2. Background
On May 25, 2006, the Commission opened this rulemaking to conduct a comprehensive review of its Telecommunications Public Policy Programs-the Universal Lifeline Telephone Service (LifeLine), Payphone Programs, Deaf and Disabled Telecommunications Program (DDTP), and California Teleconnect Fund (CTF). To initiate the review, the Commission posed a series of questions regarding these programs and set filing dates for initial comments and proposals as well as reply comments. The Commission also stated that at least three public participation hearings would be held at locations throughout the state.
Initial comments and proposals were filed on July 28, 2006,1 with reply comments following on September 15, 2006. Public participation hearings were held in San Diego, Oxnard, and Sacramento.
In initiating this proceeding, the Commission sought comment on a wide range of issues related to the four Telecommunications Public Policy Programs and the funding mechanism for those programs. The Commission believed review of these programs was long overdue, particularly given vast changes in the communications marketplace due to new federal and state laws mandating competition, new voice technologies that have developed,2 and the fact that some of the new technologies, particularly wireless phones, have been adopted by consumers in large numbers.3 The Commission performed outreach around the state via public participation hearings to talk to consumers directly impacted by these important programs. The Commission directed that all proposals for change "explicitly address consistency with statutory goals, necessity, feasibility, and cost effectiveness" and set forth "estimated costs" and "projected, specific benefits."4 To assist the parties, the Commission provided a list of questions.
On July 13, 2007, the assigned Commissioner and Administrative Law Judge (ALJ) issued a ruling and scoping memo to define the specific issues to be addressed for each program. The ruling determined that while some of the new communications services not currently subject to surcharges to fund the public policy programs, such as Internet-based telephone service, may undermine the funding mechanism as customers migrate to other providers, no significant, near-term threat to the current intrastate surcharge methodology had been identified. Accordingly, the ruling concluded the prudent course was to monitor any impacts to our funding mechanism, as well as potential changes on the federal level5 and in other states.
The ruling next considered changes necessary to the California LifeLine6 Program in light of the Commission's Uniform Regulatory Frameworks Decision (D.) 06-08-030 lifting price regulation on most local exchange service in California, but freezing basic rates until January 1, 2009. The ruling included a series of questions surrounding a proposal to adopt a specific support amount for all customers who qualify for California LifeLine, and scheduled a workshop.
The ruling noted that the Deaf and Disabled Telecommunications Program is currently implementing a Commission approved pilot project that will bring wireless devices to DDTP participants to encourage increased mobility and personal security for people with disabilities. This pilot program is limited to those persons also eligible for the LifeLine low-income program.7 The ruling asked the Communications Division to monitor evaluation of the pilot program and bring forward any proposals for permanent implementation.
In addressing the CTF, the ruling set forth several issues for further consideration:
1. Expanding the CTF to include the California Community Colleges;
2. For schools and libraries, expanding the list of CTF-eligible services to mirror the services included in the federal E-rate program;
3. Improving overall statewide E-rate application and participation rates by dedicating Commission staff or a third-party consultant to provide E-rate application assistance to nonparticipating potential applicants, particularly those in low performing schools, low income, or disadvantaged areas, and rural or remote settings;
4. Expanding the CTF to fund 50% of the remaining costs in California Telemedicine projects selected for funding by the FCC's Telemedicine Pilot Program;8 and
5. Requiring telephone service providers that are certificated by the Commission to provide CTF discounts on E-rate eligible services (telecommunications and Internet access) to all qualifying CTF entities.
The final topic addressed by the ruling was the Payphone Provider Enforcement and Public Policy Payphone Programs. The ruling sought comment on the California Payphone Association's recommendations to terminate the Public Policy Payphone Program and combine the Payphone Provider Enforcement Program with the Commission's general enforcement program, including funding.
On September 18, 2007, the assigned Commissioner and ALJ issued a ruling to seek comment on the proposal to add the Public Policy Payphone Program to CTF for administration and funding.
In today's decision, we resolve the issues identified with the CTF, Payphone, and DDTP programs. Lifeline will be addressed in a separate future decision. We first set out the positions of the parties on each program, and then address each program in the Discussion section.
1 The following parties submitted initial comments: Assistive Technology Law Center, Pacific Bell Telephone Company dba AT&T California, California Cable and Telecommunication Association, California Coalition of Agencies Serving the Deaf and Hard of Hearing, California Communications Access Foundation, California Council of the Blind, California Payphone Association, California Community Technology Policy Group and Latino Issues Forum, Cingular Wireless, Citizens/Frontier Telephone, Cox California, Cricket Communications, Disability Rights Advocates, Division of Ratepayer Advocates, Equipment Program Advisory Committee, FONES4All, Greenlining Institute, 14 Small Local Exchange Carriers, SureWest Telephone, Telecommunications Access for the Deaf and Disabled Advisory Committee, The Utility Reform Network and National Consumer Law Center, Verizon California Inc., Verizon Wireless, Winston Ching, and the World Institute on Disabilities.
2 Examples of new voice technologies include wireless and satellite phones and Voice over Internet Protocol (VoIP).
3 More Californians have wireless phones than landline phones. At the end of June 2007, California had over 30.2 million wireless phone customers, and 21.4 million landline phone customers. FCC Local Telephone Competition Report at Tables 7 an 14, March 2008, available at http://www.fcc.gov/wcb/iatd/comp.html.
4 Order Instituting Rulemaking to Review the Telecommunications Public Policy Programs, R.06-05-028, at 1 (May 25, 2006).
5 On September 6, 2007, the Federal-State Joint Board on Universal Service issued a Statement on Long Term, Comprehensive High-Cost Universal Service Reform, in WC Docket No. 05-337 and CC Docket No. 96-45. It stated: "The Joint Board is taking a fresh look at high-cost universal service support. The Joint Board has tentatively agreed that: 1. Support mechanisms for the future will focus on: a. Voice; b. Broadband; c. Mobility. 2. In addition to the principles set forth in the statute, support mechanisms for the future will be guided by the following principles: a. Cost control; b. Accountability; c. State participation; d. Infrastructure build out in unserved areas. 3. The equal support rule will not be part of future support mechanisms." The FCC is now seeking comment on these recommendations.
6 This program is authorized in the Moore Universal Telephone Service Act, Pub. Util. Code §§ 871 - 884.
7 CPUC Resolution T-17089, adopted May 3, 2007.
8 Rural Health Care Support Mechanism, WC Docket No. 02-60, Order, FCC 07-198 (rel. Nov. 19, 2007) as corrected by Rural Health Care Support Mechanism, WC Docket No. 02-60, Erratum, DA 07-5018 (rel. Dec. 17, 2007). See also, Rural Health Care Support Mechanism, WC Docket No. 02-60, Order, 21 FCC Rcd 11111 (2006) (2006 Pilot Program Order), Rural Health Care Support Mechanism, WC Docket No. 02-60, Order on Reconsideration, 22 FCC Rcd 2555 (2007) (Pilot Program Reconsideration Order).
