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On April 19, 2012, the California Public Utilities Commission held its regularly-scheduled agenda meeting.  The major telecommunications item on the agenda was a “discuss and hold” on a bill to prohibit the Commission and other state entities from regulating Voice over Internet Protocol (VoIP) and Internet Protocol-enabled service (IP-enabled service) providers except as expressly provided in statute.  On the consent agenda, the Commission denied SureWest Telephone’s petition for rulemaking to modify Section 851 requirements as to requests to secure loans with utility property.  The Commission also revoked the Certificates of Public Convenience and Necessity for more than 100 carriers for failure to comply with surcharge, user fee, and performance bond requirements.  Other items of interest on the Commission’s agenda are addressed below.
 


REGULAR AND CONSENT AGENDA ITEMS


  • SureWest Telephone’s Petition for Rulemaking to Create New Exemption from Section 851 Approval Requirement
    (Item 13, adopted on consent agenda) – ThisDecision denies SureWest Telephone’s petition for a rulemaking to exempt URF carriers from Section 851 approval in the specific context of requests to secure debt with utility assets.  SureWest had previously requested this relief through application, but the application was denied on procedural grounds, so a petition for rulemaking ensued.  SureWest argued that the 851 requirement put the company in a disadvantage in the debt market by impairing its ability to swiftly procure debt.

    In this decision, the Commission also denied the petition based  on a view that there are more efficient alternatives open to SureWest to resolve the issue on a case-by-case basis.  A copy of the Proposed Decision associated with this item is available here.

 
  • Revocation of Licenses for Noncompliance Approved  
    (Item 30, adopted on consent agenda) – The Commission approved a Decision revoking the operating authority of 106 carriers for failure to comply with Public Utilities Code Sections 401 through 405.  Specifically, the Commission’s grounds for revocation were in three areas:  (1) failure to remit/collect CPUC user fees; (2) failure to remit/collect required surcharges; and (3) failure to provide performance bonds in compliance with recent decisions requiring certain carriers to obtain performance bonds.  The final Resolution associated with this item is available here.
 
  • Commission to File Comments With FCC Regarding Certain Wireless Service Interruptions
    (Item 73, adopted on consent agenda) – This Decision approves the filing of comments in response to the Federal Communication Commission’s (FCC) Public Notice on concerns and issues related to intentional interruptions of Commercial Mobile Radio Service (CMRS) by government authorities for the purpose of ensuring public safety.  In the wake of last summer’s temporary interruption of wireless service by the Bay Area Rapid Transit agency based on stated concerns about public safety, the Commission will make the following points:  (a) there is a balance between First Amendment/due process rights and law enforcement’s ability to maintain safety, and the trigger for any such interruption must not be less than an immediate threat to public safety; (b) the FCC does not have jurisdiction over local agencies or law enforcement agencies’ abilities to determine what action is necessary to address such threats; and (c) the FCC does not have jurisdiction to preempt the Commission rules/regulations concerning rail safety.  A copy of the Staff Memorandum associated with this item is available here.
 
  • CEQA Contract Approved for Pine Mountain Learning Center Line Extension Project
    (Item 20, adopted on consent agenda) – This Resolution authorizes disbursement of California High Cost Fund-A funds not exceeding $400,000 for California Environmental Quality Act review of AT&T California, Inc.’s Pine Mountain Learning Center Line Extension Grant Project under the Rural Telephone Infrastructure (AB 140) grant program to bring basic telephone service to the Pine Mountain Learning Center, Camp Condor, and the United States Forest Service Fire Station in the mountains west of Gorman in the Los Padres National Forest.  A copy of the Resolution associated with this item is available here.
 
  • Fiber International LLC Granted Certificate of Public Convenience and Necessity
    (Item 37, adopted on consent agenda) – This Decision grants a Certificate of Public Convenience and Necessity to Fiber International LLC to provide limited facilities-based and resold competitive local exchange services throughout the service territories of Pacific Bell Telephone Company (Pacific), Verizon California, Inc. (Verizon), SureWest Telephone (SureWest) and Citizens Telecommunications Company of California, Inc. d/b/a Frontier Communications Company of California, Inc. (Frontier), and interexchange services statewide. The Proposed Decision associated with this item is available here.
 
  • Digital Transportation Granted Certificate of Public Convenience and Necessity
    (Item 38, adopted on consent agenda) – This Decision grants a Certificate of Public Convenience and Necessity to Digital Transportation, Inc. to provide full facilities-based and resold competitive local exchange services throughout the service territories of Pacific, Verizon, SureWest and Frontier, and interexchange services statewide. The Proposed Decision associated with this item is available here.
 
