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On September 24, 2009, the California Public Utilities Commission held its regularly scheduled agenda meeting. Although the meeting’s primary agenda item was the Commission’s decision committing $3.1 billion to energy efficiency programs for 2010-2012, the Commission did address some important telecommunications-related items. Significantly, the Commission awarded the first CASF “matching” grant to Frontier Communications in connection with a proposed project in Modoc County. In addition, the Commission authorized its staff to file comments in the FCC’s “Truth in Billing” and Broadband Deployment dockets. These and other telecommunications items of interest on the Commission’s agenda are discussed in further detail below.


REGULAR AND CONSENT AGENDA ITEMS

  • Contingent Approval of CASF “Matching” Funding for “Lookout” Unserved Broadband Project by Frontier Communications (Item 43, adopted on regular agenda) – In introducing this item, Commissioner Chong noted that the Commission put this item on the regular agenda in order to highlight that this is the “first of many” in a series of expedited decisions approving CASF broadband funding. These matching funds are designed to be paired with federal ARRA grants, and the CASF funding is contingent upon receipt of those funds. By this project, Frontier Communications of California (Frontier) sought funding for the Lookout Broadband Project in Modoc County that will bring broadband Internet service to a 67 square mile rural area containing 166 households currently without any high-speed Internet access. The contingent funding of $50,707 represents 10% of the total project costs of $507,066, and is dependent on Frontier receiving the 80% matching ARRA grant. The proposed decision associated with this item is available at: http://docs.cpuc.ca.gov/word_pdf/FINAL_RESOLUTION/107522.doc.
  • CPUC Comments Authorized in FCC Proceeding Addressing Possible Extension of Truth-in-Billing Rules to Additional Services (Item 44, adopted on consent agenda) – The Federal Communications Commission (FCC) seeks comment on whether its “Truth in Billing” rules should be extended to additional services such as broadband Internet access and subscription video service. The FCC issued this request in response to recent consumer complaint data the reflects upon the extent of customer awareness and understanding of the prices, terms, and conditions of their communications services. The FCC has solicited input from interested parties regarding how to provide consumers with better access to the information they need to choose a communications provider, choose a service plan, manage the use of that service plan, and decide whether and when to switch an existing provider or plan. The FCC is also considering whether disclosure requirements and “Truth in Billing” rules should be applied to Internet access services and subscription video services. The Commission endorsed the Legal Division recommendation to file comments to “(1) inform the FCC of California laws and CPUC regulations addressing service information and billing disclosures for wireline, wireless and prepaid telecommunications services; (2) provide the FCC information, if any, on whether these California rules provide consumers with effective tools for managing their communications services; and (3) propose new steps the FCC should consider to ensure consumers are able to meet the challenges of the evolving communications market.” The draft memorandum summarizing the Legal Division recommendations is available at: http://docs.cpuc.ca.gov/word_pdf/REPORT/107468.doc.
  • CPUC Comments Authorized in FCC Proceeding Regarding Timely Deployment of Broadband Services (Item 46, adopted on consent agenda) – The FCC is seeking comments on whether broadband services are being deployed to all Americans in a reasonable and timely fashion. Section 706 of the Telecommunications Act of 1996 requires the FCC to examine these questions on an annual basis. Moreover, Congress has recently mandated that the FCC develop a National Broadband Plan by February 2010, and the FCC has required broadband provides to file various reports to assist in that effort. The latest request for comments by the FCC covers how to define “advanced services” and broadband,” and, given those definitions, what data is needed to determine that broadband