BILL ANALYSIS Ó 1 SENATE ENERGY, UTILITIES AND COMMUNICATIONS COMMITTEE ALEX PADILLA, CHAIR AB 1407 - Bradford Hearing Date: July 8, 2013 A As Amended: June 10, 2013 FISCAL B 1 4 0 7 DESCRIPTION Current law authorizes the California Public Utilities Commission (CPUC) to regulate telephone corporations and requires local exchange carriers to provide residential customers "basic service," as defined by CPUC decisions (Public Utilities Code Section 495.7; Decision 12-12-038). Current law establishes state universal service programs funded by surcharges on landline, wireless and Voice over Internet Protocol (VoIP) service, and provides that only telephone corporations may receive subsidies from these programs (Public Utilities Code Section 270). Current law the Moore Universal Telephone Service Act establishes the California lifeline program and requires telephone corporation providers of residential service to offer eligible low-income customers a lifeline class of basic service (currently landline only) at a fixed monthly rate, with subsidies to providers to offset the cost of the discount. (Public Utilities code Section 871) Current federal law and rules of the Federal Communications Commission (FCC) establish a federal lifeline program that allows eligible low-income customers to apply a fixed discount to reduce the price of any voice communications service, including wireless, (47 U.S Code Section 254; 47 C.F.R.54.101) Current law prohibits CPUC regulation of VoIP service or Internet Protocol (IP)-enabled service except as required or expressly delegated by federal law or expressly directed by state statute (Public Utilities Code Section 710) This bill authorizes providers of wireless and VoIP service to voluntarily offer state lifeline service if they offer voice communications as defined by the FCC through any technology and prohibits the CPUC from requiring state lifeline providers to offer more than is required under the federal lifeline program. This bill repeals the requirement that state lifeline be a special class of service at a fixed rate and instead establishes a discount at a fixed amount that an eligible customer can apply toward any voice communications service, including a bundle of services that includes voice. This bill requires the CPUC to designate a telephone corporation or alternative provider as a state lifeline provider eligible to receive subsidies if the provider collects and remit surcharges for the lifeline program and agrees to comply with CPUC rules for the lifeline program. Current federal law provides for the CPUC to designate a lifeline provider serving California as eligible for federal lifeline subsidies, known as an Eligible Telecommunications Carrier (ETC), if the requesting provider meets ETC requirements in federal law. (47 U.S Code Section 214(e)) This bill states that the CPUC shall, upon a request of a provider, designate that lifeline provider as an ETC. Current law requires the CPUC and telephone corporations to ensure that every household qualified to receive lifeline service is informed of the service and given the opportunity to subscribe. (Public Utilities Code Sections 871.5 and 876) This bill removes this obligation for telephone corporations and prohibits the CPUC from imposing any advertising obligation other than those required by federal law for federal lifeline providers. Current law exempts state lifeline customers from paying state and federal surcharges on top of the cost of service. (Public Utilities Code Section 879) This bill requires state lifeline customers to pay those surcharges. BACKGROUND Universal Service for Low-Income Customers - Federal and state lifeline programs enable qualified low-income households to receive a reduced rate for telephone service in order to further the universal service goal of making affordable service available to all. Customer eligibility is based on household income or participation in specified public assistance programs. One rate discount per household is provided to qualified customers from designated service providers, which are compensated for providing that discount from state and federal lifeline funds generated by surcharges on service to all landline, wireless and VoIP customers. The state and federal programs share the same goal but have different features. Federal Lifeline - The federal lifeline program, administered by the FCC, was implemented in 1985 in the wake of the 1984 divestiture of AT&T to ensure that rate increases from this major marketplace shift would not put local landline service out of reach for low-income households. Since 1997, the FCC has made the federal lifeline discount available for wireless service, and since 2005 for prepaid service, in recognition that wireless services have taken on particular importance to low-income consumers, who are more likely to reside in wireless-only households than consumers at higher income levels. In early 2012, the FCC adopted a technology-neutral approach to enable lifeline service provided over any platform, including IP networks. It authorized an eligible customer to apply the $9.25 per month discount to any residential service that includes "voice telephony service," defined to include: voice grade access to the public switched network or its functional equivalent; minutes of use for local service at no additional charge to end users; access to 911 emergency telephone service and enhanced 911; and toll limitation services to control long distance charges. The discount can apply to a bundle