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On October 17, 2013, the Commission held its regularly-scheduled agenda meeting off-site in Redding.  On the regular agenda, the Commission unanimously approved $6,602,422 in CASF funding for the Karuk Tribe’s Klamath River Rural Broadband Initiative Project.  On the consent agenda, the Commission approved funding to Race Telecommunications for their Kern County High Desert Underserved Broadband Project.  The Commission also authorized United Way as Santa Cruz County’s 2-1-1 service provider.  These and other items of interest are discussed in further detail below.

REGULAR AGENDA

$6,602,422 in CASF Funding Granted to the Karuk Tribe (Item 13, approve 5-0) – This Resolution approves $6,602,422 in CASF funding to the Karuk Tribe for their Klamath River Rural Broadband Initiative Project (“Klamath River Project”).  This award represents 51.5% of the total anticipated project costs of $12,815,748.  The remainder of the funding will come primarily from grants from the U.S. Department of Agriculture’s Rural Utilities Service.  The Klamath River Project will extend high-speed broadband service to 80 square miles covering the Karuk Tribe and Yurok Tribe areas in Northern Humboldt County.  The project will install an 82.3 mile middle mile fiber optic network.  The project will also install last mile wireless broadband networks to provide broadband access to eight first responder agencies, fourteen anchor institutions, and 664 households. 
 
The Karuk Tribe and the Yurok Tribe created the Klamath River Project to deploy broadband in their Tribal lands in order to obtain high speed Internet access.  Currently, the Yurok Tribe operates fixed wireless broadband network to serve a portion of their Tribe.  However, both Tribes have signed Letters of Intent stating that if the Karuk Tribe is awarded the CASF grant, both Tribes will roll their separate broadband operations into a new single entity to achieve economies of scale to serve their respective Tribes and surrounding neighborhoods. 
 
The Resolution also notes that the Klamath River Project contains an area that overlaps with another proposed CASF project.  The Resolution notes that the other project is still under review by CD staff and has been heavily challenged. Nevertheless, the CD staff explains that it confirmed that the Karuk Tribe that the Klamath River Project will build sufficient fiber strands and capacity into the middle-mile part of the project to ensure that the network is able to support any future demand for access to dark fiber to wholesale providers.  It is also expected that the project’s middle-mile segment is being built in a manner that will allow for future expansion without additional ground disturbance.
 
This item was presented by the Communications Director, Ryan Dulin.  He noted that the CASF funding will be covering 51% of project costs, which is below the threshold levels of funding offered by the program.  He also commended the project for traversing highly rural and frontier areas that reach isolated unserved and underserved areas. 
 
Commissioner Sandoval thanked the Karuk Tribe and Yurok Tribe for their application.  She noted that part of the reservation just began receiving electric service this past December, and that this electric infrastructure is now allowing this area to pursue this project.  She expressed her appreciation to PG&E for providing the service.  She then explained that this project will allow first responders, daycare centers, and schools to have access to internet, noting that these areas currently do not even have dial-up.  She then criticized a telecommunications provider that received a grant to provide internet access to this area, a project that should have been completed last year. She warned that she would be following up with this unnamed provider and that it is unacceptable that a provider has committed to providing service, but failed to do so after funding has been provided.
 
She then thanked The Siskiyou Telephone Company and Suddenlink for providing connections for this project, noting that these providers are opening up their networks and providing necessary connections. 
 
Commissioner Ferron offered enthusiastic support for this Resolution.  He noted that he had the opportunity to read through many letters in support of this project.  He found that these letters attested to the fact that there is a significant need for high-speed internet in this area, especially to allow these communities to become economically competitive and to provide access to educational opportunities and health care services. 
 
Commissioner Florio, Commissioner Peterman, and President Peevey all expressed their support for this project as well. 
 
