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On Thursday, September 7, 2006, the CPUC held its regularly-scheduled agenda meeting. The Commissioners moved swiftly through a short agenda, which featured only a few regular agenda items. The significant items addressed during this meeting are summarized below.


REGULAR AND CONSENT AGENDA ITEMS

  • CPUC Defers Decision Regarding Controversial Eminent Domain Initiative (Item 39, held until 9/21 for further consideration) – This item provided a vehicle for the Commissioners to establish a formal Commission position regarding Proposition 90, an initiative that will likely appear on the November ballot. Proposition 90 addresses eminent domain issues, and could have significant impacts for the Commission, and for the utilities that the Commission regulates.

    General Counsel Wu introduced this item by providing a summary of the initiative. While he described it as “complex” and “not altogether clear,” he expressed apprehension that Proposition 90 could tinker with the current eminent domain procedures in some negative ways. Mr. Wu referenced a legal division memorandum that was circulated on Thursday to all of the Commission offices, which summarized the bill and highlighted its likely effects. In general, the bill is a response to a recent Supreme Court case, Kelo v. City of New London, in which the Supreme Court concluded that even generalized public benefits from public redevelopment projects were sufficient to justify eminent domain. Critics of Kelo suggest that it will allow for rampant and excessive eminent domain actions by municipalities.

    Wu characterized Proposition 90 as a backlash to the Kelo decision that may create more problems than it solves. For example, the initiative would substitute a “highest and best possible use” standard for establishing just compensation from eminent domain in place of the current “fair market value” standard. It is unclear exactly how this different standard would be applied, but it could make it significantly more expensive for utilities to exercise eminent domain. As Commissioner Brown noted, any increased expenses associated with eminent domain would ultimately flow back to California ratepayers. According to Wu, Proposition 90 could also allow for adjoining landowners to seek recovery for “economic damages” associated with nearby eminent domain projects.

    In their comments on this item, the Commissioners raised a wide variety of criticisms and possible ambiguities that would be generated by the Proposition. Commissioner Brown focused on the possible costs to ratepayers. Commissioner Grueniech noted that it could invite “considerable litigation” that would delay utility projects. Bohn spoke in more general terms, stating that while he does not support blanket or expansive applications of eminent domain, this initiative is not the right solution. According to Bohn, Proposition 90 is a “meat-axe” remedy that could “paralyze a lot of the growth initiatives that are currently in play” in California. President Peevey characterized the initiative as a “radical overreach.” Commissioner Chong seemed equally skeptical about the legislation, but asked that a decision on a CPUC position be deferred until the 9/21 meeting to give her time to read the Kelo opinion. The other Commissioners agreed to her request, so this will be taken up again at the next Commission meeting.

  • CPSD Investigators Granted Powers of “Peace Officers” (CPSD Director Clark Report, authorization granted on consent agenda) – Under Public Utilities Code Section 308.5, the Commission can authorize particular individuals within the Consumer Protection and Safety Division to exercise certain limited “powers of a peace officer” in connection with the CPSD’s enforcement efforts. This power could include the ability to issue warrants and make arrests, but in practice, it will be used to obtain and review “rap sheets,” file misdemeanor complaints, be the affiant for search warrants, assist local law enforcement in conducting searches after local law enforcement has served the warrant and secured the area, and obtain phone disconnects, when such activities are undertaken in the course of investigating entities subject to the Commission jurisdiction. This item grants this power to two individuals within CPSD: Haydee Clarke and Stephen Vaisa.

  • Complaint to Modify LATA Boundary Line Closed Due to Passage of Time (Item 27, adopted on consent agenda) – This item disposes of a very old complaint against Pacific Bell and AT&T, filed in 1992. The complainant had sought an order modifying a LATA boundary. This proceeding has now been closed due to inaction, and the passage of a significant amount of time, during which the telecommunications industry has changed significantly.

  • Resolution Granting United Way Authority to Use 2-1-1 Dialing Code in Santa Clara County, Resolution T-17052 (Item 21, adopted on consent agenda) – This item approves the advice letter of the United Way Silicon Valley to use the 2-1-1 dialing code, an N11 code by which callers can receive consolidated access to local health and human services.

  • Decision Granting Intervenor Compensation to Various Consumer Groups in Connection with SBC / AT&T and Verizon / MCI Merger Proceedings (Items 10 and 13, adopted on consent agenda) – These items grant substantial intervenor compensation awards to various consumer groups as a result of their contributions to the SBC/AT&T and Verizon/MCI merger proceedings. Among others, Latino Issues Forum, Disability Rights Advocates, The Utility Reform Network, and the Greenlining Institute received significant intervenor awards. The intervenor compensation request from the Community Technology Fund of California was dramatically reduced, based on findings that its contributions were not as significant as other interested parties.

  • NextG Networks Granted Deviation from Undergrounding Requirements on Scenic Highway 50, Resolution T-17059 (Item 4, adopted on consent agenda) – In order to improve wireless coverage along Highway 50 near Kyburz in El Dorado County, NextG Networks is hereby granted authority to install aerial cable and antennae above ground, notwithstanding the terms of Public Utilities Code Section 320 that require facilities on scenic highways to be placed underground. This decision finds that the requested deviation from statute is reasonable, and that the proposed construction project will benefit the public.

