5. Assignment of Proceeding

Rachelle B. Chong is the assigned Commissioner and Steven Kotz is the assigned ALJ.

Industry Rule 1.8 New Service

Industry Rule 1.8 broadly defines a service as a New Service if it is distinguished from any of the carrier's existing services in any of several ways listed in the rule (technology, features, functions, and/or means of access). Cox/Time Warner/XO criticize the way that the definition is currently expressed; as they read the proposed rule, it could require a carrier to file a feature as a New Service in some circumstances. They also find "means of access" unclear, and they suggest a revised definition of New Service as follows:

"New service" means a service that (i) is distinguished from any existing service offered by the Utility by virtue of the technology employed; or (ii) includes features or functions not previously offered in any service configuration by the Utility."

Upon careful consideration, we adopt Cox/Time Warner/XO's revised definition because it is more clear than the proposed rule.

Industry Rule 1.13 Transfer

Industry Rule 1.13 defines "Transfer" as a "Transfer of assets (including the entire customer base or an entire class of customers) and/or Transfer of control." Small LECs are concerned that this definition may be over-broad; for example, if a parcel of land is considered an asset, then a utility proposing the sale of a parcel of land might be required to give notice to its customers pursuant to Industry Rule 3.1, a requirement that does not exist today.

We agree with Small LECs regarding the application of current Commission rules to their example. We do not agree that a different outcome would occur under Industry Rule 1.13. "Transfer" under this definition, taken as a whole, concerns transactions that, in one way or another, fall under the requirements of Pub. Util. Code §§ 851-854. A transaction such as the sale of a small parcel of land is not a "Transfer" for these purposes to the extent that the Transfer is not of "necessary or useful property" under § 851. We adopt Industry Rule 1.13 as proposed.

Industry Rule 1.14 URF Carrier

Industry Rule 1.15 Utility

Several commenters (CALTEL, Cox/Time Warner/XO, Sprint Nextel) ask for clarification of this rule, which currently defines "URF Carrier" as a "public utility that is regulated through the Commission's uniform regulatory framework, as established in D.06-08-030, and as modified from time to time by the Commission. Cox/Time Warner/XO in particular also seek clarification on the definition of URF Carrier, and recommend that the Commission modify its advice letter procedures to retain, where appropriate, the distinctions between the four major ILECs (AT&T, Verizon, SureWest, and Frontier), the CLECs, and the IXCs.20

The URF rulemaking was intended generally to modify and revise the regulatory framework for telecommunications carriers in the state, but specifically to revisit the framework for the ILECs regulated under NRF. The URF Phase I decision established tariffing rules for the four large ILECs (AT&T, Verizon, SureWest  and Frontier) and Ordering Paragraph 13 provided "[a]ll CLECs shall be permitted to follow the same flexible tariffing procedures adopted for AT&T, Verizon, SureWest, and Frontier and need not follow more restrictive rules." Because of the equal treatment that the URF Phase I decision intended for the four largest ILECs and CLECs, we have determined that for purposes of GO 96-B, it would simplify matters to categorize these carriers as "URF Carriers." We also determine that the Commission intended to include IXCs (to the extent that they file tariffs) in the flexible tariffing procedures adopted in D.06-08-030. Accordingly, we believe that it is useful to refer to AT&T, Verizon, SureWest, Frontier, CLCs, and IXCs as URF Carriers.21

Although we retain the term "URF Carrier" to refer broadly to the four largest ILECs, in addition to CLECs and IXCs, we will modify the definition slightly as follows:

"URF Carrier" means a Utility that is a wireline carrier that has full pricing flexibility over all or substantially all of its rates and charges. "URF Carrier" includes any incumbent local exchange carrier that is regulated through the Commission's uniform regulatory framework, as established in Decision 06-08-030, and as modified from time to time by the Commission; competitive local exchange carriers; and interexchange carriers.

Following CALTEL's suggestion, we also revise our definition of "Utility" (Industry Rule 1.15) to explicitly state that the term includes wireline carriers (GRC-LECs, URF Carriers) and wireless carriers (commercial mobile radio service providers), but that only GRC-LECs and URF Carriers are to file advice letters under the Telecommunications Industry Rules. It is more consistent with the Pub. Util. Code not to exclude commercial mobile radio service providers under the definition of "Utility," but we acknowledge that the focus of the Industry Rules is almost entirely on the wireline carriers, namely, URF Carriers and GRC-LECs, who fall squarely under our jurisdiction as to intrastate services.22

We also agree with Cox/Time Warner/XO that there may be reasons to retain the distinctions among the different types of carriers.23 We will add a definition of "URF ILEC" to refer to the ILECs currently granted pricing flexibility through D.06-08-030, and as may be modified from time to time.24 Where there are distinctions in regulatory treatment among these different carriers, we will use these terms.

Industry Rule 2 Submitting Documents for Filing; Telephone Directories

In relevant part, Industry Rule 2 requires GRC-LECs and URF Carriers to provide without charge copies of their current directories to public libraries in California. AT&T and Small LECs ask that they be required to provide copies without charge to California public libraries only on request. Small LECs also ask that the requirement be limited to a single copy per library. We find these requests reasonable and will revise the last sentence of Industry Rule 2 to read as follows: "A local exchange company must notify public libraries that they will provide without charge copies of its current telephone directory to any public library in California that so requests. GRC-LECs may provide only one copy per library."

Industry Rule 3 Notice to Affected Customers

TURN raises several issues regarding Industry Rule 3. We discuss each issue separately.

"Affected Customer"

Industry Rule 3 provides, in relevant part, that a utility must give at least 30 days' notice before the requested effective date of any higher rates or charges or more restrictive terms or conditions to "each affected customer." TURN recommends we clarify who is an "affected customer" for purposes of pay-per-use services such as Call Trace or for non-recurring charges such as those for returned checks, late payments, or certain kinds of service change orders. TURN's position (Opening Comments at p. 5) is as follows:

[I]f a customer has the option or possibility of paying for a certain service or paying a certain fee, regardless of the services that customer subscribes to, then that customer is "affected." Any one of the carriers' customers, regardless of the other services to which that customer has subscribed, can elect to use a pay-per-use service. Therefore a rate change or a change in terms of that service would affect all customers and therefore all customers should be notified. Likewise, [all customers] may be subject to a return check charge or a late payment fee during their relationship with the carrier, therefore a change in those fees would affect those customers and all of the [carrier's] customers should be notified.

AT&T opposes TURN's recommendation. AT&T believes TURN's definition is overly broad, would impose unreasonable costs on carriers, and would confuse customers. According to AT&T,

The term "affected customer" is sufficiently clear. As Rule 3 is currently drafted, all customers who do not have an opportunity to avoid a charge or change in a term and condition for a service to which they currently subscribe will be given notice because they are being "affected." Customers who do not currently subscribe to a service and do not receive the notice will be informed of all charges, terms and conditions when they subscribe to the service and will have the opportunity to decide at that time if they wish to incur the associated charges.

