Case Background
Phone
Club Corporation (Phone Club) is a Florida corporation organized on May 30,
2002, with its current headquarters in Palm Coast, Florida. The company was
granted certification by the Florida Public Service Commission (FPSC or Commission)
to operate as a Competitive Local Exchange Company (CLEC) in Florida in Docket
No. 020536-TX, by Order No. PSC-02-1086-PAA-TX.
On
May 17, 2016, Phone Club petitioned the FPSC for landline eligible
telecommunications carrier (ETC) designation in the State of Florida. In its
petition, Phone Club requested that it be granted ETC status in all of the
non-rural BellSouth/AT&T (AT&T) service areas in the State of Florida for
purposes of receiving federal universal service support. Phone Club also asserts
that it is only seeking low-income support, and will not be requesting
high-cost support from the federal Universal Service Fund (USF).
Phone
Club provides local exchange service using resale obtained through a Resale
Agreement with AT&T. Phone Club signed an applicant certification attesting
that it will follow all Florida Statutes (F.S.), Florida Administrative Code
(F.A.C.) Rules, FPSC Orders, Federal Communications Commission (FCC) Rules, FCC
Orders, and regulations contained in the Telecommunications Act of 1996 (the
Act) regarding Universal Service, ETCs, and Lifeline. (Attachment A)
In
accordance with 47 C.F.R. § 54.201(d)(1), a company 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 to obtain ETC designation and receive Lifeline reimbursement
through the USF. However, non-ETC pure resellers were eligible to receive
Lifeline reimbursement as a flow-through from its wholesale service provider.
In
the 2015 Lifeline Second Further Notice of Proposed Rulemaking and Order, the
FCC amended the Lifeline rules to eliminate Lifeline reimbursement for non-ETC
resellers provisioning service through Resale Agreements. Subsequently, effective August 15, 2016,
non-ETC resellers, such as Phone Club, became ineligible to receive discounts for
Lifeline service from its underlying resale carrier. Absent an approved
Lifeline Compliance Plan by the FCC and state ETC designation, these non-ETC
reseller companies would no longer provide Lifeline service with support. Staff
informed Phone Club of this requirement, and communicated that Phone Club would
need to submit an approved FCC Compliance Plan with the FPSC before staff could
proceed with its analysis of Phone Club’s ETC petition.
On
July 26, 2016, Phone Club filed its proposed wireline Compliance Plan with the
FCC to obtain forbearance from the facilities requirement of the Act, for the
provision of Lifeline service. The FCC approved Phone Club’s proposed
Lifeline Compliance Plan on August 10, 2016.
As of August 18,
2016, Phone Club asserts that it serves 150 residential customers in Florida. The
Commission has jurisdiction pursuant to Section 364.10(2), F.S., to rule on a
petition by a CLEC seeking designation as an ETC pursuant to 47 C.F.R. §
54.201.
Discussion
of Issues
Issue 1:
Should Phone Club be granted landline ETC
designation in the State of Florida?
Recommendation:
Yes. Staff recommends that Phone Club be granted
landline ETC designation status in all non-rural AT&T wire centers listed
in Attachment B. 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. (Williams)
Staff Analysis:
Pursuant to Federal
Statute, state commissions have the primary responsibility to designate
providers as ETCs. Designation
as an ETC is required in order for a provider to be eligible to receive monies
from the USF. Section 254(e) of the Act provides that “only an eligible
telecommunications carrier designated under Section 214(e) of this title shall
be eligible to receive specific federal universal service support.”
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 areas. Further, 47 C.F.R. § 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
A state commission’s
responsibilities related to an ETC designation is provided in 47 C.F.R. §
54.201(c), where:
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 for voice telephony services, a
carrier must provide four services identified in 47 C.F.R. § 54.101(a)(1). 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 additional charge to end
users.
3) 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.
4) Toll limitation for qualifying low-income
consumers: Toll limitation or blocking restricts all direct-dial toll
access.
Also, 47 C.F.R. § 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. In
this Order, the FCC determined that an ETC applicant must also demonstrate:
1) Commitment
and ability to provide the supported services throughout the designated area
2)
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 local exchange companies (ILEC)
The FCC approved these items in Phone Club’s Compliance Plan.
Public
Interest Determinations
Pursuant to 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 Sections 214 or 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. The
FPSC has determined 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.
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 recommends 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 the supported
services throughout the designated service area, and able to provide consumers
an evolving level of universal service are designated as ETCs.
Additional ETC
Requirements
Transitional Lifeline
In accordance with Section 364.105, F.S., 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 service receives the discounted price for
a period of one year after the date the subscriber ceases to be qualified for
Lifeline.
Lifeline Advertising
Phone Club asserts that it will advertise the availability
of Lifeline in newspapers, TV, and direct mail as required by 47 U.S.C. § 214(e)(1)(B).
Phone Club also asserts that it will provide information about Lifeline availability
through community partnerships and work with social service groups that
interface with Lifeline-eligible customers.
In response to staff’s data request, Phone Club asserted that it
currently advertises its Lifeline service in small community and church
newspapers, and through direct mail. Phone Club also provided an example of a Lifeline
advertisement which included eligibility requirements.
Facilities Requirement
In accordance with 47 C.F.R. § 54.201(d)(1),
a company 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. Phone Club plans to offer all
of the supported services enumerated under Section 254(c) of the Act through
its resale agreement with AT&T. On August 10, 2016, the FCC approved Phone
Club’s wireline Compliance Plan as a condition of obtaining forbearance from
the facilities requirement for the provision of Lifeline service.
Phone Club’s Petition
Phone Club is requesting that it
be granted landline ETC status throughout the non-rural wire centers of
AT&T (Attachment B) for the purpose of receiving federal universal service
support. Phone Club maintains that it is
only seeking low-income support, and it is not requesting high-cost support
from the USF. Phone Club’s purpose in requesting ETC status in Florida is to
provide Lifeline services over landline access lines. Phone Club has
acknowledged the requirements of the Florida Lifeline program, and has agreed
to adhere to the program which provides qualified customers a $9.25 credit.
Staff reviewed Phone Club’s payment
history of regulatory assessment fees, consumer complaint incidents and the
timely resolution of those complaints, financial statements, and Phone Club’s
status with the Florida Department of State Division of Corporations, among
other sources. Phone Club appears to be
in good standing with the Commission.
Conclusion
Based on staff’s review, staff believes that Phone Club’s
petition for landline ETC designation is in the public interest and should be
approved. If Phone Club should decide in the future to seek High Cost universal
service funds, ETC status in rural areas, or ETC designation as a wireless or
broadband ETC, Phone Club should be required to file a petition with the
appropriate agency and make a showing that it would be in the public interest
to grant such a request.
Therefore, staff recommends that Phone Club be granted
landline ETC designation status in all non-rural AT&T wire centers listed
in Attachment B. 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.
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, a Consummating Order should be issued and the docket closed upon
issuance of a Consummating Order. (Lherisson)
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.
