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State of Florida
Public Service
Commission
Capital Circle Office Center 2540 Shumard
Oak Boulevard
Tallahassee, Florida 32399-0850
-M-E-M-O-R-A-N-D-U-M-
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DATE: |
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TO: |
Director, Division of the Commission Clerk & Administrative Services (Bayó) |
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FROM: |
Division of Competitive Markets & Enforcement (Maduro, Mann, Casey, Bulecza-Banks) Office of the General Counsel (Susac) |
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RE: |
Docket No. 050483-TX – Petition for designation as eligible telecommunications carrier (ETC) by Budget Phone, Inc. |
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AGENDA: |
12/06/05 – Proposed Agency Action – Interested Persons May Participate |
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None-120-day requirement for a Commission vote waived |
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SPECIAL INSTRUCTIONS: |
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FILE NAME AND LOCATION: |
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On July 12, 2005, Budget Phone, Inc. (Budget) petitioned the Florida Public Service Commission (FPSC or Commission) for designation as an Eligible Telecommunications Carrier (ETC) in the State of Florida. Specifically, Budget requested that it be granted ETC status in certain exchanges of BellSouth Telecommunications, Inc. (BellSouth), Sprint-Florida, Inc. (Sprint) and Verizon Florida (Verizon) for purposes of receiving federal universal service support. Budget’s petition indicates that it is requesting ETC designation for approximately 93 wire centers in BellSouth’s service area, 103 wire centers in Sprint’s service area, and 27 wire centers in Verizon’s service area. This is the second Competitive Local Exchange Carrier (CLEC) ETC petition to be brought before the Commission for consideration.[1]
Budget Phone is a FPSC certificated CLEC which provides local exchange and exchange access services in the BellSouth, Sprint, and Verizon service areas, using a combination of DSO UNE-P replacement services (UNEs) and resale services provided by these companies. Upon designation as an ETC, Budget indicates that it will participate in and offer Lifeline and Link-Up programs to qualified low income consumers. Additionally, Budget has committed to publicize the availability of Lifeline and Link-Up services in a manner reasonably designed to reach those likely to qualify for those services[2].
Budget Phone is headquartered in Shreveport, Louisiana and was formed in 1996 to provide prepaid home phone service. Currently, Budget provides phone service to approximately 130,000 customers in 45 states. Budget has over 7,600 agents who market and sell various types of services, which include but are not limited to, long distance calling cards, wireless phones, wireless recharge minutes, debit cards and bill payment stations. Budget indicated that it has spent millions of dollars on innovative technology and has developed its own customized point-of-sale software.
Budget has filed for ETC designation in 25 states[3]. Budget has been granted ETC status in Maryland (granted August 31, 2005), Alabama (granted September 22, 2005), and Iowa (granted October 10, 2005). Staff notes that Budget withdrew its ETC designation request in the State of Wyoming on September 23, 2005, but intends to refile its application at a later date.
Section 364.025(5), Florida Statutes, states: “Upon petition of a competitive local exchange telecommunications company, the commission shall have 120 days to vote on granting in whole or in part or denying the petition of the competitive local exchange company.” On September 21, 2005, Budget waived this 120-day requirement in order to provide supplemental information to staff. The Commission is vested with jurisdiction in this matter pursuant to 47 CFR §54.201, and Section 364.025(5), Florida Statutes.
Issue 1: Should Budget be granted ETC status in the State of Florida?
Recommendation: Yes, staff recommends that Budget be granted ETC status in the Verizon and BellSouth wire centers (Shown in Attachment A). However, Budget should not be granted ETC status in Sprint’s service area. Budget should be required, at the time of annual ETC recertification, to demonstrate how it has used the universal service funds within Florida. Budget should also be required to adhere to the new certification and reporting requirements as detailed in staff’s analysis. (Maduro, Mann, Casey, Bulecza-Banks, Fogleman)
Staff Analysis: Federal Communications Commission (FCC) rules provide that carriers designated as ETCs shall, throughout the designated service area: (1) offer the services that are supported by federal universal support mechanisms either using their own facilities or a combination of their own facilities and the resale of another carrier’s services and, (2) advertise the availability of such services and the related charges therefore using media of general distribution. See CFR §54.201(d).
Budget has identified 93 BellSouth, 103 Sprint, and 27 Verizon wire centers it wishes to offer the services that are supported by federal universal support mechanisms.
