DATE:	December 28, 2011
TO:	Office of Commission Clerk (Cole)
FROM:	Division of Regulatory Analysis (Curry, Casey) Office of the General Counsel (Robinson)
RE:	Docket No. 110100-TX – Compliance investigation of North County Communications Corporation for apparent failure to accurately disclose information on application.
AGENDA:	01/10/12 – 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\110100.RCM.DOC

 

  Case Background

On August 31, 2010, North County Communications Corporation (North County) submitted an application to obtain authority to provide competitive local exchange telecommunications services in Florida.  By Proposed Agency Action (PAA) Order No. PSC-10-0598-PAA-TX, issued September 30, 2010, the Florida Public Service Commission (Commission) granted competitive local exchange company (CLEC) Certificate No. 8799 to North County.  The Order became final and effective on October 26, 2010, upon issuance of Consummating Order No. PSC-10-0639-CO-TX.  

After the company’s certificate was granted, staff determined that North County had failed to accurately disclose information on its CLEC application.  Specifically, North County did not list on its CLEC application the states in which the company had been involved in civil court proceedings with an interexchange carrier, local exchange company, or other telecommunications entity, and the circumstances involved as required in Part 16 question F of the CLEC application.   North County also submitted a resume for an employee who was deceased at the time the resume was submitted.

Upon further investigation, staff determined that the Commission had taken regulatory action against North County in two prior dockets for failure to pay its regulatory assessment fees (RAF).[1]  Based on the company’s failure to accurately disclose information on its CLEC application and its two prior regulatory infractions, by PAA Order No. PSC-11-0405-PAA-TX, issued September 23, 2011, the Commission proposed to cancel North County’s CLEC Certificate No. 8799 for failing to meet the managerial capability requirement of Section 364.335, Florida Statutes.  On October 10, 2011, North County protested the Commission’s PAA Order and offered a proposed settlement to resolve the matter. 

This recommendation addresses North County’s proposed settlement offer.  The Commission is vested with jurisdiction over this matter pursuant to Sections 364.02, 364.33, and 364.335, Florida Statutes.[2]

                                                                                                                            Discussion of Issues

 

Issue 1: 

 Should the Commission accept North County Communications Corporation’s settlement offer to resolve its apparent failure to accurately disclose information on its application for authority to provide competitive local exchange services?

Recommendation: 

 Yes, the Commission should accept North County Communications Corporation’s settlement offer to resolve its apparent failure to accurately disclose information on its application for authority to provide competitive local exchange services.  (Curry, Robinson)

Staff Analysis: 

 Section 364.335(2), Florida Statutes (F.S.), provides in part that the Commission shall grant a certificate of authority to provide telecommunications services upon a showing that the applicant has sufficient technical, financial, and managerial capability to provide such service in the geographic area proposed to be served.

Rule 25-24.810, F.A.C., Application for a Certificate, requires that an applicant for a certificate shall submit a completed Form PSC/RAD 8 (5/08) entitled “Application Form for Authority to Provide Competitive Local Exchange Service Within the State of Florida,” and is incorporated into this rule by reference.

 

As stated in the Case Background, North County failed to accurately disclose information on its CLEC application.  Although the company resubmitted a thoroughly completed CLEC application, along with the required resumes and financial statements, this Commission ultimately determined that based on the company’s failure to accurately disclose information on its CLEC application and its two prior regulatory infractions, North County lacked the managerial capability to operate as a CLEC in Florida. 

By PAA Order No. PSC-11-0405-PAA-TX, issued September 23, 2011, the Commission proposed to cancel North County’s CLEC Certificate.  After the PAA Order was issued North County submitted a proposed settlement offer (Attachment A) wherein the company offered to submit a one-time voluntary payment in the amount of $2,500 to resolve the matter.  In addition to the settlement payment, North County has retained experienced regulatory counsel who will be responsible for ensuring that the company maintains future compliance. 

Staff notes that in the past North County has not placed the same importance on ensuring compliance in Florida (a state in which the company is non-operational) as it has on ensuring compliance in other states in which the company is operational.  It is North County’s position that hiring experienced regulatory counsel to handle the company’s regulatory matters affirms the company’s commitment to maintain future compliance.  North County has also been made aware that in the future if the company refuses to comply with or willfully violates any lawful rule or order of this Commission the company may be subject to possible penalties pursuant to Section 364.285, F.S., and/or cancellation of its CLEC Certificate.  If penalties are assessed in the future, North County also understands that this matter will be considered when determining the amount.

 

North County has worked with staff to resolve the issues with the company’s CLEC application.  The company has also diligently worked with staff to negotiate the terms of its proposed settlement offer.  North County’s proposed settlement offer is consistent with a settlement offer that the Commission has approved in similar a docket.  In Docket No. 050363-TP, In Re: Compliance investigation of Southeastern Services, Inc. for apparent failure to disclose required information on each of its applications for alternative access vendor certificate, competitive local exchange company certificate, and interexchange company certificate, Southeastern Services, Inc. inadvertently failed to disclose pertinent information on its applications.  To resolve the matter the Commission accepted Southeastern Services, Inc.’s proposed settlement offer to voluntarily contribute a payment in the amount of $2,500.[3] 

Because North County’s proposed settlement offer is consistent with a previous offer that the Commission has accepted for a similar violation and the company’s apparent failure to accurately disclose information on its CLEC application appears to be the result of carelessness rather than a malicious attempt to defraud the Commission, staff believes that the Commission should accept the company’s offer to submit a one-time voluntary payment in the amount of $2,500 to resolve the company’s apparent failure to accurately disclose information on its application for authority to provide competitive local exchange services.     

Issue 2: 

 Should this docket be closed?

Recommendation: 

 If the Commission approves staff’s recommendation on Issue 1 this docket should remain open pending the receipt of the $2,500 settlement payment.  The payment should be received by the Commission within fourteen (14) calendar days after the issuance of the Consummating Order.   The payment should be made payable to the Florida Public Service Commission and should identify the docket number and the company’s name.  Upon receipt of the payment, the Commission shall forward it to the Division of Financial Services to be deposited into the General Revenue Fund.  If North County fails to pay the $2,500 settlement payment within fourteen (14) calendar days after the issuance of the Consummating Order, its CLEC Certificate No. 8799 should be revoked.  This docket should be closed administratively upon receipt of the settlement payment or revocation of North County’s CLEC certificate.       (Curry Robinson)

Staff Analysis: 

 Staff recommends that the Commission take action as set forth in its recommendation.