V. Ex Parte Communications

This proceeding is subject to Rule 7, which specifies standards for engaging in ex parte communications and the reporting of such communications. Pursuant to Rules 7(a)(4) and 7(d), ex parte communications will be allowed in this quasi-legislative proceeding without any restrictions or reporting requirements unless and until the Commission modifies this determination of category.

IT IS ORDERED that:

1. A rulemaking is instituted on the Commission's own motion to address the requirements of Senate Bill 1712 (Ch. 943, Stats. 2000). The initial focus of this rulemaking will be the topics identified in this order and Attachment C.

2. Commissioner Brown shall be the Assigned Commissioner. The assigned Commissioner and ALJ shall develop a service list for this proceeding and further delineate issues related to scope and schedule for this proceeding.

3. This rulemaking is preliminarily categorized as quasi-legislative as that term is defined in Rule 5(d) of the Commission's Rules of Practice and Procedure.

4. Persons interested in having their names added to the service list for this proceeding shall follow the procedures described in this order.

5. Parties interested in providing comments regarding the topics of this rulemaking and investigation shall file and serve their comments on or before 60 days from the date of issuance of this order in accordance with the Commission's Rules of Practice and Procedure and the procedures described in this order. Reply comments shall be filed and served no later than 20 days after the due date for opening comments.

6. The opening and reply comments will also be the parties' opportunity, under Rule 6(c)(2) of the Commission's Rules of Practice and Procedure, to respond to the preliminary categorization, need for hearing, and preliminary scoping memo set forth in this OIR.

7. This order shall be posted at the Commission's Web Site and served by regular mail on all of the following:

a. All telecommunications carriers holding certificates of public convenience and necessity or wireless registration.

b. All parties to Rulemaking 95-01-020 and Investigation 95-01-021.

c. All cities and counties.

d. The following state agencies:

8. Persons interested in being placed on the service list for the balance of this proceeding shall send a letter to the Commission's Process Office indicating that request no later than 10 days prior to the due date for comments. Such request shall reference this proceeding and indicate the requesters name, address, telephone number, fax number and e-mail address. An e-mail address is required unless certified that the requester does not have e-mail. Requesters shall also indicate if they have any objection to future service of notices, rulings and other matters in this proceeding being accomplished by electronic means, including e-mail, in Microsoft Word format.

This order is effective today.

Dated May 24, 2001, at San Francisco, California.

ATTACHMENT A

BASIC SERVICE COMPONENTS ADOPTED IN DECISION 96-10-006

R.95-02-020, I.95-01-021 ALJ/JSW/gab **

APPENDIX B

Page 5

4. BASIC SERVICE

A. Carriers providing local exchange residential service shall, at a minimum, provide all elements of basic service, except as provided for in Rule 4.C. below.

B. Basic service includes the following service elements:

C. The seventeen smaller LECs shall be exempted from the basic service element that they be required to offer customers the choice of flat or measured rate service, unless the smaller LECs currently offer that option.

(END OF ATTACHMENT A)

ATTACHMENT B

Page 1

SB 1712, Ch. 943 Stats. 2000

An act to add Sections 871.7 and 883 to the Public Utilities Code, relating to public utilities.

SB 1712, Polanco. Universal telephone service.

The Moore Universal Telephone Service Act requires the Public Utilities Commission to establish a class of lifeline service necessary to meet minimum residential communications needs and establish rates and charges for that service.

This bill would require the commission, on or before February 1, 2001, to initiate an investigation to examine the current and future definitions of universal service, seeking input from a wide cross section of providers, users, state agencies, and convergent industries and reporting findings and recommendations, consistent with specified principles, to the Legislature. The bill would make related legislative findings and declarations.

THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

SECTION 1. Section 871.7 is added to the Public Utilities Code, to read:

871.7. The Legislature finds and declares all of the following:

(a) The Moore Universal Telephone Service Act, enacted in 1987, was intended to offer high quality basic telephone service at affordable rates to the greatest number of California residents, and has become an important means of achieving universal service by making residential service affordable to low-income citizens through the creation of a lifeline class of service.

(b) Factors such as competition and technological innovation are resulting in the convergence of a variety of telecommunications technologies offering an expanded range of telecommunications services to users that incorporate voice, video, and data. These technologies have differing regulatory regimes and jurisdictions.

