D0709018 Appendix A
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COM/CRC/rbg Date of Issuance 9/12/2007

Decision 07-09-018 September 6, 2007

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)

Order Instituting Rulemaking for the Purposes of Revising General Order 96-A Regarding Informal Filings at the Commission.

Rulemaking 98-07-038

(Filed July 23, 1998)

OPINION CONSOLIDATING PROCEEDINGS, CLARIFYING RULES
FOR ADVICE LETTERS UNDER THE UNIFORM REGULATORY
FRAMEWORK, AND ADOPTING PROCEDURES FOR DETARIFFING

Appendix A - Summary of Types of Advice Letter and Other Filings Approved in This Decision

OPINION CONSOLIDATING PROCEEDINGS, CLARIFYING RULES
FOR ADVICE LETTERS UNDER THE UNIFORM REGULATORY
FRAMEWORK, AND ADOPTING PROCEDURES FOR DETARIFFING

1. Overview

We consolidate the two rulemaking proceedings docketed above to coordinate issues that overlap between the Uniform Regulatory Framework proceeding ("URF") (R.05-04-005) and the General Order ("GO") 96-B proceeding (R.98-07-038). This decision clarifies advice letter procedures and establishes detariffing requirements for carriers subject to the URF rules (URF Carriers).1 We are adopting a companion decision establishing the Telecommunications Industry Rules as part of GO 96-B, which relies on the URF record2 and incorporates the new advice letter and detariffing requirements that we adopt here.

In this decision, we address a portion of the issues that were raised in our URF proceeding's Decision D.06-08-030 (URF Phase I decision), as modified by D.06-12-044, and in subsequent scoping memo, and deferred to this Phase II of the URF proceeding.3

1. Whether to detariff telephone service other than basic exchange service.

2. Implementation of URF Phase I decision and issues pertaining to rehearing in D.06-12-044:

a. Clarifying the relationship between one-day-effective advice letters and the notice and protest requirements of General Order 96(a) and the Public Utilities Code, as well as prior Commission decisions, and determination of which subjects should fall under the tiers of GO 96 draft 2001 Telecommunications Industry Rules.

b. Clarifying the scope of the asymmetric administrative processes language of Ordering Para. 21 of the URF Phase I decision.

c. Assessing whether company-specific marketing and disclosure requirements imposed as a condition or requirement resulting from an enforcement or complaint case should be continued, or whether, in light of changed market conditions, they may be lifted through the filing of an advice letter.

There remain other issues that we will address in the next decision in Phase II.

We will address below first the procedures and guidelines for advice letter filings for tariffed services by URF Carriers. We have considered parties' comments and the existing rules under GO 96. We hereby modify our one-day effective filing rule for the following types of advice letter filings so that they may instead be effective on the day of filing (or another day that the URF Carrier chooses), pending disposition pursuant to GO 96-B, General Rule 7.3.3:4

· All tariff changes to retail service offerings other than basic service;

· promotional offerings, bundles, new services; and

· withdrawal of services other than basic residential (1MR and 1FR) and basic business (1MB) services where withdrawal of service would raise public safety issues.5

These advice letter filings by URF Carriers ("URF advice letters") may be protested within 20 days of filing, but the grounds for protest are narrow, as provided in General Rule 7.4.2. If such a filing under General Rule 7.3.3 is protested, the advice letter is not suspended; if the staff or the Commission subsequently determines that the URF advice letter was incorrectly filed, the carrier will be required to take remedial actions regarding the filing. See General Rules 7.3.3 and 7.5.3.6 We believe that Tier 1 procedures are consistent with, and promote, URF policies. To the extent that a carrier seeks to increase or reduce rates for basic service, the issue will be addressed in R.06-06-028, and the Commission will direct parties in that proceeding as to the appropriate method for filing any such changes.

We next explain below our decision to establish voluntary detariffing procedures for URF Carriers in this decision pursuant to Pub. Util. Code Section 495.7. We find that the elements of Section 495.7 have been met and that we have the legal authority to establish detariffing procedures. The URF Phase 1 record established that, as required by Section 495.7(b)(1), the telephone corporations operating in the territories of Verizon, AT&T, Frontier, and SureWest lack significant market power. There are also existing sufficient safeguards and Commission consumer protection rules in place to satisfy the requirements of Section 495.7(c); however, we adopt in this decision new rules governing availability of rates, terms, and conditions and notices to customers for URF Carriers that detariff their services in further satisfaction of Section 495.7(c).

Because we have deregulated pricing of telecommunications services other than basic residential service (which rates are capped until January 2009), the issue of improper cross-subsidization under Section 495.7(d) does not exist. The Commission found that price floors are unnecessary in URF Phase I,7 and thus, anti-competitive pricing behavior under Section 495.7(d) is unlikely to occur. Because pricing of wholesale or resale services remains subject to regulation8 and we will require all carriers, at all times and without charge, to webpublish and also provide without charge via request to a tollfree number the applicable retail rates, charges, terms and conditions for any service available to the public on a detariffed basis, URF carriers will not be able to engage in anti-competitive or discriminatory pricing without detection.

