DATE:	August 24, 2011
TO:	Office of Commission Clerk (Cole)
FROM:	Division of Regulatory Analysis (Polk) Office of the General Counsel (Tan)
RE:	Docket No. 080201-TX – Application for designation as an Eligible Telecommunications Carrier by Tele Circuit Network Corporation.
AGENDA:	09-08-11 – Regular Agenda – Proposed Agency Action –  Interested Persons May Participate
COMMISSIONERS ASSIGNED:			All Commissioners
PREHEARING OFFICER:			Edgar
CRITICAL DATES:			None
SPECIAL INSTRUCTIONS:			None
FILE NAME AND LOCATION:			S:\PSC\RAD\WP\080201.RCM.DOC

 

Case Background

            Tele Circuit Network Corporation (Tele Circuit or Company) filed an application with the Florida Public Service Commission (FSPC or Commission) on April 4, 2008, for designation as a landline Eligible Telecommunications Carrier (ETC) in Florida throughout the BellSouth Telecommunications, Inc. d/b/a AT&T Florida (AT&T), and Verizon Florida (Verizon) service areas. On February 19, 2009, staff filed a recommendation to grant ETC status to Tele Circuit.

            On March 3, 2009, staff withdrew its recommendation when it became aware of an outstanding Notice of Apparent Liability (NAL) by the Federal Communications Commission (FCC) for violation of Customer Proprietary Network Information rules. In its application, Tele Circuit certified that the "Company will follow all FCC rules, FCC Orders, and regulations contained in the Telecommunications Act of 1996 regarding Universal Service, ETCs, Link-Up and Lifeline, and toll limitation service." (See Attachment B) Staff delayed the filing of this recommendation until after the FCC settled the NAL with TeleCircuit.

  Company History

Tele Circuit is a privately-held corporation incorporated in the state of Georgia and is authorized to transact business as a foreign corporation in Florida. Tele Circuit is a FPSC­ certificated competitive local exchange carrier (CLEC), which provides prepaid local exchange service in Florida.[1] In addition to its request for designation as an ETC in Florida, Tele Circuit currently has a petition pending in Georgia. Tele Circuit is not certified as an ETC in any other state. Tele Circuit states it is certified as a local provider in Alabama, Florida, Georgia, North Carolina, South Carolina and Tennessee. Tele Circuit further states it has not been denied ETC status in any other state, or has not withdrawn any petitions for ETC designation. Tele Circuit states it has 1,565 Florida customers as of June 2011.

            On February 15, 2008, Commission staff sent a certified letter to Tele Circuit requesting data to compile the Commission's annual report to the Legislature on the status of local competition in Florida (Local Competition Report). Tele Circuit received the certified letter, but failed to provide the requested data. On July 8, 2008, staff opened Docket 080451-TX against Tele Circuit for its apparent violation of Section 364.183(1), Florida Statutes (F.S.), Access to Company Records. By Order PSC-08-0628-PAA-TX, issued September 24, 2008, the Commission imposed a penalty of $10,000 for failure to provide information for the Local Competition Report. On October 13, 2008, Tele Circuit submitted a settlement proposal, which the Commission accepted by PAA Order PSC-08-0804-PAA-TX, issued December 4, 2008. The docket was subsequently closed January 13, 2009, upon Tele Circuit's compliance with all terms of the Order and receipt of its $3,500 settlement. On March 29, 2011, the FCC settled the NAL with Tele Circuit. On June 1, 2011, Tele Circuit sent an updated petition to the FPSC for designation as a landline ETC in the State of Florida.

            Tele Circuit is requesting that it be granted landline ETC status for the purpose of receiving low-income federal universal service support. Tele Circuit states it does not own, operate, or provide service in Florida using its own facilities; however, Tele Circuit will meet the ETC facilities requirement by purchasing Unbundled Network Elements (UNEs) through an existing interconnection agreement with AT &T[2] or unbundled network equivalents through a commercial agreement. Tele Circuit has amended its original petition and it no longer seeks ETC designation in the Verizon service area.

The Commission has authority under Section 364.l0(1)(a), 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 Tele Circuit be granted ETC designation in the state of Florida?

Recommendation: 

 Yes. Staff recommends that Tele Circuit's application for Florida ETC designation in the AT&T wire centers listed in Attachment A of this recommendation be granted. If there is a future change of company ownership, the new owners should be required to file a petition with the FPSC, and make a showing of public interest to maintain the company's ETC designation. Staff also recommends that if Tele Circuit is approved for ETC status, the Commission should also require Tele Circuit to submit the number of UNEs or UNE equivalents purchased from AT&T for each month during the quarter when it files its quarterly reports. (Polk)

Staff Analysis: 

 Under FCC rules, the state commissions have the primary responsibility to designate providers as ETCs.[3] Designation as an ETC is required in order for a provider to be eligible to receive monies from the federal Universal Service Fund. Section 254(e) of the Act provides that “only an eligible telecommunications carrier designated under Section 214(e) ... shall be eligible to receive specific Federal universal service support.”[4]  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:[5]

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, telecommunications carriers must provide nine services identified in CFR Rule 54.201(d)(1).[6]

(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.

(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.

Tele Circuit has the ability and has committed to provide 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.

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. 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)        the 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, In re: State certification of rural telecommunications carriers pursuant to 47 C.F.R. 54.314, by Order No. PSC-05-0824-FOF-TL, issued August 15,2005. Tele Circuit signed an affidavit attesting that it will follow all Florida Statutes, Florida Administrative Rules, Florida PSC Orders, FCC Rules and Orders. In addition, Tele Circuit has committed to follow all regulations contained in the Telecommunications Act of 1996 regarding Universal Service, ETCs, Link-Up and Lifeline, and toll limitation service (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. Congress did not establish specific criteria to be applied under the public interest tests in Section 214. 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.[7] The FPSC has determined that before designating a carrier as an ETC, it 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. [8]

Beyond the principles detailed in the Act, the FCC and state commissions have used additional factors to analyze whether the designation of an ETC is in the public interest. A rigorous ETC designation process ensures that only fully qualified applicants receive designation as ETCs and that all ETC designees are prepared to serve all customers within the designated service area.

