BILL ANALYSIS Ó
AB 1409
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB 1409 (Utilities and Commerce Committee)
As Amended September 6, 2013
2/3 vote. Urgency
-----------------------------------------------------------------
|ASSEMBLY: |50-21|(May 16, 2013) |SENATE: |30-0 |(September 11, |
| | | | | |2013) |
-----------------------------------------------------------------
Original Committee Reference: U. & C.
SUMMARY : Corrects incorrect code references in statute and
revises the statutory cap on fees necessary to obtain a
certificate of public convenience and necessity (CPCN) from the
California Public Utilities Commission (PUC) to adjust for
inflation. Specifically, this bill :
1)Corrects incorrect code references to code sections that were
moved or repealed as a result of
other enacted statutes.
2)Allows PUC to adjust for inflation the fee required to obtain
a CPCN.
The Senate amendments :
1)Specify the filing fee is reestablished at $500 and allow the
PUC to adjust this fee in the future only according to the
Consumer Price Index (CPI).
2)Clarify that all fees are to be deposited in the Public
Utilities Commission Utilities Reimbursement Account.
3)Deletes sections related to incorrect code references.
4)Provides that the PUC shall adopt rules applicable to all
lifeline services providers, including providers using
alternative technologies.
5)Specifies that the PUC may not deny a request to be designated
as an Eligible Telecommunications Carrier (ETC) or a state
lifeline provider based on the entity providing any VoIP or IP
enabled service.
AB 1409
Page 2
6)Provide that Commission shall not deny or revoke a CPCN for a
telephone corporation that provide retail or wholesale service
on the grounds that the carrier also provide VoIP service or
any other unregulated service.
7)Allows reimbursement for non-telephone corporations providing
Lifeline service from the Universal Lifeline Telephone Service
Trust Administrative Committee Fund.
FISCAL EFFECT : According to the Senate Appropriations
Committee, potential minor revenue increases in the low tens of
thousands of dollars to the Public Utilities Commission
Utilities Reimbursement Account (special) for increased fee
revenues on CPCN applications.
COMMENTS : This is a committee bill which revises incorrect code
references in statute and revises the statutory cap on fees
necessary to obtain a CPCN from PUC.
1)CPCN fee adjustment : The $75 fee to file an application for a
CPCN for telephone corporations and other utilities except for
passenger state corporations, and for the mortgage, lease,
transfer, or assignment of a CPCN has been in statute since
1969. The cost of CPCN application has not adjusted for
inflation. According to PUC, the CPI has increased 530.5%
since 1969. If the application fee had been adjusted for
inflation, using CPI calculator, the fee would be
approximately $473. Currently, PUC does not have the
authority to raise the fee unless there is a change in statute
through legislative action, thus the creating the need for
this bill.
The current CPCN application fee does not reflect the current
cost of PUC resources required to process the application.
The application requires extensive review and evaluation by an
Administrative Law Judge, is assigned to the Communications
Division to review tariffs and other technical aspects of the
application. Hearings may be required due to protest filed by
other parties, or other issues or by PUC's Consumer Protection
and Safety Division, or a California Environmental Quality Act
review if the applicant is proposing to build facilities.
Depending on the initial review, PUC staff may require the
AB 1409
Page 3
applicant to submit additional information.
2)Legislation adopted in 2010 directed the PUC to develop rules
to expand technology options for consumers receiving service
under the More Universal Service Lifeline Program. The PUC
has yet to develop those rules. The bill would also provide
that all lifeline providers, including those that are
non-telephone corporations, may be reimbursed for lifeline
service from the Universal Lifeline Telephone Service Trust
Administrative Committee Fund.
This bill directs the PUC to develop rules governing the
offering of lifeline service for all providers of voice
services using alternative technologies.
In addition, this bill clarifies statute by stating that:
a) The PUC may not deny a request to be designated to
receive federal lifeline support on the basis of the
technology used to provide lifeline service nor may they
deny or revoke a CPCN or authorization to provide
telecommunications services based on the fact that the
telecommunications provider also provides Voice over
Internet Protocol (VoIP) or IP-enabled services.
b) The PUC may not, in exercising its authority to carry
out the state lifeline program or to designate a provider
an eligible telecommunications carrier, deny a request
based on the provider utilizing any VoIP or IP-enable
service. Under federal law, a provider must be designated
as an ETC by the state regulatory agency in order to
participate in the federal lifeline program. Although
current state and federal law provides the PUC with the
proper authority to designate a provider an ETC, regardless
of the technology used to provide the service, the PUC has
delayed its ETC designation for any provider that uses VoIP
technologies, even where the provider already provides
telecommunications services and has been properly
certificated by the PUC.
c) The PUC may neither deny nor revoke a telephone
corporation's CPCN on the grounds that the carrier also
provides VoIP or other unregulated service. While many
providers have been providing service with the use of more
than one technology for years, the PUC has recently
AB 1409
Page 4
question a carrier's ability to obtain a CPCN if it uses a
technology that is not regulated by the PUC.
Analysis Prepared by : DaVina Flemings / U. & C. / (916)
319-2083
FN: 0002719