Regulatory Affairs

CCTA represents its members before California State Agencies, including the California Public Utilities Commission, the California Department of Energy, and the California Department of Housing and Community Development. CCTA also represents its members before the Office of Emergency Services, Department of Transportation, and the Office of the State Fire Marshal.   CCTA is a member of the California High Tech Task Force and is the national representative for the industry at the North American Numbering Committee (NANC).

The California Public Utilities Commission provides oversight to cable’s access to utility rights of way, and establishes overhead and underground safety standards for utilities and cable facilities in California. The CPUC regulates traditional wireline telecommunications facilities and services, and is also the state video franchising authority in California. To access the CPUC website, click www.cpuc.ca.gov.
 
 
Regulatory Update -- Week of March 5, 2010
 
CCTA Files Complaint Against San Diego Gas & Electric (SDG&E).   After seventeen months of negotiations, CCTA filed a complaint against SDG&E for failure to justify its pole attachment rates. SDG&E’s rates are four times the rate charged by AT&T for poles in SDG&E’s service territory, and are three times the average rate for pole attachments charged by electric utilities nationally. SDG&E has continued to provide inconsistent and incomplete backup support documentation to justify its rates, and the documentation provided suggests improper accounting practices. For example, SDG&E has provided inconsistent statements regarding the number of poles it owns, and has engaged in retirement accounting practices that inflate pole investment. SDG&E has never explained how it determines embedded costs.
 
Regulatory Update - Week of February 26, 2010
 
Smart Grid Proceeding at the California Public Utilities Commission.  The California Public Utilities Commission (CPUC) released his ruling today revising the schedule for Rulemaking to Consider Smart Grid Technologies.  The original dates for the workshop were March 10 – 12, 2010; the new dates are March 17 – 19, 2010.  The workshop will be held at the CPUC, 505 Van Ness, San Francisco, Ca.   Comments are due to the CPUC on March 5. 
 
CCTA will request that the Commission recognize the importance that existing broadband networks and providers can and should play in Smart Grid deployments.  Existing broadband networks can serve as a least-cost alternative, and obviate the need to deploy redundant communications networks.  CCTA-members broadband providers are capable and experienced in providing the secure and reliable data transmission paths that underlie Smart Grid deployments. To that end, the Commission should not adopt rules or regulations that would foreclose competition or the potential for competition in the delivery of home energy management and other Smart Grid-related products and services. 
 
 
Regulatory Update - Week of February 19, 2010 
 
California’s Smart Grid Infrastructure.  The California Public Utilities Commission has issued a joint ruling inviting comments and scheduling workshops to adopt policies to promote California’s Smart Grid infrastructure. The Opening Comments are due March 5, with reply comments due April 1. The workshops will be held March 10, 11 and 12.  Specifically, the Commission solicits information to enable it to provide policy guidance so that electric utilities may develop Smart Grid deployment plans by July 1, 2011.
 
CCTA will file comments and participate in the workshops. Our comments will essentially mirror earlier comments submitted by NCTA before the FCC, staking out a placeholder for the use of cable networks to deliver the benefits of Smart Grid technologies at low cost to consumers. We will also advocate an open energy management architecture that delineates the utility domain and the consumer domain.
 
CCTA Joins Motion To Exclude “Undergrounding” Issues From Safety OIR.  This week, CCTA joined Comcast and other Communications Infrastructure Providers in a formal motion to exclude proposed rule changes addressing undergrounding issues from Phase 2 of the California Public Utilities Commission’s Safety Rulemaking. The Motion argues that that the proposed rule changes that would consider undergrounding to be a GO 95 fire safety measure is outside the scope of the proceeding and is a collateral attack on prior Commission decisions that expressly determined that undergrounding is not be considered a fire-safety measure.
 
The Motion is in response to Commissioner Simon’s Scoping Memo that states that Phase 2 “may consider” adding fire risk to the list of reasons to permit undergrounding under Tariff Rule 20.”  That Scoping Memo prompted SDG&E and the County of Los Angeles to suggest changes to electric utility tariffs to allow use of ratepayer funds to convert aerial facilities to underground facilities. SDG&E’s proposal contemplates undergrounding only supply facilities, while leaving cable and telecommunications lines on poles.
 
If the Commission does not rule – or rules against – the Motion, parties to the Safety OIR will begin considering the proposed undergrounding rules in May workshops.
 
