN ITEMS

Draft Resolution that Authorizes the Communications Division Staff to Implement a Citation Program for Enforcing Compliance by Telecommunications Carriers with the Commission’s Resolutions, Decisions, Orders and the Public Utilities Code (Item 20, Held until 6/21 Meeting by Staff)

The Commission held a Draft Resolution that would implement a CPUC staff-administered citation program to enforce the Commission’s resolutions, decisions, orders and the Public Utilities Code. This Draft Resolution, if passed, would delegate authority to the Communications Division staff to issue citations and levy penalties in accordance with a schedule included in the Draft Resolution.

The latest version of this Draft Resolution is available here: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M213/K696/213696441.PDF

Draft Resolution to Establish an Appeal Process for All Community Based Organizations that Apply to the California Teleconnect Fund (Item 6, Withdrawn)

Without discussion, the Commission withdrew a Draft Resolution setting forth a procedure for California Teleconnect Fund (CTF) applicants and current participants to appeal their CTF program eligibility determination. The CTF program provides a discount for voice and non-voice services to California libraries, schools, government-run hospitals, community colleges, the California Telehealth Network, 2-1-1 call centers, and qualifying Community Based Organizations (CBOs). This Draft Resolution would have provided for adoption of New Evidence of CTF Qualifying Services Criteria” as a key requisite for appeal of eligibility determination. Under this standard, rejected CBOs may appeal a rejection with new information, supported by new documentation, regarding qualifying services that the CBO provides at the physical address of the location. A CBO requesting an Appeal of Eligibility Determination would have had to submit a letter to the CTF supervisor postmarked within 14 days of receipt of the rejection letter determination with documentation of new evidence of qualifying services.

The latest version of the Draft Resolution for this withdrawn item is available at the following link: http://docs.cpuc.ca.gov/SearchRes.aspx?docformat=ALL&docid=213321067

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 3)

The Commission held for further review a Proposed Decision in Application proceeding A.17-02-001 that would grant authority to Southern California Edison Company (SCE) for authority to lease certain fiber optic cables to Cellco Partnership d/b/a Verizon Wireless (Cellco) under the Master Dark Fiber Lease Agreement Pursuant to Public Utilities Code Section 851. The Proposed Decision would reject the request in the application for a 90/10 ratepayers/shareholders revenue allocation ratio. The revenue allocation pursuant to this decision would be 75 percent to ratepayers and 25 percent to shareholders. Under the terms and conditions of the Master Lease Agreement, SCE would grant Cellco an exclusive lease for the use of certain optical fibers along various cable routes within Southern California.

The latest version of the Proposed Decision that would grant the requested authority to SCE is available at the following link: http://docs.cpuc.ca.gov/PublishedDocs/Published/G000/M213/K245/213245565.PDF

Legislative Items: Assembly Bills and Senate Bills (Items 55-60, Held Until 6/21 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 udit 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).

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