DATE:	March 24, 2005
TO:	Director, Division of the Commission Clerk & Administrative Services (Bayó)
FROM:	Division of Competitive Markets & Enforcement (Buys, Casey) Office of the General Counsel (Scott)
RE:	Docket No. 050095-TL – Petition for extension and modification of existing Service Guarantee Program and for limited waiver of Rules 25-4.066(2), 25-4.070(1)(b), 25-4.070(3)(a), and 25-4.073(1)(d), F.A.C., by BellSouth Telecommunications, Inc.
AGENDA:	04/05/05 – Regular Agenda – Proposed Agency Action – Interested Persons May Participate
CRITICAL DATES:		05/03/05 – 90-day statutory deadline for rule waiver
SPECIAL INSTRUCTIONS:		None
FILE NAME AND LOCATION:		S:\PSC\CMP\WP\050095.RCM.DOC

 

Case Background

            On August 13, 2001, and February 13, 2002, the Florida Public Service Commission (Commission) issued Order Nos. PSC-01-1643-AS-TL and PSC-02-0197-PAA-TL, respectively, approving the Settlement Agreement between the Office of Public Counsel and BellSouth Telecommunications, Inc. (BellSouth), addressing BellSouth’s quality of service and granting a limited waiver of certain service quality rules.  The SGP operates as an exemption from certain quality of service rules.  The existing Service Guarantee Plan and the rules waiver expired at midnight on February 28, 2005. 

 

            On February 2, 2005, BellSouth filed a Petition for Extension and Modification of BellSouth’s existing service guarantee program, (Attachment A) and subsequently, on March 22, 2005, BellSouth sent a letter modifying its proposal (Attachment B).

 

           

           

            In accordance with Section 120.542, Florida Statutes, notice of the request for a limited rule waiver was published in the February 18, 2005, Florida Administrative Weekly.  The notice provided for responses to the Petition to be filed by March 4, 2005.  No Responses have been received.

 

 

 

Discussion of Issues

Issue 1:  Should the Commission extend BellSouth Telecommunications, Inc.’s existing Service Guarantee Plan and limited waiver of the applicability of Rule Nos. 25-4.066(2), 25-4.070(3)(a), and 25-4.070(1)(b), Florida Administrative Code, approved in Docket No. 010097-TL, until Rule 25-4.085, Florida Administrative Code, becomes effective?

 

Recommendation:  Yes.  (Buys, Casey, Scott)

 

Staff Analysis:  In Order No. PSC-02-0197-PAA-TL, issued February 13, 2002, Docket No. 010097-TL, In Re: Compliance Investigation of BellSouth Communications, Inc. for violation of service standards, the Commission approved BellSouth’s Petition for limited waiver of Rule Nos. 25-4.066(2), 25-4.070(3)(a), and 25-4.070(1)(b), Florida Administrative Code (F.A.C.).  The limited rule waiver expired on February 28, 2005.

 

            The extended waiver of the rules would be in effect until Rule 25-4.085, F.A.C., Service Guarantee Program, becomes effective.  The Commission is scheduled to address a modification to Rule 25-4.085, F.A.C., in Docket No. 991473-TP, In Re: Review and revision of Rules 25-4.002, 4.003, 4.0185, 4.023, 4.038, 4.039, 4.066, 4.070, 4.072, 4.073, 4.0770, 4.080, and 4.085, F.A.C., at the April 5, 2005, Conference Agenda.  Rule 25-4.085, F.A.C., permits companies to petition the Commission for approval of a Service Guarantee Program (SGP), which relieves the company from the rule requirement related to each service standard addressed in the approved SGP.  Once Rule 25-4.085, F.A.C., becomes effective, the waiver of Rules 25-4.066(2), 25-4.070(3)(a), and 25-4.070(1)(b), F.A.C., would be rendered moot since BellSouth would be operating under a SGP if the SGP is approved by the Commission in Issue 2.

 

            Rule Nos. 25-4.066(2), 25-4.070(3)(a), and 25-4.070(1)(b), F.A.C., pertain to the establishment of primary service and repair of interrupted service within specific time frames.