or package of voice and data services, plans with optional calling features such as caller ID and voicemail, and any family shared calling plan. The FCC reports that lifeline enrollment has greatly increased since wireless was included, consistent with the same trend toward wireless use in the general population. Wireless providers receive well over half of the total program support, with prepaid providers taking about 40 percent as of early 2012. At the same time, in response to program costs ballooning, the FCC has undertaken reforms to fight waste, fraud, and abuse, especially problems with verifying eligibility of households and wireless service being transferred to non-eligible users. The CPUC, upon request, and pursuant to federal requirements, designates as an ETC any provider that seeks to provide federal lifeline service in California. To date, four wireless carriers (Cricket, Telescape, Virgin Mobile, and Nexus) provide service in California with a variety of plans that include, at no charge, a handset, 250 voice minutes and 250 texts, with no contract or connection charge, and options for extra voice minutes and texts in price increments. California Lifeline - California's Moore Universal Telephone Service Act, enacted in 1983, requires all providers of landline residential service to provide lifeline service as part of the obligation to provide "basic service" as defined by the CPUC. The Act requires these providers to inform eligible subscribers of the availability of lifeline service and how to qualify, to offer the service at a fixed rate, and to not charge lifeline customers state and federal universal service and 911 program fees and surcharges applicable to non-lifeline customers. The program sets a fixed rate for customers, currently no more than $6.84 per month, depending on the carrier. The support amount for the provider is $11.50 per month, which is applied to offset costs after the federal subsidy is applied. The CPUC's General Order 153 specifies program requirements for providers, eligible customers, and the third-party administrator. The program budget is about $280 million for 2012-13. For at least ten years, the Legislature, customers, providers, and other stakeholders have urged the CPUC to expand California lifeline to include wireless service and new technologies. AB 2213 (Fuentes, 2010) removed a statutory barrier to wireless lifeline by making each household eligible rather than a physical residence. Today, the program still offers a price discount only for landline basic service. In December 2012, the CPUC redefined basic service to be technology neutral, but in effect only landline currently can comply with the many basic service elements and requirements listed in Attachment A. Based on that decision, the CPUC in April 2013 commenced a new phase of a multi-year proceeding to consider whether wireless and other alternative providers can provide California lifeline service, consistent with the new basic service definition. The scoping memo indicated that an initial phase, to be completed within 18 months, would consider wireless service, with a possible second phase to consider VoIP. The Assigned Commissioner, who is holding statewide public participation hearings to get customer input on what features wireless lifeline service should include, has recently expressed intent to issue a proposed decision by October 2013. Meanwhile, participation in California's basic service lifeline program has declined from nearly 3.1 million participants in 2006 to about 1.5 million in April 2012, a decline of about 50 percent. The decline mirrors a migration away from landline service by all customers, but also may reflect the change from self-certification to verification of eligibility. Industry estimates that up to 3.7 million Californians may be eligible for lifeline. COMMENTS 1. Author's Purpose . According to the author: "The LifeLine program limits low-income customers to wireline telephone service only. Changes in technology and consumer behavior have created a shift in lifeline subscriptions. This bill reforms and modernizes the program by establishing an approved financial support amount that consumers can use on the voice service that meets their needs. The bill also ensures that existing wireline lifeline customers are not impacted by program reforms and maintains all existing state and federal consumer safeguards for wireline, wireless and VoIP service." 2. A Discount Coupon for any Voice Service . This bill makes no significant change to who qualifies as an eligible lifeline customer, but makes a significant change to what that customer gets. It changes the lifeline program from offering an eligible low-income customer a special class of service (which so far has been only landline voice service) at a fixed low rate to instead offering a fixed support amount that the customer can use like a discount coupon to reduce the price of any voice communications service (landline, wireless, prepaid wireless, or VoIP). It enables a lifeline customer to receive that service under the same terms and conditions and under the same regulations as any non-lifeline customer. Today, an eligible customer has only one choice for California lifeline service - landline - but with the certainty of a fixed low rate. Under this bill, the customer would have a discount of $11.85 that can be applied to any bundle or package of service that includes voice service. 