II. DISCUSSION
A. Factual and Legal Support for Tier 3 Requirement
Cox contends that there is no factual or legal support for the Commission's determination that CLECs file more restrictive changes to basic service terms and conditions via Tier 3 advice letters. (Cox Rehrg. App. of D.07-09-018, p. 2; Cox Rehrg. App. of D.07-09-019, p. 2.) Cox contends that this requirement should be deleted because it is inconsistent with prior Commission rules and practice. (Cox Rehrg. App. of D.07-09-018, p. 6; Cox Rehrg. App. of D.07-09-019, p. 6.)
D.07-09-018 adopted the GO 96-B three-tier framework for advice letter filings of URF Carriers. (D.07-09-018, at pp. 17-18.) Tier 1 advice letters are effective upon filing and are approved automatically within 30 days ("deemed approved") if not protested. (GO 96-B, General Rule 7.3.3.) Tier 2 advice letters are effective only after approval by staff, but if there is no protest and no action by the staff within 30 days, they are deemed approved, as in the case of Tier 1 advice letters. (GO 96-B, General Rule 7.3.4.) Tier 3 advice letters are effective only after approval by Commission resolution and cannot be deemed approved. (GO 96-B, General Rule 7.3.5.)
D.07-09-018 makes the following determination regarding the filing of advice letters for basic service terms and conditions:
As also discussed in our accompanying GO 96-B decision, we find that changes to terms and conditions for basic service shall be filed in Tier 1, to the extent that such changes are not inconsistent with law, or Commission orders or decisions, and to the extent that such changes are not more restrictive. Such treatment is consistent with findings in URF Phase I. Imposition of more restrictive basic service terms and conditions, however, shall be filed in Tier 3.
(D.07-09-018, at pp. 14-15, See also D.07-09-018, at p. 76 & p. 89, Conclusion of Law ("COL") 4.)
The accompanying GO 96-B decision, D.07-09-019 states:
We reiterate that an URF Carrier may not change terms and conditions of its basic service tariff to the extent that the terms and conditions are required by state, or Commission rule or order. Imposition of more restrictive terms and conditions to the basic service tariff shall be filed in Tier 3. Otherwise, less restrictive and other changes to terms and conditions of basic service that do not conflict with law or Commission requirements shall be filed in Tier 1.
(D.07-09-019, at p. 58.)
In D.07-09-019, we adopted Telecommunications Industry Rule 7.1(5), which provides that matters eligible to be filed under Tier 1 include:
A change by an URF Carrier to a rate, charge, term, or condition of a regulated service (except for ILEC Basic Service rates). Changes to terms and conditions for Basic Service that are not more restrictive and that do not conflict with law or the Commission's decisions or orders are permitted.
We also adopted Telecommunications Industry Rule 7.3(1), which provides that any advice letter not subject to review under Tier 1 or Tier 2 must be filed under Tier 3.
Upon review of D.07-09-018 and D.07-09-019, as well as the administrative record in this proceeding, we agree with Cox that the record may be inadequate to support the determination that advice letters filings with more restrictive terms and conditions for basic service should be under Tier 3. Accordingly, we modify D.07-09-018 and
D.07-09-019, as set forth in the ordering paragraphs below, to delete language that requires URF carriers to file more restrictive changes to basic service terms and conditions via Tier 3 advice letters.2
Cox contends that advice letters with more restrictive terms and conditions to basic service should be filed in Tier 1. (Cox Rehrg. App. of D.07-09-018, pp. 3-4; Cox Rehrg. App. of D.07-09-019, pp. 3-4.) This contention has merit.
In the Phase I Decision, we determined that:
In a fast-moving technology space like telecommunications, there is no public interest in maintaining an outmoded tariffing procedure that requires the burdensome regulatory review of cost data and delays the provision of services (particularly new or less expensive ones) to customers. This system only made sense in a world where there was a single dominant ILEC, and active regulatory intervention was required to protect customers. Thus, it is reasonable that all advice letters for tariffed services should go into effect on a one-day filing.
(Phase I Decision [D.06-08-030], supra, at pp. 182-183 (slip op.) (emphasis added.).) Therefore, pursuant to the Phase I Decision, advice letters with more restrictive terms and conditions for basic service were effective on one-day filing. This one-day effective filing rule applied to URF ILECs and to CLECs. (Id. at p. 235, OP 9 & p. 236, OP 13.)
In D.07-09-018 and D.07-09-019, we modified the one-day effective advice letter filing requirement of the Phase I Decision and instead applied the GO 96-B three-tier framework for URF advice letter filings. Specifically, D.07-09-018 and D.07-09-019 modified the one-day effective filing rule to "effective pending disposition" under GO 96-B's General Rule 7.3.3 (Tier 1).3 (See e.g. D.07-09-018, at pp. 13-14.) In
D.07-09-018 and D.07-09-019, we stated that Tier 1 would comprehensively apply to the URF advice letters that formerly qualified for one-day effective filing. (See e.g.
D.07-09-018, at p. 89, COL 1; D.07-09-019, at p. 8.) Thus, in response to Cox/Time Warner Telecom of California, LP's (Time Warner's) Comments, we stated:
Cox/Time Warner supports using Tier 1 for the range of URF advice letters that we considered initially for one-day effective advice letter filing. As discussed, we believe that this approach best accommodates the policies of URF while providing guidelines for the advice letters.
(D.07-09-018, at p. 24 (footnote omitted).)
