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On October 3, 2013, the Commission held its regularly scheduled agenda meeting.  There were no telecommunications items discussed on the regular agenda, but several significant items were approved on the consent agenda.  The Commission approved CASF funding for underserved project areas for Foresthill, Happy Valley, and Winterhaven.  The Commission adopted Fiscal Year 2014-15 budgets for the California LifeLine program, California Teleconnect Fund program, and Deaf and Disabled Telecommunications Program.  The Commission also adopted a settlement designating Cox as an Eligible Telecommunications Carrier (“ETC”) and approved the involuntary transfer of control of Ducor Telephone Company following the death of its owner.  In addition, the Commission held the proposed decision that would stay Kerman Telephone Company’s rate case and deny interim rate relief.  The Commission also addressed several legislative items.  These and other significant matters on the Commission’s agenda are discussed in further detail below.

CONSENT AGENDA ITEMS

$117,000 in CASF Funding Granted to Foresthill (Item 17, adopted on consent) –This Resolution approves $117,000 in CASF funding to Foresthill Telephone Company dba Sebastian (“Foresthill”) for its Big Dipper Underserved Broadband Project (“Big Dipper Project”).  The Big Dipper Project will extend high-speed internet service to 10.88 square miles covering the Iowa Hill community in Placer County.  The award represents 60% of the total project cost of $195,000. 
 
Iowa Hill currently receives its telephone and internet services through an unlicensed microwave radio site that is fed by fiber from the Foresthill central office.  These radio sites are completely powered by solar power systems because the community of Iowa Hill has no commercial power at this time.  The Big Dipper project will upgrade the microwave radio sites in order to provide high speed internet access.  The project is anticipated to reach 85 households at maximum advertised speeds of 10 Mbps/3 Mbps, and will initially yield 42 potential subscriber households in the proposed area. 
 
The Resolution further sets forth the following conditions: (1) the Foresthill Project will be subject to CEQA review and must provide the Proponents Environmental Assessment (“PEA”) prior to the first 25% payment unless the project is statutorily or categorically exempt from CEQA; (2) Foresthill must submit quarterly progress reports on the status of the project, in addition to a project completion report before full payment is issued; (3) Foresthill must submit the Form 477 required by the FCC; (4) the project is expected to be completed within 24 months from the start date; (5) Communications Division (“CD”) shall work with Foresthill to determine a start date after the Commission has granted all approvals for the grant; (6) Foresthill must guarantee the price of service offered in the project area for two years; and (7) the Commission has the right to conduct any necessary audit, verification, and discovery during project implementation and construction to ensure CASF funding is spent properly. 
 
A copy of the Draft Resolution underlying this item is available at the following link
 
CASF Funding Approved for Winterhaven ($2,063,967) and Happy Valley ($1,833,689) (Items 19 and 20, adopted on consent) – These Resolutions approve CASF funding for Happy Valley Telephone Company (“Happy Valley”) in connection with the Olinda Last Mile Underserved Broadband Project (“Olinda Project”) and Winterhaven Telephone Company (“Winterhaven”) for the Winterhaven Last Mile Underserved Broadband Project (“Winterhaven Project”).  The Resolutions approve CASF funding in the amounts $1,833,689 for the Olinda Project and $2,063,967 for the Winterhaven Project.  These amounts constitute approximately 60% of total project costs, in accordance with CASF rules. 
 
Happy Valley and Winterhaven are both subsidiaries of TDS Telecom (“TDS”), which has been building broadband networks with technologies similar to these projects for the past decade.  Both projects will implement VDSL2 access technology, which delivers improved high speed internet access capable of voice, video, and data streaming by utilizing fiber facilities to the node and copper wire facilities to the customer premise.  The projects are expected to provide broadband service at maximum advertised speeds of 25 Mbps/5 Mbps. 
 
The Olinda Project will extend high-speed internet service to 19.86 square miles covering the Olinda and Anderson communities, in addition to other unincorporated areas of Shasta County.  The Resolution approves $1,833,689 in funding for the Olinda Project, which is expected to reach an estimated 1,908 households.  In addition, Happy Valley estimates that the project will initially yield 520 potential subscriber households in the proposed project area.  The project area also includes seven anchor institutions that may benefit from the Olinda Project. 
 
