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On November 19, 2010, the California Public Utilities Commission held its regularly-scheduled agenda meeting.  After four years of consideration, and in the face of a crowd of affected Lifeline customers, the Commission adopted sweeping changes to California’s Lifeline program.  The Commission’s LifeLine decision paves the way for LifeLine discounts to be applied to wireless services, VoIP services, and other “alternative” services that can meet the “basic service” definition.  On the consent agenda, the Commission resolved the Siskiyou rate case, approving the settlement that Siskiyou had reached with DRA.  The Commission also reduced the CHCF-A surcharge to 0.00%, effective December 1, 2010.  Further, the Commission adopted a new general order – G.O. 171 – implementing standards for approval of interconnection agreements between telecommunications carriers, extended the statutory deadline for resolution of the CommPartners matter, and granted CPCNs to several companies including Wholesale Carrier Service, Inc., BRT Company, LLC, Appia Communications, Inc., and Net Talk.com, Inc.  The Commission held the draft resolution that would designate Cricket Communications as an ETC in URF company territories until the December 2, 2010 meeting.  These and other items of interest on the Commission’s public agenda are discussed in further detail below.


REGULAR AND CONSENT AGENDA ITEMS


  • Significant Changes to the LifeLine Program Adopted (Item 55, adopted 5-0 on regular agenda) – This Decision adopts fundamental changes to the LifeLine program, reformulating it around a “Set Support Amount” that will confer a specified customer discount on any qualifying LifeLine service.  The Decision:  (1) de-links California LifeLine from the AT&T basic rate structure, setting out a specific support discount at 55 percent of the highest basic rate of the URF COLRs, with a support amount set at $11.50, effective July 1, 2011; (2) caps the LifeLine rate at no more than 50% of a carrier’s basic service rate, with a two-year transition period, during which the LifeLine rate will be frozen at $6.84; (3) authorizes carriers to adjust their LifeLine rates annually; (4) expands the LifeLine program to cover services for consumers who receive wireless equipment through the Commission’s Deaf and Disabled Telecommunications Program; (5) extends the LifeLine program to wireless and Voice-over Internet Protocol (VoIP) services, provided that they can satisfy the definition of basic service; (6) declines to modify the income-based criteria to match the low-income energy program (CARE) income-based criteria on an interim basis; (7) eliminates the recovery of bad debt costs; (8) modifies the recovery mechanism for administrative costs; and (9) eliminates the “non-ETC” makeup amount for LifeLine providers who are not ETCs.  The Decision also initiates a process for staff to work with parties in revising General Order 153.  Separately, the Decision outlines issues regarding wireless and VoIP LifeLine implementation to be addressed in a Phase II of the proceeding.
     
    After a large number of public speakers vociferously argued for retention of the current Lifeline program, all Commissioners spoke in support of the proposed changes to the program.  Commissioner Bohn introduced the item by noting that the LifeLine program has been enormously successful, and stating his belief that these program changes are necessary to ensure that the program will remain successful in the modern telecommunications environment.  Bohn acknowledged that there is “no special one-sized-fits-all” solution, and emphasized that this Decision represents a balanced approach that considers the interests of both LifeLine customers and non-LifeLine customers.  Commissioner Simon echoed Bohn’s comments.  Simon noted that “wireless is far from a luxury to some, it is a necessity.”  Simon also noted that he “questioned some of the advocates” who opposed the Decision, as Simon believes that they engaged in a “misinformation campaign” about the impact of the Decision to generate public ire around the issue.  Commissioners Grueneich and Ryan also offered support for the Decision.  Grueneich expressed concerns about affordability, but stated her belief that the Decision addresses that issue well enough.  Commissioner Ryan observed that “one customer’s subsidy is another’s surcharge,” and underscored that she “serves all Californians,” including those “who see their cell phone as their LifeLine.”  Commissioner Peevey concluded with some statements supporting the importance of wireless inclusion in the program, noting that several “young people” had spoken during public comment period to emphasize that they would benefit from discounted wireless service.
     
