XX. Assignment of Proceeding

Rachelle B. Chong is the assigned Commissioner and Timothy J. Sullivan is the assigned Administrative Law Judge in this proceeding.

Findings of Fact

1. DIVCA became effective on January 1, 2007.

2. Preventing an incumbent cable operator in one video service area from operating under a state video franchise in a new area would not promote widespread access to the most technologically advanced cable and video services in California.

3. The ability of a local entity to force an incumbent cable operator to agree to extra concessions during the time following the expiration of a local video franchise but prior to when the incumbent may operate under a state video franchise would disadvantage incumbent cable operators over new entrants and create an unfair and unlevel playing field for market competitors.

4. Like a driver's license, the authority to operate under a local franchise agreement has an expiration date.

5. According to the Assembly Analysis, DIVCA provides that as of January 1, 2008, all video service providers must seek a state video franchise instead of a local franchise.

6. Appropriate implementation of DIVCA, which is designed to create a fair and level playing field for all video service providers, requires the automatic extension of local video franchises that (i) expire before January 2, 2008 and (ii) are held by incumbent cable operators planning to seek state video franchises.

7. If an incumbent cable operator's local franchise expires before January 2, 2008, the Assembly Analysis declares that (i) the incumbent can request a state video franchise that begins on January 2, 2008 and (ii) its current local franchise will be extended until that date.

8. Failure to allow state video franchise applications in advance of the expiration of local franchises would place incumbent cable operators in legal limbo during the time between expiration of their local franchises and issuance of their state video franchises.

9. It is reasonable and consistent with DIVCA's objectives to permit incumbent cable operators to apply for state video franchises before expiration of their local franchises.

10. Without further Commission action, the potential for evasion of statutory obligations increases through the holding of multiple state video franchises via multiple entities.

11. Placing restrictions on when a video service provider is eligible to operate under a state video franchise will decrease the complexity of the application review process and reduce the potential for state video franchise holders to evade compliance with statutory obligations.

12. Restrictions placed on when a video service provider is eligible to operate under a state video franchise are relevant to implementation of statutory provisions concerning build-out requirements; broadband and video reporting obligations; and the prohibition against financing video deployment with rate increases for stand-alone, residential, primary line, basic telephone services.

13. Without further Commission action, the Commission's ability to enforce build-out requirements could be impaired if a corporate family divides its telephone and video services among different operating entities in California.

14. Without further Commission action, the Commission's authority and ability to prevent subsidization of video deployment with rate increases for stand-alone, residential, primary line, basic telephone services could be challenged if a communications company divides its video and telecommunications services between two different operating entities.

15. Without further Commission action, it could be difficult, if not impossible, for the Commission to collect comprehensive broadband and video reports if a company separated its broadband operations from its video operations, or divided its video operations among multiple California entities.

16. The proposal to limit the award of a state video franchise to the parent company in a corporate family would be unduly burdensome.

17. It is necessary and reasonable to condition an applicant's eligibility for a state video franchise on its stipulating in its application affidavit that it and all its affiliates' California operations will be included for the purposes of applying Public Utilities Code §§ 5840, 5890, 5940, and 5960.

18. The stipulations enumerated in Appendix C ensure that no state video franchise holder may evade DIVCA requirements due to the specific nature of its corporate structure.

19. It is reasonable to use the definition set forth in R.92-08-008 as a basis for the definition of "affiliate" contained herein, because that definition is longstanding and commonly used in this forum.

20. "Affiliate," when the R.92-08-008 definition is modified for the video context, means any company 5 per cent or more of whose outstanding securities are owned, controlled, or held with power to vote, directly or indirectly either by a state video franchise holder or any of its subsidiaries, or by that state video franchise holder's controlling corporation and/or any of its subsidiaries as well as any company in which the state video franchise holder, its controlling corporation, or any of the state video franchise holder's affiliates exert substantial control over the operation of the company and/or indirectly have substantial financial interests in the company exercised through means other than ownership.

21. The Commission has found the definition of affiliate contained in R.92-08-008 as adequate for reporting purposes for quite some time.

22. The FCC currently uses the term "broadband" and "advanced telecommunications capability" to describe services and facilities with an upstream (customer-to-provider) and downstream (provider-to-customer) transmission speed of more than 200 kilobits per second.

23. It is reasonable to require broadband data reporting by affiliates of state video franchise holders that use non-wireline technologies.

24. There are operational differences between wireless and wireline broadband technologies.

25. Appendix D recognizes and accounts for operational differences between wireless and wireline technologies in its reporting specifications.

26. It is reasonable to require applicants to make attestations to ensure effective local enforcement of DIVCA provisions.

27. It is reasonable to require that a single, qualified corporate entity be responsible for DIVCA compliance, accept service of process, and submit to the jurisdiction of California courts.

28. It is reasonable to allow state video franchise applicants to describe their proposed video service area footprint with a collection of census block groups or a geographic information system digital boundary meeting or exceeding national map accuracy standards.

29. It is reasonable to define areas in the proposed video service area footprint as (i) collections of contiguous census block groups or (ii) regions defined by geographic information system boundaries. These definitions provide adequate information about the footprint to the Commission and comport with common understanding of an "area."

30. It is reasonable to require a state video franchise applicant to provide an expected date of deployment for each area in the proposed video service area footprint (as defined herein).

31. Requiring the provision of deployment data at a greater level of granularity in the application could place some applicants at a competitive disadvantage to other applicants.

32. Data contained in the application are not subject to confidentiality protections.

33. The Commission will receive video and broadband deployment data at a high level of granularity through reports that a state video franchise holder must submit. These data shall be disclosed to the public only as provided for pursuant to Public Utilities Code § 583.

34. Access and subscription to advanced communication technologies are important socioeconomic indicators.

35. Broadband and video services are becoming increasingly important to active participation in our modern-day economy and society.

36. Restricting socioeconomic indicators to income alone focuses too narrowly on economic factors, and fails to encompass social factors.

37. DIVCA's legislative purposes include promoting widespread access to the most technologically advanced video services and closing the Digital Divide.

38. It is reasonable to require submission of information on access and subscription to advanced communications services as part of the socioeconomic information collected pursuant to DIVCA.

39. AT&T's proposal to not define "socioeconomic indicators" would lead to confusion by applicants as to what information we expect to be filed with the Commission.

40. The diversity of parties' comments on the definition of "socioeconomic status information" demonstrates that reasonable people can disagree regarding the appropriate definition.

41. The early collection of broadband and video services information will give the Commission time to address and resolve data collection and analysis issues that arise.

42. The first annual report on broadband and video services data is due July 1, 2008.

43. Due to the timing of data collection, requiring the submission of extensive socioeconomic data simultaneously with the filing of a state video franchise application is not reasonable.

44. Permitting an applicant for a state video franchise to attest in its application that it will provide the Commission with company-specific socioeconomic status information within 90 calendar days of state video franchise issuance ensures that the Commission will have appropriate baseline information for reviewing a company's progress, but does not impose an unnecessary barrier to entry.

45. A 90 calendar day period for submitting socioeconomic data mirrors the amount of time allotted to state video franchise holders for their preparation of annual broadband and video reports.

