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On August 2, 2012, the Commission held its regularly-scheduled agenda meeting.  Some of the more high-profile telecommunications items were held, including the draft resolution proposing to fundamentally alter the standards for confidential treatment of documents held by the Commission.  The basic service redefinition proposed decision was also held, along with the CLEC application by the Karuk tribe.  On its consent agenda, the Commission approved reply comments to be submitted on USF contribution issues being addressed at the FCC.  These and other items of interest on the Commission’s agenda are discussed below.
 


REGULAR AND CONSENT AGENDA ITEMS


  • CPUC Reply Comments Authorized in FCC Proceeding Regarding Reformation of Universal Service Fund
    (Item 40, adopted on consent agenda) – The FCC is seeking comment on proposals to reform and modernize how Universal Service Fund (USF) contributions are assessed and recovered.  The CPUC’s Communications Division (CD) previously identified four areas for comment in its Memorandum of Recommendation.  CD now recommends two additional comments to be made in the FCC proceeding, WC Docket No. 06-122 .  First, the FCC seeks comment on a proposed “bright line rule” for assessing revenues from bundled offerings to support universal service.  The FCC proposes to treat all revenues from bundled services as assessable telecommunications revenues.  The Staff recommends the FCC eliminate the word “telecommunications” so as to “acknowledge that in some instances where a bundled service offering includes video, the FCC’s proposed methodology may result in an assessment against the revenues derived from the video offering.”

    Second, the FCC seeks comment on whether it should modify or eliminate its requirement that USF be assessed on carriers’ intrastate, interstate, and international revenues.  CD supports the continued allocation of revenues and proposes that the FCC adopt another “bright line rule” for how companies should allocate revenues between jurisdictions for the purpose of applying the respective jurisdictional surcharges.  This rule would be based on FCC traffic studies and an understanding of the differences between jurisdictional revenues for different technologies.  CD also supports the conclusion that “States are entitled to surcharge a portion of the revenue derived from broadband Internet access because of the states’ role in ensuring, overseeing, and administering universal service.”

    By this item, staff’s recommendations are approved, and comments will be submitted to that effect on August 6, 2012.  A copy of the memorandum summarizing the Legal Division and Communications Division recommendations underlying this item is available at the following link.

 
  • Disclosure of Records Authorized in Connection with Investigation of an Electrical Incident at Ridgecrest
    (Item 9, adopted on consent agenda) –  This Resolution authorizes the disclosure of the Commission’s records concerning its investigation of an electric incident on June 6, 2012, at Ridgecrest, California, once the investigation is complete.  The Draft Resolution finds that the requested investigation report and related documents are “public records” under the California Public Records Act (“CPRA”).  The CPRA provides that a decision to withhold a public record be based on specified exemptions listed in the CPRA or by a showing that the public interest in confidentiality clearly outweighs the public interest in disclosure.  The Draft Resolution finds that public interest favors the disclosure of Commission’s investigation records.  However, since the Commission’s investigation of the incident is still open, the Commission has concluded that immediate disclosure would compromise the investigation.  When the investigation is complete, the Commission staff will release the requested records with personal or privileged information redacted.

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

 
  • Kingston Telecommunications, Inc. Granted CPCN to Provide Interexchange Service Statewide
    (Item 12, adopted on consent agenda) – The Decision adopts the proposed Settlement Agreement between Kingston Telecommunications and the Consumer Protection and Safety Division.  Under the settlement agreement, Kingston willpay $6,500 to the California General Fund to resolve allegations that it violated  Rule 1.1 of the Commission’s Rules of Practice and Procedure by failing to disclose in connection with its CLEC application that an affiliate had its operating authority revoked and that the California Attorney General had investigated the affiliate in connection with its telecommunications service activities.  With the adoption of the settlement agreement, this Decision also grants Kingston Telecommunications a Certificate of Public Convenience and Necessity (CPCN) to provide facilities-based and non-dominant interexchange services statewide.

    A copy of the Proposed Decision underlying this item is available at the following link.

 
  • Statutory Deadline Extended for Resolution of Dispute Between O1 Communications, Inc. and Verizon California Inc. 
    (Item 26, adopted on consent agenda) – The Commission extended the one-year deadline for concluding this proceeding for an additional six months to allow the assigned ALJ adequate time to complete and file the Presiding Officer’s Decision.  This complaint involves O1 Communications’ claim that Verizon’s refusal to pay for terminating ISP-bound calls originated by Verizon’s end users violated the parties’ interconnection agreement.  Verizon disputes O1’s claim and asserts that O1’s right to receive compensation for ISP-bound traffic is limited by the “growth cap” established by the Federal Communications Commission in its FCC Internet Order (FCC 01-131 (rel. April 27, 2001)).