  • 360networks Granted Authority to Provide Limited Facilities-Based and Resold Local Exchange Services in Large and Mid-sized ILEC Territories (Item 8, adopted on consent agenda) – Adding to its authority to provide full facilities-based competitive local exchange service, 360networks is now authorized to provide limited facilities-based and resold local exchange service as well. This expansion of 360’s CPCN applies in the service territories of SureWest, Frontier, AT&T, and Verizon.

  • Application by Pacific Bell to Lease Space and Transfer Assets to SBC Rejected Due to Passage of Time and Obsolescence (Item 9, adopted on consent agenda) – In 1999, Pacific Bell filed an application seeking authority to lease space and transfer assets to SBC. At the time, various protests were filed, and interested parties were embroiled in a dispute regarding the propriety of the request. In recent comments in this docket, SBC indicated that the transactions that were the subject of the original application have already been consummated, primarily by utilizing G.O. 69-C. Accordingly, this very old proceeding has been closed.


SIGNIFICANT HELD AND WITHDRAWN ITEMS

  • Decision Addressing Petitions for Modification of Decision Resolving Triennial Review Order Proceeding (Item 34, held by Peevey until 9/21 for further review) – This item would resolve Petitions for Modification filed by Verizon and SBC with respect to the decision concluding the Triennial Review Order, 9-month phase. In particular, the large ILECs seek to reverse the requirement that batch hot cut process and pricing disputes be submitted to arbitration. The draft decision in this case would defer these issues to a pair of pre-hearing conferences in the consolidated arbitration proceedings for Verizon and SBC.

  • Decision Resolving Dispute Regarding Rule 94 of General Order 95 (Item 28, withdrawn) – This item would modify Rule 94 of General Order 95, and thereby adopt revised rules for attaching wireless antennas on jointly used utility poles and towers. This matter was originally submitted for the Commission’s consideration at the May 25, 2006 meeting. However, in July, a group of interested parties requested that the proceeding be reopened so that the parties could pursue a settlement. That request was granted, and the Commission is now holding a hearing to give proponents of settlement an opportunity to be heard on the subject. To facilitate this, the current proposed decision has been withdrawn.

  • Possible CPUC Comments on ILECs’ FCC Petition for Forbearance from Title II and Computer Inquiry Rules as Applied to Broadband Services (Item 66, held by staff until 9/7) – This item would evaluate whether the CPUC should offer comment on a pending petition by AT&T, Bell South, and Qwest for forbearance from Title II and Computer Inquiry requirements as to their broadband services.


NOTES AND COMMISSIONER REPORTS

  • Legislative Update at the Close of the Legislative Session – CPUC Legislative Director Delaney Hunter provided a summary of recently-adopted legislation of significance to the CPUC. Her discussion was aided by a powerpoint presentation, which is available at the following link: http://www.cpuc.ca.gov/static/aboutcpuc/2006+leg+wrap+up.pps. Of particular interest is AB 2987, which would clear the way for telephone companies to enter the video market by granting them a statewide franchise. This bill will significantly impact the Commission’s administration, since the Commission will be charged with accepting and approving the statewide franchises for competitive video providers. AB 2390 is also noteworthy, since it will modify the manner in which the Commission can deliver final orders by permitting distribution of these orders by email.

    Following Ms. Hunter’s presentation, the Commissioners asked some focused questions regarding the video legislation. Commissioner Brown began by inquiring “what is left for the local community?” Ms. Hunter responded that the local communities would continue to oversee the existing franchises. Hunter also noted that when a competitor appears in a currently-franchised area, the incumbent would have the ability to abrogate local contracts, and apply for a statewide franchise. Moreover, the local authorities will remain in charge of handling complaints about video service. This fact caused Commissioner Chong to warn that the Commission will likely receive many of these complaints also, and it should be prepared to direct customers to the appropriate authorities who will be able to address their issues. Chong also suggested that some modification of the “contact information” on bundled bills should be orchestrated. Overall, as Ms. Hunter summarized, the passage of this video legislation will mean an “up-tick” in work for the Commission that will require some additional state resources and likely some revamping of the Commission’s administration.

    Both AB 2987 and AB 2390 are awaiting the Governor’s signature.

  • Reminder Regarding Public Participation Hearings in Public Purpose Program OIR – In a brief report, Commissioner Chong reminded the audience that the Commission will be holding three public participation hearings in the currently-open proceeding to address reforms to the CPUC public policy programs. These hearings will take place on September 25th in San Diego, on October 26th in Stockton, and on Nov. 3rd in Sacramento. Chong encouraged members of the public to attend these hearings.

  • New Hires in the Consumer Affairs Branch Introduced – As part of its effort to comply with the directives in the March 2006 consumer protection decision, the Commission has hired a number of additional employees to work in the Consumer Affairs Branch fielding consumer inquiries and complaints. Many of these individuals are bilingual. The Commission enthusiastically introduced the new CAB hires at the outset of the meeting.

  • E-Filing Now Available in Formal Commission Dockets – ALJ Minkin announced that electronic filing is now available to all parties in formal CPUC proceedings. Minkin thanked the members of the E-filing “focus group” who assisted the Commission in identifying many of the implementation problems associated with the E-filing procedures.

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