On June 24, 2010, the California Public Utilities Commission held its regularly-scheduled agenda meeting.  After several months of consideration, the Commission issued its Decision Determining Ratemaking Treatment for Rural Telephone Bank Stock Proceeds, granting ratepayers or the California High Cost Fund A with the Rural Telephone Bank stock proceeds, thereby departing from the Commission’s “gain on sale” rules.  The CPUC also took positions on two telecommunications-related bills, SB 1154 (Cedilla) and SB 1462 (Padilla).  These and other telecommunications items of interest on the Commission’s agenda are discussed in further detail below.


  • Redeemed Rural Telephone Bank Stock Allocated to Ratepayers (Item 3, adopted on consent agenda) – This Decision resolves 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 Decision departs from the Commission’s “gain on sale” rules by allocating the full value of redeemed RTB stock to ratepayers, including the value of patronage shares received by RTB borrowers and shareholders’ principal investments in RTB stock.  The Decision also fails to recognize that the companies paid taxes on the redeemed amounts in 2006.  The proceeding remains open to evaluate allegations that the Applicant companies were not forthcoming in disclosing the RTB proceeds.  The Decision is available here.
  • CPUC To Recommend Opposition to Bill To Ensure All Applications for California Alternate Rates for Energy and Universal Lifeline Telephone Service Programs Include Federal Earned Income Tax Credit Information (Item 45, adopted on consent agenda) – SB 1154 (Cedilla) would require the Low-Income Oversight Board (LIOB) to make recommendations on whether the California Alternate Rates for Energy (CARE) and the Universal Lifeline Telephone Service (ULTS) programs could assist with outreach regarding the Earned Income Tax Credit (EITC), a federal tax credit that is available to low to moderate to low income individuals and families.  The CPUC’s Legislative Subcommittee recommended opposing this bill unless amended because it is presently outside the jurisdiction and expertise of LIOB and the Commission to provide information about the federal EITC to California consumers.  The Commission endorsed this Legislative Subcommittee recommendation to oppose the bill.  The Memorandum associated with this item is available here
  • CPUC to Support Bill Establishing California Broadband Council (Item 53, adopted on consent agenda) – SB 1462 (Padilla) would establish the California Broadband Council, to be composed of the President of the California Public Utilities Commission or his designee, along with representatives of the state Chief Information Officer, the California Emergency Management, the Superintendent of Public Instruction, the Department of General Services, the Department of Business, the Department of Transportation and Housing, a Member of the Assembly, and a Member of the Senate. The only non-governmental entity on the Council would be the non-profit California Emerging Technology Fund.  SB 1462 would also impose specified duties on the council relating to the promotion of broadband deployment and adoption throughout the state.  The Memorandum associated with this item is available here.
  • New Rules Adopted for Public Comment at Commission Business Meetings (Item 18, adopted on regular agenda) – This Resolution adopts eighteen new rules for public comment at business meetings, as reflected in the Draft Resolution here.  The Resolution streamlines the process for public participation at Commission meetings.  The Resolution adopts specific rules to avoid repetitive comments and  comments that are on issues beyond the Commission’s jurisdiction.  The Resolution also limits the size and nature of signs and props that some speakers bring to Commission meetings. 
  • CPCN Granted to Talton Communications, Inc. (Item 14, adopted on consent agenda) – This Decision grants a Certificate of Public Convenience and Necessity (CPCN) to Talton Communications, Inc. (Talton) to provide interexchange services in California on a detariffed basis to the extent permitted by General Order 96-B, and the Telecommunications Industry Rules.  The Decision also requires Talton to post all detariffed rates, terms and conditions of service on an internet site, and notify affected customers of any service not provided under tariff. The Commission also adopts a Settlement Agreement providing for Applicant’s payment of an $11,000 fine for acknowledged unlawful operation in California without the required authority.  The Proposed Decision associated with this item is located here.
    Deadline Extended for Resolution of Rulemaking Related to Review of CPUC’s Telecommunications Public Policy Programs (R.06-05-028) (Item 29, 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 August 23, 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.  A Decision is expected later this year addressing LifeLine issues.  The Proposed Decision associated with this item is available here.
  • Commission Approves Transfer of Control of Nationwide Long Distance Service, Inc. to Andrea Hylen (Item 32, adopted on consent agenda) – Nationwide Long Distance Service, Inc. (NLDSI) holds a CPCN to provide intra-Local Access and Transport Area (LATA) and interLATA telecommunications services in California as a non-dominant interexchange carrier.  NLDSI and Hylen applied to transfer control via a 100% stock purchase of NLDSI, and stated that the transfer will be seamless to NLDSI customers and will not affect the provision of telecommunications services to customers.  The Proposed Decision associated with this item is available here
  • Statutory Deadline Extended in Adjudicatory Case Involving XO Communications and Fones4All Corporation  (Item 33, adopted on consent agenda) – The Commission extended the 12-month statutory deadline for resolution of a proceeding in which XO Communications Services, Inc., (“XO”) alleges that Fones4All Corporation (“Fones4All”) owes XO for switching and transport services related to the migration of Fones4All’s customers to AT&T California and Telscape Communications, Inc.  Fones4All filed for bankruptcy protection in August 2008, which automatically stayed the case.  The Commission therefore extended this 12-month statutory deadline for resolving the proceeding until August 2, 2011 to accommodate the stay. The Proposed Decision associated with this item is available here
  • CPCN Granted to Medallion Telecom, Inc.  (Item 34, adopted on consent agenda) – This Decision grants a CPCN to Medallion Telecom, Inc. (Medallion) to provide resold local exchange services within the service territories of Pacific Bell Telephone Company dba AT&T California (AT&T), Verizon California Inc. (Verizon), Citizens Telecommunications Company of California, Inc. dba Frontier Communications of California (Frontier), and SureWest Telephone (SureWest)..  Medallion is a California corporation located in Glendale.  The Proposed Decision associated with this item is located here.
  • $506,199 in CASF Funding Adopted for the Mojave Air and Space Port Project in Kern County (Item 42, adopted on consent agenda) – This Resolution adopts California Advanced Services Fund (CASF) funding of $506,199 for the Race Telecommunications, Inc. (Race) Mojave Air and Space Port project to provide broadband service to unserved and underserved areas of Kern County.  The project proposes to deploy long-haul fiber from Race’s Internet source in Los Angeles to the local region, after which Race will establish a regional central office and collocation facility, and build a regional optic backbone network to serve one market within Kern County.  The amount represents 40% of the project cost, with the rest being funded by Race’s existing capital budget.  The Draft Resolution associated with this item is available here.


