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On December 14, 2006, the Commission held its last regularly-scheduled agenda meeting. The meeting was the last of 2006, and marked the end of Commissioner Brown’s six year tenure with the Commission. As is often the case at the end of the calendar year, there was a full agenda, with numerous telecommunications-related items under consideration. The Commission passed a resolution addressing informal data requests, and also addressed intevenor compensation, 10-digit dialing, and various issues associated with telecommunications surcharges. Further information about these and other items of interest on the Commission’s agenda is provided below.


REGULAR AND CONSENT AGENDA ITEMS

  • Procedures Established Regarding Informal Commission Data Requests, Resolution ALJ-195 (Item 4, adopted on consent agenda) – By this agenda item, the Commission approved Resolution ALJ-195, a resolution that codifies some of the procedures associated with Commission data requests issued outside of formal proceedings. As part of the consumer protection initiative adopted earlier this year, the Commission has found that there was some confusion regarding the “timing, format, scope, and burden” surrounding informal Commission data requests. This resolution summarizes the statutory and constitutional foundations of staff’s data request powers, and articulates a presumption that staff inquiries are valid as long as they are “rationally related to public utility regulation.”

    The resolution also creates a process for handling disputes regarding these kinds of data requests. This “dispute resolution process” requires carriers to conduct an initial review of informal data requests within five business days to identify any problems with the requests. If a dispute arises, the utility should first “meet and confer” with staff to see if the problems can be resolved informally. If that process fails, either the staff or the respondent utility may seek further review by the Division Director who oversees the staff making the request. Finally, the resolution provides for further review by the Commission’s General Counsel, in the event that the Division Director cannot resolve the dispute.

    Parties offered extensive comments on draft resolution ALJ-195, but the adopted resolution is substantially the same as the original draft. Carriers argued that the presumption of validity applied to informal data requests is excessive, that the “meet and confer process” is too rigid, and that the dispute resolution procedures should provide a mechanism for ultimate review by ALJs. With only modest revisions, resolution ALJ-195 was passed on the consent agenda.

  • Intervenor Compensation Program Further Modified (Item 55, adopted on consent agenda) – This decision amends the Commission’s intervenor compensation rules in several respects, but rejects previous proposals that would have eliminated the use of the intervenor compensation fund in quasi-legislative proceedings. The decision modifies the intervenor compensation program in several respects: (1) it codifies existing Commission precedent providing that groups who advance their own business interests are not eligible for intervenor compensation; (2) it incorporates into the Commission’s rules the established principle that costs incurred prior to the initiation of a proceeding are compensable, if they are reasonable and properly related to the proceeding in question; (3) it adopts more flexible rules with regard to intervenors’ notices of intent to seek intervenor compensation; (4) it requires intervenors to specifically link their costs to particular tasks, so that the Commission can better assess whether those tasks are related to the intervenor’s “substantial contribution;” and (5) it requires that intervenors file notices of intent to claim compensation for judicial review costs within 30 days of the commencement of a lawsuit seeking judicial review.

    The decision did not adopt the rulemaking’s original proposal that the payment responsibility for intervenor compensation costs in quasi-legislative proceedings be shifted from the intervenor compensation fund to the largest utilities in each regulated industry. That proposal would have concluded that quasi-legislative intervenor costs should be paid by telecommunications and energy companies with more than $50 million in annual revenue, and water companies with more than $10 million in annual revenue. Based on comments received on the draft decision, that proposal was removed . Nevertheless, the Commission remains concerned about recent increases in the intervenor compensation budget and the associated forecasting difficulties that those increases have created.

  • AT&T Undergrounding Surcharge Approved for San Diego Customers (Item 50, adopted 5-0) – This decision grants AT&T’s request to implement a surcharge to recover the costs of compliance with a San Diego city ordinance requiring all lines to be undergrounded within the next 20 years. The city ordinance would quadruple the current rate at which AT&T is undergrounding its facilities, which will impose additional costs on AT&T, which AT&T would like to recover from its San Diego customers via a separate surcharge. The surcharge will be assessed as a fixed amount per line, and will be separately stated on each customer’s bill. Competitive carriers using AT&T’s facilities will also be responsible for remitting these surcharge amounts to AT&T, and those carriers will be permitted to recover those costs from their customers. Based on AT&T’s initial estimates, the proposed surcharge would be approximately $0.94. Lifeline customers will not be responsible for the surcharge. The surcharge will be recalculated annually, and be resubmitted by AT&T through a yearly advice letter. When AT&T receives full pricing flexibility on basic service as part of the Uniform Regulatory Framework proceeding (currently anticipated to occur January 1, 2009), the San Diego surcharge will be terminated. If AT&T’s proposed costs of undergrounding exceed SDG&E’s costs of compliance with the same ordinance by 23% or more, the Executive Director will launch an investigation into the matter.

    President Peevey briefly introduced this item, noting that a “long process” led up to the decision. Peevey praised Commissioner Brown for “bringing the parties together” in this proceeding, and for helping to broker the outcome. Peevey mentioned that the URF proceeding has an impact on this proposed surcharge, since the surcharge would no longer be appropriate once AT&T has full pricing flexibility on all services. Chuckling to himself, Commissioner Brown added that his involvement in this proceeding had been “an experience.” Ultimately, the AT&T surcharge mechanism was approved by a 5-0 vote.

