DATE:	August 21, 2008
TO:	Office of Commission Clerk (Cole)
FROM:	Division of Regulatory Compliance (Mann, Casey) Office of the General Counsel (Tan)
RE:	Docket No. 070683-TX – Petition for designation as eligible telecommunications carrier (ETC) by FLATEL, Inc.
AGENDA:	09/04/08 – Regular Agenda – Proposed Agency Action - Interested Persons May Participate
COMMISSIONERS ASSIGNED:			All Commissioners
PREHEARING OFFICER:			Skop
CRITICAL DATES:			None
SPECIAL INSTRUCTIONS:			None
FILE NAME AND LOCATION:			S:\PSC\RCP\WP\070683.RCM.DOC

 

Case Background

On November 9, 2007, FLATEL, Inc. d/b/a Florida Telephone Company d/b/a Oscatel d/b/a Telephone USA d/b/a Global Telecom (FLATEL or “the Company”) petitioned the Florida Public Service Commission (FPSC or Commission) for designation as an Eligible Telecommunications Carrier (ETC) in the State of Florida.  Specifically, FLATEL is requesting that it be granted ETC status throughout the non-rural BellSouth Telecommunications, Inc./AT&T (AT&T) and Verizon Florida (Verizon) wire centers listed in Attachment A for purposes of receiving federal universal service support.  FLATEL has existing interconnection agreements with both AT&T and Verizon.  The company states that it is only seeking low income support, and that it is not requesting high-cost support from the federal Universal Service Fund (USF).  FLATEL’s primary purpose in requesting ETC status in Florida is to provide Lifeline and Link-Up services.

                           

FLATEL is a Florida corporation formed in 1997 and headquartered in West Palm Beach, Florida.  FLATEL is a FPSC-certificated competitive local exchange carrier (CLEC) which provides prepaid local exchange services in the AT&T, Embarq, and Verizon service areas.  It provides these services using a combination of wholesale local platform (WLP)/unbundled network element (UNE) lines and resale services.  According to responses to staff’s data requests, FLATEL currently provides telephone service in Florida, Kentucky, Oregon, New Jersey, South Carolina, and North Carolina, and it has not received any complaints in the past 12 months in any location where it provides telephone service.

To date, FLATEL has not filed for ETC designation, nor is it seeking ETC status in any other state.  Upon designation as an ETC, FLATEL states that it will participate in and offer Lifeline and Link-Up programs to qualifying low-income consumers in Florida.  FLATEL has committed to publicize the availability of Lifeline and Link-Up services in a manner reasonably designed to reach those likely to qualify for services, as required by the Federal Communications Commission (FCC) rules.  According to FLATEL, it could have Lifeline available to its Florida customers within 30 days of receiving approval.

The Commission has authority under Section 364.10(2), Florida Statutes, to decide a petition by a CLEC seeking designation as an eligible telecommunications carrier pursuant to 47 C.F.R. § 54.201. 

Discussion of Issues

Issue 1: 

Should FLATEL be granted ETC designation in the State of Florida?

Recommendation: 

 Yes.  Staff recommends that FLATEL be granted ETC designation status in the AT&T and Verizon wire centers listed in Attachment A of this recommendation. (Mann, Casey)

Staff Analysis: 

 Pursuant to Federal Statute, state commissions have the primary responsibility to designate providers as ETCs.[1]  Designation as an ETC is required in order for a provider to be eligible to receive monies directly from the USF.  Section 254(e) of the Telecommunications Act of 1996 (Act) provides that “only an eligible telecommunications carrier designated under Section 214(e) shall be eligible to receive specific federal universal service support.”[2]  According to Section 214(e)(1), a common carrier designated as an ETC must offer and advertise the services supported by the federal universal service mechanisms throughout a designated service area.

 

ETC Certification Requirements

 

            The Code of Federal Regulations addresses a state commission’s responsibilities related to an ETC designation:[3]  

 

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.

 

            To qualify as an ETC, a carrier must provide nine services identified in 47 CFR 54.101.  The services are:

 

(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, ETCs must advertise the availability of such services and the associated charges using media of general distribution.  FLATEL has provided evidence to support that it is currently offering these services and will advertise the availability of Lifeline and Link-Up offerings in media of general distribution as required in §214(e)(1).

 

            FLATEL has the ability to meet the nine-point list of services that are supported by federal universal support mechanisms using its own facilities or a combination of its own facilities and the resale of another carrier’s services.  Staff believes that the leasing of the physical components of the telecommunications network for the transmission or routing of services, whether as UNEs or through commercial agreements, meets the statutory definition of “own facilities” for universal service purposes.  FLATEL provided data to staff indicating that approximately 281 (or 21%) of its customers are being provided service through Commercial Facilities Agreements/UNE’s, and also provided affidavits showing commercial agreements have been signed with both AT&T and Verizon.