Since advice letter filings with more restrictive terms and conditions for basic service qualified for one-day effective filing under the Phase I Decision, Tier 1 treatment for these advice letters is consistent with our determination that Tier 1 would apply comprehensively to advice letters that were previously effective on one-day filing. Therefore, it is consistent with our treatment of other URF advice letters that had previously qualified for one-day effective filing.4 We note that there is no support in the record for treating basic service terms and conditions differently than terms and conditions for other services, which are eligible to be filed under Tier 1. In making their proposals regarding which tier would be appropriate for advice letter filings for changes to terms and conditions, parties did not differentiate between basic service and other services.5
Accordingly, we modify D.07-09-018 and D.07-09-019, as set forth in the ordering paragraphs below, to clarify language regarding advice letter filings for basic service terms and conditions that is inconsistent with our determination that Tier 1 would comprehensively apply to the URF advice letters that formerly qualified for one-day effective filing.6
B. Notice of Tier 3 Requirement
Cox contends that by requiring CLECs to file more restrictive basic service terms and conditions via a Tier 3 advice letter, the Commission modified the existing rules without providing notice and a comment period in violation of Cox's procedural due process rights. (Cox Rehrg. App. of D.07-09-018, p. 7; Cox Rehrg. App. of
D.07-09-019, p. 7.) As discussed above, we are modifying D.07-09-018 and
D.07-09-019 to delete this requirement. Accordingly, Cox's contention about notice is moot.
C. Clarifications
In addition, we clarify and correct the following inconsistencies and clerical errors in D.07-09-019:
Telecommunications Industry Rule 5.2(i) should be modified so that the word "services" follows the word "detariffed."
Telecommunications Industry Rule 7.1(5) should be modified to replace the word "regulated" with the word "retail."
Telecommunications Industry Rule 7.4(3) should be clarified to state that: "a GRC-LEC or an URF Carrier that is an incumbent local exchange carrier" is subject to the application requirement for transfers of control. This clarification is consistent with Telecommunications Industry Rule 7.2(4), which provides that the following matter must be filed under Tier 2: "A request to transfer by a carrier other than a GRC-LEC or an URF Carrier that is an incumbent local exchange carrier."
2 Although Cox's rehearing applications contentions relate only to CLECs, we delete this requirement as to URF Carriers, including both URF ILECs and CLECs, because the record also does not support imposing this requirement on URF ILECs. (See SureWest Response to Cox Rehrg. App. of D.07-09-018, at p. 3; Verizon Response to Cox Rehrg. App. of D.07-09-018, at p. 7.) Furthermore, this requirement was imposed on URF Carriers and there was no distinction made between URF ILECs and CLECs.
3 The Phase I Decision required URF carriers to provide 30-day advance notice to all affected customers for tariffs that imposed price increases or more restrictive terms and conditions. (Phase I Decision [D. 06-08-030], supra, at p. 232, COL 35 (slip op.).) D.07-09-018 and
D.07-09-019 did not modify this notice requirement.
4 A review of the types of advice letter filings in Tiers 2 and 3 further supports the appropriateness of Tier 1 for advice letter filings with more restrictive terms and conditions for basic service. Most of the advice letter filings in Tiers 2 and 3 involve GRC-LEC advice letters. GRC-LECs are rural local exchange carriers who are still subject to traditional rate-of-return regulation and have their rates set through general rate cases. (D.07-09-018, at pp. 43-44.) The market power findings of the Phase I Decision excluded the GRC-LECs. (D.07-09-018, at pp. 43-44.) Aside from GRC-LEC advice letters, Tier 2 includes: detariffing by an URF Carrier; a request to transfer by a carrier other than a GRC-LEC or URF ILEC; and an advice letter appropriate to Tier 1 but for which the utility submitting the advice letter requests review and disposition under Tier 2. (Telecommunications Industry Rule 7.2.) Aside from GRC-LEC advice letters, Tier 3 includes: a matter appropriate to an advice letter but not subject to review and disposition under Tier 1 or Tier 2 and a negotiated interconnection agreement pursuant to Section 252 of the Telecommunications Act of 1996. (Telecommunications Industry Rule 7.3.)
5 See e.g. Opening Comments of Cox/Time Warner dated February 28, 2007 at p. 1; Opening Comments of the Division of Ratepayer Advocates dated March 2, 2007 at p. 50; Opening Comments of TURN dated March 2, 2007 at p 19; Reply Comments of Cox/ Time Warner dated March 30, 2007 at p. 13; and Reply Comments of Calaveras Telephone Company, et al. dated March 30, 2007 at pp. 1-2.
6 The modifications made herein to D.07-09-018 and D.07-09-019 do not change our determination that only changes to terms and conditions for Basic Service that do not conflict with law or the Commission's decisions or orders are permitted under Tier 1. For instance, there are requirements regarding basic service imposed in prior Commission decisions, such as in Re Universal Service and Compliance with the Mandates of Assembly Bill 3643 [D.96-10-066] (2006) 68 CPUC.2d 524, that cannot be changed through a Tier 1 advice letter.
Furthermore, the modifications made herein to D.07-09-018 and D.07-09-019 only apply to requirements regarding advice letter filings for basic service terms and conditions. Therefore, the modifications made herein do not affect any other determinations we made in D.07-09-018 or D.07-09-019 that certain advice letters that may have formerly been effective on one-day filing do not qualify for Tier 1 treatment. For instance, the modifications do not affect advice letter filings for basic service rates since we explicitly deferred consideration of this issue to
R.06-06-028.