 
Regulatory Update - Week of February 12, 2010
 
Commission’s GO 95-related Fire Safety Workshops.  Last week, the Commission’s Consumer Protection and Safety Division (CPSD) tentatively agreed to support changes to the Commission’s current rules concerning the establishment of safety maintenance programs; the resolution of safety hazards contained in current GO 95 Rule 18 A; and the reporting of safety hazards from one utility to another (Rule 18B).
 
CPSD’s compromise came at last week’s GO 95 Fire Safety Workshops where Cable and other CIPs expressed concern that the current rules adopted in the hurried Phase 1 Safety OIR Decision were laden with too much detail and process that detracted from the underlying purpose of the safety rules. CIPs also wanted rules that allowed for greater consistency with current business practices.  SDG&E continues to oppose efforts to modify the existing Rules 18 A and 18 B claiming that those rules in current form have forced CIPs to be more responsive to SDG&E-identified hazards.
 
Cable and CIPs are now working to resolve concerns regarding a CPSD proposal that would mandate annual “patrol” inspections in Extreme and Very High Fire Hazard Zones and would additionally require “detailed inspections” once every ten years on all overhead communications lines installed on joint use poles. Cable and other CIPs contend that the proposed inspections are duplicative, excessive, and not in the public interest given the negligible fire risk posed by communications facilities.  This issue will be further addressed at workshops resuming on February 24.
 
Market Sourcing Regulations/Cost of Performance:  On February 10, the Franchise Tax Board held an interested parties meeting to discuss possible amendments to California Code of Regulations, Title 18, Section 25136 (sales other than sales of tangible personal property), to implement the recently enacted Revenue & Taxation Code Section 25136 that applies for tax years beginning on or after January 1, 2011. This is the new market sourcing regulation that will replace the existing cost of performance rules.
The discussion was focused on variations of Iowa, Ohio and other states approaches to where the benefit of the service or use of property is received for purposes of assignment of sales. There was a lot of discussion related to how to define a "purchaser" and how to determine their location in determining if the benefit received from a sale is attributable to California. FTB has allowed the comment period to continue until March 15th, 2010 with regulations to be drafted sometime in April.
The California Taxpayers Association (Cal-Tax) is monitoring these workshops.  If you are planning to submit comments and would like to share with Cal-Tax, let us know.   
 
Regulatory Upate - Week of February 5, 2010
 
Nancy Ryan Sworn in as the newest CPUC Commissioner.  On Thursday, February 4, 2010, California Public Utilities Commission (CPUC) President Michael R. Peevey administered the Oath of Office for new Commissioner Nancy E. Ryan. As mentioned in last week’s CCTA Update, Ms. Ryan is an economist with expertise in energy markets, climate change policy, and the public health and ecological impacts of energy production. Since February 2009, she has served as the CPUC’s Deputy Executive Director for Policy.  She joined the CPUC in January 2006 as President Peevey’s Chief Energy Advisor and served as his Chief of Staff from April 2007 to February 2009. Commissioner Ryan will have one year to be confirmed by the State Senate.
 
Federal Communication Commission’s Network Outage Reporting System (NORS). The Federal Communications Commission (FCC) issued on February 2, 2010, a Public Notice asking for comments, due March 4, on a California Public Utilities Commission (CPUC) Petition for Rulemaking, in which the Commission requested password protected access to the FCC’s Network Outage Reporting System (NORS).
The CPUC currently requires all facilities-based certificated and registered carriers to file with the Communication Division and the Division of Ratepayer Advocates, a written report detailing when California service is affected, regardless of whether or not the California outage independently would meet the FCC’s significant disruption and outage reporting threshold. In fact, the CPUC already also requires concurrent reporting at the CPUC with FCC NORS reports. The Petition thus appears to be an effort to expand access to reports filed by cable, and potentially, VoIP providers, although VoIP service is currently exempt from the FCC’s NORS filing requirement.

 
Regulatory Upate - Week of January 29, 2010

Governor Appoints Nancy Ryan as the newest California Public Utilities Commissioner.
 
Commissioner Ryan is an economist with expertise in energy markets, climate change policy, and the public health and ecological impacts of energy production.  Since February 2009, she has served as the CPUC’s Deputy Executive Director for Policy.  She joined the CPUC in January 2006 as President Peevey’s Chief Energy Advisor and served as his Chief of Staff from April 2007 to February 2009.  While at the CPUC, Commissioner Ryan has played a key role in developing policies in the areas of climate change, electricity market design, and renewable energy.  In the course of these efforts she has helped to build and enhance the CPUC’s working relationships with its sister energy agencies and the Federal Energy Regulatory Commission, as well as the Legislature and Governor’s office. Commissioner Ryan must be confirmed by the State Senate.
 
