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On August 18, 2011, the California Public Utilities Commission held its regularly-scheduled agenda meeting.  The Commission set 2012-2013 budgets for several of its public policy and high-cost fund programs, including the CHCF-A and the CHCF-B.  Although the Commission has not yet voted on a Draft Resolution adopting the California Advanced Services Fund Expense Budget for 2012-2013, the Communications Division gave an extensive report on the program’s progress. These and other items of interest on the Commission’s public agenda are discussed in further detail below.
 


REGULAR AND CONSENT AGENDA ITEMS


  • California High Cost Fund-A $49.7 Million Expense Budget for 2012-2013 Approved
    (Item 15, adopted on consent agenda) – This Resolution approves a $49.773 million expense budget for the California High Cost Fund-A (CHCF-A) for fiscal year 2012-2013.  The Adopted Budget is a decrease from the $56.283 million budget for fiscal year 2011-2012, primarily due to the decrease in project submissions under the Rural Telecommunications Infrastructure Grant Program, and the associated $5 million reduction in associated grant distributions.  The recommendation in this Resolution will be conveyed to the Legislature as it forecasts the funding needs for the public policy programs in the 2012-2013 state budget.  The Draft Resolution associated with this item is available here.
 
  • California High Cost Fund-B $36.3 Million Expense Budget for 2012-2013 Approved
    (Item 36, adopted on consent agenda) – This Resolution approves the California High Cost Fund-B (CHCF-B) budget of $36.333 million for fiscal year 2012-2013.  The budget is based on carrier’s estimates of expected claims, and estimates from the Commission’s fiscal office regarding staff and administrative costs, inter-agency fees, banking charges, audits, and administrative committee costs.  The 2012-2013 funding amount reflects the increased funding benchmark and the changed methodology for computing the CHCF-B subsidy, as adopted in D.07-09-020.  The carrier claims under the CHCF-B have steadily declined since the new CHCF-B system took effect.  The amount in this Resolution represents a more than $11 million decrease from the $47.711 million budget for fiscal year 2011-2012.  In fiscal year 2010-2011, the CHCF-B budget was $50.935 million.  The recommendation in this Resolution will be conveyed to the Legislature as it forecasts the funding needs for the public policy programs in the 2012-2013 state budget.  The Draft Resolution associated with this item is available here.
 
  • Deaf and Disabled Telecommunications $76 Million Expense Budget for 2012-2013 Approved
    (Item 17, adopted on consent agenda) – This Resolution approves a $76.12 million Deaf and Disabled Telecommunications Equipment and Service Program (DDTP) expense budget for fiscal year 2012-2013.  The program provides specialized equipment and discounted service to hearing-impaired and disabled individuals.  The DDTP budget includes $25.8 million for the purchase of Speech Generating Devices (SDGs), an increase of $10.8 million over the amount dedicated to similar purchases in fiscal year 2011-2012.  The Commission directed in D.10-11-033 that SGDs be funded through the DDTP, and legislation is pending to formally include SGDs in the program.  DRA commented on the legislation, arguing that the budget for SGDs was premature.  The Resolution notes these comments, and states that “CD agrees that legislation has not passed yet but includes this budget item to be able to implement the program if the legislation passes.”  Overall, the DDTP budget increased by $7.09 million over the 2011-2012 fiscal year budget of $69.03 million.  The Draft Resolution associated with this item is available here.
 
  • California Teleconnect Fund $92.2 Million Budget for 2012-2013 Approved
    (Item 37, adopted on consent agenda) – This Resolution adopts a budget of $92.234 million for fiscal year 2012-2013 for the California Teleconnect Fund (CTF) program.  This represents an increase of more than $17 million over the prior fiscal year’s budget of $75.207 million.  The additional forecasted expenses relate primarily to an anticipated $15 million increase in carrier claims, a $300,000 increase in expenses for inter-agency fees, audits, banking, and Commission staff, and a $2.1 million increase in the costs associated with programming and document storage needed to create a smoother, more automated claims process.

    In addition to adopting the budget, this Resolution raises the appropriations cap for the CTF fund from $80 million to $92.2 million.  The appropriations cap was originally set at $50 million in 1996, and has been increased considerably over the past decade to reach the new proposed cap of $92.2 million.  Along with the increase in the overall cap in this Resolution, the Commission voted to increase the amount that can be allocated to community colleges from $7.2 million to $8.3 million.

    DRA had offered comments on the proposals in Resolution, arguing that the Commission should adopt a performance and financial audit of the CTF program to address concerns about rising administrative costs in the program in recent years.  The Resolution finds that DRA’s recommendation has merit, but suggests that this Resolution is not the appropriate vehicle through which to address the issue.

