Assignment of Proceeding
Carl W. Wood is the Assigned Commissioner and Glen Walker is the assigned Administrative Law Judge in this proceeding.
1. At Commission direction, Verizon has identified 18 lease and license agreements for which it seeks approval under Pub. Util. Code § 851.
2. In D.99-06-092, the Commission gave approval under Section 851 to 59 license and lease agreements that Verizon had executed between 1994 and 1997.
3. Verizon did not seek prior approval for these transactions under the mistaken belief that lease of surplus space was not covered by Section 851.
4. Seventeen licenses or leases submitted as exhibits to this Application permit various uses of Verizon property or facilities by either third parties or affiliates.
5. An additional sublease with Verizon Select Services, Inc., was identified by ORA and submitted as an amendment to this application.
6. All of the licenses and leases are several years old and any activity which took place that may have warranted our timely CEQA review has already taken place.
7. Verizon seeks a ruling that a license revocable on 30 days' notice does not
constitute an encumbrance to the extent that Section 851 review is necessary.
8. ORA and Verizon jointly recommended that the Commission grant Section 851 approval for the transactions at issue and rule that Verizon licenses revocable on 30 days' notice need not be submitted for Section 851 review.
9. Agreements which meet the criteria of G.O. 69-C do not require Commission approval.
10. Verizon also seeks approval of a shared asset methodology as a substitute for separate 851 applications for use of office space and office equipment by three affiliates that provide administrative services for Verizon entities.
11. The shared asset methodology was reviewed by ORA in a NRF audit, and ORA does not contest the accuracy of the methodology as it is presently constituted.
12. At ORA's recommendation, Verizon has included a third service organization, VDSI, in the shared asset methodology.
13. ORA opposes the use of the shared asset methodology as a substitute for Section 851 applications for the types of encumbrances at issue here.
14. If the Commission adopts the shared asset methodology as a substitute for Section 851 applications for the use of space and office equipment by three service affiliates, ORA urges substantial modification of the process.
15. It can be seen with certainty that the discretionary approval request in the application will have no significant impact on the environment.
1. Section 851 requires Commission authorization before a utility may sell, lease, assign. mortgage, or otherwise dispose of or encumber necessary or useful utility property.
2. ORA has examined the 18 lease and license agreements at issue here and has no objection to Section 851 approval of the transactions.
3. Verizon licenses with third parties that meet the criteria of G.O. 69-C do not require Section 851 approval.
4. The Commission should approve Verizon's shared asset methodology as meeting all but the prior-approval requirements of Section 851 for use of office space and office equipment by three affiliates that provide administrative services for Verizon entities.
5. Verizon should be given the option of filing every three years for advance approval of shared-space leases to Service Corp., CSI and VDSI.
6. The shared asset methodology should be included in all future audits of Verizon by ORA and/or the Commission.
7. Use of the share asset methodology as a substitute for all but the prior-approval of Section 851 should be authorized only for the services of Service Corp, CSI and VDSI.
8. A hearing is not warranted on the facts of this application.
IT IS ORDERED that:
1. Pursuant to Section 851 of the Public Utilities Code, the application of Verizon California Inc. (Verizon) for approval of the 18 license and lease agreements in this proceeding is granted. The approval is on a prospective basis and does not include retroactive approval.
2. We grant Verizon's request to exempt from Section 851 review of any license in which Verizon has retained the right to revoke or terminate the arrangement without cause within 30 days, provided that such license must otherwise meet the requirements of General Order (G.O.) 69-C.
3. Verizon need not in the future submit for Section 851 approval those Verizon licenses with third parties that meet the criteria of G.O. 69-C and are terminable at will within 30 days.
4. Verizon may continue to implement its shared asset methodology for dealing with the use of Verizon space and office equipment by Service Corp, Consolidated Services Incorporated (CSI), and Verizon Data Services, Inc. (VDSI).
5. Verizon is granted the option of filing an 851 application every three years (or filing the Section 851 information for advance approval as part of the triennial New Regulatory Framework review) that forecast upcoming leases (or upcoming licenses that do not comply with G.O. 69-C) of Verizon space and office equipment by Service Corp/CSI/VDSI.
6. If Verizon exercises its option of triennial filings of forecasted leases of Verizon space and office equipment by Service Corp/CSI/VDSI, Verizon shall be required to file an advice letter annually to update actual use of the lease arrangements that have been approved in advance by the Commission under the procedure authorized by this order.
7. Verizon shall continue to use the shared asset methodology to account for the use of licenses and leased space and office equipment to Service Corp/CSI/VDSI.
8. Verizon at its option may continue to file individual Section 851 applications for Service Corp/CSI/VDSI leases instead of or in addition to a triennial filing.
9. All licensed and leased use of shared space by Verizon's affiliates shall conform to the requirements of the California Environmental Quality Act.
10. The shared asset methodology shall be reviewed by the Commission's Office of Ratepayer Advocates and/or the Commission in all future audits of Verizon.
11. Application 99-10-010 is closed.
This order is effective today.
Dated _____________________, at San Francisco, California.
CERTIFICATE OF SERVICE
I certify that I have by mail this day served a true copy of the original attached Alternate Opinion and Order of Commissioner Wood as on all parties of record in this proceeding or their attorney of record.
Dated March 2, 2004, at San Francisco, California.
/s/ SUSIE TOY
Susie Toy
N O T I C E
Parties should notify the Process Office, Public Utilities
Commission, 505 Van Ness Avenue, Room 2000,
San Francisco, CA 94102, of any change of address to
insure that they continue to receive documents. You
must indicate the proceeding number on the service list
on which your name appears.
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