14. Assignment of Proceeding

Catherine J. K. Sandoval is the assigned Commissioner and Richard W. Clark is the assigned Administrative Law Judge in this proceeding.

Findings of Fact

1. California Broadband Cooperative, Inc. (CBC) filed an application, on September 16, 2011, for a certificate of public convenience and necessity (CPCN) for authority to operate as a competitive provider of full facilities-based and resold competitive local exchange and nondominant interexchange telecommunication services within the State of California.

2. CBC requested authority to operate as a full facilities-based local exchange carrier in the territories currently served by AT&T, Verizon, SureWest, and Frontier Communications and as a non-dominant interexchange carrier in the entire State of California.

3. On September 21, 2011 CBC filed a Motion to Strike reference to Frontier Communications of the Westcoast, Inc. from the application because that company is a rate-regulated telecommunications carrier whose territory is not yet open to competition.

4. CBC has been awarded grants totaling $100,443,505 through state (CASF funding of $19,294,717)8 and federal (ARRA funding of $81,148,788)9 grant programs.

5. CBC requested an exemption from the tariffing requirements, pursuant to the Commission's General Order 96-B, Telecommunications Industry Rule 5.14 because CBC does not intend to offer residential services.

6. CBC requested that it be exempted from the requirements of Pub. Util. Code §§ 816-830 concerning stocks and security and § 851 concerning the encumbrance and transfer of CBC property.

7. CBC requested that it be exempted from any requirement to maintain its books and records in accordance with the Uniform System of Accounts specified in Title 47 I.E Part 32.

8. The environmental impacts of CBC's middle mile network has already been studied by the Commission and a Mitigated Negative Declaration (MND) was approved in Resolution T-1737 on November 10, 2011, consistent with CEQA.  Applicant is seeking authority to undertake certain construction activities pursuant to this CPCN application, in addition to those studied in the MND, that it believes are exempt from CEQA but subject to the 21-day process for obtaining review and approval of such construction by the Commission Energy Division staff.

9. The Commission has granted other carriers authority to rely upon the 21-day review process to determine if a proposed project is exempt from CEQA. See, e.g., ClearLinx Network Corporation (D.06-04-063), New Path Networks, LLC (D.06-04-030), CA-CLEC LLC (D.06-04-067), Sunesys, Inc. (D.06-06-047), NextG Networks of California, Inc. (D.07-04-045), Broadband Associates International (D.07-08-026), Trillion Partners, Inc. (D.07-11-028), Freedom Telecommunications, Inc. (D.09-11-021), etc.

10. CBC has a minimum of $100,000 of cash or cash equivalent that is reasonably liquid and readily available to meet its start-up expenses.

11. CBC has sufficient additional cash or cash equivalent to cover deposits that may be required by other telecommunications carriers in order to provide the proposed service.

12. CBC's management possesses sufficient experience, knowledge, and technical expertise to provide local exchange and inter-exchange services to the public.

13. No one associated with or employed by CBC as an affiliate, officer, director, partner, or owner of more than 10% of CBC was previously associated with a telecommunications carrier that filed for bankruptcy, or was sanctioned by the Federal Communications Commission or any state regulatory agency for failure to comply with any regulatory statute, rule, or order.

14. No one associated with or employed by it as an affiliate, officer, director, partner, or owner of more than 10% of CBC was previously associated with any telecommunications carrier that has been found either civilly or criminally liable by a court of appropriate jurisdiction for a violation of Sections 17000, 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.

15. In Exhibit 3 to its application, CBC provided a map of the location of its proposed service territory.

16. CBC provided an estimate of its customer base for the first, second, third and fifth year of operation.

17. Pursuant to Rule 11.4, Applicants filed a motion for leave to file confidential materials under seal, including Exhibits 4 through 7 to the application.

Conclusions of Law

1. CBC should be granted a CPCN to provide full facilities-based and resold competitive local exchange telecommunication services in the territories currently served by AT&T, Verizon, SureWest, and Frontier Communications and as a non-dominant interexchange carrier in the entire State of California, subject to compliance with the terms and conditions set forth in the Ordering Paragraphs.

