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On November 5, 2015, the Commission held its regularly-scheduled agenda meeting.  No telecommunications items were addressed on the regular agenda, but on consent, the Commission approved an award in the amount of $331,350.14 to The Utility Reform Network (TURN), for its contribution to Decision D.14-12-084, pertaining to the California High Cost Fund-A (CHCF-A) program.  In addition, the Commission approved Resolution T-17489 revoking the operating authorities of 26 telephone carriers for failure to comply with user fee, public purpose program surcharge, and performance bond requirements.

The Commission also held determination on two Draft Resolutions.  Draft Resolution T-17473 would deny Blue Jay Wireless, LLC’s request to be designated as an Eligible Telecommunications Carrier (ETC) and provide LifeLine wireless services to qualified California customers.  The Commission likewise held determination on Draft Resolution T-17504, which would approve the Mobile Telephony Surcharge and user fee rates effective January 1, 2016 through December 31, 2016.  These and other items of interest are discussed in further detail below.
 
CONSENT AGENDA   

Decision Granting Compensation to The Utility Reform Network for Substantial Contribution to Decision (D.)14-12-084 (Item 26, approved on consent) – The Commission approved the Proposed Decision granting intervenor compensation to The Utility Reform Network (TURN) in the amount of $331,350.14 for TURN’s contribution to Decision D.14-12-084.  Decision D.14-12-084 adopts rules and regulations pursuant to Phase I of the California High Cost Fund-A (CHCF-A) Program rulemaking.  R.11-11-007 (Order Instituting Rulemaking into the Review of the CHCF-A Program).  As a result of the Commission’s analysis of the reasonableness of TURN’s claims for compensation, and based on the requirements of Public Utilities Code §§ 1801-1812, the Commission reduced TURN’s claimed costs and expenses by 16.37% from $396,225.00, to the final approved amount of $331,350.14.

A copy of the Decision is available at the following link.

Proposal to Decertify Wireline Carriers for Failure to Report Intrastate Revenue and Pay Resulting Public Purpose Program Surcharges and User Fees(Item 3, approved on consent) – The Commission issues operating authorities to telephone carriers and with this grant of authority, carriers must comply with certain requirements.  Failure to comply may result in suspension or revocation of operating authority.  Resolution T-17489 revokes the operating authorities of 26 telephone carriers for failure to comply with Public Utilities Code §§ 401 through 405, and Commission Decisions D.96-10-066 and D.10-09-017.  Specifically, the resolution finds that the subject telephone carriers failed to comply with two or more of the following requirements:  (a) reporting and remittance of California Public Utilities Reimbursement Account Fee (user fees) in accordance with Public Utilities Code §§ 401 through 405; (b) reporting and remittance of public purpose programs surcharges in compliance with Decision D.96-10-066; and (c) submission of a performance bond as ordered in Decision D.10-09-017.  To reinstate operations in California, each of the 26 decertified telephone carriers would have to reapply with the Commission for a new operating authority, and pay all applicable fees and surcharges, including a 25% fine on applicable fees and surcharges for all periods of non-compliance.

A copy of the Resolution is available at the following link.

SIGNIFICANT HELD ITEMS
 
Draft Resolution Denying Blue Jay Wireless, LLC Designation as a LifeLine Eligible Telecommunications Carrier in California(Item 9, held until November 19, 2015) – The CPUC’s LifeLine program helps eligible wireline and wireless telephone carriers provide telephone services at discounted rates to qualified low-income California customers.  On April 15, 2014, Blue Jay Wireless, LLC, (Blue Jay), a wireless carrier, submitted an advice letter to the CPUC requesting designation as an Eligible Telecommunications Carrier (ETC) to receive federal LifeLine support, and authorization to be a LifeLine provider in California.  In its advice letter and in three subsequent supplemental submissions, Blue Jay outlined its plans to offer discounted wireless services to qualified low-income Californians, primarily through arrangements with T-Mobile and Sprint.

In response to Blue Jay’s advice letter, Communication Division (CD) conducted a due diligence review of the carrier, in an effort to determine whether Blue Jay is fit to serve California consumers.  CD learned that, in 2014, Blue Jay oversubscribed Hawaiian LifeLine residents who were, in fact, ineligible for the LifeLine program.  Further, Blue Jay filed federal subsidy reimbursement requests based on this oversubscription.  As a result of these findings, CD recommends in Draft Resolution T-17473 that the Commission deny Blue Jay’s request for ETC designation and authorization to provide LifeLine wireless services to California customers.

Finally, CD also recommends that before re-requesting LifeLine authorizations from the CPUC, Blue Jay be required to:  1) resolve the oversubscription issue in Hawaii with federal LifeLine program administrators; and 2) offer wireless services in California on a retail basis (non-LifeLine) for a minimum of one year.

A copy of the Draft Resolution is available at the following link.

Approval of the Mobile Telephony Services Surcharge Rates to be Assessed on Prepaid Wireless Telephone Service Effective January 1, 2016(Item 14, held until November 19, 2015) – The State of California, city and county governments, and federal agencies assess a variety of surcharges, taxes and fees on end-users of telecommunications services.  Draft Resolution T-17504 would adopt the Mobile Telephony Services (MTS) surcharge and user fee rates effective from January 1, 2016 through December 31, 2016.

The MTS surcharge and user fee rates are designed to recover: 1) the CPUC’s Public Purpose Program Surcharges and User Fee; in addition to, 2) costs related to the administration of Assembly Bill 1717.

The CPUC’s Public Purpose Program Surcharges support the following six programs:  LifeLine; DDTP (Deaf and Disabled Telecommunications Program); CHCF-A (California High Cost Fund-A); CHCF-B (California High Cost Fund-B); CTF (California Teleconnect Fund); and CASF (California Advanced Services Fund).

Assembly Bill 1717 enacted The Prepaid Mobile Services Surcharge Collection Act (The Act).  The Act will become effective January 1, 2016 and will remain in effect until January 1, 2020.  The Act establishes a mechanism to collect the following charges:  Commission Public Purpose Program Surcharges; California Public Utilities Commission User Fee; Emergency Telephone Users (911) Surcharge, and local utility user taxes.  The Act also creates the new MTS surcharge that replaces the individual fees on prepaid wireless services, and requires the Commission to calculate new prepaid MTS surcharge rates on an annual basis.

Appendix A to Draft Resolution T-17504 provides details of the CPUC MTS surcharge and user fee rates effective January 1, 2016 through December 31, 2016, which would be adopted pursuant to approval of the Draft Resolution.

A copy of the Draft Resolution is available at the following link.

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