 

            Rule 25-4.066(2), F.A.C., provides:

 

Where central office and outside plant facilities are readily available, at least 90 percent of all requests for primary service in any calendar month shall normally be satisfied in each exchange or service center within an interval of three working days after receipt of application when all tariff requirements relating thereto have been complied with, except those instances where a later installation date is requested by the applicant or where special equipment or services are involved.

 

           

            Rule 25-4.070(3)(a), F.A.C., provides:

 

Service Interruption:  Restoration of interrupted service shall be scheduled to insure at least 95 percent shall be cleared within 24 hours of report in each exchange as measured on a monthly basis.  For any exchange failing to meet this objective, the company shall provide an explanation with its periodic report to the Commission.

 

            Rule 25-4.070(1)(b), F.A.C., provides:

 

In the event a subscriber's service is interrupted other than by a negligent or willful act of the subscriber and it remains out of service in excess of 24 hours after being reported to the company, an appropriate adjustment or refund shall be made to the subscriber automatically, pursuant to Rule 25-4.110 (Customer Billing).  Service interruption time will be computed on a continuous basis, Sundays and holidays included.  Also, if the company finds that it is the customer's responsibility to correct the trouble, it must notify or attempt to notify the customer within 24 hours after the trouble was reported.

 

            In order for the Commission to grant a waiver of the rules, BellSouth must demonstrate that its SGP will achieve the purpose of the statutes underlying the rules.  Section 120.542(2), Florida Statutes, states:

 

Variances and waivers shall be granted when the person subject to the rule demonstrates that the purpose of the underlying statute will be or has been achieved by other means by the person and when application of a rule would create a substantial hardship or would violate principles of fairness.  For the purposes of this section, “substantial hardship” means a demonstrated economic, technological, legal, or other type of hardship to the person requesting the variance or waiver.  For purposes of this section, “principles of fairness” are violated when the literal application of a rule affects a particular person in a manner significantly different from the way it affects other similarly situated persons who are subject to the rule.

 

            BellSouth’s SGP has been in effect since March 1, 2002, and meets the quality of service provisions of Chapter 364, Florida Statutes, by giving immediate and direct compensation to customers.  Additionally, it provides similarly swift penalties to BellSouth for not meeting objectives that are consistent with the Commission’s service rules.  Further, the application of the Commission’s rules, during the same time credits are being made or accrued, would constitute unfairness and an economic hardship by imposing duplicate penalties. 

 

            The Commission is vested with jurisdiction over this matter pursuant to Sections 120.542, 364.01, 364.03, 364.17, and 364.183, Florida Statutes.  Based on the aforementioned, staff recommends that the Commission extend the existing limited waiver of the applicability of Rule Nos. 25-4.066(2), 25-4.070(3)(a), and 25-4.070(1)(b), F.A.C., approved in Docket No. 010097-TL.

 

 

 

Issue 2:  Should the Commission approve BellSouth Telecommunications, Inc.’s Petition for Extension and Modification of BellSouth’s existing Service Guarantee Program and for relief from Rules 25-4.066(2); 25-4.070(1)(b); 25-4.070(3)(a); and 25-4.073(1)(d), Florida Administrative Code?

 

Recommendation:  Yes.  (Buys, Casey, Scott)

 

Staff Analysis:  BellSouth’s proposed Modified Service Guarantee Program (SGP) is similar to its existing Service Guarantee Program approved by the Commission in Order No. PSC-02-0197-PAA-TL, issued February 13, 2002, Docket No. 010097-TL, In Re: Compliance Investigation of BellSouth Communications, Inc. for violation of service standards, except for the changes summarized in Table 1. 

 

Table 1
Repair – Out-of-Service (Restoration of Interrupted Service)
Existing SGP	Proposed Modified SGP
Where BellSouth fails to complete a repair within 24 hours from the time an order is received; The customer will receive an automatic credit on the bill in the amount of $4.00, plus 3 times the daily local service charge, up to $35.00 and no less than $10.00. Saturdays and Sundays are included in calculating service credits. The SGP only applies to residential and single line business customers.	Identical except that the minimum amount of automatic credit a customer will receive increases from $10 to $11, and the maximum credit increases from $35 to $40.  The SGP for single line business will be eliminated upon the effective date of the rules approved in Docket No. 991473-TP.

