On January 27, 2011, the California Public Utilities Commission held its regularly scheduled agenda meeting – the first meeting with newly appointed Commissioners Catherine Sandoval and Mike Florio. Mr. Florio was most recently a senior attorney at The Utility Reform Network, working primarily on energy matters. Ms. Sandoval’s experience is in telecommunications law and regulation. She has held positions at the Federal Communications Commission and is currently an associate professor at Santa Clara University School of Law. The timing of the appointment of the Commissioners resulted in a number of the Commission items being held to the next agenda meeting, so the agenda was relatively brief. Items of interest on the Commission’s public agenda are discussed in further detail below.
REGULAR AND CONSENT AGENDA ITEMS
- Small LECs’ California High Cost Fund-A Adjustments Authorized for Calendar Year 2010 (Item 3, adopted on consent agenda) – This Resolution resolves residual funding items for the 14 small local exchange carriers (Small LECs) for 2010. In October 2009, the Small LECs made their annual California High Cost Fund-A (CHCF-A) advice letter filings, requesting total calendar year (CY) 2010 CHCF-A support of $38.886 million. On January 21, 2010 the Commission authorized $35.535 million in funding for 2010, and deferred a decision on requested carrier adjustments related to: (1) revenue effects associated with National Exchange Carrier Association (NECA) separations methodology changes; (2) revenue effects associated with virtual NXX calls; and (3) revenue effect associated with wireless intercarrier compensation.
The Resolution adopts the CY 2010 CHCF-A adjustment requests and late interest in the amount of $2,327,455.40 for Calaveras, Foresthill, Kerman, Pinnacles, Ponderosa, Sierra Tel, Siskiyou and Volcano. It addresses the three deferred items by: (1) approving the proposed NECA separations methodology revenue adjustments; (2) approving Foresthill and Kerman’s request for a CHCF-A adjustment related to the implementation of intercarrier compensation agreements with 01 Communications in the total amount of $77,972; and (3) allows claims for the revenue effect of wireless intercarrier compensation changes following April 29, 2005, but denies claims for lost revenues prior to that date. The Resolution associated with this item is available here.
- California High Cost Fund-A Allocations Adopted for Calendar Year 2011 (Item 22, adopted on consent agenda) – This Resolution adopts a CY 2011 budget for the CHCF-A. This fund provides supplemental revenues to the 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 $38,455,296.34 for 2011, to be paid in monthly increments of $3,204,608.02. The Resolution associated with this item is available here.
- Deadline Extended for Resolution of Rulemaking Related to Review of CPUC’s Telecommunications Public Policy Programs (R.06-05-028) (Item 28, 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 March 20, 2011. 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 Decision associated with this item is available here.
- Order Extending Statutory Deadline in City of Davis v. Newpath Networks, LLC (Item 30, adopted on consent agenda) – This Decision extends the statutory deadline to resolve the City of Davis’s complaint against Crown Castle (formerly Newpath Networks, LLC) related to the proposed construction of a distributed antenna system in the City that the City claims violates provision of the California Environmental Quality Act (CEQA) and Crown Castle’s certificate of public convenience and necessity (CPCN). The Decision extends the statutory deadline to March 23, 2012 to permit ongoing settlement negotiations. The Decision associated with this item is available here.
SIGNIFICANT HELD OR WITHDRAWN TELECOMMUNICATION ITEMS
- Resolution Making the Rates of Cost-Of-Service Rate Regulated Utilities Subject to Refund Under Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (Item 41, held to 2/24/11) – This Draft Resolution would notify cost-of-service utilities that their rates may be subject to refund based on the impact of the federal Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010. The new tax law provides for 100% accelerated bonus depreciation on certain business property put into service after September 8, 2010. By this Draft Resolution, the Commission would grant authority to the Utility, Audit, Finance & Compliance Branch of the Division of Water and Audits (Branch) to address: (1) what impact the New Tax Law is likely to have on the various classes of cost-of-service rate-regulated utilities; (2) the extent to which the benefits of the tax law will accrue to ratepayers under existing ratemaking mechanisms; and (3) what, if anything, the Commission should do to further address the impact of the legal changes on utilities’ cost of service and their rates. Although this Draft Resolution suggests that the Branch should hold workshops to address these questions, those workshops do not need to be held if the Branch determines it already has sufficient information to make recommendations to the Commission. The Draft Resolution associated with this item is available here.
- Request for Certificate of Public Convenience and Necessity by DTS of CA, Inc. (Item 7, held by Commissioner Sandoval until 2/24/11) – This Proposed Decision would grant a CPCN to DTS of CA, Inc. to construct telecommunications facilities and to provide local exchange and interexchange service to unserved territories in California. The Proposed Decision associated with this item is available here.
- Pac-West Telecomm, Inc.’s Complaint Against Various Carriers for Failure to Pay Termination Fees – Request for Dismissal (Item 11, held to 2/24/11) – This Proposed Decision would dismiss Pac-West Telecomm, Inc.’s (Pac-West) consolidated action alleging that defendants – carriers that provide Commercial Mobile Radio Service (CMRS) and transmit CMRS traffic to Pac-West for termination – wrongfully refused to pay Pac-West for termination services, and that the defendants should be required to pay an amount equal to the termination rate in Pac-West’s intrastate tariff. The Commission would dismiss the complaints due to the pendency of an appeal of a Federal Communications Commission (FCC) decision upon which the complaints are based, and on the grounds that the conduct that Pac-West challenges appears to be permitted under current federal law and the complaints fail to state causes of action under California law for undue discrimination, unreasonable utility practices, or unjust enrichment. The Proposed Decision would also authorize Pac-West to file a petition to reopen the proceeding if the FCC appeal is resolved in its favor. The Proposed Decision associated with this item is available here.
MANAGEMENT AND COMMISSIONER REPORTS
- Commissioner Florio pledged to “work like a dog on behalf of the people of California.” He called on the entire Commission and California community to “restore the luster of the Golden State once again” in the face of the current economic crisis. Former Administrative Law Judge Angela Minkin will serve as Commissioner Florio’s interim chief of staff, and Matthew Tisdale (former Commissioner Grueneich’s energy advisor) and Sepideh Khosrowjah (former Commissioner Ryan’s chief of staff) will also join Florio’s interim staff.
- Commissioner Sandoval indicated that she shared Governor Brown’sgoal of improving California’s economy and increasing jobs. She also particularly noted California’s role as the birthplace of the Internet, and committed to increasing Internet access and planning for the future of California. Sandoval announced that Phil Weismehl will be her interim chief of staff.
- Commissioner Peevey commented on the actions taken by the Commission to address the San Bruno Pipeline Explosion. At the next meeting, he will present a new procedure to consolidate prior and future actions related to the safety of all California’s pipelines. He also pledged to ensure that the Commission will both consider appropriate enforcement actions, and to quickly implement the independent Commission panel’s recommendations related to the Commission’s ongoing investigation of the explosion, that he expects later this Spring. Commission Staff also commented on the ongoing efforts to work with the National Transportation Safety Board (NTSB) in its investigation of the explosion.