Reply Comments at p. 3 (emphasis added, note omitted).

We agree with TURN that a customer may be "affected" by many kinds of increased rates or charges or more restrictive terms or conditions, independent of the services to which the customer subscribes. For example, there is no returned check or late payment "service" to which a customer may subscribe, but there is a charge for a returned check or a late payment that any customer may incur. Although most customers likely do not intend to dishonor a check or pay late, a utility should give current information about late payment charges to all its customers so that they are informed.

We do not know on what basis AT&T reads into Industry Rule 3 a condition that the customer notice requirement depends on whether the customer can "avoid a charge." Nothing in the language of the rule suggests such a condition. More to the point, the purpose of Industry Rule 3 is, in large part, to give customers current information about their carrier's charges, so that they can make knowledgeable choices about their utilization of services, and hence the charges they choose to incur or "avoid."

TURN has accurately characterized the term "affected customer." We reject AT&T's objection regarding purported customer confusion; we think there is far greater danger under AT&T's approach that customers will not receive full and timely information about their carrier's services. We reject AT&T's objection regarding the burden on carriers; we already have provided for customer notice to be distributed by bill insert and by e-mail (where the customer has consented to receive bills or notices by e-mail).

In short, if a carrier requests an increase to a rate or charge, or a more restrictive term or condition, and that rate, charge, term, or condition is one that any of the carrier's customers might incur or be affected by, then the carrier must give customer notice of the request to all of its customers pursuant to Industry Rule 3.

Industry Rule 3.1 Customer Notice of Transfer

Consistent with the requirements set forth in D.02-01-038, we are revising the requirements in this rule to track the requirements of that decision. In particular, in response to CALTEL's question as to whether customer notice was required for transfers, we are clarifying that the notice requirement in this rule relates to transfers of customer base.

Concurrent Notice to Commission Staff, Others

TURN suggests that carriers be required to serve notices on Commission staff and on their advice letter service list at the same time as the carriers serve their customers. TURN justifies this requirement on the grounds that it would enable the Commission and organizations like TURN to answer questions from the public about the substance of the notice, and would help those groups "monitoring the marketplace." TURN emphasizes that it does not propose any substantive rights come along with the notice. Opening Comments at pp. 2-3.

We reject this suggestion, in which we see little benefit. Carriers should answer their customers' questions about their services, including questions about notices of increased rates or more restrictive terms. TURN and other organizations may "monitor the marketplace" by obtaining carriers' advice letters by e-mail25 and by reviewing carriers' rates, and other terms and conditions of service, on the Internet. Both of these information sources are far more comprehensive than the customer notices. We do not believe the nominal benefit from broadening the service of customer notices outweighs the costs of service on the Commission staff and the advice letter service lists.

Customer Notice of "Rate Changes"

TURN says customer notice must be clear, and gives as an example of unclarity a carrier's 50% increase in the per-use charge for Local Directory Assistance that was listed under the general heading "news you can use" and then under the sub-heading "rate change." We agree with TURN that this notice does not clearly notify the customer of the rate increase. We note that under Industry Rule 3, a carrier is not required to give customer of all rate changes but only of rate increases.

The customer notice requirement in Industry Rule 3 pertains to increased rates or charges or more restrictive terms or conditions. Carriers must label their notices so as to communicate this information clearly. If they are increasing a rate or charge, they must state so in the text and the heading of the notice. The purpose of a clear notice is to enable the customer to quickly understand how a service will change; from this information, the customer can determine the impact of the change for that customer.

TURN's other suggestions for improvement of notice clarity relate to format. TURN urges that we establish a 10 point font minimum and require customer notices to be in a "clear and conspicuous part of the phone bill." We reject these suggestions. The Commission declined to impose a font minimum when it adopted GO 168 (see D.06-03-013, mimeo., at pp. 34-36). We expect the carrier to use comparable font to the rest of the notice's text to promote clear communication to a reader. As for the "clear and conspicuous" recommendation, we find it vague and subjective.

Exception for Compliance Advice Letter

The second paragraph of Industry Rule 3 provides that no customer notice is required under Industry Rule 3 or General Rule 4.2 of a carrier's Compliance Advice Letter that implements a prior Commission order approving the carrier's request for authorization of a Transfer, Withdrawal of Service, or higher rates or charges or more restrictive terms or conditions. The purpose of this exception to the customer notice rule is to prevent customer confusion because the change to which the Compliance Advice Letter relates must necessarily have been the subject of a previous carrier request to the Commission, preceded by customer notice of the request. If the carrier also gave customer notice in advance of the Compliance Advice Letter, customers would receive duplicate notice of the same request by the carrier.

TURN seems to read this exception as broader than we intend. In order to emphasize that the exception applies only to certain requests for which the carrier has already given customer notice, we will amend the exception to state that "no further customer notice" is required under the specified circumstances, unless so ordered by the Commission in the previous decision.

Industry Rule 5.1 URF Carrier

Industry Rule 5.1 is part of our set of rules on detariffed service. Industry Rule 5.1 contains procedures specific to detariffing by an URF Carrier. The rule provides in part that when the Commission has authorized an URF Carrier to detariff in whole or part, "the URF Carrier may make available to the public New Service offerings on a detariffed basis to the extent consistent with the Commission's authorization." The draft Rule 5.1 would not require a Tier 2 advice letter, but the URF Carrier must file an information-only filing describing the New Service and attesting that it is not one of the services excepted from detariffing under Industry Rule 5. We are revising our draft rule for detariffing New Services in this section and requiring instead that URF Carriers must file a Tier 2 advice letter for New Services similar to the detariffing letters they must file for existing services. We explain our treatment below.

As an initial matter, we respond to comments from Verizon and Sprint Nextel regarding whether we intended under Industry Rule 5.1 that, if an URF Carrier has not detariffed in whole or part, the URF Carrier may not introduce a New Service on a detariffed basis by information-only filing. Verizon believes this result is unintended; both Verizon and Sprint Nextel urge the Commission to revise Industry Rule 5.1 to allow an URF Carrier to offer a New Service on a detariffed basis by information-only filing even if the URF Carrier has not previously detariffed any existing service.

We fully intend that an URF Carrier first detariff in whole or part before it can introduce a New Service on a detariffed basis by information-only filing. We seek to encourage URF Carriers to detariff the existing services that they desire to detariff, before they can introduce New Services as detariffed. Therefore, an URF Carrier should detariff as much of its existing services as it wishes during the 18-month implementation period. Our rationale in part for requiring detariffing of existing services before New Services may be detariffed is that we believe carriers will consider carefully whether detariffing makes sense for its business during the initial 18-month period. To the extent that a carrier does not detariff any services, we do not believe that the carrier should be permitted to take advantage of our detariffing scheme as to New Services.

