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On March 1, 2007, the Commission held its regularly scheduled agenda meeting. The Commissioners welcomed a new addition, Commissioner Timothy Simon. Commissioner Simon was sworn in right before the meeting, and participated in most of the matters discussed during the meeting. The chief telecommunications item for the day was the decision adopting the video franchising legislation. That and other significant items from today’s agenda are addressed in further detail below.


REGULAR AND CONSENT AGENDA ITEMS

  • Decision Adopted Implementing State Video Franchising Legislation (Item 25, adopted 5-0) – This decision completes the Commission’s efficient and expeditious implementation of the Digital Infrastructure and Video Competition Act of 1996 (“DIVCA”). Commissioner Chong introduced this decision, announcing “a new digital information era” had begun. Chong described the many benefits of the video franchising framework, noting that it will provide more choices for consumers, and more opportunities for California workers and businesses.

    Chong also discussed the Commission’s approach to implementing DIVCA. Since the requirements of the video franchising program are spelled out very specifically in the legislation, the Commission’s decision and general order closely track the legislation. As Chong noted, the Legislature made clear that video providers are not supposed to be treated like telephone companies. Chong reflected that the “usual statutory structure” of DIVCA “is inconsistent with business as usual” at the Commission. The Commission’s responsibility for overseeing video franchises is very limited. The general order restricts the circumstances under which claims can be brought to the Commission, but does implement a number of reporting requirements. To assist with the Commission’s oversight function, the Commission will be hiring individuals with geographical mapping skills and other background that will be useful in the video context. Chong concluded her remarks by stating that the Commission is ready for applications, and that they may get applications “within a day.”

    The other Commissioners also offered support for the video franchising decision. Commissioner Bohn described it as something that is “good for everybody,” and possibly the “greatest thing since sliced bread.” Bohn underscored the competitive advantages of the Commission’s approach, observing that “we have to get some more elephants into the game to beat down the prices that are going on.” Bohn also echoed the importance of keeping the Commission’s role clear. He suggested that “we are now the California Public Utilities Commission and the Video Franchising Authority.” These rules are “distinct and different” from each other.

    Commissioner Peevey concluded the discussion by stating that the decision is “comprehensive, well reasoned, and before us in a timely way.” Peevey expressed hope that municipalities would not complicate the video franchising process by imposing excessive delays on the local permitting process. He also warned carriers that the Commission would take allegations of discrimination in video rollout seriously, saying “do not exclude minority and low-income communities from your plan.” Following these comments, the decision was adopted 5-0.

  • AT&T Application for Rehearing Denied in Dispute with Pac-West Regarding Tariff Charges for ISP-Bound Traffic (Item 34, adopted 4-0 in closed session) – This decision denies AT&T’s application for rehearing of D.06-06-055, the decision which ruled in Pac-West’s favor in the underlying dispute between Pac-West and AT&T regarding alleged unpaid charges for ISP-bound traffic. Pac-West’s complaint had alleged that it was entitled to reciprocal compensation for AT&T-originated traffic that is terminated on Pac-West’s network, in accordance with Pac-West’s intrastate tariffs, even though Pac-West and AT&T had no interconnection agreement governing their exchanges of traffic. The Commission found in Pac-West’s favor, and directed AT&T to pay more than $7 million in unpaid tariff charges. In its application for rehearing, AT&T raised several arguments to challenge the Commission decision. AT&T challenged the Commission’s jurisdiction to adjudicate the case, and once again alleged that the ISP Remand Order preempts application of intrastate tariffs to ISP-bound traffic. This decision rejects AT&T’s arguments.

  • Settlement Approved Regarding AT&T Collocation Rates (Item 7, adopted on consent agenda) – This decision adopts a settlement between AT&T and a group of CLECs who purchase collocation services from AT&T. Since 1999, AT&T has been charging interim collocation rates to these CLECs while the Commission pondered appropriate permanent rates. This settlement makes the AT&T interim collocation rates “permanent” for a three year period, thereby obviating any need for a “true up.” After the three year period, collocation rates will revert to an alternate set of rates, but CLECs may “opt into” those alternate rates at any time prior to the expiration of the three year period. This decision resolves AT&T’s collocation rates, but Verizon’s rates remain to be determined.

  • Public Policy Fund Surcharge Modifications Adopted (Items 8, 9, 10, adopted on consent agenda) – Effective April 1, 2007, the Commission modified the surcharge rates for the CHCF-B, ULTS, and DDTP programs. The CHCF-B surcharge will be 1.30% (down .70% from 2.00%). The ULTS surcharge will be 1.15% (down .14% from 1.29%). The DDTP surcharge will be .37% (up .32% from .05%).