A copy of the Draft Resolution underlying this item is available at the following link
 
CONSENT AGENDA ITEMS

$12,583,343 in CASF Funding Granted to Race Telecommunications (Item 9, approved on consent) –  This Resolution approves $12,583,343 in CASF funding to Race Telecommunications Inc. (“Race”) for its Kern County High Desert Underserved Broadband Project (“Kern County Project”).  The Kern County Project will extend high-speed internet service to 72.5 square miles covering Springs, Bear Valley Springs, and a portion of Golden Hills in Kern County. 
 
The proposed project area currently does not have access to wireline broadband service at served speeds and wireless broadband speeds are less than 6 Mbps/1.5 Mbps.  The project is expected to provide broadband access to households at speeds of 1 Gbps/100 Mbps by expanding the fiber-to-the-premises (“FTTP”) Last Mile network deployment into the project area.  The expansion will bring high-speed internet access to 4,731 households in the project area. 
 
As an initial step in reviewing Race’s application, the Communications Division (“CD”) staff checked the census block groups (“CBGs”) submitted in the project application to determine if those CBGs were correctly deemed underserved.  CD found that certain northwest and northeast portions of the project area showed broadband availability from Verizon Wireless and Bright House Networks.  To address this issue, Race agreed to remove these served areas from its proposal by submitted a revised project area and an updated project budget. 
 
Verizon Wireless had challenged Race’s initial application arguing that wireless carriers continue to build-out 4G-LTE networks.  This Resolution finds that the challenge was vague and unsubstantiated.  The CD staff issued requests for further information from Verizon, but Verizon was apparently unresponsive.  Therefore, the CD staff determined that the challenge should be rejected. 
 
Commissioner Sandoval made several comments regarding this item in her concluding remarks.  She explained that this project builds upon a previous CASF project that brought high-speed internet to the Mojave Air and Space Port, and that this Resolution grants funding to a project that will build out that connection.  She further explained that the project will connect Kern County to the One Wilshire internet exchange point, which is one of the “largest and best” internet exchange points, and will allow Kern County to connect with the entire world.  According to Sandoval, this will be a “game changer” for the community. 
 
The also thanked the Communications Division for their analysis of the challenges to this particular application.  She explained that the staff very closely analyzed a challenge that involved very vague promises of potential future build-out.  She then warned other companies who may be thinking about issuing a challenge based on vague promises that promises of future services with no milestones would not stand in the way of entrepreneurs who are willing to offer services immediately. 
 
A copy of the Draft Resolution underlying this item is available at the following link:   
 
United Way Certified As Santa Cruz County’s 2-1-1 Service Provider (Item 15, approved on consent) – This Resolution grants United Way of Santa Cruz County (“UWSCC”) the authority to use the 2-1-1 abbreviated dialing code to provide information and referral (“I&R”) services to all of San Benito County.  United Way will provide immediate public safety benefits during non-emergencies, emergencies, and disasters by providing a web-based and call-in information call center that addresses the public safety 24 hours a day, 7 days a week.  United Way will also work closely with the Santa Cruz Regional 911 Center and the Office of Emergency Services to ensure that the 9-1-1 and 2-1-1 partnership remains effective. 
 
Certifying United Way as 2-1-1 provider will be in the public interest.  Upon dialing 2-1-1, a caller will be routed to a referral service and then to an agency that can provide information regarding social services, including housing assistance, programs to assist with utility bills, food assistance and other less urgent situations not addressed by 91-1- or 3-1-1 services. 
 
The Resolution finds that United Way has demonstrated an ability to adhere to the standards for delivery of I&R services that will ensure that calls are handled in a manner that is consistent with the guidelines developed by the Alliance of Information and Referral Services.  Moreover, the Resolution also determines that United Way has cooperative relationships and partnerships with other organizations that have extensive experience in providing services in time of local and national disasters. In addition, United Way has submitted over 20 letters of endorsements from broad range of organizations and agencies.
 
