5. Should Reporting Rules Be Changed to Require the Reporting of Broadband Speeds by Tiers?

The ACR of March 27, 2008 sought comments on "whether the Commission should require franchise holders to report on a census tract basis information regarding (i) the number of households to which the holder makes certain broadband speed tiers available in this state; and (ii) the number of households that subscribe to certain broadband speed tiers that the holder makes available in this state."29

In addition, the Commission invited comments on which broadband speed tiers franchise holders should report information on availability and subscribership. Specifically, the ACR of March 27, 2008 stated:

We believe that at a minimum, the speed tiers on which the California Broadband Task Force collected data (less than 1 megabyte per second [mbps]; 1-5 mbps; 5-10 mbps), or comparable to the new Federal Communications Commission (FCC) broadband mapping speeds in its recent decision in Docket 07-38.30

In inviting comments on this proposed modification to General Order 169, the ACR of March 27 cited three new developments that warrant a re-examination of D.07-10-013, where the Commission declined to require franchise holders to submit data concerning broadband speeds:

First, we issued D.07-12-054 in R.06-06-028, in which we established the California Advanced Services Fund (CASF) to encourage the deployment of broadband facilities for providing advanced telecommunications and voice services in unserved and underserved areas of the state.

Second, since our issuance of the Phase II DIVCA decision, the FCC has indicated that it will expand its collection of broadband subscriber data at the federal level ...

Third, we note that the Governor's Broadband Task Force collected data regarding broadband availability and broadband speed tiers as of 2007 ... identifying at least 4% of the state, representing just under 2000 communities and approximately 1.4 million people, who do not have access to broadband at this time.31

Further, the ACR of March 27, 2008 proposed confidentiality protections, promising that the Commission "will not use or make public any of this data on a carrier-specific basis,"32 but also seeking comment "on whether current confidentiality requirements are adequate, or whether the Commission should order more protection (or request additional confidential protection from the Legislature for this data)."33

On June 12, 2008, the FCC issued its Form 477 Order.34 The Form 477 Order requires that each company report the speed of service purchased by customers in a matrix format that includes 64 variations of upstream and downstream speeds.35 It also requires the provision of this information by Census Tracts.36 In those rare instances in which the provision of data at the Census Tract level proves "overly burdensome," the FCC permits the acceptance of "service addresses or GIS coordinates of service" and explicitly cites the California proposals pertaining to matter.37

On the issue of whether a provider offers service and the development of availability maps, the Form 477 Order tentatively concludes "that the Commission [FCC] should collect information that providers use to respond to prospective customers to determine on an address-by-address basis whether service is available."38 In addition, the FCC seeks comment "on whether and how a nationwide broadband mapping program can incorporate the data collected on Form 477, including information on broadband service subscriptions by Census tract and speed tier."39

5.1. Positions of Parties

Concerning reporting requirements, AT&T states that "it cannot support additional broadband reporting requirements proposed in the Scoping Memo"40 and instead "proposes that it voluntarily provide the California Public Utilities Commission with the California broadband data AT&T is required to report to the FCC."41 AT&T offers three arguments to support its position. First, AT&T argues that the reporting requirements outlined in the ACR of March 27, 2008 are pre-empted "most plainly because the FCC has acted within the scope of its congressionally delegated authority to pre-empt state regulation of broadband."42 Second, AT&T argues that no section "of DIVCA requires each franchise holder to report the additional broadband data proposed in the Scoping Memo. Thus, the imposition of such a requirement would be unlawful."43 Third, AT&T argues that broadband reporting requirements imposed on video franchise holders "would be ineffective and discriminatory"44 because many "of the providers offering this wide range of broadband technologies are not video franchise holders or affiliates of video franchise holders."45 As a result, AT&T argues that the information will not be a "reliable indicator that no broadband service is available in that area from some other provider" and would be discriminatory because it would impose "significant costs and potential penalties on only one segment of a very competitive industry" and therefore "would distort the market and result in bad public policy."46

Verizon "strongly urges the Commission to adopt speed tiers and reporting requirements that are consistent with those adopted by the FCC."47 Verizon advances several arguments supporting this position. First, Verizon notes that once the FCC acts, "carriers will be obligated to track data in that format, and use of a different format for California will only create duplicate tracking and reporting efforts, leading to additional costs and administrative confusion."48 Verizon argues that such action "would reverse course on a form of regulation that has proven so successful."49

