Report — April 11

CALIFORNIA STATE LEGISLATURE

Legislative Spring Recess. On Thursday, April 10th, the California Senate and Assembly adjourned for the Spring Recess and will return to the Capitol and reconvene Session on Monday, April 21st.

Universal Service Programs. Senate Bill 1364 (Fuller) would extend the existing California High Cost Fund A (CHCF-A) and B (CHCF-B) programs for four years to January 1, 2019.

The California Public Utilities Commission (CPUC) manages a number of programs to ensure all Californians have access to telecommunications services, funded by customer surcharges on landline, wireless, and Voice over Internet Protocol (VoIP) intrastate service. The CHCF-A program supports small rural telephone companies by offsetting costs not collected from customer revenue or federal support. The program collects approximately $35 million annually from customer surcharges. The CHCF-B program supports large carriers that are “Carriers of Last Resort” by offsetting high service costs in areas exceeding a CPUC set baseline which is currently $36 per month. Given the fiscal implications, SB 1364 was heard in the Senate Appropriations Committee week and was HELD in the Committee’s “SUSPENSE FILE” for consideration later in the year.

Non-Rechargeable Household Battery Recycling Program. Assembly Bill 2284 (Williams) would require producers of non-rechargeable household batteries to develop and implement a recycling plan to collect and manage batteries sold in the state. As currently written, this requirement would also apply to any business that provides consumers with electronic devices that include disposable household batteries, such as a cable set-top box universal remote control. Producers would either have to implement their own recycling program to meet targeted goals, which could be prohibitively expensive, or contract with a product stewardship entity to manage the recycling program. Alternative, any entity providing electronic devices with a non-rechargeable household battery could also exclusively provide batteries identified by the state as having a battery recycle program.

According to the Author, more than 150 million household batteries are sold in California annually and yet only about five percent are currently collected for recycling. California classifies household batteries as universal waste which includes materials and substances hazardous to human and environmental health. Since 2006, universal waste has been prohibited from disposal in solid waste landfills. Local government hazardous waste collection programs have been unsuccessful in enforcing the law. This bill would require businesses to share the responsibility of properly disposing of household batteries.

AB 2284 is sponsored by the California Product Stewardship Council, the organization that would contract to manage a business’ recycling program and the National Electrical Manufacturers Association who represent the compliant battery producers. The bill is also supported by the City of Sacramento and the Solid Waste Association of North America. The measure is opposed by the California Cable & Telecommunications Association (CCTA), the Advanced Medical Technology Association, TechAmerica, and the Toy Industry Association. Last year, the Author introduced the same proposal (AB 488) which had significant support from the environmental community and significant opposition from the business community. CCTA requested that the measure be amended to exempt batteries that are provided in a consumer electronic device that controls network equipment installed to provide a service. The author rejected the amendment. However, AB 488 failed to be approved by the Assembly Appropriations Committee.

CCTA opposes the measure because it would make the industry responsible for recycling household batteries that we do not control. Alternatively, the industry would be forced to remove batteries from cable remote devices, impeding the cable industry’s ability to demonstrate the functionality of the cable systems to our customers.

AB 2284 was heard and approved (6-3) on Monday, April 7th in the Assembly Natural Resources Committee. The measure now moves to the Assembly Appropriations Committee for consideration.

Property Crimes; Disconnecting Communications Services.Assembly Bill 1782 (Chesbro), as amended in the Assembly Public Safety Committee, would increase the criminal fine up to $10,000 for any person who “willfully and maliciously” disconnects or obstructs any communications infrastructure or electrical lines. Pursuant to current law, the penalty is $500 penalty or up to one-year in the county jail. AB 1782 includes technical amendments to clarify that disconnecting communication lines includes eliminating the backup power supply, such as deep cycle batteries.

The cable industry has seen a dramatic increase in the number of incidents of willful damage to its broadband networks. Historically, cable networks primarily provided multichannel video service, but today provide advanced residential and business communications services and broadband bandwidth for large data centers and cellular towers (backhaul). Cable networks also support critical services like E-911, and are the basis for enabling telemedicine, emergency alerts, energy efficiency monitoring and home security services and other innovative technologies.

The California Cable & Telecommunications Association supports AB 1782. Dependable communication services are critical for public safety, national security and California’s economic sustainability. The measure is also supported by a number of communications service providers, electrical utilities and law enforcement agencies. Support comes from Suddenlink, Cox Communications, Verizon, Frontier Communications, Southern California Edison, Pacific Power, the California Municipal Utilities Association, the Southern California Public Power Authority, the Trinity Public Utility District, California State Sheriffs Association, California Police Chiefs Association, the Taxpayers for Improving Public Safety and the Humboldt County Board of Supervisors.

AB 1782 was heard and unanimously approved (7-0) on Tuesday, April 8th in the Assembly Public Safety Committee. The proposal is officially opposed by the California Attorneys for Criminal Justice and the California Public Defenders Association but are reconsidering their position given the recent amendments increased the penalty to $10,000. The measure moves to the Assembly Floor for consideration.

CALIFORNIA REGULATORY UPDATE

April 9 California High Cost Fund A Prehearing Conference. Commissioner Sandoval and Administrative Law Judge Colbert held a Prehearing Conference on April 9 to schedule the remainder of Phase I of the California High Cost Fund A proceeding, which is considering, among other issues, whether to open the Independent Small LEC territories to competition, and whether to include broadband revenues in the Commission’s rate of return calculations (since broadband revenues are statutorily included in the rate base). CCTA is participating in this proceeding on behalf of its members.

The remainder of the schedule is:

Reply Comments on schedule and scope: April 22.

(parties to meet and confer prior to filing replies). Use of the CD report in the proceeding should be addressed in these Replies.

Workshops: May 28, 29, (and 30th if needed)

Tentative date for workshop report: June 20.

Testimony filed: July 11

Reply testimony filed: August 1.

Hearings: September 2, 3, and 4

Opening Briefs: September 26

Reply Briefs: October 10

Proposed Decision to be issued in time for vote at last Commission meeting: December 18.

AT&T U-Verse PEG Settlement with Cities of Los Angeles, El Segundo and Sacramento. A Settlement Agreement between AT&T, and the cities of Los Angeles, El Segundo and Sacramento was released to resolve the cities’ dispute over the manner in which AT&T delivers PEG channels on its U-verse service. The plaintiff cities alleged that AT&T violated DIVCA and alleged negligence in designing, installing and operating a service that does not comply with DIVCA. DIVCA requires that state franchise holders designate a sufficient amount of capacity on its network to allow the provision of the same number of PEG channels as are activated by the incumbent cable operator, that the channels be carried on the basic service tier, and to the extent feasible, that the PEG channels be the same channels used by the incumbent operator. AT&T claimed that it could not comply with DIVCA’s requirements due to its U-verse technology. In the settlement, AT&T agreed to provide the cities with a “custom PEG solution” with each plaintiff’s PEG channels accessed via a menu-based user interface application customized for each plaintiff, with video programming delivered via an Internet media device. The settlement agreement allows each plaintiff to enter into a Customer PEG Solution Agreement for an initial 4 year term. The City of Los Angeles has filed a Motion at the City Council to accept payment from AT&T in the amount of $338,632.26, to be deposited into the “Telecommunications Liquidated Damage and Lost Franchise Fees Fund, with $175,000 to be placed into a new account to be used to pay AT&T to develop the customized channel application, and $163,632.26 to reimburse the City for legal fees paid on behalf of fellow plaintiffs associated with the claim.

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