46. It is reasonable to permit an applicant for a state video franchise to attest in its application that it will provide the Commission with company-specific socioeconomic status information within 90 calendar days of being issued a state video franchise.

47. It is not reasonable to deem an application incomplete when an applicant has attested that it will provide the Commission with company-specific socioeconomic status information within 90 calendar days of being issued a state video franchise.

48. It is reasonable for a state video franchise application to include information on all parent entities, if more than one.

49. It is reasonable to require that applicants determine the number of low-income households by utilizing U.S. Census projections of low-income households available as of January 1, 2007.

50. Since the Commission is requiring submission of a bond to provide adequate assurance that the applicant possesses the financial, legal, and technical qualifications necessary to construct and operate the proposed system and promptly repair any damage it causes to the public right-of-way, it is not necessary to establish other means by which a state video franchise holder may demonstrate that it possesses the requisite financial, legal, and technical qualifications.

51. Coordination and exchange of information with local entities will facilitate the success of the new state video franchise system.

52. The staff of the Commission's new video franchise unit is best suited for developing plans to coordinate with local entities.

53. It serves no useful purpose to require applicants to show how they intend to meet build-out and antidiscrimination requirements; rather, the focus should be on their concrete actions, or lack thereof, as state video franchise holders.

54. Monitoring the actions of a state video franchise holder through the Commission's reporting requirements will enable the Commission to determine whether a state video franchise holder is complying with build-out and antidiscrimination requirements.

55. Pursuant to Public Utilities Code § 5810(c), it is the intent of DIVCA that collective bargaining agreements be respected.

56. Pursuant to Public Utilities Code § 5870(b), a transferee of a state video franchise must agree that any collective bargaining agreement entered into by a video service provider shall continue to be honored, paid, or performed to the same extent as would be required if the video service provider continued to operate under its state video franchise.

57. To ensure the Commission is adequately informed of collective bargaining requirements when a state video franchise is transferred, it is consistent with DIVCA to require state video franchise holders to produce annual reports that indicate whether their employees are subject to a collective bargaining agreement.

58. When transfer of a state video franchise is sought, it is consistent with DIVCA to require a transferee to complete an affidavit that attests it will respect existing collective bargaining agreements.

59. The application affidavit requires the affiant to swear that she or he has "personal knowledge of the facts," is "competent to testify to [the facts]," and has "authority to make this Application behalf of and to bind the Company."

60. It is reasonable for the Commission to impose a bond requirement to determine whether applicants possess financial, legal, and technical qualifications necessary to be state video franchise holders.

61. A bond typically cannot issue without a franchise date.

62. The Commission's bond requirement only demonstrates that the applicant possesses the "qualifications" necessary to offer video service. It does not substitute for security instruments required by local entities as part of their oversight of local rights-of-way.

63. A tiered bonding requirement can be sufficient to establish a state video franchise holder's qualifications, without placing a significant barrier to entry on applicants that are qualified to provide video service.

64. It is reasonable to adopt a tiered bonding requirement and base the size of the bond on the number of a state video franchise holder's potential customers.

65. A requirement that state video franchise holders carry a bond in the amount of $100,000 per 20,000 households in a proposed video service area, with a required $100,000 minimum and a cap of $500,000 per state video franchise holder, is reasonable in light of the record of this proceeding that demonstrated a range of bonding requirements currently in use.

66. A cap of $500,000 per state video franchise holder on the bond requirement will not discourage competition.

67. It is reasonable to require state video franchise holders to carry a bond in the amount of $100,000 per 20,000 households in a video service area, with a required $100,000 minimum and a cap of $500,000 per state video franchise holder on the bond requirement.

68. It is reasonable to require that a corporate surety authorized to transact a surety business in California issue the state video franchise holder's bond, because the bond is to fulfill state purposes.

69. It is reasonable to require that the bond list the Commission as the obligee and no other obligees for two reasons: (i) the bond is designed only to prove to the Commission that the applicant possess adequate qualification to be a state video franchise holder and (ii) local entities may require additional security instruments pursuant to their existing authority.

70. It is reasonable to require a state video franchise holder to provide a copy of its executed bond to the Executive Director (i) within five business days after receipt of a state video franchise and (ii) prior to initiating video service.

71. It is reasonable to require an applicant to attest to the amount and future execution of the required bond in its application affidavit.

72. It is not reasonable to require a state video franchise holder to provide a copy of the executed bond sixty days before it commences video system construction in a local jurisdiction, because notice of the bond is provided through the receipt of the application affidavit.

73. It is reasonable to require that a state video franchise holder not allow its bond to lapse during any period of its operation pursuant to a state video franchise.

74. An application fee of $2,000 is reasonable for recovering the costs to process a state video franchise application.

75. The state video franchising process is strictly limited by DIVCA and less complex than the franchising process now in place at the local level.

76. It is not necessary to impose additional fees to cover other tasks associated with administering the state video franchise program. Such expenses will be recovered through annual user fees.

77. Since DIVCA does not envision that the Commission will have discretion in its review of an application, it is not reasonable to permit protests of a state video franchise application.

78. It would not be feasible to entertain protests, responses to protests, and Commission action to resolve the protests during the short period set by DIVCA for the review of a state video franchise application.

79. The submission of information indicating that an applicant has violated a final nonappealable order relating to either the Cable Television and Video Providers Customer Service and Information Act or the Video Customer Service Act does not constitute a protest.

80. It is reasonable for the Commission to provide notice of application incompleteness and the specific reason for incompleteness in the same document.

81. It is reasonable for the Commission to provide affected local entities, as well as the applicant, notice of application incompleteness and the specific reason for incompleteness.

82. It is reasonable for the Commission to provide notice of the statutory ineligibility of an applicant, if known, to the applicant.

83. It is reasonable that an application will not be deemed granted due to the Commission's failure to act when the applicant is statutorily ineligible to hold a state video franchise.

84. Since DIVCA specifies that an incumbent cable operator's right to abrogate a local franchise is triggered when a state video franchise holder provides notice to a local jurisdiction that it intends to initiate providing service in all or part of that jurisdiction, it is reasonable to require the state franchise holder to provide notice of imminent market entry to the incumbent cable operators operating in that jurisdiction.

85. Requiring a state video franchise holder to provide concurrent notice of imminent market entry to affected local entities and incumbent cable operators is reasonable in light of the legislative intent that DIVCA create a fair and level playing field for all market competitors.

86. It is reasonable to determine and collect a user fee from state video franchise holders to finance the costs of administering the state video franchise program.

87. The Commission determines the utility user fee for all utilities based on revenues.

88. It is reasonable for the Commission to base its user fees on gross state video franchise revenues reported by state video franchise holders.

89. There are significant policy and administrative benefits to harmonizing our collection of user fees across all fee payers by relying on a revenue-based system that uses the Commission's traditional payment schedule and processes.

90. The budget adopted by the Commission to administer the costs of the video franchising program is reasonable.

91. It is reasonable to base a user fee upon the percentage of all state video franchise holders' gross state video franchise revenues that is attributable to an individual state video franchise holder.

92. It is reasonable to determine the user fee to be paid by each state video franchise holder annually.

93. The payment schedule developed herein for the payment of user fees is reasonable and consistent with Commission collection of user fees from public utilities.