    The CTF surcharge is currently set at .079%, and this Resolution does not modify that amount, but future increases may be necessary to accommodate the augmented CTF budget.  The Draft Resolution associated with this item is available here.

 
  • Section 851 Pilot Program Extended for an Additional Year  
    (Item 14, adopted on consent agenda) – This Resolution extends the Commission’s Section 851 Pilot Program for an additional year in order to consider comments filed by interested parties regarding whether the Pilot Program should be continued or made permanent, possible future amendments of the pilot program, and the adoption of a Commission order on these issues.

    The Section 851 Pilot Program provides an advice letter process to facilitate Commission approval of transfers of utility property valued at less than $5 million.  These transactions would otherwise require an application for Commission approval under Public Utilities Code Section 851.  The Pilot Program was initiated in August 2005, and several carriers have successfully utilized the program as an alternative to the full Section 851 process.  The program has been revised pursuant to statute and Commission action since its inception.  This Resolution confirms that the Commission will leave the Pilot Program in place while it considers modifications to the program.  The Draft Resolution associated with this item is available here.

 
  • Certificate of Public Convenience and Necessity Granted to Radical Systems Solutions, Inc.
    (Item 28, adopted on consent agenda) – This Decision grants Radical Systems Solutions Inc. (Radical) a CPCN to provide resold interexchange telecommunications services in the service territories of Pacific Bell Telephone Company d/b/a AT&T California (AT&T California), Verizon California Inc. (Verizon), Citizens Telecommunications Company of California, Inc. d/b/a Frontier Communications Company of California (Frontier) and SureWest Telephone (SureWest). Radical currently provides automated operator-assisted call completion services to inmates and other incarcerated persons in facilities throughout California. The Proposed Decision associated with this item is available here.
 
  • Statutory Deadline Extended for Resolving Fire Safety Rulemaking
    (Item 25, adopted on consent agenda) – This Decision extends the statutory deadline to resolve the Commission’s rulemaking to consider and adopt measures to reduce the fire hazards associated with overhead power line facilities and communications lines located in close proximity to overhead power lines (R.08-11-005). The Proposed Decision associated with this item is available here.
 
  • Extending Statutory Deadline Extended in Dispute Between California Building Industry Association and AT&T California
    (Item 21, adopted on the consent agenda) – This Decision extends the statutory deadline to resolve the dispute between the California Building Industry Association’s (CBIA) and AT&T California over AT&T’s practice of charging for the actual cost rather than the estimated cost of undergrounding, where such undergrounding is requested by a customer.  CBIA alleges that Rule 32 of AT&T’s tariff does not permit it to charge actual costs for undergrounding conversions where the requesting entity is not a developer or subdivider.  A Presiding Officer’s Decision (POD) has been issued ruling that AT&T’s current practice is inconsistent with its tariff, but denying reparations requested by the CBIA.  The Commission will now have until September 18, 2012 to resolve this matter.  No Proposed Decision was made available in connection with this item.
 
  • The Utility Reform Network Granted $63,922 in Intervenor Compensation in Cramming Proceeding
    (Item 31, adopted on consent agenda) – This Decision awards The Utility Reform Network (TURN) $63,922.73 in intervenor compensation for its contributions to the most recent decision in the consumer protection proceeding addressing cramming and third-party billing.  The Proposed Decision associated with this item is available here.
 


SIGNIFICANT HELD OR WITHDRAWN TELECOMMUNICATION ITEMS


  • Decision Adopting $40 Million Expense Budget for California Advanced Services Fund for Fiscal Year 2012-2013
    (Item 16, held to September 8, 2011 by Commissioner Simon for further review) – This Draft Resolution would approve a $40 million California Advanced Services Fund (CASF) Budget for Fiscal Year 2012-2013 in response to recent legislation expanding the CASF and increasing the funding for the program.  Although the Item was held by Commissioner Simon, the Communications Division gave a detailed presentation on the progress of the CASF, and the Commissioners engaged in a lengthy discussion regarding the direction of the program.

    As reported by the Commission staff, $44.98 million in CASF funds have been distributed to date, for 33 projects covering 10,186 square miles, benefiting 286,572 households (split evenly between underserved and unserved populations).  This year, 17 project approvals had to be rescinded, allegedly due to economic issues, but 14 projects have been completed in 12 counties with actual broadband services reaching 872 households.  It is estimated that 7 or 8 more projects will be done by the end of the fiscal year, with a total household target of 2,743.  Going forward, the CASF funding will be divided into three sub-fund categories:  the Infrastructure Grant Account, the Consortia Grant Account, and the Revolving Loan Account.  The Commission will collect $20 million, $2 million, and $3 million for these three programs, respectively.