 

Primary Service Installation
Existing SGP	Proposed Modified SGP
Where BellSouth fails to install a customer’s primary or additional local or single line business service on the date which the customer and BellSouth agree, BellSouth will give the customer an automatic credit of $25.00.  Where BellSouth is offering a commitment date greater than 3 days and the customer requests an earlier date, the commitment credit will be based on the customer requested date, or on 3 days, whichever is greater.	Identical, except that the SGP for single line business will be eliminated upon the effective date of the rules approved in Docket No. 991473-TP.

 

Lifeline Tariff Filing
Existing SGP	Proposed Modified SGP
File a tariff for an income eligibility test at 125% of the Federal poverty income guidelines for Lifeline.	File a tariff adding the National School Lunch Program as an eligible Lifeline criterion to augment the current eligibility guidelines.

 

 

 

 

 

Term
Existing SGP	Proposed Modified SGP
Expires on February 28, 2005.	No expiration date.  The SGP may be terminated by either the Commission or the company at any time.  The current SGP will remain in effect until Rule 25-4.085, F.A.C., becomes effective.  At that time, the SGP will operate until that rule and the waivers become moot with no further Commission action.

 

Force Majeure
Existing SGP	Proposed Modified SGP
In the event of an emergency, Bellsouth will operate under Force Majeure and when it is reasonable to expect that the company will be unable to meet its installation and repair commitments, it shall be relieved of its obligations to provide credits for failure to meet the objectives for installation and repair within the affected areas.	Identical, except when under Force Majeure, BellSouth will also suspend payments into the Lifeline Community Service Fund for missed answer time measurements within the affected areas.

 

Answer Time
Existing SGP	Proposed Modified SGP
A measurement for answer time was not included.    BellSouth established the Community Service Fund in the form of a corporate undertaking.   BellSouth contributed $250,000 to the fund in 2002 and $150,000 in 2003.	A new answer time measurement applies to customers who call the residential business and repair offices and who do not interact with the automated answer system.   Where BellSouth fails to meet the answer time measurement, it will credit the Lifeline Community Service Fund.    The measurement will require at least 90% of the calls to the Business office and repair office to be answered by the live attendant prepared to give immediate assistance within 55 seconds of being transferred to the attendant.  BellSouth will maintain 100% accessibility.   The amount of the payment of credits shall be calculated separately for the business and repair offices and shall be applied based on BellSouth’s performance in accordance with the following parameters:     Less than 90%, but greater or equal to 80% - $2,000 Less than 80%, but greater or equal to 70% - $5,000 Less than 70%                                               - $7,000

           

 

BellSouth estimates that the increase in the minimum ($10 to $11) and maximum ($35 to $40) automatic credits for missing out-of-service repair objectives equates to approximately $140,000 additional customer credits as compared to the existing SGP.  BellSouth was not able to provide an estimate for the increase in cost to add the National School Lunch Program as an eligible Lifeline criterion.  BellSouth submits that the programming to implement the increased amount of the automatic credits for out-of-service would not be completed until August 2005.

           

            The Commission is vested with jurisdiction over this matter pursuant to Sections 120.542, 364.01, 364.03, 364.17, and 364.183, Florida Statutes.  It appears that BellSouth’s proposed modified SGP benefits the customers and is in the public interest.  Accordingly, staff recommends that the Commission approve BellSouth Telecommunications, Inc.’s Petition for Extension and Modification of BellSouth’s existing Service Guarantee Program and for relief from Rules 25-4.066(2); 25-4.070(1)(b); 25-4.070(3)(a); and 25-4.073(1)(d), Florida Administrative Code, and extend the existing limited waiver of the applicability of Rule Nos. 25-4.066(2), 25-4.070(3)(a), and 25-4.070(1)(b), Florida Administrative Code.

 

 

 

 

 

 

Issue 3:  

Should this docket be closed?

Recommendation:  

If no person whose substantial interests are affected by the proposed agency action files a protest within 21 days of the issuance of the order, this docket should be closed upon the issuance of a consummating order.  (Scott)

Staff Analysis:  

At the conclusion of the protest period, if no protest is filed, this docket should be closed upon the issuance of a consummating order.