COM/CRC/avs Date of Issuance 9/9/2008
Decision 08-09-015 September 4, 2008
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking on the Commission's Own Motion to Assess and Revise the Regulation of Telecommunications Utilities. |
Rulemaking 05-04-005 (Filed April 7, 2005) |
DECISION REGARDING MONITORING REPORTS, RETAIL
SPECIAL ACCESS PRICING AND CUSTOMER DISCLOSURE RULES
TABLE OF CONTENTS
Title Page
DECISION REGARDING MONITORING REPORTS, RETAIL SPECIAL ACCESS PRICING AND CUSTOMER DISCLOSURE RULES 22
3.2. Pricing of Special Access Services 2626
3.3. Additional Customer Disclosure Rules 2929
4. Comments on Proposed Decision 3333
DECISION REGARDING MONITORING REPORTS, RETAIL
SPECIAL ACCESS PRICING AND CUSTOMER DISCLOSURE RULES
1. Summary
In initiating the Uniform Regulatory Framework (URF) proceeding, we sought to review the regulatory framework for all telecommunications carriers and to determine the extent to which dramatic changes in the communications market support revising the regulatory framework. As we recognized in the first phase of this proceeding, the market is now far more competitive than it was when we imposed the New Regulatory Framework (NRF) on the incumbent local exchange carriers. In California, we have various competitive alternatives to the traditional wireline incumbent local exchange carriers (ILECs), including numerous wireless carriers; competitive local exchange carriers (CLECs); cable companies that have added Voice over Internet Protocol (VoIP) telecommunications products to yield a "triple play" of voice, video and data offerings; and pure-play VoIP providers that add voice communications services to broadband connections.
Both federal and state policies have changed to recognize the dynamic and competitive nature of the telecommunications market. This Commission has expressed its goal to encourage growth and innovation of services and level the playing field. Consistent with those policies, in URF Phase I, we granted pricing flexibility for most services to the URF Carriers1 and we found that many of the requirements, such as monitoring reports that the ILECs filed pursuant to NRF, should be eliminated as no longer necessary. We left for Phase II of this proceeding, however, specific decisions regarding, among other things, whether additional monitoring reports are necessary; whether retail special access should be deregulated; and whether there is a need for additional consumer protection rules.
This decision addresses those remaining issues in Phase II of this proceeding and finds that: i) there is no need for additional monitoring reports of URF Carriers due to satisfactory information to be obtained from reports by them to the FCC and remaining URF reports; ii) we should not deregulate pricing for retail special access at this time; and iii) there is no need for additional consumer protection rules to govern URF Carriers, given significant actions by this Commission in the last two years in the area of consumer protection initiatives, including cramming and in-language protections, and new enforcement measures.
We affirm the tentative finding of the first phase of this rulemaking that the Commission does not need to adopt new reporting requirements to monitor the industry and may rely instead on carrier reports to the Federal Communications Commission (FCC) and other existing filings by URF Carriers to provide it with sufficient information necessary to meet its statutory obligations and exercise effective regulatory oversight. If certain FCC reports are no longer required in the future, we will require URF ILECs to continue to file the California-specific information from those ARMIS reports pending this
Commission's determination as to the necessity of that information.2 We note that targeted third-party surveys may be an effective way to monitor industry developments under URF, particularly with regard to affordability of voice services; however, we decline to establish such third-party surveys at this time. Finally, we reiterate that the Commission always has authority to enforce the Pub. Util. Code and its rules and may audit and obtain records from carriers pursuant to Pub. Util. Code §§ 313 and 314 if necessary.
We find that the record does not support a reconsideration of our regulation of special access at this time. Instead, we will observe the pending FCC action on interstate special access prices, terms, and conditions, and may determine whether to revisit this issue in the future. We clarify that our decision with regard to special access pertains to the URF ILECs and that competitive local exchange carriers (CLECs) and interexchange carriers (IXCs) have already had full pricing flexibility. We also clarify that CLECs and IXCs may detariff special access services as discussed below. We note that the deadline for URF Carriers to detariff their existing tariffed services was initially set at 18 months from the effective date of our detariffing decision D.07-09-018. Given some of the clarifications that we have had to make regarding detariffing, we are extending the implementation period for detariffing to September 12, 2009 (24 months from the effective date of D.07-09-018); to the extent that they seek to detariff existing services, URF Carriers must file to detariff by that date.
We also decline to adopt additional customer disclosure rules beyond those adopted in Decision (D.) 06-03-013, as the Commission has taken several actions since the issuance of our Consumer Protection Initiative in D.06-03-013 to address issues of fraud, consumer education, and enforcement. We believe that our actions in these areas provide sufficient protections for consumers in a competitive environment.
We make these determinations based on our findings in the Phase I decision. The monitoring reports that were collected from the ILECs under NRF focused on data that pertained to rate-of-return or price-cap regulation; today, URF Carriers enjoy pricing freedom for most of their services. Moreover, we initially imposed the requirements for monitoring reports when the ILECs were the only providers offering voice services to consumers; today, consumers receive voice services from traditional landline, but also from wireless services, as well as VoIP providers. One recent survey of the levels of subscription to wireless services indicates that 15.8% of American homes relied only on wireless service (and have cut the cord to their wireline service) during the second half of 2007.3 Thus, the competitive nature of the market eliminates the need for most regulations; the dynamic nature of the market makes most regulations obsolete before they can be issued. The Commission has instead focused on developing targeted rules ensuring consumer protection for individuals who have limited English proficiency and on further developing its consumer education program to ensure consumers are aware of the laws and their rights. We have opted for a light-handed regulatory approach that emphasizes consumer empowerment through education while retaining the power to identify and penalize actions that violate our statutes and rules and harm consumers.
1 The URF Carriers include the four largest incumbent local exchange carriers, CLECs, and interexchange carriers (IXCs). See D.07-08-018.
2 We recognize that the FCC granted the petition of AT&T to forbear from enforcement of certain of the Commission's Cost Assignment Rules. See In the Matter of Petition of AT&T Inc. for Forbearance Under 47 U.S.C. § 160 From Enforcement of Certain of the Commission's Cost Assignment Rules, Petition of BellSouth Telecommunications, Inc., for Forbearance Under 47 U.S.C. § 160 From Enforcement of Certain of the Commission's Cost Assignment Rules, WC Docket Nos.07-21, 05-342, Memorandum Opinion and Order, FCC 08-120 (AT&T Forbearance Order) (April 2008). As discussed below, we find that the FCC's action in this order does not affect our determination to eliminate NRF-specific reports or to not impose additional monitoring reports.
3 Wireless Substitution, Early Estimates from National Health Interview Survey July - December 2007, Center for Disease Control (June 2008). Further, that same survey found that 13.1% of American homes communicated mostly on their wireless phone despite having a wireline phone.
