CPUC Rulemaking to Update Surcharge Mechanisms for Equity and Transparency in Telecommunications Services Fees

Strategic Insights -

The California Public Utilities Commission (CPUC) has initiated a rulemaking proceeding to update surcharge mechanisms for telecommunications services fees, aiming to ensure equity and transparency. Cox Communications, a major telecommunication provider, has submitted reply comments emphasizing the importance of a thorough analysis before making any decisions. The company recommends that the CPUC direct staff to submit a written report assessing the current collection mechanism, applicable state and federal laws, and the impact on both consumers and businesses.

Key Takeaways:

  • Cox California Telcom strongly recommends that the CPUC direct staff to submit a written report assessing the current end-user collection mechanism and proposing modifications.
  • The report should analyze applicable state law requirements, including California Public Utilities Code sections governing the Public Purpose Programs (PPP) and billing requirements.
  • Cox opposes assessing surcharges on broadband service, citing it as poor public policy and unlawful.
  • The Utility Reform Network and the Center for Accessible Technology's proposal to include broadband service in the surcharge collection method is premised on broadening the base of those contributing to the PPP surcharges but lacks merit and would not achieve the stated goal.
  • Assessing a per-line fee on broadband service would mean the majority of consumers would pay duplicate surcharges, with at least 7.1 million out of 11 million customers subscribing to voice service required to pay at least two per-line surcharges.
  • The CPUC's current PPP budget review process makes Phase 2 of the proceeding unnecessary, as the Commission determines the budgets and associated surcharges are reasonable through this process.

Statistics:

  • 62% of residential customers purchase voice service bundled with broadband (PAO Comments at 16).
  • 11 million customers subscribe to voice service, with 7.1 million (or 64.5%) paying at least two per-line surcharges (PAO Comments at 16).
  • 2.36 million broadband-only services and 1.5 million voice-only services were active in California as of 2020 (PAO Comments at 16).

Sources:

  • CPUC Rulemaking Document (Comments)
  • Reply Comments of Cox California Telcom, LLC
  • Comments submitted by the Utility Reform Network and the Center for Accessible Technology
  • California Public Utilities Code
  • CPUC Budget Review Process