The California Public Utilities CPUC (CPUC) released a Proposed Decision on February 20, 2015 denying a petition by Google Fiber Inc. (Google) to modify the CPUC’s Video Service Provider Decision or DIVCA Order. Google’s proposed modification would have allowed it and all other state-franchised video service providers (VSPs) the right to access utility poles, ducts and rights-of-way under the terms of the CPUC’s 1998 ROW rules. Those rules, which were adopted in Decision 98-10-058 (ROW Order), 82 CPUC 2d 510 (1998), as amended, provide only cable TV corporations and competitive local communications carriers (CLCs) the right to access utility infrastructure, and have never been amended to include VSPs like Google. Although some VSPs may be cable TV corporations, and thus eligible to demand access under the ROW Rules, the CPUC found that it could not force VSPs like Google to comply with the CPUC’s safety rules because those rules are only applicable to defined public utilities, which does not include VSPs. For mainly this reason, the CPUC denied Google’s petition and declined to modify its earlier DIVCA Order to allow VSPs rights under the ROW Order. The CPUC left open the possibility of a different result after the Federal Communications Commission (FCC) issues the text of its recent ruling reclassifying broadband service as a federal Title II common carrier service. Following that ruling a VSP providing Internet access might become a CLC entitled to access rights under the ROW Order.
In the 1998 ROW Order, the CPUC asserted its authority to regulate pole attachments (reverse preemption of FCC jurisdiction) and adopted ROW rules providing CLCs and cable TV corporations with nondiscriminatory access to utility infrastructure owned by the state’s large and mid-sized incumbent local exchange carriers and major investor-owned electric utilities. The ROW rules not only require the enumerated utilities to provide access to their infrastructure but also address timeframes for access, safety standards, and cap pole attachment rates at the equivalent of what the FCC’s cable formula would yield.
In 2006, the state legislature passed the Digital Infrastructure and Video Competition Act (DIVCA). According to the Proposed Decision, DIVCA was enacted “to promote competition for broadband and video services in order to provide consumers with more choice and lower prices; accelerate the deployment of new communication and broadband technologies; and provide social and economic benefits.” DIVCA directed the CPUC to “establish and administer a new state franchise authorization process for” VSPs, pursuant to which the CPUC became the state’s sole franchising authority for issuing state video franchises. In the DIVCA Order, the CPUC adopted General Order 169 to implement the processes and procedures for carrying out its obligations under DIVCA. The CPUC determined in the DIVCA Order that its authority over VSPs was limited because VSPs are not “public utilities” under California law. For example, the CPUC concluded that it lacked authority to enforce its safety rules, such as GO 95, with respect to VSPs.
Google became a VSP in 2011. While Google does not currently offer video services in California, it is exploring service in several communities, according to the Proposed Decision. Google claims that unlike cable TV corporations (which have access rights under the ROW Order), VSPs lack mandatory access rights to utility infrastructure, in part, because the DIVCA Order does not grant such rights. As a result, according to Google, some utilities refuse to negotiate pole attachment agreements or provide access. Google’s Petition, which was filed last July, therefore sought, inter alia, to have the CPUC modify the DIVCA Order so that VSPs could take advantage of the ROW Rules and “level [the] playing field” between VSPs and cable TV corporations. Indeed, the electric utilities involved in the proceeding admitted that because VSPs were not subject to the CPUC’s safety rules, their contracts with VSPs “come at a higher cost than the ROW Rules, but that cost reflects the shift of [safety] oversight from the [CPUC] to the public utility.”
Nevertheless, and unfortunately for Google, the CPUC denied Google’s Petition ruling that it “lacks specific authority under the California Public Utilities Code to (1) grant [VSPs] the right to access public utility infrastructure, and (2) promulgate and enforce safety regulations with respect to VSPs,” and concluded “that it is not in the public interest to grant VSPs the right to use utility infrastructure,” chiefly for safety reasons.
That said, the CPUC left the “mandatory access” door open to Google and other VSPs in two interesting ways. First, the CPUC explained that while all VSPs are not cable TV corporations, as defined by state law, some VSPs may be cable TV corporations and thus covered by the ROW Rules. The CPUC, however, declined to “reach the issue [in the Proposed Decision] of how to distinguish [VSPs] that are cable TV corporations from those that are not. . . .”. Second, and perhaps more interesting, the CPUC referenced the FCC’s February 4, 2015 “Fact Sheet” outlining its proposed Net Neutrality rules (the text of which has yet to be released). The Fact Sheet indicates that the reclassification of retail broadband Internet access service as a “telecommunications service” would endow providers like Google with the protections of Section 224 of the federal Communications Act, also known as the Pole Attachment Act (see our advisories before and after the FCC vote on Feb. 26). Currently, only “cable television systems” and “providers of telecommunications service” are covered by Section 224, which requires investor-owned utilities to provide access to their infrastructure. The CPUC explained that its Proposed Decision “evaluates Google’s Petition largely in the context of California law . . . and does not take into consideration what effects, if any, the FCC’s proposed rules may have on Google’s Petition.”
Whether or not the CPUC reevaluates its decision once the FCC releases the text of its draft rules, which is expected shortly, remains to be seen. According to a cover letter accompanying the Proposed Decision, the earliest the CPUC will make a final decision on Google’s Petition is at its March 26, 2015 Business Meeting. Stay tuned.