2. CBC should be allowed to use the Energy Division 21-day CEQA exemption process for aspects of the project not covered by Resolution T-17347.

3. CBC, once granted a CPCN, should be subject to the applicable Commission rules, decisions, General Orders, and statutes that pertain to California public utilities.

4. CBC should be granted an exemption from our tariff filing requirements pursuant to the Commission's General Order 96-B, Telecommunications Industry Rule 5.14.

5. CBC should be granted an exemption from requirements of Pub. Util. Code §§ 816-830 concerning stocks and security and § 851 concerning the encumbrance and transfer of CBC property.

6. CBC should be granted an exemption from any requirement to maintain its books and records in accordance with the Uniform System of Accounts specified in Title 47 I.E Part 32.

7. Applicants' motion to file their Exhibits 4 through 7 to the supplement to the application under seal should be granted for two years.

ORDER

IT IS ORDERED that:

1. A certificate of public convenience and necessity is granted to the California Broadband Cooperative, Inc., to provide full facilities-based and resold competitive local exchange telecommunication services in the territories currently served by Pacific Bell Telephone Company dba AT&T California, Verizon California, Inc., SureWest Telephone (formerly Roseville Telephone Company), and Frontier Communication as a non-dominant interexchange carrier in the entire State of California, subject to compliance with the terms and conditions set forth below.

2. The certificate of public convenience and necessity granted and the authority to render service under rates, charges, and rules authorized herein will expire if not exercised within 12 months after the effective date of this order.

3. The corporate identification number assigned to California Broadband Cooperative, Inc., U 7221, 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. California Broadband Cooperative, Inc. may seek authorization to construct facilities which may be subject to an exemption from the requirements of the California Environmental Quality Act, pursuant to the process set forth in section 3 of the body of this order. For other types of projects, California Broadband Coalition, Inc. shall apply for Commission authorization and undergo any required environmental review before commencing construction.

5. The California Environmental Quality Act review process adopted in today's decision is appropriate for the projects as described in the application. A different level of California Environmental Quality Act review may be required, should California Broadband Coalition, Inc. propose different types of construction projects.

6. The staff of the Commission's Energy Division is authorized to review, process, and act upon California Broadband Coalition, Inc. requests for a determination that its proposed construction activities are exempt from the requirements of the California Environmental Quality Act.

7. In addition, to all the requirements applicable to competitive local exchange carriers and interexchange carriers included in Attachments B, C, and D to this decision, California Broadband Cooperative, Inc. shall be subject to all applicable Commission rules, decisions, General Orders and statutes that pertain to California public utilities.

8. California Broadband Cooperative, Inc.'s motion to file their Exhibits 4 through 7 to supplement the application under seal is granted. The information will remain under seal for a period of two years after the date of issuance of this order. During this two-year period, this information will remain under seal and may not be viewed by any person other than the assigned Commissioner, the assigned Administrative Law Judge (ALJ), the Assistant Chief ALJ, or the Chief ALJ, except as agreed to in writing by California Broadband Cooperative, Inc. or their successors in interest, or as ordered by a court of competent jurisdiction. If California Broadband Cooperative, Inc. or its successors in interest, believe that it is necessary for this information to remain under seal for longer than two years, California Broadband Cooperative, Inc., or their successors in interest may file a new motion at least 30 days before the expiration of this limited protective order.

9. Application 11-09-010 is closed.

This order is effective today.

Dated December 1, 2011, at San Francisco, California.

ATTACHMENT A

(intentionally left blank)

Exemption from filing tariffs is granted.

ATTACHMENT B

REQUIREMENTS APPLICABLE TO COMPETITIVE LOCAL EXCHANGE CARRIERS AND INTEREXCHANGE CARRIERS

1. Applicant shall file, in this docket, a written acceptance of the certificate granted in this proceeding within 30 days of the effective date of this order.

