Rachelle B. Chong is the assigned Commissioner and Steven Kotz and Timothy J. Sullivan are the assigned Administrative Law Judges.

Findings of Fact

1. The case-by-case compliance mechanism is an application including a plan in which the franchise holder would justify the reasonableness of its development efforts based on the circumstances peculiar to its service area.

2. GO 169 contains a suitable case-by-case compliance mechanism. The additional guidance set forth below follows closely from Pub. Util. Code § 5890. First, the company-specific application shall contain clearly stated build-out milestones that demonstrate a serious and realistic planning effort by the state video franchise holder. Second, the company-specific application shall clearly state the constraints affecting the applicant's build-out, with particular attention to the types of constraints noted in DIVCA itself. Third, to the extent that there are areas within the smaller franchise holder's service area that are substantially higher cost than average to provide video service, those substantially higher cost areas shall be clearly delineated and explained in the application.

3. Periodic reporting by state video franchise holders provides important information to the Commission that it uses in fulfilling its roles under DIVCA regarding broadband deployment in California and enforcing DIVCA's non-discrimination and build-out requirements.

4. Reporting by a state video franchise holder of the number of its video customers by census tract, in addition to the number of households that are offered video service, will provide necessary information to the Commission in enforcing the non-discrimination requirements of Pub. Util. Code § 5890(a).

5. Through oversight, GO 169 failed to include the requirement that a state video franchise holder give notice to incumbent cable operators of the holder's imminent market entry.

6. The Commission should adopt renewal rules a reasonable time before current state video franchises begin to expire in 2017.

7. The Commission should institute a rulemaking no later than April 2011, or such earlier time as the matter may be deemed ripe, to adopt principles and policies regarding state video franchise renewals. Any interested person, under Pub. Util. Code § 1708.5(f), may petition the Commission at any time to adopt a regulation pertaining state video franchise renewals. The petition should cite this decision and discuss with specificity the developments, such as changes of law or other occurrences, that cause the renewal issue to be ripe for determination by the Commission.

Conclusions of Law

1. DIVCA requires that state video franchise holders actively develop their franchise.

2. DIVCA requires state video franchise holders to provide non-discriminatory access to their video service.

3. DIVCA gives smaller state video franchise holders flexibility in how they demonstrate compliance with the non-discrimination and build-out requirements of Pub. Util. Code § 5890.

4. The flexibility that the Legislature intended in DIVCA for the smaller telephone companies in demonstrating compliance with DIVCA's non-discrimination and build-out requirements is set forth within the four corners of the statute.

5. Pub. Util. Code § 5890(c) does not mandate or authorize after-the-fact reasonableness review.

6. Pub. Util. Code § 5890(b), regarding non-discriminatory service to low-income households, should apply to smaller state video franchise holders. Some franchise holders may find difficulty complying if the proportion of low-income households in the holder's service area is relatively low. In such cases, the franchise holder should demonstrate that the percent of low-income households in its service area to which it provides access to video service correlates closely to the percent of all households provided access.

7. The Commission has authority to take actions necessary to carry out its duties under DIVCA, and to that end the Commission may impose additional reporting requirements beyond those set forth in DIVCA.

8. To the extent that information contained in a report submitted to the Commission pursuant to its video franchise program contains competitively sensitive information, the state video franchise holder submitting the report may request confidential treatment, as provided by Pub. Util. Code § 5960(d).

9. DIVCA enlarges the Commission's complaint jurisdiction by directing the Commission to hear a complaint brought by a local government against a state video franchise holder, even though the latter, by express provision of DIVCA, is not a public utility.

10. Ordering Paragraph 25 of D.07-03-014 states: "No party shall be awarded intervenor compensation in a proceeding arising under DIVCA." This DIVCA rulemaking itself falls within the broad ambit of the holding in Ordering Paragraph 25. Therefore, the pending NOIs and TURN's request for compensation should also be rejected.

11. Today's order should be made effective immediately.

ORDER

IT IS ORDERED that:

1. State video franchise holders may satisfy the non-discrimination and deployment (build-out) requirements of Pub. Util. Code § 5890 by doing either of the following:

a. Complying with Pub. Util. Code § 5890(b) and with either Pub. Util. Code § 5890(e)(1) or Pub. Util. Code § 5890(e)(2), depending on whether fiber optic facilities are predominantly deployed; or

b. Obtaining Commission approval of a company-specific build-out plan submitted to the Commission by application under Section VI.B.1(3) of General Order (GO) 169.

2. GO 169 shall be amended as follows:

a. Amend Section VI.B.1.(3) as shown:

The State Video Franchise Holder satisfies company-specific build-out requirements adopted by the Commission. To seek to satisfy this condition, a State Video Franchise Holder shall file an application with the Commission within the calendar year in which it applies for a State Video Franchise. This application shall specify how the State Video Franchise Holder plans to offer Video Service to its telephone customers within a reasonable time. The application must contain clearly stated build-out milestones and must demonstrate a serious and realistic planning effort by the State Video Franchise Holder. The application must clearly state the constraints affecting the build-out, with particular attention to the constraints noted in DIVCA itself. To the extent that there are areas within the State Video Franchise Holder's Telephone Service Area that are substantially higher cost than average to provide Video Service, those substantially higher cost areas should be clearly delineated and explained in the application.

b. New subsection "3. Notice of Imminent Market Entry" is added to Section VI.B as shown:

A State Video Franchise Holder must concurrently notify each affected local jurisdiction and each affected incumbent cable operator of the holder's imminent market entry. The State Video Franchise Holder must provide the concurrent notice to the incumbent cable operator before initiating Video Service pursuant to a State Video Franchise, and to any local jurisdiction within which, or within any part of which, the holder intends to provide Video Service.

c. Amend the following paragraphs in Section VII.C.1.(3) as shown:

(b) If neither the State Video Franchise Holder nor any of its Affiliates is a Telephone Corporation:

    (i) The number of Households in each Census Tract of the State Video Franchise Holder's and/or any of its Affiliates' Video Service Area; and

    (ii) The number of Households in each Census Tract of the State Video Franchise Holder's and/or any of its Affiliates' Video Service Area that are offered Access pursuant to a State Video Franchise by the State Video Franchise Holder and/or any of its Affiliates.

    (iii) The number of Households in each Census Tract of the State Video Franchise Holder's and/or any of its Affiliates' Video Service Area that subscribe to the Video Service offered pursuant to a State Video Franchise by the State Video Franchise Holder and/or any of its Affiliates.

3. The notices of intent filed in Phase I of this Rulemaking 06-10-005 by Latino Issues Forum and Consumer Federation of California, and the request of The Utility Reform Network for an award of compensation for substantial contribution to Decision 07-03-014 are denied.

4. This Rulemaking 06-10-005 remains open for a possible Phase III, as discussed in Section 7 of the foregoing Opinion.

5. After concluding this Rulemaking 06-10-005, but no later than April 2011, the Commission will institute a new rulemaking to consider principles and policies regarding state video franchise renewals.

This order is effective today.

Dated October 4, 2007, at San Francisco, California.

APPENDIX A

Rule 4.1 of the Commission's Rules of Practice and Procedure,

as Amended to Implement Pub. Util. Code § 5890(g)

4.1 (Rule 4.1) Who May Complain

Note: Authority cited: Section 1702, Public Utilities Code. Reference: Section 1702 and Section 5890(g), Public Utilities Code.

(END OF APPENDIX A)

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