3. Low-Income Customers Want Wireless Service, Especially Prepaid Wireless . Low-income customers are no different than anyone else in wanting to enjoy the convenience and mobility of wireless service. No stakeholder disputes this. The CPUC Assigned Commissioner reports that this has been a theme of recent public participation hearings on lifeline service. Industry proponents of the bill point out the growing number of low-income customers who are opting for wireless service even without a state subsidy. Prepaid wireless, like the service options offered by federal providers now in California, are especially attractive to low-income customers because of no long-term contract, no connection charge, free handsets, and options to buy increased voice and data usage on a month-to-month basis. 4. Do Low-Income Customers Need a Special Kind of Wireless Service ? The CPUC and consumer groups state that lifeline customers should get their own special class of wireless service with attributes prescribed by the CPUC that may exceed what the federal rules require, including, among others, a minimum number of minutes and texts per month, guaranteed coverage in the home, and service quality standards not already applicable to wireless. Service providers supporting the bill claim that the CPUC, in its proceeding, is likely to prescribe wireless service elements for lifeline customers so different from how they offer wireless service to non-lifeline customers that they will not be willing to participate in the state lifeline program (and the CPUC does not have authority to require them to do so). Providers argue that lifeline customers, like other customers, should be able to choose among the many wireless service offerings a plan that most suits their individual needs (just as many are doing now even without a state lifeline subsidy). 5. Maintaining Basic Service and COLR Obligations . The CPUC and consumer groups state that this bill will reduce consumer protections for lifeline customers because wireless service and VoIP service are regulated differently than landline service, especially regarding the CPUC's authority to handle customer complaints. However, nothing in this bill requires a lifeline customer to choose wireless or VoIP service. Moreover, the author states that this bill maintains all consumer protections on existing services and ensures that existing wireline lifeline customers are not impacted by reforms in the program. According to the author, there is no intent to eliminate or diminish the Carrier of Last Resort (COLR) obligation to provide basic service (which is subject to the greatest level of regulation) to any customer upon request. Thus, if this bill is enacted, any lifeline customer who prefers basic service will retain the option to get that service upon request from their COLR provider of basic service. However, some language in this bill creates ambiguity as to the author's intent. On page 7, lines 36 to 37 of the bill, it is unclear why the mandate to offer basic service references "as of January 1, 2013." On page 8, lines 1-3, the bill states that any lifeline provider, including a local exchange carrier, may use any technology, or multiple technologies, within the provider's service territory." This could potentially be interpreted to allow a COLR local exchange carrier to meet its basic service obligation with a technology that does not meet the CPUC's definition of basic service. On page 11, lines 24-28, the bill states that the CPUC, shall not, as a condition for designating ETCs or lifeline providers, impose any obligation that exceeds the obligations in federal rules for designated ETCs. This presumably does not affect any obligation a COLR otherwise has to provide basic service. On page 11, lines 29-33, the bill provides that the CPUC shall require a lifeline provider to offer only the minimum service elements to eligible lifeline customers as required by the FCC for federal lifeline. To be consistent with the author's intent, that provision would apply to the lifeline service except to the extent that a COLR is still required to provide basic service to any customer upon request, including any lifeline customer. Thus, to ensure consistency with the author's intent that this bill has no impact on the COLR obligation to provide basic service, and that any lifeline eligible customer will still have access to basic service upon request, the author and committee may wish to consider amending the bill to strike the reference to "as of January 1, 2013," and to explicitly state that the other identified provisions, or any provision in this bill, shall not be construed to eliminate or diminish the COLR obligation to provide basic service to any customer upon request, including any lifeline-eligible customer. 