ALJ/JLG/avs Date of Issuance 11/19/2007
Decision 07-11-048 November 16, 2007
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
In the Matter of the Application of Pacific Bell Telephone Company d/b/a AT&T California (U 1001 C) for a Commission Order Exempting AT&T California from the Requirements of Public Utilities Code Section 851. |
(Filed July 25, 2006) |
OPINION GRANTING URF ILECS A PARTIAL
EXEMPTION FROM THE SECTION 851 APPROVAL PROCESS
We deny Pacific Bell Telephone Company's (AT&T California) request for a full exemption from Pub. Util. Code § 851's requirements for the disposition or encumbrance of necessary and useful property.1 We extend relief from the requirements of § 851 comparable to that in place for nondominant interexchange carriers (NDIEC) and competitive local exchange carriers (CLEC) to AT&T California and other Uniform Regulatory Framework (URF) incumbent local exchange carriers (ILECs), subject to limitations. We defer consideration of full exemption for URF ILECs, CLECs and NDIECs to a rulemaking, which we will issue in the near future.
1. Background
AT&T California applied for an exemption from Pub. Util. Code § 851 under § 853(b). Section 851 requires pre-approval for dispositions of necessary property-by order for property valued above $5 million and by resolution for property valued at $5 million or less. Section 853(b) permits the Commission to exempt any public utility or class of public utilities from § 851 if applying § 851 procedures is not necessary in the public interest.2
SureWest Telephone (SureWest) and Verizon California Inc. (Verizon)3 supported the application and requested that the exemption apply to all Decision (D.) 06-08-030 URF ILECs. The Division of Ratepayer Advocates (DRA) and The Utility Reform Network (TURN) protested the application due to public interest concerns.
By ruling on February 8, 2007, the parties were asked to comment on two potential outcomes. The first outcome would consider exemption from § 851 for URF ILECs, CLECs and NDIECs in a rulemaking and defer the rulemaking until recommendations issue from the § 851 pilot program. The second outcome would extend the advice letter process in place for CLECs and NDIECs to AT&T California and the URF ILECs as an interim measure.4 The parties responded to these proposals in prehearing conference (PHC) statements and at the March 21, 2007 PHC. The ILECs favor full exemption but would accept CLEC/NDIEC-equivalent treatment as an interim measure. DRA and TURN favor a rulemaking to consider a full exemption without interim relief.
On June 4, 2007, parties in the URF proceeding, Rulemaking (R.) 05-04-005, and in this proceeding were given the opportunity to comment on extending the relief granted in this proceeding (AT&T California's application) to other URF ILECs. On June 14, 2007, the California Association of Competitive Telecommunications Companies (CALTEL) opposed the request because the § 851 approval process is the means for review of copper loop retirements.5 Sprint Nextel6 supports extending any relief ordered to CLECs and NDIECs. Both CALTEL and Sprint Nextel support opening a rulemaking to consider exemptions from § 851 for URF ILECs, CLECs and NDIECs. The URF ILECs, DRA and TURN filed comments consistent with their earlier positions.
1 Pub. Util. Code § 851 provides:
No public utility . . . shall sell, lease, assign, mortgage, or otherwise dispose of or encumber the whole or any part of its . . . line, plant, system, or other property necessary or useful in the performance of its duties to the public, or any franchise or permit or any right thereunder, nor by any means whatsoever, directly or indirectly, merge or consolidate its . . . line, plant, system, or other property, or franchises or permits or any part thereof, with any other public utility, without first either having secured an order from the commission authorizing it to do so for qualified transactions valued above five million dollars, or for qualified transactions valued at five million dollars or less, filed an advice letter and obtained a resolution from the commission authorizing it to do so . . .
2 Section 853(b) provides: "The commission may from time to time by order or rule, and subject to those terms and conditions as may be prescribed therein, exempt any public utility or class of public utility from this article if it finds that the application thereof with respect to the public utility or class of public utility is not necessary in the public interest. The commission may establish rules or impose requirements deemed necessary to protect the interest of the customers or subscribers of the public utility or class of public utility exempted under this subdivision. These rules or requirements may include, but are not limited to, notification of a proposed sale or transfer of assets or stock and provision for refunds or credits to customers or subscribers."
3 Verizon submitted its comments on behalf of itself and its certificated California affiliates: Bell Atlantic Communications, Inc., d/b/a Verizon Long Distance, MCI Communications Services, Inc., d/b/a Verizon Business Services, MCI Metro Access Transmission Services, d/b/a Verizon Access Transmission Services, TTI National, Inc. d/b/a Verizon Business Services, Teleconnect Long distance Services & Systems Company, d/b/a Telecom USA, and Verizon Select Services, Inc.
4 CLECs and NDIECs use the advice letter process for most § 851 approvals.
5 AT&T has noticed the retirement of copper loops in other jurisdictions but not in California. In July 2007, CALTEL filed a petition for rulemaking, Petition (P.) 07-07-009, to devise a process for the retirement of copper loops. This petition is still pending before this Commission.
6 Sprint Communications Company L.P., Sprint Telephony PCS, L.P., Sprint Spectrum L.P. as agent for Wireless Company, L.P., and Nextel of California, Inc.