Moreover, we seek to prevent opportunistic detariffing. Under Sprint Nextel's and Verizon's proposed revisions, an URF Carrier could try (impermissibly) to characterize as a "New Service" changes to terms and conditions, and thereby avoid filing advice letters opportunistically.26 Although by definition, a "New Service" should not encompass mere changes to terms and conditions, a New Service could fall into a category of services. We do not intend to permit a carrier to offer existing services under tariff, while introducing as detariffed "New Services" that fall into similar categories to existing tariffed services. Such tariffed and detariffed service offerings may create confusion. For these reasons, Industry Rule 5.1 gives URF Carriers a strong incentive to broadly detariff their existing services within the 18-month period, within the limits that we have established. If a carrier does not detariff during that 18-month period, we assume that the carrier does not believe detariffing services is useful for its business and thus that carrier should not have the ability to detariff New Services.

On further consideration of the law, we are also revising our rule governing the introduction of New Services as detariffed offerings. Consistent with Pub. Util. Code § 495.7 and our detariffing process, we find that we should establish an advice letter process for detariffing of New Services. If a carrier has not already obtained detariffing approval for a category of service similar to the New Service, the URF Carrier shall introduce and detariff the New Service by a Tier 2 advice letter. The Tier 2 advice letter shall describe the New Service with sufficient detail for the Commission to determine whether that New Service may be detariffed. We believe that this treatment is consistent with the detariffing framework we established for existing services and with Section 495.7.

Industry Rule 5.2 Publication of Rates, Charges, Terms, and Conditions (URF Carriers)

Three-Year Archiving Requirement

AT&T and Verizon oppose the proposed requirement to archive rates, terms, and conditions for detariffed services on their website.27 They contend that publishing of expired or canceled rates, terms, and conditions would potentially confuse customers, and propose instead that the requirement be modified to require carriers to maintain records for three years and provide information to customers at no charge "upon request." DRA responds that carriers' tariff revision procedures have "always provided a record of service changes, albeit one that is manual and hard for consumers to access and use." DRA Reply Comments at p. 2. DRA further refutes carriers' assertion that it will be confusing for consumers to have online access to past service rates and terms and conditions; "[c]arriers can easily keep historical information behind a `no longer available' or similar heading and have relevant pages clearly labeled." Id. at pp. 2-3. TURN similarly observes that Verizon has a tariff archive on its website and that a website may be designed to delineate between current and archived material. TURN Reply Comments at p.2.

We agree with TURN and DRA that publishing rates, terms and conditions for detariffed services and archiving this information for a period of three years should not require substantially more complicated technology than is currently involved for carriers to publish their tariffs online. Requiring such information to be readily available on websites for three years will aid consumers who need to obtain such information if they have a complaint or inquiry about a past rate or bill.28 Thus, carriers that have detariffed services shall publish their rates, terms and conditions for those detariffed services for three years (beyond the date when the rate, term, or condition expires or is canceled). To prevent customer confusion, the carrier may place rates, terms, and conditions that are no longer effective on a page with a link that conspicuously identifies the page as providing "expired" rates, terms, and conditions, and should further identify on that page the exact time periods for when the rates, terms, and conditions were in effect.

Additional Internet Publishing Requirements

TURN and DRA further seek clarification on the Internet publication requirements for detariffed services. TURN proposes detailed requirements, including a requirement that the information be posted in a "clear and conspicuous" manner with direct access links from the home page of the carrier's site; that the page be free of marketing or sales tactics; that the pages be freely accessible without requiring personally identifying information except for area code, NXX, or zip code; and that there be a direct link from the Commission's website to the carrier's rate page.29 On consideration of these comments, we amend our draft Industry Rule 5.2 to ensure that information regarding detariffed services is made available in an accessible and simple format for consumers. Industry Rule 5.2 shall be amended to add the following requirements:

i) the webpage containing rates, terms, and conditions for detariffed services shall be free of marketing and sales information or ads;

ii) the webpages for rates, terms, and conditions shall be accessible without requiring personally identifying information except for area code, NXX, or zip code; and

iii) the URF carrier shall provide the Commission with a current link to the carrier's webpage for accessing tariffed and detariffed rates.

These requirements for webposting will further satisfy requirements of Pub. Util. Code § 495.7(c)(1) and ensure availability of information about rates, terms, and conditions of detariffed services; promote the Commission's goals for increasing consumer access to information about the choices in the marketplace; and prevent customer confusion.

CALTEL also seeks modification to Industry Rule 5.2 so that they are not required to publish on websites those services that are currently voluntarily tariffed but not "regulated intrastate services" - and asserts that it should be allowed to detariff these without incurring additional website publishing or notice requirements.30 We clarify Industry Rule 5.2.

If a carrier has voluntarily tariffed a service that is not regulated by the Commission and seeks to offer that service on a stand-alone basis as detariffed, the carrier is not required to file formally to detariff that unregulated service.31 However, if the unregulated service is bundled with other services that are (or were required) to be tariffed at the Commission, the URF Carrier must file to detariff that bundled offering and shall post on its website the rates, terms, and conditions for any bundled offering that includes a combination of regulated and unregulated services.

We also revise draft Industry Rule 5.2 to eliminate confusion as to when a carrier must comply with the Internet publication rules. URF Carriers may apply to detariff those retail services that are regulated by, and were required to be tariffed by, this Commission. We delete certain language in the draft Industry Rule 5.2 that may have been confusing and clarify that, if a carrier has detariffed a service or bundled offering (including detariffed interexchange services prior to the date of this order), that carrier must comply with the Internet-publishing requirements in Industry Rule 5.2.

Industry Rule 5.3 Notice to Customers (URF Carrier)

Industry Rule 5.3 requires an URF Carrier that has detariffed to give 30 days' notice to affected customers before the effective date of a higher rate or charge, or more restrictive term or condition, or Withdrawal of Service, or Transfer. The rule allows notice by e-mail to customers who receive their bills by e-mail. CALTEL comments that some customers consent to receive their notices but not their bills by e-mail, and CALTEL asks that Industry Rule 5.3 be revised to allow e-mail notice to such customers. We agree to this revision, which also is consistent with General Rule 4.2 (regarding customer notice by e-mail for changes to tariffed services).

Industry Rule 5.4 Market Trial; Technical Trial

Industry Rule 5.4 requires that a Market Trial or Technical Trial be submitted by information-only filing but following the guidelines of specified resolutions. AT&T points out that the specified resolutions contain various requirements dating back to the New Regulatory Framework; requirements such as cost support are out-of-date, and we therefore delete reference to these resolutions. Moreover, Industry Rule 5.4, like Industry Rules 5.1 to 5.3, specifically governs URF Carriers. We amend the heading and the text of Industry Rule 5.4 accordingly.

