2. Background
In June 2006, the Commission opened R.06-06-028, to review and implement reforms to the B-Fund program. Pursuant to Public Utilities Code § 739.3, the B-Fund program was established as part of a broader policy framework to meet universal telephone service goals. Through various decisions and rulings in R.06-06-028, we adopted measures to reform the B-Fund program. In particular, Decision (D.) 07-09-020 resolved a number of issues to reform the B-Fund, significantly reducing the overall magnitude of subsidized support. Beginning July 1, 2009, high-cost support will be limited to basic access lines in areas with a proxy cost above $36. Although raising the high cost benchmark to $36 per line will significantly reduce the number of lines receiving B-Fund support, a number of "areas" still qualify for support based on cost proxy data currently in use.
In R.06-06-028, the Commission also issued D.08-09-042, establishing a two-year transition period leading to full pricing flexibility in retail rates for "basic telephone service" by January 1, 2011, in regions not supported by the B-Fund. D.08-09-042 also provided for an interim increase in the California LifeLine Telephone Program (LifeLine) basic service rate cap from January 1, 2009 through December 31, 2010 of 25% of the rate cap increment authorized in that decision.
In addition to these reform measures that have already been implemented, however, additional tasks remain to be completed. In particular, these tasks involve reforming the process for selecting carriers of last resort (COLRs) and determining the amount of high-cost B-Fund support to be disbursed in a technologically neutral and cost-efficient manner. We also intend to make the processing of B-Fund payment claims more streamlined and automated. To accomplish these tasks, we hereby open a new rulemaking to resolve the remaining issues relating to reform of the B-Fund program. 1
1 R.06-06-028 has also been a forum to encourage greater deployment of advanced communications services through broadband. We intend to open a separate rulemaking for purposes of continuing to promote greater access to advanced communications services through the deployment of broadband. Because this goal involves issues that are separate and distinct from the provision of a carrier of last resort to offer basic service, a separate rulemaking is the most appropriate procedural vehicle to pursue broadband issues.
