DATE:	January 15, 2010
TO:	Office of Commission Clerk (Cole)
FROM:	Division of Regulatory Analysis (M. Watts) Office of the General Counsel (Tan) Division of Service, Safety & Consumer Assistance (Moses)
RE:	Docket No. 090461-TL – Petition for modification of Service Guarantee Program by BellSouth Telecommunications, Inc. d/b/a AT&T Florida.
AGENDA:	01/26/10 – 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\RAD\WP\090461.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 (Docket No. 991378-TL) and PSC-02-0197-PAA-TL (Docket No. 010097-TL),[1] respectively, approving the Settlement Agreement between the Office of Public Counsel and BellSouth Telecommunications, Inc. (n/k/a BellSouth Telecommunications, Inc. d/b/a AT&T Florida d/b/a AT&T Southeast and hereinafter referred to as AT&T Florida), addressing AT&T Florida’s quality of service and granting a limited waiver of certain service quality rules.  This resulted in AT&T Florida’s first Service Guarantee Program, which operated as an exemption from those quality of service rules.

 

            On April 25, 2005, and May 20, 2005, the Commission issued Order Nos. PSC-05-0440-PAA -TL and PSC-05-0550-CO-TL,[2] respectively, modifying the first Service Guarantee Program and extending the rule waivers until Rule 25-4.085, Florida Administrative Code (F.A.C.), became effective on June 14, 2005.  Rule 25-4.085, F.A.C., provides that a party is relieved from a set of service standard rules that is addressed in a Service Guarantee Program.  The Service Guarantee Program as modified by the Commission’s 2005 Orders is currently in effect.  The current Service Guarantee Program may be terminated by either the Commission or the company at any time.  The service quality rule waivers the company initially sought in 2001 became moot when Rule 25-4.085, F.A.C., became effective.

 

            On September 29, 2009, AT&T Florida filed a petition (Attachment A) for modification of its current Service Guarantee Program.  In addition to other changes, AT&T Florida’s proposed Service Guarantee Program removes certain services it deems nonbasic from the protection of the existing AT&T Florida Service Guarantee Program.  Removal of these services is based on AT&T Florida’s interpretation of the Legislature’s recently revised definitions of basic and nonbasic service in Chapter 364, Florida Statutes (F.S.).  Because AT&T Florida’s proposed Service Guarantee Program only affords protection to customers who receive basic services, AT&T Florida’s proposed Service Guarantee Program would significantly reduce the number of customers who are currently benefitting from its existing Service Guarantee Program.  As a result, staff believes that the determination of what services constitute basic or nonbasic service will have a significant impact on Florida consumers.

           

            Staff believes it is imperative that the Commission determine what services constitute basic or nonbasic before approving AT&T Florida’s proposed Service Guarantee Program.  Furthermore, such a decision would provide guidance to the other carriers in Florida regarding what services should be covered by their Service Guarantee Programs or the Commission’s service quality rules.

 

The Commission is vested with jurisdiction over this matter pursuant to Sections 120.569, 364.01, 364.03, 364.035, 364.15, 364.17, and 364.183, F.S.

 

Discussion of Issues

Issue 1: 

 Pursuant to 364.02, F.S., what services constitute basic telecommunication service for purposes of AT&T Florida’s proposed Service Guarantee Program?

Recommendation: 

 Pursuant to Section 364.02(1), F.S., access to intraLATA and interLATA are basic services.  Staff believes that an AT&T Florida customer who is presubscribed to intraLATA and interLATA services should not be exempted from the protection of AT&T Florida’s proposed Service Guarantee Program.  Presubscription simply provides a customer access to intraLATA and interLATA services.  Furthermore, interLATA services are not unregulated because the Commission retains limited oversight and regulation of intrastate interexchange telecommunication (IXC) services.  Presubscribing to interLATA and intraLATA toll should be identified as basic telecommunication service for purposes of AT&T Florida’s proposed Service Guarantee Program.  (Tan)

Staff Analysis: 

 AT&T Florida’s Service Guarantee Program exempts the company from specific service quality rules but allows the company to achieve the purpose of the statutes underlying the rules. AT&T Florida’s Service Guarantee Program is intended to meet the quality of service provisions of Chapter 364, F.S., by providing a quick response time and compensation to qualifying customers should service issues arise.  The benefits to the consumer include providing automatic payments in the form of credits to customers and penalties to AT&T Florida for not meeting objectives of installation and repair of service interruptions as established by the Commission.[3]  AT&T Florida’s most recent Service Guarantee Program was last modified April 25, 2005, by Order No. PSC-05-0440-PAA-TL.[4] 

 

