On December 17, 2009, the California Public Utilities Commission held its regularly scheduled agenda meeting. The meeting was well attended, both by utility practitioners and by Commission staff. The Commission addressed several telecommunications matters during the meeting, but the Commissioner reports from Commissioner Chong, Commissioner Bohn, and President Peevey were the focal point.
President Peevey announced that he had been confirmed that morning by the Legislature, but Commissioner Chong’s appointment was not confirmed. TracFone’s ETC request was denied, and an investigation into TracFone’s compliance with public policy fund contribution requirements was initiated. The Commission also adopted some initial policies governing Smart Grid Projects. The CASF surcharge was discontinued, CommPartners’ 911-related claims against AT&T were rejected, and a last mile “matching” project was adopted in Lassen, Sierra, and Plumas counties. These and other telecommunications items of interest on the Commission’s agenda are discussed in further detail below.
REGULAR AND CONSENT AGENDA ITEMS
- TracFone Wireless, Inc.’s Request for ETC Designation in California Denied (Item 72, adopted on consent agenda) – TracFone Wireless, Inc. (TracFone) sought to be designated as an ETC in order to receive federal universal service support to provide LifeLine discounts in connection with its resold, wireless prepaid service. This Resolution finds that designation of TracFone as an ETC is not in the public interest because TracFone had failed to collect and remit public purpose program surcharges and user fees as is required under the California Public Utilities Code. TracFone has argued that it did not have to collect and remit such fees because it is not a “telephone corporation,” and therefore not a public utility. The Draft Resolution further directs the Communications Division to institute an investigation into why TracFone should not be ordered to collect and remit all those user fees/surcharges, and be penalized for its failure to do so previously. On the eve of the Commission meeting, TracFone attempted to withdraw its request for ETC status, but this Resolution was adopted nevertheless. A related new Petition for Rulemaking filed by Verizon Wireless mayaddress the underlying legal issues related to TracFone’s failure to collect and remit public policy fund surcharge amounts. The Draft Resolution associated with this item is available here.
- Revised CASF Surcharge Rate of 0.00% Adopted Effective January 1, 2010 (Item 12, adopted on consent agenda) – This Resolution revises the California Advanced Services Fund (CASF) surcharge rate from 0.25% to 0.00% on the grounds that the two-year CASF program had a $100 million surcharge revenue collection limit that will be met by the end of this year. Based on an analysis of collection levels for 2009, the Communications Division (CD) predicted that the CASF program – in effect since 2008 – will be able to collect the $100 million surcharge revenue by December 2009. The CD therefore recommended that the surcharge rate be reduced to 0.00% effective January 2010. The funding levels will be evaluated again during the first quarter of 2010 to determine whether a true-up adjustment to the surcharge is necessary. The Draft Resolution associated with this item is available here.
- 911 Trunking Dispute Resolved Between CommPartners, LLC and AT&T California, Inc. (Item 15, adopted on consent agenda) – This Decision denies CommPartners, LLC’s claims against Pacific Bell Telephone Company, doing business as AT&T California, Inc. (AT&T) that AT&T discriminated against CommPartners by refusing to relieve CommPartners of its 911 trunking obligations under the parties’ interconnection agreement (ICA). The Commission found that federal law controlled the obligations between the parties, that pertinent California Public Utilities authority did not compel AT&T to negotiate a waiver of CommPartners’ 911 trunking obligations under the ICA, but encouraged AT&T to negotiate the requested waiver with CommPartners for the prospective application. By this Complaint, CommPartners sought disconnection of certain Enhanced 911 trunks, elimination of the associated billing charges, reimbursement of amounts paid to AT&T, and sanctions against AT&T. The Proposed Decision denying the complaint and closing this case is available here.