(c) It is the intent of the Legislature that the commission initiate a proceeding investigating the feasibility of redefining universal telephone service by incorporating two-way voice, video, and data service as components of basic service. It is the Legislature's further intent that, to the extent that the incorporation is feasible, that it promote equity of access to high-speed communications networks, the Internet, and other services to the extent that those services provide social benefits that include all of the following:

(1) Improving the quality of life among the residents of California.

(2) Expanding access to public and private resources for education, training, and commerce.

ATTACHMENT B

Page 2

(3) Increasing access to public resources enhancing public health and safety.

(4) Assisting in bridging the "digital divide" through expanded access to new technologies by low-income, disabled, or otherwise disadvantaged Californians.

(5) Shifting traffic patterns by enabling telecommuting, thereby helping to improve air quality in all areas of the state and mitigating the need for highway expansion.

(d) For purposes of this section, the term "feasibility" means consistency with all of the following:

(1) Technological and competitive neutrality.

(2) Equitable distribution of the funding burden for redefined universal service as described in subdivision (c), among all affected consumers and industries, thereby ensuring that regulated utilities' ratepayers do not bear a disproportionate share of funding responsibility.

(3) Benefits that justify the costs.

SEC. 2. Section 883 is added to the Public Utilities Code, to read:

883. (a) The commission shall, on or before February 1, 2001, issue an order initiating an investigation and opening a proceeding to examine the current and future definitions of universal service. That proceeding shall include public hearings that encourage participation by a broad and diverse range of interests from all areas of the state, including, but not limited to, all of the following:

(1) Consumer groups.

(2) Communication service providers, including all providers of high-speed access services.

(3) Facilities-based telephone providers.

(4) Information service providers and Internet access providers.

(5) Rural and urban users.

(6) Public interest groups.

(7) Representatives of small and large businesses and industry.

(8) Local agencies.

(9) State agencies, including, but not limited to, all of the following:

(A) The Trade and Commerce Agency.

(B) The Business, Transportation and Housing Agency.

(C) The State and Consumer Services Agency.

(D) The Department of Information Technology.

(E) The State Department of Education.

(F) The State Department of Health Services.

(G) The California State Library.

(10) Colleges and universities.

(b) The objectives of the proceeding set forth in subdivision (a) shall include all of the following:

(1) To investigate the feasibility of redefining universal service in light of current trends toward accelerated convergence of voice, video, and data, with an emphasis on the role of basic telecommunications and Internet services in the workplace, in education and workforce training, access to health care, and increased public safety.

ATTACHMENT B

Page 3

(2) To evaluate the extent to which technological changes have reduced the relevance of existing regulatory regimes given their current segmentation based upon technology.

(3) To receive broad-based input from a cross section of interested parties and make recommendations on whether video, data, and Internet service providers should be incorporated into an enhanced Universal Lifeline Service program, as specified, including relevant policy recommendations regarding regulatory and statutory changes and funding options that are consistent with the principles set forth in subdivision (c) of Section 871.7.

(4) To reevaluate prior definitions of basic service in a manner that will, to the extent feasible, effectively incorporate the latest technologies to provide all California residents with all of the following:

(A) Improved quality of life.

(B) Expanded access to public and private resources for education, training, and commerce.

(C) Increased access to public resources enhancing public health and safety.

(D) Assistance in bridging the "digital divide" through expanded access to new technologies by low income, disabled, or otherwise disadvantaged Californians.

(5) To assess projected costs of providing enhanced universal lifeline service in accordance with the intent of this article, and to delineate the subsidy support needed to maintain the redefined scope of universal service in a competitive market.

(6) To design and recommend an equitable and broad-based subsidy support mechanism for universal service in competitive markets in a manner that conforms with subdivision (c) of Section 871.7.

(7) To develop a process to periodically review and revise the definition of universal service to reflect new technologies and markets consistent with subdivision (c) of Section 871.7.

(8) To consider whether similar regulatory treatment for the provision of similar services is appropriate and feasible.

(c) In conducting its investigation, the commission shall take into account the role played by a number of diverse but convergent industries and providers, even though many of these entities are not subject to economic regulation by the commission or any other

government entity.

(d) The recommendations of the commission shall be consistent with state policies for telecommunications as set forth in Section 709, and with all of the following principles:

(1) Universal service shall, to the extent feasible, be provided at affordable prices regardless of linguistic, cultural, ethnic, physical, financial, and geographic considerations.

(2) Consumers shall be provided access to all information needed to allow timely and informed choices about telecommunications products and services that are part of the universal service program and how best to use them.

ATTACHMENT B

Page 4

(3) Education, health care, community, and government institutions shall be positioned as early recipients of new and emerging technologies so as to maximize the economic and social benefits of these services.

