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On May 20, 2010, the California Public Utilities Commission held its regularly-scheduled agenda meeting.  The Commission issued a resolution revoking CASF grants in areas where the grantees had not received ARRA funding.  The Commission also closed the long-standing Open Access and Network Architecture Development proceeding, and took positions on several bills of significance that are pending at the Legislature.  These and other telecommunications items of interest on the Commission’s agenda are discussed in further detail below.


REGULAR AND CONSENT AGENDA ITEMS


  • $38,098,392 in California Advanced Services Fund Grant Awards for Broadband Projects Revoked (Item 17, adopted on consent agenda) – This Resolution reverses California Advanced Services Fund (CASF) awards and revises Census Block Groups set aside for broadband projects that were dependent upon American Reinvestment and Recovery Act (ARRA) funding approval, but which did not receive ARRA funding in “Round 1” and did not reapply for “Round 2.”  The projects included Inyo Networks’ Last Mile Broadband Project, Race Telecommunications’ Last Mile Project, the California Valley Broadband project, Frontier’s Lookout unserved broadband project, the Frontier Alturas Middle Mile Fiber broadband project, the Plumas-Sierra Telecommunications underserved Last Mile project, and Broadband Associates International, Inc.’s Northeastern California project.  The Resolution rescinds past CASF resolutions and grant awards for those projects, and makes those funds available to new applicants to the specified census block groups.  The Draft Resolution underlying this item is available here
  • Ponderosa Cablevision’s Auberry Project California Advanced Services Fund Award Increased to $1,154,780 (Item 19, adopted on consent agenda) – This Resolution amends a 2009 resolution by the Commission by increasing the CASF 10% matching funds to Ponderosa Cablevision (Ponderosa) from $405,613 to $1,154,780 for its Auberry Project.  The Auberry Project will deliver service to 1,043 households covering a formerly-unserved 18.65 square mile area.  Ponderosa plans to extend its DSL coverage into the proposed areas.  The increase augments CASF funding for Ponderosa based on Ponderosa’s 50%-50% ARRA grant award.  Ponderosa’s request was initially a request for 80% funding.  The Draft Resolution underlying this item is available here.
  • Hypercube Telecom, LLC Complaint Against Level 3 Communications, LLC Dismissed (Item 14, adopted on consent agenda) – This Decision grants Level 3 Communications, LLC’s (Level 3) motion to dismiss a complaint brought by Hypercube Telecom, LLC (Hypercube) to collect approximately $5.5 million in intrastate charges pursuant to its California Intrastate Access Tariff for access services, database query service, and routing of toll-free calls to Level 3 for termination to Level 3 customers.  Hypercube does not provide originating access for the toll-free calls, but rather, those calls originate on wireless carriers’ networks and Hypercube picks the calls up at wireless carriers’ switching centers and delivers them to the incumbent local exchange carrier for routing to Level 3.  The Commission found that Hypercube did not allege the existence of a joint billing arrangement that would have provided Hypercube the right to collect rates for the wireless carriers.  The Proposed Decision underlying this item is available here
  • Open Access and Network Architecture Development Proceeding Closed
    (Item 10, adopted on consent agenda) – This Decision closes the long-pending Open Access and Network Architecture Development (OANAD) proceeding, initiated in 1993 to set prices that incumbent local telephone exchange carriers (ILECs) would charge competitors who leased portions of the ILECs’ networks.  The proceeding served as an umbrella proceeding to address several different issues relating to the development of competition in the telecommunications industry, including AT&T’s entry into the long distance market, the establishment of UNE rates for Verizon, collocation issues, resale pricing issues, and line sharing issues.  Given that the only active issue remaining was Verizon’s collocation rates and terms and conditions, this Decision will close all phases of this proceeding.  The Commission requests that parties with residual issues in the OANAD proceeding address those issues in new applications.  The Proposed Decision underlying this item is available here
  • CPUC to Oppose Bill Requiring Opening of a Proceeding to Address Collection of 911 Surcharges in Connection with Wireless Prepaid Offerings (Item 50, approved on regular agenda) – AB 2545 (De La Torre) would require the CPUC to open or expand the scope of a proceeding to determine an equitable manner for mobile phone service providers to collect a 911 surcharge from users of prepaid communications services.  The CPUC will oppose this bill because of its conclusion the definitions of prepaid services in the bill have “serious flaws,” and recommends that the bill be amended to delete the definitions and permit the CPUC to define “prepaid wireless services” as part of the rulemaking required by the bill.  The memorandum from the CPUC legislative subcommittee recommending CPUC opposition to the bill is available here.
  • CPUC to Support Legislation to Expand Procurement Diversity Requirements to Companies (Item 53, approved 4-1) – AB 2758 (Bradford) would expand the CPUC’s supplier diversity program to cable corporations and would add specific language to the authorizing statute stating that diversity requirements apply to renewable energy, wireless telecommunications, broadband, smart grid, and rail projects.  At present, cable companies are voluntarily complying with the supplier diversity requirements, as set forth in CPUC General Order 156. 
     
