4. Assignment of Proceeding

Rachelle B. Chong is the assigned Commissioner and Janice Grau is the assigned ALJ in this proceeding.

Findings of Fact

1. The Commission has exempted two classes of telecommunications carriers from § 851 review, wireless carriers and BPL carriers under certain circumstances, in an investigation and a rulemaking, respectively.

2. In D.94-05-041, D.97-06-096, D.98-07-094, and D.07-09-019, the Commission adopted and modified the advice letter process for NDIECs and CLECs seeking authority to transfer assets or control pursuant to Pub. Util. Code § 851. In D.04-10-038 and D.07-09-019, the Commission imposed conditions on § 851 procedures for NDIECs and CLECs.

3. AT&T California has faced regulatory delays in the § 851 approval process. The Commission has taken years to act on some applications, adversely impacting AT&T's business operations, and is not in the public interest.

4. In D.06-08-030, the Commission determined that URF ILECs lack market power in their service territories, because carriers providing alternative technologies compete with wireline telephone service.

5. Section 853(b) permits the Commission to exempt any public utility or class of public utility from § 851, subject to terms and conditions, if the application of § 851 is not necessary in the public interest.

6. In D.07-09-019, the Commission determined that all carriers seeking to withdraw authority for basic service should file an application.

7. CALTEL has filed P.07-07-009 to address procedures for URF ILEC retirement of copper loops and subloops, and this petition is still pending before this Commission.

Conclusions of Law

1. It is reasonable to deny AT&T California's request for an unconditional exemption from § 851 under § 853(b).

2. It is reasonable to consider a broader exemption from § 851 under § 853(b) for URF ILECs, NDIECs, and CLECs in a rulemaking.

3. It is reasonable to condition the § 853(b) exemption for AT&T California and other URF ILECs seeking authority to transfer assets pursuant to § 851 consistent with the conditions and procedures previously adopted for NDIECs and CLECs in D.94-05-051, D.97-06-096, D.98-07-094, D.04-10-038, and D.07-09-019, except as noted in Conclusions of Law 4 and 5. Applying the current procedures to URF ILECs is not necessary in the public interest.

4. It is reasonable to exempt withdrawals from basic service from the procedures adopted for URF ILECs seeking authority to transfer assets pursuant to § 851.

5. Retirement of copper loops and subloops shall be governed by any procedures adopted in P.07-09-009 and related proceedings. If the Commission denies P.07-09-009, retirement of copper loops and subloops shall be governed by the procedures adopted in this proceeding.

6. It is reasonable to make this decision effective today to conform the requirements for URF ILECs seeking authority to transfer assets pursuant to § 851 to those in place for NDIECs and CLECs. Such advice letters should be filed as Tier 2 advice letters.

ORDER

IT IS ORDERED that:

1. The application of Pacific Bell Telephone Company is denied.

2. The procedure for Uniform Regulatory Framework (URF) incumbent local exchange carriers (ILEC) seeking authority to transfer assets pursuant to Public Utilities Code § 851 shall be modified to be consistent with the procedures and conditions previously adopted for nondominant interexchange carriers and competitive local exchange carriers in Decision (D.) 94-05-051, D.97-06-096, D.98-07-094, D.04-10-038, and D.07-09-019 except that the procedure will not apply to withdrawals from basic service. The retirement of copper loops and subloops shall be governed by procedures adopted in Petition (P.) 07-09-009 and related proceedings unless P.07-09-009 is denied.

3. The Executive Director shall cause a copy of this order to be served on all URF ILECs certificated in California.

4. Application 06-07-026 is closed.

This order is effective today.

Dated November 16, 2007, at San Francisco, California.

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