2. Applicant is subject to the following fees and surcharges that must be regularly remitted. Per the instructions in Appendix E to Decision (D.) 00-10-028, the Combined California PUC Telephone Surcharge Transmittal Form must be submitted even if the amount due is $0.

a. The current 1.150% surcharge applicable to all intrastate services except for those excluded by D.94-09-065, as modified by D.95-02-050, to fund the Universal Lifeline Telephone Service Trust Administrative Committee Fund (Pub. Util. Code § 879; Resolution T-17071, dated March 1, 2007, effective April 1, 2007);

b. The current 0.200% surcharge applicable to all intrastate services except for those excluded by D.94-09-065, as modified by D.95-02-050, to fund the Deaf and Disabled Telecommunications Program (Pub. Util. Code § 2881; D.98-12-073 and Resolution T-17127, dated December 20, 2007, effective January 1, 2008);

c. The user fee provided in Pub. Util. Code §§ 431-435, which is either 0.180% of gross intrastate revenue (Resolution M-4819, dated June 7, 2007, effective July 1, 2007);

d. The current 0.00% surcharge applicable to all intrastate services except for those excluded by D.94-09-065, as modified by D.95-02-050, to fund the California High Cost Fund-A (Pub. Util. Code § 739.3; D.96-10-066, at 3-4, App. B, Rule 1.C (Resolution T-17299, dated November 19, 2010, effective December 1, 2010);

e. The current 0.300% surcharge applicable to all intrastate services except for those excluded by D.94-09-065, as modified by D.95-02-050, to fund the California High Cost Fund-B (D.96-10-066, p. 191, App. B, Rule 6.F.; D.07-12-054; Resolution T-17311, dated March 24, 2011, effective May 1, 2011);

f. The current 0.140% surcharge applicable to all intrastate services except for those excluded by D.94-09-065, as modified by D.95-02-050, to fund the California Advanced Services Fund (D.07-12-054); Resolution T-17343, dated September 22, 2011, effective November 1, 2011; and

g. The current 0.079% surcharge applicable to all intrastate services except for those excluded by D.94-09-065, as modified by D.95-02-050, to fund the California Teleconnect Fund (D.96-10-066, at 88, App. B, Rule 8.G, Resolution T-17142, dated April 24, 2008, effective June 1, 2008).

Note: These fees change periodically. In compliance with Resolution T-16901, December 2, 2004, Applicant should check the joint tariff for surcharges and fees filed by Pacific Bell Telephone Company (dba AT&T California) and apply the current surcharge and fee amounts in that joint tariff on end-user charges until further revised.

3. The decision granting this application exempts the California Broadband Coalition, Inc. from the requirement to file tariffs with the Commission.

4. Prior to initiating service, Applicant shall 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 shall be updated if the name or telephone number changes, or at least annually.

5. Applicant shall 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.

6. Applicant shall notify the Director of the Communications Division in writing of the date interLATA service is first rendered to the public within five days after service begins, and again within five days after intraLATA service begins.10

7. Applicant shall keep its books and records in accordance with the Generally Accepted Accounting Principles.

8. In the event Applicant's books and records are required for inspection by the Commission or its staff, it shall either produce such records at the Commission's offices or reimburse the Commission for the reasonable costs incurred in having Commission staff travel to its office.

9. Applicant shall file an annual report with the Director of the Communications Division, in compliance with GO 104-A, on a calendar-year basis with the information contained in Attachment C to this decision.

10. Applicant shall file an affiliate transaction report with the Director of the Communications Division, in compliance with D.93-02-019, on a calendar year basis using the form contained in Attachment D.

11. Applicant shall ensure that its employees comply with the provisions of Public Utilities (Pub. Util.) Code § 2889.5 regarding solicitation of customers.

12. Within 60 days of the effective date of this order, Applicant shall comply with Pub. Util. Code § 708, Employee Identification Cards, and notify the Director of the Communications Division in writing of its compliance.