(e) The commission shall complete its investigation and report to the Legislature its findings and recommendations on or before January 1, 2002.

(END OF ATTACHMENT B)

ATTACHMENT C

Page 1

QUESTIONS FOR COMMENT

1. To what extent should the definition of universal service be modified to include digital access services, which allow the convergence of voice, video and data services? In addressing this, consider the role of basic telecommunications and Internet services in the workplace, in education and workforce training, access to health care, and increased public safety. (§ 883(b)(1))


a. Address the "feasibility" of any proposed change to the definition of universal service, as that term is defined in Section 871.7(d), including whether the benefits justify the costs and whether the funding burden can be equitably distributed so as to prevent regulated utility ratepayers from bearing a disproportionate share of funding responsibility.


b. What additional criteria should be used to determine the nature and definition of universal service?

2. To what extent have competition and advances in technology reduced the relevance of existing regulatory regimes given their current segmentation based upon technology? (§ 883(b)(2))

3. Should video, data, and Internet services be incorporated into an enhanced Universal Lifeline Service program? This should be addressed in the context of regulatory and statutory changes and funding options that are consistent with the principles set forth in Section 871.7(c). (§ 883(b)(3))


a. How should the Commission regulate video, data, voice over IP and Internet providers providing services included as part of an enhanced Universal Lifeline Service Program? What regulatory and legislative changes are needed at a state and/or federal level?

ATTACHMENT C

Page 2


b. How would the Commission regulate and audit payments made to providers of video, data, and Internet services under an enhanced Universal Lifeline Service program?


c. Address the "feasibility" of implementing an enhanced Universal Lifeline Service Program, as that term is defined in Section 871.7(d).

4. To what extent should the definition of basic service be modified to incorporate the latest technologies? (§ 883(b)(4)) Consideration should be given to how this would impact California residents with respect to:


a. Improved quality of life.


b. Expanded access to public and private resources for education, training, and commerce.


c. Increased access to public resources enhancing public health and safety.


d. Assistance in bridging the "digital divide" through expanded access to new technologies by low income, disabled, or otherwise disadvantaged Californians.


e. What criteria should be used to determine whether and how the definition of basic service should be modified? Do the criteria set forth in D.96-10-066, Appendix B, Rule D, provide a useful analytical framework for making this determination?


f. Address the "feasibility" of modifying the definition of basic service to incorporate the latest technologies, as that term is used in Section 871.7(d).

ATTACHMENT C

Page 3

ATTACHMENT C

Page 4

9. Should the California Teleconnect program be revised? If so, how?

a. What is the projected cost of the revised California Teleconnect program? How should the Commission assess the projected cost of a revised California Teleconnect program.

b. How should the Commission design and structure an equitable and broad-based subsidy support mechanism for a revised California Teleconnect program?

10. What process and procedures should the Commission adopt to periodically review and revise the definition of universal service, as necessary, to reflect new technologies and markets consistent with the intent of Section 871.7(c). (§ 883(b)(7))

11. Is it appropriate and feasible to have similar regulatory treatment for the provision of similar service? (§ 883(b)(8))

ATTACHMENT C

Page 5

12. How should the Commission evaluate whether the projected costs of the enhanced programs are excessive or reasonable?

13. Are there alternatives to revising the basic service definition at this time that can achieve the enhanced service objectives at lower cost?

14. When is it appropriate to provide subsidies for "digital services" when individuals who may be subject to both "digital" universal service and lifeline program funding fees are not themselves subscribers to, or beneficiaries of the digital service?

15. Is access to digital services essential? Why? If not essential now, under what conditions should access to digital services be considered essential?

16. How much digital bandwidth access is essential?

17. Should the Commission reprioritize the use of available universal services subsidies? For example, should subsidies for digital access services take precedence over the significant percentage of California territory not served by any phone?

18. Is dial-up modem access to digital services (Internet) essential?

19. Is wireless phone service access to digital services (Internet) essential?

20. What should the Commission consider in determining whether wired or wireless digital service is essential?

21. Have the current Universal Service, Lifeline, and/or Teleconnect programs achieved their goals? Are the goals changing?

22. If program Universal Service, Lifeline, and/or Teleconnect Program goals are changing, what alternatives exist to achieve the new goals?

(END OF ATTACHMENT C)

2 In Resolution T-16435, the Commission projected there would be more than 3.7 million lifeline customers during 2001.

Previous PageTop Of PageGo To First Page