  • Statutory Deadline Extended in Cox California Telcom’s Case Against Verizon and MCI Entities
    (Item 50, adopted on consent agenda) – This Proposed Decision grants a 12-month extension of time to resolve a proceeding between Cox California Telcom, LLC and Verizon, MCI METRO Access Transmission Services and MCI Communications Services, Inc. regarding the interpretation of two interconnection agreements.  The new statutory deadline is May 8, 2013.  The Proposed Decision associated with this item is available here.
 
  • Statutory Deadline Extended in Cox California Telcom’s Case Against Vaya Telcom
    (Item 52, adopted on consent agenda) – This Proposed Decision grants a 6-month extension of time – until March 8, 2013 – to resolve a dispute between Cox California Telcom, LLC and Vaya Telcom LLC, in which Cox alleges that Vaya owes $2.5 million under the Cox Switched Access Tariff.  The Proposed Decision associated with this item is available here.
 
  • Settlement Approved in Consumer Complaint Case Against Sprint Telephony PCS
    (Item 40, adopted on consent agenda) – The Commission approved a settlement offer in a consumer complaint that:  (1) Sprint Telephony PCS, LP improperly levied overcharges on a mobile service plan; (2) Sprint had engaged in conspiracy, unprofessional and discourteous treatment; (3) the hours on the phone with Sprint customer service personnel resulted in the customer developing a tumor on his ear; (4) the Commission’s Complaint process was flawed and unfair; and (5) that the assigned Administrative Law Judge was biased, corrupt, and acting in collusion with Sprint.  Sprint made a settlement offer to credit the customer’s account the alleged past due charges and remove the matter from a collection agency, and the Commission approved the settlement.  The Proposed Decision associated with this item is available here.
 


SIGNIFICANT HELD AND WITHDRAWN ITEMS


  • Senate Bill 1161 (Padilla) Prohibiting The CPUC from Regulating VoIP
    (Item 92, discussed and held until May 10, 2012 for further review) – This bill would prohibit the Commission from regulating Voice over Internet Protocol (VoIP) and Internet Protocol enabled service (IP enabled service) providers unless expressly provided otherwise in statute. The bill would prohibit any department, agency, commission, or political subdivision of the state from enacting, adopting, or enforcing any law, rule, regulation, ordinance, standard, order, or other provision having the force or effect of law, that regulates or has the effect of regulating VoIP or other IP enabled service, unless expressly authorized by statute.  The bill would specify certain areas of law that are expressly applicable to VoIP and IP enabled service providers.  A copy of the existing bill text is available here.

    The Commissioners held an extensive discussion regarding the item.  Commissioner Sandoval explained her concerns at length.  Her primary concern was that many telephone carriers use internet protocol within their networks to help to move or transit Plain Old Telephone Service (POTS) calls, and the “sweeping use of reference to internet protocol services” in the legislation has the potential to preempt some of the “very important” state regulations that have been adopted to protect consumers who use POTS carried by VoIP.  Sandoval questioned whether this bill would harm CPUC, local, or state jurisdiction over existing carriers.  She observed that the exceptions currently stated in the bill are for emergency telephone user surcharges, the state’s universal service funds, the Digital Infrastructure and Video Competition Act compliance, implementation of sections 251 and 252 of the Federal Communications Act, the commission’s authority to require data or other information pursuant to Public Utilities Code Section 716, and the commission’s authority to address other carrier compensation disputes and the enforcement of criminal or civil laws of general applicability.  As Sandoval argued, the issue of VoIP being exempt from consumer protections in California is still a wide-open issue that should not be foreclosed by this legislation.

    Commissioners Florio and Ferron agreed with Commissioner Sandoval’s presentation. Commissioner Florio concluded that “there is simply no need for this kind of legislation and it’s so poorly written that a person of ordinary intelligence really cannot determine what its effects would be.”  He further complained that it “seems to be designed to prevent this commission from even thinking about VOIP and frankly I find it rather insulting that certain parties think that we’re so untrustworthy that we can’t be allowed any jurisdiction to even look at these issues.”  Florio strongly expressed his view that the consumer protection, the service quality, and other types of issues that surround this are vitally important.  Commissioner Ferron stated his position that VoIP is a technology and not a service, and that “we should be making the definition of basic service technology neutral so that it can be provided by any technology that’s able to provide the service. ”  According to Ferron, “the combination of deregulating all VoIP provided service would effectively deregulate basic service provided using VoIP.”