    The Final Decision adopting LifeLine reforms is available here.
  • Settlement Adopted in Siskiyou Telephone Company’s 2011 Rate Case (Item 19, adopted on consent agenda) – By this Decision, the Commission adopted an all-party settlement resulting an overall increase in test year 2011 intrastate revenues for Siskiyou Telephone Company (Siskiyou) of $713,048 (6.8%), effective January 1, 2011.  About 80% of the increase will be funded by the California High-Cost Fund-A (CHCF-A), with the remainder provided through an increase in local service rates.  The settlement consisted of the following components:  (1) a reduction in total intrastate test year expenses (not including depreciation) of $695,974 from the expense amount originally filed by Siskiyou; (2) a reduction in test year net plant additions by approximately $1.6 million, leading to a reduction in total intrastate company test year rate base from $45,280,502 to $44,823,878; (3) adoption of DRA’s estimate for materials and supplies for calculation of test year rate base; (4) reduction in total intrastate test year revenues by $1,902,234 from Siskiyou’s original proposal; (5) rate design as proposed by Siskiyou in its corrected and updated testimony; (6) a 10% intrastate rate of return; (7) no stipulated capital structure; (8) acceptance of Siskiyou’s annual certification as an ETC as adequate notice of plant additions; and (9) agreement that issues associated with Rural Telephone Bank proceeds will be addressed in A.07-12-026.  The Final Decision associated with this item is available here.
  • CHCF-A Surcharge Rate Adjusted to 0.00%, Effective December 1, 2010 (Item 20, adopted on consent agenda) – This Resolution adopts a revised CHCF-A surcharge rate of 0.00% on revenues collected from end-users for intrastate telecommunications services, effective December 1, 2010.  The Commission adopts this surcharge rate in large part based on the Commission’s Decision in the Rural Telephone Bank matter, in which the Commission ordered several of the Small LECs to provide massive credits to the CHCF-A.  The Draft Resolution associated with this item is available here
  • Statutory Deadline Extended in CommPartners Matter (Item 45, adopted on consent agenda) – This Decision extends the statutory deadline for resolution of a complaint brought by certain Small LECs against CommPartners, LLC and CommPartners Holding Company to address CommPartners’ non-payment of access charges on long distance traffic that CommPartners alleges is IP-based.  Shortly after the filing of the Small LECs’ complaint, CommPartners filed voluntarily petitions for relief under Chapter 11 of the Bankruptcy Code, which immediately instituted an automatic stay on any actions against CommPartners.  This extension accommodates the stay granted this complaint until the resolution of the bankruptcy matter.  The Proposed Decision extending the statutory deadline is available here
  • General Order 171 Adopted Implementing Standards for Approval of Interconnection Agreements Between Telecommunications Carriers  (Item 5, adopted on consent agenda) – This Decision adopts further standards for the approval of interconnection agreements by the Commission, including providing assistance to negotiating parties in reaching agreements through mediation and/or compulsory arbitration.  This Decision and the associated General Order 171 clarify the process that carriers should use to “opt in” to previously-approved agreements, and incorporates rule changes to clarify ex parte rules associated with interconnection matters.  The Decision also clarifies the applicable service lists to use for arbitrations and for related advice letter filings.  The Proposed Decision associated with this item is available here
  • Commission Staff to File Comments at FCC re: Empowering Consumers to Avoid Bill Shock, Consumer Information and Disclosure (Item 60, adopted on consent agenda) – This Decision authorizes the Commission Staff to file comments in response to the Federal Communications Commission’s request for comments on proposed requirements that will provide consumers with timely information about cell phone usage, to assist consumers in avoiding unexpected overage, roaming, and international charges on their wireless bills.  The Staff recommends that the CPUC file comments in support of the proposed usage and notification requirements, and that the CPUC comments address the overlap in scope of FCC and Commission authority.  
  • Wholesale Carrier Service, Inc. Granted Certificate of Public Convenience and Necessity (Item 30, adopted on consent agenda) – This Decision grants a certificate of public convenience and necessity (CPCN) to Wholesale Carrier Services, Inc. (Wholesale)  to provide resold and limited facilities-based local exchange telecommunications services in the service territories of Pacific Bell Telephone d/b/a AT&T California (AT&T), Verizon California Inc. (Verizon), Citizens Telecommunications Company of California, Inc. (Citizens) and SureWest Communications (SureWest).  Wholesale is a Florida corporation that proposes to provide local exchange services utilizing unbundled network elements purchased from incumbent local exchange carriers, and routed solely over facilities owned by other certified carriers.  The Proposed Decision associated with this item is available here.
  • BRT Company, LLC d/b/a Big River Telephone Company, LLC Granted Certificate of Public Convenience and Necessity (Item 41, adopted on consent agenda) – This Decision grants a CPCN to BRT Company, LLC d/b/a Big River Telephone Company, LLC (Big River) to provide limited facilities-based and resold competitive local exchange service in the service territories of services in the service territories of AT&T, Verizon, Citizens and SureWest, and non-dominant interexchange services in California.  Big River is a Missouri-based corporation that proposes to provide services via leased local network facilities of cable TV companies, dedicated private line transmission services for point-to-point and point-to-multipoint communications within local areas in California to and from Big River’s Private Switched Network, and leased transport facilities from incumbent local exchange carriers.  The Proposed Decision associated with this item is available here
  • Appia Communications, Inc. Granted Certificate of Public Convenience and Necessity (Item 42, adopted on consent agenda) – This Decision grants a CPCN to Appia Communications, Inc. (Appia) to provide limited facilities-based and resold local exchange services in the service territories of AT&T, Verizon, Citizens and SureWest, and limited facilities-based and resold interexchange telecommunications services statewide, on a detariffed basis.  Appia’s principal place of business is in Michigan, and it proposes to provide business lines, direct inward dialing, digital signal 1, and other similar services, primarily to small and mid-size businesses operating in California.  The Proposed Decision associated with this item is available here
  • Net Talk.com, Inc. Granted Certificate of Public Convenience and Necessity (Item 43, adopted on consent agenda) – This Decision grants a CPCN to Net Talk.com, Inc. (Net Talk) to provide resold and limited facilities-based local exchange telecommunications services in the service territories of AT&T and Qwest Communications International, Inc. (Qwest).  NetTalk is located in Florida, and proposes to provide exchange services to enterprise customers through the resale of local exchange carrier servicers and through the use of unbundled network elements purchased from local exchange carriers.  The Proposed Decision associated with this item is available here.
  • Deadline Extended for Resolution of Rulemaking Related to Review of CPUC’s Telecommunications Public Policy Programs (R.06-05-028) (Item 46, adopted on consent agenda) – The Commission again extended the statutory deadline for resolution of R.06-05-028, the proceeding in which the new LifeLine Decision was adopted.  The new deadline is January 21, 2011.  Based on the schedule for Phase II of the LifeLine inquiry, further extensions will be necessary during 2011.  The Final Decision associated with this item is available here


