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ALJ/PSW/sid * Mailed 5/29/2001

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Rulemaking on the Commission's Own Motion to Comply with the Mandates of Senate Bill 1712.

FILED

PUBLIC UTILITIES COMMISSION

MAY 24, 2001

SAN FRANCISCO OFFICE

RULEMAKING 01-05-046

ORDER INSTITUTING RULEMAKING

I. Introduction

The Commission initiates this proceeding in response to Senate Bill (SB) 1712 (Polanco, Ch. 943, Stats. 2000), which was enacted during the 2000 legislative session. A copy of SB 1712 is attached to this Order Instituting Rulemaking (OIR) as Attachment A. SB 1712 requires the Commission to open a proceeding to "examine the current and future definitions of universal service" and to report its findings and recommendations to the Legislature on or before January 1, 2002. In particular, SB 1712 directs the Commission to investigate "the feasibility of redefining universal telephone service by incorporating two-way voice, video, and data service as components of basic service." SB 1712 lays out numerous objectives for this proceeding, which are detailed below, and directs the Commission to hold public hearings to encourage participation by a broad and diverse range of interests from all areas of the state.

Integrally related to the issues raised by SB 1712 is the definition of universal service this Commission adopted in D.96-10-066. A copy of the adopted universal service definition is attached to this OIR as Attachment B. The adopted definition essentially reflects this Commission's determination, in 1996,

as to what telecommunications services are so essential as to be considered a necessary part of basic service and therefore subject to support mechanisms to ensure their availability. D.96-10-066 also established a process for customers or carriers to petition the Commission for additions to the definition of basic service and established criteria to be used to evaluate such requests. (D.96-10-066, App. B at 6, 68 CPUC2d at 673-674). No parties have yet petitioned the Commission for a review of the basic service definition. Nevertheless, because a review of the definition of basic service is squarely raised by SB 1712, this proceeding will include a review of the definition of basic service adopted in D.96-10-066.

This OIR initiates and charts a process to achieve the objectives and directives of SB 1712 and to review and reconsider the definition of basic service adopted in D.96-10-066.

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