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On October 6, 2011, the California Public Utilities Commission held its most recent regularly-scheduled agenda meeting. The meeting was held in Los Angeles, and provided the opportunity to hear from a wide variety of public speakers on issues of significance to the Southern California region. The Commission had an extensive discussion of the pending proposals to adopt new fire safety regulations for utility overhead facilities, but did not act on the item. The Commission also approved comments on issues in the pending FCC cramming proceeding and granted “LifeLine only” ETC status to Telscape’s wireless and wireline operations. The Commission held items relating to a proposed overlay of the 408 area code, a Proposed Decision resolving SureWest’s 851 exemption application, and a Draft Resolution to modify the service protocols for telecommunications advice letters. These and other items of interest on the Commission’s agenda are addressed below.

REGULAR AND CONSENT AGENDA ITEMS


  • CPUC Comments on FCC Proposal to Adopt New Cramming Rules and Apply Them to VoIP Providers (Item 41, adopted on consent agenda) – By this item, the Commission authorized its staff to prepare comments on behalf of the CPUC in the FCC’s Notice of Proposed Rulemaking to examine “rules designed to assist consumers in detecting and preventing the placement of unauthorized charges on their telephone bills.” The Commission will ask that the FCC build upon its existing “Truth in Billing” rules by requiring that billing carriers provide an option to block third-party charges and mandating that non-carrier third-party charges appear in a separate section of the bill from charges from carriers. The overall thrust of the CPUC comments will be to move the FCC rules further in line with California’s more extensive rules addressing cramming and third-party billing. The Commission will recommend that “the FCC require all carriers to offer the option to block all third party charges.” In addition, the Commission will advocate extension of the rules to all wireless and VoIP providers. The Legal Division Memorandum outlining the Commission’s anticipated comments is provided at the following link: http://docs.cpuc.ca.gov/word_pdf/REPORT/144424.doc
  • Telscape Granted Wireless and Wireline “LifeLine Only” ETC Authority in URF Company Territories (Items 16 and 17, adopted on consent agenda) – These items approve Telscape’s two parallel requests to be designated as an Eligible Telecommunications Carrier for the provision of LifeLine services in the service territories of the large and mid-sized ILECs. Item 16 grants Telscape’s authority as a wireless ETC in URF company territories, and item 17 grants its authority as a wireline ETC in Verizon and AT&T territories. Telscape did not seek authority to receive federal LifeLine subsidies in Small LEC territories. To reflect that limitation on its authority, the Resolution under Item 17 orders the Small LECs to provide Telscape and the Commission with zip code + 4 data to define the scope of Small LEC territories. This limitation is similar to that which was imposed in connection with previous wireless ETC designations. The Draft Resolution granting Telscape’s wireless ETC authority is available here:  http://docs.cpuc.ca.gov/word_pdf/AGENDA_RESOLUTION/144307.doc. The Draft Resolution granting Telscape’s wireline ETC authority is available here:  http://docs.cpuc.ca.gov/word_pdf/AGENDA_RESOLUTION/144313.doc.
  • Proposed Settlement Between CPSD and Legacy Long Distance International, Inc. (Item 37, adopted 5-0) – By this item, the Commission adopted a settlement between CPSD and Legacy Long Distance resolving an enforcement action against Legacy for violations of Public Utilities Code Section 2980 and Commission Rule of Practice and Procedure 1.1. In response to more than 1,300 complaints against Legacy, the Commission opened an investigation into whether Legacy had placed unauthorized charges on customers’ bills. The investigation showed that Legacy had indeed “double billed” for more than 5000 telephone calls, and also revealed that Legacy had failed to disclose sanctions against it imposed by 16 other jurisdictions. Commissioner Sandoval introduced this item, noting that it was placed on the regular agenda to serve as a warning to providers who fail to follow Commission rules. Sandoval summarized the settlement approved by the Decision, noting that Legacy must pay a penalty of $215,000 and must issue customer credits to reverse all excess billings to its customers. Legacy must also conduct an internal investigation and take additional steps to make its charges clearer to the public. Commissioner Sandoval emphasized that “in our competitive telecommunications field, consumer protection must be a priority” and that slamming and cramming “will not be tolerated . . . and will be dealt with.” Commissioner Florio expressed support for the item, but observed that “in some sense, the company at issue is getting off light.” According to Florio, in his mind, Legacy is now “on probation.” Florio underscored that “we need to send a strong signal that people who violate our rules are going to get a significant sanction.” The Proposed Decision underlying this item is available at the following link: http://docs.cpuc.ca.gov/word_pdf/AGENDA_DECISION/144478.doc.
  • Complaint for Breach of Contract Against AT&T Dismissed Due to Complainant’s Death (Item 15, adopted on consent agenda) – Ataollah Ramin, M.D., dba. Assuta Medical Center had filed a complaint against AT&T alleging that AT&T imposed excessive charges pursuant to a three-year contract between the parties. The matter was in mediation, but the Commission was informed of the complainant’s death, so the matter has now been dismissed. The Proposed Decision to confirm the dismissal is available here: http://docs.cpuc.ca.gov/word_pdf/AGENDA_DECISION/144551.doc.
  • Wavecom Solutions Corporation Application for CPCN (Item 21, adopted on consent agenda) –  By this item, the Commission granted a CPCN to Wavecom Solutions Corporation to provide interLATA and intraLATA interexchange services and competitive local exchange services as a reseller in AT&T, Verizon, Frontier, and SureWest service territories. The Proposed Decision underlying this grant of authority is available here: http://docs.cpuc.ca.gov/word_pdf/AGENDA_DECISION/143737.doc.
  • TURN Granted Intervenor Compensation in Connection with Verizon Request to Modify White Pages Directory Delivery Mechanism (Item 30, adopted on consent agenda) – By this item, the Commission grants $10,371.40 in intervenor compensation to The Utility Reform Network in connection with TURN’s work on Resolution T-17302 addressing Verizon’s proposal to modify the mechanism for its delivery of white pages directories. The Proposed Decision associated with this item is available here: http://docs.cpuc.ca.gov/word_pdf/AGENDA_DECISION/143791.doc.