 

Additional ETC Certification Requirements

 

            In addition to requiring the above services, the FCC, on March 17, 2005, issued a Report and Order that established additional criteria that all ETC applicants must satisfy in order to be granted ETC status by the FCC.[4]  In this Order, the FCC determined that an ETC applicant must also demonstrate:

 

1)     a commitment and ability to provide the supported services throughout the designated area;

2)     the ability to remain functional in emergency situations;

3)     ability to satisfy consumer protection and service quality standards;

4)     provision of local usage comparable to that offered by the incumbent LEC; and

5)     an acknowledgement that the applicant may be required by the FCC to provide equal access if all other ETCs in the designated service area relinquish their designations pursuant to Section 214(e)(4) of the Act.

 

            The FCC encouraged states to also adopt these criteria, and the FPSC has done so in Docket No. 010977-TL, by Order No. PSC-05-0824-FOF-TL, issued August 15, 2005.  FLATEL has filed an affidavit certifying that it will perform these additional duties required of an ETC (see Attachment B).

 

Public Interest Determinations

 

            Under Section 214 of the Act, the FCC and state commissions must determine that an ETC designation is consistent with the public interest, convenience and necessity for rural areas.  They also must consider whether an ETC designation serves the public interest consistent with Section 254 of the Act.  Congress did not establish specific criteria to be applied under the public interest tests in Section 214 or Section 254.  The public interest benefits of a particular ETC designation must be analyzed in a manner that is consistent with the purposes of the Act itself, including the fundamental goals of preserving and advancing universal service; ensuring the availability of quality telecommunications services at just, reasonable, and affordable rates; and promoting the deployment of advanced telecommunications and information services to all regions of the nation, including rural and high-cost areas.[5]  Staff believes that before designating a carrier as an ETC, the FPSC should make an affirmative determination that such designation is in the public interest, regardless of whether the applicant seeks designation in an area served by a rural or non-rural carrier.

 

FLATEL, Inc.’s Petition

 

            FLATEL is requesting designation as an ETC in the non-rural AT&T and Verizon territories for purposes of providing Lifeline and Link-Up service to Florida consumers and receiving federal universal service support.  FLATEL is not seeking ETC status in any rural exchange, nor is it attempting to obtain any high-cost funding from the Universal Service Administrative Company (USAC).  

            Since becoming a telephone company in Florida, FLATEL has shown a willingness to actively process both consumer and carrier-to-carrier disputes.  With this history and relatively few consumer complaints in the past few years, staff believes that FLATEL has shown a managerial proficiency in handling both carrier-to-carrier disputes and consumer complaints.

            To adjudge this petition, staff reviewed FLATEL’s data gathering effort involved in the Commission’s Competition Report, payment history of regulatory assessment fees, consumer complaint incidents and the timely resolution of those complaints, compiled financial statements, and the company’s status with the Florida Department of State Division of Corporations, among other sources. FLATEL has no outstanding regulatory assessment fees, penalties, or interest associated with its Florida CLEC certificate; nor does the company have any active customer complaints on file with  this Commission.

 

FLATEL has also indicated that its accounts with the FCC and the USAC are current, and it is not aware of any outstanding complaints or violations with either entity.  As part of the petition process, FLATEL has agreed to abide by the Commission’s rules, such as the procedures for approving, denying, and terminating recipients, timelines for submitting reports, and expectations pertaining to the Lifeline and Link-Up programs.  FLATEL commits to use federal universal support only for the provision of services for which the support is intended. 

FLATEL has acknowledged the requirements of the Florida Lifeline program, and it 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.  FLATEL indicates that it will provide the $3.50 credit to qualified clients, advertise the availability of Lifeline, and begin offering these services within 30 days of receiving ETC status.

Conclusion

Staff believes that FLATEL will promote the availability of universal service to the underserved, economically disadvantaged telephone customers in Florida.  It also believes that FLATEL has the experience and managerial aptitude to effectively provide and promote Lifeline service and that a grant of ETC designation to FLATEL will enhance the subscribership among needy telephone customers in the State.

If FLATEL is designated as an ETC, it should be required, at the time of annual ETC recertification, to demonstrate how it has used the universal service funds within Florida.  Additionally, if FLATEL should decide to seek any high-cost universal service funds, or seek ETC status in any rural service areas in the future, it should be required to file a petition and make a showing that it would be in the public interest to grant such a request.

Based on staff’s review, along with FLATEL’s commitment to abide by both state and federal rules and procedures, staff believes that FLATEL’s petition to be designated as an ETC is in the public interest and should be approved.  Staff believes that public interest benefits of a particular ETC designation should be analyzed in a manner that is consistent with the purposes of the Act itself, including the fundamental goals of preserving and advancing universal service; ensuring the availability of quality telecommunications services at just, reasonable, and affordable rates; and promoting the deployment of advanced telecommunications and information services to all regions of the nation, including rural and high-cost areas.  Upon a decision by the Commission, staff will continue the necessary oversight to ensure that FLATEL, along with all other ETCs in Florida, are upholding these principles and attaining the goals and objectives of both the state and federal universal service programs.  Therefore, staff recommends that FLATEL be granted ETC designation status in the AT&T and Verizon wire centers listed in Attachment A of this recommendation.

 

 

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. (Tan)

 

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.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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