ETC Certification Requirements
CFR Rule 54.201(c), addresses a state commission’s responsibilities related to ETC designation, stating:
Upon request and consistent with the public interest, convenience, and necessity, the state commission may, in the case of an area served by a rural telephone company, and shall, in the case of all other areas, designate more than one common carrier as an eligible telecommunications carrier for a service area designated by the state commission, so long as each additional requesting carrier meets the requirements of paragraph (d) of this section. Before designating an additional eligible telecommunications carrier for an area served by a rural telephone company, the state commission shall find that the designation is in the public interest.
With respect to Florida law, Section 364.025(5), Florida Statutes, states:
After January 1, 2001, a competitive local exchange telecommunications company may petition the commission to become the universal service provider and carrier of last resort in areas requested to be served by that competitive local exchange telecommunications company. Upon petition of a competitive local exchange telecommunications company, the commission shall have 120 days to vote on granting in whole or in part or denying the petition of the competitive local exchange company. The commission may establish the competitive local exchange telecommunications company as the universal service provider and carrier of last resort, provided that the commission first determines that the competitive local exchange telecommunications company will provide high-quality, reliable service. In the order establishing the competitive local exchange telecommunications company as the universal service provider and carrier of last resort, the commission shall set the period of time in which such company must meet those objectives and obligations.
To qualify as an ETC, telecommunications carriers must provide nine services identified in CFR Rule 54.201(d)(1).
(1) Voice grade access to the public switched network Voice grade access is defined as a functionality that enables a user of telecommunications services to transmit voice communications, including signaling the network that the caller wishes to place a call, and to receive voice communications, including receiving a signal indicating there is an incoming call;
(2) Local Usage Local usage indicates the amount of minutes of use of exchange service, provided free of charge to end users;
(3) Dual tone multi-frequency signaling or its functional equivalent Dual tone multi- frequency ("DTMF") is a method of signaling that facilitates the transportation of signaling through the network, thus shortening call set-up time;
(4) Single-party service or its functional equivalent Single party service is telecommunications service that permits users to have exclusive use of a wireline subscriber loop or access line for each call placed, or in the case of wireless telecommunications carriers, which use spectrum shared among users to provide service, a dedicated message path for the length of a user's particular transmission;
(5) Access to emergency services Access to emergency services includes access to services, such as 911 and enhanced 911, provided by local governments or other public safety organizations;
(6) Access to operator services Access to operator services is defined as access to any automatic or live assistance to a consumer to arrange for billing and/or completion, of a telephone call;
(7) Access to interexchange service Access to interexchange service is defined as the use of the loop, as well as that portion of the switch that is paid for by the end user, or the functional equivalent of these network elements in the case of a wireless carrier, necessary to access an interexchange carrier’s network;
(8) Access to directory assistance Access to directory assistance is defined as access to a service that includes, but is not limited to, making available to customers, upon request, information contained in directory listings; and
(9) Toll limitation for qualifying low-income consumers Toll limitation or Blocking restricts all direct dial toll access.
In addition to providing the above services, ETC’s must advertise the availability of such services and the associated charges using media of general distribution.
New Certification and Reporting Requirements
The FCC’s rules currently require all ETCs to make an annual certification, on or before October 1, that high-cost universal service support will be used for its intended purposes.[4] By Order No. FCC 05-46, the FCC maintained and augmented this requirement. The FCC now requires every ETC designated by the FCC who desires high cost support to submit the following information on an annual basis starting October 1, 2006:
(1) progress reports on the ETC’s five-year service quality improvement plan, including maps detailing progress towards meeting its plan targets, an explanation of how much universal service support was received and how the support was used to improve signal quality, coverage, or capacity; and an explanation regarding any network improvement targets that have not been fulfilled.[5] The information should be submitted at the wire center level;
(2) detailed information on any outage lasting at least 30 minutes, for any service area in which an ETC is designated for any facilities it owns, operates, leases, or otherwise utilizes that potentially affect at least ten percent of the end users served in a designated service area, or that potentially affect a 911 special facility (as defined in subsection (e) of section 4.5 of the Outage Reporting Order).[6] An outage is defined as a significant degradation in the ability of an end user to establish and maintain a channel of communications as a result of failure or degradation in the performance of a communications provider’s network.[7] Specifically, the ETC’s annual report must include: (1) the date and time of onset of the outage; (2) a brief description of the outage and its resolution; (3) the particular services affected; (4) the geographic areas affected by the outage; (5) steps taken to prevent a similar situation in the future; and (6) the number of customers affected;[8]
(3) the number of requests for service from potential customers within its service areas that were unfulfilled for the past year. The ETC must also detail how it attempted to provide service to those potential customers;
(4) the number of complaints per 1,000 handsets or lines;
(5) certification that the ETC is complying with applicable service quality standards and consumer protection rules;
(6) certification that the ETC is able to function in emergency situations;[9]
(7) certification that the ETC is offering a local usage plan comparable to that offered by the incumbent LEC in the relevant service areas; and
(8) certification that the carrier acknowledges that the Commission may require it to provide equal access to long distance carriers in the event that no other eligible telecommunications carrier is providing equal access within the service area.