SIGNIFICANT HELD ITEMS


  • Proposed Decision Adopting New Fire Safety Regulations Applicable to Joint Utility Poles (Item 31, discussed and held until 11/10/11 for further review) – Given the particular importance of fire safety and wildfire issues in Southern California, the Commission took the opportunity to discuss this item while meeting in Los Angeles even though it did not vote on the item. Commissioner Simon introduced the Proposed Decision, summarizing the new rules for correction of General Order 95 nonconformances, inspection of facilities, marking of facilities, vegetation management, pole loading, and cooperation between utilities. Simon also mentioned that the ongoing efforts to create and update maps to identify the areas where fire threats are most significant. Simon expressed that the Proposed Decision will improve fire safety throughout the state, and particularly in high fire threat areas. The Proposed Decision is undergoing final revisions in response to additional input at the recent “all party meeting,” but Simon expects to move forward with a final decision soon.
    The other Commissioners commended Commissioner Simon for his work in this arena, and addressed some targeted items raised by the Proposed Decision. Commissioner Florio noted his concern regarding recent changes to the rule governing the marking of facilities. Both Sandoval and Florio reflected uneasiness with the new rule that would allow for a shutoff of facilities to allow for correction of vegetation management issues. Both Commissioners noted strong opposition to this rule from the California Farm Bureau, who stated that the rule would give the utilities an unfair advantage in discussions about how to address conflicts between fruit trees and other similar plants and utility facilities. Commissioner Florio also raised concerns about the “will not fail” standard for utility pole design, citing concerns from the Commission’s Consumer Protection and Safety Division. The current version of the Proposed Decision underlying this item is available at the following link: http://docs.cpuc.ca.gov/word_pdf/AGENDA_DECISION/143946.pdf.
  • Proposed Rulemaking to Modify CPCN and Wireless Registration Rules (Item 2, held by staff until 10/20) – This proposed Order Instituting Rulemaking (OIR) would revise the requirements for telephone corporations seeking CPCNs and commercial mobile radio telephone service (CMRS) providers seeking wireless reseller identification (WIR) registration. The description of this item on the Commission’s agenda indicates that the OIR could result in higher application and registration fees for prospective CLECs and WIR registrants. Existing certificated carriers could also incur additional undetermined costs associated with expanded background check and performance bond requirements. No draft OIR has been made available in connection with this item.
  • Verizon Request to Deviate from Scenic Byway Undergrounding Requirements Along Highway 395 In Mono County (Item 3, held by staff until 10/20/11) – By this item, the Commission grants a retroactive deviation from the undergrounding requirement of Public Utilities Code Section 320 to Verizon in connection with facilities placed on poles along a “scenic byway” section of U.S. Highway 395 in Mono County. Verizon installed the facilities at issue without first seeking Commission approval for a deviation from Section 320. This Resolution imposes a $5,000 penalty on Verizon and also requires Verizon to: (1) mitigate glare from aluminum cable dampers in specified locations; (2) complete a General Order 95 compliance audit; and (3) implement an improved plan for working with local, state, and federal agencies in connection with future construction of overhead facilities. The Draft Resolution associated with this item is available at this link: http://docs.cpuc.ca.gov/word_pdf/AGENDA_RESOLUTION/144076.doc.
  • Proposal to Add New Service Requirements for Telecommunications Industry Advice Letters (Item 9, held by staff until 10/20/11) – By this Revised Draft Resolution, the Commission would adopt a new protocol governing the service of telecommunications advice letters. The Revised Draft Resolution would require all telecommunications carriers to serve all advice letters on all “adjacent and competing utilities.” In addition, the proposal would encourage utilities to maintain their individual carrier advice letter service lists in six different categories. A group of telecommunications utilities has raised numerous concerns with the proposal in the Revised Draft Resolution, and has offered an alternative proposal. The Joint Utilities’ proposal would utilize the Commission’s existing information technology resources to allow the Commission to maintain service lists in six advice letter categories and make those lists available to serving parties to fulfill their service obligations. The staff is considering further revisions to the Revised Draft Resolution. The current version of the Revised Draft Resolution is available here: http://docs.cpuc.ca.gov/word_pdf/AGENDA_RESOLUTION/143889.doc.
  • SureWest Request for Exemption from 851 Requirements With Respect to Debt Encumbrances (Item 11, held by staff until 10/20/11) – By this item, the Commission would deny SureWest Telephone’s request for an exemption from the Public Utilities Code Section 851 pre-approval requirements as to encumbrances of assets for the purpose of securing indebtedness. When SureWest issues debt, its lenders require it to secure the debt with all of its telephone company assets. Although SureWest is exemption from the debt approval requirements with respect to the issuance of debt itself, it is still subject to Section 851’s mandate with respect to encumbrances of its telephone company assets. Because other URF ILECs issue debt through their holding companies, 851 review of debt securitization would occur for SureWest, but not for any of its competitors. This Proposed Decision would deny SureWest’s request on procedural grounds. The Commission views this as an issue that affects all of the URF companies that is more appropriate for a rulemaking where the issue could be addressed globally. The Proposed Decision has been held by staff to allow for further consideration. The Proposed Decision is available here: http://docs.cpuc.ca.gov/EFILE/PD/142051.pdf.
  • 408 Area Code Overlay Proposal (Item 14, held by staff until 10/20/11) – This Proposed Decision would adopt an immediate plan to avoid number exhaust in the 408 area code by implementing an all services area code overlay. The new 669 area code overlay would cover the same geographic region as the existing 408 code, which includes the City of San Jose and neighboring communities. Customer education would begin shortly following the adoption of the item, with full implementation to be completed within 13 months. The Proposed Decision is available here: http://docs.cpuc.ca.gov/EFILE/PD/142539.pdf.
  • Proposed Rejection of Advice Letter Seeking Approval of Acquisition of IXC Holdings by TelePacific (Item 19, held by staff until 10/20/11) – By this Draft Resolution, the Commission would U.S. TelePacific’s requested approval of an acquisition of the assets and customer base of IXC Holdings, Inc. (IXCH). IXCH is a CLEC currently doing business in California as Telekenex. The advice letter seeking approval of this transaction was protested by a third-party company, Straightshot RC LLC (Straightshot). Straightshot objects to the asset acquisition on the grounds that it could prevent Straightshot from recovering a potential judgment against IXCH in connection with pending litigation in the state of Washington. The Commission rejects the proposed approval of the transaction without prejudice, and orders TelePacific to file a full application to seek formal Commission approval. The Draft Resolution is available here: http://docs.cpuc.ca.gov/word_pdf/COMMENT_RESOLUTION/142617.doc.

