On February 1, 2012, the California Public Utilities Commission held its regularly-scheduled agenda meeting. PG&E’s controversial smart meter program was again the big-ticket item on the agenda. More than 60 public speakers addressed that topic alone, and provided an unruly reaction to the Commission’s decision to require payments to “opt out” of the smart meter program. On the telecommunications agenda, the Commission issued its Decision in the broadband grant and revolving loan program proceeding, raising broadband grant limits to 70% of the project cost in unserved areas, and 60% in underserved areas. The deadline for submitting broadband grant applications for unserved areas is May 15, 2012, and September 11, 2012for underserved areas. The Commission also held a proposed decision addressing proposed revisions to basic telephone service. These and other items of interest on the Commission’s agenda are addressed below.
REGULAR AND CONSENT AGENDA ITEMS
- Decision Implementing Broadband Grant and Revolving Loan Program Provisions
(Item 30, adopted 4-0 on regular agenda) – This Decision continues the implementation of SB 1040 relating to the Broadband Infrastructure Grant Account (Grant Account) and Revolving Loan (Loan Account) Programs, adopting several updated rules for administering the California Advanced Services Fund (CASF) Grant program, as well as initial rules for administering the CASF Revolving Loan Account. The Decision: (1) increases the CASF grant funding limits to 70% for “unserved” areas and 60% for “underserved” areas, with loans available for 10-20% of projects; (2) retains the possibility of funding for middle-mile, backbone, and backhaul; (3) allows for applications from satellite providers, but continues to define “unserved” and underserved areas without reference to satellite coverage; (4) adopts a revised speed threshold for underserved areas to require a 6 mbps download and 1.5 mbps upload; (5) continues the existing rules that restrict CASF grants only to telephone corporations; (6) continues the requirement that applicants submit shapefiles of their proposed projects so that the proposed area map can be posted on the CASF webpage; (7) requires that applicants include a plan to encourage adoption and sustainability of broadband service in the proposed areas; (8) requires that monthly recurring charges be fixed for 2 years; (9) slightly revises financial eligibility reporting requirements; (10) reiterates that basic service is not a requirement of CASF, but requires applicants to ensure that if voice service is provided, compliance with the FCC’s E911 and battery backup requirements must be met; (11) establishes separate application window deadlines for unserved and underserved projects; (12) maintains the current process for challenging an application as to the area being unserved or underserved; (13) retains the requirement that applicants must attest as to whether the applicant has ever been sanctioned by the FCC or any state regulatory agency for failure to comply with any regulatory statute, rule, or order, or convicted by any court for any criminal activity; (14) uses number of households in a service area in lieu of service area (in square miles) for scoring of applications; (15) requires that certain information regarding the project be made available to the public; (16) declines to implement any open access rules; (17) requires the applicant to inform the Communications Division if the project will not be completed within the completion date approved in the funding resolution; and (18) requires specific financial information.
The Commission set deadlines for grant applications of May 15, 2012 for unserved areas, and September 11, 2012 for underserved areas. President Peevey and Commissioner Simon spoke especially strongly regarding the critical nature of this funding. President Peevey stressed that with the new rules, up to 90% of the costs of a project could come from grants and loans. Commissioner Simon stressed the importance of this being a performance-driving program, requiring detailed plans from applicants, and noted that California has a long way to go to bring it to the level of leadership in this area that it should have attained.
A copy of the Proposed Decision associated with this item is available here.
- Advanced Technology Distributors, Inc. dba Adtech for a Certificate of Public Convenience and Necessity
(Item 16, adopted on consent agenda) – This Decision grants Advanced Technology Distributors, Inc. dba Adtech a Certificate of Public Convenience and Necessity (CPCN) to provide resold and facilities-based competitive local exchange service and non-dominant interexchange services in the service territories of Pacific Bell Telephone Company d/b/a AT&T California (AT&T), Verizon California Inc. (Verizon), Citizens Telecommunications Company of California, Inc. d/b/a Frontier Communications of California (Frontier) and SureWest Telephone (SureWest). A copy of the Proposed Decision associated with this item is available here.
- Decision Granting Transfer of Control and CPCN for Blue Casa Telephone, LLC and Tcast Communications, Inc.
(Item 23, adopted on consent agenda) – This Decision grants a joint request of Blue Casa Telephone, LLC (BCT) and TCAST Communications, Inc. (TCAST) for approval of a transfer of control of BCT from a wholly owned subsidiary of TCAST to a standalone company owned by Jeff Compton and Howard Brand, and for approval of a standalone CPCN to provide resold and limited facilities-based local exchange services and resold and limited facilities-based interexchange services. A copy of the Proposed Decision associated with this item is available here.
- Decision Extending Statutory Deadline in O1 Communications, Inc. v. Verizon California, Inc.