  • CPUC Adopts Requirements for Smart Grid Deployment Plans (Item 38, adopted on regular agenda)  – This Decision provides the investor owned utilities (IOUs) with guidance on filing Smart Grid Deployment Plans that need to be filed with the Commission by July 1, 2001.  The Decision requires that utilities follow a common outline in preparing their Smart Grid Deployment Plans, and that the Plans present a vision of the Smart Grid consistent with legislative initiatives, among other things.  Commissioner Ryan presented this as the next step in “planning for the electric grid of the future” and emphasized that consumer privacy issues should be of paramount concern to the IOUs.  The Proposed Decision associated with this item is available here.


  • CPUC Comments Before FCC in the Matter of Connect America Fund, a National Broadband Plan for Our Future High-Cost Universal Service Support (Item 43, held to 7/8/10 by Staff) — The Federal Communications Commission (FCC) is seeking comment on whether it should use a model to help determine universal service support levels in areas where there is no private sector business case to provide broadband and voice services. The FCC also seeks comment on the best way to create an accelerated process to target funding toward new deployment of broadband networks in unserved areas, and comment on specific common-sense reforms to cap growth and cut inefficient funding in the legacy high-cost support mechanisms and to shift the savings toward broadband communications. There is no memorandum associated with this item.
  • CPUC Position on Warmline Bill (Item 47, held to July 8, 2010 by Staff) – SB 1375 (Price) would modify the current “warmline” requirements under Public Utilities Code Section 2883 by allowing providers to remove 911 “warmline” functionality after the expiration of a certain number of days following service disconnection.  Current customers would still have full access to 911 service, as they do under current law.  The CPUC has not yet taken a position on this bill.  

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