II. Background
On October 4, 2001, AT&T Communications of California (old AT&T)2 filed a petition pursuant to § 1708.53 seeking a reduction in intrastate access charges. In Decision (D.) 03-08-018, the Commission granted old AT&T's petition and noted that certain components of the access charges are not cost-based or associated with the costs of any specific transport function. In the decision resolving the first phase of the proceeding, D.04-12-022, the Commission decided that should it authorize local exchange carriers to decrease access charges, these carriers would also be authorized to offset any decrease in access charge revenue with comparable increases in revenue for local services by imposing a surcharge on local telephone service.
The Commission resolved Phase II of this proceeding with D.06-04-071, which eliminated the non-cost-based elements of the access charges assessed by the two largest incumbent local exchange carriers, Pacific Bell Telephone Company (now merged with AT&T) and Verizon. That decision also directed the small, mid-sized, and competitive local exchange carriers to submit comments on whether any non-cost-based elements of their respective access charges should also be modified in a Phase III decision.
On March 13, 2007, the proposed decision resolving the remaining Phase III issues was mailed to the parties for comment. Based on the parties' comments and reply comments, the assigned Commissioner and ALJ determined that further procedural actions were required before the record was ready for consideration by the Commission. The proposed decision was therefore withdrawn.
On May 4, 2007, the assigned Commissioner and ALJ issued a joint ruling requiring further procedural steps and seeking comment on additional issues. The ruling directed the mid-size, small, and competitive local exchange carriers to provide notice to their customers of this proceeding and the potential for local service rate increases. Comment was sought on the Commission's decision granting pricing flexibility to AT&T, Verizon, SureWest Telephone, and Citizens Telecommunications Company of California dba Frontier Telecommunications Company of California (Frontier) for all services except basic residential service, and the most appropriate means for treating these carriers in this docket. Comments were also sought on using a two-rate case cycle to move the small local exchange carriers to comply with the policy in D.06-04-071, and whether the FCC's interstate access charge cap methodology should be adopted for intrastate charges as well.
The positions of the parties are set out below on the initial issues in this proceeding, as well as the later issues. Today's decision resolves all remaining issues in this proceeding.
2 This refers to AT&T prior to its merger with SBC.
3 All section citations are to the Public Utilities Code, unless otherwise indicated.