is sufficiently “available.” The FCC also seeks comments regarding the impact of new technological developments on broadband deployment, the reach and timeliness of deployment, and what the FCC can do to accelerate broadband deployment and improve data collection. The CPUC Legal Division recommends that the Commission make six points in its comments: (1) the FCC should not continue to use subscribership data as a proxy for broadband availability because better information is being gathered through the NTIA broadband mapping program and under the Broadband Data Improvement Act; (2) the FCC should look to other sources of data to guide the definitions of broadband and the definitions of “served” and “unserved” areas; (3) the FCC should share raw data on broadband availability and subscribership data with the state commissions; (4) the FCC should use the most granular area available for defining a “geographic area” in Section 706 broadband progress reports; (5) the FCC should assess data regarding demand and deployment to inform the development of benchmarks for the National Broadband Plan; and (6) the FCC should include the broadband services offered by satellite providers in considering whether an area has access to broadband services, and should collect related information. The draft memorandum summarizing these recommendations is available at: http://docs.cpuc.ca.gov/word_pdf/REPORT/107465.doc. The Commission approved this direction by adopting this item on the consent agenda.
  • Proceeding Closed in Cox California Telcom, LLC Dispute with Pacific Centrex Services, Inc. Over Call Termination Charges and Related Matters (Item 18, adopted on consent agenda) – This matter involved a complaint for payment of unpaid call termination charges by Pacific Centrex Services, Inc. (Pacific) and additional termination charges and late payment penalties incurred under Cox California Telcom’s (Cox) Intrastate Tariff. The ALJ issued a proposed decision on June 24, 2009 ordering payment of termination charges and imposing sanctions on Pacific. Pacific recently filed a Chapter 11 bankruptcy petition, which automatically stayed the proceeding and deprived the CPUC of jurisdiction. Accordingly, the Commission on its own motion closed the proceeding. The proposed decision closing the case is available here: http://docs.cpuc.ca.gov/word_pdf/AGENDA_DECISION/107331.doc.
  • Convergence Systems, Inc. Granted Certificate of Public Convenience and Necessity to Provide Limited Facilities-Based Local Exchange and Interexchange Services Throughout California (Item 27, adopted on consent agenda) – The CPUC previously granted Convergence Systems, Inc. (Convergence) a certificate of public convenience and necessity (CPCN) in order to construct telecommunications facilities and provide limited facilities-based local exchange and interexchange services in San Diego and Orange Counties. By an unopposed petition to modify that original decision, Convergence sought to expand the territorial reach of its local exchange authority to all territories currently served by AT&T California, Verizon California Inc., SureWest Telephone, and Citizens Telephone Company. Convergence also sought to extend its interexchange authority to all of California. This decision grants the petition. The proposed decision associated with this item is available at: http://docs.cpuc.ca.gov/word_pdf/AGENDA_DECISION/106706.doc.
  • CalPop.Com, Inc. Granted Certificate of Public Convenience and Necessity to Provide Limited Facilities-Based Local Exchange and Interexchange Telecommunications Services (Item 29, adopted on consent agenda) – CalPop.Com, Inc. (CalPop) is a Los Angeles-based corporation that applied for a CPCN to provide limited facilities-based and resold competitive local exchange telecommunications services currently served by AT&T California, SureWest Telephone and Verizon California Inc., and to operate as a non-dominant interexchange carrier. Specifically, CalPop initially intends to provide dedicated private line transmission services for the transmission of point-to-point and point-to-multipoint information within a local exchange area from points of origin within California to destination points in California. This decision grants the application. The proposed decision associated with this item is available at: http://docs.cpuc.ca.gov/word_pdf/AGENDA_DECISION/106709.doc.