  • California High Cost Fund A Budget Adopted for 2007, Resolution T-17064 (Item 5, adopted on consent agenda) – This decision adopted a 2007 calendar year budget for the California High Cost Fund A (CHCF-A). This fund provides supplemental revnues to California’s 17 Small LECs, to ensure that customers in areas served by those companies continue to receive high quality service at affordable rates. This resolution authorizes total support payments of $28,370,801.08 for 2007, to be paid in monthly increments of approximately $2.36 million.

  • Petition to Institute 10-Digit Dialing for Area Code Overlays Denied (Item 13, adopted on consent agenda) – In the wake of the 310/424 area code overlay decision, a group of parties have been vigorously urging the Commission to adopt a 10-digit dialing protocol for area code overlays rather than the existing 1+10-digit dialing protocol. After several prior procedural skirmishes on the subject, this policy debate took the form of a petition for modification of D.96-12-086, the Commission decision that requires a “1” to be dialed prior to any 10-digit number, including a 10-digit number that is part of an area code overlay. This decision denies that petition for modification, and endorses the current 11-digit dialing protocol.

    The petition for modification was brought by Douglas F.Carlson, and was supported by CALTEL and a couple of smaller competitive carriers operating in the Los Angeles area. The proponents of 10-digit dialing argued that customers prefer to dial fewer digits, and that a 10-digit dialing paradigm for overlays would promote consistency between wireline and wireless dialing patterns. Verizon and AT&T opposed the proposal, arguing that a 10-digit dialing protocol in overlay areas could result in customer confusion and unnecessary costs for carriers. The large ILECs also raised a series of technical implementation issues, noting that a calling delay would have be implemented to accommodate 10-digit dialing to ensure that calls are properly routed. Ultimately, rejected the petition for modification on the consent agenda.

  • Order Approving $1.3 Million Reduction in SureWest CHCF-B Draw (Item 20, adopted on consent agenda) – This decision approves a $1.3 million reduction in SureWest’s CHCF-B draw, starting on January 1, 2007, pending resolution of SureWest’s request for a phased-down elimination of the company’s CHCF-B draws.

    Foresthill Rate Case Resolved, T-17048 (Item 52, adopted on consent agenda) – This resolution resolves the informal rate case of Foresthill Telephone Company. The resolution authorizes $3,022,819 in CHCF-A support for Foresthill for 2007, and approves a 10% rate of return.

  • Modifications to Affiliate Transaction Rules and G.O. 77 Adopted for Large Energy Companies (Item 33, adopted 5-0) – This decision adopts various modifications to the affiliate transaction rules for the large energy utilities, and expands General Order 77 to include additional holding company executive compensation reporting requirements for those same entities. Neither the changes to the affiliate transaction rules nor the revisions to G.O. 77 apply to telecommunications carriers.

  • Greenlining Petition for Post-Decision Intervenor Costs Denied (Item 30, adopted on consent agenda) – This decision rejects a request by Greenlining to augment its prior award of intervenor compensation in connection with the AT&T / SBC merger. In a previous decision, Greenlining was already compensated for its “substantial contributions” to the decision approving the AT&T / SBC merger. After the merger was approved, Greenlining apparently incurred additional costs in meetings with SBC’s chief executive officer. Through a petition for modification of its intervenor award decision, Greenlining sought to recover those post-decision costs. This decision denies that petition for modification, finding it both procedurally and substantively defective. Procedurally, Greenlining’s petition failed to demonstrate any changed facts that would justify modification of the Commission’s prior decision. Substantively, Greenlining failed to show that post-decision intervenor costs are compensable. As this decision confirms, such costs cannot be recovered as intervenor compensation, since they are not costs incurred to assist the Commission with a decision.


SIGNIFICANT HELD AND WITHDRAWN ITEMS

  • Rulemaking to Address “In Language” Issues (Items 51, 70, held by staff until 1/11/07) – These items would institute a rulemaking to evaluate “ways to improve services to California customers who do not speak English fluently.” The draft OIR that appeared as item 51 on the agenda was developed by staff based on concerns raised in the consumer protection initiative. Item 51 would investigate a variety of proposed “in language” regulations, including possible requirements that telecommunications carriers provide additional customer service, disclosures, and other services to limited English proficiency customers. The details of item 70 were not disclosed, but it presents an alternative to item 51.

  • Decision Addressing VNXX Issues for Small LECs (Item 49, held by Brown until 1/11/07 for further consideration) – This proposed decision would clarify the proper intercarrier compensation treatment of calls with disparate rating and routing points (often called “Virtual NXX” or “VNXX” calls), where those calls are rated as local calls in Small LEC service territories.