94. The replacement or reduction of our user fee with task-specific fees is inconsistent with the procedures used to assess fees on public utilities subject to Commission jurisdiction.

95. For Fiscal Year 2007-2008, it is not practical to assess user fees based on state video franchise holders' revenues.

96. For Fiscal Year 2007-2008, it is reasonable to assess user fees based on the pro rata share of households existing in a state video franchise holder's video service area.

97. The procedures for collecting user fees for Fiscal Year 2007-2008 as discussed herein, including the requirement that all state video franchise holders pay for an entire year, are reasonable.

98. Basing a user fee for Fiscal Year 2007-2008 on a state video franchise holder's potential number of subscribers best responds to the legislative desire to create a fair and level playing field and ensure small video service providers are not placed at a competitive disadvantage.

99. Basing user fees on telephone revenues or telephone lines is not reasonable, because there is no direct nexus between telephone lines and the provision of video service.

100. The proposal to collect Year 1 user fees in Year 2 is not reasonable, because the Commission has a legal obligation to collect user fees in the year in which the state has authorized spending.

101. It is reasonable to allow for confidential treatment of information provided pursuant to the revenue reporting requirements of DIVCA.

102. It is not reasonable to permit state video franchise holders to submit simultaneously user fees and the data upon which the user fees are based. Such a procedure would not permit the determination of the appropriate user fee.

103. The procedures for reporting, setting, and receiving user fees contained herein are reasonable and necessary for the implementation of DIVCA.

104. The procedures for reporting, setting, and receiving user fees closely track the user fee procedures currently used by California telecommunications carriers and should not raise novel implementation issues.

105. The employment reports required in General Order 169 are reasonable.

106. It is reasonable to make employment reports available to the public.

107. It is reasonable to deem data on broadband and video availability to be collected "on a census tract basis" if a company uses a geocoding application that assigns its potential customers' addresses in the manner prescribed in Appendix D.

108. It is reasonable to require subscribership reports to be based upon customers' individual addresses and geocoded to specific, corresponding census tracts or other census units that nest within census tracts.

109. It is reasonable to require the reporting of all broadband data on a census tract basis. It is reasonable to permit approximation of these data only if the state video franchise holder (i) does not maintain this information on a census tract basis in its normal course of business and (ii) the alternate reporting methodology reasonably approximates census tract data.

110. The annual reporting requirements pertaining to broadband and video services discussed herein are reasonable.

111. It is reasonable to release annual broadband and video data only if the Commission determines that this disclosure is made "as provided for pursuant to Section 583."

112. It is reasonable to determine in Phase II if additional, more detailed broadband and video information is required for enforcement of specific DIVCA provisions.

113. Given the sensitivity of nonpublic state video franchise revenue data, it is reasonable to release individual state video franchise holders' annual state video franchise revenue data only if we determine that disclosure of the data is made "as provided for pursuant" to Public Utilities Code § 583.

114. It is reasonable to expect that aggregated broadband and video data presented in statutorily required reports will not be competitively sensitive.

115. It is reasonable to allow for confidential treatment of granular broadband and video data submitted by state video franchise holders, because such information may be competitively sensitive.

116. The level of detail required by the Commission for the reporting of annual broadband and video data is reasonable.

117. Since Public Utilities Code § 5890(b) establishes low-income build-out requirements that are benchmarked upon household income data available as of January 1, 2007, it is reasonable and useful for enforcement to require low-income household information that utilizes the most recent U.S. Census projections available as of January 1, 2007.

118. It is reasonable to define "telephone service area" as the area where the Commission has granted an entity a CPCN.

119. To the extent a company does not have customers in a portion of its telephone service area, the company need only collect and report updated U.S. Census demographic data for that region.

120. The information and reports required to enforce the antidiscrimination and build-out provisions, as set forth herein, are reasonable.

121. Reports on video availability will allow the Commission to gauge whether a state video franchise holder has made a "substantial and continuous effort" to meet the build-out requirements established by Public Utilities Code § 5890.

122. The build-out requirements of Public Utilities Code § 5890 apply to a state video franchise holder's entire video service area, rather than individual subdivisions of a state video franchise holder's service territory.

123. It is reasonable to require state video franchise holders to submit annual reports on video service offered, on a census tract basis both to California households generally and to low-income households specifically.

124. Unless information on free service to community centers is reported to the Commission, there is no way for the Commission to know if a state video franchise holder is adhering to Public Utilities Code § 5890(b)(3).

125. The reporting requirements pertaining to the provision of free service to community centers, adopted herein, are reasonable and necessary for enforcement of specific DIVCA provisions.

126. Restricting public access to aggregate build-out data would unduly impede external stakeholders' ability to monitor compliance with build-out requirements.

127. It is not reasonable to give confidential treatment to aggregate build-out data.

128. It is reasonable to allow for confidential treatment of build-out data on a case-by-case basis and to release individual state video franchise holder's build-out data only if we determine that the disclosure of the data is made as provided for pursuant to Public Utilities Code § 583.

129. Participation by state video franchise holders in Commission diversity efforts is in the public interest.

130. If they decline to provide workplace diversity data equivalent to that provided by CUDC members, it is reasonable to require state video franchise holders that submit Employment Information Report EEO-1 (EEO-1) filings to the federal Department of Labor to provide us copies of these future filings.

131. The filing of a copy of EEO-1 report places a minimal burden on state video franchise holders.

132. It is reasonable (i) to afford information provided on individual EEO-1 filings confidential treatment and (ii) release aggregate state video franchise workplace diversity data only at the statewide level.

133. Pursuant to Public Utilities Code § 5810(a)(2), DIVCA was intended to both (i) "promote the widespread access to the most technologically advanced cable and video services" and (ii) "complement efforts to increase investment in broadband infrastructure and close the digital divide." It, therefore, is reasonable to find that "free service" provided to community centers must include both broadband and video services.

134. It is not reasonable to impose eligibility requirements on community centers receiving free service beyond those requirements imposed in Public Utilities Code § 5890(b)(3).

135. The build-out requirements pertaining to state video franchise holders that alone, or in conjunction with their affiliates, have more than one million California telephone customers are reasonable.

136. As contained in the attached General Order, the provisions for determining the build-out requirements pertaining to state video franchise holders that alone, or in conjunction with their affiliates, have less than one million California telephone customers are reasonable.

137. Since DIVCA's build-out requirements apply to holders of a video franchise (and not to applicants) and since DIVCA affords only thirty calendar days for review to determine the completeness of an application, it is not reasonable to assess whether a proposed video service area is drawn in a discriminatory fashion at the time of application.

138. A review of a proposed video service area at the time of application is not necessary for proper enforcement of DIVCA, because local governments can bring complaints concerning discrimination to the Commission, which may open an investigation on discrimination matters at any time after the award of a state video franchise.

139. It is reasonable for the Commission to limit its initiation of investigations to issues regarding franchising; antidiscrimination and build-out; reporting; the prohibition against financing video deployment with rate increases for stand-alone, residential, primary line, basic telephone services; and annual user fees.

140. It is not reasonable for the Commission to initiate an investigation if we do not have authority to regulate in response to investigative findings.

