DATE:	April 20, 2006
TO:	Director, Division of the Commission Clerk & Administrative Services (Bayó)
FROM:	Division of Competitive Markets & Enforcement (Buys) Office of the General Counsel (Tan)
RE:	Docket No. 060244-TI – Request for waiver of carrier selection requirements of Rule 25-4.118, FAC, due to asset purchase agreement, whereby Reduced Rate Long Distance, LLC will acquire substantially all assets of W2Com International, LLC, including, but not limited to, W2Com's customer accounts in the State of Florida.
AGENDA:	05/02/06 – Regular Agenda – Proposed Agency Action – Interested Persons May Participate
COMMISSIONERS ASSIGNED:		All Commissioners
PREHEARING OFFICER:		Administrative
CRITICAL DATES:		None
SPECIAL INSTRUCTIONS:		None
FILE NAME AND LOCATION:		S:\PSC\CMP\WP\060244.RCM.DOC

 

 Case Background

On March 16, 2006, W2Com International, LLC (W2Com) and Reduced Rate Long Distance, LLC (RRLD), submitted a joint request for a waiver of the carrier selection requirements of Rule 25-4.118, Florida Administrative Code.  Both companies are registered intrastate interexchange companies (IXCs).  The purpose of filing for the waiver is so all of W2Com’s assets, including its customer accounts, can be transferred to RRLD without RRLD having to obtain each customer’s authorization.

This waiver is being sought to provide the Commission notice of the transfer of assets for the treatment of customers in a consumer-friendly manner and allows for a transition to occur in a smooth process protecting both the consumer and the company.  Without this waiver, RRLD would be required to obtain signed letters of agency (LOAs) or third party verifications (TPVs) from each W2Com customer being transferred.  With the waiver, RRLD can protect itself from possible complaints of unauthorized carrier changes.  This waiver is also beneficial to the customers as they will not be subject to a loss of service on the date of transfer.  Thus, this recommendation addresses the request for waiver of Rule 25-4.118, Florida Administrative Code, for intrastate interexchange telecommunications services.

The Commission is vested with jurisdiction in this matter pursuant to Sections 364.02, 364.336, and 364.603, Florida Statutes.  Accordingly, staff believes the following recommendations are appropriate.

Discussion of Issues

Issue 1: 

 Should the Commission approve the request for waiver of the carrier selection requirements of Rule 25-4.118, Florida Administrative Code, in the transfer of W2Com International, LLC’s customers to Reduced Rate Long Distance, LLC?

Recommendation: 

 Yes, the Commission should approve the request for waiver of the carrier selection requirements of Rule 25-4.118, Florida Administrative Code.  (Buys / Tan)

Staff Analysis: 

 Pursuant to Rule 25-4.118(1), Florida Administrative Code, a customer’s carrier cannot be changed without the customer’s authorization. Rule 25-4.118(2), Florida Administrative Code, provides that a carrier shall submit a change request only if one of the following has occurred:

(a) The provider has a letter of agency (LOA) . . . from the customer requesting the change;

(b) The provider has received a customer-initiated call for service . . . ;

(c) A firm that is independent and unaffiliated with the provider . . . has verified the customer’s requested change . . .

Pursuant to Rule 25-24.475(3), Florida Administrative Code, Rule 25-4.118, Florida Administrative Code, is incorporated into Chapter 25-24, and applies to IXCs.

Rule 25-24.455(2), Florida Administrative Code, states:

An IXC may petition for a waiver of any provision of this Part. The waiver shall be granted in whole, granted in Part or denied based on the following:

(a) The factors enumerated in Section 364.337(4), Florida Statutes;

(b) The extent to which competitive forces may serve the same function as, or obviate the necessity for, the provision sought to be waived;

(c) Alternative regulatory requirements for the company which may serve the purposes of this part; and

(d) Whether the waiver is in the public interest.

The authority for Rule 25-4.118, Florida Administrative Code, is found in Section 364.603, Florida Statutes, which is a section the Commission is authorized to waive.

RRLD has attested that it will provide for a seamless transition while ensuring that the affected customers understand available choices with the least amount of disruption to the customers.  Further, W2Com will assist RRLD in the transition and integration of the acquired assets after the transaction and RRLD will continue to serve the transferred W2Com customers with the same high level of expertise.  Staff has reviewed the notice that will be sent to W2Com’s customers and found it to be adequate.  The customers should not experience any interruption of service, rate increase, or switching fees.  Any consumer complaints received after the transfer of customers regarding service provided by W2Com prior to the transaction will be handled by RRLD.

Neither W2Com nor RRLD has any outstanding regulatory assessment fees, penalties, or interest associated with its IXC registration.  Further, there are no active customer complaints on file with the Commission for either company.

Staff believes that in this instance it is appropriate to waive the carrier selection requirements of Rule 25-4.118, Florida Administrative Code.  If prior authorization is required in this event, customers may fail to respond to a request for authorization, neglect to select another carrier, and lose their long distance services.  Furthermore, staff believes that granting this waiver will avoid unnecessary slamming complaints during this transition.

Therefore, staff recommends that the Commission approve the request for waiver of the carrier selection requirements of Rule 25-4.118, Florida Administrative Code, in the transfer of W2Com International, LLC’s customers to Reduced Rate Long Distance, LLC.

Issue 2: 

 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.  (Tan)

Staff Analysis: 

 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.