On August 20, 2009, the California Public Utilities Commission (“CPUC”) held its regularly scheduled agenda meeting. The meeting was well attended, with the principal item of telecommunications interest on the regular agenda being the Decision on Measures to Reduce Fire Hazards in Southern California Before the 2009 Fall Fire Season in the safety infrastructure proceeding (R.08-11-005). This and other telecommunications items of significance on the Commission’s agenda are discussed in further detail below.
REGULAR AND CONSENT AGENDA ITEMS
- Decision Adopted in Phase 1 of Safety Infrastructure Proceeding (R.08-11-005): Measures to Reduce Fire Hazards in Southern California Before the 2009 Fall Fire Season (Item 52, adopted 5-0 on regular agenda) – The Commission unanimously adopted a decision resolving Phase 1 issues in the safety infrastructure proceeding – a proceeding designed to improve fire safety by adopting further rules applicable to communications and energy utilities (“Decision”). Commissioner Simon summarized the Decision, noting that it focuses on immediate reduction of fire hazards in Southern California “Extreme and Very High Fire Threat Zones” in time for the 2009 fall fire season. Commissioner Simon instructed entities subject to the rules to take all reasonable measures to immediately begin complying with the Decision, and specifically directed affected Communications Infrastructure Providers (CIPs) to immediately begin the required patrol inspections, maintain the required records of those inspections, with a September 30, 2010 completion deadline. Next, the Commission will set a schedule for Phase 2, which will involve a more detailed review of the relationship between fire safety and the General Order (G.O.) 95 rules. Commissioner Chong also spoke in support of the proposed decision, and expressed her hope that Phase 2 would be used to fully develop evidence and technical aspects of the rules.
The Decision modifies and clarifies G.O. 95 in several respects, and adopts additional rules limited in scope to the Southern California “Extreme and Very High Fire Threat Zones.” Among other things, the Decision adopts new provisions regarding: (1) additional inspection, maintenance, and corrective action requirements for communications and energy utility lines and facilities; (2) coordination with the Commission regarding G.O. 95 compliance; and (3) pole loading and vegetation management. The decision also clarifies that “cost of service” regulated utilitiesare entitled to fully recover reasonable costs associated with complying with the new rules, and directs such utilities to file an advice letter establishing a memorandum account and to record costs related to implementation (but the Commission rejected AT&T’s claims that URF carriers should be permitted to separately surcharge these costs). The Decision is available here.
- California High Cost Fund-A Funds Authorized for CEQA Review of Siskiyou Telephone’s Eddy Gulch Rural Telecommunications Infrastructure Grant Project (Item 13, adopted on consent agenda) – Pursuant to the Rural Telecommunications Infrastructure Grant Program (RTIGP) initiated by AB 140, the Commission authorized a California Environmental Quality Act (CEQA) review of the proposed Eddy Gulch Line extension grant project located in The Siskiyou Telephone Company’s service territory. The RTIGP provides grants of up to $5 million per project for the construction of telecommunications infrastructure projects to serve low-income, rural communities currently without telephone service. The CEQA review contract for this project has an estimated cost of $345,000. Pending results of the CEQA review, the Commission noted that a subsequent resolution would consider: (1) any required mitigation; (2) whether to authorize a $1,083,791 grant for Project construction; (3) whether to enter into a contract with the Town of Fort Jones, California, for Fiscal Agent services associated with the Project; and (4) whether to authorize related revisions to existing line extension tariffs. This draft resolution is available here.
- California Advanced Services Fund Expense Budget Approved for Fiscal Year 2010-2011 (Item 14, adopted on consent agenda) – This resolution adopts a California Advanced Services Fund (CASF) budget of $25 million for Fiscal Year 2010-2011. The CASF is a public purpose program that encourages deployment of broadband services to unserved and underserved areas by funding 40% of project costs through a one-time infrastructure grant. In accordance with Public Utilities Code § 281(b)(3), the budget is stated as $24,023,000 in grant payments and $977,000 in related program expenses which include audits, inter-agency fee, CPUC staff and other operating costs. This draft resolution is available here.