    This item is held until the Commission’s September 8, 2011 agenda.  The Draft Resolution is available here.

 
  • Proposed Decision to Reduce Fire Hazards with Overhead Power Lines and Communications Facilities
    (Item 33, held to September 22, 2011 by President Peevey) – This Proposed Decision would adopt regulations to reduce fire hazards associated with power lines and aerial communication facilities located in close proximity to power lines.  The Proposed Decision would also:  (1) establish a Phase 3 of the proceeding to provide a forum in which the Consumer Protection and Safety Division can collect data on power line fires, analyze the data, and use the information to formulate measures to reduce the number of fires ignited by power lines; (2) call for the development and adoption of updated fire threat maps; (3) identify the regulatory mechanisms cost-of-service utilities should use to recover of costs incurred in complying the regulations; and (4) deny parties’ requests to make undergrounding of power-line facilities part of a new rulemaking proceeding.  The Proposed Decision associated with this item is available here.
 
  • OIR to Revise the Certification Process for Telephone Corporations and the Registrations Process for Wireless Resellers
    (Item 11, held to September 22, 2011 by Staff) – This Order Instituting Rulemaking (OIR) would revise the requirements for telephone corporations seeking CPCNs and commercial mobile radio telephone service (CMRS) providers seeking wireless reseller identification (WIR) registration pursuant to prior Commission decisions.  The description of this item on the Commission’s agenda indicates that the OIR could result in higher application and registration fees for CPCN-holders and WIRs.  Existing certificated carriers could also incur additional undetermined costs associated with expanded background check and performance bond requirements.  No draft OIR has been made available in connection with this item.
 
  • Verizon’s Requested Deviations From Undergrounding Rules Along Scenic Highway 395 in Mono County Granted
    (Item 8, held to 9/8/11 by Staff) – This Draft Resolution would grant Verizon California Inc.’s (Verizon) requests to deviate from Public Utilities Code Section 320, which requires undergrounding of communications facilities within 1,000 feet of a scenic highway.  Verizon requested the deviations (after construction) for approximately 65,000 feet of aerial facilities from the junction of State Route 108 and U.S. Highway 395 north of Bridgeport.  The Commission’s Draft Resolution would grant the request but imposes a $5,000 penalty on Verizon for violating Section 320. The Draft Resolution underlying this item is available here.
 
  • Proposed Decision to Allow Access to 2-1-1 Services in Counties and Localities Without 2-1-1 Centers
    (Item 18, held to 9/8/11 by Staff) – This Proposed Decision would authorize provision of 2-1-1 emergency services in counties without existing 2-1-1 capability and designate 2-1-1 California the “lead entity” for 2-1-1 services, both for regular 2-1-1 service, and for 2-1-1 service during an emergency.  2-1-1 California is a joint venture of the California Association of Information and Referral Services and the United Way of California to implement 2-1-1 services across California.  This Proposed Decision would not alter any of the fundamental rules governing the provision of 2-1-1 service, but would provide for statewide rollout of 2-1-1.  The Proposed Decision associated with this item is available here.
 


SIGNIFICANT ENERGY ITEMS


  • Renewable Auction Mechanism Plan Established to Procure Energy
    (Item 35, adopted on consent agenda) – This Decision implements a renewable auction mechanism (RAM) for the procurement of energy, to assist in lowering transaction costs and promoting the development of system-side renewable distributed generation projects of up to 20 megawatts in size. The program has an interim 1,000 megawatt procurement target over two years, and requires the affected investor-owned utilities (Pacific Gas & Electric Company, Southern California Edison Company, and San Diego Gas & Electric Company) to hold two auctions per year. The Proposed Decision associated with this item is available here.
 


MANAGEMENT AND COMMISSIONER REPORTS


  • Commissioner Simon noted that the Commission would be celebrating the National Telephone Discount Lifeline Awareness Week from September 12-18, 2011. California LifeLine Awareness Week is the 3rd annual state campaign to encourage qualified consumers to take advantage of California LifeLine, which provides discounted home phone service and lowers monthly home phone bills.
 
  • The Consumer Protection and Safety Division (CPSD) made a presentation regarding the federally-mandated national “Call Before You Dig” number, 8-1-1. State law requires all excavators to call One Call to determine whether their excavation may risk damage to subsurface utility facilities.  CPSD warned that although the system is in place, there is no real enforcement, and the federal government is threatening to begin enforcement in states that do not have adequate 8-1-1 service in place. Commissioner Peevey strongly suggested that there be a legislative solution to this, to encourage proactive enforcement of the rules.  For further information on the 8-1-1 process, go to this website: http://www.call811.com.

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