A copy of the Draft Resolution underlying this item is available at the following link:  
 
TURN Granted $21,260.65 in Intervenor Compensation for Substantial Contribution to G.O. 77 Exemption Proceeding (Item 21, adopted on consent) –This Decision grants The Utility Reform Network (“TURN”) intervenor compensation in the amount of $21,260.65 for “substantial contribution” in connection with the application by Citizens dba Frontier, SureWest Telephone, and Verizon California requesting exemption from General Order 77-M.  This Decision orders Frontier, SureWest, and Verizon to pay portions of the award to TURN in amounts corresponding to their respective California-jurisdictional telecommunications revenues for the 2012 calendar year. 
 
A copy of the Proposed Decision underlying this item is available at the following link:  
 
Staff Authorized to Prepare and File Comments to FCC Regarding Internet Protocol Captioned Telephone Service (Item 32, approved on consent) –
The FCC issued a Report and Order in which it adopted rules for the provision of Internet Protocol Captioned Telephone Service (“IP CTS”).  These rules include: (1) prohibiting referrals-for-rewards programs and other forms of direct or indirect incentives to register for or use IP CTS or for referral of IP CTS customers; (2) requiring each IP CTS provider to register new IP CTS users and to obtain self certifications regarding a consumer’s need to use IP CTS; and (3) requiring IP CTS providers to ensure that equipment and software used in conjunction with their service have default setting of captions off at the beginning of each call, so that consumers must affirmatively turn on captions. 
 
In the accompanying Further Notice of Proposed Rulemaking (“FNPRM”), the FCC seeks comment on several additional issues, including: (1) the extent to which the funding and responsibilities for overseeing and determining eligibility for IP CTS should be shifted to state programs; (2) the use of a registration database; (3) the need for mandatory minimum standards; (4) requirements for the dissemination of additional educational information about IP CTS; (5) whether to adopt any low income exceptions to the rule restricting the provision of IP CTS equipment for less than $75; (6) whether to modify the $75 minimum price for software and applications; (7) concerns regarding the default caption-off requirement; and (8) whether to adopt a general prohibition of providing services to users who do not need IP CTS.
 
A memorandum regarding the staff’s comments and positions is not available, but a copy of the FNPRM is available at the following link:  
 
LEGISLATIVE WRAP-UP
 
The Commission’s Office of Governmental Affairs (“OGA”) presented its annual Legislative Wrap-Up.  Lynn Sadler led the discussion, beginning with some statistics.  In 2013, OGA monitored a total of 139 bills. The OGA took positions on a total of 31 of those bills.  Of the OGA’s 16 “support” positions, 4 were defeated, 12 passed, and 11 were signed by the Governor.  Of the OGA’s 8 “neutral” positions, 2 were defeated, 6 passed, and 7 were signed by the Governor.  Of the OGA’s 6 “oppose” positions, 4 were defeated, 2 passed, and 0 were signed by the Governor.  Additionally, the OGA sponsored two bills in 2013, including the extension of the Deaf and Disabled Telecommunications Program sunset date. 
 
The OGA monitored ten telecom-related bills.  Four of the telecom-related bills were signed by the Governor and six of the bills failed, as follows:
 
AB 1407 (Bradford) – LifeLine Program Rules.  This bill would have modified the existing California LifeLine program effective January 1, 2015 and would have replaced the program with a voucher system.  The voucher system would have allowed for the use of vouchers to be applied toward existing service options at a consumers discretion.  This bill was held in suspense in the Senate. 
 
AB 1409 (Bradford) – VoIP LifeLine.  This bill would have required the CPUC to conclude the pending LifeLine Proceeding (R.11-03-013) by June 1, 2014.  The bill also included language suggesting that a non-telephone corporation could participate in the LifeLine program.  This bill was vetoed by the Governor to allow the current LifeLine proceeding to be completed. 
 
AB 1299 (Bradford) – Public Housing Developments.  This bill will make low-income public housing with broadband service at the property line eligible for broadband infrastructure grants in order to provide broadband to residents.  This bill also authorizes the collection of $25 million for broadband in public housing.  This bill was signed by the Governor. 
 
