ALJ/KAJ/abw DRAFT Item 1
2/8/2001
Decision PROPOSED DECISION OF ALJ JONES (Mailed 12/29/2000)
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Joint Application for Approval of Settlement Transition Agreement and Implementation of Replacement Funding for Small Local Exchange Carriers. |
Application 99-09-044 (Filed September 21, 1999) |
Beck & Ackerman, by Jeffrey F. Beck and Jillisa Bronfman, Attorneys at Law, for the following Small LECs: Evans Telephone Company, Happy Valley Telephone Company; Hornitos Telephone Company; Kerman Telephone Company, Pinnacles Telephone Company, The Siskiyou Telephone Company, and The Volcano Telephone Company; Cooper, White & Cooper by E. Garth Black, Alvin H. Pelavin, Mark P. Schreiber, and Sean P. Beatty, Attorneys at Law, for the following Small LECs: Calaveras Telephone Company, Cal-Ore Telephone Company, Ducor Telephone Company; Foresthill Telephone Company, The Ponderosa Telephone Company, and Sierra Telephone Company, Inc.; and Colleen O'Grady, Attorney at Law, for Pacific Bell Telephone Company, applicants.
Jason J. Zeller and Laura J. Tudisco, Attorneys at Law, for the Office of Ratepayer Advocates, protestant.
Randolph Deutsch, Attorney at Law, for AT&T Communications of California, Inc.; Tony DiTirro, Attorney at Law, for MCI WorldCom; Patrick McMahon, Attorney at Law, at the Law Office of Patrick McMahon, for Sprint Communications Company, L.P.; and Thomas Long, Attorney at Law, for The Utility Reform Network, intervenors.
OPINION 2
1. SUMMARY 2
2. PROCEDURAL HISTORY 3
3. THE HISTORY OF INTER-COMPANY SETTLEMENTS 5
4. SHOULD THE COMMISSION APPROVE THE STAS AND IMPLEMENT THE POOL TERMINATION PROCEDURES NEGOTIATED BY THE APPLICANTS? 6
4.1. Small LECs' Position 6
4.2. Pacific's Position 8
4.3. ORA's Position 8
4.4. AT&T Communications of California, Inc. (AT&T); WorldCom, Inc. (WorldCom); and Sprint Communications Company L.P. (Sprint) (the IXCs') Position 9
4.5. Discussion 9
5. USE OF CHCF-A FOR REPLACEMENT FUNDING 10
5.1. History of CHCF-A 10
5.2. Small LECs' Position 12
5.3. Pacific's Position 16
5.4. ORA's Position 18
5.5. The IXCs' Position 21
5.6. Discussion 24
6. PROVISION OF INTRALATA TOLL SERVICE 27
6.1. Background 27
6.2. Small LECs' Position 28
6.3. Pacific's Position 34
6.4. ORA's Position 36
6.5. The IXCs' Position 39
6.6. Discussion 41
6.6.1. Provision of intraLATA Toll Service 41
6.6.2. Implementation of IntraLATA Presubscription 48
7. ACCESS CHARGE RATES AND STRUCTURE 51
7.1. Small LECs' Position 51
7.2. Pacific's Position 56
7.3. ORA's Position 58
7.4. The IXCs' Position 59
7.5. Discussion 61
8. SHOULD PACIFIC BE REQUIRED TO REDUCE ITS RATES TO REFLECT THE ELIMINATION OF THE POOLING PAYMENTS? 63
FINDINGS OF FACT 75
CONCLUSIONS OF LAW 77
ORDER 80
1. Summary
In this decision, we approve, with modifications, the Settlement Transition Agreements (STAs) which Pacific Bell (Pacific) negotiated with each of 13 Small Local Exchange Carriers (LECs)1 We grant applicants' proposal that replacement funding for the Small LECs come from the California High Cost Fund-A (CHCF-A). However, we deny applicants' request that the CHCF-A draws by the small companies not be subject to the means test, waterfall, and rate increase requirements, as required by the rules governing the CHCF-A.
We authorize Pacific and each Small LEC to discontinue offering intraLATA toll service if at least one interexchange carrier (IXC) is willing to provide the service on a presubscribed basis. If no IXC offers presubscribed intraLATA toll service in a particular Small LEC's service territory, the Small LEC will provide service as the Carrier of Last Resort (COLR). Pacific is not required to serve as COLR for intraLATA toll service in the Small LECs' service territories. We also require the Small LECs to implement intraLATA presubscription (ILP) and set an implementation schedule.
We adopt the Small LECs' National Exchange Carrier Association (NECA) switched access rates, with one modification. We eliminate the Carrier Common Line Charge (CCLC) rate element from the NECA rates, and the Small LECs are instructed to apply to the CHCF-A for recovery of the revenue shortfall which results from elimination of the CCLC.
We determine that Pacific is not required to refund the approximately $37.2 million it currently makes in STA payments to the Small LECs to its ratepayers, once it discontinues making its payments to the Small LECs.
1 The Small LECs include: Calaveras Telephone Company, Cal-Ore Telephone Co., Ducor Telephone Company, Evans Telephone Company, Foresthill Telephone Co., Happy Valley Telephone Company, Hornitos Telephone Company, Kerman Telephone Company, Pinnacles Telephone Co., The Ponderosa Telephone Co., Sierra Telephone Company, Inc., The Siskiyou Telephone Company, and The Volcano Telephone Company.