Regulatory Upate - Week of January 15, 2010
 
California Public Utilities Commission Begins Phase 2 Safety OIR Workshops.  This week the Commission held the first two days of workshops in Phase 2 of the Safety OIR 08-11-005. The workshops will consist of 2 to 3 day meetings, twice a month, through May. The purpose of the workshop is to “collaboratively explore” proposed rule changes relating to General Orders 95 and 165 related to inspection and maintenance of facilities, and to the extent possible to agree on specific proposed rules to be recommended for adoption by the Commission. CCTA will participate throughout the process.
 
Battery Back-up Proceeding.  Comcast and CCTA filed Joint Comments on the Alternate Proposed Decision of Commissioner Peevey in the proceeding relating to customer premise backup battery requirements. The Alternate PD requires the same customer education program as the Proposed Decision of Commissioner Simon, but does not impose CPUC jurisdiction over VoIP providers. The Commission is now scheduled to vote on either the PD or Alternate PD on January 21. 
 
 
Regulatory Update - Week of January 8, 2010 
 
Backup Battery Proceeding.  An Alternate Proposed Decision in the proceeding examining backup battery issues at the customer premise was issued by CPUC President Peevey.  The Alternate Proposed Decision proposes the same customer notification requirements as the Proposed Decision of Commissioner Simon, but does not assert that the Commission has jurisdiction to impose the requirements over VoIP providers.

 
 
2009 Year End Report
CALIFORNIA PUBLIC UTILITIES COMMISSION
 
Backup Battery Proceeding. CCTA and its members effectively reversed a Proposed Decision at the CPUC to require a minimum 8 hour standard for backup batteries at the customer premise. The current decision requires customer education programs regarding the backup battery for VoIP provided at the customer premise.
 
Tariff Proposal Reversal. CCTA reversed a tariff proposal filed at the CPUC by SDG&E to assume responsibility to inspect and maintain cable network overhead plant.
 
Wood to Steel Utility Pole Proposal. CCTA worked with its members to reverse proposals by SDG&E to require new applications for all poles changed out from wood to steel, and facilitated a streamlined process for the change out of cable plant to the steel poles.
 
Pole Attachment Rates. CCTA negotiated reduced pole attachment rates with AT&T. Pole attachment rate increases were avoided for two years with Southern California Edison, and the increase for 2010 was kept to a minimum, far less than the rate proposed by Edison. Negotiations were also held with PG&E, with the proposed rate confirmed, and negotiations with SDG&E continue.         
Safety Order Instituting Rulemaking (OIR) – Phase 1 and 2. This year, the Commission’s Consumer Protection and Safety Division, electric utilities, cable, wireline, and wireless phone service providers engaged in a marathon rulemaking to revise and clarify Commission regulations relating to the Safety of Electric utility and communications infrastructure provider facilities.  The OIR was established in response to the 2007 Southern California fires.
 
The Rulemaking was divided into two phases: In August, the Commission adopted a Phase 1 Decision adopting measures said to reduce fire hazards that could be implemented in time for the 2009 autumn fire season in Southern California.  The purpose of Phase 2 is to address measures that require more time to consider and implement. CCTA, joined by its members and a broader telecommunications coalition, recently submitted proposed rule changes in the Phase 2 proceeding aimed at providing reasonable rules while respecting the fact that cable and telecommunications facilities pose significantly less risks than those associated with electric facilities. Phase 2 workshops will begin in January 2010.
 
SDG&E’s De-Energization Application. In September, the Commission voted 4-1 to reject SDG&E’s plan to proactively cut power to customers in high fire danger weather conditions.  The final decision also rejected SDG&E’s requested tariff which would have expressly protected SDG&E from liability resulting from proactive de-energization.   That decision was a success for the cable industry, who along with a telecommunications coalition, participated in seven months of workshops, pleadings, and meetings with regulators and other public officials in an effort to convince the Commission to reject the plan.
 
CCTA is now participating in a “collaborative stakeholder process” coordinated by SDG&E with the aim of developing a comprehensive fire prevention program for the San Diego area. The Federal Mediation and Conciliation Services facilitate the meetings.
 
CALIFORNIA EMERGENCY MANAGEMENT AGENCY
 
California Alert and Warning Workgroup. CCTA continues to actively participate in the development of California Emergency Management Agency’s (Cal EMA) work plan to implement the recommendations set forth earlier this year by the “Alert and Warning Workgroup.”  This workgroup was established to implement the provisions of AB 2231 (Chapter 764, Statutes of 2006) regarding enhancing alert, notification, and warning systems in California through public/private partnerships.