DATE:	December 4, 2008
TO:	Office of Commission Clerk (Cole)
FROM:	Division of Regulatory Compliance (Williams, Casey) Office of the General Counsel (Murphy, Morrow)
RE:	Docket No. 080169-TX – Application for designation as eligible telecommunications carrier (ETC) by Express Phone Service, Inc.
AGENDA:	12/16/08 – Regular Agenda – Proposed Agency Action - Interested Persons May Participate
COMMISSIONERS ASSIGNED:			All Commissioners
PREHEARING OFFICER:			McMurrian
CRITICAL DATES:			None
SPECIAL INSTRUCTIONS:			None
FILE NAME AND LOCATION:			S:\PSC\RCP\WP\080169.RCM.DOC

 

 Case Background

On March 21, 2008, Express Phone Service, Inc. (Express Phone) petitioned the Florida Public Service Commission (FPSC or Commission) for designation as an eligible telecommunications carrier (ETC) in the State of Florida.  In its original application, Express Phone requested that it be granted ETC status throughout the BellSouth/AT&T (AT&T), Embarq and Verizon territories for purposes of receiving federal universal service support.  However, via letter dated July 11, 2008, Express Phone modified its request for certification as an ETC to exclude Embarq’s service territory.  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). 

 

In its original application, Express Phone states that it provides local exchange and exchange access service using a combination of resale and unbundled network elements, or unbundled network equivalents obtained through Interconnection Agreements (UNEs) that allow end-to-end switching delivery of calls.  However, on September 25, 2008, Express Phone filed an “Amendment to Application for Certification as an Eligible Telecommunications Carrier.”  Express Phone explained that it was filing the Amendment to its Application to clarify that it does not currently provide service using UNEs, but intends to provide service utilizing UNEs upon certification as an ETC.   

 

Express Phone signed an affidavit attesting that it will follow all Florida Statutes, Florida Administrative Rules, Florida PSC Orders, Federal Communications Commission (FCC) Rules, FCC Orders, and regulations contained in the Telecommunications Act of 1996 regarding Universal Service, ETCs, Link-Up, Lifeline, and toll limitation service.  (Attachment A)

 

Express Phone is a Florida corporation organized in 1999 with its headquarters in Pensacola, Florida.  The company was granted certification to operate as a Competitive Local Exchange Company (CLEC) in Florida on May 4, 1998, through Order Number PSC-98-0628-FOF -TX. 

 

As of July 2, 2008, Express Phone states that it serves 2,720 residential customers in Florida.  The Commission has authority under Section 364.10(2), Florida Statutes, to decide a petition by a CLEC seeking designation as an ETC pursuant to 47 C.F.R. § 54.201.

 

 

Discussion of Issues

Issue 1: 

 Should Express Phone be granted ETC designation in the State of Florida?

Recommendation:

 Yes.  Staff recommends that Express Phone be granted ETC designation status in the AT&T and Verizon wire centers listed in Attachment B of this recommendation. (Williams, 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 from the federal 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 its designated service area.  Further, 47 CFR 54.405(b) specifies that ETCs must publicize the availability of Lifeline service in a manner reasonably designed to reach those likely to qualify for the service. 

 

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, 47 CFR 54.405(b) specifies that ETCs must publicize the availability of Lifeline service in a manner reasonably designed to reach those likely to qualify for the service. 

 

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 (State certification of rural telecommunications carriers pursuant to 47 C.F.R. 54.314),  by Order No. PSC-05-0824-TL, issued August 15, 2005.

 

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.

 

Express Phone’s Petition

 

Express Phone is requesting that it be granted ETC status throughout the non-rural wire centers of AT&T and Verizon territories (Attachment B) for the purpose of receiving federal universal service support.  The company maintains that it is only seeking low-income support, and it is not requesting high-cost support from the federal USF.  Express Phone’s primary purpose in requesting ETC status in Florida is to provide Lifeline and Link-Up services. 

 

Express Phone 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.  Express Phone 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.

Express Phone states that it can provide local exchange and exchange access services using a combination of resale and unbundled network elements (UNEs).  Federal rules do not require companies to lease UNEs prior to ETC designation.  However, Federal rules do require that ETCs provide local exchange and exchange access services using a combination of resale and UNEs prior to requesting reimbursement from the USF.

 

Express Phone has also indicated that its accounts with the FCC and the Universal Service Administrative Company (USAC) are current, and it is not aware of any outstanding complaints or violations with either entity.  As part of the petition process, Express Phone 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.  Express Phone commits to use federal universal service support only for the provision of services for which the support is intended. 

           

Staff reviewed Express Phone’s 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.  On August 29, 2008, the Commission issued Order No. PSC-08-0562-PAA-TX which addressed Express Phone’s first-time violation of Rule 25-4.0161(10), Florida Administrative Code, which enforces the timely payment of Regulatory Assessment Fees.[6] 

 

            Express Phone was delinquent on its most recent Regulatory Assessment Fee, and was assessed the applicable fine of $500.00 pursuant to Rule 25-4.0161(10), Florida Administrative Code.  To comply with Order No. PSC-08-0562-PAA-TX, Express Phone was directed to pay the $500.00 fine, or provide justification why it should not be fined by September 19, 2008.  Express Phone paid the fee and applicable fine associated with the first time violation.

 

Conclusion

 

Staff acknowledges that concern was raised in light of the issuance of Order No. PSC-08-0562-PAA -TX regarding Express Phone’s Regulatory Assessment Fee violation.  However, staff took into consideration that this was Express Phone’s first time violation, and the fee and applicable fine were paid.  If Express Phone 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 Express Phone’s commitment to abide by both state and federal rules and procedures, staff believes that Express Phone’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 Express Phone, 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 Express Phone be granted ETC designation status in the AT&T and Verizon wire centers listed in Attachment B 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.

(Murphy, Morrow) 

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.