DATE:	July 20, 2012
TO:	Office of Commission Clerk (Cole)
FROM:	Office of Telecommunications (Polk) Office of the General Counsel (Robinson)
RE:	Docket No. 120150-TL – 2013 State Annual Certification of Rural Telecommunications Carriers Pursuant to 47 C.F.R. 54.314, High Cost Universal Service.
AGENDA:	08/02/12 – Regular Agenda – Interested Persons May Participate
COMMISSIONERS ASSIGNED:			All Commissioners
PREHEARING OFFICER:			Administrative
CRITICAL DATES:			October 1, 2012 Filing Deadline with the FCC.
SPECIAL INSTRUCTIONS:			None
FILE NAME AND LOCATION:			S:\PSC\TEL\WP\120150.RCM.DOC

 

Case Background

Section 254(e) of the Telecommunications Act of 1996 provides that a carrier that receives universal service support “…shall use that support only for the provision, maintenance, and upgrading of facilities and services for which the support is intended...”  In its Fourteenth Report and Order, Twenty-Second Order on Reconsideration, and Further Notice of Proposed Rulemaking in CC Docket No. 00-256 (the Rural Task Force Order), the Federal Communications Commission (FCC) modified its rules pertaining to the provision of high-cost support for rural telephone companies.[1]  The FCC adopted a rule requiring that states desiring for rural carriers within their jurisdiction to receive federal high-cost support must each file a certification annually with the FCC and with the Universal Service Administrative Company (USAC).  This certification is to affirm that the federal high-cost funds flowing to rural carriers in the state, or to any competitive eligible telecommunications carriers seeking support for serving customers within a rural carrier’s service area, will be used in a manner that comports with Section 254(e).  47 C.F.R. §54.314(a), (c) provide the following:

Certification of support for eligible telecommunications carriers.

 

(a)        Certification.  States that desire eligible telecommunications carriers to receive support pursuant to the high-cost program must file an annual certification with the Administrator and the Commission stating that all federal high-cost support provided to such carriers within that State was used in the preceding calendar year and will be used in the coming calendar year only for the provision, maintenance, and upgrading of facilities and services for which the support is intended. High-cost support shall only be provided to the extent that the State has filed the requisite certification pursuant to this section.

(c)        Certification format.  (1)  A certification pursuant to this section may be filed in the form of a letter from the appropriate regulatory authority for the State, and must be filed with both the Office of the Secretary of the Commission clearly referencing WC Docket No. 10–90, and with the Administrator of the high-cost support mechanism, on or before the deadlines set forth in paragraph (d) of this section. If provided by the appropriate regulatory authority for the State, the annual certification must identify which carriers in the State are eligible to receive federal support during the applicable 12-month period, and must certify that those carriers only used support during the preceding calendar year and will only use support in the coming calendar year for the provision, maintenance, and upgrading of facilities and services for which support is intended. A State may file a supplemental certification for carriers not subject to the State's annual certification.  All certificates filed by a State pursuant to this section shall become part of the public record maintained by the Commission.    

            The FCC requires that certifications for the next calendar funding year must be submitted by the preceding October 1; thus, in order for a rural carrier to be eligible for high-cost universal service support for all of calendar year 2013, certification must be submitted by October 1, 2012.

 

             47 C.F.R. §54.314 contains one new requirement which must be completed for high-cost certification.  ETC high-cost certification must now include a statement that all federal high-cost support was used in the preceding calendar year only for the provision, maintenance, and upgrading of facilities and services for which the support was intended.  This recommendation addresses the Florida Public Service Commission (FPSC or Commission) certification of Florida’s rural LECs for 2013 in accordance with 47 C.F.R. §54.314.

 

             

Discussion of Issues

Issue 1: 

 Should the FPSC certify to the FCC and to the USAC that Windstream Florida, Inc., Frontier Communications of the South, LLC, GTC, Inc. d/b/a FairPoint Communications, ITS Telecommunications Systems, Inc., Northeast Florida Telephone Company d/b/a NEFCOM, Quincy Telephone Company d/b/a TDS Telecom/Quincy Telephone, and Smart City Telecommunications, LLC d/b/a Smart City Telecom, have used the federal high-cost support in the preceding calendar year, and will use the federal high-cost support they receive in the coming calendar year only for the provision, maintenance, and upgrading of facilities and services for which the support is intended?

Recommendation: 

 Yes.  The FPSC  should certify to the FCC and to the USAC that Windstream Florida, Inc., Frontier Communications of the South, LLC, GTC, Inc. d/b/a FairPoint Communications, ITS Telecommunications Systems, Inc., Northeast Florida Telephone Company d/b/a NEFCOM, Quincy Telephone Company d/b/a TDS Telecom/Quincy Telephone, and Smart City Telecommunications, LLC d/b/a Smart City Telecom, have used the federal high-cost support in the preceding calendar year, and will use the federal high-cost support they receive in the coming calendar year only for the provision, maintenance, and upgrading of facilities and services for which the support is intended. (Polk)

Staff Analysis: 

 Unless the Commission submits certifications to the FCC and to the USAC by October 1, 2012, Florida’s rural carriers will not receive high-cost universal service funds during the first quarter of 2013, and would forego all federal support for that quarter.  Certifications filed after October 1, 2012, would cause rural carriers to be eligible for high-cost funds for only partial quarters of 2013.  For example, certifications filed by January 1, 2013, would allow rural carriers to be eligible for high-cost funds in the second, third, and fourth quarters of 2013.  Certifications filed by April 1, 2013, would only allow rural carriers to be eligible for high-cost funds in the third and fourth quarters of 2013. 

As has been done in prior years, each of the Florida rural ETCs has provided the Commission with an affidavit (see Attachments A through G) in which they have certified that their use of high-cost universal service support they will receive during 2013 will comport with Section 254(e) of the Act and applicable FCC rules.  In addition, to comply with the new requirement, the rural ETCs each certified that all federal high-cost support was used in the preceding calendar year only for the provision, maintenance, and upgrading of facilities and services for which the support was intended.

Given these ETCs’ certifications, staff recommends that the Commission certify to the FCC and to the USAC that Windstream Florida, Inc., Frontier Communications of the South, LLC, GTC, Inc. d/b/a FairPoint Communications, ITS Telecommunications Systems, Inc., Northeast Florida Telephone Company d/b/a NEFCOM, Quincy Telephone Company d/b/a TDS Telecom/Quincy Telephone, and Smart City Telecommunications, LLC d/b/a Smart City Telecom, have used the federal high-cost support in the preceding calendar year, and will use the federal high-cost support they receive in the coming calendar year only for the provision, maintenance, and upgrading of facilities and services for which the support is intended.

Issue 2: 

 Should this docket be closed?

Recommendation: 

 Yes.  This docket should be closed and subsequent annual certifications of rural telephone companies should be addressed in a new docket. (Robinson)

Staff Analysis: 

 Under 47 C.F.R. §54.314, state commission certification that its rural LECs used federal high-cost universal service support in the preceding calendar year, and will use high-cost universal service support in the coming calendar year only in a manner that comports with Section 254(e) will need to be addressed once a year.  Staff anticipates that in subsequent years, Florida’s rural LECs that continue to desire to receive high-cost universal service support will again submit affidavits to this Commission.   Such affidavits would need to be received on a schedule that allows for an order to be issued and forwarded with a letter to the FCC and the USAC prior to October 1.  Accordingly, staff believes it is appropriate that this docket should be closed and subsequent annual certifications of rural telephone companies should be addressed in a new docket.