On March 4, 2021, the California Public Utilities Commission (Commission) initiated the Order Instituting Rulemaking to Update Surcharge Mechanisms to ensure Equity and Transparency of Fees, Taxes and Surcharges Assessed on Customers of Telecommunications Services in California to address the need for a sustainable and cost-effective method to fund the state’s Universal Service Public Purpose Programs (PPPs). The current funding mechanism for PPPs, based on a percentage surcharge applied to intrastate telecommunications services revenue, is not sustainable due to the continuing decline of intrastate revenue billing base being reported by service providers.

The proceeding proposes two phases:

  • Phase 1 - Consider reforming the surcharge mechanism for the state PPPs and user fee from the existing revenue-based approach to a per access-line flat-rate end-user mechanism by January 1, 2022.
  • Phase 2 - Review the reasonableness and transparency of the PPP surcharges and user fees that telecommunications service providers impose on end users, as well as additional taxes, fees and surcharges assessed by federal, state, and local governments.

On June 28, 2021 President Batjer released a scoping memo, staff report - part 1 and data request for the Surcharge and Fee Proceeding. These documents are available here:

  • The Assigned Commissioner’s Scoping Memo and Ruling is available here.
  • The Data Request for all communications companies licensed by the Commission is available here.
  • The Staff Report – Part 1 is available here.
  • The worksheet providing detailed breakouts of consumer bills that is referenced in the Staff Report – Part 1  is available here.

 

On October 29, 2021, the assigned ALJ released staff report - part 2.  These documents are available here:

  • The Staff Report - Part 2 is available here.
  • Spreadsheet providing total carriers’ subscription and revenue data for year 2020 that is referenced in the Staff Report - Part 2, Section III.A is available here.

All filings related to this proceeding, including documents, rulings, decisions, and public comments are available here.

The Decision to open this Order Instituting Rulemaking, voted out on March 4, 2021, is available here.

Related Divisions