Industry Rule 5.5 Commercial Mobile Radio Service Provider

Industry Rule 5.5 is part of our set of rules on detariffed and non-tariffed service. The detariffing of commercial radio mobile service (that is, wireless) providers occurred pursuant to federal law over a decade ago. AT&T and Sprint Nextel oppose proposed Industry Rule 5.5, which says that commercial mobile radio service providers do not file advice letters but must "make available to the public schedules showing [their] rates, charges, terms, and conditions." Sprint Nextel says these providers publish such information anyway; both commenters prefer the quoted language be deleted. Sprint Nextel, however, proposes a reasonable compromise. First, Sprint Nextel would use "information" in place of "schedules" because the latter term suggests tariffs, which these providers have not filed for over a decade. Second, Sprint Nextel would make available information about its generally available services, i.e., those available on a mass market basis as opposed to an individualized contract.

We will revise Industry Rule 5.5 consistent with the changes suggested by Sprint Nextel. As revised, Industry Rule 5.5 reads as follows: "A commercial mobile radio service provider may not file tariffs with the Commission but shall make available information showing rates, charges, terms, and conditions of its generally available services."

Industry Rule 7 Advice Letter Review

Industry Rule 7.1 Matters Appropriate to a Tier 1 Advice Letter (Effective Pending Disposition)

Industry Rule 7 provides that the carrier submitting an advice letter must designate the appropriate tier (based on the content of the advice letter), but that this tier designation does not bind Commission staff. Table 1 of D.07-01-024 (the decision in which the Commission adopted GO 96-B) is a comprehensive summary of what happens if an error appears in an advice letter, and what remedies are available to the carrier and to Commission staff. We reproduce Table 1 below:

TABLE 1: DISPOSITION OF ADVICE LETTERS

In general, the reviewing Industry Division, by letter, will approve or reject an advice letter (AL) submitted in Tiers 1 or 2. The Commission, by resolution, will approve or reject ALs submitted in Tier 3. Exceptions will occur, however, due to utility error or issues arising during review. This table shows how exceptions will be handled and what remedial actions a utility may take.

1. Utility Designates Wrong Tier*

Designated Tier

Proper Tier

Staff Action

1

2 or 3

Reject w/o prejudice

2

3

Reject w/o prejudice

3

1 or 2

Approve/reject under Tier 2 **

Any

None***

Reject w/o prejudice

2. Utility Designates Correct Tier But...

Any tier: AL is clearly erroneous

Reject

Any tier: matter in AL requires hearing

Reject w/o prejudice

Any tier: issue requires exercise of discretion

Prepare resolution

3. Remedial Action by Utility if AL is Rejected w/o Prejudice

The utility may modify and resubmit an advice letter (with an explanation) if the utility believes the modification will moot the reason for rejection. Other possibilities:

Wrong Tier

Utility may submit new AL in proper tier

Utility must stop implementation (Tier 1)

Hearing Required

Utility may file formal proceeding

Matter Inappropriate for AL

Utility may file formal prodeeding

* Note that a utility may designate for Tier 2 an advice letter that would qualify for Tier 1. The Tier 2 designation therefore is not "wrong" in this situation.

** However, by the utility's wrongly designating Tier 3, the advice letter may not be deemed approved.

*** This situation arises where the subject matter of the advice letter requires a formal proceeding (typically, an application or petition for modification).

DRA urges that corrective action for an advice letter submitted in the wrong tier include a significant penalty. DRA gives the example of a merger condition imposed by Commission decision. Industry Rule 7.4 requires an URF Carrier to file a petition if the URF Carrier seeks to modify the merger condition, but DRA argues that if there is no risk of a penalty, the URF Carrier might file an advice letter to cancel the condition, because at the worst, the URF Carrier would face rejection of its advice letter and the necessity of some remedial action. DRA concludes that without a potential penalty, carriers actually have an incentive to make improper tier designations, hoping to escape detection.

In rebuttal, AT&T asserts that remedial action should be based on the facts and circumstances giving rise to such action, and that it would be inappropriate for the Commission to prejudge the need for a penalty.

We are aware of the possibility that a carrier may inadvertently or deliberately designate the wrong tier or otherwise misuse the advice letter process. Because there are many permutations, we need to preserve our flexibility to address the particular circumstances of a given advice letter. We have already indicated, however, that a knowingly and deliberately erroneous submittal, particularly of a Tier 1 advice letter, might trigger sanctions as well as the requirement to undo the actions taken under the improper advice letter. See D.07-01-024, mimeo. at p. 16. No further elaboration is needed at this time.

7.1(5) A change by an URF Carrier to a Rate, Charge, Term, or Condition of a Regulated Service Other than Basic Service or Resale Service

Both AT&T and Verizon seek clarification as to the proper tier to file changes to basic service rates after January 1, 2009. TURN notes that the rules for advice letters should clarify that Tier 3 treatment for changes to basic service tariffs should be required.

Although the Commission has indicated that price caps for basic service not subsidized by the CHCF-B will no longer remain in effect on January 1, 2009,32 we are considering fully the schedule and process for granting pricing flexibility for basic service rates in the High Cost Fund-B rulemaking R.06-06-028. Therefore, we defer to R.06-06-028 the determination as to the proper treatment/tier for basic service tariff filings. Any determinations made there will then be reflected in the Industry Rules.

We reiterate that an URF Carrier may not change terms and conditions of its basic service tariff to the extent that the terms and conditions are required by statute, or Commission rule or order. Imposition of more restrictive terms and conditions to the basic service tariff shall be filed in Tier 3. Otherwise, less restrictive and other changes to terms and conditions of basic service that do not conflict with law or Commission requirements shall be filed in Tier 1.

7.1(10) A new Promotional Offering, or
continuation of a Promotional Offering, by
an URF Carrier

We have provided for an URF Carrier to introduce its Promotional Offerings by Tier 1 advice letter. Verizon recommends that tariffing of Promotional Offerings be required only of services that remain tariffed.

We agree with Verizon's proposal to limit Industry Rule 7.1(10) to a new Promotional Offering for a tariffed service, or a continuation of a tariffed Promotional Offering, by an URF Carrier. We note, in regard to Promotional Offerings for detariffed service, that these are subject to the publication and customer notice requirements of Industry Rules 5.2 and 5.3.

7.1(12) Emergency Service pursuant to General Rule 8.2.3

Industry Rule 7.1(12), as originally proposed, would authorize an URF Carrier to submit under Tier 1 an advice letter regarding the URF Carrier's provision of service to a government agency or to the public, for free or at reduced rates and charges, under emergency conditions. We had originally proposed, under Industry Rule 7.3(8), that a GRC-LEC be required to submit a Tier 3 advice letter regarding its provision of emergency service if it did so for free or at reduced rates or charges. AT&T suggests that the Tier 1 advice letter be used only when a tariffed service is involved, and that any discount applied to a detariffed service be reported by information-only filing. Small LECs suggest that a GRC-LEC also be allowed to submit a Tier 1 advice letter. (The Small LECs are all GRC-LECs, and their services are entirely tariffed services.)