6. Is Affordability Threatened with No Fixed Rate and Surcharges ? This bill replaces the current fixed rate of no more than $6.84 per month for lifeline basic service with a fixed support amount for the provider. It is possible that the $11.85 state support, plus the $9.25 federal subsidy, could equal more than a provider's charge for service, leaving the customer with no charge. On the other hand, as TURN and other consumer groups point out, the elimination of a fixed rate, and with no cap on basic service rates, could make service unaffordable for low-income customers as basic rates increase. This bill also repeals current law that exempts lifeline customers from paying surcharges for public purpose programs and the state 911 program, although it is unclear if surcharge rates would be calculated on the service charge before or after the discount is applied. The bill on page 10, line 35 provides that an eligible customer shall not be entitled to any combined monthly federal and state support in excess of the customer's "monthly rate," which is unclear if that includes surcharges or just the service rate. All of these issues need clarification to enable a more precise determination of affordability. While the bill is intended to afford low-income customers many new low-cost or no-cost wireless service options, the author also intends to minimize impact on customers who still want to retain basic service lifeline with a fixed rate. Thus, the author and committee may wish to consider amending the bill with language proposed by the author to guarantee a fixed rate for the landline basic service option for a temporary transition period as follows: Until December 31, 2014, all providers participating in the California lifeline program shall be required to offer lifeline service at the same rates that were in effect on July 1, 2013. 7. Is Subsidy for Service Connection Charge Necessary ? This bill limits to $10 the charge a lifeline customer may pay for commencing service and authorizes a provider to be reimbursed the difference paid by non-lifeline customers up to $40 per service connection, with no cap on how often it is paid. The current state lifeline program authorizes carrier recovery of up to $39 per connection. The FCC eliminated the federal "LinkUp" service connection subsidy, concluding that it offers potential for waste, fraud and abuse and that the availability of a subsidy invites carriers to impose a service connection charge they might not otherwise impose. The lack of any limit on service connection subsidies also invites churn whereby customers could frequently change providers, increasing program costs. The author and committee may wish to consider amending the bill to eliminate the service connection subsidy except for a COLR providing lifeline service. 8. Removing Delay for Customers to Become Eligible for Lifeline Service . This bill prohibits the CPUC's current requirement that a customer seeking to get lifeline service must first establish service before being certified as eligible. This practice requires carriers to then provide a refund for the period of time an eligible customer paid for service at the regular rate, which is burdensome and adds to program costs. Stakeholders appear to universally agree with this change. At least one carrier which already provides prepaid wireless service in California under the federal program states that this is the single biggest barrier to allowing customers to subscribe to their service. Changing this requirement immediately would enable many California customers to obtain a free telephone and free calling plans from existing federal lifeline providers. To make this change effective as quickly as possible, perhaps this bill should have an urgency clause. 9. Removing Delay in Designating Lifeline Providers . According to the author, this bill seeks to address current CPUC delay in designating providers as ETCs and to prevent potential CPUC delay in its new duty required by this bill to designate state lifeline providers. This designation is required for providers to obtain lifeline subsidies to cover their cost of giving lifeline customers a price discount. Unnecessary regulatory delay in designating providers slows market entry by new competitors and delays lifeline customers' access to low-cost service options. Delay in ETC designation also impedes flow of federal lifeline dollars to California, creating more demand on the state lifeline fund. For example, the request of Cox Communications for ETC designation has been stalled for nearly a year because of claims that designation may be unauthorized by the prohibition on CPUC regulation of VoIP service in section 710 of the Public Utilities Code, enacted by SB 1161 (Padilla, 2012). Cox provides basic service to residential customers, in part with VoIP service, and serves about 50,000 low-income customers under the state lifeline program. If granted ETC status, it could draw federal lifeline subsidies. An Assigned Commissioner's ruling in late February expanded the Cox ETC application to include many questions on CPUC authority over VoIP. Cox and others responded that such a broad inquiry was not necessary because section 710 restricts regulation of a service, not a provider, and SB 1161 was specifically amended to be clear on that distinction. Cox also cited to a prior CPUC decision which concluded that requiring wireless and VoIP service providers that voluntarily participate in the California lifeline program to comply with lifeline program rules does not constitute regulation of those carriers. In seeking to address this problem the bill, on page 11, lines 22-24, states that the CPUC "shall, upon a request of a provider, designate the lifeline provider" as an ETC. The CPUC and others correctly point out that this language could require the CPUC to violate federal law that specifies ETC designation requirements. But the Legislature could direct the CPUC on how to exercise its discretion not inconsistent with federal law. Thus, to prevent the CPUC from misconstruing section 710 in connection with lifeline, the author and committee may wish to consider amending the bill to provide that the CPUC shall not, in exercising its discretion under federal law in designating ETCs, or in exercising its authority to designate state lifeline providers, deny a request to be designated based on the requesting entity providing any VoIP or IP-enabled service. 