141. It is reasonable for the Commission to hold public hearings as a part of formal investigations regarding franchising; antidiscrimination and build-out; reporting; the prohibition against financing video deployment with rate increases for stand-alone, residential, primary line, basic telephone services; or user fees.

142. Under current Commission practice, an investigation typically may include evidentiary, full panel, and public participation hearings conducted in public.

143. It is reasonable that any formal investigation to determine whether an applicant failed to comply with DIVCA franchising provisions follow standard Commission procedures for the initiation of an investigation. These procedures include a majority vote of the Commission on an order initiating the investigation (which either contains a report or declarations of Commission witnesses pertaining to facts that demonstrate an investigation of Public Utilities Code § 5890 compliance is warranted).

144. It is reasonable to determine the procedures for the conduct of a proceeding concerning compliance with franchising provisions in Phase II of this proceeding.

145. It is reasonable for the Commission to undertake significant monitoring for the enforcement of the antidiscrimination and build-out requirements discussed herein.

146. It is reasonable to require that a local government's complaint alleging that a state video franchise holder has failed to meet the antidiscrimination and build-out requirements of Public Utilities Code § 5890 include sworn declarations pertaining to the facts that the local government believes demonstrate a failure to fulfill obligations imposed by Public Utilities Code § 5890.

147. It is reasonable that the Commission require a local entity filing a complaint to clearly identify that the complaint pertains to a failure to meet an obligation imposed by Public Utilities Code § 5890.

148. In any proceeding investigating a state video franchise holder's compliance with the antidiscrimination and build-out provisions of Public Utilities Code § 5890, it is reasonable to allow interested parties to petition the Commission to participate in the investigation and hearing process.

149. The procedures described herein for initiating and conducting a proceeding investigating allegations of a state video franchise holder's failure to comply with the antidiscrimination and build-out provisions of Public Utilities Code § 5890 are reasonable.

150. The procedures described herein for initiating a proceeding to investigate allegations of a state video franchise holder's failure to comply with the reporting requirements of DIVCA are reasonable.

151. It is reasonable to determine the procedures for conducting a proceeding regarding a state video franchise holder's failure to comply with the reporting requirements of DIVCA in Phase II of this proceeding.

152. The procedures adopted herein to enforce DIVCA reporting requirements are reasonable.

153. The Commission has remained vigilant in enforcing existing prohibitions on unlawful cross-subsidization of intrastate telecommunications services.

154. The freezing of basic residential rates adopted in Public Utilities Code § 5950 ensures that there is no opportunity for basic residential rates to be increased to support video service operations during the period of the freeze.

155. The Commission has reasonable requirements in place to prevent financing of video deployment with rate increases for stand-alone, residential, primary line, basic telephone services.

156. The procedures discussed herein for investigation and sanctioning of the unlawful cross-subsidization of video services are reasonable.

157. The procedures contained in General Order 169 for enforcing the submission of user fees are reasonable.

158. It is reasonable for the Commission to exercise its authority to revoke or suspend a state video franchise in response to a pattern and practice of material breaches that is established by local entities or the courts.

159. The procedures for initiating and conducting a proceeding concerning whether a pattern and practice of violations of DIVCA provisions that are regulated by local entities warrant suspension or revocation of the state video franchise are reasonable.

160. In conducting a proceeding concerning whether a pattern and practice of violations of DIVCA provisions that are regulated by local entities warrants suspension or revocation of the state video franchise, it is not reasonable for the Commission to consider the merits of alleged material breaches de novo.

161. It is not clear which of the Commission's Rules of Practice and Procedure remain applicable in a specific situation pertaining to a proceeding conducted pursuant to DIVCA.

162. The procedures adopted herein to provide DRA with access to information submitted to the Commission pursuant to DIVCA are reasonable and afford DRA unfettered access to that data.

163. It is reasonable to permit DRA, upon review of this information, to copy that information required for it to fulfill its obligations pursuant to DIVCA, i.e., obligations pertaining to state video franchise renewals and enforcement of Public Utilities Code §§ 5890, 5900, and 5950.

164. It is reasonable to permit DRA to copy information submitted by state video franchise holders to the Commission when the information copied is necessary for DRA's advocacy and enforcement actions based upon Public Utilities Code §§ 5890, 5900, and 5950.

165. The procedures adopted herein concerning amendments to a state video franchise are reasonable.

166. It is not reasonable to adopt state video franchise renewal provisions at this time.

Conclusions of Law

1. Increasing competition for video services is a matter of statewide concern.

2. DIVCA directs the Commission to issue state video franchises for the provision of video services in California.

3. Pursuant to Public Utilities Code § 5810, DIVCA declares that a state video franchising process should:

a. Create a fair and level playing field for all market competitors that does not disadvantage or advantage one service provider or technology over another.

b. 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.

c. Protect local government revenues and their control of public rights of way.

d. Require market participants to comply with all applicable consumer protection laws.

e. Complement efforts to increase investment in broadband infrastructure and close the digital divide.

f. Continue access to and maintenance of the public, education, and government (PEG) channels.

g. Maintain all existing authority of the California Public Utilities Commission as established in state and federal statutes.

4. DIVCA provides that the Commission is the "sole franchising authority" for issuing state video franchises. As of January 2, 2008, the Commission is the only government entity that may grant a video service provider a franchise to operate within California.

5. DIVCA establishes a transition period, whereby local franchises continue to operate until they expire or are abrogated pursuant to Public Utilities Code § 5840(o).

6. Pursuant to DIVCA, video service providers are not public utilities, and a holder of a state franchise shall not be deemed a public utility as a result of providing video service.

7. Pursuant to DIVCA, the Commission may not impose any requirement on any holder of a state video franchise, except as expressly provided by DIVCA.

8. DIVCA grants local entities, not the Commission, sole authority to regulate pursuant to many statutory provisions, including those addressing franchise fees (§ 5860), PEG channels (§ 5870), the Emergency Alert System (§ 5880), and, notably, federal and state customer service and protection standards (§ 5900).

9. Pursuant to DIVCA, the local entity is the lead agency for any environmental review with respect to network construction, installation, and maintenance in public rights-of-way (§§ 5820 and 5885).

10. It would not be consistent with DIVCA for the Commission to exercise its authority in a manner that diminishes the statutory responsibilities afforded to local entities.

11. Pursuant to DIVCA, the Commission may promulgate rules only as necessary to enforce statutory provisions on franchising (§ 5840); antidiscrimination and build-out (§ 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).

12. It would not be consistent with DIVCA for the Commission to adopt regulatory proposals that fall outside the scope of its statutory authority.

13. An incumbent cable operator should not be considered an incumbent in areas outside of its local franchise areas as of January 1, 2007.

14. Public Utilities Code § 5840(n) requires a state video franchise holder to notify an affected local entity that it will provide video service in the local entity's jurisdiction.

15. Pursuant to Public Utilities Code § 5930(b), when an incumbent cable operator is providing service under an expired local franchise or a local franchise that expires before January 2, 2008, the local entity may extend that franchise on the same terms and conditions through January 2, 2008.

