Case Background
SH Services LLC
(SH Services or the Company) is a regulated telecommunications company located
in Miami, Florida. The Company’s
application for a competitive local exchange telecommunications services
certificate was approved by the Commission on August 11, 2004, by Order No.
PSC-04-0787-PAA-TX. Pursuant to Section 364.336, Florida Statutes (F.S.),
certificate holders must pay a minimum annual Regulatory Assessment Fee (RAF)
if the certificate was active during any portion of the calendar year.
Pursuant to
Section 350.113(4), F.S., RAF forms are mailed to regulated companies for the
period January 1 through December 31, at least 45 days prior to the date that
payment of the fee is due. Pursuant to Rule 25-4.0161(2), Florida
Administrative Code (F.A.C.), the RAF form and applicable fees are due to the
Commission by January 30 of the subsequent year.
In keeping with
Commission rules and statutes, 2020 RAF forms were mailed on December 9, 2020,
for the period January 1, 2020 through December 31, 2020. The RAF form and applicable fees were due on
or before January 30, 2020.
On February 22,
2021, the Commission mailed a letter to the Company informing it that,
according to Commission records, its RAF payment had not yet been received, and
was past due. The letter also informed
the Company that payment would need to be postmarked within 15 calendar days of
receipt of the notice, as evidenced by the certified mail receipt, and, if not
received by that date, a RAF rule violation penalty of $500, $1,000, or $2,000,
is automatically imposed, depending on the number of previous dockets opened
against the entity for violation of the RAF rule.
SH Services had
three prior dockets opened for violation of Rule 25-4.0161, F.A.C. – Docket No.
20080469-TX, Docket No. 20090201-TX, and Docket No. 20100207-TX. Because this docket was opened for an
apparent fourth violation by the Company of Rule 25-4.0161, F.A.C., staff is
required to file a recommendation addressing the fourth violation for the
Commission’s consideration and further action.
On April 21,
2021, the Commission received a partial payment which included the RAF and
associated delinquent RAF penalty and interest, along with a portion of the
additional rule violation penalty, from SH Services. On May 20, 2021, the
Commission received the remaining balance owed.
The Commission
has jurisdiction over this matter pursuant to Sections 350.113, 364.336, and
364.285, F.S.
Discussion
of Issues
Issue 1:
Should the Commission impose a penalty and a cost of
collection, together totaling $4,000 or cancel the SH Services tariff and
remove SH Services, TX797, from the register for an apparent fourth violation
of Section 364.336, F.S., and Rule 25-4.0161, F.A.C., Regulatory Assessment
Fees; Telecommunication Companies?
Recommendation:
The Commission should impose a penalty and the cost
of collection, together totaling $4,000, but should not cancel the SH Services
tariff nor remove the Company’s name from the register. (Kunkler)
Staff Analysis:
The Commission has opened three prior dockets, in
2008, 2009, and 2010, to address the same rule violation by SH Services. In all three dockets, the Company’s failure
to pay past due RAFs by the delinquency notice deadlines resulted in the
Company paying not only the delinquent RAFs, but also the statutory late
payment penalties and interest amounts, and additional rule violation penalties
per Rule 25-4.0161(12), F.A.C.
Due to the failure to timely pay the past due RAFs, SH
Services consequently paid an additional rule violation penalty of $500 to
resolve Docket No. 20080469-TX, $1,000 to resolve Docket No. 20090201-TX, and
$2,000 to resolve Docket No. 20100207-TX, along with all RAF amounts, statutory
penalties, and interest charges. These
actions resulted in the Company’s certificate remaining active, which would
have otherwise been cancelled administratively.
For a company’s fourth-time failure to pay the RAF, Rule
25-4.0161(13), F.A.C., provides that staff shall file a recommendation for the
Commission’s consideration and further action.
Pursuant to this rule, the Commission has authority, and also
discretion, to either cancel the company’s certificate, or waive the
cancellation if a penalty, plus the outstanding RAF, including accrued
statutory late payment charges, are paid in full. While the Company has had
three prior violations of this Rule, the most recent violation for RAF
non-compliance occurred over 11 years ago, in Docket No. 20100207-TX.
