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On November 14, 2013, the Commission held its regularly-scheduled agenda meeting.  No telecommunications items were on the regular agenda, but on the consent agenda, the Commission voted to authorize comments before the FCC that would support an “opt-in” requirement for non-affiliated third-party billings.  TURN was also awarded intevenor compensation for its contribution to the decision requiring VoIP providers to pay surcharges that support the Commission’s public purpose programs.  Further, the Commission adopted an additional hold on the Proposed Decision and Alternate addressing a possible rulemaking to evaluate privacy compliance practices for telecommunications carriers.  These and other items of interest are discussed in further detail below.

CONSENT AGENDA ITEMS

Staff Authorized To Submit Comments to the FCC Related to “Cramming” (Item 46, approved on consent) – The FCC issued a Public Notice (DA 13-2064) on October 18, 2013 seeking comments to refresh the record regarding cramming and the current effectiveness of rules designed to address cramming.  Specifically, the FCC sought further comment on whether stronger measures to prevent cramming on wireline and CMRS consumer bills should be adopted by requiring consumers to specifically “opt-in” before providers can place third-party charges on a customer’s bill.  The “opt-in” requirement would require billing telephone companies to obtain a consumers’ affirmative consent before placing third-party charges on the consumer’s bill.  The FCC also sought comments on the specific “mechanics” or implementation requirements of mandating an “opt-in.”

The Commission authorized the staff to file comments on this issue and to provide the following recommendations: (1) if the FCC does not prohibit third-party billing outright, the FCC should require all carriers to implement an opt-in requirement for all third-party billings, except for billings by a carrier’s affiliates or billings for long distance companies; (2) the opt-in requirement should apply to new and current customers; and (3) customer approval should be obtained through a written letter of authorization or by verbal recording.  

A copy of the staff memorandum underlying this item is available at the following link
  
A copy of the FCC’s Public Notice underlying this item is also available at the following link
  
TURN Awarded $16,496.74 for Substantial Contribution to VoIP Proceeding (Item 35, approved on consent) – This Decision awards The Utility Reform Network (“TURN”) $16,496.74 for its “substantial contribution” to the decision mandating that VoIP carriers contribute to the Commission’s public purpose programs.  The Decision finds that TURN provided recommendations related to the surcharge requirement and registration process that warrants intervenor compensation.  The Decision orders an award to be paid from the CPUC’s Intervenor Compensation Fund within 30 days of the effective date of the Decision. 

A copy of the Proposed Decision underlying this item is available at the following link

Trillion’s CPCN Transferred to TX Communications (Item 29, approved on consent) – This Decision authorizes the transfer of control of Trillion Partners, Inc. (“Trillion”) to TX Communications LLC (“TXC”).  Trillion is a Delaware corporation that provides facilities-based local service as a competitive local exchange carrier and interexchange telecommunications services through the service territories of the URF companies.  In July 2011, a creditor filed a civil action against Trillion seeking appointment of a receiver and other remedies on the basis of Trillion’s material default on its payments and other obligations to the creditor.  The receiver appointed then initiated this proposed transaction.  TXC was formed by TX Broadband Holding Company (“TX Holding”), which in turn is comprised of three of Trillion’s major creditors.  The proposed transaction will allow the three creditors to acquire indirect control of Trillion through TXC, which will enter an Asset Purchase Agreement that includes a purchase price of $50 million and the assumption of certain court-approved liabilities. 

After the transaction is approved, TXC will continue to operate as Trillion, without any changes to rates or services.  The Decision approves the proposed transaction, as it is consistent with the public interest.  The Decision acknowledges certain bankruptcy proceedings and State Attorney General investigations into Trillion but notes that these issues have been resolved in their entirety and were appropriately disclosed.  Overall, the Decision concludes that the proposed transaction will ensure that Trillion’s customers will continue to receive service, and is in the best interest of the communities served by Trillion.  

A copy of the Proposed Decision underlying this item is available at the following link
  
Consumer Complaint Against Verizon Dismissed (Item 19, approved on consent) – This Decision dismisses a consumer complaint against Verizon California, Inc. (“Verizon”) because the relief requested is moot to the extent that it is within the Commission’s jurisdiction.  The complainants sought a refund of $164.67 and to have negative remarks related to the disputed charges to be removed from their credit report.  Complainants claim that they canceled certain requested services within the allowable time, but that Verizon nevertheless billed them for those services.  When the bill was not paid, Verizon then sent the account to collections and later to credit reporting agencies. Verizon maintains that the charges and negative credit remarks were proper, and that the complainants had substantial opportunity to contest the charges before the negative report was sent to the credit reporting agencies.  Nevertheless, in order to avoid further litigation costs, Verizon issued the complainants a credit for the outstanding charges and deleted the negative remarks in the complainants’ credit report.  Therefore, the Decision concludes that the only relief request by the complainants is moot and dismisses the complaint.  