- California High Cost Fund-A Expense Budget Adopted for Fiscal Year 2010-2011 (Item 18, adopted on consent agenda) – The Commission established a 2010-2011 program budget for the California High Cost Fund A (CHCF-A). The Director of the Commission’s Communications Division (CD) estimated the California High Cost Fund-A $57.591 million budget by using the carriers’ estimates of expected funding, estimates from the Commission’s Fiscal Office for staff and administrative costs, inter-agency fees, banking charges, audits, and administrative committee costs. Carrier payments for Fiscal Year 2010-2011 are estimated at $41.685 million, which is a decrease of $7.137 million from the previous year’s adopted budget. The total program budget is down from $64.713 million for Fiscal Year 2009-2010. This draft resolution is available here.
- California Teleconnect Fund Budget Adopted for Fiscal Year 2010-2011 (Item 20, adopted on consent agenda) – The Commission also adopted a budget for the California Teleconnect Fund (CTF) Program for 2010-2011. As shown in the draft resolution, $66.238 million of the Fiscal Year 2010-2011 budget is for payments to carriers providing CTF discounted services; $1.400 million for financial, compliance and surcharge remittance audits; $5,000 for banking fees; $34,000 for Advisory Committee expenses; $686,000 for CPUC staff costs; $139,000 for inter-agency costs; $5,000 for programming and maintaining the electronic and monitoring systems; and $1.400 million for outreach. By this resolution, the CTF’s Fiscal Year 2010-2011 budget of $69.907 million is adopted, and the cap on total CTF discounts available for eligible California Community Colleges is increased from last year’s $7.874 million budget to $8.093 million for this Fiscal Year. This draft resolution is available here.
- Deaf and Disabled Telecommunications Program Budget Adopted for Fiscal Year 2010-2011 and Proposed Changes to Consumer Advisory Board Structure (Item 22, adopted on consent agenda) – The Commission adopted a budget for 2010-2011 for the Deaf and Disabled Telecommunications Program (DDTP). By this resolution, the Commission adopts the same fiscal year 2010-2011 budget as the last fiscal year. In addition, the Commission presently has three advisory committees to assist guide its administration and adoption of policies that govern the DDTP: (1) the Telecommunications Access for the Deaf and Disabled Administrative Committee (TADDAC), (2) the Equipment Program Advisory Committee (EPAC), a subcommittee, and (3) the California Relay Service Advisory Committee (CRSAC), also a subcommittee. By this resolution, the Commission merges the CRSAC subcommittee into the TADDAC, effective January 1, 2010, to provide “for a more effective and efficient use of resources.” The EPAC will remain a separate subcommittee. This draft resolution is available here.
- Changes Ratified to Categorization of City of Huntington Beach’s Complaint Regarding NextG Networks of California Fiber-Optic Network Project (Item 23, adopted on consent agenda) – This resolution approves a recategorization of an April 23, 2008 complaint filed by the City of Huntington Beach regarding a fiber-optic network project (Project) planned by NextG Networks of California, Inc. (NextG) in Huntington Beach that would allow NextG to offer Distributed Antennae System (DAS) services to support multiple wireless carriers within a single infrastructure. The Commission initially categorized the City’s complaint as adjudicatory, and the parties stipulated that NextG would file a formal application for the Project along with a Proponent’s Environmental Assessment (PEA), and parties would jointly request that the Commission’s Energy Division conduct environmental review of the project and prepare either a negative declaration, a mitigated negative declaration, or an environmental impact report pursuant to CEQA. NextG then filed an application for approval of the Project, which was categorized as ratesetting. By this resolution, the Commission affirmed a ruling that the original complaint should be recategorized as ratesetting and consolidated with NextG’s application. A copy of the draft resolution associated with this item is available here.
- Cruzio Media, Inc. Granted Certificate of Public Convenience and Necessity to Provide Limited Facilities-Based Local Exchange and Interexchange Services (Item 27, adopted on consent agenda) – Cruzio Media, Inc. applied for a certificate of public convenience and necessity in order to provide local and interexchange service, as well as switched access service, long distance resale, advanced services and high speed digital service in all exchange areas currently served by incumbent local exchange carriers Pacific Bell Telephone Company dba AT&T California, and Verizon California Inc. Cruzio intends to offer local exchange and intra- and inter-LATA long distance services to business and residential customers through the purchase of unbundled network elements and the resale of other carriers’ services, and in combination with Cruzio’s collocated facilities. The Commission’s proposed decision granting the Certificate is available here.
