COM/CRC/hkr Date of Issuance 4/17/2009
Decision 09-04-005 April 16, 2009
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 ADVICE LETTER FILINGS
FOR SPECIAL ACCESS SERVICE PRICE CHANGES
On August 18, 2008, Assigned Commissioner Rachelle B. Chong issued an Assigned Commissioner's Ruling (ACR) on the proposed treatment of advice letters containing price changes for special access services.1 The ACR asked parties to file comments on the proper advice letter tiers2 for filing of price changes for special access services.
Decision (D.) 07-09-018 and D.07-09-019 established that under our Uniform Regulatory Framework (URF), carriers may file Tier 1 notices of price changes for services that were permitted pricing flexibility in the URF Phase I decision.3 Because the URF Phase I decision carved out "special access services" from those services that were granted pricing flexibility, the ACR sought comment on how Incumbent Local Exchange Carriers (ILECs), Competitive Local Exchange Carriers (CLECs), and Interexchange Carriers (IXCs) should implement special access service price changes.
Recognizing that the Commission has already granted CLECs and IXCs "full pricing flexibility"4 for retail special access services, the ACR tentatively proposed that CLECs and IXCs should file their price changes through advice letters in Tier 1. The ACR also proposed certain filing treatment for ILECs to make special access price changes, consistent with the filing requirements that existed previously for ILEC special access services.
In this decision, we define "special access services" as the offering of non-switched lines dedicated to a customer's use between two points and establish advice letter filing rules for all "special access services"-retail and wholesale. We conclude that CLECs and IXCs may file special access price changes in Tier 1 as proposed in the ACR.
We affirm that ILECs shall file their price changes to special access services that were previously categorized as Category II under the New Regulatory Framework (NRF) in the manner that we proposed in the ACR: i) price changes between previously approved floors and ceilings by Tier 1 advice letters; ii) price reductions below previously approved floors by Tier 2 advice letters (with cost support); and iii) price increases above previously approved ceilings by applications.
However, because the Commission has already permitted some ILEC special access services to be classified as Category III under NRF, we recognize that those special access services have been granted more relaxed treatment. For those Category III special access services, we direct ILECs to file advice letters for all price changes in Tier 1, except for price increases greater than 5% of the maximum price, which shall be filed in Tier 2. Because we have not changed pricing treatment for special access services, we believe that this treatment most closely approximates the advice letter filing requirements that the ILECs complied with prior to the establishment of GO 96-B's advice letter tiers. We also reiterate that no URF Carriers may impose use and user restrictions on special access services.
Background
The URF Phase I decision of August 2006 concluded that there is competition in the telecommunications market and granted the ILECs pricing flexibility for their retail services (with certain exceptions). As a result, ILECs are regulated, for the most part, under the same regulatory framework as CLECs and IXCs.
Although we granted the ILECs increased pricing flexibility as to most of their retail services, we stated that the URF Phase I decision did not apply to special access services.5 In D.08-09-015, we concluded that we would maintain the same pricing regulations over ILEC special access services as had existed prior to the URF Phase I decision.6 Consistent with maintaining the same pricing treatment for special access services, the August 2008 ACR proposed the following advice letter filing requirements for special access price changes:
1. CLECs and IXCs may change retail special access prices by filing Tier 1 advice letters.
2. ILECs may change retail special access prices within previously approved floors and ceilings by filing Tier 1 advice letters.
3. ILECs must file applications to raise retail special access prices above previously approved ceilings.
4. ILECs may lower retail special access prices below previously approved floors by filing Tier 2 advice letters (with cost support).
Opening comments were filed on August 28, 2008 by the California Association of Competitive Telecommunications Companies (CALTEL) and on September 2, 2008 by Pacific Bell Telephone Company d/b/a AT&T California, Sprint Communications, L.P. and its affiliates (SprintNextel) and tw telecom of california (TimeWarner). Reply comments were filed on September 8, 2008 by AT&T California, SprintNextel, TimeWarner and Verizon California, Inc. and its affiliates (Verizon California). In addition to commenting on the proposed Tier filings for retail special access services, the parties also commented on the use of the term "retail special access" and on whether IXCs and CLECs may detariff retail special access services. We address these issues below.
1 The ACR sought comment on the proper advice letter treatment for "retail special access services." However, as discussed below, we have determined in this decision that we should establish advice letter rules generally for all "special access services" and not just "retail special access services." See Discussion, sub-paragraph 1, below.
2 Advice letter tiers referred to herein are set out in Commission General Order (GO) 96-B as modified by D.07-09-018, D.07-09-019 and D.08-05-019.
3 See D.06-08-030.
4 In this context, by "full pricing flexibility," we refer to the ability to change prices for services without restriction, including price floors, or ceilings.
5 D.06-08-030, Finding of Fact 14.
6 We also noted in D.08-09-015 that CLECs and IXCs historically had pricing flexibility for special access services and that nothing in the decision was intended to reduce that flexibility.
