On October 4, 2007, the Commission held its regularly-scheduled agenda meeting. The meeting was extremely brief, and the Commission considered only one matter on their regular agenda: the Phase II Decision in the video franchising proceeding. A summary of this and the other significant telecommunications-related items on the Commission’s agenda is provided below.


  • Video Franchising Phase II Decision Adopted (Item 23, adopted 5-0) – This decision resolved a series of issues alotted to Phase II of the video franchising proceeding, R.06-10-005. Most significantly, the decision adopts build-out and low-income penetration rate requirements for video providers with fewer than 1 million telephone customers. Despite arguments from these providers that the build-out standards for smaller providers should be more lenient than for AT&T and Verizon, the decision declines to adopt more flexible “safe harbors” for smaller providers. Under this approach, smaller providers must either meet the build-out and low-income quota standards that apply to the larger providers, or they must file company-specific applications to obtain a Commission determination that their build-out is reasonable.

    The decision also adopts a new reporting requirement for franchise holders. Holders must now report actual household video subscribership data in addition to information regarding the availability of video service. Further, the decision declines to institute any specific procedures for renewal of franchises at this time. A proceeding will be opened in 2011 to address that issue. Finally, the decision mentions that a Phase III is anticipated in the video franchising proceeding. Phase III will address procedural issues related to holders’ compliance with ongoing responsibilities under their video franchises.

    Commissioner Chong introduced this item, describing it as consistent with the goal of fostering video competition throughout the state and creating a “fair and level playing field” for such competition. She emphasized that treating small and large video providers will help ensure that video competition will be provided throughout the state. Commissioner Chong also mentioned that smaller providers have the option to seek company-specific approval for their build-out plans, and that they may seek adjustments to the build-out requirements with respect to areas that are particularly “high cost.” In conclusion, Chong noted that the new subscribership data required under the decision would be important in identifying obstacles that may exist in holders’ provision of video service. After these brief comments, the Commissioners voted unanimously to support the item.

    The decision is available at the following link: http://www.cpuc.ca.gov/word_pdf/AGENDA_DECISION/73478.doc.

  • GVNI Receives Authority to Grandfather Foreign Exchange Service, Res. T-17106 (Item 10, adopted on consent agenda) – This resolution grants the request of Global Valley Networks, Inc. for authority to grandfather its “Foreign Exchange” service. Foreign Exchange (or “FX”) service allows a customer to select a distant local exchange as the rate center for local calls, thereby avoiding toll rates in calling customers in that distant exchange. The advice letter presenting GVNI’s request demonstrates that demand for FX service does not justify its continued provision. GVNI has 40 current customers purchasing this service, and the last time a new order for the service was processed was 2000. GVNI also noted that this is a relatively expensive service to provide because the company must convert AT&T’s charges for this service to its own charges in order to bill GVNI customers. Further, the availability of wireless and other non-traditional wireline alternatives has made FX service far less viable economically. Based on this resolution, no new orders for FX service will be processed. A recent draft of the resolution approving the proposed grandfathering is available at the following link: http://www.cpuc.ca.gov/word_pdf/AGENDA_RESOLUTION/72069.doc.

  • NCLC Granted Intervenor Compensation in Connection with LifeLine Certification Proceeding, Greenlining Denied Compensation (Item 7, adopted on consent agenda) – This decision awards more than $29,000 in intervenor compensation to the National Consumer Law Center in connection with NCLC’s contributions to Commission Decision 07-05-030. That Decision lifted the stay on the LifeLine verification process, and reformulated the LifeLine program to resolve some of the problems experienced by carriers, customers, and the Commission during year one of the new LifeLine certification and verification system.

    This decision finds that NCLC made substantial contributions to D.07-05-030. The decision notes NCLC’s commentary on the inadequacies of the Certifying Agent’s mailing protocols, NCLC’s call for a web-based enrollment procedure, and its proposal that additional information be provided to consumers regarding the verification and certification process.

    By contrast, the decision finds that Greenlining did not make a substantial contribution to D.07-05-030. Based on that finding, the Commission rejects Greenlining’s request for $21,435 in intervenor compensation. The decision concludes that Greenlining failed to adequately demonstrate that the Commission evaluated and adopted Greenlining’s proposals in the proceeding. According to the decision, Greenlining’s efforts were largely duplicative of the efforts of other carriers. Greenlinng’s proposal that self-certification be maintained was already rejected in a previous Commission decision. Greenlining’s arguments regarding the negative impacts of carrier back-billing and regarding the geographical differences in customers’ abilities to pay for phone service were not endorsed by the Commission, and therefore these arguments do not entitle Greenlining to intervenor compensation. Most significantly, the Commission notes Greenlining’s proposal that the LifeLine fund be expanded to include discounted wireless service. The decision cites the ALJ ruling rejecting Greenlining’s motion to strike for the proposition that the wireless expansion issue was explicitly beyond the scope of this proceeding. Greenlining’s request for intervenor compensation is rejected in its entirety.

    The decision is available at the following link: http://www.cpuc.ca.gov/WORD_PDF/FINAL_DECISION/73547.PDF.


  • Kerman Rate Case Resolution, Res. T-17081 (Item 1, Held by staff until 10/18 regular agenda) – This draft resolution would resolve the informal rate case filed by Kerman Telephone Company. The draft resolution would establish a revenue requirement, rate base, and rate of return for test year 2008. The item would also set Kerman’s draw from the CHCF-A based on test year 2008. A recent version of the draft resolution is available at the following link: http://www.cpuc.ca.gov/word_pdf/AGENDA_RESOLUTION/73163.doc.

  • Volcano Telephone Rate Case Resolution, Res. T-17108 (Item 24, Held by staff until 10/18) – This draft resolution would resolve the informal rate case filed by Volcano Telephone Company. The draft resolution would establish a revenue requirement, rate base, and rate of return for test year 2008. The item would also set Volcano draw from the CHCF-A based on test year 2008. A recent version of the draft resolution is available at the following link: http://www.cpuc.ca.gov/word_pdf/AGENDA_RESOLUTION/72829.doc.

  • Directive Authorizing CPUC Comments in FCC Emergency Alert System Proceeding (Item 26, held by staff until 10/18/07) – The Commission is considering whether to offer comments on the FCC’s Further Notice of Proposed Rulemaking addressing whether Emergency Alert System participants should be required to deliver alerts originated by local, county, tribal, and state governments. This FCC inquiry is being conducted in EB Docket No. 04-296.

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