Further, Verizon points out that "different reporting formats will mean that California will be unable to benchmark itself against other states or against national data compiled by the FCC."50 Verizon also argues that implementation issues will need to "be indentified and addressed" and notes that since annual reports are not due until next April, there is "more than sufficient time to review any rules established by the FCC and implement them as needed in California."51 Verizon concludes that "the Commission should defer to the FCC and state its intent to conform its requirements to any standards adopted by the FCC.52

CCTA argues "that rather than imposing new, burdensome requirements, particularly state-specific requirements, on state franchise holders, the Commission adopt the speed tiers used by the FCC and access the FCC reports."53 Also, despite the fact the FCC reports indicate that it will require the reporting of the number of subscribers by broadband speed, CCTA states "there is no justification to require reports as to the number of households that subscribe to the specific broadband tiers, and the Ruling offers none."54 Thus, CCTA appears to both endorse and oppose the adoption of the FCC reporting requirements.

The Small LECs argue for reporting requirements that track those of the FCC. The Small LECs state "[b]ecause of the impact on competition that regulatory costs can have, particularly by favoring large competitors over smaller competitors, the Small LECs urge the Commission to parallel the FCC's broadband reporting requirements to the fullest extent possible."55 The Small LECs also join CCTA in opposing "a data collection requirement that mandates reporting the number of homes that subscribe to a particular broadband data speed tier"56 especially because "such information is particularly sensitive in what is a very competitive environment and should not be collected."57

DRA supports "the collection of data on broadband speed tiers from video service providers" "[f]or all the reasons set forth in the ACR."58 DRA supports requiring the "reporting of speed tiers of less than 1 mbps, 1-3 mbps, 3-5 mbps, 5-10 mbps, and greater than 10 mbps "59 In its Reply Comments, DRA states that it

... is also not opposed to adopting the speed tiers proposed by the FCC because the breakdown of tiers in all of these proposals is very similar for the most part. However, the breakdown of tiers should definitely include one cut-off at 3 mbps (which the current proposed FCC tier structure includes, pending issue of the order) and another in excess of 10 mbps (which would be an addition for California state franchisees). ... Collecting data in excess of 10 mbps is also necessary, because, according to the Broadband Task Report, over 50% of California households already have access to broadband speeds that are greater than 10 mbps.60

In addition, DRA supports "performing a periodic review and possible adjustment because technological advances could render the speed tiers that the Commission now adopts obsolete in the future."61 Finally, concerning the issue of confidentiality, "DRA sees no reason to provide additional disclosure restrictions" beyond the protection of GO 66-C, Pub. Util. Code § 583 and the ACR's promise that the Commission "will not use or publicly disclose any of this data on a carrier specific basis."62

TURN states that it "wholeheartedly endorses the requirement for granular reporting of broadband information" arguing that "only through such reporting that the Commission will be able to assess the degree of success ... with increased broadband deployment and competition for video services."63

LIF/CCTP did not file opening comments, but used Reply Comments to support the proposed reporting requirements concerning broadband speed and to urge the collection of even more detailed information. LIF/CCTP notes that it "has continually argued throughout this proceeding that reporting on the specific broadband technology - or as an alternate, on the broadband speed - offered to various communities is necessary for proper monitoring of the non-discriminatory build-out provisions of the Digital Infrastructure and Video Competition Act of 2006 (DIVCA)."64 In addition, LIF/CCTPG argues that "Census Block data is more appropriate [than Census Tract data]"65 and that "reporting on both broadband availability and subscribers is needed."66 Finally, LIF/CCTPG argues that "no additional confidentiality protections are required for broadband speed data."67

5.2. Discussion

We will begin by describing the reporting requirement that we adopt, and then proceed to discuss why this reporting requirement is reasonable, produces benefits at low costs, and is consistent with state law.

We find that it is reasonable to leave unchanged the current GO 169 reporting requirement concerning the availability of broadband service, but that it is reasonable to require that holders of state video franchises report by census tract the number of households that subscribe to broadband speed tiers that the holder makes available in this state. In particular, we find that it is reasonable to require service providers to report on the services to which customers subscribe in exactly the same way that the FCC requires providers to report on the number of subscribers in each Census Tract in each of the broadband tiers and reporting requirements imposed by the FCC.

With the release of the FCC's Form 477 Order, we know that the FCC has announced its intention of developing a "responsive Order within 4 months"68 to develop information on broadband service that is "a rich resource for use by other federal agencies, states, localities, and public private partnerships in focusing on expanding broadband availability in a manner similar to the focusing of resources enabled by the Connect Kentucky project."69 Because of this ongoing investigation by the FCC, we decline to change GO 169 at this time.