Rule 25-4.0161, F.A.C., does not specify a penalty amount
for a fourth rule violation. As stated earlier, the rule prescribes a penalty
of $500, $1,000, or $2,000, depending on the number of previous violations
(i.e. dockets opened due to a utility’s failure to pay). Staff notes that the
penalty amount per the rule doubles each time a subsequent RAF rule violation
occurs up to three violations. Since this is the Company’s fourth RAF rule
violation, staff believes an appropriate penalty is $4,000, which equates to a
doubling of the $2,000 penalty amount for a third RAF rule violation.[1] Most
recently, this penalty amount was approved by the Commission, in Docket No.
20200141-TA.[2] Pursuant
to Section 364.285, F.S., the Commission has authority to penalize up to
$25,000.
On April 21, 2021, the Commission received a partial RAF payment
from SH Services in the amount of $1,744. Staff reached out by phone to the
Company on April 26, 2021, and by email on April 29, 2021 and May 11,
2021. On each occasion the Company was
responsive and expressed its intent to pay the appropriate amount owed in an
effort to keep the Certificate active.
On May 3, 2021, the Commission received an additional partial payment in
the amount of $617.34, and on May 20, 2021, the Commission received the
Company’s remaining balance in the amount of $2,000.
Pursuant to Section 350.113(4), F.S., five percent of the
2020 RAF amount due is imposed as a penalty for each 30 days or fraction
thereof during the time in which the failure continues, not to exceed a total
penalty of 25 percent.[4]
Additionally, an interest rate of 12 percent per annum is also applied to any
delinquent amounts. Thus, at the time of the Company’s April 21, 2021 payment, an
estimated 2020 RAF amount of $600, plus a late penalty in the amount of $90 (5
percent x 3 months x $600), plus accrued interest in the amount of $18,
resulted in a total amount due of $708.[5]
This amount, added to the staff-proposed fourth violation penalty amount of
$4,000, including cost of collections, resulted in a total amount due to the
Commission of $4,708. Staff notes that the amounts paid by SH Services in April
and May 2021, as described above, in addition to the carryover credits from
2019 and 2020, equal $4,708, leaving the Company with a zero balance under the
assumption that a $4,000 penalty in this case is appropriate.
Considering that the Company has paid the outstanding RAFs
and penalties prior to staff filing this recommendation, and three times
previously, as well as taking into account the extended amount of time elapsed
since its last RAF rule violation, staff believes that SH Services’ certificate
should not be cancelled.
Therefore, staff recommends the Commission acknowledge the
appropriate 2020 RAF, including accrued statutory late payment charges, along
with the $4,000 penalty, for a total amount due of $4,708. Staff also
recommends the Commission acknowledge that SH Services has paid this amount in
full. Furthermore, staff recommends that the Company’s tariff and registration
should not be cancelled nor removed from the register.
Issue 2:
Should this docket be closed?
Recommendation:
Staff recommends that the
Order issued from this recommendation should become final and effective upon
issuance of a Consummating Order. Thereupon, this docket should be closed
administratively either upon acknowledgment that SH Services has paid in full
the appropriate 2020 RAF, including accrued statutory late payment
charges, along with the $4,000 penalty, for a total amount due of $4,708, or
upon cancellation of the Company’s local exchange certificate and removal of
its name from the register. (Murphy)
Staff Analysis:
Staff recommends that the Order issued from this
recommendation should become final and effective upon issuance of a
Consummating Order, unless a person whose substantial interests are affected by
the Commission’s decision files a protest that identifies with specificity the
issues in dispute, in the form provided by Rule 28-106.201, F.A.C., within 21
days of the issuance of the Proposed Agency Action Order. As provided by
Section 120.80(13)(b), F.S., any issues not in dispute should be deemed
stipulated. If the Company fails to timely file a protest and to request a
Section 120.57, F.S., hearing, the facts should be deemed admitted and the
right to a hearing waived.
Staff recommends that the Commission take action as set
forth in the foregoing staff recommendation statement.
