On Thursday, May 7, 2009, the California Public Utilities Commission held its regularly scheduled agenda meeting. Once again, the LifeLine Proposed Decision in the Public Policy Program proceeding (R.06-05-028) was held by Commissioner Grueneich. There were significant public comments on the LifeLine issue, ranging from support for expanding eligibility for the program and making LifeLine available to cell phone users to concerns that allowing rate fluctuations would adversely affect low-income participants in the program who must make difficult financial decisions each month on how to spend their fixed incomes. Speakers also expressed concerns that the Proposed Decision may create additional obstacles that will prevent qualified individuals from participating. Several speakers said that they had only recently become aware that the Commission was amending the LifeLine program, and requested that the Commission slow down the process.

The only telecommunications-related decisions that garnered discussion on the Commission’s regular agenda were a proposed rulemaking to exempt URF carriers from Section 851’s requirements and an item addressing the planned submission of comments by the Commission to the Federal Communications Commission with respect to its national broadband plan. These and other telecommunications items of significance are detailed below.


  • Decision Initiating Rulemaking to Consider Exemption from Public Utilities Code Requirements Related to Property (Item 34, adopted 5-0) – The Commission initiated a rulemaking to consider a full exemption for URF carriers from Public Utilities Code Section 851, which requires Commission pre-approval of the disposition or encumbrance of any “necessary or useful” utility property. 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 rulemaking will consider whether granting a full exemption from section 851 is appropriate for URF carriers that lack market power, which would allow them to complete on a level playing field with non-URF competitors, according to Commissioner Chong. Citing public safety and service quality concerns, Commissioner Simon expressed reservations about a full exemption from 851’s requirements, but Simon noted that something short of a full exemption might be appropriate. In response, Commissioner Chong emphasized that the history of this issue, noting that wireless carriers have already been granted a full exemption from 851, and that AT&T had filed a previous request for a full exemption for URF carriers, which was only partially granted. The proposed rulemaking was adopted unanimously following this brief discussion. A recent draft of this decision is available at http://docs.cpuc.ca.gov/word_pdf/AGENDA_DECISION/99847.doc.

  • CPUC Comments Authorized on FCC National Broadband Plan (Item 39, directive to comment approved 5-0) – The Commission voted to file comments in response to the FCC’s Notice of Inquiry addressing a national broadband plan. The FCC’s NOI stems from language in the American Recovery and Reinvestment Act of 2009 requiring the FCC to create and deliver a national broadband plan to Congress by February 17, 2010. Although the CPUC’s proposed comments are not yet in draft, the CPUC circulated a Legal Division memorandum outlining the points to be addressed. The comments will emphasize the need for further broadband mapping prior to the development of a full broadband plan and urge that immediate action should focus on adoption, deployment of critical public infrastructure, and targeted deployment in unserved areas. The Commission will also suggest that the FCC create a federal subsidy to support internet access by low-income individuals. As she offered support for the comments, Commissioner Chong emphasized the need to focus on supporting access in both unserved and underserved areas. Commission Bohn also stated that the comments should specifically address the cost of any subsidies and administration that are recommended.

  • Settlement Approved Between UCAN and AT&T Regarding Alleged Deceptive Billing Practices (Item 9, adopted on consent agenda) – The Commission approved a settlement agreement between the Utility Consumers’ Action Network (“UCAN”) and AT&T Mobility LLC dba New Cingular Wireless (“AT&T”), thereby dismissing a complaint brought by UCAN charging AT&T with: (1) imposing unauthorized international roaming charges on customers who had not affirmatively enabled the service or received adequate notice that AT&T was enabling the service, thus allegedly violating Public Utilities Code 2890(a); (2) charging customers for calls never placed while traveling abroad, also in alleged violation of section 2890(a); (3) violating General Order 168’s cramming rules by not resolving customer cramming complaints within 30 days; and (4) violating G.O. 168 by refusing to cease collection actions while conducting investigations into charges disputed by customers. Under the settlement agreement, AT&T has agreed to provide its customers with affirmative notification as to when it activates pay-per-use international roaming service on a subscriber’s account, implement new procedures allow residential customers to opt-out or block the service, and implement a mechanism for customers to affirmatively manage their usage. Additionally, AT&T agrees to inform customers that it may charge them for incoming phone calls that go directly to voicemail when their phone is turned on in a foreign country. A recent draft of this decision is available at http://docs.cpuc.ca.gov/word_pdf/AGENDA_DECISION/100618.doc.