We find the suggestions of AT&T and Small LECs are reasonable. We amend Industry Rule 7.1(12) and delete Industry Rule 7.3(8) accordingly. We amend Industry Rule 5.1 to add the information-only filing requirement.

Industry Rule 7.2 Matters Appropriate to a Tier 2 Advice Letter (Effective After Staff Approval)

Industry Rule 7.2 sets forth the matters that must be filed by Tier 2 advice letter. Tier 2 advice letters are subject to review and disposition by Communications Division staff under General Rule 7.6.1 of GO 96-B; consequently, a Tier 2 advice letter may be "deemed approved" in certain circumstances, although even a deemed approval is to be memorialized by staff through a "written disposition." Id., 7th para.

Small LECs note that there is sometimes a delay in receiving confirmation of approval by staff [the "written disposition"] of an advice letter. Small LECs ask that the parenthetical from the heading of Industry Rule 7.2 be deleted, because affirmative approval does not appear necessary in the case of an advice letter deemed approved although the parenthetical seems to suggest otherwise.

We will retain the parenthetical. Industry Rules 7.1, 7.2, and 7.3 each has a distinguishing parenthetical in its heading [effective pending disposition, effective after staff approval, effective after Commission approval, respectively]. Each parenthetical states the distinctive feature of the tier to which the parenthetical corresponds. Removing the parenthetical risks creating more confusion than any clarity we might gain.

We agree with Small LECs, however, that the effect of a deemed approval is automatic. The "staff approval" in that situation occurs whenever a Tier 2 advice letter has not been suspended by staff by the end of the initial [30-day] review period. See General Rule 7.6.1, 7th para. A delay in the receipt of the confirming "written disposition" does not affect the status of an advice letter that has been deemed approved.

Industry Rule 7.4 Matters Requiring Review in a Formal Proceeding

Industry Rule 7.4 indicates that staff will reject without prejudice an advice letter that "requests relief or raises issues requiring an evidentiary hearing or otherwise requiring review" in a formal proceeding. The rule gives examples of matters requiring review in a formal proceeding. AT&T argues that Industry Rule 7.4 is an unlawful delegation of authority to staff to reject a Tier 1 advice letter without due process. In support of this argument, AT&T asserts, first, that staff's rejection without prejudice is essentially a final decision (by compelling the utility to halt the effectiveness of its Tier 1 advice letter) and is inconsistent with the Commission's determination that an already effective advice letter may not be suspended. Second, AT&T asserts that the rejection without prejudice in these circumstances is inherently an exercise of discretion that only the Commission itself can perform. We disagree; we believe AT&T misunderstands both Tier 1 and Industry Rule 7.4, as we discuss below.

We carefully and comprehensively addressed the operation of Tier 1 for all industries when we adopted GO 96-B. See D.07-01-024, mimeo., pp. 12-17. We also discuss Tier 1 extensively in today's accompanying URF Phase II decision, where we approve the use of Tier 1 for the review and disposition of URF advice letters. Inherent in the streamlined character of Tier 1 is that those advice letters are subject to review and disposition by the relevant industry division at the Commission, in this case, the Communications Division. We have carefully assigned subject matter to Tier 1, and described that subject matter, such that the review and disposition of Tier 1 advice letters will typically involve ministerial authority, which under settled law we may to delegate to our staff.

Tier 1 is for those matters for which we have allowed carriers maximum flexibility, and we permit those advice letters to be effective pending disposition. A carrier putting an advice letter into effect before it is approved, in fact as early as the same day that it is filed, gains competitive advantages from such early effectiveness. Thus, the Commission must ensure that consumers and competitors are not disadvantaged by any use of Tier 1 advice letters to make changes except as authorized by the Commission. Thus, the key question staff must address, for present purposes, is whether an advice letter submitted in Tier 1 is properly so submitted.

For example, suppose one of the four large incumbent local exchange companies submits a Tier 1 advice letter, prior to January 1, 2009, raising Basic Service rates. These rates are currently frozen pursuant to D.06-08-030, Ordering Paragraph 2, and may not be increased by Tier 1 advice letter. See Industry Rule 7.1(5). The advice letter is clearly erroneous, and rejecting it does not exceed staff's ministerial function. Staff would reject the advice letter without prejudice under Industry Rule 7.1, which states in relevant part, "By submitting an advice letter in Tier 1, a Utility represents that the advice letter is properly filed in Tier 1." As the example illustrates, Industry Rule 7.4 does not enter staff's analysis at all: If an advice letter's subject matter is proper to Tier 1, it necessarily is a proper advice letter, and if its subject matter is not proper to Tier 1, staff has authority to reject it under Industry Rule 7.1.

Industry Rule 7.4 is unlikely to come under consideration except regarding Tier 3, which concerns informal matters where the Commission will make the ultimate disposition by resolution, and the issue for staff is whether the utility should submit a Tier 3 advice letter or some formal request (typically, an application or petition). A Tier 3 advice letter would never involve an already effective advice letter; by definition, Tier 3, advice letters can become effective only upon Commission approval. Thus, we do not see how the problem that AT&T hypothesizes under Industry Rule 7.4 could ever arise.

Finally, we consider the possibility that despite our efforts to clearly define the subject matter of Tier 1, a utility submits in Tier 1 an advice letter whose ineligibility is not as easily resolved as in our example above. Where a substantial question of interpretation is raised, even for Tier 1 or Tier 2, in which the advice letters are normally subject to staff disposition, staff will nevertheless prepare a proposed resolution for the Commission's consideration.

In short, AT&T has not shown any improper delegation of authority to staff in our advice letter review process under GO 96-B, whether under Industry Rule 7.4 or otherwise.

Industry Rule 7.4(1) Matters Requiring Review in a Formal Proceeding -- Withdrawal or Freezing of Resale Service or of Basic Service

We will revise Industry Rule 7.4(1) to delete reference to "resale service" in the "Withdrawal or freezing of Resale Service or of Basic Service..." consistent with Verizon's recommendations. Because the URF ILECs are required to offer certain retail services at resale and at a mandated discount from the retail service rate, the URF ILECs will not be able, as a matter of law, to withdraw "resale service" alone. As we note in our accompanying URF Phase II decision, if an URF ILEC detariffs a retail service, it must continue to file resale tariffs for that retail service at this time as we have not yet undertaken the analysis required by Pub. Util. Code § 495.7 to detariff resale services.