SIGNIFICANT HELD AND WITHDRAWN ITEMS

  • Decision Resolving Outstanding Issues in Cingular Wireless Investigation (Item 4, held to October 15, 2009 by Commissioner Bohn for further review) – In D.04-09-062, the Commission fined Cingular Wireless (Cingular) $12.14 million for its unlawful early termination fee (ETF) policies and other corporate practices. Cingular was also ordered to pay reparations of $18,467,220.38 to affected customers, with any unpaid reparations to be distributed to the State of California General Fund. Following extensive litigation, Cingular (now known as AT&T Mobility (AT&T)), the Utility Consumers Action Network (UCAN), and the Commission’s Consumer Protection and Safety Division entered into an all-party settlement resolving the litigation, requiring Cingular to pay the $12.4 million penalty as well as customer reparations through two different funds. This decision would resolve all issues related to this proceeding and close the reparations funds by: (1) revising the Decision requiring payment of a second intervenor compensation award to UCAN because that amount had previously been paid to UCAN directly; (2) refunding to AT&T the balance remaining on the original amount deposited for notice and claims administration; and (3) distributing the residual balance of $1.9 million in the two reparations funds to the CPUC’s Telecommunications Consumer Protection Fund. The proposed decision associated with this item is available at: http://docs.cpuc.ca.gov/word_pdf/AGENDA_DECISION/106694.doc.
  • Rejection of AT&T California’s Advice Letter Requesting Authority to Increase Measured Rate Usage Rates (Item 11, held until 10/15 for further review) – In a 2008 Advice Letter, AT&T California (AT&T) requested authority to increase measured usage rates for local Zone Usage Measurement (ZUM) Zones 1, 2 and 3 calls. The Communications Division rejected that request and AT&T ultimately reversed rate increases it had imposed on customers concurrently with the filing of its Advice Letter. While AT&T provided the Commission’s Communications Division with a customer refunds status report, it has not yet completed the steps it committed to take to reverse the rate increases. This Draft Resolution would direct AT&T to complete the required customer refunds within 30 days, and empower the Communications Division to issue and prosecute an order to show cause why AT&T should not be fined $911,200 for its actions. The Draft Resolution associated with this item is available at: http://docs.cpuc.ca.gov/word_pdf/AGENDA_RESOLUTION/107329.doc.
  • CPUC Comments to FCC Regarding Analysis of Wireless Markets (Item 45, held to 10/15/09 by Staff) – The FCC seeks to expand and enhance its analysis of competitive conditions in the wireless communications market, and requests comments on which analytic framework and data sources most clearly describe competition in that market. The FCC is also requesting comment regarding the impact of new market segments not covered in previous reports on competitive conditions in the wireless industry, as well as an analysis of vertical relationships between “upstream” and “downstream” market segments. The CPUC’s Legal Division recommends that the CPUC’s comments focus on the proper analytic framework for evaluation of market competition and suggestions on what data should be given weight in that evaluation. Specifically, the Legal Division recommends that the CPUC comment in favor of the FCC’s expansion of the mobile wireless competition inquiry beyond the Commercial Mobile Radio Services (CMRS) market. The Legal Division also recommends that the CPUC support three prongs of the FCC’s current market condition analysis framework: (1) market structure; (2) provider conduct; and (3) market performance. However, the Legal Division believes that the “consumer behavior” prong of the current framework is unnecessary for the evaluation. The Legal Division would also have the FCC consider further data regarding market share, including market share by service type, intermodal market share, market share by wholesale and retail service types, evaluation of horizontal integration, current frequency allocations and utilization, and backhaul ownership for all facility types. Finally, the Legal Division recommends that the CPUC ask the FCC to review how exclusive handset contracts affect competition. The draft memorandum containing the Legal Division recommendations is available at: http://docs.cpuc.ca.gov/word_pdf/REPORT/107173.doc.
  • Comments to FCC Regarding Universal Service Charges for Voice over Internet Protocol Services (Item 47, withdrawn) – The FCC seeks comment on a petition for declaratory ruling that the FCC has not pre-empted the states from assessing universal service charges on intrastate revenues collected by providers of “nomadic” interconnected Voice over Internet Protocol (VoIP) services, and that states have the discretion to adopt mechanisms and procedures for identifying and assessing intrastate revenues. In the alternative, the petition asks the FCC to propose and adopt relevant rules. The Legal Division sought authority to submit comments in support of state authority to require universal service contributions from interconnected VoIP providers.


2009 LEGISLATIVE WRAP-UP

  • Pamela Loomis, Director of the CPUC’s Office of Governmental Affairs, provided a detailed overview of pending public utilities-related legislation. Although telecommunications-related items were sparse, there were a few items that are worthy of note from Ms. Loomis’s “legislative wrap-up” report, as follows:SB 17[Electricity: smart grid systems] This bill would codify the existing Commission work by requiring the CPUC to determine the requirements for a smart grid deployment plan by July 1, 2010, and requiring electrical corporations to develop and submit a smart grid deployment plan to the CPUC for approval by July 1, 2011. SB 17 is on Governor Schwarzenegger’s desk for signature. AB 1553 [Telecommunications: universal service: deaf and disabled telecommunications programs] This bill would effectuate a “quick and easy extension” of the existing deadline to establish a rate recovery mechanism for universal service programs, including the deaf and disabled programs. AB 1553 is also on Governor Schwarzenegger’s desk for signature. AB 1555 [Telecommunications: California Advanced Services Fund] This bill implements what Ms. Loomis termed a “quick fix” to allow companies to participate in the California Advanced Services Fund and the American Recovery and Reinvestment Act of 2009. This bill has already taken effect as an urgency statute.


COMMISSIONER REPORTS

  • Commissioner Simon reported on the 2009 Telecoms Equipment Distribution Program Association Conference, where state representatives and vendors for the deaf and disabled community were reviewing the latest in equipment used to assist the deaf and disabled community. At the conference, he spoke about the effect of the AB 2393 backup power proceeding and the recent changes to G.O. 95 in the safety infrastructure proceeding. In passing, he also confirmed that the Commission is considering a proceeding specifically to address 9-1-1 issues, and noted that the disability community would be keenly interested in that proceeding.
  • Commissioner Chong repeated her comments from the previous agenda meeting, again emphasizing that all applicants for ARRA broadband funding need to provide their applications to the CIO as soon as possible. Commissioner Chong emphasized that the CASF staff is working “night and day” to review NTIA projects. According to Chong, there will be two rounds of review of the applications on the California side – the first by a group of experts, and the second by a group of senior state officials who will ultimately make a recommendation to the Governor.

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