16. It is consistent with DIVCA to require automatic extension of local video franchises that expire before January 2, 2008 if they are held by incumbent cable operators seeking state video franchises.

17. DIVCA seeks to create a fair and level playing field for all market competitors that does not disadvantage or advantage one video service provider or technology over another.

18. Permitting incumbent cable operators to apply for state video franchises before expiration of their local franchises is consistent with DIVCA.

19. Public Utilities Code § 5840(e)(1)(B) recognizes that both "the applicant" and "its affiliates" must "comply with all federal and state statutes, rules, and regulations," which include provisions found in DIVCA.

20. To ensure enforcement of DIVCA provisions cutting across communications sectors, the Commission has the authority to require an applicant to stipulate that it and all its affiliates' California operations will be included for the purposes of applying Public Utilities Code §§ 5840, 5890, 5960, and 5940.

21. It is consistent with Public Utilities Code § 5840(f) to require an applicant to include a statement in its affidavit that it and all its affiliates' California operations will be included for the purposes of applying Public Utilities Code §§ 5840, 5890, 5960, and 5940.

22. The restrictions adopted herein on whom may hold a state video franchise are consistent with DIVCA.

23. Reliance on the definition of "affiliate" set forth in R.92-08-008 and contained herein is consistent with DIVCA and prior Commission precedent.

24. The definition of "affiliate" set forth herein is consistent with DIVCA's statutory scheme.

25. Public Utilities Code § 5830(a) defines "broadband" as "any service defined as broadband in the most recent Federal Communications Commission inquiry pursuant to Section 706 of the Telecommunications Act of 1996 (P.L. 104-104)."

26. Since the FCC currently uses the term "broadband" and "advanced telecommunications capability" to describe services and facilities with an upstream (customer-to-provider) and downstream (provider-to-customer) transmission speed of more than 200 kilobits per second, "broadband," as used in Public Utilities Code § 5960, is not limited to wireline technologies.

27. Public Utilities Code § 5960 explicitly anticipates collection of data on broadband provided by non-wireline technologies.

28. Public Utilities Code § 5960(b)(1)(C) instructs state video franchise holders to give the Commission information on whether the broadband provided by the holders utilizes wireline-based facilities or another technology.

29. Pursuant to DIVCA, the Commission should collect broadband data for both wireline and non-wireline technologies used by state video franchise holders or their affiliates.

30. DIVCA assigns specific enforcement responsibilities to local entities, and the application process should require the applicant to make attestations to ensure effective local enforcement of DIVCA provisions.

31. Pursuant to DIVCA's enforcement scheme, a single, qualified corporate entity should be responsible for DIVCA compliance, accept service of process, and submit to the jurisdiction of California courts.

32. Pursuant to Public Utilities Code § 5840(e)(6), permitting applicants to describe their proposed video service area footprints with a collection of census block groups or a geographic information system digital boundary meeting or exceeding national map accuracy standards is consistent with DIVCA.

33. Pursuant to Public Utilities Code §§ 5840(e)(6) and 5840(e)(8), defining areas in the proposed video service area footprint as collections of contiguous census block groups or regions defined by geographic information system boundaries is consistent with DIVCA.

34. Pursuant to Public Utilities Code § 5840(e)(8), requiring a state video franchise applicant to provide an expected date of deployment for each area in the proposed video service area footprint pursuant to the definition proposed herein is consistent with DIVCA. The resulting provision of an expected date of deployment for the entirety of each non-contiguous grouping or region included in an applicant's proposed video service area footprint is consistent with DIVCA.

35. DIVCA does not provide the Commission the authority to impose confidentiality restrictions on expected deployment data submitted in an application. Specifically, DIVCA does not give the Commission authority to impose confidentiality restrictions on local entities that receive information on expected deployment dates in a state video franchise application.

36. Requiring the submission of information on access and subscription to advanced communications services is consistent with DIVCA and its statutory purposes.

37. It is inconsistent with DIVCA to require applicants to provide information in their application concerning the applicants' efforts over the last three years to help close the Digital Divide; demonstrate diversity at all levels of employment and management; and demonstrate business opportunities created for small, minority-owned, and women-owned businesses, because all such requirements are inconsistent with DIVCA's application process, which sets forth requirements with particularity and strictly limits the Commission's role to determining whether the application is complete.

38. It is inconsistent with DIVCA to require the reporting of customer services provided in languages other than English.

39. It is consistent with DIVCA to deem (i) an application that contains an attestation that the applicant will submit company-specific socioeconomic data, including data on access and subscription to advanced communications services, within 90 calendar days of the date when the Commission issues a state video franchise as equivalent to (ii) an application that contains the data.

40. As amended pursuant to the discussion herein, the application form and the affidavits are consistent with DIVCA.

41. Public Utilities Code § 5840(e)(9) permits the Commission to require a bond to establish that an applicant for a state video franchise possesses the financial, legal, and technical qualifications necessary to construct and operate the proposed system and promptly repair any damage to the public right-of-way caused by the applicant.

42. Public Utilities Code § 58940(e)(1)(C) tasks local entities with governing the "time, place, and manner" of a state video franchise holder's use of local rights-of-way.

43. DIVCA does not preclude local entities from requiring further security instruments to ensure that a state video franchise holder fulfills locally regulated obligations.

44. The requirement to name the Commission as an obligee of the bond required pursuant to Public Utilities Code § 5840(e)(1)(C) is consistent with DIVCA.

45. The requirement that the state video franchise holder submit a copy of the executed bond to the Executive Director (i) within five business days after receipt of a state video franchise and (ii) prior to initiating video service is consistent with DIVCA.

46. DIVCA does not permit the submission of a financial statement (in lieu of a bond) to demonstrate an applicant is qualified to hold a state video franchise.

47. An application fee of $2,000 is consistent with DIVCA.

48. If the workload related to the application review process differs from current Commission estimates, the Commission has the statutory authority to revise its calculation of the application fee and change the fee.

49. DIVCA does not provide authority to collect fees for other Commission franchise actions.

50. Public Utilities Code § 5840 directs that the Commission's authority to oversee the state video franchise application process shall not exceed the provisions set forth in that section.

51. Public Utilities Code § 5840 provides the Commission with authority to evaluate whether a state video franchise is complete or incomplete. This authority is limited to specific tasks delineated in the statute.

52. Public Utilities Code § 5840 provides that the Commission must inform an applicant of whether its state video franchise application is complete within thirty calendar days of receipt of its application.

53. DIVCA provides the Commission with no discretion over the substance or timing of its review of state video franchise applications. The substance of the Commission's review is limited to the task of determining whether the application is complete.

54. If the Commission determines an application is complete, DIVCA requires the Commission to issue a state video franchise before the fourteenth calendar day after that finding.

55. The only stated ground for rejecting an application is incompleteness.

56. If an application is incomplete, the Commission must explain with particularity how the application is incomplete, and the applicant has an opportunity to amend the application to overcome the defects.

57. Public Utilities Code § 5840 does not provide for protests.

58. The protest of a Commission review when the Commission has no discretion would be an idle act and could accomplish nothing.

59. The failure of the Commission to act on an application within forty-four calendar days of its receipt is deemed to constitute issuance of the state video franchise applied for and requires no further action on behalf of the applicant.

