2. Background
Copper wiring has been used in telephone networks across the country for more than 100 years, but as fiber optic cable becomes more widely used, competitive local exchange carriers (CLECs) and consumer groups have raised questions about whether this Commission should impose rules to preserve the copper facilities in order to safeguard choices by consumers and protect competition by CLECs.
We therefore opened this rulemaking on CALTEL's petition (Petition (P.) 07-07-009) to examine: (1) whether we should establish procedural rules that ILECs and others must follow when an ILEC intends to retire or permanently remove copper loop facilities, and if so, what the rules should be; (2) whether we should adopt substantive prohibitions or conditions on the removal of such facilities, and, if we require that the facilities be maintained, who shall pay for such maintenance; and (3) whether ILECs are permanently removing copper drops and, if so, what action we may take to ensure their replacement where a customer so requests.
In examining these issues, we specifically reviewed the extent to which ILECs that are installing fiber are removing the copper network, whether customers or ILEC competitors have been harmed by any such practice, and whether we should adopt rules to preserve the copper network for future generations.
In addition to the comments and data we received in response to P.07-07-009, we took comments in connection with this Rulemaking. CALTEL, Integra Telecom of California, Inc. (Integra), the United States Department of Defense/Federal Executive Agencies (DOD/FEA), the Commission's Division of Ratepayer Advocates (DRA), and The Utility Reform Network (TURN) filed comments generally supporting CALTEL's proposed rules, while the ILECs -Pacific Bell Telephone Company dba AT&T California (AT&T), Verizon California Inc. (Verizon), SureWest Telephone (SureWest) and the small California ILECs4 (Small LECs) - each filed comments, data request responses, or both in P.07-07-009 (with comments filed on August 13, 2007, August 23, 2007, and October 16, 2007, and data request responses5 filed on October 4, 2007) and in this proceeding (with comments filed on March 14, 2008 and May 28, 2008).
We sought information from the ILECs as to whether they were permanently removing or retiring copper facilities in the "local loop," located between the ILECs' central offices and customers' homes and businesses, including the "drop" line that attaches underground or overhead telephone facilities to individual customer premises.6 Based on the record, it appears that Verizon is the only large ILEC whose new broadband-based network - called FiOS - consists entirely of fiber. Thus, Verizon is the ILEC most likely to remove copper plant from its central office all the way to the home (FTTH), although its removal of copper loops to date and plans for future removal are somewhat limited, as we discuss below.
Verizon's actions to date consist of removal of approximately 40,000 copper drops, the short span between customers' premises and Verizon's poles or underground facilities.7 Because Verizon will replace these facilities upon customer request, Verizon contends that removal of copper drops does not constitute permanent removal of copper loops. We agree that as long as Verizon continues to replace drops upon request, such action does not constitute permanent removal of the copper loop.
In contrast, AT&T's network, U-Verse, is a hybrid network of fiber and copper that will require AT&T to leave the copper portion of the network in its system. AT&T's current network plan does not involve either an FTTH or FTTC approach; instead, it is placing fiber in the system between the central office and the remote terminal, but the copper loop from the remote terminal to the home remains in place. Thus, AT&T asserts, it has no plans to remove the copper network in the foreseeable future.8
While SureWest is in the process of rebuilding its network to install fiber all the way to the home, it has no CLEC in its service territory that obtains unbundled network element (UNE) loops from SureWest using copper plant. Thus, SureWest claims, removing its copper network will not deprive any CLEC of its right to lease UNEs on the SureWest network.
Finally, the Small LECs are not building fiber optic networks to replace copper facilities, and have no CLECs leasing their lines, so they too claim the facts do not support action in this proceeding.
We also asked CALTEL to identify any harm it had suffered as a result of the status quo.9 Neither CALTEL nor the other parties favoring CALTEL's proposed rules were able to identify any harm, or pattern of harm relevant to copper retirement, that convinces us to adopt prescriptive rules at this time. CALTEL could point to no customer of its members that had lost service, no customers who had complained, and no member companies that had lost their ability to serve customers as a result of ILEC removal of copper facilities to date. This Commission believes that extensive rules on this issue could discourage the significant investment of carriers in advanced fiber communications systems in our State, contrary to Pub. Util. Code § 709.10
4 Calaveras Telephone Company (U1004C), Cal-Ore Telephone Co. (U1006C), Ducor Telephone Company (U1007C), Foresthill Telephone Co. (U1009C), Global Valley Networks, Inc. (U1008C), Happy Valley Telephone Company (U1010C), Hornitos Telephone Company (U1011C), Kerman Telephone Company (U1012C), Pinnacles Telephone Co. (U1013C), The Ponderosa Telephone Co. (U1014C), Sierra Telephone Company, Inc. (U1016C), The Siskiyou Telephone Company (U1017C), Volcano Telephone Company (U1019C), Winterhaven Telephone Company (U1021C) ("Small LECs").
5 The Administrative Law Judge (ALJ) issued a ruling on September 14, 2007 asking the ILECs to disclose the extent of their removal of copper facilities, how they defined retirement, the impact of such retirement, and related information. The ILECs' responses are the data request responses referred to in text above.
6 Rulemaking Regarding Whether to Adopt, Amend, or Repeal Regulations Governing the Retirement by Incumbent Local Exchange Carriers of Copper Loops and Related Facilities Used to Provide Telecommunications Carriers of Copper Loops and Related Facilities Used to Provide Telecommunications Services, Rulemaking (R.) 08-01-005, Order Granting Petition for Rulemaking and Instituting Rulemaking as to Whether to Adopt, Amend or Repeal Regulations Governing the Retirement by Incumbent Local Exchange Carriers of Copper Loops and Related Facilities Used to Provide Telecommunications Carriers of Copper Loops and Related Facilities Used to Provide Telecommunications Services (OIR), Appendix A, at 2 (R.08-01-005).
7 P.07-07-009, Additional Comments and Information Request Responses of Verizon California, Inc, October 16, 2007, Attachment A, at A-2, Response to Question 3 and Question 4 (Verizon Additional Comments and Information); see also Initial Comments of The Utility Reform Network to Order Granting Petition for Rulemaking, R.08-01-005, filed March 14, 2008 (TURN Opening Comments) at 17; Reply Comments of Verizon California Inc. and Verizon West Coast Inc. on Order Instituting Rulemaking, R.08-01-005, filed May 28, 2008 (Verizon Reply Comments) at 19.
8 Comments of AT&T on Order Granting Petition for Rulemaking, R.08-01-005, filed March 14, 2008 (AT&T Opening Comments) at 27.
9 Order Instituting Rulemaking, § 4.3 (Issues to be Considered) & Appendix A; P.07-07-009, Administrative Law Judge's Requesting Additional Information and Noticing Prehearing Conference, filed Sept. 14, 2007.
10 Pub. Util. Code § 709 sets forth the Legislature's policies for telecommunications in California as, among other things, to encourage the development and deployment of new technologies and the equitable provision of services in a way that efficiently meets consumer need and encourages the ubiquitous availability of a wide choice of state-of-the-art services.