Industry Rule 8.1 Negotiated Interconnection Agreements

Industry Rule 8.1 provides that a negotiated interconnection agreement under the federal Telecommunications Act of 1996 must be submitted by Tier 3 advice letter for Commission approval. Verizon argues that Tier 2 would be more appropriate for the review of these interconnection agreements. In rebuttal, Cox/Time Warner/XO support the use of Tier 3 advice letters, as proposed in Industry Rule 8.1. Cox/Time Warner/XO also suggest that the Commission allow amendment of an interconnection agreement by Tier 1 advice letter, noting that under Rule 6.2 of Res. ALJ-181 (where we set forth our procedures for these interconnection agreements), amendments may be deemed approved 30 days after filing.

For reasons explained earlier in today's decision, we affirm the use of Tier 3 for review of negotiated interconnection agreements. We modify Industry Rule 8.1 to provide that an amendment to a negotiated interconnection agreement may be filed, and will be reviewed and take effect, under the terms of Res. ALJ-181.

Industry Rule 8.2.1 Deadline for Submittal; Effective Date

Under Industry Rule 8.2.1, any contract for a tariffed service must be submitted by advice letter within 15 business days after execution. Cox/Time Warner/XO recommend the filing time be increased to 30 days, arguing that there is a "normal lag time between the execution of a tariffed service contract and its forwarding to the regulatory offices of the carrier for filing with the Commission. Requiring filing within 15 days will, in some cases, require carriers to modify their processes and add additional expense." Opening Comments at pp. 3-4.

The 15-business day filing deadline comes from the URF Phase I decision. See D.06-08-030, Ordering Paragraph 11. We make no change to Industry Rule 8.2.1.

Industry Rule 8.2.2 Availability of Contract Rates

Industry Rule 8.2.2 requires a rate or charge under a contract "then in effect" be made available to any similarly situated customer that is willing to enter into a contract with the same terms and conditions of service. SureWest recognizes that this rule is rooted in the non-discrimination standard of Pub. Util. Code § 453 but is concerned that the phrase "then in effect" could force a carrier to give promotional contract rates to customers after those promotional rates were no longer offered. SureWest recommends that if Industry Rule 8.2.2 is retained, the phrase "then available" replace "then in effect."

After careful consideration, we adopt Industry Rule 8.2.2 as proposed. We disagree that the rule could compel a carrier to give promotional contract rates after the promotional offer has expired. To be eligible for those rates, a customer would have to accept them within the time stated in the promotional offer; customers requesting those rates after expiration of the offer are not "similarly situated" for purposes of Industry Rule 8.2.2.

Industry Rule 8.2.4 Cost Justification (GRC-LEC)

Industry Rule 8.2.4 provides, in relevant part, that a GRC-LEC must show each rate or charge in a contract for a tariffed service is at or above cost. This provision is unchanged from the 2001 draft rules, although there was much language from the version in the 2001 draft rules that we deleted because the language was specific to the New Regulatory Framework. We also added a substantially identical provision to Industry Rule 8.3 (New Service), requiring a GRC-LEC to show that the rate or charge set for a New Service is at or above cost.

Small LECs (who are all GRC-LECs) object that the provision added to the New Service rule had not been previously vetted, and that as small utilities with limited resources, they rarely do formal cost studies nor could such a study be justified in relation to the revenue a New Service would likely produce. Small LECs assert that their rates are set residually, and that the reasonableness of their rate levels is often established by reliance on rates charged by other carriers for similar services.

In response, we intend Industry Rules 8.2.4 and 8.3 to continue our current practices regarding supervision of these GRC-LECs, which are still subject to cost-of-service regulation and which in many cases receive subsidies. We need some cost justification to prevent cross-subsidization. For example, Small LECs may submit AT&T or Verizon pricing support as a proxy for internal cost studies on the assumption that the Small LECs' costs would not be less than those of larger incumbent local exchange companies. In short, there is flexibility under Industry Rules 8.2.4 and 8.3 for a GRC-LEC to work with staff on its cost showing.

Industry Rule 8.3 New Service

Industry Rule 8.3 provides, in relevant part, that an advice letter requesting approval of a New Service must "attest" that the proposed service would:

(1) comply with all applicable provisions of the Public Utilities Code, including without limitation Sections 2891 to 2894.10, and with the applicable consumer protection rules adopted by the Commission;

(2) not result in a degradation in quality of other service provided by the Utility submitting the advice letter; and

(3) not be activated for a particular customer unless affirmatively requested by the customer.

TURN argues that the attestation requirement is too lax; Cox/Time Warner/XO and Sprint Nextel argue that the attestation requirement is too stringent. We retain the requirement as set forth in the proposed rule. We will respond to TURN first, and then to Cox/Time Warner/XO and Sprint Nextel.

TURN prefers the version of Industry Rule 8.3 published in the 2001 draft rules. In that version, the advice letter would have been required to demonstrate, rather than attest, the same things (compliance with applicable law, non-degradation in quality of service, no activation unless affirmatively requested). TURN argues the "burden of proof" should be on the carrier introducing a New Service to "explain, show, or demonstrate compliance." Opening Comments at p. 7.

We state earlier in today's decision that we believe requiring a carrier to "demonstrate" compliance, within the context of an advice letter, would be infeasible. TURN's argument illustrates the infeasibility of such a "demonstration." Logically, demonstration connotes both fact-finding and legal analysis. We can undertake these activities in the advice letter process only to a limited extent. What TURN describes is more appropriate to evidentiary hearings, and we only hold evidentiary hearings as part of formal proceedings. In contrast, our staff can readily determine whether the advice letter includes an attestation, if required, and whether the attestation is complete.

We also state earlier in today's decision that we believe requiring a carrier to "demonstrate" compliance would be unnecessary. Our purpose is not to cause a carrier to put on a showing at the Commission in support of each New Service the carrier introduces. Our purpose, rather, is to ensure that the carrier takes reasonable steps to investigate the possible impacts that a New Service may have, recognizing that introducing a New Service, owing to the very uniqueness distinguishing it from "any existing service" offered by the carrier, needs special forethought. For that purpose, attestation is sufficient.

For Cox/Time Warner/XO and Sprint Nextel, the attestation requirement is excessive, at least as to compliance with applicable provisions of the Public Utilities Code and applicable consumer protection rules adopted by the Commission. Cox/Time Warner/XO would revise Industry Rule 8.3 by changing "attest" to "indicate" and by striking the provision regarding compliance with applicable law; the provisions regarding non-degradation in quality of service and no activation without affirmative consent would be retained. Sprint Nextel would delete everything in Industry Rule 8.3 except the cost justification provisions relating to GRC-LECs. (The latter provisions are irrelevant to this discussion.)

Neither Cox/Time Warner/XO nor Sprint Nextel give persuasive reasons for changing the attestation requirement. According to Cox/Time Warner/XO, "introduction of an attestation requirement ... would constitute an unnecessary sideshow...." Opening Comments at p. 5. We fail to see how that result would follow. Sprint Nextel claims the rule would require a carrier to attest a proposed New Service would comply "with every provision in the Public Utilities Code" and with "every `consumer protection rule' ever adopted by the Commission." Opening Comments at p. 13, emphasis in original. In fact, Industry Rule 8.3 requires attestation of compliance with applicable code provisions and with applicable protection rules.