60. An amended application must be reviewed for completeness within thirty calendar days of submission.

61. There is no statutory basis for the assertion that DRA has the right to protest a state video franchise application.

62. TURN and Joint Cities misconstrue DIVCA when they assert that Public Utilities Code § 5840(e)(1)(D) permits local entities to file protests. The statute only requires that local entities receive a copy of the state video franchise application.

63. The Commission should accept no protests to any state video franchise application.

64. The Commission should receive any information indicating that an applicant has violated a final nonappealable order relating to either the Cable Television and Video Providers Customer Service and Information Act or the Video Customer Service Act. Provision of such information does not constitute a protest.

65. The requirement of a bond provides adequate assurance that an applicant possesses the necessary financial, legal, and technical qualifications to operate pursuant to a state video franchise.

66. Pursuant to Public Utilities Code § 5840(h), notification of affected local entities of whether an applicant's application is complete or incomplete and the particular items that are incomplete is consistent with DIVCA.

67. DIVCA establishes that no person or corporation shall be eligible for a new or renewed state video franchise if that person or corporation is in violation of any final nonappealable order relating to either the Cable Television and Video Providers Customer Service and Information Act or the Video Customer Service Act.

68. Pursuant to Public Utilities Code § 5840(b), a state video franchise holder must provide a local entity notice that it will begin offering service in the entity's jurisdiction. This notice of imminent market entry shall be given at least ten calendar days but no more than sixty calendar days, before the video service provide begins to offer service.

69. Implicit in the incumbent cable operator's right to abrogate its franchise with the local entity is the assumption that an incumbent cable operator will know when a state video franchise holder provides notice of imminent market entry.

70. Pursuant to Public Utilities Code § 5810(a)(2)(A), the Commission shall place all user fees into a subaccount of the Commission's Utilities Reimbursement Account.

71. The user fees assessed by the Commission on state video franchise holders are not "franchise fees," as defined by Section 542 of the Federal Communications Act.

72. User fees levied by the Commission pursuant to DIVCA are either fees of "general applicability" or fees incidental to the awarding or enforcing the state video franchise.

73. Pursuant to Public Utilities Code § 401(b), the user fee shall produce enough, and only enough, revenues to fund the Commission with (i) its authorized expenditures for each fiscal year to regulate applicants and state video franchise holders, less the amount to be paid from special accounts (with designated exceptions); (ii) an appropriate reserve; and (iii) any adjustment appropriated by the Legislature.

74. The user fee should include funding for DRA, whose budget is included in the Commission budget.

75. Pursuant to Public Utilities Code § 5810(a)(3), collection of user fees from state video franchise holders in the same manner and under the same terms as collection of user fees from public utilities is consistent with DIVCA.

76. Pursuant to Public Utilities Code § 5810(a)(3), any user fees levied by the Commission should not discriminate against video service providers or their subscribers.

77. Pursuant to Public Utilities Code § 442(e), the Commission should issue refunds if it collects a fee in error.

78. The methodology and procedures for assessing a user fee for Fiscal Year 2007-2008 are consistent with DIVCA.

79. The methodology and procedures for assessing user fees for Fiscal Years following Fiscal Year 2007-2008 are consistent with DIVCA.

80. Pursuant to Public Utilities Code § 443(a), the Commission has the authority to require a video service provider to furnish information and reports needed to assess a user fee.

81. Public Utilities Code § 5920 imposes specific employment reporting requirements that direct state video franchise holders with more than 750 California employees to report upon the number and types of jobs held by their employees in California.

82. Pursuant to Public Utilities Code § 5920, state video franchise holders must provide projections of new hires expected during an upcoming year.

83. Granting confidential treatment to employment data provided pursuant to DIVCA would violate the express language of Public Utilities Code § 5920(b), which requires the Commission to make the employment data available on its public website.

84. Pursuant to Public Utilities Code § 5960, state video franchise holders must submit detailed annual reports on broadband and video services.

85. The reporting requirements pertaining to broadband and video services adopted in General Order 169 are consistent with DIVCA and fulfill a variety of statutory purposes. In addition to enabling the Commission to monitor build-out, the reports enable the Commission to support voluntary efforts to increase broadband adoption.

86. Given the sensitivity of nonpublic revenue data, the Commission should release individual state video franchise holder's annual state video franchise revenue data only if it determines that the disclosure of the data is made as provided for pursuant to Public Utilities Code § 583.

87. The procedures for reporting information on broadband and video availability contained in General Order 169, including the reporting methodology contained in Appendix D, are consistent with DIVCA.

88. The procedures for reporting broadband and video subscribership data contained in General Order 169 and discussed herein are consistent with DIVCA.

89. Pursuant to Public Utilities Code § 5960(B)(1)(A), a state video franchise holder may elect to approximate certain broadband availability data only if the state video franchise holder (i) "does not maintain this information on a census tract basis in its normal course of business" and (ii) the alternate reporting methodology "reasonably approximate[s]" census tract data.

90. Pursuant to Pursuant to Public Utilities Code § 5960(d), annual broadband and video data reported to the Commission shall be disclosed to the public only as provided for pursuant to Public Utilities Code § 583.

91. Scaling back our broadband reporting requirements, as proposed by AT&T, contravenes the principles underlying DIVCA, including its goals to promote widespread access to the most technologically advanced cable and video services to all California communities and to complement efforts to increase investment in broadband infrastructure.

92. Requiring the reporting of low-income household information that utilizes the most recent U.S. Census projections available as of January 1, 2007 is consistent with the definition of low-income household found in Public Utilities Code § 5890(j)(2).

93. Public Utilities Code § 5890(b) establishes low-income build out requirements that are benchmarked upon household income data available as of January 1, 2007.

94. The reporting requirements pertaining to the provision of free service to community centers, adopted herein, are consistent with the enforcement of specific DIVCA provisions.

95. Pursuant to Public Utilities Code § 5890(b)(3), the community center reporting requirement should apply to state video franchise holders that alone, or in conjunction with their affiliates, have more than one million California telephone subscribers.

96. The submission of information pertaining to employment, such as CUDC information or EEO-1 forms, is consistent with DIVCA's interest in tracking new jobs created by state video franchise holders.

97. Pursuant to Public Utilities Code § 5890, the Legislature required certain state video franchise holders to offer video service to California consumers within predetermined time periods.

98. Build-out provisions in subsections (b)(1)-(2) and (e) of Public Utilities Code § 5890 clearly require state video franchise holders that alone, or in conjunction with their affiliates, have more than one million California telephone customers to (i) offer service to a certain percentage of households in their telephone service areas in a designated time period, depending on the technology used by the holders and (ii) ensure that a certain percentage of households offered video access are "low-income households."

99. As contained in the attached General Order, the provisions for determining build-out requirements for state video franchise holders that alone, or in conjunction with their affiliates, have fewer than one million California telephone customers are consistent with DIVCA.

100. Public Utilities Code § 5890(j)(2) defines a low-income household as one with an annual household income of less than $35,000.

101. Pursuant to Public Utilities Code § 5890(b)(3), state video franchise holders that alone, or in conjunction with their affiliates, have more than one million California telephone customers must provide free service to community centers at the ratio of one community center per 10,000 customers.