    Commissioner Simon focused on how this bill would affect the Commission’s oversight and regulation of public safety, which in his view is “non-negotiable,” and also indicated concern over jurisdiction and constitutionality in general.  Simon emphasized that the CPUC’s jurisdiction should not be determined by what the Legislature says it can do.  On the other hand, Commissioner Simon noted that he did not have a final position on the bill because he recognizes the importance of maintaining a robust broadband communication competitive environment that “these entities are not cost of service rate regulated and they are fundamentally different than the energy entities that we regulate.”

    Commissioner Peevey noted a “profound philosophical difference between” himself and the majority of the commissioners on this issue, stating that the sponsors of this bill are Tech America, Tech Net and the Silicon Valley Leadership – who are “concerned that this state will attempt to regulate the Internet.” Commissioner Peevey does not want “to support anything that will in any way diminish, throttle or choke” the economic potential of the Silicon Valley businesses.

    Ultimately, the Commissioners did not vote on the item.  The bill will be considered at the next Commission meeting.

 
  • Proposed Decision to Revise Definition of Basic Service
    (Item 68, held to 5/24/12 for further review) – This Proposed Decision would adopt revisions to the definition of basic telephone service that would be applied to carriers seeking to receive support from the California High Cost Fund-B and/or the California LifeLine programs.  The current basic telephone service definition was adopted in 1996.  The Commission’s stated goals in reviewing the basic service definition are to (a) consolidate and streamline existing listings of service elements, (b) apply technology-neutral terminology and definitions, and (c) avoid degrading standards necessary to meet essential universal service needs.  The Proposed Decision being considered by the Commission is available here.

 

  • Consideration of SB 1002 Re: Public Records Release Format Withdrawn
    (Item 89, withdrawn) – SB 1002 (Yee) would authorize an agency, when requested, to provide an electronic record in a format in which the text in the electronic record is searchable by commonly used software, with the requester to pay the costs associated with the conversion, but not the costs necessary to produce the record. There was no Legislative Subcommittee Memorandum or specific recommendation associated with this item made available at the meeting.

 

  • Senate Bill 1160 (Padilla) Regarding Intentional Service Disruption  
    (Item 91, withdrawn) – This bill would provide that a person who owns, operates or controls facilities for providing telecommunications service that interconnects with the public switched telephone network shall not intentionally interrupt, suspend or disconnect service to a particular user or to a geographic area, except as specified. There was no Legislative Subcommittee Memorandum or specific recommendation associated with this item made available at the meeting.


SIGNIFICANT ENERGY ITEMS


  • Modification of “Vintaging” Requirements for Direct Access Customers Who Return to Bundled Service
    (Item 8, adopted on regular agenda) – This Decision clarifies an earlier Commission Decision by requiring “ContinuousDirect Access customers” who return to bundled service and subsequently return to direct access service to be subject to the “vintaging” process previously adopted by the Commission, and are responsible for “New World Generation Costs” applicable to their assigned vintage. “Vintaging” is a non-bypassable charge established in Commission Decision (D.) 08-09-012 that recovers the uneconomic or stranded costs related to new generation resources from departing customers. A copy of the Proposed Decision associated with this item is available here.
 
  • Gas & Pipeline Safety-Related Citation and Fine Against PG&E
    (Item, adopted on consent agenda) –
    This Decision affirms a citation of $16.76 million against PG&E for failure to conduct gas safety tests in Contra Costa County, and a separate $3 million fine for failure to comply with a CPUC pipeline records search.  A copy of the Draft Resolution affirming the citation is available here, and a copy of the Proposed Decision regarding the $3 million fine is available here.
 
  • Approval of Analog Meter Options for SCE and SDG&E Customers
    (Item 17, adopted on consent agenda) – This Decision modifies SCE and SDG&E’s advanced metering programs to include an analog meter option for SCE and SDG&E customers who do not wish to have a wireless Smart Meter installed at their location.  Customers will be assessed an initial fee of $75 and a monthly charge of $10 thereafter.  A copy of the SCE Proposed Decision is available here; a copy of the SDG&E Proposed Decision is available here.
 


NOTES AND COMMISSIONER REPORTS


  • Commissioner Sandoval met last week with the City of Los Angeles and several utilities including AT&T, Verizon, and Sprint to discuss coordination of street maintenance policies with gas pipeline and infrastructure safety policies.  She noted telecommunications providers’ observation that “water is often the enemy” of telco-related services.  She also spoke at an event sponsored by TURN addressing telecommunications services, and heard from consumers regarding wireline and wireless service availability in the Los Angeles area. 

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