    A copy of the Proposed Decision underlying this item is available at the following link.

 


SIGNIFICANT HELD ITEMS


  • Draft Resolution L-436 Modifying Confidentiality Standards Applicable to Documents Held by the Commission
    (Item 39, held by staff until 8/23) – This Draft Resolution would adopt new regulations regarding public access to records of the Commission and requests for confidential treatment of utility records.  The Resolution would repeal the long-standing  procedures for obtaining information and records from the Commission embodied in G.O. 66-C, replacing it with G.O. 66-D.  G.O. 66-D would eliminate the current protections for documents which, if revealed, would create an “unfair business disadvantage.”  It would also flip the burden of proving confidential designation of utility information and data onto the utility at the point of submission.  The Resolution directs the Staff to develop a publicly accessible index of information on the confidentiality presumptions applicable to broad classes of records and, where applicable, the legal basis for withholding records from the public. The Draft Resolution would also increase public access to safety-related documents and records by ordering the creation of a safety information on the CPUC’s internet site.  Under the Draft Resolution, the Staff would be directed to maintain a publicly accessible index or database of safety related records and information in the custody of the CPUC.  The index or database would provide links to such safety-related records.

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

 
  • Karuk Tribe CLEC Application
    (Item 6, held by Simon until 8/23/12) – This Decision would grant the Karuk Tribe a Certificate of Public Convenience and Necessity (CPCN) to provide limited facilities-based and resold local exchange service as a competitive local carrier in California in the service territories of Pacific Bell Telephone d/b/a AT&T California (AT&T), Verizon California, Inc. (Verizon), Citizens Telecommunications Company of California, Inc. (Citizens) and SureWest Communications (SureWest).  A copy of the Proposed Decision underlying this item is available at the following link.
 
  • Proposed Decision and Alternative Proposed Decision to Revise the Definition of Basic Telephone Service
    (Items 36 and 36a, held by 311(e) Requirement until 8/23/12) – 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.

    An Alternate Proposed Decision of Commissioner Florio was made available on July 18, 2012.  The Alternative Proposed Decision differs from the Proposed Decision in a number of substantive ways.  A few notable differences include requirements for: (1) providers to maintain tariffs for their basic service offerings; (2) basic service to be offered at monthly rates with no contracts; (3) basic service to be offered as a stand-alone option; (4) basic service providers to provide unlimited incoming calls with no per-minute or per-call charges; (5) all basic service providers to offer a flat rate for unlimited outgoing calls within a specified calling area; and (6) all COLRs, unless exempted, to offer measured rate basic service options.

    A copy of the Proposed Decision underlying this item is available at the following link.

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

 
  • Resolution Resolving Rehearing Issues for Ducor Telephone Company’s 2008 Rate Case
    (Item 3, held by staff until 9/13/12) – This Draft Resolution would resolve the issues set for rehearing in connection with Ducor Telephone Company’s 2008 rate case.  The Draft Resolution would increase Ducor’s 2009 CHCF-A draw by $5,812 to $2,520,328.  This adjustment reflects the addition of certain vehicle costs to regulated rate base.  However, the Draft Resolution would reject Ducor’s requests for the inclusion of costs associated with redundant fiber routes and digital loop carrier projects.

    Ducor had filed a General Rate Case application in December 2007, using a test year of 2009.  The rate case was processed by CD staff during 2008.  On January 29, 2009, the Commission adopted a resolution resolving the Ducor GRC, authorizing it to receive $2,514,450 in CHCF-A support beginning January 1, 2009.  Ducor petitioned to modify that Resolution in July 2009, and the Commission approved an increase in Ducor’s draw in the amount of $66.  In March 2010, Ducor filed an application for rehearing of certain issues, which was denied except that the Commission concurred with Ducor to remove references to a “cap” on benefits, and granted a limited rehearing on legal error for five capital expenditure items.  This Draft Resolution would resolve these remaining issue and conclude the rate case.

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

 
  • Proposal to Make the Section 851 Pilot Program Permanent, Res. ALJ-186
    (Item 4, held by staff until 8/23/12) – This item would make the Section 851 pilot program permanent.  The pilot program was originally created  in 2005 as a streamlined alternative mechanism for utilities to obtain Commission pre-approval for non-controversial lower-value transactions not subject to review under the California Environmental Quality Act that would otherwise be subject to the full application process to comply with the requirements of Public Utilities Code Section 851 for the disposition of assets necessary or useful in the provision of public utility service to the public.  In 2005, the Legislature adopted AB 736, thereby providing for approval of transactions of $5 million or less through the advice letter process.  The pilot program has been continued and refined over the following years to reflect the requirements of AB 736 and modifications to the advice letter process adopted as part of General Order 96-B.  Under the current process, the Executive Director can now issue orders approving such advice letters.  By this Draft Resolution, Commission would adopt a new General Order to implement the Section 851 advice letter program.  The Draft Resolution would also orders workshops to be held to consider the need to clarify the scope of General Order 69-C, which authorizes utilities to enter into transactions involving the transfer of minor, revocable interests in utility property, such as easements, licenses, or permits, without prior Commission approval.  Finally, the Draft Resolution would authorize an exemption for PacifiCorp, a multi-jurisdictional utility, from the need to obtain Commission approval for certain transactions involving assets located outside of California.

