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On May 6, 2010, the California Public Utilities Commission held its regularly-scheduled agenda meeting.   The Commission approved two matching grants of $4.3 million from the California Advanced Services Fund (CASF), including $1.2 million for the Audeamus LLC Last Mile project in Fresno County and $3.1 million for the Mother Lode Broadband Project in Tuolumne, Calaveras, Alpine, Amador and Mariposa Counties.  With the approval of these two projects, the total approved CASF grant amounts have reached $91.37 million for 44 projects,  covering 30,000 square miles of the state, and benefiting over 300,000 households.  The Communications Division indicated that it is drafting a resolution for the Commission to rescind about $38 million in grants that were contingent on American Recovery and Reinvestment Act (ARRA) funding that was not awarded.  The Commission also adopted a Section 851 exemption for URF carriers, and issued decisions on rehearing addressing the 2009 Ducor Telephone Company rate case resolution and the denial of TracFone’s ETC request.  These and other telecommunications items of interest on the Commission’s agenda are discussed below.


REGULAR AND CONSENT AGENDA ITEMS


  • CASF Grant in Favor of California Valley Broadband Modified, and Resolution Adopted Approving $1,154,494 CASF Funding for Audeamus LLC’s Last Mile Project (Items 4 and 5, adopted on regular agenda) – This Decision and Resolution (1) modify a January 21, 2010 Commission resolution adopting $7,893,700 in contingent funding for the California Valley Broadband (CVB) Middle and Last Mile project by transferring certain census block groups from CVB’s California Advanced Services Fund (CASF) approved area and transferring them to Audeamus, LLC’s CASF application, and (2) adopt $1,154,494.50 in CASF funding for Audeamus’ Last Mile Project. 
     
    Resolution T-17245 adopted contingent funding in the amount of $7,893,700 to deploy a fixed wireless network using two unregulated (WiFi) frequencies and one licensed (WiMAX) frequency to deliver high speed internet services to the Central Valley (including areas in Sacramento, Solano, San Joaquin, Stanislaus, Merced, Madera, and Fresno counties).  Audeamus filed a CASF application for  a Last Mile Project that covered four of the areas covered by CVB’s application, but the Commission granted the CASF funding to CVB.  After being granted ARRA funding, Audeamus filed an application to remove and transfer certain census block groups (CBG) from CVB’s grant area because CVB was not awarded ARRA funding for the Last Mile CBGs.  The Decision in this matter enables Audeamus to obtain CASF funding to match its ARRA award, and awards Audeamus $,154,494.50 from CASF to provide broadband service to unserved and underserved areas in West Fresno County. 
     
    A draft of the Decision modifying Resolution T-17245 is available here.  A draft of the Resolution approving funding for the Audeamus Last Mile Project is available here
     
  • Exemption for Certain Telecommunications Carriers from Compliance with Public Utilities Code Section 851 for Uniform Regulatory Framework and Other Competitive Carriers (Item 38, adopted 4-0 on regular agenda) – This Decision grants Uniform Regulatory Framework (URF) carriers and competitive carriers a limited four-year exemption from Public Utilities Code Section 851 approval requirements.  Section 853(b) of the Public Utilities Code allows the Commission to exempt any public utility from section 851 if applying those procedures is not necessary in the public interest.  The exemption adopted in the Decision will continue past 2014 if no party to the proceeding requests re-examination of the exemption.  This Decision closes Phase I of this rulemaking proceeding, leaving for Phase II the issues of whether an exemption should be granted in connection with more controversial assets, such as those used to provide collocation, unbundled network elements, or other wholesale services.  A draft of the Proposed Decision adopted in Phase I is available here.    
     
