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On Thursday, September 4, 2008, the California Public Utilities Commission held its regularly-scheduled agenda meeting. The decision regarding backup power systems and emergency notification was adopted, but it postponed until later a definitive answer on its most divisive issue. The Commission’s legislative liaison provided a status report on pending and recently-adopted state legislation affecting the Commission. The legislative wrap-up contained several bills of interest to the CPUC, and to carriers generally. These and other telecommunications-related items addressed during the meeting are summarized below.


REGULAR AND CONSENT AGENDA ITEMS

  • Decision Addressing Backup Power and Emergency Notification Issues Approved (Items 35/35a, Item 35 adopted 5-0) – This decision resolves Phase II of the proceeding to address backup power and emergency notification issues pursuant to Assembly Bill 2393. The decision adopts the Final Analysis Report (“FAR”) prepared by the Commission’s Communications Division for transmittal to the Legislature. The FAR analyzes the backup power, network reliability, and emergency notification issues identified in AB 2393 and sets forth various options for addressing those issues. However, the Rulemaking leaves open the question of whether specific rules are necessary to ensure that sufficient backup power exists on customer premises equipment in connection with fiber-to-the-premises offerings. This issue will be addressed in a third phase of this proceeding. The decision also empowers Commission staff to pursue consumer education efforts, including informing consumers about how networks and services provided through those networks will respond during emergencies.

    As Assigned Commissioner, Commissioner Simon introduced this item. He stressed the need for concrete rules, opining that a competitive marketplace is not enough to address issues related to backup power and network reliability during emergencies. Emphasizing the importance of protecting consumers during emergencies, Simon declared that the Commission would under no circumstances accept that “competition will be the answer to disaster.” Commissioner Chong also spoke about this item, having withdrawn her own alternative decision because she and Commissioner Simon had reached an agreement as to how to proceed. Although she ultimately supported the decision, Chong noted that she does not believe that the current FAR “meets the statutorily-mandated cost-benefit analysis” sufficient to justify any rules or standards regarding backup power.

    Commissioner Simon’s original proposed decision would have adopted a rule that carriers must provide and maintain at least eight hours of backup power on customer premises equipment in connection with fiber-to-the-home offerings. Commissioner Chong’s alternate would have rejected this rule and closed the proceeding. The adopted decision represents the compromise position that no rule will be adopted in this phase, but that the proceeding will remain open for a further examination of the issue, including whether or not to adopt a rule on the subject. A recent draft of the decision can be found at the following web address: http://docs.cpuc.ca.gov/word_pdf/AGENDA_DECISION/87519.doc.

  • Approval of URF Phase II Decision Regarding Monitoring Reports, Retail Special Access Pricing, and Customer Disclosure Rules (Item 36, adopted 5-0) – This decision resolves various issues in Phase II of the Commission’s Uniform Regulatory Framework (“URF”) proceeding. The decision looks specifically at three issues related to regulations of URF companies: the need for new monitoring reports, whether retail special access services should be deregulated, and the need for additional consumer disclosure rules. Significantly, the decision states that no additional monitoring reports or disclosure rules are necessary at this time. The decision finds that the ARMIS reports that carriers currently file with the FCC are sufficient to allow the CPUC to track important industry trends. In response to concerns that the FCC may discontinue ARMIS reporting requirements, the decision requires carriers to continue providing California-specific ARMIS information to the CPUC until further notice. Regarding special access, the Commission will observe how the FCC handles its pending action on interstate special access prices before taking any action in this area. The also decision extends by six months the deadline for URF Carriers to detariff their existing services. The deadline is now September 12, 2009.

    Commissioner Chong introduced this item and detailed each of the three main issues: monitoring, special access, and customer disclosure issues. She commented that the Commission expects to finish up the URF proceeding by the end of the year. Commissioner Bohn noted that the market has become ever more competitive since the URF proceeding began, as was the Commission’s prediction. While competition appears to be disciplining the market, he half-jokingly warned the audience, “[w]e’ve got our eyes on you,” reminding the carriers in the audience that the Commission would continue watching to ensure that this basic assumption is correct. Commissioner Grueneich will file a concurrence in the decision based on her concern that the Commission always have at least a “snapshot” report from carriers, regardless of whether the FCC requires such reports. A recent draft of the decision is available at the following link: http://docs.cpuc.ca.gov/word_pdf/AGENDA_DECISION/87410.doc.