SIGNIFICANT HELD OR WITHDRAWN ITEMS  


  • Proposal to Grant Wireless ETC Request by Cricket in AT&T and Verizon Territory Only (Item 17, held to 12/2/10 by Staff) – This Draft Resolution would approve the request of Cricket Communications Inc (Cricket) for eligible telecommunications carrier (ETC) designation in California to offer federally-subsidized LifeLine and Link-up services.  The Draft Resolution would refuse Cricket’s request to be designated as an ETC in its entire California footprint, part of which overlapped with Small LEC territories.  The Draft Resolution associated with this item is available here
  • Proposed Decision Adopting General Order 170 Specifying Review Procedures Pursuant to California Environmental Quality Act (Item 56, held until December 2, 2010 by Commissioner Bohn) – This Proposed Decision would adopt General Order 170 setting forth Commission procedures for reviewing telephone corporations’ proposed construction projects pursuant to the California Environmental Quality Act (CEQA).  The new General Order 170 would institute a new discretionary approval process that would apply to a large percentage of construction projects for most carriers.  The Proposed Decision and proposed new General Order 170 are available here


MANAGEMENT AND COMMISSIONER REPORTS 


  • Report on CPUC “In Language” Outreach Efforts – Kyle Devine from the CD staff reported on the CPUC’s “TEAM” project, by which the Commission is providing customer education and assistance to consumers in over 28 languages, in partnership with 34 community based organizations.  The program has provided 82,839 consumers with education, resolved 4,800 complaints, and reached out to over 21,400,000 consumers.       

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