  • CenturyTel / Embarq Merger Approved (Item 14, adopted on consent agenda) – The Commission approved a request by Embarq Corporation (“Embarq”) by which it sought approval of a transaction in which CenturyTel, Inc. (“CenturyTel”) will obtain indirect control of Embarq. CenturyTel is a publicly traded Louisiana corporation headquartered in Monroe, LA. that provides communications services in small to mid-sized cities. As of December 31, 2007, CenturyTel local exchange operations served approximately 2.1 million local access lines in 25 states. However, its local exchange subsidiary in California, CenturyTel of Eastern Oregon, Inc., has fewer than 125 access lines, all located in New Pine Creek near the Oregon border. Its long distance affiliate, CenturyTel Long Distance, LLC, has a similar number of California customers. Embarq is a publicly-traded Delaware corporation headquartered in Overland Park, Kan., whose subsidiaries offer a suite of communications services to residential customers and businesses, including local, long distance, high speed data, wireless and video services. Embarq has incumbent local exchange operations in 18 states. As of December 31, 2007, Embarq operations served approximately 6.5 million local access lines, but does not currently provide local exchange services in California. Embarq has certified affiliates that provide long distance and payphone services in California. Embarq and CenturyTel anticipate that the merger will create a stronger telephone company that will continue to provide the same type and quality of services to consumers in California that are presently provided by their respective certificated subsidiaries. A recent draft of this decision is available at http://docs.cpuc.ca.gov/word_pdf/AGENDA_DECISION/100345.doc.

  • Wireless Consumer Demand for Refund for Calls Not Made Denied (Item 20, adopted on consent agenda) – The Commission denied a request by a customer of AT&T Mobility for a refund of $585.58 for calls he alleges he did not make. The complainant says he initially paid the bill to avoid disconnection, but that the calls are to telephone numbers he does not recognize, and to states in which he has no business or social connections. The complainant could not identify which calls he disputed or how he arrived at the refund amount, other than that was the total owed on his bill. Although the Commission did find that usage for the disputed period was higher than complainant’s normal usage, it refused his request for a refund. A recent draft of this decision is available at http://docs.cpuc.ca.gov/word_pdf/AGENDA_DECISION/100175.doc.


  • Decision Revamping LifeLine Program (Item 33, held by Grueneich until 5/21/09) – Commissioner Grueneich again held this proposed decision, this time until the Commission’s May 21, 2009, meeting. This proposed decision would effectuate significant changes to the California LifeLine program. It would permanently de-link the LifeLine rate from the AT&T basic rate, but would re-link LifeLine to a “set support amount” mechanism derived from the highest basic rate charged by an ILEC. The proposed decision would also expand the LifeLine program to include discounted wireless service, data service and other services. In addition, the proposed decision would eliminate bad debt and administrative recovery under the program. A recent draft of this decision is available at http://docs.cpuc.ca.gov/word_pdf/AGENDA_DECISION/99783.doc.

  • Decision Granting Distribution of Reparations Funds to the Telecommunications Consumer Protection Fund (Item 11, withdrawn) – The Commission withdrew an item from the consent agenda that, if approved, would have granted the Utility Consumers’ Action Network’s (“UCAN”) request that the residue of two established reparations funds resulting from the Cingular Wireless early termination fee investigation be distributed to the Telecommunications Consumer Protection Fund. The residue, totaling approximately $1.056 million, consists of monies that were never converted to checks and cannot be traced to identified persons or entities entitled to restitution from the Reparations Funds, which were established when Cingular Wireless was fined $12.14 million and ordered to pay reparations of more than $18.467 million to affected customers in connection with its unlawful early termination fee policies and other corporate practices. More than $4 million of monies that were either converted to checks that were never cashed or were not issued due to an inability to find the entitled individuals is expected to escheat to the state pursuant to state law. A recent draft of this decision is available at http://docs.cpuc.ca.gov/EFILE/PD/99454.pdf.

  • Resolution Adopting Conditional Funding for Mother Lode Broadband Project, Res. T-17197 (Item 35, held by staff until 5/21/09) – The Commission held a resolution that would approve conditional funding from the California Advanced Services Fund totaling $2,771,341 for the Mother Lode Broadband Project of Rapid Link Inc. and Mother Lode Internet pending Commission approval of Rapid Link’s application to acquire Telenational Communications Inc. The Mother Lode project would provide service in currently unserved areas of Alpine, Amador, Calaveras, Tuolumne and Mariposa counties. A recent draft of this decision is available at http://docs.cpuc.ca.gov/word_pdf/COMMENT_RESOLUTION/99441.doc.

  • Assembly Bill Related to Appointment of Commission President, AB 1315 (Item 51, held by staff until 5/21/09) – The Commission held its decision to the May 21, 2009, meeting on whether to oppose a proposed bill, as recommended by the Legislative Subcommittee, that would make the Governor’s appointment of the Commission’s president subject to Senate confirmation, as well as remove the president’s administrative authority over the general counsel and executive director in favor of transferring such authority to the Commission as a whole. The bill also would require the Commission to hold its regular business meetings in Sacramento once a month.

  • In the Matter of High-Cost Universal Support Service (Item 38, held by staff until 5/21/09) – The Commission held until its May 21, 2009, meeting a decision to consider participating in a Federal Communications Commission call to refresh the record pertaining to issues raised by the U.S. Court of Appeals for the Tenth Circuit in the Qwest II decision. In that decision, the court invalidated the FCC’s high-cost universal service support mechanism for non-rural carriers, which determines the amount of support to be provided to each state by comparing the statewide average forward-looking cost per line for non-rural carriers to a nationwide cost benchmark.

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