CPUC Adopts Connections-Based USF, One-Touch Pole Attachments

California will shift to a connections-based state USF contribution method and adopt one-touch, make-ready (OTMR) rules for pole attachments, utility commissioners decided at a livestreamed meeting Thursday. Also, the California Public Utilities Commission denied -- at least for now -- eligible telecom carrier designation for Starlink, needed for federal Rural Digital Opportunity Fund (RDOF) support.

Commissioners cleared the telecom items as part of a unanimous vote on a consent agenda. Under the state USF order, carriers must count access lines to determine contributions to California public purpose programs including state USF starting April 1 (see 2210190026). The fee will be $1.11 monthly per line. Customers will see one consolidated surcharge on bills instead of six separate PPP fees. Low-income LifeLine customers and incarcerated people won’t have to pay surcharges. CTIA objected to switching from a revenue-based method but most were unopposed to the change, in comments last month (see 2209230031).

CPUC approval of the OTMR item means California utilities will have three months to implement the pole attachments policy that's based on FCC rules. The telecom industry supported adopting OTMR in comments earlier this month despite safety concerns raised by union workers and the CPUC’s enforcement division (see 2210070061). A New Hampshire committee delayed adopting similar OTMR rules earlier Thursday (see 2210200016).

The CPUC granted Starlink a certificate of public convenience and necessity (CPCN) but denied the satellite company ETC designation. Noting the FCC rejected Starlink’s long-form application for RDOF support, the CPUC’s Sept. 13 draft encouraged Starlink to reapply for ETC designation upon final approval from the FCC (see 2209150032).

The agency delayed voting on Etheric’s similar application after the company asked Commissioner Darcie Houck to hold it (see 2210130018). The proposed decision, as revised Monday, would have denied ETC designation while granting the CPCN. Commission President Alice Busching Reynolds said the item was “subject to a rate-setting deliberative meeting” and held to the Nov. 3 meeting. The delay puts the item in an ex-parte quiet period Oct. 31-Nov. 3, she said.

The CPUC initially cleared an enforcement item on T-Mobile’s allegedly false statements about its CDMA shutdown (see 2206090017) but later took back the vote. “There was a technical issue and the [modified presiding officer's decision] was not published,” so commissioners “rescinded its adoption and it will be on the Nov. 3” agenda, emailed a CPUC spokesperson: Expect the proposal to appear on that meeting’s yet-to-be-released agenda.

The change to California’s contribution method is “a well thought-out and necessary step to ensure that California is able to fund the Public Purpose Programs that help keep service available and affordable, particularly to low-income households,” emailed Paul Goodman, Center for Accessible Technology legal counsel. “It solves a long-standing problem” where “traditional telephone customers were paying too much in surcharges, while wireless and VoIP customers were not contributing their fair share.” The CPUC “will have to closely monitor the new method to ensure that the new surcharges don't cause customers any bill shock, and that low-income customers can still afford to pay their phone bill,” he added.

“CTIA opposes the regressive tax adopted by the CPUC over opposition" from industry and consumer groups, said Senior Vice President-State Affairs Jamie Hastings. "This decision shifts an undue share of the state USF funding obligation onto low-income wireless customers, with acute impacts on low-income families.”

Uncertainty lingers about key parts of the surcharge decision and how it will be implemented, said Regina Costa, The Utility Reform Network (TURN) telecom policy director. “What is clear, is that there will be a substantial shift in who will pay for the surcharge,” with much of the burden on “customers with multiple wireless lines or who are on low incomes but do not qualify for the state or federal Lifeline programs,” she said. “These likely include many households in low-income neighborhoods or people of color with modest incomes.”

TURN welcomed OTMR to California. “With the historic levels of federal and state investments for broadband deployment soon flowing to the states, the CPUC took concrete action towards addressing the sometimes years-long delays facing new attachments of broadband infrastructure to existing pole,” said Leo Fitzpatrick, TURN telecom policy analyst. “The CPUC correctly rejected proposals to delay OTMR implementation by a year and accepted a safety recommendation to require attachers to photograph their work on the poles.”

California will join a handful of other states with a flat fee, including Maine, Montana, Nebraska, New Mexico, Oklahoma and Utah. The Regulatory Commission of Alaska may consider switching to connections-based mechanism at their meeting next week, with the state’s USF sunset review appearing on the agency’s Oct. 26 agenda Wednesday.

“With the decline in intrastate telecommunications revenues, connections may prove to be a simple way to stabilize the state universal service funds until the FCC addresses the question of the overall USF methodology,” a NARUC official said. “California’s adoption of this methodology may encourage other states to consider this solution to stabilize their funds.”