- $166,911 CASF Grant Approved for the Plumas-Sierra Telecommunications Last Mile Project (Item 19, adopted on consent agenda) – This Resolution adopts contingent funding in the amount of $166,911 for the Plumas-Sierra Telecommunications Last Mile (PST) project in Lassen, Sierra, and Plumas counties. PST is a wholly-owned non-profit subsidiary of Plumas-Sierra Rural Electric Cooperative, a member-owned electric distribution providing electricity to over 6,500 members in Plumas, Lassen and Sierra counties as well of portions of Washoe County in Nevada. PST initially submitted a CASF application via Inyo Networks because Inyo Networks had a Certificate of Public Convenience (CPCN) and PST does not. The CASF rules no longer require that applicants hold CPCNs. This grant is the result of a revised application solely by PST to provide broadband service to 12 underserved areas in Lassen, Plumas and Sierra Counties. The total project cost is $1,669,106, and 10% is being requested from CASF as a match to PST’s 80% ARRA fund request. The Draft Resolution associated with this item is available here.
- Volunteer Center of Sonoma County Certified as 2-1-1 Service Provider for Mendocino County (Item 42, adopted on consent agenda) – By this Resolution, the CPUC grants Volunteer Center of Sonoma County (Volunteer Center) authority to provide 2-1-1 Information and Referral (I&R) services to all of Mendocino County for an indefinite term. Volunteer Center is a California non-profit that partners with agencies and local government to operate programs such as Sonoma County’s I&R service, volunteer wheels, court-mandated community service, and the Resource Center for Nonprofits. 2-1-1 is the national dialing code to be used to phone non-emergency community I&R providers. Upon dialing 2-1-1, callers are routed to a referral service and agency that provides information concerning social services such as housing assistance, utility bill assistance, food assistance, and information about other non-urgent situations currently unaddressed by either 9-1-1 or 3-1-1 services. The Draft Resolution associated with this item is available here.
- Initial Review Concluded with Respect to Smart Grid Projects and Investments by Investor-Owned Utilities (R.08-12-009) (Item 64, adopted 5-0 on regular agenda) – The Commission unanimously approved Commissioner Chong’s Proposed Decision adopting policies and findings pursuant to the smart grid policies established by the federal Energy Information and Security Act of 2007 (EISA). Commissioners Chong and Grueneich spoke in support of this initial decision not to impose EISA requirements on several California power companies. The Commissioners also praised the Decision’s adoption of policies regarding consumer access to usage and price information that will be available through California’s Smart Grid infrastructure. Based on the Decision, the Commission will focus on providing consumers with near real-time information on prices charged for electricity by the end of 2010, and smart meters with near real-time access to usage data by the end of 2011. The Proposed Decision associated with this item is available here.
- CPCN Granted to United Telecom, Inc. (Item 30, adopted on consent agenda) – This Decision grants a CPCN to United Telecom, Inc. (United Telecom) to provide voice and data telecommunications as a switchless reseller in California. The CPSD initially protested the application on the grounds that United Telecom had failed to identify individuals in United Telecom with ownership interests in other interexchange carriers, and withdrew its protest after United Telecom demonstrated that CPSD’s initial research regarding affiliation had been “the result of mistaken identity.” The Proposed Decision associated with this item is located here.
- Impulse Telecom, LLC Granted CPCN (Item 31, adopted on consent agenda) – This Decision grants authority to Impulse Telecom, LLC (Impulse Telecom) to provide resold and facilities-based competitive local exchange services in AT&T, Verizon California, Inc. (Verizon), SureWest Telephone (SureWest), and Citizens Telecommunications Company of California, Inc. dba Frontier Communications of California’s (Frontier) service territories, and resold and facilities-based interexchange services statewide. The Proposed Decision associated with this item is located here.
- CPCNs Granted to Rosebud Telephone, LLC and Inyo Networks (Items 32, 52 adopted on consent agenda) – These Decisions grant CPCNs to Rosebud Telephone, LLC and Inyo Networks, Inc. to provide resold and facilities-based local exchange telecommunications services in the service territories of AT&T and Verizon, and facilities-based and resold intrastate interexchange telecommunications services within California. The Proposed Decisions associated with the Rosebud Telephone matter is available here, and Inyo Networks is available here.