  • Statutory Timeframes Extended in AT&T / Fones4All Complaint Case (Item 14, adopted on consent agenda) – This order extends the 12-month statutory deadline for resolution of the complaint case between AT&T and Fones4All regarding alleged over-charges by Fones4All for Intra-LATA traffic. AT&T contends that Fones4All demanded excessive payment for this traffic by overstating call volumes.

  • SBC ASI Granted Exemption >From Section 851 Requirements with Regard to “Local Field Organization” Assets (Item 16, adopted on consent agenda) – This decision grants the request of SBC ASI for an exemption from the requirements of Public Utilities Code Section 851 with regard to a transfer of assets to its affiliate, Pacific Bell. The transferred assets include test kits, trucks, and leases for garage space. The Commission granted this exemption pursuant to its authority under Section 853(b), based on a finding that the application of the 851 requirements is “not necessary in the public interest.” The Commission found that the transfer did not have any significant environmental impacts.


SIGNIFICANT HELD ITEM

  • Proposed Decision Addressing Alleged Improper Ex Parte Contacts in Connection with 911 Warmline Complaint Case (Item 24, held by Bohn until 4/12 for further consideration) – This decision would penalize both Cox and AT&T for allegedly engaging in impermissible ex parte contacts with Commissioner advisors with respect to an ongoing adjudicatory matter. These allegations of improper contacts stem from a complaint case by UCAN against Cox and AT&T for supposed violations of the 911 warmline obligations under Public Utilities Code Section 2883. In June 2006, AT&T and Cox brought a motion to stay that complaint case, and a related motion to open a generalized investigation of warmline issues in the Commission’s local competition docket. The carriers contend that the “ex parte” contacts giving rise to this item were focused on the motion rather than the merits of the complaint case.


NOTES AND REPORTS

  • New Commissioner Simon Introduced to the Commission – This meeting was the first for the newest Commissioner, Timothy Simon. Commissioner Simon was appointed by the Governor on February 15, 2007, and was sworn in right before Thursday’s Commission meeting. Commissioner Peevey welcomed him and Commissioner Simon then made some introductory remarks. He introduced his family, and said he is “excited to be part of the team.”

  • Grueneich Report on Problems with the ULTS Program – Commissioner Grueneich, Executive Director Steve Larson, and CSID Director Linda Serizawa gave a report regarding the ongoing problems that carriers and the Commission have been experiencing with respect to the ULTS (or “lifeline”) program. Commissioner Grueneich began by providing some background on the ULTS program, and by outlining the nature of the recent problems since the program was brought into compliance with the FCC’s Lifeline / Linkup Order. Grueneich mentioned the low response rate under the new program, and the flurry of complaints that have been received on the subject.

    Grueneich then turned her attention to the recent ACR that she issued regarding alleged problems with AT&T and Verizon’s compliance with General Order 153. That ACR contends that Verizon and AT&T have been misinforming customers about the ULTS program, and that they have been improperly charging customers conversion fees. Based on these allegations, a hearing will be held on March 8, 2007, at which AT&T and Verizon will explain their behavior, and identify the steps that have been taken to correct the situation. Weekly updates will be provided thereafter.

    Executive Director Larson provided further detail to support Grueniech’s comments. He explained that the CPSD had done 50 test calls regarding ULTS to see whether AT&T and Verizon were providing correct information. Those tests suggested that customers were not receiving accurate information “as much as 75% of the time.” Mr. Larson acknowledged that a formal enforcement action is a possibility. Regarding the ULTS issues more globally, Larson indicated that the Commission will be releasing a report on April 2, 2007 discussing the problems. A new contract between Solix and the Commission has also been brokered, and it is awaiting approval from the Department of General Services. While some of the problems will be alleviated, Larson did recognize that even with the fixes, many customers will still be angry, since the ULTS program is not as simple as it once was.

    A more extensive discussion of the issues with the ULTS program then ensued, but was cut short by Commissioner Peevey, who urged that the issues should be deferred to the March 8th hearing.

  • Larson Announces Reorganization of the Telecommunications Division – As has been rumored for several months, the Commission will be reorganizing the Telecommunications Division, which will be renamed as the “Communications Division.” The Division will have three sub-divisions. The “Policy and Decision Analysis Branch” will provide centralized planning, coordination between state and federal rulemakings, and interdivisional planning. The “Program Management and Implementation Branch” will manage the public programs, implement the Uniform Regulatory Framework, and addressing numbering issues, interconnection agreements, and arbitrations. The “Licensing Tariffs, Rural Carriers and Support Branch” will focus on issues related to rural carriers, including Small LEC rate cases, rural telecommunications grants, and CHCF-A program administration.

  • Reminder Regarding March 7th Fruitvale Bill Forum – The Commissioners briefly reminded the audience that the first Commission-sponsored “bill forum” will take place this coming week near the Fruitvale BART station. Energy and telecommunications utilities will be present to provide information and explanations regarding issues that consumers are having regarding their bills and other issues.

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