    After the Legislative Director, Ed Randolph, summarized the item, Commissioners Peevey and Simon both expressed support for the bill.  Commissioner Simon noted that there are a lot of efforts in the diversity arena right now, but that all of these efforts are necessary to ensure California’s commitment to a sense of openness and fairness.  Simon ruminated that “these are no easy actions to implement” and that “they have risks associated with them that . .  . will require a degree of caution.”  Simon noted that he was “proud to be in a state” that values diversity rather than “isolating certain communities.”
     
    Commissioner Bohn dissented on this item on legal grounds.  Bohn reiterated that he has “serious concerns about whether the CPUC has the authority under California law to mandate policies with regard to women and minorities.  He acknowledged that policies to promote veterans and disabled individuals could pass legal muster, but argued that “doubts remain regarding the affirmative action issues surrounding this.”  Bohn noted that he agrees with Commissioner Simon regarding the overall benefits of diversity, but that he continues to believe that Proposition 209 would prevent a program that favors minorities and women in this way. 

  • CPUC to Oppose Smart Grid Legislation Unless Amended (Item 54, adopted on consent agenda) – SB 837 (Florez) addresses two principal issues related to smart meter technology and deployment planning.  First, the bill would expand the definition of protected personal information under the Civil Code and elsewhere to include information about energy usage.  Second, the bill would implement certain smart meter testing standards and technology standards.  The Commission voted to oppose the bill on the grounds that it would impose significant additional administrative costs on utilities in connection with the proposed privacy requirements.  Since these compliance costs would be “quite burdensome” and would “ultimately be passed on to ratepayers,” the Commission is requesting that the requirements be amended.  The Commission’s position and proposed amendments are summarized in the memorandum at this link.
  • Approval of United Way of Santa Cruz for Certification as 2-1-1 Provider for Santa Cruz County (Item9, adopted on consent agenda) – By this Resolution, the CPUC grants United Way of Santa Cruz (UWSC) authority to provide 2-1-1 Information and Referral (I&R) services to all of Santa Cruz County.  UWSC is a California non-profit that applied for authority to provide 2-1-1 services in Santa Cruz County, after extensive investigation by the Santa Cruz County public-private partnership.  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 bills assistance, food assistance, and 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.
  • Adoption of Successor Interconnection Agreement Between AT&T California and Reliance Globalcomm Services, Inc.(Item 11, adopted on consent agenda) – This Decision adopts a draft interconnection agreement (ICA) proposed by Pacific Bell Telephone Company d/b/a AT&T California (AT&T) to Reliance Globalcomm Services, Inc. (Reliance) in an arbitration proceeding between the parties.  Reliance apparently failed to respond to a proposed draft successor interconnection from AT&T for eight months, and failed to appear at Commission hearings on the proposal, and the Commission therefore concluded that Reliance had no objection to adopting the draft ICA as the successor ICA between the parties.  The Proposed Decision associated with this item is available here
  • Speedypin Prepaid, LLC Granted CPCN and Fined $13,000 (Item 13, adopted on consent agenda) – This Decision approves a proposed settlement agreement between Speedypin Prepaid, LLC (Speedypin) and the Commission’s Consumer Protection and Safety Division (CPSD), whereby Speedypin is granted a registration Certificate of Public Convenience and Necessity (CPCN) to provide services in California as a non-dominant interexchange carrier.  Speedypin offers prepaid phone products for both domestic and international calling services.  As part of the settlement agreement, Speedypin admitted that it had not successfully obtained Commission approval before selling prepaid phone cards in California.  This Decision requires Speedypin to pay a $13,000 penalty and to fully comply with all applicable regulatory and legal requirements going forward.  The Proposed Decision associated with this item is available here.
  • Southern California Edison Authorized to Lease Fiber Optic Cables to Clear Wireless, LLC (Item 34, adopted on consent agenda) – This Decision approves Southern California Edison Company’s (SCE) application for authority to lease certain optical fibers along existing routes and additional routes being constructed in SCE’s service territory, to Clear Wireless, LLC.  Clear Wireless is in the business of providing wireless broadband internet transmission to internet subscribers, and will use these additional fibers as part of its telecommunications network.  The Decision will enable SCE to generate additional revenues from commercial use of its temporarily available capacity, providing a financial benefit to ratepayers.  The Proposed Decision associated with this item is available here