- Deadline Extended for Resolution of Rulemaking Related to Review of CPUC’s Telecommunications Public Policy Programs (R.06-05-028) (Item 47, adopted on consent agenda) – The Commission again extended the statutory deadline for resolution of R.06-05-028, the proceeding to comprehensively review the CPUC’s Telecommunications Public Policy Programs, including the Universal Lifeline Telephone Service (Lifeline), Payphone Program, Deaf and Disabled Telecommunications Program, and the California Teleconnect Fund. The new deadline is February 15, 2010. Commission Decision 08-06-020 addressed four of the five Telecommunications Public Policy Payphone Programs at issue, with the only remaining program under review being the Lifeline Program. The Proposed Decision associated with this item is available here.
- Complaint Dismissed in Greg McAllister v. Verizon (Item 50, adopted on consent agenda) – This case involved complainant’s claim that he owned two 1-800 numbers and his request that Verizon reverse charges related to either or both numbers due to Verizon’s alleged negligence in re-issuing one or both numbers to another owner who subsequently incurred charges that were billed to complainant. The CPUC dismissed the complaint for lack of prosecution by the complainant. The draft order dismissing the complaint is available here.
- Statutory Deadline Extended in Investigation into Application of CEQA to Applications of Telecommunications Utilities for Authority to Offer Service and Construct Facilities (R.06-10-006) (Item 53, adopted on consent agenda) – This Decision extends the statutory deadline for completion of this proceeding until February 15, 2010. The stated goals of this order instituting rulemaking are to develop rules and policies to: (1) ensure that Commission practices comply with the California Environmental Quality Act; (2) promote the development of an advanced telecommunications infrastructure; and (3) ensure that CEQA to the telecommunications arena does not cause undue harm to competition, particularly intermodal competition. The draft order extending statutory deadline is available here.
SIGNIFICANT HELD AND WITHDRAWN ITEMS
- Determination of Ratemaking Treatment for Rural Telephone Bank Stock Redemption Proceeds (Item 4, held by staff until 1/21/10) – The Proposed Decision in this proceeding would resolve the Small LECs’ application, prompted by previous Commission directives in certain Small LEC rate cases, to address “gain on sale” implications of the recent stock redemption associated with the dissolution of the Rural Telephone Bank. The original Proposed Decision in this proceeding would have departed from the Commission’s “gain on sale” rules by allocating the full value of redeemed RTB stock to ratepayers. The Commission has now released a Revised Proposed Decision that acknowledges that the principal amounts associated with the redeemed stock should be returned to the company shareholders, but would still allocate all amounts beyond par value to ratepayers and propose to redistribute patronage refunds received by the RTB to ratepayers. Opening comments are due on the Revised Proposed Decision on January 8, 2010, with reply comments to follow on January 15, 2010. The Revised Proposed Decision associated with this item is available here.
- Decision Adopting Guidelines for Customer Education Programs Regarding Backup Power Systems (R.07-04-015) (Item 70, held by Bohn until 1/21/10 for further review) – This Proposed Decision would conclude the Commission’s investigation into reliability standards for telecommunications emergency backup power systems. The Proposed Decision would: (1) adopt guidelines for customer education programs for facilities-based providers of telephony services who provide service to residential customers via technologies that require backup power on the customer’s premises; (2) direct service providers to enhance their existing customer education programs to meet these new guidelines; and (3) require service providers to file advice letters within 180 days of the decision, detailing their customer education programs. The Proposed Decision associated with this item is available here.
