California telecom bond issuesIn June 2013, the California PUC issued a Decision revising the registration process for wireless carriers (and the certification process for telephone corporations).   See our 6/6/13 blog posting “California PUC – Performance Bond from CPCN and WIR.”

On July 3, 2013, a group of wireless carriers filed a request for rehearing of the decision to impose a $25,000 (continuing) performance bond requirement on all wireless telecommunications carriers.

The carriers argue that the PUC is preempted from imposing a broad-based bond requirement on wireless carriers.  The carriers do not dispute that the PUC has the authority to regulate certain terms and conditions of wireless service under the Communications Act and California General Order 168.  However they assert that the bonding requirement at issue here does not fall into either category. This is because term and condition regulation is generally reserved for issues that relate to consumer welfare and does not apply to entry regulation.

The carriers also point out that the imposition of a bond requirement on wireless carriers is inconsistent with California statutes.  PU Code §1013 subsection (f) allows the PUC to require that NDIECs (i.e., IXCs) secure a bond to “facilitate the collection of fines, penalties, and restitution.”  However, other provisions of the same code section specifically exclude wireless providers from its scope.

Finally, the carriers argue that the exemptions to the bonding requirement are discriminatory and that the PUC adopted an “arbitrary and capricious” standard for exempting certain (but not other) well-established carriers from the bonding requirement.  The carriers are referring to the fact that the Decision exempts only Uniform Regulatory Framework (URF) and General Rate Case (GRC) ILEC Carriers of Last Resort and their wholly-owned and majority-owned subsidiaries and affiliates from the bonding requirement.

The carriers ask the PUC to modify the Decision accordingly.  The PUC has not reacted as yet.  Watch for further details.


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