XVI. Intervenor Compensation Disallowed

Pursuant to Public Utilities Code §§ 1801 et seq., we have awarded reasonable compensation to eligible intervenors making substantial contributions to utility proceedings. Parties in this proceeding debate whether similar awards are appropriate in the video context. This section reviews and assesses these parties' comments.

A. Position of Parties

Consumer organizations and communications companies sharply divide over whether the Commission should award intervenor compensation for participation in video franchising proceedings. CCTPG/LIF, CFC, DRA, Greenlining, and TURN all call for the Commission to allow intervenor compensation awards in video proceedings, whereas AT&T, CCTA, Small LECs, SureWest, and Verizon contend that an intervenor compensation award is never appropriate in the video context.

TURN argues that Public Utilities Code "provisions express a legislative intent to encourage broad participation in Commission proceedings."⁷¹⁹ According to TURN, Public Utilities Code §§ 401 and 5810(3) "specifically provide that the Commission should treat its new video franchising responsibilities in the same manner as the Commission treats its other regulatory duties . . . ," and to "prohibit compensation because the companies subject to [Commission] processes and procedures are not called `public utilities' would be totally at odds with the intent of the intervenor compensation statute."⁷²⁰ TURN adds that nothing in Public Utilities Code §§ 1801 et seq. suggests that the Commission had discretion to declare proceedings "off-limits for intervenor compensation purposes."⁷²¹

CCTPG/LIF asserts that the "Commission must encourage customer participation in video franchising regulation similarly to its other regulated utilities."⁷²² In support of this contention, CCTPG/LIF makes several claims: (i) "AB 2987 placed video franchises within the jurisdiction of the Commission as a regulated utility," (ii) "franchise holders will be companies already participating in the intervenor compensation program through telecommunications regulation," and (iii) without intervenor compensation, "community groups will be effectively blocked from participating in video franchising regulation because of their inability to cover staff costs."⁷²³

Greenlining agrees that intervenor compensation "is important . . . to ensure that the unserved and the underserved are fully protected."⁷²⁴ According to Greenlining, intervenor compensation is especially "necessary at this time" due to the fact that state video franchising regulation "is a new field," and it "is unclear that the user fees . . . are adequate to ensure that the CPUC is adequately staffed."⁷²⁵ Given these concerns, Greenlining adds that the Commission also may "wish to consider some other methods for encouraging, at least in this proceeding, greater participation."⁷²⁶

CFC links intervenor compensation with Commission review of state video franchise applications. According to CFC, an "eligible intervenor who raises significant compliance issues should be compensated for bringing these matters to the Commission's attention."⁷²⁷

DRA maintains that its "role in advocating for consumers of video services under the Act should not be used as an excuse to deny others access to the Commission terms that allow that access to be effective."⁷²⁸ It contends that "no one entity can speak for all consumers, nor should one be expected to."⁷²⁹

In contrast to the consumer organizations, Verizon argues that "the Commission lacks authority to impose intervenor compensation obligations on holders of state franchises."⁷³⁰ It explains that "video service customers are not `public utility' utility customers," and the statutory intervenor compensation program only provides for funding of "public utilities" customers.<sup>731</sup> Verizon further asserts that DIVCA prohibits imposition of a requirement on any state franchise holder other than as "`expressly provided' in the Act."⁷³² According to Verizon, the "level playing field principles of the Act dictate" that all state video franchise holders - including those who are also telephone corporations - "should be treated equally . . . and should not be subject to intervenor compensation obligations when others are not."⁷³³

AT&T agrees that "intervenor compensation is not available for AB 2987-related proceedings."⁷³⁴ Reviewing applicable Public Utilities Code provisions, AT&T reasons that there is "no legal basis" for applying intervenor compensation in video service proceedings:

AB 2987 took pains to make clear that "video service providers are not public utilities," and that the Commission has no more authority over video service providers than that expressly granted in AB 2987. The Legislature has made it equally clear that the intervenor compensation program only applies to public utilities. ⁷³⁵

AT&T contends that "the unavailability of intervenor compensation in AB 2987-related proceedings is confirmed by the fact that AB 2987 specifically outlines the role to be played by [DRA], while conspicuously omitting any role for intervenors."⁷³⁶

AT&T further argues that the Commission "has no inherent authority to grant intervenor compensation" in the video context.⁷³⁷ According to AT&T, the "Commission's unquestionably broad, general grants of authority in the Constitution (Article XII) and the Public Utilities Code (e.g., § 701) are premised on its regulation of public utilities. . . ."⁷³⁸ Also AT&T notes that "[i]t has long been the statutory and case law in California that, attorney fees are left to the parties `[e]xcept as attorney's fees are specifically provided for by statute."⁷³⁹

SureWest contends that there are two primary reasons for why intervenor compensation should not apply in video franchise matters. First, the Commission's authority in the video franchising area "is highly circumscribed."⁷⁴⁰ Second, "the Franchise Act does not provide the Commission the authority to award intervenor compensation for franchise-related proceedings."⁷⁴¹

CCTA concurs that there is no role for intervenor compensation in proceedings arising directly out of DIVCA. According to CCTA, the "Commission cannot permit intervenor compensation . . . , because the holders of a state-issued franchise are not public utilities. . . ."⁷⁴² Moreover, CCTA maintains that "even if the Commission were to allow intervenor compensation (which it lawfully cannot), intervention would be necessarily limited to investigations regarding those limited matters over which the Commission has authority."⁷⁴³

Small LECs argues that "intervenor compensation is inappropriate in proceedings involving video franchise applicants and franchise holders, since these entities are not necessarily public utilities."⁷⁴⁴ They add that "AB 2987 makes no provision for intervenor compensation, and the Commission should not inject such a requirement into this framework."⁷⁴⁵ Small LECs reasons that since "there is no role for protests, there is also no role for intervenor compensation in franchise application proceedings."⁷⁴⁶

B. Discussion

Before considering any policy arguments, we first must establish whether the Commission has the statutory authority to grant intervenor compensation in the video services context. Our review of the Public Utilities Code and comments leads us to the threshold conclusion that we lack this statutory authority. We, therefore, decline to reach policy arguments for or against intervenor compensation awards.