The Winterhaven Project will extend high-speed internet service to 15.67 square miles covering the Winterhaven Community and other areas of incorporated Imperial County.  The Winterhaven Project is expected to provide broadband access to an estimated 961 households and Winterhaven estimates that the project will initially yield 233 potential subscribers in the proposed area. 
 
The Resolutions determine that the projects qualify for CASF funding because the project areas are underserved.  Happy Valley’s initial application for the Olinda Project included a small area that T-Mobile claims to serve at requisite speeds.  To address this issue, Happy Valley chose to remove this area from its proposal, but the adjustment had little impact on the analysis because there were no households located in the disputed area.  Verizon also challenged both Happy Valley and Winterhaven’s initial applications, arguing that wireless carriers continue to build-out 4G-LTE networks.  The Resolutions find that these challenges were 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 challenges should be rejected. 
 
The Resolutions further sets forth the following conditions for each of the projects: (1) both projects will be subject to CEQA review and must provide the Proponents Environmental Assessment (“PEA”) prior to the first 25% payment unless the project is statutorily or categorically exempt from CEQA; (2) Happy Valley and Winterhaven must submit quarterly progress reports on the status of their project, in addition to a project completion report before full payment is issued; (3) Happy Valley and Winterhaven must submit the Form 477 required by the FCC; (4) the projects are expected to be completed within 24 months from the start date; (5) the CD shall work with Happy Valley and Winterhaven to determine a start date after the Commission has granted all approvals for the grant; (6) Happy Valley and Winterhaven must guarantee the price of service offered in the project area for two years; and (7) the Commission has the right to conduct any necessary audit, verification, and discovery during project implementation and construction to ensure CASF funding is spent properly. 
 
A copy of the Draft Resolution for Happy Valley’s Olinda Project  is available at the following link
 
A copy of the Draft Resolution for the Winterhaven Project is available at the following link
 
Majority Control of Ducor Transferred to Ducor’s President and CEO (Item 31, adopted on consent) – This Decision approves the transfer of control of Ducor Telephone Company (“Ducor”) to Ducor’s President and Chief Executive Officer following the death of the majority owner of Ducor.  This transfer of control follows instructions in the trust of Virgil Roome, the previous owner of Ducor and its holding company, Varcomm, Inc. (“Varcomm”).  The trust shifts 75% of the 3,140 outstanding shares of stock of VarComm to Galen Norsworthy, the current President of Ducor.  The Decision finds that the requested transfer will not impact the day-to-day operations of Ducor and that the transfer is in the public interest.  In addition, the Decision also concludes that Ducor’s President and other key management personnel have been in their current positions for many years and have extensive experience in the management of Ducor and the telecommunications industry. 
 
A copy of the Proposed Decision underlying this item is available at the following link
 
LifeLine Program Expense Budget Adopted for Fiscal Year 2014-15 (Item 11, adopted on consent) – This Resolution adopts an expense budget recommendation of $204,438,000 for fiscal year 2014-15 for the California LifeLine Program.  The adopted budget for FY 2014-15 is $78.315 million less than the budget adopted for FY 2013-14.  Approximately $72 million of the reduction is attributed to a projected decrease in carrier claims. 
 
The proposed budget is based on the following program expenditures:  (1) carrier claims ($181.4 million); (2) staff costs ($1.431 million); (3) the California LifeLine Administrator ($12.3 million); (4) LifeLine consultant to provide technical support for website design and database management ($200,000); (5) auditing costs ($2.356 million); (6) interagency costs ($2.668 million); (7) marketing and outreach costs ($2.1 million); (8) data processing automation costs; ($133,000); (9) travel costs ($3,000); (10) administrative committee costs ($1,000); (11) state controller costs ($52,000); and (12) Fiscal Information System costs ($1.792 million). 
 
A copy of the Draft Resolution underlying this item is available at the following link
 
DDTP Program Expense Budget Adopted for Fiscal Year 2014-15 (Item 10, adopted on consent) – This Resolution adopts an expense budget recommendation of $63.1 million for the Deaf and Disabled Telecommunications Equipment and Relay Service Program (“DDTP”). 
 
