California Regulators Dig in on Investigating AT&T, Verizon Service Quality

The CPUC proceeding has been ongoing and greatly debated since 2011, with concern for what oversight of telcos is necessary and what penalties the CPUC should potentially levy against service quality shortcomers. The docket includes one proposed decision from a CPUC commissioner in January (http://bit.ly/WRKRQD), a workshop from that same month and a CPUC scoping memo last fall suggesting potential focus (http://bit.ly/YujYpn). The CPUC is considering commissioning an independent consultant and may conduct hearings based on the consultant’s findings. It anticipates a proceeding decision in late 2014.

Verizon and AT&T want to limit any studies. “TURN [The Utility Reform Network], CALTEL, DRA [CPUC Division of Ratepayer Advocates], CWA [Communication Workers of America], tw telecom and others propose an expansive study virtually unlimited in scope addressing nearly every aspect of the companies’ operations, practices and policies,” Verizon told the CPUC Monday (http://bit.ly/X5tyNp). “In so doing, they attempt to transform this rulemaking into a detailed investigation of the historical operating performance of two companies, Verizon and AT&T.” It suggested the CPUC keep its study to “an objective analysis of the condition of the wireline network, focusing on residential voice service” and ensure any consultant comes in without bias and conducts a study in a timely fashion.

Verizon California, in separate comments (http://bit.ly/YQ4g0T), said Verizon should have “significant input in developing the RFP and in working with any third-party contractor to ensure that any infrastructure study does not adversely affect Verizon’s day-to-day operations.” AT&T California said other stakeholders have raised issues “clearly beyond the scope of the evaluation as set forth in the scoping memo and would lead the Commission down many rabbit holes” (http://bit.ly/Yb1DLH). It encouraged the CPUC to keep its study to the scoping memo and focus on areas where winter storms were shown to have hurt facilities in 2010. The telco wants the ability to comment on any draft RFP seeking a consultant, and it suggests AT&T and Verizon be allowed to comment on a draft report before the release of a final version.

The Greenlining Institute criticized AT&T and Verizon’s proposals as “unnecessarily narrow” and proposed a broader framework, with attention to procedural safeguards, a look at the integrity of the ILECs’ records and other dimensions related to the companies’ infrastructure (http://bit.ly/YugS4F). It wants the study to include interviews with the telcos’ employees and examine staffing levels. “A study using the parameters described by AT&T and Verizon at the [January] workshop would lead to a report based on insufficient and potentially biased information, and an unrepresentative sample of geographic areas,” the institute told the CPUC. “Additionally, such a study would disregard AT&T and Verizon’s investment decisions, maintenance and testing policies and procedures, and staffing levels, all of which are critical factors in ensuring service quality.”

"Any meaningful investigation into the carriers’ service quality must go beyond mere examination of the actual network and examine company practices which affect service quality,” said CWA, District 9 (http://bit.ly/14lxpZz). It also argued for a broader examination, including “the carriers’ practices regarding investing in human resources and training” and a geographic scope beyond Southern California. “The RFP should be as broad as possible, and not limit the consultant’s access to types of data which might prove useful in completing the study,” the union said. In other comments also posted this week (http://bit.ly/ZotLX9), CWA said AT&T and Verizon have been “steadily downsizing for five years,” AT&T’s workforce is down 33 percent since 2006 and Verizon’s 38 percent. Such reduction “directly leads to the deterioration of the network,” CWA said. It identified “poor service quality” in Chico, Auburn, Grass Valley and the Southern California high desert.

Tw telecom cited service quality failures of Verizon and AT&T in its comments (http://bit.ly/XCdfU8). Past data troubles tw telecom, which is concerned “data for 2012 will show the same service quality shortcomings,” the telco said. It has “experienced service quality problems in and before 2012 related to the ILECs’ infrastructure and Operations Support Systems ('OSS') that have caused significant customer problems, including service degradation and outages,” it said. “Not only are these service quality issues causing difficulties for twt’s customers, but they also damage twt’s business reputation, as the customer is typically unaware that the underlying facilities are provided by the ILEC and twt has no control over them.” The CPUC should include the ILEC policies and practices as well as the problems wholesale providers experience, tw telecom said.

"The Commission should move forward with a Request for Proposal for the study of AT&T’s and Verizon’s network infrastructure and policies and procedures contemplated in the Scoping Memo,” said the CPUC’s DRA, agreeing any consultant shouldn’t have bias for or against the telcos (http://bit.ly/XCefb0). “All of the factors listed in the Scoping Memo should be examined as part of the study because they are critical factors that affect service quality.” It disagreed that the focus should be only on the areas hurt by the 2010 winter storms.

In Commissioner Mark Ferron’s proposed decision from January, he said the study is estimated to cost $1 million, an expense to be shared equally by AT&T and Verizon. That cost may be increased up to a cap of $1.5 million, he proposed. “If the Commission wants to ensure it receives the most thorough study, it should not set an arbitrary cap,” CWA said of those limits.