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

 
  • Verizon CASF Project in Crowley Lake Area (Item 8, held by Florio until 8/23/12) – The Draft Resolution would grant $329,040 from the California Advanced Services Fund (CASF) to Verizon California, Inc. for its Crowley Lake Project. The project would extend high-speed Internet service to the Crowley Lake and Swall Meadows communities in Mono County.  Verizon’s CASF application has drawn opposition from small Internet service providers in the area who believe the grant would unfairly disadvantage them and opposition from DRA based primarily on the quality of the service proposed by Verizon.

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

 
  • Decision Approving Partial Settlement in Malibu Canyon Fire Investigation
    (Item 38, held by Simon until 8/23/12) – This Proposed Decision would resolve the Commission’s 3-year investigation into the 2007 Malibu Canyon Fire.  The Proposed Decision would approve a settlement agreement between the Commission’s Consumer Protection and Safety Division, and AT&T Mobility LLC, Sprint Telephony PCS, L.P., and Verizon Wireless (“Settling Parties”), subject to certain conditions.  Under this proposal, the Settling Parties would pay $12 million divided evenly among them.  Of that $12 million, $6.9 million would be paid into the Commission’s General Fund, and $5.1 million into a new “Enhanced Infrastructure and Inspection Fund (EIIF)” established pursuant to this Proposed Decision.  The EIIF money would be used to strengthen utility poles in Malibu Canyon, and to conduct a statistically valid survey of joint-use poles in Southern California Edison Company’s (SCE) service territory to determine compliance with G.O. 95 safety factor requirements.  The settlement agreement would not resolve issues regarding SCE and NextG Networks of California, Inc. (NextG)’s alleged involvement with the Malibu Canyon Fire.  Although the Settling Parties did not admit liability, the Proposed Decision would find the settlement agreement to be “reasonable in light of the whole record, as it provides a comprehensive remedy for the safety-related issues that were raised in CPSD’s testimony with respect to the Settling Respondents.”

    A copy of the Proposed Decision underlying this item is available at the following link.

 
  • Dismissal of Commission’s Investigation into the proposed Merger of AT&T Wireless and T-Mobile USA
    (Item 2, held by Ferron until 8/23/12) – The Proposed Decision would have dismissed as moot the Commission’s investigation into the proposed merger of AT&T Wireless and T-Mobile USA due to the abandonment of the planned merger.  Based on input from some of the interested parties, the Proposed Decision declines to adopt a requirement to preserve the record for future use.  Despite AT&T and T-Mobile’s objections, the Proposed Decision provides that parties otherwise eligible for intervenor compensation may request compensation.

    A copy of the Proposed Decision underlying this item is available at the following link.

 


NOTES AND COMMISSIONER REPORTS


  • Commissioner Sandoval noted her role in hosting the Direct Application Processing workshop for the LifeLine program.  She stated that she looks forward to moving forward with proposals and procedures discussed in the workshop and to speed up the LifeLine enrollment process.  This workshop, which took place on Monday, July 30, 2012, was initiated to develop a process that would allow carriers to use “direct application processing” for LifeLine applicants, an optional procedure where customers can access LifeLine certifications forms without waiting for the forms in the mail.  She also noted her participation on a recent universal service panel, to discuss California’s experience with implementing the FCC’s proposed universal service reform.  On the panel, she also discussed the safety issues related to maintaining vegetation around telephone poles and referenced West Virginia’s recent outage allegedly caused by excessive vegetation around a utility pole.  Finally, she noted her attendance at the western states NARUC meetings.
 
  • Commissioner Florio reported that workshops on Draft Resolution L-436 will be held on August 7th, 17th, and 27th and noted his attendance at the NARUC meetings.
 
  • Commissioner Simon also noted his attendance at the NARUC meetings.
 
The meeting concluded with a presentation by the Consumer Protection and Safety Division on One-Call.  One-Call requires all excavators to contact One-Call centers by calling 811 prior to any excavation project.  One-Call is intended to prevent improper excavation practices, damage to subsurface facilities, loss of services, and injuries or deaths.  A copy of the presentation is available at the following link.

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