The proposed budget is based on the following program expenditures:  (1) Primary Program and Contract Administrator costs ($17.09 million); (2) Equipment Processing Center ($6.63 million); (3) Marketing Services Provider ($3.35 million); (4) Rents and Leases ($1.51 million); (5) technical consultant expenses ($250,000); (6) accommodations ($220,000); (7) landline carrier claims ($210,000); (8) California Relay Services ($10.84 million); (9) DDTP program equipment ($6.24 million); (10) wireless equipment ($ 2 million); (11) speech generation devices ($11.60 million); (12) CPUC Administration and staff costs ($2.14 million); (13) committee expenses ($70,000); (15) state controller costs ($12,000); (16) California State Library ($552,000); and (17) Financial Information System for California costs ($160,000). 
 
A copy of the Draft Resolution underlying this item is available at the following link
 
CTF Program Expense Budget Adopted for Fiscal Year 2014-15 (Item 12, adopted on consent) – This Resolution adopts an expense budget recommendation of $107,983,000 for fiscal year 2014-15 for the California Teleconnect Fund (“CTF”).  This is an increase from earlier years due to an anticipated increase in carrier claims in the amount of $32,653,000 resulting from expected program growth. 
 
The proposed budget is based on the following program expenditures:  (1) carrier claims ($104,605,000); (2) audit expenses ($678,000); (3) outreach expenses ($500,000; (4) Program Claim Automation program expenses ($38,277); (5) travel costs ($6,000); (6) Administrative Committee Costs ($24,000); (7) inter-agency fees ($811,000); (8) staff costs ($888,000); (9) State Controller’s Office ($10,000); and (10) Financial Information System ($423,000).
 
The Resolution also determines that due to anticipated carrier claims, that the Commission’s self-imposed appropriations cap would be exceeded.  Therefore, this Resolution also raises the appropriations cap to accommodate program expenses.  Finally, based on recommendations by CD staff, the Resolution also increases the California community colleges cap by $211,000 to $11,379,000 for FY 2014-15. 
 
The Draft Resolution underlying this item is available at the following link
 
Settlement Agreement Approved and Cox Designated an ETC (Item 8, adopted on consent) – This Decision designates Cox California Telecom, LLC (“Cox”) as an Eligible Telecommunications carrier (“ETC”) by adopting a settlement agreement between Cox, the Greenlining Institute (“Greenlining”), and The Utility Reform Network (“TURN”). 
 
Cox filed an application for ETC designation in September 2012.  DRA protested on the basis that the Commission may lack authority under SB 1161 to designate Cox as an ETC because Cox utilizes Voice over Internet Protocol (“VoIP”) technologies to provide retail telephone service.  SB 1161, which amended Section 710 of the Public Utilities Code, prohibits the Commission from regulating VoIP or IP-enabled services except as delegated by federal law or specified in state statute.  DRA also requested that the Commission clarify its jurisdiction over Internet Protocol (“IP”) based telephone services prior to designating Cox as an ETC.  Cox argued that under Section 214(e)(2), the Commission must designate a common carrier as an ETC for the purposes of receiving federal universal services if it offers services designated by the FCC for federal universal service support and advertises the availability of such services using media of general distribution.  Cox further argued that it qualifies as a common carrier even though it utilizes VoIP to some extent to provide services. 
 
To resolve these issues, all parties to the proceeding engaged in settlement discussions.  A settlement agreement was reached between Cox, Greenlining, and TURN.  The settlement agreement designates Cox as an ETC subject to the following terms and conditions:  (1) Cox provides Basic Service and LifeLine service pursuant to its tariff; (2) Cox operates as a common carrier as it offers Basic Service and LifeLine service to the public on a nondiscriminatory basis; (3) Cox will comply with current and future laws applicable to providers participating in the state and/or federal LifeLine programs; (4) the Commission will have authority to address and resolve inquiries and complaints that it receives related to Basic Service and Lifeline service provided by Cox; and (5) Cox will comply with G.O. 96-B with respect to the rules governing detariffing Basic Service and LifeLine service, withdrawing such services and/or modifying rates for such services.
 