We find the attestation requirement reasonably well-suited to our regulatory purposes, and we adopt it.

1. The Commission adopted the General Rules of GO 96-B, applicable to the handling of advice letters in all utility industries including telecommunications, in D.07-01-024.

2. Four rounds of comments were received on the 2001 draft rules, which were based on the New Regulatory Framework. Two further rounds of comments were received in March 2007, following the Commission's adoption of D.07-01-024 and D.06-08-030 (the Phase I decision in the URF rulemaking).

3. The Phase II scoping memo in the URF rulemaking and Ordering Paragraph 6 of D.07-01-024 both invited the parties to comment on how GO 96-B should be coordinated with URF.

4. The chief task in coordinating GO 96-B with URF is revising the allocation of subject matter to the three advice letter tiers so as to reflect the change from incentive regulation under the New Regulatory Framework to full pricing flexibility for most services under the Uniform Regulatory Framework.

5. Although the 2001 draft rules were based on the New Regulatory Framework, they provide a procedural template for advice letters under URF.

6. The structure of the 2001 draft rules requires no change for purposes of URF.

7. Many regulatory distinctions can be deleted from the 2001 draft rules because the distinctions have become unnecessary or counter-productive with the growth of competition and technological advances in the telecommunications industry.

8. No showing of cost justification need accompany an URF Carrier's advice letter submitting a contract for tariffed service.

9. The date of filing is the day an advice letter is received by the Commission's Communications Division. During the transition period to electronic filing, current filing instructions will be published at the Communications Division's area of the Commission's Internet site (www.cpuc.ca.gov).

10. With the exceptions listed in Industry Rule 5, it is appropriate to allow an URF Carrier to request authority to detariff the carrier's services, in whole or part, by Tier 2 advice letter. An URF Carrier shall introduce and detariff a New Service by Tier 2 advice letter if the New Service does not fall into a category of services that the carrier previously detariffed.

11. The replacement of the New Regulatory Framework with URF does not cause any fundamental shift in Commission policy regarding GRC-LECs.

12. It is appropriate that Resale Service continue to be tariffed.

13. The customer notice rule set forth in Industry Rule 3 applies to all carriers and is competitively neutral.

14. Where a duly-noticed rate increase has already been approved by the Commission, customer notice of a Compliance Advice Letter regarding the increase would be confusing and inappropriate.

15. There is no longer a need to have any carriers include in their tariff books a list of their contracts and other deviations from tariffed service.

16. DRA's proposals for the handling of URF advice letters would require significant modifications to Tier 1 and Tier 2 procedures under GO 96-B, and would also be inconsistent with the GO 96-B protest rule. TURN's proposals are similar to DRA's.

17. Both DRA and TURN recommend that URF advice letters should be subject to suspension by the Commission and that the rate changes proposed in URF advice letters should be subject to protest on grounds of unreasonableness. These recommendations are inconsistent with the full pricing flexibility that the Commission granted to URF Carriers in D.06-08-030.

18. The advice letter service requirements of GO 96-B, which have now been in effect for several years, may be more stringent for some carriers than the requirements that previously applied to those carriers. However, the existing requirements have been in place since D.05-01-032 and treat all carriers equally.

19. A uniform deadline of 15 business days after contract execution is appropriate for submittal to the Commission of a contract for a tariffed service. The submittal deadline serves the purpose of making public those terms that are currently being made available in the marketplace.

20. It is reasonable that carriers be required to attest to the compliance of their New Service offerings with applicable law.

21. It is reasonable that carriers be required to attest that their New Service offerings will not result in degradation in the quality of other service provided by the carriers.

22. In light of the rate flexibility granted URF Carriers by the Commission in D.06-08-030, it is reasonable to allow an URF Carrier to submit under Tier 1 an advice letter regarding the URF Carrier's provision of tariffed service to a government agency or to the public, for free or at reduced rates and charges, under emergency conditions (natural disasters, etc.) A Tier 1 advice letter would also be appropriate for GRC-LECs under such circumstances.

1. The Telecommunications Industry Rules set forth in Appendix A should be adopted. These rules govern the filing, review, and disposition of advice letters and information-only filings by regulated carriers. These rules also include requirements regarding the detariffing of services.

2. Most URF Carrier advice letters are suitable for processing under Tier 1 (effective pending disposition).

3. All URF Carriers, included affiliated carriers, should be treated alike for purposes of filing URF advice letters under Tier 1.

4. Because GRC-LECs continue to be rate-regulated, and in many cases receive rate subsidies, their advice letters generally require regulatory review before going into effect. Thus, most GRC-LEC advice letters should be processed in Tier 2 and Tier 3.

5. Consistent with the Commission's procedures for Mass Migration of customers (D.06-10-021), a Withdrawal of Basic Service should be handled in a formal application.

6. A request by an URF Carrier to modify or cancel a provision, condition, or requirement imposed by the Commission in an enforcement, complaint, or merger proceeding should be made to the Commission in a formal application or petition.

7. Industry Rules 5.2 and 5.3 satisfy the requirements of Pub. Util. Code § 495.7(c)(1) and (2) regarding information that must be made available to consumers by their carrier after it detariffs.

8. A carrier's erroneous designation of advice letter tier is not binding on Staff.

9. It is not necessary to respond to those comments on the 2001 draft rules to the extent that the comments are cumulative, refer solely to the New Regulatory Framework or are otherwise moot, or have been responded to already in any of the interim decisions in the GO 96-B rulemaking.

10. For purposes of Industry Rules 1.13, 3, 3.1, and 8.6, a Transfer of customers means a Transfer of the entire customer base or an entire customer class of the carrier.

11. "Transfer" under Industry Rule 1.13, taken as a whole, concerns only those transactions that fall under Pub. Util. Code §§ 851-54. For example, a sale of a parcel of land is a Transfer only if the land is "necessary or useful" under § 851.

12. The customer notice rule set forth in Industry Rule 3 conforms to directions contained in two decisions in the GO 96-B rulemaking and the Phase I decision of the URF rulemaking.

13. If a carrier requests an increase to a rate or charge, or a more restrictive term or condition, and that rate, charge, term, or condition is one that any of the carrier's customers might incur or be affected by, then the carrier must give customer notice of the request pursuant to Industry Rule 3.

14. A knowingly and deliberately erroneous submittal, particularly of a Tier 1 advice letter, may trigger sanctions as well as the requirement to undo the actions taken under the improper advice letter.

15. If an advice letter's subject matter is proper to Tier 1, it necessarily is a proper advice letter, and if its subject matter is not proper to Tier 1, staff has authority to reject it under Industry Rule 7.1.