Our analysis begins with the intervenor compensation statutes. Like Verizon, we find that these statutes limit the intervenor compensation program to proceedings involving utilities. The statutorily defined purpose of the intervenor compensation program "is to fund participation by `public utility' customers; its provisions `shall apply to all formal proceedings of the commission involving electric, gas, water, and telephone utilities' to encourage participation of those with `a stake in the public utility regulation process,' and intervenor compensation awards are to be paid by `the public utility which is the subject of the . . . proceeding. . . .'"⁷⁴⁷ Similarly, statutes granting us broad, general grants of authority are largely premised upon our regulation of public utilities.⁷⁴⁸

Next we look at how DIVCA classifies and describes our authority to regulate video services. Although DIVCA never directly addresses intervenor compensation, we find that the plain language of the statute explicitly considers the classification of video service. DIVCA states that "video service providers are not public utilities or common carriers."⁷⁴⁹ "The holder of a state franchise shall not be deemed a public utility as a result of providing video service under this division."⁷⁵⁰ With respect to our authority to regulate video service, Public Utilities Code § 5840(a) declares that the Commission may not "impose [a] requirement" on state franchise holders other than one "expressly provided" in the Act.⁷⁵¹ We interpret this statute to mean that we may not impose a regulation on a state video franchise holder unless we deem the regulation necessary for enforcement of a specific DIVCA provision.

Considering these statutory analyses together, we conclude that we do not have the authority to impose intervenor compensation obligations on video franchise holders. State video franchise customers, i.e., customers of a non-utility service, are not afforded the same statutory right to intervenor compensation funding like traditional utilities customers. Moreover, our ability to impose intervenor compensation obligations on state video franchise holders is sharply curtailed by DIVCA. The statute prohibits our imposing intervenor compensation obligations - or any other requirement not necessary for enforcement of a specific DIVCA provision.

Our decision here applies uniformly to all state video franchise holders. We find merit in Verizon's legal argument that state video franchise holders that also are telephone companies should not be subject to intervenor compensation obligations if other state video franchise holders are not subject to the same requirements.⁷⁵² While a state video franchise holder may be "a public utility with respect to the provision of telephone service, it is not one with respect to the provision of video service, which is not regulated as a public utility service by the Commission."⁷⁵³ Also we find that our decision to treat all state video franchise holders alike is consistent with the Legislature's intent that DIVCA "create a fair and level playing field for all market competitors. . . ."⁷⁵⁴ Thus, there is no legal basis for funding intervenor compensation in video proceedings.

⁷¹⁹ TURN Reply Comments at 12.

⁷²⁰ Id. at 12-13.

⁷²¹ TURN Opening Comments at 7.

⁷²² CCTPG/LIF Opening Comments at 6.

⁷²³ Id.

⁷²⁴ Greenlining Opening Comments at 9.

⁷²⁵ Id.

⁷²⁶ Id. (suggesting that "[o]ne mechanism would be to provide a fund of $250,000 to secure input from a broad range of nonprofits with expertise in the areas covered by the OIR who primarily represent underserved communities").

⁷²⁷ CFC Opening Comments at 5.

⁷²⁸ DRA Reply Comments at 13.

⁷²⁹ Id.

⁷³⁰ Verizon Opening Comments at 4.

⁷³¹ Id.

⁷³² Id. at 4-5.

⁷³³ Id. at 4.

⁷³⁴ AT&T Reply Comments at 8.

⁷³⁵ Id. (citations omitted).

⁷³⁶ Id. at 9.

⁷³⁷ Id.

⁷³⁸ Id.

⁷³⁹ Id. at 9-10.

⁷⁴⁰ SureWest Opening Comments at 17.

⁷⁴¹ Id. at 18.

⁷⁴² CCTA Opening Comments at 12.

⁷⁴³ CCTA Reply Comments at 12.

⁷⁴⁴ Small LECs Reply Comments at 4.

⁷⁴⁵ Id. at 5.

⁷⁴⁶ Small LECs Opening Comments at 7.

⁷⁴⁷ Verizon Opening Comments at 3 (citing Public Utilities Code §§ 1801, 1801.3, and 1807).

⁷⁴⁸ As noted by AT&T, examples of such statutes include Article XII of the California Constitution and § 701 of the Public Utilities Code. AT&T Reply Comments at 9.

⁷⁴⁹ Cal. Pub. Util. Code § 5810(a)(3).

⁷⁵⁰ Id. at § 5820(c).

⁷⁵¹ Id. at § 5840(a).

⁷⁵² Verizon Opening Comments at 4.

⁷⁵³ Id. at 3-4. Verizon cites Southwestern Bell Tel. Co. v. FCC, 19 F.3d 1475, 1481 (D.C. Cir. 1994) ("[w]hether an entity in a given case is to be considered a common carrier" turns not on its typical status but "on the particular practice under surveillance") and Nat'l Ass'n Regulatory Util. Comm'rs v. FCC, 533 F.2d 601, 608 (D.C. Cir. 1976) (finding it "logical to conclude that one can be a common carrier with regard to some activities but not others") in support of this proposition. Id.

⁷⁵⁴ Cal. Pub. Util. Code § 5810(a)(2)(A).