- Resolution Granting Verizon $2,147,110 in CASF Funding for the Cazadero and Timber Cove Areas of the Sea Ranch Project (Item 7, held by staff until 1/21/10) – This Draft Resolution would adopt $2,147,110 in CASF funding for Verizon’s Sea Ranch project. Verizon sought a CASF grant for $1,654,800, representing 40% of the total project cost, plus Contribution in Aid of Construction (CIAC) funding of $528,000. Verizon does not plan to seek federal ARRA funds in connection with this project. Verizon’s Sea Ranch Project would cover three project area locations in Sea Ranch, Timber Cove, and Cazadero, with the construction of 19 miles of new fiber-optic line extending from its Timber Cove wire center to the Sea Ranch center, eventually enabling the backhaul of traffic to Verizon’s Novato facilities. The Draft Resolution associated with this item is available here.
- Resolution Adopting CASF Funds for Mother Lode Broadband Project (Item 71, held by staff until 1/21/10) – This Draft Resolution would adopt funding from the CASF totaling $3,110,064 for the Mother Lode Broadband Project of Telenational Communications Inc./Rapid Link Inc. and Mother Lode Internet. The Mother Lode project will construct broadband infrastructure in “unserved” and “underserved” areas of Alpine, Amador, Calaveras, Mariposa and Tuolumne counties. The Draft Resolution associated with this item is available here.
- $8,216,583 CASF Grant Approved for the California Valley Broadband Middle and Last Mile Project (Item 73, held by staff until 1/21/10) – This Draft Resolution would adopt contingent funding in the amount of $8,216,583 for the California Valley Broadband (CVB) project. CVB is a consortium of the principals of Moreno Trenching Ltd, Mika Telecom Group, and MT2 Telecom, LP. The CVB project would deploy a fixed wireless network using two unregulated (WiFi) frequencies and one licensed (WiMAX) frequency to deliver high speed internet services to the Central Valley (including Sacramento, Solano, San Joaquin, Stanislaus, Merced, Madera, and Fresno counties), as well as Voice over IP (VoIP). The total project cost is $82,216,583, and 10% ($3,216,583) is being requested from CASF as a match to CVB’s 80% ARRA fund request. The Draft Resolution associated with this item is available here.
NOTES AND COMMISSIONER REPORTS
Commissioners React to Chong’s Departure – As the Commission meeting drew to a close, the Commissioners addressed the impending departure of Commissioner Chong. Commissioner Bohn began the discussion with some “reflections on the season.” He noted that it has been an “acrimonious year at the political level” but he offered hope that the policy process at the Public Utilities Commission has fostered “a developing sense of responsibility for our fellow citizens.” He asked the audience to “ask kind thoughts about our nation,” in the hopes that we will be able to “resolve our issues in the greater interest.” Bohn expressed fear that “we are moving away from the process of compromise” both in government and in society at large. Bohn observed that the “political dialogue has become more shrill,” that “positions have gotten more absolute,” and that the conversations have become more heated. He encouraged the participants in CPUC proceedings to do their part to bring more substance and less heat to the discussion, and to “bring this country back toward the center.”
President Peevey read a prepared statement from Commissioner Chong that highlighted her work in the areas of the broadband deployment, smart grid implementation, consumer protection, and regulatory reform. Chong’s statement praised the work in getting broadband to where “the last, the least, and the lost” live. Chong noted that “the focus should move from voice to broadband, and stakeholders who focus on only the voice part are missing the bigger picture.” Chong also observed that URF “was clearly the right decision,” and that regulations have changed to provide the right incentives. Chong also praised the transformation of the Commission’s “Consumer Affairs Branch” into a more modern and responsive unit. In conclusion, Chong noted that the clash of perspectives between stakeholders and consumer groups has for the most part resulted in sound policy. The meeting closed with a final statement from President Peevey that Chong’s contributions have been large, and that she will be missed. Peevey observed that politics can be brutal, and the outcomes can be unfair, but that what happened to Commissioner Chong “lacked the civility” that Commissioner Bohn had earlier pleaded for. Peevey concluded that this would “leave a scar on the body politic, and on us as individuals.” The auditorium then gave a standing ovation to Chong’s accomplishments, and the final meeting of the year was brought to a close.