 

Staff believes that if there is a future change of company ownership, the new owners should be required to file a petition with the FPSC, and make a showing of public interest to maintain the company's ETC designation. This will ensure that only carriers that are financially viable, likely to remain in the market, willing and able to provide supported services throughout the designated service area, and able to provide an evolving level of universal service are designated as ETCs.

Transitional Lifeline

Transitional Lifeline requires that ETCs offer discounted residential basic local telecommunications service at 70 percent of the residential local telecommunications service rate for any Lifeline subscriber who no longer qualifies for Lifeline. A Lifeline subscriber who requests such services receives the discounted price for a period of one year after the date the subscriber ceases to be qualified for Lifeline. Tele Circuit understands that Florida's Lifeline program provides that if a Lifeline customer is no longer eligible for Lifeline, that the ETC must provide a 30 percent monthly discount off its local rate to that customer for a period of 12 months at the ETC's expense.

Lifeline Advertising

Tele Circuit states that it will announce and advertise telecommunications services as a landline ETC where it provides service in its designated area in Florida and will publicize the availability of Lifeline and Link-Up services in a manner reasonably designed to reach those likely to qualify for those services. Tele Circuit will be running advertising in newspaper, magazine, flyers, and radio commercials as required by Section 214( e)(1 )(B) of the Act.

Facilities Requirement

In accordance with 47 C.F.R. 54.201(d)(l), a company must offer the services that are supported by the federal universal service support mechanisms either using its own facilities or a combination of its own facilities and resale of another carrier's services. Tele Circuit states that it intends to offer all of the supported services enumerated under Section 254( c) of the Act using facilities obtained as UNEs. Section 54.201, C.F.R., provides that the term "own facilities" includes facilities obtained as UNEs.

            Rule 25-4.0665(20), Florida Administrative Code, requires ETCs offering Link-Up and Lifeline service to submit quarterly reports to the Commission, no later than 30 days following the ending of each quarter. The quarterly reports must include the following data:

(1)        The number of Lifeline subscribers, excluding resold Lifeline subscribers, for each month during the quarter.

 

(2)        The number of subscribers who received Link-Up for each month during the quarter.

 

(3)        The number of Lifeline subscribers added each month during the quarter.

 

 

(4)        The number of transitional Lifeline subscribers who received discounted service for each month during the quarter.

 

(5)        The number of residential access lines with Lifeline service that were resold to other carriers each month during the quarter.

 

Staff believes that if Tele Circuit is approved for ETC status, the Commission should also require Tele Circuit to submit the number of UNEs or UNE equivalents purchased from AT&T for each month during the quarter when it files its quarterly reports. This will allow staff to confirm that Tele Circuit is following FCC rules which require that an ETC must offer the services that are supported by the federal universal support mechanisms either using its own facilities or a combination of its own facilities and resale of another carrier's services.

Tele Circuit's Petition

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

Tele Circuit has 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, Tele Circuit has agreed to abide by the Commission's rules, such as the procedures for approving, denying, and terminating recipients, time lines for submitting reports, and expectations pertaining to the Lifeline and Link-Up programs. Tele Circuit commits to use federal universal support only for the provision of services for which the support is intended.

Tele Circuit 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 percent match of federal support for having a state lifeline program requiring a $3.50 credit under the Florida eligibility criteria. Tele Circuit indicates that it will provide the $13.50 credit to qualified clients, advertise the availability of Lifeline, and begin offering these services within 60 days of receiving ETC status. Tele Circuit plans to advertise the services supported by the Federal Universal Service mechanisms throughout the area where designated, as required in 47 C.F.R. §214(e)(l).

Tele Circuit states that it will pass through all applicable state and federal service discounts and mandated service support to its Lifeline and Link-Up customers, thus reducing the price of access to telecommunications services for the Lifeline and Link-Up eligible customers in Florida. Tele Circuit commits to apply the Lifeline discount to bundled packages, as well as non-bundled services.

Granting Tele Circuit ETC status in Florida, would provide Lifeline eligible customers in Florida another option for landline telephone service.  For customers who have been disconnected from other carriers due to non-payment, Tele Circuit provides local service, prepaid long-distance services, and toll restriction services to customers. Per Florida Statutes, carriers cannot charge for toll blocking, and Tele Circuit complies with this law. Tele Circuit intends to educate customers about the option of toll blocking and prepaid long-distance, in hopes of reducing toll charges for customers.

Conclusion

Staff believes that Tele Circuit will promote the availability of universal service to the underserved, economically disadvantaged telephone customers in Florida. If Tele Circuit 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 Tele Circuit's commitment to abide by both state and federal rules and procedures, staff believes that Tele Circuit's petition for landline ETC designation 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 Tele Circuit, 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 Tele Circuit's application for landline ETC designation in the Florida AT&T wire centers listed in Attachment A of this recommendation be granted. If there is a future change of company ownership, the new owners should be required to file a petition with the FPSC, and make a showing of public interest to maintain the company's ETC designation. Staff also recommends that if Tele Circuit is approved for ETC status, the Commission should also require Tele Circuit to submit the number of UNEs or UNE equivalents purchased from AT&T for each month during the quarter when it files its quarterly reports.

Issue 2: 

 Should this docket be closed?

Recommendation: 

 Yes.  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.