DRA opposed the settlement agreement, asserting that it does not resolve the issues raised in the scoping memo and does not clarify whether consumer protection laws would apply.  The Decision noted that Cox is a CPCN holder bound to the terms of its CPCN, which requires compliance with the Public Utilities Code and all of the Commission’s rules, decisions, and orders.  AT&T did not oppose the settlement agreement to the extent that it only applies to Cox.  AT&T was specifically concerned that decisions reached in this proceeding would have industry-wide impacts.  In particular, AT&T expressed concern because it was a provider of VoIP services, and found that the scoping memo issued in this proceeding included “fundamental and generally-applicable issues relating to Senate Bill (SB) 1161, and the classification and regulation of “VoIP  services.”  To the extent that the Proposed Decision was specifically limited to Cox, AT&T did not object, but did indicate that it would object to any effort to apply the proposed settlement to any other party because it would be a denial of due process. 
 
The Decision concludes that the settlement agreement is consistent with applicable state and federal law, reasonable in light of the whole record, and in the public interest.  Specifically, the Decision finds that consumer interests are represented through TURN and Greenlining and that the settlement agreement would not be prejudicial to other providers because it would only bind Cox.  Moreover, the Decision finds that the settlement agreement is in the public interest because it would allow Cox to continue providing LifeLine service to low-income customers. 
 
A copy of the Proposed Decision underlying this item is available at the following link
 
A copy of the Draft Settlement Agreement is available at the following link:  
 
Lone Pine Television, Inc. Granted Partial Waiver to Bond Requirement (Item 16, adopted on consent) – This Resolution grants Lone Pine Television, Inc. (“Lone Pine”) a partial waiver of the bond requirement established under General Order (“G.O.”) 169, which requires state-issued video service franchise holders to post a bond in the amount of $100,000 up to a maximum of $500,000 for every 20,000 households in its service territory.  This is the first and only waiver of G.O. 169’s application requirements. 
 
Lone Pine currently holds a state-issued video franchise and is required to post a $100,000 bond under G.O. 169.  Lone Pine requested a partial waiver of the bond requirement because it is a small video service provider with approximately 1,000 households in its video service territory.  Lone Pine explains that it would suffer a financial burden by posting the bond.  In addition, Lone Pine supported its request by demonstrating that its customer base is limited to approximately 300 subscribers in remote and rural areas.  The Resolution concludes that a partial waiver is appropriate because the bond requirement should not be so onerous as to pose a significant barrier to entry on small providers that are qualified to provide service.  Moreover, the Resolution finds that Lone Pine has provided service to its customers without incident for over 50 years, thereby addressing one of the purposes of the bond requirement.  Therefore, the Resolution finds that it is appropriate to grant Lone Pine a partial waiver by allowing it to satisfy the bond requirement with a fully executed bond in the amount of $10,000.
 
A copy of the Draft Resolution underlying this item is available at the following link
 
Control of Securus Technologies and T-NETIX Transferred to Securus Investment Holdings (Item 23, adopted on consent) –This Decision authorizes the transfer of Securus Investment Holdings, LLC (“SIH”) and T-NETIX Telecommunications Services, Inc. (“T-NETIX”) to Securus Investment Holdings, LLC (“SIH”).  STI is a Delaware corporation with its principal business office located in Dallas, Texas. STI and T-NETIX each hold CPCNs to operate as non-dominant interexchange carriers to provide resold interLATA and intraLATA services in California. 
 
The Decision concludes that this transfer is in the public interest and that it will not have an adverse effect on customers.  In particular, the Decision finds that STI and T-NETIX will continue to operate as separate entities, with no changes in rates, terms, or conditions of service resulting from the transaction.  Moreover, STI and T-NETIX will retain their current day-to-day management after the merger and will therefore have sufficient technical expertise in the telecommunications industry.  The  Decision also orders STI and T-NETIX to obtain a performance bond of at least $25,000 as a condition of the transfer. 
 