             In 2009 the Florida Legislature amended Chapter 364, F.S.  These changes became effective on July 1, 2009.[5]  The legislature expanded the definition of nonbasic service to add that “any combination of basic service along with a nonbasic service or an unregulated service is nonbasic service.”  Based upon the recent legislation, AT&T Florida filed a proposed modified Service Guarantee Program on September 29, 2009.  On October 16, 2009, staff sent a data request to AT&T Florida regarding the proposed Service Guarantee Program and AT&T Florida’s interpretation of the definition of basic and nonbasic service as defined by Chapter 364, F.S.  In its October 23, 2009 response, AT&T Florida indicated that it considers nonbasic service to include access to interLATA services.[6]

           

Chapter 364, F.S.

 

The relevant statutes are referenced below with the 2009 changes underlined:

 

• Section 364.02(1), F.S., defines “Basic local telecommunications service” as voice-grade, single-line, flat-rate residential local exchange service that provides dial tone, local usage necessary to place unlimited calls within a local exchange area, dual tone multifrequency dialing, and access to the following: emergency services such as “911,” all locally available interexchange companies, directory assistance, operator services, relay services, and an alphabetical directory listing.  For a local exchange telecommunications company, the term includes any extended area service routes, and extended calling service in existence or ordered by the commission on or before July 1, 1995.

 

• Section 364.02(10), F.S., defines “Nonbasic service” as any telecommunications service provided by a local exchange telecommunications company other than a basic local telecommunications service, a local interconnection arrangement described in s. 364.16, or a network access service described in s. 364.163.  Any combination of basic service along with a nonbasic service or an unregulated service is nonbasic service.

 

AT&T Florida’s position

 

            In its petition, AT&T Florida identifies the modified Service Guarantee Program qualified lines as basic local telecommunication service (single line flat rate service).  AT&T Florida states that based upon changes to the definition of nonbasic, nonbasic and unregulated services will not qualify under the modified Service Guarantee Program.  According to AT&T Florida, if a customer has purchased basic service but chooses an interLATA service in addition to AT&T Florida’s basic service, the customer should be considered nonbasic.  AT&T Florida stated that it believes that interLATA is an unregulated service and intraLATA (local toll) is a nonbasic service included in the Competitive Basket in AT&T Florida’s price plan approved in Docket No. 951159-TL, In re: Investigation to determine categories of non-basic services provided by local exchange telephone companies pursuant to Chapter 364.051(6), F.S., by Order No. PSC-96-0012-FOF-TL.  AT&T Florida believes that both interLATA and intraLATA should be treated as a nonbasic service when in combination with basic service.

 

            Staff sent data requests to AT&T Florida seeking clarification of what services it believed to be basic.  In its Response to Staff’s Second Data Request filed on December 11, 2009, AT&T Florida listed its rationale for classifying a service as basic or nonbasic (Attachment B), including the concept that provision of long distance services renders a service nonbasic.  AT&T Florida also indicated that the company has the discretion to allow services that it considered to be nonbasic be considered as a basic service for the purposes of the Service Guarantee Plan (see rationales C through F in the footer of Attachment B).

 

Analysis

 

Access is a basic service

 

            Staff believes that access[7] to long distance service (i.e. intra and interLATA[8]) does not change a basic service to a nonbasic service. The legislative definition of basic is very clear as it pertains to access.  AT&T Florida must give access for the following services pursuant to Section 364.02(1), F.S.:

 

•  emergency services such as “911;”
•  all locally available interexchange companies (1+ dialing);
•  directory assistance;
•  operator services (0+ dialing, 1010xxx or other dial around codes);
•  relay services (dialing either 711 or 1+800 for Sprint Relay); and
•  an alphabetical directory listing. 

 

            Staff believes that access to all the above services is included as a basic service and the use of the services once accessed should not fundamentally change a consumer’s level of service from basic service to nonbasic service.  It would appear that AT&T Florida’s interpretation of basic service provides that once the consumer takes advantage of any access listed above, the consumer is nonbasic.  If this interpretation is correct, the Service Guarantee Program is moot since every access line provided by AT&T Florida would be considered nonbasic if any dial around long distance call is made, any relay long distance call or operator service call such as accepting the charges for a collect call, or if the charges are billed on the LEC bill.

 

Legislative intent

 

            The Legislature modified the definition of “basic telecommunications service” to clearly delineate it from other services such as video and Internet based services.  In addition, staff has reviewed the audio tapes of the committee meetings and there was no discussion that presubscribing to interLATA service offered by a long distance company would change the service from basic to nonbasic service. 