10. Removing a Barrier to Entry for Providers Offering VoIP Service . As in the Cox application, wide-ranging questions about CPUC authority over VoIP providers have been raised in applications to the CPUC for certificates of public convenience and necessity (CPCNs) by entities seeking authority to provide service. This also could impede a competitive marketplace for lifeline service (and other services) unless the Legislature expressly clarifies that the CPUC may not deny a new CPCN or revoke an existing CPCN based on the underlying technology used to provide service. CALTEL, a trade association for competitive local exchange carrier (CLECs) that use both circuit-switched and VoIP/IP-enabled technologies to provide services to hundreds of thousands of business and residential customers, fear that its members' CPCNs are in jeopardy, which would eliminate their ability to get interconnection and wholesale inputs to provide service. CalTel objects to this "piecemeal approach" in application proceedings, which it claims is "unfair and inefficient, and violates notice and due process rights." Moreover, it delays new entry by CLECs that could be lifeline providers. In order to remove the current business uncertainty for existing CLECs and new entrants and to remove this barrier to CLECs' participation in the Lifeline program, the author and committee may wish to consider amending the bill by adding the following new section to the Public Utilities Code: The commission shall neither deny nor revoke certificates of public convenience and necessity to carriers that provide retail or wholesale telecommunications services on the grounds that such carriers also provide Voice over Internet Protocol service or any other unregulated service. Nothing in this section expands the commission's existing jurisdiction over any service or affects any provision of section 710. Nothing in this section gives any carrier any new rights or powers. 11. Lifeline Providers Should Pay All Surcharges . This bill makes it a condition of being a lifeline provider that the provider collect and remit surcharges for the lifeline program. Current law requires all landline, wireless and VoIP service customers, including prepaid service, to contribute to all the CPUC public purpose programs and the state 911 program. Thus, the author and committee may wish to consider amending the bill to require a lifeline provider to collect and remit surcharges for all the CPUC public purpose programs listed in Section 270 of the Public Utilities Code, as well as the state 911 fee pursuant to Section 41030 of the Revenue and Taxation Code. 12. Providers Have a Role in Customer Notification . Current law provides that every means should be employed by the CPUC and telephone corporations to ensure that every household qualified to receive lifeline telephone service is informed of and is afforded the opportunity to subscribe to lifeline service. General Order 153 requires California lifeline providers to send all residential customers an annual notice of availability, terms, and conditions of California lifeline, inform new potential customers about lifeline and how to apply, and provide 30 days notice to lifeline customers of any increase in rates, service restrictions, or withdrawal from offering service, with notices in the same language as sales information. This bill removes this obligation from telephone corporations and prohibits the CPUC from imposing any advertising obligations other than those required by federal law, which include advertising the availability of lifeline service and rates using media of general distribution, and publicizing the availability of service in a manner reasonably designed to reach those likely to qualify for service. The author states his intent to amend the bill by adding the following: Every lifeline provider, on first contact by a prospective eligible customer, shall inform the customer of the availability of the lifeline discount and how they may qualify for and obtain the discount. Such customers shall be presented with information orally, electronically, or in print form. This amendment adds to what is otherwise required of wireless providers under the federal rules. However, it is less than what is currently required for COLRs' provision of basic service. To be consistent with the author's intent that this bill has no impact on the COLR obligation to provide basic service, and that any lifeline eligible customer will still have access to basic service upon request, the author and committee may wish to consider amending the bill with the author's language and to state that a COLR that is a lifeline provider remains subject to any customer notification obligations applicable to basic service. 