  • Application for Rehearing of Ducor Rate Case Denied (Item 49, adopted 5-0 on closed session agenda) – By this Decision on Rehearing, the Commission ordered a partial rehearing of Ducor’s 2009 rate case.  Ducor had sought rehearing to challenge the imposition of an arbitrary salary-to-benefit ratio that inhibited Ducor’s ability to provide reasonable benefits to its employees.  This Decision denies rehearing on that ground, but grants rehearing as Ducor’s challenge to the disallowance of various capital expenditures.  Finally, the Decision denies rehearing on Ducor’s challenge to the Commission’s failure to include an elasticity factor to account for losses driven by forced increases in basic service rates.  On the matters set for rehearing, Ducor will have 30 days to provide follow-up information in a supplemental advice letter.  The Decision on Rehearing is attached at the following link.
  • TracFone ETC Denial Reversed (Item 50, adopted 5-0 on closed session agenda) – This Decision on Rehearing reverses Resolution T-17235, a Resolution that denied TracFone’s request for “LifeLine only” ETC status in connection with its wireless, prepaid offering.  TracFone’s request had been denied based on the Commission’s determination that TracFone improperly failed to contribute to the public policy funds.  The Decision on Rehearing cites the “controversial” nature of the issues surrounding Resolution T-17235 as grounds for granting the Decision on Rehearing.  TracFone’s advice letter requesting ETC status is denied without prejudice subject to further proceedings in the open investigation into TracFone’s compliance with the public purpose program surcharge obligations.  The Decision on Rehearing is attached at the following link.
  •  Resolution Adopting CASF Funds for Mother Lode Broadband Project (Item 39, adopted 4-0 on regular agenda) – This Draft Resolution adopts funding from the CASF totaling $3,110,064 for the Mother Lode Broadband Project of Telenational Communications Inc./Rapid Link Inc. and Mother Lode Internet.  The Mother Lode project would construct broadband infrastructure in 87 unserved and underserved areas of Alpine, Amador, Calaveras, Mariposa and Tuolumne counties, and the $3,110,064 award represents 40% of the total project cost to provide a new level of speed throughout the Mother Lode region.  This is the second CASF grant to Mother Lode.  The Draft Resolution associated with this item is available here.
  • Legislative Subcommittee Recommends That CPUC Oppose Bill Requiring Telephone Corporations and Third-Party Vendors to Allow Customers to Opt Out of Receiving White Page Directories, To Require Recyclable Telephone Directories, and to Require Promotion of Directory Recycling (Item 45, approved 5-0 on regular agenda) – SB 920 (Yee) would allow customers to opt out of delivery of white page directories published by telephone corporations and by other third-party directory vendors, require that all alphabetical directories are recyclable, and require telephone corporations to promote recycling of such directories.  It would require the CPUC to conduct a rulemaking to, among other things, establish and enforce recycling requirements.  The Legislation Subcommittee recommends opposing this bill because of its conclusion that the CPUC is not the appropriate agency to establish and enforce the recycling requirements of this bill, nor does the CPUC have authority to govern the business activities of non-telephone/non-public utility corporations publishing white page directories.  The memorandum recommending CPUC opposition to the bill is available here.
  • Legislative Subcommittee Recommends Oppose Position on Application for Rehearing Reform Legislation (Item 46, approved on consent agenda) – SB 1414 (Kehoe) would reform the application for rehearing process at the Commission by deeming applications granted if they are not acted upon in 60 days.  The Commission will oppose this bill largely on the grounds that it would significantly increase the Legal Division’s workload, and not solve the backlog issues associated with pending applications for rehearing.   The memorandum recommending CPUC opposition to the bill is available here.
  • Reporting Requirements Eliminated Related To NXX Codes or Prefixes That Have Not Been Activated Within Six Months (Item 8, adopted on consent agenda) – This Resolution eliminates the requirements for telecommunications service providers to: (1) notify the Commission’s Communication Division (CD) of NXX codes or prefixes which have not been activated within six months; (2) submit a copy of the service providers semi-annual number resource utilization and forecast provided to the Federal Communications Commission (FCC), to the Commission.  Apparently, the service provider reports and copies have not been used by CD for several years, as the staff has instead used reports issued by the Pooling Administration and by the North American Numbering Plan Administrator website.  The Draft Resolution associated with this item is located here.
     
  • CPCN Granted to Comity Communications, LLC (Item 18, adopted on consent agenda) – This Decision grants a CPCN to Comity Communications, LLC (Comity) to provide limited facilities-based and resold competitive local exchange services in California, throughout the service territories of AT&T, Verizon California, Inc., SureWest Telephone and Citizens Telecommunications Company of California, Inc. d/b/a Frontier Communications Company of California, Inc. (Citizens).  The Proposed Decision associated with this item is located here.

SIGNIFICANT ENERGY ITEMS 


  • Decision Staying Commission Decision Authorizing Use of Tradeable Renewable Energy Credits and Implementing Temporary Moratorium on Commission Approval of Certain Contracts (Item 34, adopted 4-1 on regular agenda) – This Decision takes what President Peevey called the “extraordinary” step of staying a Commission Decision.  Decision (D.) 10-03-021 issued March 11, 2010 (March 11, 2010 Decision) authorized the use of tradeable renewable energy credits (TRECs) for compliance with renewables portfolio standard (RPS) program, defines TREC transactions for RPS purposes, and sets out market and compliance rules of TRECs.  Southern California Edison Company, Pacific Gas & Electric Company, and San Diego Gas & Electric Company petitioned to modify that decision, and apparently engaged in heavy lobbying to obtain a stay of the March 11, 2010 Decision.  Commissioner Grueneich called this Decision “ill advised” and “unprecedented,” noting that “nothing has changed in the intervening weeks [since the March 11, 2010 Decision] except relentless lobbying by the utilities at this Commission and in Sacramento to overturn a decision they didn’t like.”  Commissioner Grueneich reserved the right to file a dissent, with Commissioner Bohn concurring with a “profound sense of frustration”, and Commissioner Ryan reserving the right to file a concurrence.  The Proposed Decision underlying this item is available here.

NOTES AND COMMISSIONER REPORTS


  • Commissioner Ryanreported on a communications policy summit she attended, put on by CETF Executive Director Sunne McPeak and featuring former CPUC Commissioner Chong speaking about the “brave new world” of California communications and broadband expansion.  It “whetted her appetite to really be involved in communications issues.”

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