- Mosaic Networx, LLC Granted Certificate of Public Convenience and Necessity to Provide Resold and Limited Facilities-Based Local Exchange and Interexchange Services (Item 32, adopted on consent agenda) – Mosaic Networx applied for a certificate of public convenience and necessity in order to provide limited facilities-based and resold competitive local exchange and interexchange services in California to business customers. Mosaic intends to offer facilities-based local exchange services in areas currently served by AT&T California and Verizon, and interexchange services statewide. The Commission’s proposed decision granting the certificate is available here.
- Statutory Deadline Extended in Fones4All Corporation v. Pacific Bell Telephone Company d/b/a AT&T California (Item 37, adopted on consent agenda) – This case involves Fones4All Corporation’s complaint filed against Pacific Bell Telephone Company d/b/a/ AT&T California for various claims related to alleged overcharges by AT&T California, namely that AT&T California ignored Fones4All’s requests to place toll blocks on customer accounts, unlawfully slammed Fones4All’s customers, and billed Fones4All at inappropriately high resale rates. AT&T California filed a related action alleging that Fones4All refused to pay amounts that AT&T California claims are owed for services provided to Fones4All. In August 2008, Fones4All filed for bankruptcy protection, thereby staying AT&T California’s counterclaims. The Commission has therefore extended the statutory deadline another 180 days to accommodate the bankruptcy stay. This proposed decision extending this deadline is available here.
- Indirect Transfer of Control Approved for NextG Networks of California (Item 38, adopted on consent agenda) – NextG is a Delaware corporation that provides radio frequency transport and backhaul services for commercial mobile radio service (CMRS) providers in California through a Distributed Antenna System, allowing CMRS providers to amplify and extend their radio frequency signals and capacity in difficult coverage areas. NextG had previously been granted full facilities-based local exchange authority. By this decision, the Commission grants NextG and Madison Dearborn Partners’ (MDP) joint request for authorization to transfer indirect control of NextG to MDP through a merger of NextG’s corporate parent by which MDP will hold 61% of the NextG corporate parent. The proposed decision associated with this item is available here.
- Deadline Extended for Resolving Rulemaking related to Telecommunications Public Policy Programs (Item 39, adopted on consent agenda) – In May 2006, the Commission opened R.06-05-028 to review its Telecommunications Public Policy Programs, including the Universal Lifeline Telephone Service (LifeLine) program, various payphone programs, the Deaf and Disabled Telecommunications Program (DDTP), and the California Teleconnect Fund (CTF). The original scoping memo in this proceeding was issued on July 13, 2007, and, by statute, the Commission should have resolved all issues raised in the scoping memo by January 13, 2009. Prior to the 18-month deadline, the Commission had completed its review of four of the five public purpose programs, but issues remain to be resolved in the most recent phase of the proceeding addressing the LifeLine program. To accommodate this ongoing review, this order extends the deadline for resolving any remaining issues in this proceeding to October 19, 2009. A draft of the proposed decision is available here.
- Compensation Granted to The Utility Reform Network (TURN) for Contributions to Decisions 08-11-033 and 04-02-062 in Copper Loop Proceeding (Items 42 and 45, adopted on consent agenda) – The Commission granted The Utility Reform Network’s (TURN) request for compensation in the amount of $93,379.86 in connection with its contributions to D.08-11-033, a decision in the “copper loop” rulemaking to consider the need for rules regarding the replacement of copper wire local loops. Although the decision did not adopt rules requiring incumbent local exchange carriers (ILECs) to seek Commission approval before permanently retiring copper wire local loops, it did establish a notice and negotiation process for ILECs to follow to retire copper loops. The proposed decision associated with this item is available here. The Commission also approved a similar request for compensation in connection with D.04-02-062, also adopted in the copper loops proceeding. That decision is available here.