SB 740 (Padila) – CASF Program Eligibility.  This bill will expand the CASF program eligibility to entities other than telephone corporations, if those entities meet other requirements.  This bill also provides an additional $65 million in funding for broadband infrastructure grants.  This bill was signed by the Governor. 
 
AB 876 (Bonta) – California Teleconnect Fund (“CTF”) Program Rules.  This bill would have required a comparison of rates charged to schools with rates charged to for-profit entities and would have prioritized funds for advanced communications services over legacy services.  This bill missed the policy committee deadline, so it did not proceed. 
 
AB 1100 (Levine) – California Community Colleges.  This bill would have removed the CTF cost caps for California’s community colleges and would have prohibited funding limits on a  single class of participants.  This bill was held on suspense by the Assembly. 
 
AB 911 (Bloom) – Enhanced 911.  This bill would have required multi-line telephone service system operators to configure equipment to allow public safety officials and first responders to identifya caller’s precise location in buildings and campuses.  This bill was held on suspense in the Senate. 
 
SB 380 (Padilla) – Service Disruptions.  This legislation will prevent communication service shut offs except in the case of extraordinary circumstances in order to preserve 911 access to the public.  This bill was signed by the Governor. 
 
AB 300 (Parea) – Prepaid Wireless.  This bill would have modified the existing process for levying prepaid wireless surcharges by levying the surcharges at the point of sale along with state and local taxes.  This bill was vetoed by the Governor.
 
SB 50 (Lieu) – Payphones.  This legislation will require all payphone operators to disclose call rates regardless of the type of payphone.  This bill was signed by the Governor. 
 
PUBLIC SESSION AND COMMISSIONER REPORTS
 
During the Public Session, multiple speakers spoke out in favor of the Klamath River Rural Broadband Initiative Project, including representatives of the Karuk and the Yurok Tribes.  The speakers thanked the Commission and the California Advanced Services Fund (“CASF”), and stressed the importance of high-speed internet access in their rural Tribal areas.  The speakers expressed their excitement about the opportunities for private investments, local jobs, and revenues that the broadband expansion will offer.  The speakers also raised concerns with the lack of basic services available to rural areas, noting that the lack of services tend to jeopardize both the health and safety of their communities. 
 
The CEO of Race Telecommunications also spoke and thanked the Commission for the CASF program.  He explained that the CASF program has been proven to be a success and pointed to a CASF award granted to Race to bring high-speed internet into the Mojave Desert last year.  He commended the CASF program for accomplishing great things. 
 
Another speaker spoke about the challenges of running a viable motel business in Humboldt County using satellite internet connection, which is the only internet access available in his community.  He explained that one guest could exceed the motel’s internet limit for several days at a time, and thereby prevent any other guests from accessing the internet.  He also expressed his frustration with AT&T, who runs fiber-optic cable right through his street, carrying high-speed internet access from San Francisco to Eureka, yet does not offer services to his community. 
 
President Peevey took the opportunity to commend Senator Padilla for caring deeply about the entire state and authoring the CASF legislation that many of the speakers spoke fondly about.  He explained that Senator Padilla is one example of an individual in a large urban area that cares deeply about the rural areas.  He also stated that all five members of the Commission similarly cared for the rural population. 
 
Commissioner Sandoval thanked Cathy Emerson for organizing the Broadband Consortium held on October 15th, which recognized the need to promote internet connections in the Northern California area.  She noted that over 47 people came to the meeting, and that the meeting demonstrated that people understood the benefits of the internet and that the problem is basic access.  She raised concerns with the infrastructure problems, specifically the middle-mile issues and the companies that have high-speed cables that bypass areas in need without allowing for connections.  She reiterated that one cannot get broadband to the last mile without middle mile links, and acknowledged that she understood that additional projects are currently underway. 
 
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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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