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On May 9, 2013, the Commission held its regularly-scheduled agenda meeting.  No telecommunications items were discussed on the regular agenda, but the CPUC was authorized on the consent agenda to file comments on the FCC’s proposed rulemaking to consider 9-1-1 reliability issues.  The Commission continued its hold on several important items, including the draft Order Instituting Rulemaking (“OIR”) to implement franchise renewal provisions of the Digital Infrastructure and Video Competition Act of 2006 (“DIVCA”) and the Proposed Decision modifying requirements for CPCN and WIR holders or applicants.  These and other items of interest are discussed in further detail below. 

CONSENT AGENDA ITEMS

CPUC to File Comments with FCC Addressing 9-1-1 Reliability (Item 35, approved on consent agenda) – This item authorizes the CPUC to file comments in response to the FCC’s Notice of Proposed Rulemaking in the Matter of Improving 9-1-1 Reliability.  The FCC’s Notice requested comments on approaches to ensure that infrastructure is in place to provide for continued availability of the nation’s 9-1-1 system, especially during times of major disaster.  The CPUC’s comments will:  (1) provide support for the FCC’s technology-neutral definition of “9-1-1 service provider”; (2) urge the FCC to adopt technology-neutral minimum back-up power requirements for 9-1-1 networks; (3) provide for the adoption of a federal certification requirement where providers certify to the reliability of their 9-1-1 systems; and (4) present a proposal that the FCC should provide states with timely access to carrier reports pertaining to 9-1-1 networks in their state. 
 
A copy of the Legal Division’s Memorandum underlying this item is available at the following link

A copy of the Notice of Proposed Rulemaking is available at this link:  
 
SIGNIFICANT HELD AGENDA ITEMS

Rulemaking to Modify Video Franchise Renewal Procedures (Item 5, held by Staff until 5/9/13) – This item would adopt a new rulemaking to evaluate the terms under which state video franchisees can seek renewal of their authority under DIVCA.  The Draft OIR outlines an approach to renewal that harmonizes Public Utilities Code Section 5850(b) with the requirements of federal law.  As with the application process under DIVCA, the OIR envisions a relatively informal, largely ministerial process.  The proposal would permit comment on franchise renewals, but comments would be limited to whether or not an application is complete – the Commission would not be exercising discretionary authority over franchise renewals with reference to policy considerations.
 
A copy of the Proposed Decision underlying this item is available at the following link
 
Revisions to the Certification Processes for Telephone Corporations Seeking or Holding CPCNs and WIRs (Item 33, held by Staff until 5/9/13) – This item would adopt revisions to the certification process for telephone corporations seeking or holding Certificates of Public Convenience and Necessity (“CPCN”) and wireless carriers seeking or holding Wireless Identification Registration (“WIR”).  The changes to the certification processes are intended to increase accountability for carriers, reduce the need for enforcement actions to be brought, and improve the Commission’s ability to collect fines, penalties, and bring restitution.  The Proposed Decision would establish a Phase II of the proceeding to determine performance bond requirements, as discussed below.
 
The Proposed Decision would require all applicants seeking or holding a CPCN or WIR to post a bond to facilitate the collection of fines, fees, surcharges, taxes, penalties, and restitution.  ILECs are specifically exempted from the bond requirement.  The bond amount for applicants seeking or holding a CPCN or a WIR would be initially set at $25,000.  In Phase II of the rulemaking, the Commission will determine, starting with input in workshops, a reasonable performance bond amount based on intrastate revenue and/or consumer protection considerations.  The bond amount for new applicants granted a CPCN or WIR that have not reported annual intrastate revenues to the Commission would be $25,000. 
 
The Proposed Decision would also: (1) require CPCN applicants and wireless registrants to provide the Commission with resumes and detailed information on key officers, directors, and certain owners; (2) require applicants seeking to transfer licenses or registrations to verify compliance with Commission reporting, fee, and surcharge transmittals; (3) increase the application fee for new and transferred CPCN authority from $75 to $500, subject to legislative approval; (4) require wireless registrants to pay a $250 fee for new and transferred registration; (5) establish a minimum annual user fee of the Commission-established rate in effect at the time or $100, whichever is greater; and (6) require a new verification with specified language that certain key officers, directors, and owners were never associated with a telecommunications carrier that filed for bankruptcy, was sanctioned by the FCC or state regulatory agency, or was ever found civilly or criminally liable by a court. 
   
