18. Assignment of Proceeding

Michael R. Peevey is the assigned Commissioner and Linda A. Rochester is the assigned Administrative Law Judge in this proceeding.

1. Notice of the application appeared on the Daily Calendar on April 2, 2009. No protests were filed.

2. The Commission is the Lead Agency for this project under CEQA.

3. DTS' service installation activities would generally involve placement of a satellite dish on customer premises with power provided by household current. However, if that option is not available, it may be necessary to install the dish on a pole which would require a digging a hole and connecting to a power source via a conduit which would require minor trenching and backfilling. These installation activities do not have a significant adverse effect upon the environment.

4. DTS' service installation activities are identified as projects that meet the CEQA exception requirements established in D.10-12-056.

5. DTS has cash on deposit with a financial institution and has identified additional sources of funds to cover its start-up construction expenses.

6. DTS' management possesses sufficient experience, knowledge, and technical expertise to provide local exchange services to the public.

7. DTS' parent company DialToneServices received an NAL in February 2009 for failing to file the newly required annual CPNI certificate. On June 28, 2010, the FCC adopted a consent decree terminating and cancelling the NAL.

8. Except as noted in Finding of Fact 7, no one associated with or employed by DTS as an affiliate, officer, director, partner, or owner of more than 10% of DTS was previously associated with any telecommunications carrier that filed for bankruptcy, or has been found either civilly or criminally liable by a court of appropriate jurisdiction for a violation of § 1700, et seq. of the California Business and Professions Code, or for any actions which involved misrepresentations to consumers, nor is currently under investigation for similar violations.

9. Except for the deficiencies indentified in Attachment A to this decision, DTS' draft tariffs comply with the Commission's requirements.

10. DTS provided a map of its service territory, created by the Commission depicting the number of housing units in unserved territories of the state. The unserved territories are DTS' proposed service territory.

11. DTS has no information to report under Rule 3.1(i), which requires that a utility filing an application under Pub. Util. Code §1001, provide a statement regarding compliance with General Order 104-A.

12. DTS' application provided an estimate of its first and fifth year customer base.

13. DTS' application described its E911 architecture as similar to that of traditional local exchange carriers, but there is no description of third parties utilized to deliver 911 calls or of the FCC's 911 requirements and whether DTS is exempt or purchasing services and capacity from the satellite provider. Additionally, DTS did not have approval from the 911 office approving its proposed plan for delivery of 911 calls.

14. DTS proposes to file a general rate case once it has a minimum of one calendar year operating experience.

15. DTS is not eligible to receive California High Cost Fund-A funds until the Commission has completed a review of DTS' first general rate case.

16. DTS' anticipated request from the California High Cost Fund-A is $574 per line for its first year of eligibility.

17. The Commission does not guarantee that the amount of California High Cost Fund-A support sought by DTS will be granted.

18. As an incumbent local exchange carrier, DTS would have COLR obligations to notify its customers and the Commission if it intends to discontinue service and find a suitable substitute carrier to provide service to its customers.

19. DTS' ability to effectively serve all unserved customers in the state is of concern given DTS' limited verifiable funding sources for its start-up costs. As a result, many unserved customers may remain in its proposed service territory.

20. Granting DTS unconditional authority to provide service to all unserved territory effectively eliminates the Rural Telecommunications Infrastructure Grant Program as no other carrier would be able to apply for funds to provide service to unserved areas.

1. DTS application for a CPCN to provide limited facilities-based local exchange telecommunications service and interexchange service in the unserved territories of California is in the public interest and should be granted.

2. DTS, once granted a CPCN should be subject to the applicable commission rules, decisions, General Orders, and statutes that pertain to California public utilities.

3. DTS' initial tariff filing should correct the tariff deficiencies shown in Attachment A to this decision.

4. Prior to offering service DTS should update its service territory description and map, by LATA, as described in Section 7. of this decision and serve it on all incumbent local exchange carriers whose service territory is adjacent to DTS'. DTS should file its updated service territory description and map and the proof of service on all incumbent local exchange carriers as a Tier 1 Advice Letter with the Director of the Communications Division

5. In order for the Commission to track the number and location of DTS' customers, DTS should update the Commission on its customer base within 30 days of providing service to its first customer, 12 months after the effective date of this decision, 24 months after the effective date of this decision, and 60 months after the effective date of this decision.

6. Prior to offering service, DTS should provide the Commission with a description of third party providers of 911 services, a description of the FCC 911 requirements and whether DTS is exempt or purchasing services and capacity, and provide a letter from the 911 Office approving DTS' proposed delivery of 911 calls.