This newly required information will initially be due on October 1, 2006, and thereafter annually on October 1 of each year, at the same time as the carrier’s certification that the universal service funds are being used consistent with the Act.[10] However, if the ETC does not seek high cost funding, this additional criterion is not required.
By Order No. PSC-05-0824-FOF-TL, issued August 15, 2005, Docket No. 010977-TL, In Re: State certification of rural telecommunications carriers pursuant to 47 C.F.R. 54.314, the FPSC adopted these new high-cost annual certification and reporting requirements established in Order No. FCC 05-46 for all FPSC designated ETCs desiring high cost support. In the Order, the Commission noted that to the extent a Florida ETC believes that it has already submitted a report or information to us that would comply with the list above, it may certify in its annual letter which proceeding and on what date such report or information was provided to us, in lieu of resubmitting the required information. However, if a company is not seeking high cost reimbursement, this additional criteria is not required.
Conclusion
Section 364.025, Florida Statutes, allows for CLECs to petition this Commission for ETC status. This authority stems from the Commission's statutory duty to exercise oversight over the transition from the monopoly provision of local exchange service to a competitive provision in order to protect consumers and provide for the development of a fair and effective telecommunications market.[11] Staff recognizes that there are dual goals of preserving the universal service system, while at the same time fostering competition.[12]
Staff had reservations regarding Budget’s petition since Budget is a pre-paid telephone company. However, the FCC considers the provisioning of service through UNEs as meeting its requirement of using its own facilities. Budget has the ability to meet the nine-point list of services that are supported by federal universal support mechanisms using its own facilities (as defined/clarified by the FCC)[13]or a combination of its own facilities and the resale of another carrier’s services. Budget provided data indicating the number of customers being provided service through unbundled network elements, and also provided affidavits showing commercial agreements had been signed with BellSouth and Verizon. Budget has not signed an agreement with Sprint to serve customers in the Sprint service area. Therefore, Budget cannot serve customers via UNEs in Sprint’s territory making it ineligible to receive ETC status in Sprint’s area.
Budget has acknowledged the requirements of the Florida Lifeline program and has agreed to adhere to the program which provides qualified customers a total of $13.50 in Lifeline assistance credits consisting of: $6.50 in federal subscriber line charges, $1.75 in federal support for states that have approved the credit, and $1.75 which is a 50% match of federal support for having a state lifeline program requiring a $3.50 credit under the Florida eligibility criteria. Budget indicates that it will provide the $3.50 credit to qualified clients, advertise the availability of Lifeline, and begin offering these services within 60 days of receiving ETC status.
Budget commits to use federal universal support only for the provision and maintenance of facilities used for telecommunications services. Staff believes that Budget should be required, at the time of annual ETC recertification, to demonstrate how it has used the universal service funds within Florida.
Based on the above, staff recommends that Budget be granted ETC status in the Verizon and BellSouth wire centers (Shown in Attachment A). However, Budget should not be granted ETC status in Sprint’s service area. Budget should be required, at the time of annual ETC recertification, to demonstrate how it has used the universal service funds within Florida. Budget should also be required to adhere to the new certification and reporting requirements as detailed in staff’s analysis.
Issue 2: Should this docket be closed?
Recommendation: Yes. If no person whose substantial interests are affected files a protest to the Commission’s Proposed Agency Action within 21 days of the issuance of the Commission Order, this docket should be closed upon issuance of a consummating order. (Susac, B. Keating)
Staff Analysis: If no person whose substantial interests are affected files a protest to the Commission’s Proposed Agency Action within 21 days of the issuance of the Commission Order, this docket should be closed upon issuance of a consummating order.
