I. Summary
The California Public Utilities Commission (Commission) issues this decision and General Order to establish procedures for implementing the Digital Infrastructure and Video Competition Act of 2006 (DIVCA), Assembly Bill (AB) 2987 (Ch. 700, Stats. 2006) (Appendix A hereto).
To promote video service competition in this State, the Legislature created a new state video franchising process in DIVCA.1 The Legislature directed the Commission to issue state video franchises for the provision of video services in the state. It declared that the state video franchising process should achieve the following objectives:
Create a fair and level playing field for all market competitors that does not disadvantage or advantage one service provider or technology over another.
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.
Protect local government revenues and their control of public rights-of-way.
Require market participants to comply with all applicable consumer protection laws.
Complement efforts to increase investment in broadband infrastructure and close the digital divide.2
In this decision, we set forth procedures, rules, and orders necessary to fulfill the duties and responsibilities assigned to the Commission by DIVCA. We create a regulatory regime consistent with and supportive of the Legislature's stated objectives for the statute.
DIVCA provides that the Commission is the "sole franchising authority" for issuing state video franchises.3 This role, however, is a limited one. The statute provides that "video service providers are not public utilities,"4 and a "holder of a state franchise shall not be deemed a public utility as a result of providing video service. . . ."5 Thus, DIVCA states that the Commission may not "impose any requirement on any holder of a state franchise except as expressly provided by . . ." the Act.6
The Commission may promulgate rules only as necessary to enforce statutory provisions on franchising (§ 5840); antidiscrimination (§ 5890); reporting (§§ 5920 and 5960); the prohibition against financing video deployment with rate increases for stand-alone, residential, primary line, basic telephone services (§§ 5940 and 5950); and regulatory fees (§ 401, §§ 440-444, § 5840).7 We shall not adopt proposals that fall outside of the scope of this statutory authority.8
We are careful to avoid encroaching on the prerogatives and obligations of local entities. Among other items, local entities are responsible for consumer protection (§ 5900); environmental reviews (§ 5820); initiation of complaints concerning antidiscrimination and build-out obligations (§ 5890); enforcement of PEG channel requirements (§ 5870); management of local rights-of-way (§ 5810); and enforcement of Emergency Alert System standards (§ 5880).
Consistent with statutory restrictions on our authority, the Commission will only adopt regulations if they are necessary for enforcement of specific DIVCA provisions. The Commission will not regulate the rates, terms, and conditions of video services, except as explicitly set forth in DIVCA. Moreover, we find that we lack statutory authority to order intervenor compensation awards in the video service context, because the statutory intervenor compensation program is limited to utilities, a class of entities distinct from video service providers. Statutory restrictions similarly prevent us from accommodating a protest period during the application process. Commission review of applications is tightly circumscribed both in substance and in process.
To the extent that we have authority to act, the Commission fully intends to enforce DIVCA provisions and allow significant public participation in its enforcement proceedings. Our enforcement processes are designed to be transparent and fair. Once an enforcement proceeding is opened, any interested party may participate fully in the proceeding. In addition, even though DIVCA limits who can initiate a proceeding through a formal complaint, any individual or interested party can bring matters to the attention of the Commission via a letter. Upon receipt, the Commission then can investigate and determine an appropriate response. Any subsequent formal enforcement action will permit full participation by all parties and the public.
We will be vigilant in our efforts to enforce antidiscrimination and build-out requirements. Consistent with the express intent of the Legislature, this decision seeks to encourage "widespread access to the most technologically advanced cable and video services to all California communities."9 Advanced video and broadband systems are critical to social and economic development in our state. Increased competition among video service providers will help drive down prices for consumers, provide new choices in rate plans, and promote increased programmatic diversity. We encourage video service providers to strive to serve every California community where there is demonstrable demand for their service.
The General Order adopts specific provisions to ensure required reports are straightforward and reasonable. Reports mandated by the Commission provide valuable information concerning our user fees; state employment; broadband and video service access and adoption; antidiscrimination and build-out; collective bargaining agreements; and workplace diversity. Of special import, the annual broadband reports will give the State of California - for the first time - detailed information that it needs to address gaps in broadband access and depressed broadband usage rates.
This General Order also describes the procedures that we will use to enforce the cross-subsidy provisions contained in Public Utilities Code §§ 5940 and 5950. We clarify that the Commission at any time may initiate a formal investigation into alleged financing of video deployment with rate increases for stand-alone, residential, primary line, basic telephone services. Launch of a formal investigation will trigger public hearings.
The Commission fully intends to implement these and other DIVCA provisions in a thorough and swift manner. We act ahead of the mandated statutory deadline to bring new video services to Californians as quickly as possible.
1 This process was effected by additions to the Public Utilities Code (Division 2.5, commencing with § 5800, and Article 4, commencing with § 440, to Chapter 2.5 of Part 1, Division 1), as well as by amendments to Public Utilities Code § 401 and Revenue and Taxation Code § 107.7.
2 Cal. Pub. Util. Code § 5810(2).
3 Id. at § 5890.
4 Id. at § 5810(a)(3).
5 Id. at § 5840(a).
6 Id.
7 With respect to the application process in particular, DIVCA states that the authority granted to the Commission in Public Utilities Code § 5840 "shall not exceed the provisions set forth" in that section. Id. at § 5840(b).
8 These proposals include, but are not limited to, the following: developing a consumer education program for video service, extending the Commission's supplier diversity program to video franchising, reviewing availability of in-language customer service, and assessing the diversity of cable programming. CCTPG/LIF Opening Comments at 9, 12; Greenlining Opening Comments at 1-6. Many such proposals are discussed further in subject-specific sections below.
9 Cal. Pub. Util. Code § 5810(2)(f).