Concerning reporting on broadband subscribership, we note that the FCC requires broadband providers to furnish information on the number of subscribers by Census Tract, broken down into 64 speed tiers and by technology. This provides information at a level of detail that meets California's policy needs and enables us to compare California's broadband infrastructure with those of other states and indeed other nations.

The FCC requires the submission of information at much greater detail than the reports developed by the California Broadband Task Force. This information will be especially useful in the implementation of the CASF, adopted in D.07-12-054. We see no reason to depart in any way from the FCC's approach.

We note that since the FCC is collecting this information by census tract, the same collection unit that California is using in its DIVCA reports, the information will be readily useable by the DIVCA program.70 Moreover, the Form 477 Order makes clear that there is no difference between the California and FCC policy goals for understanding and advancing the development of broadband infrastructure.

In particular, this information that the FCC and we are requiring is consistent with Pub. Util. Code § 5960(b)(1), which requires information on broadband subscribership. Furthermore, this FCC reporting requirement is consistent with the stated intent of the DIVCA statute, which seeks to promote "the widespread access to the most technologically advanced cable and video services to all California communities in a nondiscriminatory manner regardless of socioeconomic status"71 and will "[c]omplement efforts to increase investment in broadband infrastructure and close the digital divide."72

We also note that the FCC requirement to collect this detailed information on broadband deployment and speeds makes this information available to California at very low incremental cost; all that a video franchise holder needs to do is transmit this information to the CPUC.

Furthermore, by adopting the reporting requirements of the FCC, California not only avoids imposing regulatory costs on state video franchise holders, but also reaps substantial benefits. In particular, by adopting the reporting requirements of the FCC, California will be able to compare itself with other states. As a result, California will not only be able to track the advances of its digital infrastructure, but compare California's broadband infrastructure with that available in other states and nations. This information, in particular, will provide the best opportunity of ascertaining the effectiveness of DIVCA and enabling California to determine whether additional programs are needed.

We note that we can maintain the ability to compare California data with that of others to the extent that we adopt a procedure for assigning customers to a census tract that is identical to that adopted by the FCC. Therefore, in the case of any conflict, we will defer to the FCC's procedures for assigning customers to census tracts.

In addition, as noted in the ACR dated March 27, 2008, information collected on subscribership to different data speeds will assist the Commission in the implementation of the CASF and collecting this information advances the public interest.

Moreover, since the FCC is requiring the reporting of information on speed and subscribership, the FCC has removed the cost obstacle to collecting the data. Thus, the benefits of requiring that franchise holders submit this information clearly exceed the costs and make it reasonable to modify GO 169 to include such information.

Since the costs of requiring video franchise holders to submit this information that they have collected for the FCC are de minimis, there is little chance that imposing this reporting requirement on video franchise holders will result in the asymmetric and adverse impacts that AT&T posits.

We note that in the Form 477 Order, the FCC requires broadband providers to report separately on speeds greater than 10 mbps, 25 mbps and 100 mps, in substantially greater detail than DRA requests. Since our reporting requirements track those of the FCC, they meet DRA's request.

In summary, we adopt the reporting requirements outlined above and codified in Appendix C as a cost-effective and reasonable method of obtaining information needed to assist in the implementation of DIVCA and CASF.

We decline to adopt TURN's and LIF/CCTPG's proposal to require the collection of data at the census block level, rather than the census tract level. We note that census tract reporting is the current requirement for both the DIVCA program and the FCC. A requirement of reporting data at the census block level of detail would surely increase costs to California broadband companies and at this time we do not see a need for such a detailed requirement. In particular, to compare California to other states would require the aggregation of data into units that make the data comparable to that reported in other states. Additionally, most census information which the Commission may use to analyze broadband deployment is available at the census tract but not the census block level. Thus, imposing a requirement to report a census block benefit is unlikely to produce significant benefits while imposing real costs.

Concerning the question of whether the collection of information on speeds and subscribers should be offered special confidentiality protections, we note that § 5960(d) of the California Public Utilities Code extends the protections of § 583 to all data provided to the Commission annually in the reporting requirements imposed by DIVCA. In addition, General Order 66-C excludes from disclosure confidential information obtained by the Commission which, "if revealed, would place the regulated company at an unfair business disadvantage."73 Since the disclosure of the data concerning a company's data service offerings and subscribership at the census tract level is competitively sensitive information that, if revealed, would place a company at a serious competitive disadvantage, the information collected pursuant to the annual reporting requirements as to a particular company, qualifies for confidential treatment. We therefore amend GO 169 as set forth in Appendix C to clarify that the protections of § 583 and GO 66-C apply to the data submitted.