A copy of the Proposed Decision underlying this item is available at the following link:  
 
Greenlining Granted Intervenor Compensation in G.O. 77 Exemption Proceeding (Item 38, adopted on consent) –This Decision grants the Greenlining Institute (“Greenlining”) intervenor compensation in the amount of $19,283.75 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 Greenlining 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
 
Resolution Confirming the Rejection of Channel Islands Telephone Company’s Request for RTIGP Funding (Item 5, approved on consent) – This Resolution affirms the rejection of Resolution T-17382, which declined Channel Islands Telephone Company’s (“CITC”) request for funding from the Rural Telecommunications Infrastructure Grant Program (“RTIGP”).  Resolution T-17382 was rejected by a vote of the Commission at the March 21, 2013 Commission meeting.  On May 20, 2013, the CITC filed an advice letter requesting the issuance of a formal written opinion regarding Resolution T-17382.
 
The Resolution explains that Resolution T-17982 was rejected for the following reasons:  (1) the proposed project was not cost effective as it would cost $2.692 million and would not serve a single residential customer on the islands; (2) the benefit of the project for visitors to the island were questionable, and it was not clear whether the project would enhance responsiveness by emergency personnel on the islands; and (3) the project was strongly opposed by the Chumash Indian community.
 
The Resolution also approves $304,343.75 to reimburse the CITC for Phase 2 preparation costs as provided under Section 276.5, which permits reimbursement for preliminary engineering feasibility studies, including substantial “Dedicated Employment” costs.  Finally, the Resolution approves an additional $18,000 to complete the Energy Division’s CEQA review. 
 
A copy of the Draft Resolution underlying this item is available at the following link
 
Bigredwire.com, Inc.’s CPCN Application Denied (Item 10, approved on consent) – This Decision denies without prejudice Bigredwire.com, Inc.’s (“BRW”) application for a certificate of public convenience and necessity (“CPCN”) to provide resold interexchange service on the basis that BRW is not financially viable at this time.  The Decision also directs any carriers doing business with BRW to cease providing services to BRW.  A letter from CD is expected to be issued to memorialize this requirement.
 
BRW is a Delaware corporation that was granted a CPCN to provide inter and intra-LATA services in California as a non-dominant interexchange carrier in 2001.  BRW’s CPCN was revoked in 2004 for failure to file annual reports and remit fees and surcharges to the Commission.  However, BRW continued operating without authority and continued collecting fees and surcharges from customers without remitting  them to the Commission.  In 2007, BRW filed for registration as an Interexchange Carrier Telephone Corporation, which was protested by the Consumer Protection and Safety Division, now known as SED.  SED protested on the basis that BRW continued providing telecommunications services to consumers following revocation of its CPCN in 2004 and BRW violated Rule 1.1 by not disclosing that it had been subject to sanctions by the Commission and the Florida Public Services Commission.  BRW and SED entered into a settlement agreement, which directed BRW to file an amended application within 30 days and imposed both a $20,000 fine to the State General Fund and a $41,264.80 in back fees and surcharges. 
 
The Decision concludes that BRW does not meet the financial qualifications and viability necessary to obtain a CPCN.  Specifically, an applicant must demonstrate that it has a minimum of $25,000 cash or cash equivalent to meet expenses and sufficient additional resources to cover all deposits required.  While BRW indicates that it is currently providing service and generating revenue, BRW provides no information about where it is providing service or its agreements with telecommunications carriers.  The Decision finds that it is impossible to determine the amount and source of BRW’s revenue in which to determine whether BRW has the financial resources required to be issued a CPCN.  Moreover, BRW has twice requested temporary reduction in monthly installment payments on the fines imposed by the settlement agreement due to financial hardship and has defaulted under the terms of the settlement agreement.  As of February 2013, BRW owed $7,245.83 of the $20,000 fine and $16,787.10 of the $41,264.80 unpaid surcharges and user fees.
 
Given BRW’s history of operating without authority from the Commission and collecting user fees and surcharges from customers without remitting them to the Commission, the Proposed Decision would order BRW to notify all of its customers that it is not authorized to provide telecommunications services in this state.  In addition, the Communications Division would also be directed to notify all carriers that BRW is or could be doing business with that BRW’s CPCN was revoked in 2004 and that any such carriers must discontinue providing such services within 60 days of issuance of the Decision. 
  