- California High Cost Fund-B Budget Approved for Fiscal Year 2010-2011 (Item 57, adopted on consent agenda) – The California High Cost Fund-B (CHCF-B) provides universal service subsidy support in the high cost areas in the service territories of AT&T California, Verizon of California, SureWest Telephone, Frontier Communications of California and the territories of any other COLRs operating in those territories. The CHCF-B is funded by a surcharge assessed on consumers’ intrastate telecommunications services. The CD’s proposed budget of $50.935 million reflects the changes in the benchmark threshold adopted in D.07-09-020 (increases to the threshold benchmark at which COLRs are subsidized), the carrier’s estimates of expected claims, and estimates from the Commission’s fiscal office for staff and administrative costs, inter-agency fees, banking charges, audits, and administrative committee costs. This draft resolution is available here.
SIGNIFICANT HELD AND WITHDRAWN ITEMS
- Cox California Telcom, LLC (Complainant) vs. Pacific Centrex Services, Inc. (Defendants) (Item 5, withdrawn from consent agenda) – This decision would have ordered (1) a payment of $268,066.96 in unpaid call termination charges by Pacific Centrex Services, Inc. (Pacific) as of November 13, 2008 plus applicable late payment penalties, (2) payment of any additional termination charges and late payment penalties incurred under Cox California Telcom’s (Cox) Intrastate Tariff since November 13, 2008, and (3) a $10,000 fine for violation of and Rule 1.1 of the Commission’s Rules of Practice and Procedure (parties appearing before the Commission agree “never to mislead the Commission or its staff by an artifice or false statement of fact or law”). Pacific Centrex late-filed an answer to Cox’s complaint, and failed to appear at a prehearing conference after requesting extensions of time to answer based upon representations that it was prepared to go forward with the case once it found new counsel. This draft decision is available here.
- Transfer of Ownership of TGEC Communications Co., LLC. to West Coast Voice & Data, Inc., Approved (Item 8, withdrawn from consent agenda) – This decision would have authorized the transfer of ownership of TGEC Communications Co., LLC (TGEC) to West Coast Voice & Data, Inc. (West Coast). Because TGEC is a certified telecommunications provider in California and would continue to provide services in California as a wholly-owned subsidiary of West Coast, the parties have not sought to transfer TGEC’s operating authority in connection with the transaction. This draft decision is available here.
- Decision Resolving All Outstanding Issues and Providing for Closure of Reparations Funds Resulting From 2002 Investigation of Cingular Wireless (Item 15, held to 9/10/09 by Commissioner Chong for further review) – In D.04-09-062, the Commission fined Cingular Wireless (Cingular) $12.14 million for its unlawful early termination fee (ETF) policies and other corporate practices. Cingular was also ordered to pay reparations totaling $18,467,220.38 to affected customers, with any unpaid reparations distributed to the State of California General Fund. Reparations funds were created to hold the amounts to be distributed to customers. The proposed decision associated with this item would resolve all issues related to this proceeding and close the reparations funds. Specifically, the proposed decision would: (1) revise the Decision requiring payment of a second intervenor compensation award to Utility Consumers Action Network (UCAN) because that amount had previously been paid to UCAN directly; (2) refund the balance remaining on the original amount deposited for notice and claims administration; and (3) distribute the residual balances in the two funds to the Telecommunications Consumer Protection Fund. This proposed decision associated with this item is available here.
- Decision Establishing Processes and Criteria for Review of Smart Grid Projects and Investments by Investor-Owned Utilities Seeking Recovery Act Funding from Department of Energy (Item 51, held by Commissioner Bohn until 9/10/09 for further review) – This decision would align the timeline of the Commission’s review of investor-owned utility “smart grid” projects with the U.S. Department of Energy’s rapid timeline for reviewing and granting awards for projects under the American Recovery and Reinvestment Act of 2009. Significantly, President Peevey began the meeting by moving to have the hold on this item overridden given the time-sensitive nature of this issue. Commissioners Simon, Grueneich, and Bohn voted to retain the hold, with Commissioner Chong voting with President Peevey, so the request to remove the hold was defeated by a 3-2 vote. The proposed decision associated with this item is available here.
- Commissioner Chong. Commissioner Chong reminded the utilities to get copies of their Broadband ARRA applications to Mr. Camicia of the California CIO’s office as soon as possible.