  • Decision Addressing VNXX Issues for Small Local Exchange Carriers (Item 46, Held by Peevey until 12/14 for further consideration) – This proposed decision would clarify the proper intercarrier compensation treatment of calls with disparate rating and routing points (often called “Virtual NXX” or “VNXX” calls), where those calls are rated as local calls in Small LEC service territories. As currently configured, the proposed decision would apply reciprocal compensation principles to VNXX calls, but would permit the Small LECs to charge CLECs originating VNXX calls for the transport required to get the calls from the meet point to the ILEC-CLEC point of interconnection. The ALJ recently issued a ruling permitting parties to offer comments on recent revisions to the proposed decision.

  • Decision Modifying Standards for Wireless Pole Attachments (Items 34, 34a, 34b, held by Bohn until 1/11/07 for further consideration) – The proposed decision and alternates presented by this item would modify Rule 94 of General Order 95, and thereby adopt revised rules for attaching wireless antennas on jointly used utility poles and towers. This matter was originally submitted for the Commission’s consideration at the May 25, 2006 agenda meeting. However, in July 2006, a group of interested parties requested that the proceeding be reopened so that the parties could pursue a settlement. That request was granted, and the Commission held a hearing on September 12, 2006 to give proponents of settlement an opportunity to be heard on the subject. As a result of that proceeding, a proposed settlement was reached, which was then endorsed by the proposed decision in item 34.

    Since that subsequent proposed decision was issued, a pair of alternates have emerged that have supplanted the proposed decision. Item 34a is sponsored by Commissioner Chong, and Item 34b is sponsored by Commissioner Brown. Item 34a would adopt the settlement agreement, but would also require all wireless antennae owners and operators that are subject to Commission jurisdiction to submit certain information about their installations to the Commission’s Consumer Protection and Safety Division. This proposed reporting requirement would commence in January 2008, and would call upon antennae owners and operators to describe any installations that are not covered by the terms of the settlement agreement. The other alternate, item 34b, would reject the proposed settlement and adopt a decision similar to the one previously submitted at the May 25, 2006 Commission meeting. Item 34b objects to the settlement based on concerns that it could limit CPSD’s ability to protect worker safety, and based on concerns that it does not adequately represent all affected entities (several of whom are not signatories). The Brown alternate also explicitly rejects the arguments raised by certain telecommunications carriers that the FCC’s radio frequency exposure rules would preempt state regulations designed to protect worker safety.

    Commissioner Brown offered a brief commentary on these items at the outset of the meeting, expressing vehement opposition to the proposed settlement, and to the Chong alternate. He described the preemption concerns raised by the telecommunications industry as “intellectually vacant,” and urged that the settlement be rejected. While Brown acknowledged that he would not around when the items are voted out, he expressed hope that the Commission would not ignore worker safety issues in the future.


NOTES AND REPORTS

  • Chong Summarizes Governor’s Broadband Executive Order — Commissioner Chong provided a brief report on an executive order issued by the Governor regarding broadband. The Governor announced the executive order on November 30, 2006. Among other things, the executive order creates a broadband task force, with Commissioner Chong as one of its members. Chong noted that “right of way” issues will be a major focus of the task force. Commissioner Chong stated that she expects the Commission to have an information gathering role in this enterprise, in part through the Commission’s administration of its video franchising program. Chong agreed to report back on this subject when there is more to report.

  • Commissioners Praise Commissioner Brown for Six Years of Service — To commemorate Commissioner Brown’s contributions over the past six years, each of the Commissioners offered a final tribute to Commissioner Brown. Commissioner Peevey began with a series of humorous PowerPoint slides of Commissioner Brown. The slides presented six pieces of advice on “How to Become a Good Commissioner. A copy of the presentation is available at the following link: http://www.cpuc.ca.gov/static/aboutcpuc/061214_brown+presentation.ppt. Following the presentation, Commissioner Peevey presented a resolution praising Commissioner Brown, and stated that Commissioner Brown “has always believed and fought for the public interest.” Commissioner Grueneich thanked Commissioner Brown for helping her “personally and professionally.” Grueneich also praised Commissioner Brown for his readiness to remind the other Commissioners when certain outcomes are not supported by the record or the law. Commissioner Chong reflected upon Commissioner Brown’s exceptional storytelling ability, and noted that “it might have been even better when he was ‘off the wagon.'” Chong described how Brown is loved both within the Commission and outside the Commission. Chong commended Brown for his willingness to engage her in “substantive debates,” and for his recognition that the telecommunications arena has changed. Bohn observed that “it is easy to be popular, it is easy to be glib, it is easy to be affable, it is not easy to stand up for what you believe in the face of criticism” and “stand up for the little guy” the way that Commissioner Brown has.

    In conclusion, Commissioner Brown apologized for “hurting people’s feelings” at times with his sometimes intense rhetoric. He explained that he has “expressed himself as a lawyer would in a courtroom,” and that nothing personal was meant by his passionate remarks. Brown then thanked his advisors, the Commission staff, the employees of the regulated utilities, and the advocates that have appeared before him during his tenure. In his final comments, Brown stressed the importance of preserving “the process,” and underscored the need for vital, healthy utilities. Following his comments, Brown received a standing ovation from those present. Commissioner Brown will now assume a position as Dean of the JFK Law School in Contra Costa County.

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