13. CPUC Authority Limited to Implementation . This bill requires a lifeline provider to agree to comply with and be held liable for any violations of the requirements of the bill and any CPUC rules implementing this bill. Section 21 of the bill, which is uncodified, requires the CPUC to revise General Order 153 by May 1, 2014, to confirm with the bill and provides that the CPUC "shall not adopt any obligations, rules, or standards that exceed, or otherwise add to, those that are expressly required by this act." The CPUC and other stakeholders point out that this language is overly restrictive and in practical effect cripples the CPUC from administering the program. In response, the author has proposed to clarify the intent: (1) authorize the CPUC to implement the express requirements of the bill so that a lifeline customer can apply the discount to any service that is otherwise available to any non-lifeline customer; and (2) prohibit the CPUC from imposing any new requirement on the provision of that service different from how it is provided to non-lifeline customers. The author and committee may wish to consider amending the bill by striking Section 21 at page 16, lines 25-33, and replacing it with the following: (a) This act does not create or expand commission jurisdiction over any provider, service or technology. In implementing this act, the commission shall not impose any new obligation, standard, or requirement upon any provider, service, or technology that is not expressly required by the act. (b) By May 1, 2014, the commission shall revise General Order 153 to bring it into compliance with the changes made by this act. The commission shall eliminate or modify any rule that imposes substantive requirements upon lifeline providers beyond the express terms of this act, but may retain, modify or enact rules governing the administration of the lifeline program that are not inconsistent with this act, including rules governing enrollment processes, eligibility forms, the third-party administrator, the calculation of the fund and establishment of the surcharge, reporting and remittances of surcharges, use of electronic communications, and audits and records. The commission shall allow a lifeline provider a reasonable period of time to implement the requirements or obligations of this act. 14. Cap on Program Surcharge . The lifeline program is funded by a ratepayer surcharge imposed on intrastate services of all landline, wireless and VoIP customers. The rate is currently set at about 1.5 percent. This bill sets a cap of 3.3 percent, which potentially could have the effect of precluding eligible customers from participating in the program. Other measures may be available to contain program costs that do not risk excluding eligible customers, such as eliminating the service connection subsidy. Moreover, the bill requires an annual report to the Legislature on the fiscal status of the lifeline fund, along with options for controlling costs. 15. Ratepayer Impact . This bill is likely to significantly increase costs of the state lifeline program funded by a ratepayer surcharge. ASSEMBLY VOTES* Assembly Floor (74-0) Assembly Appropriations Committee (17-0) Assembly Utilities and Commerce Committee (15-0) *Prior votes not relevant POSITIONS Sponsor: Author Support: Alliance Against Family Violence and Sexual Assault American GI Forum of California Amethod Public Schools Asian Pacific islander American Public Affairs Association AT&T BPSOS-California Bakersfield Homeless Center Brotherhood Crusade California Black Chamber of Commerce California Cable & Telecommunications Association California Chamber of Commerce California Hispanic Chambers of Commerce California Partnership to End Domestic Violence California State Conference of the NAACP Center for Fathers and Families COFEM Community Youth Center of San Francisco Congress of California Seniors Support: (Continued) ----------------------------------------------------------------- |CTIA-The Wireless Association |Mexican American Legal Defense | |Eskaton Foundation |and Educational Fund | |Florence Douglas Senior Center |Mobile Future | |Fresno Barrios Unidos |Monument Crisis Center | |Frontier Communications |OneChild | |Greater Los Angeles African |Proyecto Pastoral at Dolores | |American Chamber of Commerce |Mission | |I-5 Social Services Corporation |PUENTE Learning Center | |Jenesse Center, Inc. |Self-Help for the Elderly | |La Maestra Community Health |TechAmerica | |Centers |The Arc San Francisco | |Latin Business Association |United Cambodian Community | |Los Angeles Urban League Works |Verizon California, Inc. | | |Watts/Century Latino | | |Organization | | | | ----------------------------------------------------------------- Oppose: --------------------------------------------------------------- |AARP, California |Inland Congregations United | |Access Humboldt |for Change | |African American Lutheran |Inland Empire Concerned | |Association |African American Churches | |Allen Chapel African Methodist |Inland Empire Latino Coalition | |Episcopal Church |Knotts Family Agency | |Alliance for African |Media Alliance | |Assistance |Messiah Lutheran | |BLU Educational Services |Milestone Consulting | |California Labor Federation |Parents and Communities | |California Public Utilities |Engaged for Education | |Commission |Predestined in Christ | |California's One Million NIU |San Diego Area Congregations | |Coalition |for Change | |Cathedral of Praise |San Diego Black Health | |Central City SRO Collaborative |Associates | |Centro La Familia Advocacy |San Diego Consumers' Action | |Service, Inc. |Network | |Chicana Latina Foundation |St. Paul A.M.E. | |Coalition for Economic |Talented and gifted in the | |Survival |Inland Empire | |Communications Workers of |Tenderloin Neighborhood | |America, # 9 |Development Corporation | |Congregations Organized for |The Center of High Church | |Prophetic Engagement |The Earth Center | |Consumer Federation of |The Greenlining Institute | |California |The Kemet Coalition, Inc. | |Davis Media Access |The Lord's Gym | |Division of Ratepayer |The Utility Reform Network | |Advocates |West Fresno Family Resources | |Eagles Wing Christian Church |Center | |El Concilio of San Mateo |Word in Action | |County |Young Visionaries | |Ephesians New Testament Church |11 individuals | |Faith Temple Apostolic Church | | |Greater Light Community Church | | |Imani Temple Church | | --------------------------------------------------------------- Jacqueline Kinney AB 1407 Analysis Hearing Date: July 8, 2013 ATTACHMENT New Basic Service Definition from Decision 12-12-038 At a minimum, the following service elements must be offered on a nondiscriminatory basis by any carrier providing Residential Basic Telephone Service (basic service) within California. These revised basic service elements do not impose an obligation to provide basic service upon any carrier where no such obligation exists today. Nor do they prohibit a carrier from electing to provide additional elements as part of its basic service offering. Any carrier may use any technology to satisfy any obligation to provide basic service as detailed below: I. Basic Service Elements: 1. The provider must offer customers the ability to place and receive voicegrade calls over all distances utilizing the public switched telephone network or successor network. a. Carriers offering basic service must at a minimum enable calls to be sent and received within a local exchange or over an equivalent or larger-sized local calling area. b. A basic service provider must allow equal access to all interexchange carriers within the local calling area in accordance with state and federal law and regulation. c. Carriers offering basic service must provide a voice-grade connection from the customer residence to the public switched telephone network or successor network. d. Carriers offering basic service must disclose to each customer before subscription that they are entitled to a voicegrade connection and the conditions under which the customer may terminate service without penalty if one cannot be provided. e. If at any time, a basic service customer fails to receive a voicegrade connection to the residence and notifies the provider, the basic service provider is required to (1) promptly restore the voice-grade connection, or if not possible (2) provide basic service to that customer using a different technology if offered by the provider and if the customer agrees; or (3) allow the customer to discontinue service without incurring early termination fees, if applicable. Nothing in these rules should be inferred as modifying the service obligation of a Carrier of Last Resort (COLR) to ensure continuity of customers' basic service. 1. Free access to 911/Enhanced 911 (E911) service. a. A basic service provider must provide free access to 911/E911 emergency services, in compliance with current state and federal laws and regulations. b. Any carrier that is not a traditional wireline provider of basic service will be required to make a showing by filing a Tier 3 Advice Letter that demonstrates its ability to provide 911/E911 location accuracy and reliability that is at a minimum at least reasonably comparable, but not necessarily identical to, that traditional wireline service offered by the existing COLR. c. The basic service provider will further be required to certify in a Tier 3 Advice Letter filing that it is compliant with 911/E911 standards established by state and federal laws and regulations, and will not be deemed to provide basic service if it has obtained a waiver from such state and federal laws and regulations. d. Each basic service provider must provide its potential and existing customers information regarding its 911/E911 emergency services location accuracy and reliability standards. 1. Access to directory services. a. Each basic service provider must offer access to directory assistance within the customer's local community that covers an area at least equivalent to the size of the geographic area the existing COLR's directory assistance service provides. b. For basic service provided by other than a traditional wireline carrier, a customer's listing may be excluded from the local directory and directory assistance as a default unless the subscriber affirmatively requests to have the number listed. c. For basic service provided by a traditional wireline carrier, a customer's listing shall be included for free in the local directory and directory assistance as a default unless the customer affirmatively requests to have the number unlisted. d. A basic service provider must provide customers the option to receive a free white pages directory covering the local community in which the customer resides. For purposes of this definition, the local community shall include a geographic region at least equivalent to the area covered by the white pages directory that the existing COLR currently provides. e. Because Verizon California, Inc. (Verizon) and other providers of basic service to customers residing in Verizon's service territory have been authorized to provide electronic delivery pursuant to Resolution T17302, that authorization is compliant with the white pages directory requirement for basic service in Verizons territory. f. The requirement to provide a free published directory can be satisfied using the procedures authorized in Resolution T17302 in other territories upon the filing of a Tier 2 Advice Letter. Under this authorization, the affected customers will receive delivery of the directory electronically by CD-ROM or by online access, unless a customer affirmatively elects to receive a traditiong.al printed paper copy by contacting the basic service provider under the procedures authorized in Resolution T17302. 