A copy of the Proposed Decision underlying this item is available at the following link
 
Consumer Complaint Against AT&T Resolved (Item 18, approved on consent) – This Decision approves a settlement offer that resolves a consumer complaint against Pacific Bell Telephone Company d/b/a AT&T California (“AT&T”).  The complaint alleged that AT&T overcharged the consumer by $250 through double billing and improper increases to long distance telephone call charges.  The $250 amount is approximately equal to the consumer’s balance based on services previously provided and late payment charges. 

The Decision concludes that the complaint provided no evidence to show that AT&T double billed the consumer, nor did the evidence suggest of improper billing practices by AT&T.  On the contrary, the Decision finds that AT&T frequently provided the consumer with courtesy credits for her telephone service.  Nevertheless, in order to resolve the complaint, AT&T offered a credit equal to the total amount due on the consumer’s bill.  The consumer refused this offer, and requested instead a $250 payment by check.  The Decision finds that the settlement offer was generous given AT&T does not owe consumer any monies or any refunds.  The Decision also finds that the consumer failed to make payments that covered the cost for monthly service.  The Decision approves AT&T’s settlement offer and provides the consumer with 60 days to accept the offer.  In the meantime, AT&T is not required to continue to offer the consumer service. 

A copy of the Proposed Decision underlying this item is available at the following link
 
HELD ITEMS

Ponderosa’s Application for CASF Funding for the Beasore/Central Camp Project (Item 7, held by Florio until 12/4/13) – This Resolution would grant $1,755,042 in CASF funding to Ponderosa for the Beasore/Central Camp Last Mile Unserved and Underserved Broadband Project (“Beasore/Central Camp Project”).  This project would extend high-speed internet service to 3.49 square miles covering the Beasore and Central Camp communities of Madera County.  The project would also provide safety-enhancing landline telephone service in an area where there is currently none. 
This project would install fiber-to-the-home connections capable of 50 Mbps downstream throughput and 20 Mbps upstream, and would provide internet, telephone, and potentially video services to an area completely unserved by landlines. 

The Draft Resolution underlying this item is available at the following link

Petition for Rulemaking on the Privacy Practices of Telecommunications Corporations (Items 44 and 44a, held by Florio until 12/4/13) – This item would address the Petition for Rulemaking by a group of consumer groups who are asking the Commission to examine privacy issues for telecommunications carriers.  Commissioner Ferron’s original decision would decline to open the rulemaking, while Commissioner Sandoval’s Alternate would recommend granting the petition in part and initiating a proceeding to examine the issue.
 
In November 2012, the Consumer Federation of California, The Utility Reform Network, and the Privacy Rights Clearinghouse (“Joint Consumers”) filed a Petition for Rulemaking (“Petition”) to modify the privacy practices telecommunications carriers.  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 telephone 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.  The Petition also seeks to 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”), 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.
 
The Proposed Decision issued by Commissioner Ferron would deny the Joint Consumers petition and would find that it is not clear that a review of telecommunications companies’ privacy practices in California is necessary at this time.  The Proposed Decision would recognize the importance of protecting the privacy of customer information, and notes that the Commission 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 conclude 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. 
 
On October 2nd, Commissioner Sandoval issued an Alternate Proposed Decision granting in part the Joint Consumers’ Petition.  The Alternate would open a rulemaking that focuses on the privacy practices of telephone corporations under its jurisdiction (recognizing that the Commission has no jurisdiction over third parties).  While the Alternate acknowledges that existing federal and state standards already exist to protect consumer information, it nevertheless concludes that gaps exist between federal and state regulations that must be reviewed due to changes in telecommunications technology.  In addition, the Alternate expresses concern that the Commission may not have the ability to enforce existing federal privacy laws. 
 
A copy of the Proposed Decision underlying this item is available at the following link
 
A copy of the Proposed Alternate is available at the following link:

COMMISSIONER REPORTS
 
Commissioner Sandoval briefly noted her participation as the assigned Commissioner on the Low Income Oversight Board and on a panel with Gwen Moore.  She also discussed her attendance at a “hackathon,” which was an opportunity for consumers and interested parties to develop app ideas to track, address, or raise awareness regarding energy consumption patterns.  She also noted that she looked forward to TURN’s 40th anniversary event and the upcoming NARUC conference where she would continue to contribute to the federalism and telecommunications resolution.
 
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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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