(Item 21, adopted on consent agenda) – This Decision extends the 12-month statutory deadline to August 15, 2012 for resolving two related adjudicatory matters to provide the Commission with additional time to prepare a Presiding Officer’s Decision. This additional time is necessary given significant staffing constraints and press of other urgent Commission business. The Proposed Decision associated with this item is available here.
SIGNIFICANT HELD ITEMS
- Rulemaking Regarding Revisions to Definition of Basic Service
(Item 62, held to 2/1/12) – 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 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. The Proposed Decision being considered by the Commission is available here.
- Disposition of TelePacific’s Advice Letter 314
(Items 31 and 31A, held to 2/16/12 by Commissioner Sandoval for further review) – The Commission again held the disposition of U.S. TelePacific’s (TelePacific) Advice Letter 314. U.S. TelePacific filed Advice Letter 314 earlier this year, thereby notifying the Commission of its proposed acquisition of the assets, including the customer base and CPCN, of IXC Holdings, Inc. (IXCH) by TelePacific’s wholly-owned subsidiary, TelePacific Managed Services. Shortly thereafter, Straitshot RC LLC and Straitshot Communications, Inc. (collectively, Straitshot) filed a protest, claiming that TelePacific failed to disclose that it was involved in pending litigation with IXCH, and raising concerns that the proposed acquisition of assets might impair its ability to recover an eventual judgment against IXCH.
The Draft Resolution would suspend the Communications Division’s previous approval of TelePacific’s Advice Letter 314, and direct to the parties to file an application seeking approval of the proposed acquisition. The Draft Resolution would reverse the CD’s written disposition of the Advice Letter on the grounds that the Advice Letter process is meant to be for “ministerial” acts, i.e., non-controversial decisions that do not raise important policy questions and do not require evidentiary hearings. The Alternate Draft Resolution would deny the protest and approve the Advice Letter. The Draft Resolution associated with Item 31 is available here. The Draft (Alternate) Resolution associated with item 31a is available here.
- AB 1050 Re: Prepaid Mobile Telephony Services Taxes and Fees
(Item 70, held to 2/16/12 by President Peevey for further review) – AB 1050 (Ma) would establish a uniform method for retail sellers of prepaid mobile telephony communications services to use to collect from customers local and certain state communications taxes, fees and surcharges. The Commission’s Office of Government Affairs (OGA) recommends opposing the bill on the grounds that it falsely asserts that no method exists for collecting communications taxes, fees and surcharges from prepaid end-use customers. Another flaw in the bill from the Commission’s perspective is that it would require retail sellers of prepaid mobile telephony services and the Board of Equalization to needlessly administer what are currently programs wholly under CPUC jurisdiction and oversight. It would also make the prepaid customer liable for remitting the user fee and universal service surcharges, stating that payment of such charges is the liability of the consumer and not the seller or service provider. In addition, it would require the CPUC to take into consideration the degree to which prepaid wireless customers benefit from state universal service programs, and to adjust the prepaid wireless universal service surcharges downward to the extent the Commission determines that prepaid wireless users derive a lower benefit from universal service programs. The Commission is concerned that this would jeopardize its ability to manage and adjust the surcharge amounts. The OGA Memorandum is available here.
SIGNIFICANT ENERGY ITEMS
- Commission Approves Analog Meters for PG&E Customers Electing to Opt-Out of the Smart Meter Service
(Item 28, adopted 4-0 on regular agenda) – After listening to over 60 public speakers for 2 hours in opposition to Pacific Gas & Electric’s Smart Meter program, the Commission modified Pacific Gas & Electric Company’s Smart Meter program to include an analog meter option for residential customers who do not wish to have a wireless Smart Meter installed at their locations, adopted interim fees for residential customers electing that option ($75 for opt-out, $10 monthly fee for regular customers; $40 for opt-out, $5 monthly fee for low-income customers), and established a second phase of proceeding to consider costs and cost allocation issues. The Decision caused an uproar in the audience, with very vocal opposition lasting several minutes. President Peevey and the other Commissioners strongly supported the decision. President Peevey noted that this was the beginning of implementation of a national vision for a fully-empowered electric consumer, with 25 states adopting a Smart Meter program, and reiterated the reports demonstrating the meters’ safety record. Commissioner Simon recommended a separate proceeding to address the consumer backlash and again scolded the businesses benefiting from such technology speaking out in support of the program. Commissioners Ferron and Sandoval supported the establishment of a new proceeding to address costs, and noted that this was just an interim measure so that the Commission could have a full opportunity to address all the issues presented by consumers. A copy of the Final Decision is available here.
NOTES AND COMMISSIONER REPORTS
Commissioner Simon congratulated Commissioners Florio and Sandoval on their unanimous confirmation by the California State Senate.
- Commissioner Sandoval spoke glowingly about Verizon’s innovation center in San Francisco, describing the program Verizon has set up to work with application developers to make communications-friendly software applications.