1. Billing Provisions a. Providers of basic service must offer customers the option to receive unlimited incoming calls without incurring a perminute or per-call charge. b. Carriers offering basic service must offer a flat rate option for unlimited outgoing calls that at a minimum mirrors the local exchange or an equivalent or larger sized local calling area in which the basic service customer resides. c. Basic service must be offered on a non-discriminatory basis to all residential households within the provider's service territory. A carrier may satisfy this obligation using different technologies throughout its service territory. d. Basic service providers must offer Lifeline rates on a non-discriminatory basis to any customers meeting Lifeline eligibility requirements residing within the service territory where the provider offers basic service. e. Carriers providing basic service must offer an option with monthly rates and without contract or early termination penalties. f. Carriers may offer added features and/or enhanced serve elements without additional charge(s) as part of a basic service offering. For example, carriers must not obligate customers to also subscribe to service bundles that require subscription to data and/or video services as a condition of receiving basic service. g. As of January 1, 2011, the California Public Utilities Commission (CPUC) no longer imposes caps on basic rates. A COLR serving in a high-cost area, however, will continue to be required to certify that its basic rate in a designated high-cost area does not exceed 150% of the highest basic rate charged by a COLR in California outside of the high-cost area. 1. Access to 800 and 8YY Toll-Free Services. a. Each provider of basic service must offer at least one basic service option that allows unlimited calls to 800 and 8YY toll-free numbers with no additional usage charges for such calls. A provider may offer alternative billing plans for basic service that may include usage charges for calls to 800 and 8YY toll-free numbers. b. In any event, the carrier must provide full disclosure to the customer concerning how charges for 800 numbers would apply if the customer does not subscribe to an unlimited calling flat rate option. 1. Access to Telephone Relay Service as Provided for in Public Utilities Code Section 2881. Basic service providers must offer free access to California Relay Service pursuant to Section 2881 for deaf or hearing-impaired persons or individuals with speech disabilities. 2. Free Access to Customer Service for Information about Universal Lifeline Telephone Service (ULTS) Service Activation, Service Termination, Service Repair and Bill Inquiries. The basic service provider shall provide free access to customer service for information about the above-referenced services. 3. One-Time Free Blocking for Information Services, and One-Time Billing Adjustments for Charges Incurred Inadvertently, Mistakenly, or Without Authorization. Basic service must include the provision of one-time free blocking for 900/976 information services and one-time free billing adjustments for changes inadvertently or mistakenly incurred, or without authorization. 4. Access to operator services Basic service shall include free access to operator services. II. General Requirements In addition to the basic service elements and related requirements listed above, basic service shall be provided consistent with the following requirements. a. A basic service provider must file and maintain tariffs or schedules with the CPUC by a Tier 2 Advice Letter for its basic service offerings which must include its basic service rates, charges, terms, and conditions; and must make them publicly available. Requirements for customer notice and/or CPUC filings for revisions in basic service rates, charges, terms, and/or conditions must be made in accordance with the applicable requirements for tariff filings set forth in General Order 96-B. b. If a carrier chooses to offer basic service in all or part of its service territory using multiple, different technologies, each type of offering must be tariffed or scheduled with the CPUC. This requirement does not extend beyond basic service. c. Each basic service provider must clearly inform all potential residential subscribers who contact the provider prior to initiating service of their option to purchase basic service and to subscribe to basic service on a month-to-month basis with no termed contracts. d. A provider must not represent to customers, or in advertising or by any other means, that any services, service elements, or service conditions, except those authorized by the CPUC, constitute basic service in California. e. Until the CPUC determines the extent to which new service quality standards should be adopted for carriers, a provider that wishes to offer basic service utilizing anything other than traditional exchange-based wireline technology that cannot comply with all the requirements of General Order 133-C must file a Tier 3 advice letter. f. This filing must indicate what General Order 133-C service quality measurements and reporting procedures it can comply with, those it can provide functionally equivalent reporting information for and lastly what measurement and reporting requirements are not applicable to the technology it is using to provide basic service. This filing must further indicate how the new service or new technology maintains essential basic services or standards.