A copy of the Proposed Decision underlying this item is available at the following link:  

SIGNIFICANT HELD ITEMS

Kerman’s Request for Interim Rate Relief (Item 14, held until 10/31 by Sandoval) – This Proposed Decision would impose an unprecedented stay on Kerman Telephone Co. d/b/a Sebastian’s (“Kerman”) rate case and deny Kerman’s related request for interim rate relief for calendar year 2013.  Kerman brought this rate case in 2011 using a 2013 test year.  The rate case is now well into its test year, and the Proposed Decision would stay the case until January 1, 2014, with an additional protracted stay likely to be imposed for the duration of the CHCF-A rulemaking (R.11-11-007). 
 
The Proposed Decision asserts that proceeding with the rate case would not be reasonable because of the existence of R.11-11-007, a pending Commission proceeding evaluating the CHCF-A program.  However, the Proposed Decision does not explain how future modifications to the CHCF-A program would impact the rules for adjudicating the pending rate case.  Similarly, the Proposed Decision would rely on a finding that it would not be administratively efficient to process the rate case or to issue interim relief without addressing the additional logistical and administrative uncertainties created by the stay. 
 
A copy of the Proposed Decision underlying this item is available at the following link:  

Petition for Rulemaking on the Privacy Practices of Telecommunications Corporations (Items 2 and 2a, held) – This item would address the Petition for Rulemaking by a group of consumer groups seeking to initiate a proceeding addressing privacy issues for telecommunications carriers.  Commissioner Ferron’s original decision would refuse to open the rulemaking, while Commissioner Sandoval recommends granting the petition in part and initiating a proceeding to examine the issue.
 
On November 8, 2012, the Consumer Federation of California, The Utility Reform Network, and the Privacy Rights Clearinghouse (“Joint Consumers”) filed Petition for Rulemaking (“Petition”) to modify the privacy practices telecommunications carriers filed.  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 telecommunications 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, and to protect the privacy of customer’s information.  The Petition 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”) and 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. 
 
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
 
LEGISLATIVE ITEMS
 
Legislation on LifeLine, AB 1409 (Bradford) – Mr. Zanjani also introduced this bill and explained it is a pared down version of AB 1407, an earlier bill addressing potential LifeLine reforms.  He explained that the bill would require the Commission to conclude its LifeLine proceeding by June 1, 2014 and to have rules applicable to all LifeLine service providers regardless of technologies.  The bill also specifies that the Commission should apply federal law to designate ETCs and would mandate that the Commission shall not deny or revoke a CPCN if a telephone corporation also happens to provide VoIP service. 
 
Commission Sandoval raised concerns with the bill’s language and pointed to the lack of definition for “alternative technologies.” 
 
Commissioner Florio and Commissioner Peterman supported some of the comments made by Commissioner Sandoval.
 
A copy of the most recent version of this bill is available at the following link
 
Legislation Addressing Collection of Surcharges by Prepaid Mobile Telephony Services, AB 300 (Perea) – This bill was also introduced by Nick Zanjani from the Commission’s Office of Governmental Affairs.  He explained that this bill is formally opposed by the Commission and is an effort whereby carriers are attempting to switch the existing collections and remittance system for prepaid to a system based on points of sale.  Currently, prepaid carriers remit the amount of surcharge and fee revenue directly to Commission, 911 fees directly the Board of Equalization, and utility user taxes directly to the local governments.  AB 300 would replace this system with one where all surcharges, fees, and taxes would be lumped into a single mobile telephony services (“MTS”) surcharge that would be assessed at point of sale when minutes are purchased by a customer. 
Commissioner Sandoval expressed her concern with the financial impact of the bill.  First, she raised concerns with the estimated $10 million a year costs associated with setting up the system and the annual implementation and administration costs.  Second, she noted figures indicating a net $1.7 million in revenue loss per year if the bill is implemented. 
 
President Peevey noted that the bill initially was very strongly supported by cities and carriers and asked for an update on the parties currently supporting the bill.  Mr. Zanjani responded that there is significant confusion surrounding the bill and its local impact.  However, he did indicated that some cities are now opposing the bill.
 
 
A copy of the most recent version of this bill is available at the following link
 
COMMISSIONER REPORTS
 
Commissioner Sandoval noted her attendance at a recent CEQA rulemaking workshop, which she found very insightful.
 
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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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