 

            Unregulated services include Voice Over Internet Protocol, video, or wireless.  Section 364.02(13), F.S., exempted video and Internet from the term “service” for the purposes of Chapter 364, F.S.[9]  With nonbasic service offerings such as video or broadband, there is an understanding that the customer has the ability to take market choice to another provider, thereby providing incentive for the company to provide high levels of service for those service offerings.

 

            The basis for AT&T Florida’s argument is the addition of the language that “any combination of basic service along with a nonbasic service or an unregulated service is nonbasic service.”  Consequently, because AT&T Florida believes that presubscription to an IXC offering long distance is an unregulated service, it falls into the nonbasic category.  Staff disagrees with AT&T Florida’s assertion.  Section 364.011, F.S., states that intrastate interexchange telecommunication services are exempt from oversight from the commission, except to the extent delineated in Chapter 364, F.S.  Section 364.02(14), F.S., provides that intrastate interexchange telecommunications companies shall continue to be subject to Sections 364.025, 364.04, 364.10(3)(a) and (d), 364.163, 364.285, 364.336, 364.501, 364.603 and 364.604, F.S.  IXCs shall also provide the commission with current information as the commission deems necessary to contact and communicate with the company.  Furthermore, IXCs must follow the Rules governing interexchange telecommunications companies, Rules 25-24.455-25 through 24.495, F.A.C.

 

             In addition, staff believes that IXCs do not provide nonbasic service because the service provided does not meet the definition of nonbasic.  A nonbasic service is defined as any telecommunication service provided by a local exchange telecommunications company other than a basic local telecommunications service.  An IXC is not a telecommunication company pursuant Section 364.02(14), F.S., which states that the term telecommunication company does not include intrastate interexchange telecommunications companies.  Therefore, IXCs are regulated and the services they provide do not meet the definition of nonbasic service pursuant to Section 364.02(10), F.S. 

 

IntraLATA service

 

            AT&T Florida claims that intraLATA service is a nonbasic service.  However, although intraLATA was in AT&T Florida’s price plan as a nonbasic service for pricing purposes, staff believes that intraLATA has never been defined as a nonbasic service for the purposes of service quality standards.  This is a distinction between how pricing and service quality issues are handled.  The Commission has established categories for basic and non-basic services for pricing.  Staff notes that Order No. PSC-96-0012-FOF-TL states that Docket 951159-TL was opened to establish categories of non-basic services for the purpose of price regulation, which was created before the levels of service quality were established.  In the last legislative session, the changes in law distinguished between basic and nonbasic service standards under the Commission’s purview.  However, intraLATA service is neither a basic service nor a nonbasic service.

 

Conclusion

 

Pursuant to Section 364.02(1), F.S., access to intraLATA and interLATA are basic services.  Staff believes that an AT&T Florida customer who is presubscribed to intraLATA and interLATA services should not be exempted from the protection of AT&T Florida’s proposed Service Guarantee Program.  Presubscription simply provides a customer access to intraLATA and interLATA services.  Furthermore, interLATA services are not unregulated because the Commission retains limited oversight and regulation of intrastate interexchange telecommunication (IXC) services.  Presubscribing to interLATA and intraLATA toll should be identified as basic telecommunication service for purposes of AT&T Florida’s proposed Service Guarantee Program.

Issue 2: 

 Should the Commission approve AT&T Florida’s request to modify its existing Service Guarantee Program, pursuant to the changes to the service quality rules necessitated by Chapter 2009-226, Laws of Florida?

Recommendation: 

 Yes, the Commission should approve AT&T Florida’s request to modify its existing Service Guarantee Program, pursuant to the changes to the service quality rules necessitated by Chapter 2009-226, Laws of Florida.  Customers, to whom the Service Guarantee Program applies, should be identified based on the Commission’s decision in Issue 1.  (M. Watts/Moses/Tan)

Staff Analysis: 

 AT&T Florida seeks to modify its current Service Guarantee Program.  Rule 25-4.085, F.A.C., states:

 

A company may petition the Commission for approval of a Service Guarantee Program, which would relieve the company from the rule requirement of each service standard addressed in the approved Service Guarantee Program.  When evaluating a Service Guarantee Program for approval, the Commission will consider the Program’s benefits to the customers and whether the Program is in the public interest.  The Commission shall have the right to enforce the provisions of the Service Guarantee Plan.

 

            AT&T Florida’s current approved Service Guarantee Program relieves it from the requirements of Rules 25-4.066(2), 25-4.070(1)(b), 25-4.070(3)(a), and 25-4.073(1)(a)-(c), F.A.C.  These rules pertain to the establishment of primary service and repair of interrupted service within specific time frames, and the measurement of answer time for subscribers who call in to the residential business or repair office.