For the reasons set out in Section 6 below, we decline to order mandatory detariffing. We also reject comments that urge us to impose specific disclosures or contract terms on carriers that choose to detariff a service. We establish permissive detariffing procedures in this decision for URF carriers to seek to detariff via advice letter within the next 18 months from the effective date of this decision any presently filed retail tariff except for:

(a) a tariff for basic service;

(b) a tariff that includes requirements, provisions, or conditions imposed in an enforcement, complaint, or merger proceeding;

(c) a tariff for 9-1-1 or other emergency services;

(d) a tariff relating to customer direct access to an interexchange carrier or customer choice of an interexchange carrier;

(e) a tariff for a service that was not granted full pricing flexibility in Decision 06-08-030 (e.g., resale services); or

(f) a tariff containing obligations as a Carrier of Last Resort, and other obligations under state and federal law, or Commission orders and decisions.

Advice letters filed to detariff in compliance with this decision shall be treated as "Tier 2" advice letters under the Telecommunications Industry Rules that we adopt today in our companion decision, and shall be effective following staff review and approval, as provided for in General Order 96-B. See GO 96-B, General Rule 7.3.4. We intend for these detariffing procedures to apply for all URF Carriers, including the four major ILECs, competitive local exchange carriers ("CLECs"), and interexchange carriers ("IXCs").

In submitting the advice letter to detariff, the carrier must list the tariff pages and describe services that it is detariffing so that the Commission may understand the categories or types of services that the carrier is seeking to detariff. Furthermore, if an URF Carrier seeks to offer on a detariffed basis a "new service,"9 the carrier may offer the new service as detariffed through a Tier 2 advice letter, if the new service does not fall into the categories of services for which we prohibit detariffing and does not fall into categories of services that the carrier has already detariffed. We will not apply the 18-month implementation period to "new services," as technological innovations will continue to result in new services that we cannot anticipate at this time and which should not be subject to traditional forms of regulation. If the carrier seeks to offer the "new service" on a tariffed basis under Tier 1, the carrier may do so.

Parties have been given full notice and opportunity to be heard on all issues surrounding detariffing. However, as discussed below, to the extent that they have not already done so, we gave parties an additional opportunity to comment on policy issues relating to detariffing and waived the page and content limitations under Rule 14.3 of the Rules of Practice and Procedure. We also waived the page and content limitation to allow parties to comment on whether the detariffing procedures that we establish here should apply to IXCs, in addition to CLECs and the four major ILECs.

We clarify Ordering Paragraph 21 of D.06-08-030, and find that the paragraph was intended to permit carriers to file advice letters removing certain asymmetrical marketing, disclosure, and administrative requirements, as long as such requirements did not, among other things, pertain to basic service, or were not requirements imposed on a carrier as a result of an enforcement, complaint, or merger proceeding. Accordingly, we conclude that on a prospective basis, carriers may not remove such asymmetric requirements through an advice letter filing and must file a petition to modify the underlying decision that imposed such condition or requirement.

We will resolve the issues raised by protests to AT&T advice letters 28800 and 28982 in the next decision in this Phase II of the URF proceeding. TURN asserts that evidentiary hearings are required on issues that it alleges are material to the disposition10 of the issues and we have issued a ruling on that issue separately.

1 See Appendix A for a summary of the filing requirements we establish in this decision.

2 R.98-07-038 concerns the procedures for the handling of informal filings at the Commission. Some informal filings, namely, advice letters, are subject to review and approval or rejection.

3 See, e.g., Assigned Commissioner's Ruling and Revised Scoping Memo (Dec. 21, 2006).

4 As discussed further below and in the companion decision we adopt today establishing the Telecommunications Industry Rules, such filings would fall under Tier 1 of the industry rules.

5 See D.06-08-030 at Ordering Para. 9. The withdrawal of basic service and/or withdrawal of service as a carrier of last resort requires an application, pursuant to D.06-10-021 and D.96-10-066 respectively.

6 In our companion decision, we revise our 2001 draft Telecommunications Industry Rules so that these types of URF advice letters may be filed under "Tier 1" treatment in GO 96-B.

7 D.06-08-030 at 183-84.

8 We noted in D.06-08-030 that wholesale services are not within the scope of this proceeding. See D.06-08-030 at 132.

9 We define "new service" as a service that is distinguished from any existing service offered by a telecommunications carrier by virtue of the technology employed and/or features, functions, and means of access provided. See also Rule 1.8 of the Telecommunications Industry Rules (Appendix B to companion General Order 96-B decision).

10 See TURN Comments on Phase 2 (March 7, 2007) at 31.

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