NOTES AND COMMISSIONER REPORTS


  • Sunne McPeak provided an extensive report to the Commissioners regarding the activities of the CETF organization. The CETF was created with funds derived from the Verizon/MCI and AT&T/SBC mergers, with a goal of furthering broadband deployment and adoption in California, with a focus on underserved low-income and rural areas. Ms. McPeak reported “significant progress” statewide, noting home access to broadband in rural California increased from 51% to 69% from 2008 to 2011. California is also ahead of the adoption curve overall, with statewide adoption increasing from 55% to 72%, while nationwide adoption increased from 54% to 61% over that same period. Ms. McPeak emphasized that there is still important work to be done to reach the CETF goals of 80% adoption by 2015 and 90% by 2020. Consumer education and a proper targeting of broadband funding initiatives will be key to this effort. The Commissioners uniformly praised the CETF’s efforts, and affirmed the Commission’s commitment to continue the CETF’s mission even after its funding has run out. Commissioner Sandoval also invited CETF to participate in the LifeLine program reform proceedings, where the program will be expanding to include wireless technologies.
  • Commissioner Sandoval praised Comcast for holding its “internet essentials” conference, an event designed to encourage youth to learn about computer use, computer repair, and the benefits of broadband connectivity. Sandoval also noted that Comcast has a successful low-income program that allows families qualifying for the school lunch program to purchase computers for $150 and receive internet access at a rate of $9.99/month. Sandoval also noted that her recent participation in a NARUC group to discuss the anticipated federal intercarrier compensation and universal service reforms. The FCC is expected to initiate those reforms next month.

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