  • Approval of Commercial Mobile Radio Services (CMRS) Interconnection Agreement between TDS Companies and Sprint Spectrum, L.P. (Items 16, 17, 18 , adopted on consent agenda) – The Commission adopted three resolutions approving wireless interconnection agreements between three TDS companies and Sprint Spectrum, L.P. The Happy Valley agreement will remain in effect until March 1, 2009, and the Hornitos and Winterhaven agreements will be effective until June 13, 2009. Drafts of these three resolutions are available below:


SIGNIFICANT HELD ITEMS

  • Proposed Decision Addressing Basic Service Rate Transition (Item 37, held by Grueneich until 9/18 for further review) – This decision would authorize transitional rate increases for basic exchange service provided by the URF ILECs leading up to the full pricing flexibility transition date of January 1, 2009.

  • Proposed Decision Addressing Phase II Issues In “In Language” Proceeding (Item 38, held by Peevey until 9/18 for further review) – This proposed decision would resolve Phase II of the “in language” proceeding. The decision would address the following issues relative to the Commission’s interest in protecting customers with Limited English Proficiency (“LEP”): (1) whether to adopt tracking and reporting of LEP consumer complaints and language preference information, (2) whether to require carriers to provide fraud notification to LEP consumers, and (3) whether to adopt relaxed rules governing market trials in non-English languages.

  • Proposed Decision Regarding Removal of Copper Loops (Item 11, held by Simon until 9/18 for further review) – This proposed decision would decline to adopt any rules requiring carriers to seek the Commission’s permission before permanently removing copper wire local loops. The California Association of Competitive Telecommunications Companies (“CALTEL”) initiated this application proceeding requesting a set of rules addressing this procedure.


NOTES AND COMMISSIONER REPORTS

  • Legislative Wrap-up — Commission Governmental Affairs Director Pam Loomis provided a report to the Commission regarding the outcome of legislative items on which the Commission had taken a position during the most recent session. This “legislative wrap-up” is summarized in the following power point presentation prepared by Ms. Loomis: http://www.cpuc.ca.gov/NR/rdonlyres/06BEAC29-B220-4F16-A62B-E4DCAF0EADE4/0/9_4_08_2008_Legislative_wrap_up_Agenda_3220.pps. The fate of all these bills remains undetermined. Governor Schwarzenegger has threatened not to sign any bill on his desk into law unless the Legislature can agree on a budget by the end of September. Director Loomis opined that this may not actually occur, but that the possibility does exist. The telecommunications-related and other bills of particular significance to the CPUC are outlined below.

    • Senate Bill 780 (Introduced by Wiggins, currently on Governor’s desk) – This bill extends the sunset dates for the California High Cost Funds A and B. The CHCF-A would be extended four years, until 2013, and the CHCF-B would be extended three years, until 2012, with a related basic service affordability study due by July 1, 2010. The Commission would be in charge of conducting the study.
    • Assembly Bill 2885 (Introduced by De La Torre, currently on Governor’s desk) – This bill authorizes the CPUC to enforce the standards and requirements of the Business & Professions Code for consumer disclosure and services applicable to sellers of prepaid calling cards and services.
    • Senate Bill 1772 (Introduced by Senate Rules Committee, currently on Governor’s desk) – This bill will require the CPUC Commissioners to report payments made at their behest for $5,000 or more in the aggregate from the same source in the same calendar year to the Fair Political Practices Commission.
    • Assembly Bill 1973 (Introduced by Ruskin, currently on Assembly Floor) – This bill would require the Governor’s appointment of CPUC presidents to be confirmed by the Senate and would require the direction of the Commission’s Executive Director and General Counsel to be from the Commission as a whole. It would also make quasi-legislative decisions by the CPUC subject to the Administrative Procedures Act and review by the Office of Administrative Law.

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