13. If Applicant is 90 days or more late in filing an annual report, or in remitting the surcharges and fee listed in 2 above, the Communications Division shall prepare for Commission consideration a resolution that revokes Applicant's CPCN unless it has received written permission from the Communications Division to file or remit late.

14. Applicant is exempt from Commission Rules of Practice and Procedure 3.1(b).

15. Applicant is exempt from Pub. Util. Code §§ 816-830.

16. Applicant is exempt from the requirements of Pub. Util. Code § 851 for the transfer or encumbrance of property whenever such transfer or encumbrance serves to secure debt.

17. If Applicant decides to discontinue service or file for bankruptcy, it shall immediately notify the Communications Division's Bankruptcy Coordinator.

18. Applicant shall send a copy of this decision to concerned local permitting agencies not later than 30 days from the date of this order.

(END OF ATTACHMENT B)

ATTACHMENT C

ANNUAL REPORT

An original and a machine readable, copy using Microsoft Word or compatible format shall be filed with the California Public Utilities Commission, State Office Building, 505 Van Ness Avenue, Room 3107, San Francisco, CA 94102-3298, no later than March 31st of the year following the calendar year for which the annual report is submitted.

Failure to file this information on time may result in a penalty as provided for in §§ 2107 and 2108 of the Public Utilities Code.

Required information:

For answers to any questions concerning this report, call (415) 703-2883.

(END OF ATTACHMENT C)

ATTACHMENT D

CALENDAR YEAR AFFILIATE TRANSACTION REPORT

1. Each utility shall list and provide the following information for each affiliated entity and regulated subsidiary that the utility had during the period covered by the annual Affiliate Transaction report.

· Form of organization (e.g., corporation, partnership, joint venture, strategic alliance, etc.);

· Brief description of business activities engaged in;

· Relationship to the utility (e.g., controlling corporation, subsidiary, regulated subsidiary, affiliate);

· Ownership of the utility (including type and percent ownership)

· Voting rights held by the utility and percent; and

· Corporate officers.

2. The utility shall prepare and submit a corporate organization chart showing any and all corporate relationships between the utility and its affiliated entities and regulated subsidiaries in #1 above. The chart should have the controlling corporation (if any) at the top of the chart; the utility and any subsidiaries and/or affiliates of the controlling corporation in the middle levels of the chart and all secondary subsidiaries and affiliates (e.g., a subsidiary that in turn is owned by another subsidiary and/or affiliate) in the lower levels. Any regulated subsidiary should be clearly noted.

3. For a utility that has individuals who are classified as "controlling corporations" of the competitive utility, the utility must only report under the requirements of #1 and #2 above any affiliated entity that either (a) is a public utility or (b) transacts any business with the utility filing the annual report excluding the provision of tariff services.

4. Each annual report must be signed by a corporate officer of the utility stating under penalty of perjury under the laws of the State of California (CCP 2015.5) that the annual report is complete and accurate with no material omissions.

5. Any required material that a utility is unable to provide must be reasonably described and the reasons the data cannot be obtained, as well as the efforts expended to obtain the information, must be set forth in the utility's annual Affiliate Transaction Report and verified in accordance with Section I-F of Decision 93-02-019.

6. Utilities that do not have affiliated entities must file, in lieu of the annual transaction report, an annual statement to the Commission stating that the utility had no affiliated entities during the report period. This statement must be signed by a corporate officer of the utility, stating under penalty of perjury under the laws of the State of California (CCP 2015.5) that the annual report is complete and accurate with no material omissions.

(END OF ATTACHMENT D)

8 See Resolution T-17232 (describing CBC's "Digital 395 project" for which it conditionally received a California Advanced Services Fund grant).

9 See NTIA Awarded Grants ( http://www2.ntia.doc.gov/grantee/california-broadbandcooperative-inc).

10 California is divided into ten Local Access and Transport Areas (LATAs), each containing numerous local telephone exchanges. InterLATA describes services, revenues and functions relating to telecommunications originating within one LATA and terminating in another LATA. IntraLATA describes services, revenues and functions relating to telecommunications originating within a single LATA.

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