 

            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:

 

Restoration of interrupted service shall be scheduled to ensure at least 90 percent shall be cleared within 24 hours of the report.

 

            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, F.A.C. (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.

 

            Rule 25-4.073(1)(a)-(c), F.A.C., provides:

 

(a) At least 90 percent of all calls directed to business and repair offices for basic local telecommunications service shall be answered within 90 seconds after the last digit is dialed when no menu driven system is utilized.

(b) When a company utilizes a menu driven, automated, interactive answering system (referred to as the system or as an Integrated Voice Response Unit (IVRU)), at least 95 percent of the calls offered shall be answered within 30 seconds after the last digit is dialed.  The initial recorded message presented by the system to the customer shall include the option of transferring to a live attendant within the first 60 seconds of the message.

(c) For subscribers who select the option of transferring to a live assistant, the call shall be transferred by the system to a live attendant.  At least 90 percent of the calls shall be answered by the live attendant prepared to give immediate assistance within 90 seconds of being transferred to the attendant.

 

            AT&T Florida’s current Service Guarantee Program has been in effect since May 20, 2005, and meets the quality of service provisions of Chapter 364, F.S., by giving immediate and direct compensation to customers if certain quality standards are not met.  Additionally, the Service Guarantee Program imposes similarly swift penalties on AT&T Florida for not meeting objectives that are consistent with the Commission’s service rules.  The rules and a Service Guarantee Program are not applied simultaneously, because doing so would constitute unfairness and an economic hardship by imposing duplicate penalties.

 

            AT&T Florida’s proposed modified Service Guarantee Program is similar to its existing Service Guarantee Program approved by the Commission in Order No. PSC-05-0440-PAA -TL, issued April 25, 2005, Docket No. 050095-TL, In Re: 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., except for the changes summarized in Table 2-1. 

 

Table 2-1.  Comparison of AT&T Florida’s current vs. proposed Service Guarantee Program (SGP)
Repair – Out-of-Service (Restoration of Interrupted Service)
Existing SGP	Proposed Modified SGP
Where AT&T Florida 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 $40.00 and no less than $11.00. Saturdays and Sundays are included in calculating service credits. The SGP only applies to residential customers.	Identical except that the SGP applies only to residential basic local service (single line flat rate service).

 

Primary Service Installation
Existing SGP	Proposed Modified SGP
Where AT&T Florida fails to install a customer’s primary or additional local service on the date which the customer and AT&T Florida agree, AT&T Florida will give the customer an automatic credit of $25.00.  Where AT&T Florida 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 applies only to residential basic local service (single line flat rate service).

 

Term
Existing SGP	Proposed Modified SGP
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.	The SGP will become effective on the day following the Commission’s vote approving the program.  AT&T Florida may petition the Commission to revert back to the existing Commission rules at any time.

 

Force Majeure
Existing SGP	Proposed Modified SGP
In the event of an emergency, AT&T Florida 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.  AT&T Florida will also suspend payments into the Lifeline Community Service Fund for missed answer time measurements within the affected areas.	Identical except that the SGP applies only to residential basic local service (single line flat rate service).

 

Answer Time
Existing SGP	Proposed Modified SGP
An 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 AT&T Florida 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.  AT&T Florida 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 AT&T Florida’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	Identical for customers who do not interact with the system, except that when customers are transferred to a live attendant, the attendant must be prepared to give immediate assistance within 90 seconds of being transferred to the attendant.   Greater than 90% within 90 seconds            -        $0 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   The proposed SGP also provides alternatives to being placed in a queue, i.e. an interactive voice response system that will allow customers to report trouble, get a trouble ticket number and make repair appointments without ever talking to a live attendant.  Additionally, the company offers an automated Right Touch System, use of its web page, and a Customer Call Back System to complete other transactions without having to talk to a live attendant.   If the customer interacts with the system in any way, answer time measurement no longer applies to the call.

 

 

AT&T Florida states that it will continue to make payments to basic residential customers based on the standards of the current Service Guarantee Program, pending completion of changes to internal operations systems to implement the proposed Service Guarantee Program changes.  When the system changes are complete, AT&T Florida will notify the Commission and subsequent Service Guarantee Program payments will be made in accordance with the changes approved by the Commission in this proceeding.

           

Accordingly, staff recommends that the Commission approve AT&T Florida’s petition to modify its existing Service Guarantee Program, pursuant to the changes to the service quality rules necessitated by Chapter 2009-226, Laws of Florida.  Customers, to whom the Service Guarantee Program applies, should be identified based on the Commission’s decision in Issue 1.

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.  (Tan)

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.