A copy of the Proposed Decision underlying this item is available at the following link

Sprint’s Application for Indirect Transfer of Control (Item 4, held by Sandoval until 5/23/13) –This Proposed Decision would authorize a transaction that allows Starburst II, Inc. (“Starburst II”) to become the direct parent of Sprint Nextel Corporation (“Sprint Nextel”) and the indirect parent of Sprint Nextel’s wholly-owned subsidiary, Sprint Communications Company, L.P. (“Sprint Communications”).  Starburst II is a newly formed entity of SoftBank Corp. (“SoftBank”).  Through Starburst II, SoftBank will invest $20.1 billion in Sprint Nextel and indirectly acquire approximately 70% of the shares of Sprint Nextel.  SoftBank is a publicly-traded holding company organized under the laws of Japan and headquartered in Tokyo.  SoftBank’s various subsidiaries and affiliates are engaged in a range of information technology and Internet-related businesses in Japan.  SoftBank’s wholly-owned subsidiary, SOFTBANK MOBILE Corp. is currently Japan’s third largest wireless carrier.  SoftBank holds no authorizations from the Commission, but one of its subsidiaries holds an FCC authorization to provide a private line service to another wholly-owned subsidiary of SoftBank. 
 
Sprint Communication’s application was protested by the National Asian American Coalition, Latino Business Chamber of Greater, L.A., and Ecumenical Center for Black Church Studies (collectively,”NAAC”).  The application was also protested by The Center for Accessible Technology, Division of Ratepayer Advocates, The Greenlining Institute, The National Consumer Law Center, and The Utility Reform Network (collectively, the “Consumer Groups”).
NAAC’s protested on the basis that the applicants had not adequately addressed the public interest benefits related to the proposed acquisition.  NAAC also detailed additional issues for the Commission to examine, including Sprint’s plans for accelerating broadband deployment,  specific devices and services that Sprint planned on offering as a result of the acquisition, the CPUC’s jurisdiction over the wireless component of the acquisition, and the planned public benefit to California’s poverty-stricken ratepayers. The Consumer Groups raised concerns about the potential impacts that the proposed transaction would have on ratepayers.  Specifically, the Consumer Groups were concerned with the impact on competition, quality of service, state and local economies, and the Commission’s ability to regulate public utilities.  The  Consumer Groups urged the Commission to further investigate to ensure that risks to Sprint’s customers are mitigated. 
 
The Proposed Decision would find that the protests fail to point to any specific instance where the applicants failed to meets its public interest obligation.  In addition, the Proposed Decision notes that the protests do not identify general or specific harms that would impact ratepayers in California.  Instead, the Proposed Decision would conclude that there is no aspect of the transaction that would be adverse to the public interest and that a change in ultimate ownership would not negatively impact Sprint Communication’s operations or financial status.  Moreover, the Proposed Decision would find that the applicants have demonstrated that the acquiring company, Starburst II, has sufficient managerial and technical expertise, as well as sufficient financial resources to operate the acquired carrier.  In addition, the Proposed Decision determines that the transfer of control would be appropriate and consistent with the Commission’s technical, safety, and environment requirements for granting CPCN authority to a telecommunications carrier. 
 
A copy of the Proposed Decision underlying this item is available at the following link
 
Verizon’s Deviation from Public Utilities Code Section 320 (Item 14, held by staff until 5/23/13) –This Draft Resolution would approve Verizon California Incorporated’s (“Verizon”) deviation from Public Utilities Code Section 320 for overhead distribution facilities installed without Commission approval in 2004.  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, resulting 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 audit for compliance with G.O. 95; (3) the development of a plan for future construction of overhead distribution facilities within California; and (4) payment of a $5,000 penalty for failure to comply with Section 320.  These conditions must be met within one year after this Draft Resolution is approved. 
 