16. General Rule 8.2.3 of GO 96-B should be modified, consistent with Finding of Fact 22, so that an advice letter submitted for provision of service under emergency conditions may be subject to disposition under General Rule 7.6.1, as specified in the Telecommunications Industry Rules.

17. General Rule 1.1 of GO 96-B should be modified by adding a reference to the Telecommunications Industry Rules. General Rule 3.5 should be corrected by replacing the reference to "General Rule 5.4" with "General Rule 5.3." General  Rule 7.5.3 should be corrected by replacing the reference to "General Rule 5.4" with "General Rule 5.3." General Rule 7.6.2 should be corrected by replacing the references to General Rules 5.4 and 5.5 with a reference to General Rule 5.3.

18. The Telecommunications Industry Rules set forth in Appendix A should be codified with GO 96-B, as adopted in D.07-01-024 and as modified by today's decision.

19. Today's order should be made effective immediately, and the Telecommunications Industry Rules set forth in Appendix A should be made applicable to all telecommunications advice letters or information-only filings submitted 30 days from the effective date of today's order or thereafter.

20. R.98-07-038 should be closed.

ORDER

IT IS ORDERED that:

1. The Telecommunications Industry Rules set forth in Appendix A are adopted and are incorporated into General Order (GO) 96-B.

2. The Telecommunications Industry Rules shall become effective 30 days from the effective date of today's order, and shall apply to all telecommunications advice letters or information-only filings submitted 30 days from the effective date of today's order or thereafter.

3. The first two paragraphs of General Rule 1.1 are amended to reflect the addition of the Telecommunications Industry Rules to GO 96-B. The amendments are shown below; new language is underlined, and deleted language is stricken through:

This General Order contains General Rules, and Energy Industry Rules, Telecommunications Industry Rules, and Water Industry Rules. Telecommunications Industry Rules may be added later. The General Rules govern all informal matters (advice letters and information-only filings) submitted to the Commission by public utilities that are gas, electrical, telephone, water, sewer system, pipeline, or heat corporations, as defined in the Public Utilities Code. The General Rules also govern certain informal matters submitted to the Commission by certain non-utilities subject to limited regulation by the Commission.

The Industry Rules have limited applicability. The Energy Industry Rules apply to gas, electrical, pipeline, and heat corporations and to load-serving entities as defined in Public Utilities Code Section 380. The Telecommunications Industry Rules apply to telephone corporations. The Water Industry Rules apply to water and sewer system corporations. Within their respective industries, the Industry Rules may create rules specific to a particular type of utility or advice letter. Also, for purposes of advice letter review, the Industry Rules will contain three tiers that will distinguish, for the respective Industry Divisions, between those kinds of advice letters subject to disposition under General Rule 7.6.1 (Industry Division disposition) and those subject to disposition under General Rule 7.6.2 (disposition by resolution). The Industry Rules may contain additional tiers as needed for efficient advice letter review or implementation of a statute or Commission order.

4. In the second sentence of General Rule 3.5 of GO 96-B, the reference to "General Rule 5.4" is amended so that the reference is to "General Rule 5.3."

5. In the last sentence of General Rule 7.5.3 of GO 96-B, the reference to "General Rule 5.4" is amended so that the reference is to "General Rule 5.3."

6. In the first sentence of General Rule 7.6.2 of GO 96-B, the reference to "General Rules 5.4, 5.5, 7.5.1, or 7.6.1" is amended so that the reference is to "General Rules 5.3, 7.5.1, or 7.6.1."

7. The first paragraph of General Rule 8.2.3 of GO 96-B is amended consistent with Finding of Fact 22 and Conclusion of Law 12. The amendment is shown below; new language is underlined, and deleted language is stricken through:

Under emergency conditions, such as war, terrorist attack, and natural disasters, a utility that is a telephone corporation as defined in the Public Utilities Code may provide service to a government agency or to the public for free, or at reduced rates and charges, or under terms and conditions otherwise deviating from its tariffs then in effect. The utility may begin such service without prior Commission approval, but the utility shall promptly submit an advice letter to the Telecommunications Division to notify the Commission of the utility's provision of emergency service and of the rates, charges, terms, and conditions under which the service is provided. Although tThe advice letter may be effective pending disposition, it and shall be subject to disposition under General Rule 7.6.1. The Commission may determine, as in an appropriate proceeding, the reasonableness of such service.

8. The Executive Director will publish GO 96-B at the Commission's Internet site and otherwise make it readily available to utilities and interested persons.

9. Rulemaking 98-07-038 is closed.

This order is effective today.

Dated September 6, 2007, at San Francisco, California.

20 Sprint Nextel also sought clarification of the definition to mean "an ILEC, CLEC, or IXC that is regulated through the Commission's uniform regulatory framework..." Sprint Nextel Comments at p. 8. CALTEL notes that it does not object to the definition as applying to ILECs, CLECs, and IXCs, but seeks clarification of the specific carriers or types of carriers intended to be included in the carrier class. CALTEL Comments at p. 3.

21 We decline Time Warner et al.'s suggested term "Competitive Market Carrier" to encompass the four major ILECs, CLECs, and IXCs.

22 We are federally preempted from regulating the rates of wireless services, and wireless carriers have not filed tariffs (or even advice letters) since 1993.

23 The Phase I decision granted regulatory flexibility, including full pricing flexibility for most retail services, to the four largest incumbent local exchange companies. Competitive local exchange carriers and interexchange carriers already had such flexibility.

24 CLEC will continue to refer to "competitive local exchange carrier" and IXC will refer to "interexchange carrier."

25 The organization first must request that it be placed on the advice letter service list(s) maintained by the carrier and provide the organization's current e-mail address. See General Rule 4.3.

26 The definition of "New Service" means a service that is "distinguished from any existing service offered by the Utility by virtue of the technology employed and/or features, functions, and means of access provided."

27 See AT&T Opening Comments at p. 8-9; Verizon Opening Comments at p. 3.

28 Such information may also aid prospective consumers who may wish to monitor a carrier's prices over time.

29 TURN Opening Comments at p. 11. DRA similarly asserts that a carrier offering a detariffed service must post the rates, terms, and conditions to provide easy access to rates and terms and conditions; allow comparison of alternatives by an end-user; ensure that information obtained from the end-user will be discarded/not made available to carriers or third-party marketers; and is free from marketing content. DRA Opening Comments at pp. 8-9.

30 CALTEL argues that it should not be required to publish rates, terms and conditions on their websites for all services available to the public - whether intrastate or interstate or unregulated - particularly if the carrier had "ever tariffed the service in the past." CALTEL Opening Comments at pp. 5-6.

31 CALTEL did not identify specific services that it envisioned as falling into this category, and therefore, we will not conjecture as to the services to which CALTEL is referring.

32 In D.06-08-030, the Commission froze the rate for basic service and ordered that: "[p]rice caps on basic residential services that are not subsidized by CHCF-B shall be automatically lifted on January 1, 2009."

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