7. DTS should file a general rate case once it has a minimum of one year of operating experience.

8. DTS should be granted exclusive authority to provide service to all currently unserved territory for twelve months from the effective date of this decision. After that time, if any carrier applies to provide service to any LATA where DTS is not currently providing service to at least one customer, DTS should surrender that LATA without protest.

ORDER

IT IS ORDERED that:

1. DTS of CA, Inc. is granted a certificate of public convenience and necessity to operate as an incumbent local exchange carrier providing limited facilities-based local and interexchange telecommunications services in the unserved areas of the State, subject to the terms and conditions set forth below.

2. DTS of CA, Inc. may not offer local exchange services until tariffs are filed with and authorized by this Commission, in accordance with General Order 96-B and as corrected for deficiencies set forth in Exhibit A.

3. The corporate identification number assigned to DTS of CA, Inc., U1027C, must be included in the caption of all original filings with this Commission and in the titles of other pleadings filed in existing cases.

4. In addition to all requirements applicable to local exchange carriers and interexchange carriers included in Attachments B, C, and D to this decision, DTS of CA, Inc. is subject to the Consumer Protection Rules contained in General Order 168, and all applicable Commission rules, decisions, General Orders, and statutes that pertain to California public utilities.

5. DTS of CA, Inc. must file, in this docket, a written acceptance of the certificate granted in this proceeding within 30 days of the effective date of this order.

6. DTS of CA, Inc. must pay the user fee and public purpose surcharges specified in Attachment B. Per the instructions in Exhibit E to Decision 00-10-028, the Combined California Public Utilities Commission Telephone Surcharge Transmittal Form must be submitted even if the amount due is $0. Under Public Utilities Code Section 405, carriers that are in default of reporting and submitting user fees for a period of 30 days or more will be subject to penalties including suspension or revocation of their authority to operate in California.

7. Prior to initiating service, DTS of CA, Inc. must provide the Commission's Consumer Affairs Branch with the name and address of its designated contact person(s) for purposes of resolving consumer complaints. This information must be updated if the name or telephone number changes, or at least annually.

8. DTS of CA, Inc. must notify the Director of the Communications Division in writing of the date that local exchange service is first rendered to the public, no later than five days after service first begins.

9. DTS of CA, Inc. must file an affiliate transaction report with the Director of the Communications Division, in compliance with Decision 93-02-019, on a calendar year basis using the form contained in Attachment D.

10. DTS of CA, Inc. must file an annual report with the Director of the Communications Division, in compliance with General Order 104-A, on a calendar-year basis with the information contained in Attachment C to this decision.

11. DTS of CA, Inc. (DTS) must provide service to at least one customer in its service territory within 12 months of the effective date of this order, or its certificate will be cancelled. DTS may seek an extension of the 12-month deadline pursuant to Rule 16.6 of the Commission's Rules of Practice and Procedure.

12. DTS of CA, Inc. (DTS) must update its service territory description and map, by local access and transport area, and serve it on all incumbent local exchange carriers whose service territory is adjacent to DTS. DTS should file its updated service territory description and map and the proof of service on all incumbent local exchange carriers as a Tier 1 Advice Letter with the Director of the Communications Division.

13. DTS of CA, Inc. must file Tier 1 Advice Letters with the Director of the Communications Division updating the Commission on the number and location of customers served within 30 days of providing service to its first customer, 12 months after the effective date of this decision, 24 months after the effective date of this decision, and 60 months after the effective date of the decision.

14. Prior to providing service, DTS of CA, Inc. (DTS) must file a Tier 1 Advice Letter with the Director of the Communications Division and provide:

a. A description of any third parties utilized to deliver 911 calls;

b. A description of the Federal Communications Commission's 911 requirements for satellite service and providers and whether DTS is exempt or simply purchasing services and capacity from the satellite service provider;

c. A letter from the 911 Office approving DTS' process for delivery of 911 calls; and

d. A letter from DTS attesting to its provisioning of 911 service to all of its customers.

15. DTS of CA, Inc. (DTS) must complete at least one year of operations before filing a general rate case and the Commission must have completed a review of its general rate case prior to DTS receiving California High Cost Fund-A support.

16. DTS of CA, Inc. (DTS) has exclusive authority to provide service to all currently unserved territory for twelve months from the effective date of this decision. After that time, if another carrier applies to provide service to any local access and transport area where DTS is not currently providing service to at least one customer, DTS must surrender that local access and transport area without protest.

17. This proceeding is closed.

This order is effective today.

Dated February 24, 2011, at San Francisco, California.

D1102007 Attachments A-D

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