A copy of the Draft Resolution underlying this item is available at the following link
 
LEGISLATIVE ITEMS
 
Proposed Legislation on 911 Service, AB 911 (Bloom) (Item 40, held by Staff until 5/23/13) – This bill would establish 911 emergency call technology requirements for multiline telephone systems (“MLTS”).  These requirements would become effective on January 1, 2019.  Specifically, this bill would require an MLTS operator in an area that has enhanced 911 capability to ensure that emergency calls placed from any telephone station on the MLTS is routed to a public safety answering point (“PSAP”) that provides automatic location information or automation number identification to the 911 network that connects to a PSAP.  This bill would also authorize civil penalties against MLTS providers who do not comply with the requirements outlined in the bill. 
 
A copy of the Legislative Memo underlying this item is currently unavailable, however a copy of the most recently amended bill is available at the following link
 
Proposed Legislation on the California Advanced Services Fund, AB 1299 (Bradford) (Item 45, held by Staff until 5/23/13) –  This bill would require the Commission to develop, implement, and administer the California Advanced Services Fund to encourage deployment and adoption of broadband to Californians living in publicly supported housing communities in urban regions without increasing, or assessing a new surcharge.  The bill is related to concerns raised by various Legislators that certain areas of Los Angeles are inadequately served with broadband.
 
A copy of the Legislative Memo underlying this item is currently unavailable, however a copy of the most recently amended bill is available at the following link
 
Proposed Legislation on Service Interruptions, SB 380(Padilla) (Item 47, held by Staff until 5/23/13) – This bill requires 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.    
 
A copy of the Legislative Memo underlying this item is currently unavailable, however a copy of the most recently amended bill is available at the following link
 
Proposed Legislation on Intervenor Fees, AB 995 (Frazier) (Item 42, withdrawn) – This bill would require the Commission to adopt rules establishing standards to verify that a customer representative is authorized by consumers, customers, or subscribers of any of the utilities.  In addition the bill would revise the definition of “substantial contribution” to require a Commission finding that the customer’s participation promoted a public purpose that directly benefits other customers.  The bill would also prohibit the total amount of the Commission annually awards for intervenor compensation from exceeding the mean average of awards for the previous 3 calendar years. 
 
A copy of the Legislative Memo underlying this item is currently unavailable, however 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 46, held by staff until 5/23/13) – 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 will require the development of technology to improve the detection of earthquakes. 
 
A copy of the Legislative Memo underlying this item is currently unavailable, however a copy of the most recently amended bill is available at the following link
 
SAFETY AND ENFORCEMENT DIVISION REPORTS
 
The Safety and Enforcement Division (“SED”) provided an update on the limousine tragedy that occurred on May 4, 2013.  The SED explained the Commission’s role in regulating limousines, which is to inspect licensing, insurance, and certification issues.

Commissioner Sandoval expressed concern regarding the Commission’s lack of oversight over stretch limousines.  She noted that most limousines are regular town cars that have been “stretched” through the addition of steel and other material.  She was particularly concerned with the safety implications of “stretching” these vehicles and the lack of oversight over companies who provide these expansions, which may or may not comply with a manufacturer’s motor and electrical plans.   
 
The SED also provided a presentation on vegetation management to provide safe clearance for transmission lines.  The presentation highlighted the relevant state and federal regulations governing clearance requirements that help to prevent fire hazards and outages caused by vegetation. 
 
COMMISSIONER REPORTS
 
Commissioner Peterman attended a forum at the University of Southern California regarding the role of the government in facilitating innovation in communications and in establishing consumer protection.  She also noted several telecommunication-related events taking place in the next few weeks, including eight Public Participation Hearings to discuss revisions to the LifeLine program and workshops to discuss the development of a Speech Generating Device program for the deaf and disabled. 
 
Commissioner Sandoval participated in another meeting with the Presidential Task Force of Federalism and Telecommunications where they continued to discuss and develop the principles necessary to guide regulations in telecommunications.  A draft of these principles is available at the following link
  
 
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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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