SIGNIFICANT HELD AND WITHDRAWN ITEMS


  • Determination of Ratemaking Treatment for Rural Telephone Bank Stock Redemption Proceeds (Item 3, held until June 3, 2010 by Staff) – This Proposed Decision 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 Proposed Decisions issued in this proceeding would depart 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 revised Proposed Decision is available here.
  • TURN Request for $16,162.50 Intervenor Compensation In Connection with TracFone’s Request to Be Designated as an ETC in California (Item 37, withdrawn) – This item would grant $16,162.50 in intervenor compensation to The Utilities Reform Network (TURN) in connection with its participation in a proceeding whereby TracFone requested designation as an Eligible Telecommunications Carrier (ETC) in California for purposes of receiving federal Lifeline support.  TracFone’s request for ETC designation was initially rejected, but that decision was reversed on rehearing, purportedly based on the “controversial” nature of the issues surrounding TracFone’s non-compliance with public policy fund surcharge obligations.  The Proposed Decision associated with this item is available here.  
  • CPUC Position on Bill To Extend Minority, Women, Disabled Veteran-Owned Business Procurement Requirements to Wireless Telecommunications Providers (Item 46, withdrawn) – AB 1918 (Davis) is a bill that would extend the minority, women, disabled veteran-owned business enterprises procurement requirements to wireless telecommunications service providers with gross annual revenues of more than $25,000,000 and would encourage each electrical, gas, water, wireless telecommunications service provider, and telephone corporation that is not required to submit a plan, to voluntarily adopt a plan for increasing women, minority, and disabled veteran business enterprise procurement in all categories.
  • CPUC Position on 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 55, held to June 3, 2010 by Staff)– SB 1154 (Cedillo) would require the CPUC to ensure that all applications to the California Alternate Rates for Energy and the Universal Lifeline Telephone Service programs include information about the applicant’s eligibility to qualify for the Federal Earned Income Tax Credit. 

NOTES AND COMMISSIONER REPORTS


  • Simon Report on Operation Hand Salute — Commissioner Simon reported that he attended an “Operation Hand Salute” event held by AT&T to encourage disabled veterans to further develop their contracting opportunities with public utilities.  Simon applauded AT&T for its efforts in connection with this program, but suggested that there should be more outreach toward female veterans.
  • Melissa Slawson Appointed as Telecom Advisor to Commissioner Ryan – Commissioner Ryan announced that she has selected Melissa Slawson as her telecommunications advisor.  Ms. Slawson has worked in the video and broadband group at the CPUC for the past couple of years, so she has considerable experience working on DIVCA implementation and CASF-related issues.  Ms. Slawson is a lawyer, and has interned at the FCC.  
     

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