102. Pursuant to Public Utilities Code § 5890(b)(3), a community center eligible for free service must be a facility that (i) qualifies for the California Teleconnect Fund, (ii) makes the state video franchise holder's service available to the community, and (iii) only receives service from one state video franchise holder at a time.

103. The build-out requirements adopted herein that pertain to state video franchise holders that alone, or in conjunction with their affiliates, have more than one million California telephone customers are consistent with DIVCA.

104. Pursuant to DIVCA, the design of build-out requirements is a fact-specific endeavor based upon conditions affecting individual video service providers.

105. The procedures adopted herein for determining the build-out requirements pertaining to state video franchise holders that alone, or in conjunction with their affiliates, have fewer than one million California telephone customers are consistent with DIVCA.

106. Pursuant to Public Utilities Code § 5890(d), "[w]hen a holder provides video service outside of its telephone service area, is not a telephone corporation, or offers video service in an area where no other video service is being offered, other than direct-to-home satellite service, there is a rebuttable presumption that discrimination in providing service has not occurred within those areas."

107. If not rebutted, the existence of any one of the three factors listed in the prior Conclusion of Law is sufficient to prove that a state video franchise holder is not discriminating in its provision of video service.

108. It is consistent with Public Utilities Code § 5890(d), which applies non-discrimination provisions to a "holder" rather than an "applicant," that the Commission's review of the antidiscrimination and build-out provisions take place after a state video franchise is awarded.

109. DIVCA's build-out requirements apply to a state video franchise holder's video service area as a whole, not a per-contiguous-area basis.

110. Pursuant to Public Utilities Code § 5890(g), local governments may bring complaints concerning discrimination to the Commission for resolution, and the Commission itself may open investigations on discrimination matters.

111. Public Utilities Code § 5890(e)(2)-(3) establishes automatic extensions for build-out requirements imposed by Public Utilities Code § 5890(e)(1)-(2). These extensions go into effect if a significant percentage of households fail to subscribe to a state video franchise holder's service.

112. Public Utilities Code § 5890(f) affords the Commission discretionary authority to grant an extension for the build-out requirements imposed in subsections (b), (c), and (e).

113. Pursuant to Public Utilities Code § 5890(g), the Commission may suspend or revoke a state video franchise if it finds any of the following: (i) The state video franchise holder has failed to comply with any demand, ruling, or requirement of the Commission made pursuant to and within the authority of Division 2.5; (ii) The state video franchise holder has violated any provision of Division 2.5 or any rule or regulation made by the Commission under and within the authority of this division; or (iii) A fact or condition exists that, if it had existed at the time of the original application for the state franchise (or transfer thereof), reasonably would have warranted the Commission's refusal to issue the state video franchise originally (or grant the transfer thereof).

114. DIVCA expressly limits the Commission's use of enforcement actions, such as investigations.

115. Pursuant to DIVCA, the Commission may impose a fine only when a state video franchise holder is in violation of a provision concerning user fees or antidiscrimination/build-out requirements.

116. Pursuant to Public Utilities Code § 5890(g), the Commission is given authority to address local entities' formal complaints based on DIVCA only when the complaints arise under Public Utilities Code § 5890.

117. It is consistent with DIVCA for the Commission to limit its initiation of investigations to those situations where DIVCA explicitly assigns the Commission authority to regulate.

118. Pursuant to Public Utilities Code § 5890(g), the Commission has the flexibility to determine which type of public hearing could best develop the record needed for deciding an individual matter.

119. Pursuant to Public Utilities Code §§ 5840 or 5930, any party at any time can bring the Commission information that demonstrates an applicant is ineligible to obtain a state video franchise. Such information is relevant to the Commission's review of an application, and providing it does not constitute a protest to an application.

120. Upon validation of evidence of ineligibility pursuant to Public Utilities Code §§ 5840 or 5930, the Commission can respond in a number of ways, including rejection of an application, immediate suspension of a state video franchise, issuance of an order to show cause for why a state video franchise should not be deemed invalid, and/or any other appropriate action consistent with the Commission's authority.

121. Pursuant to (i) our general enforcement powers in Public Utilities Code § 5890(g) and (ii) our specific authority to administer the state video franchise application process pursuant to Public Utilities Code § 5840, the Commission has the authority to investigate allegations that a fact or condition exists that, if it had existed at the time of the original application for the state video franchise (or transfer or amendment thereof), reasonably would have warranted the Commission's refusal to issue the state video franchise originally (or grant the transfer or amendment thereof).

122. Pursuant to Public Utilities Code § 5890(g), the Commission may open an investigation to determine whether an applicant failed to comply with DIVCA franchising provisions.

123. It is consistent with DIVCA to require that any formal investigation to determine whether an applicant failed to comply with DIVCA franchising provisions follow standard Commission procedures for the initiation of an investigation. These procedures include a majority vote of the Commission on an order initiating the investigation that either contains a report or the declarations of Commission witnesses pertaining to facts that demonstrate an investigation of DIVCA compliance is warranted.

124. Pursuant to DIVCA, formal investigation of antidiscrimination and build-out compliance may be launched in two ways: (i) in response to a complaint filed by a local government, or (ii) on the Commission's own motion.

125. The procedures discussed herein concerning complaints filed by local governments alleging the failure of a state video franchise holder to comply with antidiscrimination and build-out requirements are consistent with DIVCA.

126. The procedures discussed herein concerning Commission-initiated investigations on the failure of a state video franchise holder to comply with antidiscrimination and build-out requirements are consistent with DIVCA.

127. Failure to comply with antidiscrimination and build-out provisions of Public Utilities Code § 5890 may lead to multiple penalties, including fines, suspension of a state video franchise, and/or revocation of a state video franchise.

128. Pursuant to DIVCA, it is unlawful for any applicant or state video franchise holder willfully to make any untrue statement of material fact in any application, notice, or report filed with the Commission.

129. Pursuant to DIVCA, it is unlawful for any applicant or state video franchise holder willfully to omit to state in any application, notice, or report any material fact that is required to be stated by DIVCA.

130. Consistent with DIVCA, a formal investigation into compliance with reporting requirements may be launched (i) on the Commission's own motion or (ii) initiated in response to a complaint filed by a local government if the reporting requirement at issue is used to monitor compliance with Public Utilities Code § 5890.

131. Pursuant to Public Utilities Code § 444(a), the Commission may impose a penalty for failure to provide financial reports required by the Commission. In particular, the Commission may assess a penalty not to exceed 25 percent of the amount of a state video franchise holder's estimated user fee, on account of the failure, refusal, or neglect to prepare and submit the report required by Public Utilities Code § 443.

132. Pursuant to DIVCA, the Commission may fine a state video franchise holder if it fails to provide accurate reports needed to enforce antidiscrimination and build-out provisions.

133. The authority to impose penalties pursuant to Public Utilities Code § 5890(g) flows to instances where a state video franchise holder misstates or omits information required by Public Utilities Code § 5960.

134. Current federal and state law subject California telecommunications companies to a variety of measures designed to prevent unlawful cross-subsidization between telecommunications costs and non-telecommunications costs.