In addition, the Commission's announced policy of not using or publicly disclosing any of the data on a carrier-specific basis is a reasonable and necessary precaution. We direct the Executive Director and Director of Communications Division to ensure precautions are taken to protect carrier-specific data.

We further note that although parties pointed out the market sensitivity of the data that the Commission plans to gather, no party recommended that the Commission either provide special confidentiality protections for this data or seek additional legislative authority to provide additional confidentiality protections for this data. We note that the Commission routinely collects extremely market-sensitive information in the energy field and in other market areas. To date, the protections of data provided by Pub. Util. Code § 583 and GO 66-C have proved adequate in protecting competitively sensitive energy data, and we do not anticipate that our experience with broadband speeds and subscribership data will be different.

Finally, we find AT&T's argument that federal law pre-empts this Commission from requiring franchise holders to report on subscribership and speed of data connection unconvincing. AT&T's legal arguments that federal law has pre-empted the Commission's requirement that video franchise holders provide information on data services and subscribership depend on Louisiana Pub. Serv. Comm'n v. FCC, 476 U.S. 355 and Vonage Holdings Corp. v. Minnesota PUC, 290 F. Supp.2d 993. Yet when one examines these cases closely, one does not find support for federal pre-emption.

Indeed, a close reading of Louisiana Pub. Serv. Comm'n v. FCC shows that its reasoning supports the conclusion that this Commission has authority to impose the reporting requirements adopted herein. We note that the effect of Louisiana Pub. Serv. Comm'n v. FCC was to permit the regulation of depreciation schedules for intrastate telecommunications services and overturned as unlawful an FCC action to pre-empt the states from regulation of depreciation rates. Nevertheless, as AT&T notes, Louisiana Pub. Serv. Comm'n v. FCC did set out a clear discussion of when state regulatory actions can be pre-empted:

The Supremacy Clause of Art. VI of the Constitution provides Congress with the power to pre-empt state law. Pre-emption occurs when Congress, in enacting a federal statute, expresses a clear intent to pre-empt state law, Jones v. Rath Packing Co., 430 U.S. 519 (1977), when there is outright or actual conflict between federal and state law, e.g., Free v. Bland, 369 U.S. 663 (1962), where compliance with both federal and state law is in effect physically impossible; Florida Lime & Avocado Growers, Inc. v. Paul, 373 U.S. 132 (1963), where there is implicit in federal law a barrier to state regulation; Shaw v. Delta Air Lines, Inc., 463 U.S. 85 (1983), where Congress has legislated comprehensively, thus occupying an entire field of regulation and leaving no room for the States to supplement federal law; Rice v. Santa Fe Elevator Corp., 331 U.S. 218 (1947), or where the state law stands as an obstacle to the accomplishment and execution of the full objectives of Congress. Hines v. Davidowitz, 312 U.S. 52 (1941). Pre-emption may result not only from action taken by Congress itself; a federal agency acting within the scope of its congressionally delegated authority may pre-empt state regulation. Fidelity Federal Savings & Loan Assn. v. De la Cuesta, 458 U.S. 141 (1982); Capital Cities Cable, Inc. v. Crisp, 467 U.S. 691 (1984).74

Applying these criteria to the extant case shows that there is no pre-emption of the proposed reporting requirement. First, the federal statute in question is the same one, albeit modified, as that discussed in this decision - Telecommunications Act - and it remains committed to the principle of shared federal/state jurisdiction. In fact, §  706(a) of the Telecommunications Act of 1996 provides that the FCC "and each State commission ... shall encourage the deployment on a reasonable and timely basis of advanced telecommunications capability to all Americans ... by utilizing ... price cap regulation, regulatory forbearance, measures that promote competition in the local telecommunications market, or other regulating methods that remove barriers to infrastructure investment." (Emphasis added.) Thus, there is no clear intent to pre-empt state law or state efforts to promote investment in the information infrastructure.

Second, there is no outright or actual conflict between federal and state law nor is it physically impossible to comply with federal and state law. Both federal and state laws seek to promote digital infrastructure. Moreover, there is no conflict between the federal and state reporting requirements adopted in this decision - they are identical.