135. As discussed herein, the Commission has ample authority to investigate allegations of unlawful cross-subsidization.

136. Pursuant to Public Utilities Code § 5950, the Commission prohibits incumbent local exchange carriers that obtain a state video franchise from changing any rate for basic telephone service until January 1, 2009, unless the incumbent is subject to rate-of-return regulation.

137. The procedures discussed herein for investigation and sanctioning of unlawful cross-subsidization of video services are consistent with DIVCA.

138. The procedures contained in General Order 169 for enforcing the submission of user fees are consistent with DIVCA.

139. DIVCA explicitly empowers local entities to enforce its consumer protection provisions.

140. DIVCA limits the Commission's role in enforcement of consumer protection provisions.

141. The procedures discussed herein regarding initiation of a proceeding to determine whether a pattern and practice of violating consumer protection laws warrants suspension or revocation of a state video franchise are consistent with DIVCA.

142. It is necessary to ensure that the Commission's Rules of Practice and Procedure are consistent with DIVCA.

143. DIVCA limits DRA's role to advocacy and enforcement actions related to state video franchise renewal and Public Utilities Code §§ 5890, 5900, and 5950.

144. DIVCA provides that DRA may have access to information in the Commission's possession "for this purpose" of enforcing the Public Utilities Code sections referenced in the preceding Conclusion of Law.

145. The procedures adopted herein whereby DRA has unfettered access to all information submitted to the Commission and the ability to make a copy of the information that it requires to fulfill its obligations pursuant to DIVCA (i.e., obligations pertaining to state video franchise renewals and enforcement of Public Utilities Code §§ 5890, 5900, and 5950) are consistent with DIVCA.

146. The procedure in the prior Conclusion of Law is consistent with DIVCA's intention to provide DRA with access any information that it requires for the purpose of advocating on behalf of video customers regarding state video franchise renewals and enforcement of Public Utilities Code §§ 5890, 5900, and 5950.

147. DIVCA does not allow for the Commission to order a grant of intervenor compensation.

148. The procedures adopted herein concerning amendments to a state video franchise are consistent with DIVCA.

149. Federal and state law may change between now and 2017, the earliest a state video franchise may be renewed.

ORDER

IT IS ORDERED that:

1. A state video franchise holder shall not allow its bond to lapse during any period of its operation pursuant to a state video franchise.

2. The Executive Director shall provide notice of application incompleteness and the specific reason for incompleteness in the same document and shall provide this notice both to the franchise applicant and to affected local entities.

3. The Executive Director shall provide notice of statutory ineligibility for a state video franchise, when known, to the applicant.

4. A state video franchise holder shall provide a local entity and affected incumbent cable operators notice that it will begin offering service in the entity's jurisdiction. This notice of imminent market entry shall be given at least ten calendar days but no more than sixty calendar days, before the state video franchise holder begins to offer service.

5. The Executive Director shall place all state video franchise holders' user fee payments into a subaccount of the Commission's Utilities Reimbursement Account.

6. The Commission shall annually determine the user fee to be paid by each state video franchise holder pursuant to the methodology and procedures discussed herein.

7. The Commission shall refund any user fee collected in error.

8. State video franchise holders shall provide the Commission with the reports and information needed to assess annual user fees according to the method and schedule discussed herein.

9. The General Order attached to this decision is hereby adopted.

10. Applicants and state video franchise holders shall follow the procedures and comply with the requirements of General Order 169.

11. The Commission shall provide for a public hearing in any formal proceeding where franchising; antidiscrimination and build-out; reporting; the prohibition against financing video deployment with rate increases for stand-alone, residential, primary line, basic telephone services; or user fee provisions are at issue.

12. Any formal investigation initiated by the Commission regarding whether an applicant failed to comply with DIVCA franchising provisions shall follow standard Commission procedures for the initiation of an investigation. These procedures include, among other things, a majority vote of the Commission on an order initiating the investigation (which either contains a report or declarations of Commission witnesses pertaining to facts that demonstrate an investigation of Public Utilities Code § 5840 compliance is warranted). Such an investigation shall include public hearings and proceed in the manner discussed herein.

13. Any complaint by a local government alleging that a state video franchise holder has failed to meet the antidiscrimination and build-out requirements of Public Utilities Code § 5890 shall include sworn declarations pertaining to the facts that the local government believes demonstrate a failure to fulfill obligations imposed by Public Utilities Code § 5890. In addition, the local government filing a complaint shall clearly identify that the complaint pertains to a failure to meet an obligation imposed by Public Utilities Code § 5890.

14. The document initiating a Commission investigation on whether a state video franchise holder has failed to meet the antidiscrimination and build-out requirements of Public Utilities Code § 5890 shall contain a report prepared by Commission staff and/or declarations of Commission witnesses pertaining to facts that demonstrate an investigation of Public Utilities Code § 5890 compliance is warranted. Such an investigation shall proceed in the manner discussed herein, including public hearings.

15. DIVCA requires the Commission to hold public hearings in conjunction with any formal antidiscrimination or build-out investigations, and the Commission will determine through rulings which form or forms of hearings to use.849

16. Any investigation into allegations that a state video franchise holder has failed to meet the reporting requirements of DIVCA shall follow the procedures discussed herein.

17. Any investigation into allegations that a state video franchise holder has violated the provisions of DIVCA prohibiting the financing of video deployment with rate increases for stand-alone, residential, primary line, basic telephone services shall follow the procedures discussed herein.

18. Any investigation into allegations that a state video franchise holder has violated the user fees requirements of DIVCA shall follow the procedures used in enforcing other DIVCA provisions regulated by the Commission.

19. The Commission shall follow the procedures discussed herein regarding initiation of a proceeding to determine whether a pattern and practice of DIVCA violations warrants suspension or revocation of a state video franchise. In conducting this legal proceeding, the Commission shall not consider the merits of alleged material breaches de novo. Instead, the Commission shall only consider whether enforcement actions and penalties assessed by a local entity were uncontested or sustained by courts and whether these enforcement actions and penalties rise to a level such that state video franchise suspension or revocation is warranted.

20. Phase II of this proceeding shall determine which of the Commission's Rules of Practice and Procedure remain applicable in proceedings conducted pursuant to DIVCA.

21. Phase II of this rulemaking shall consider whether the Commission needs additional, more detailed broadband and video information for enforcement of specific DIVCA provisions.

22. In Phase II of this proceeding, the Commission shall establish "safe harbor" standards for compliance with Public Utilities Code § 5890(c).

23. DRA shall have unfettered access to all information provided to the Commission pursuant to DIVCA. DRA may copy any such information needed to fulfill its obligations pursuant to DIVCA, i.e., obligations pertaining to state video franchise renewals and enforcement of Public Utilities Code §§ 5890, 5900, and 5950.

24. The Commission shall not consider any protest to a state video franchise application, and no such protest shall be docketed.

25. No party shall be awarded intervenor compensation in a proceeding arising under DIVCA.

26. Phase II of this proceeding shall address renewal issues to the extent possible at the time of the proceeding.

This order is effective today.

Dated March 1, 2007, at San Francisco, California.

849 Id. at § 5890(g) (declaring that the "state franchising authority shall hold public hearings before issuing a decision").

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