Third, the Federal government has not acted to occupy the entire field of government action. We note that the Supreme Court in Louisiana Pub. Serv. Comm'n v. FCC noted:

However, while the Act would seem to divide the world of domestic telephone service neatly into two hemispheres - one comprised of interstate service, over which the FCC would have plenary authority, and the other made up of intrastate service, over which the States would retain exclusive jurisdiction - in practice, the realities of technology and economics belie such a clean parceling of responsibility. This is so because virtually all telephone plant that is used to provide intrastate service is also used to provide interstate service, and is thus conceivably within the jurisdiction of both state and federal authorities. Moreover, because the same carriers provide both interstate and intrastate service, actions taken by federal and state regulators within their respective domains necessarily affect the general financial health of those carriers, and hence their ability to provide service, in the other "hemisphere."75

We note that the situation that we have today is very similar to that addressed by the court in 1986. Where in 1986 "the realities of technology and economics belie such a clean parceling of responsibility" between federal and interstate jurisdiction, today, technology and economics belie the clean parceling of responsibility between voice, data, and video. Indeed, the same wire is used to transmit voice, data, and video. In addition, voice, data and video are now simply packets of digits.

Fourth, we note that the FCC has not pre-empted states from imposing reporting requirements concerning the deployment and subscribership to digital technologies. This is not surprising, because there is no conflict between federal and state policy - each seeks to promote the digital infrastructure within the economy and to overcome digital divides. Moreover, the very information useful to the FCC that is critical for determining the effectiveness of its programs is also critical to California in determining the effectiveness of its programs, particularly those used to encourage the deployment of broadband technologies in underserved communities and areas of the state.

Similarly, a close reading of Vonage Holdings Corp. v. Minnesota PUC76 finds a factual situation readily distinguishable from that under consideration here. In Vonage Holdings, the Minnesota PUC was attempting to impose an entire telecommunications regulatory regime developed for analog voice on a digital information service, VoIP. Here California is obtaining information, already required by the FCC, on the use and technological capabilities of the local connection to a home or place of business. This local connection, which supplies voice, video and data service, is subject to shared state and federal jurisdiction. Finally, as we noted above, DIVCA has given this Commission the authority to require and the responsibility to assess information on California's information infrastructure.77

In summary, we find AT&T's arguments that federal action prohibits California from requiring cable franchisees to submit information on subscription to high-speed data technologies unconvincing. Neither Louisiana Pub. Serv. Comm'n v. FCC nor Vonage Holdings Corp. v. Minnesota PUC support the proposition that the federal government has pre-empted California from requiring the submission of federal data on the capabilities and use of telecommunications infrastructure. Finally, DIVCA gives the Commission both responsibility and authority to act in the area of infrastructure policy.

29 ACR of March 27, 2008 at 6.

30 Id. at 7.

31 Id. at 8-10.

32 Id. at 12.

33 Id.

34 Development of Nationwide Broadband Data to Evaluate Reasonable and Timely Deployment of Advanced Services to All Americans, Improvement of Wireless Broadband Subscribership Data, and Development of Data on Interconnected Voice over Internet Protocol (VoIP) Subscribership, WC Docket No. 07-38, Report and Order and Further Notice of Proposed Rulemaking, FCC 08-89 (rel. June 12, 2008) (Form 477 Order).

35 Id. at ¶ 20.

36 Id. at ¶14.

37 Id. at ¶ 15 at fn. 50.

38 Id. at ¶35.

39 Id.

40 AT&T Opening Comments at 2.

41 AT&T Opening Comments at 3.

42 Id.

43 Id. at 5.

44 Id. at 6.

45 Id.

46 Id.

47 Verizon Opening Comments at 3.

48 Id.

49 Id.

50 Id.

51 Id. at 4.

52 Id.

53 CCTA Opening Comments at 4.

54 Id. at 3.

55 Small LECs Opening Comments at 3.

56 Small LECs Reply Comments at 2.

57 Id.

58 DRA Opening Comments at 1.

59 DRA Opening Comments at 2, footnote 8.

60 DRA Reply Comments at 2.

61 Id. at 3.

62 DRA Opening Comments at 3.

63 TURN Opening Comments at 3.

64 LIF/CCTPG Reply Comments at 1, footnote omitted.

65 Id. at 3.

66 Id.

67 Id. at 4.

68 Form 477 Order at ¶ 35.

69 Id.

70 We may, however, require that the franchise holders submit the report in a particular data format.

71 Section 5818(a)(2)(B).

72 Section 5818(a)(2)(E).

73 GO 66-C.

74 Louisiana Pub. Serv. Comm'n v. FCC, 476 U.S. 355, 368-369 (U.S. 1986).

75 Id. at 360.

76 Vonage Holdings Corp. v. Minnesota PUC, 290 F. Supp.2d 993.

77 Section 5960.

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