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PA Bulletin, Doc. No. 99-606

NOTICES

PENNSYLVANIA PUBLIC UTILITY COMMISSION

Formal Investigation to Examine and Establish Updated Principles and Policies for Telecommunications Services in this Commonwealth; Report and Recommendation of the Universal Service Task Force (Monitoring and Reporting/Subscribership Subcommittee); Doc. No. I-00940035

[29 Pa.B. 1959]

   Commissioners Present: John M. Quain, Chairperson; Robert K. Bloom, Vice Chairperson; David W. Rolka; Nora Mead Brownell; Aaron Wilson, Jr.

Public Meeting held
February 11, 1999

Order

By the Commission:

   On January 28, 1997, the Public Utility Commission (Commission) adopted an Order which established a ''Universal Telephone Service Task Force'' (Task Force) in Pennsylvania. The purpose of this Task Force is to provide a collaborative forum through which all interested telecommunications-related entities can provide input on a wide spectrum of universal service issues. The Monitoring and Reporting/Subscribership Subcommittee (Monitoring Subcommittee) is one of four established Task Force subcommittees.

   On September 29, 1997, the Task Force issued a Report and Recommendation which suggested, among other things, that the Monitoring Subcommittee reconvene to review the Commission's existing Extended Area Service (EAS) regulations codified at 52 Pa. Code §§ 63.71--63.77. The Monitoring Subcommittee subsequently met at times during July through September of 1998, and drafted a Report on EAS issues which both addresses EAS regulations and recommends Commission action on these regulations. The Monitoring Subcommittee submitted its EAS Report to the Commission on January 27, 1999. The EAS Report follows to this order as ''Annex A.''

   In pertinent part, the EAS Report (at page 5) recommends the following:

   1.  Continue application of the Extended Area Service Regulations with the exception of conducting the biennial traffic usage studies. Suspend the biennial traffic usage studies until the Monitoring and Reporting/Subscribership Subcommittee further recommends how to conduct more accurate traffic usage data.

   2.  While the Monitoring and Reporting/Subscribership Subcommittee evaluates the accuracy and usefulness of traffic usage data collection, the current toll traffic usage studies from 1997 should be utilized. However, in a formal complaint process, it is suggested that if an Administrative Law Judge concludes that there is a strong community of interest demonstrated, a more current traffic usage study may be ordered.

   3.  The Monitoring and Reporting/Subscribership Subcommittee will evaluate the accuracy and usefulness contained in the traffic usage studies, determine how to conduct more accurate traffic usage studies, and review the regulations and the need for additional revisions.

   The Commission currently intends to enter a subsequent order which incorporates the recommendations set forth in the Monitoring Subcommittee EAS Report and waives 52 Pa. Code § 63.72 (relating to EAS traffic usage studies) pending further Monitoring Subcommittee analysis. However, the Commission wishes to ensure that our regulatory processes satisfy all appropriate due process concerns. Consequently, we will publish this order and the EAS Report for public comment before taking any further action on this matter; Therefore,

It Is Ordered That:

   1.  A copy of this order and the Monitoring Subcommittee EAS Report be forwarded to the Pennsylvania Bulletin for publication and public comment.

   2.  Interested parties have 30 days from the publication date of the order and the Monitoring Subcommittee EAS Report to submit comments on the EAS Report.

   3.  This order and the Monitoring Subcommittee EAS Report be posted on the Commission's website.

   4.  The contact person in this matter is Stephen E. Gorka, Assistant Counsel, Law Bureau, at (717) 772-8840. Alternate formats of these documents are available to persons with disabilities and may be obtained by contacting Sherri DelBiondo, Regulatory Coordinator, at (717) 783-2810.

JAMES J. MCNULTY,   
Secretary

REPORT OF THE MONITORING AND REPORTING/SUBSCRIBERSHIP SUBCOMMITTEE on Extended Area Service

September 30, 1998

Background

   The Monitoring and Reporting/Subscribership Subcommittee's review of the Extended Area Service (EAS) regulations is an outgrowth of the Public Utility Commission's January 28, 1997 Opinion and Order on universal service in the telecommunications industry in Pennsylvania. That Order established a ''Universal Telephone Service Task Force'' for the purpose of providing a collaborative forum through which all interested telecommunications stakeholders could participate in the development of recommendations on a wide range of issues involving universal telephone service. Four subcommittees were created as part of the Task Force, including the Monitoring and Reporting/Subscribership Subcommittee.

   On September 29, 1997, after meeting over a period of six months, the Universal Service Task Force issued its Final Report and Recommendation. That report included a recommendation that the Monitoring and Reporting/Subscribership Subcommittee be reconvened to review the EAS regulations in detail and make a final recommendation to the Commission. The Commission, in its March 19, 1998 Final Opinion and Order, adopted and approved the Task Force's Final Report.

   The March 19 Order had the additional directive that the Commission's Bureau of Fixed Utility Services (FUS), with the assistance of the Law Bureau, analyze the results of the 1997 traffic usage studies and determine whether the number of qualifying EAS routes were significant enough that the EAS requirements should be maintained, and provide a recommendation to the Office of Executive Director for further action if necessary. The FUS report, issued on June 12, 1998, recommended that the Commission continue to maintain the EAS requirements in some form until such time that the Commission could rely on local competition to address the concerns of limited local calling areas throughout the Commonwealth. The FUS report also recommended that the Subcommittee be reconvened to resolve a number of issues and make a final recommendation on the EAS regulations.

   On July 15, 1998 the Office of Executive Director announced that the Monitoring and Reporting/Subscribership Subcommittee would be reconvening and issued an invitation to all interested parties to work with the Subcommittee to review the EAS regulations and make a recommendation to the Commission. The following report, with concluding recommendations, is a result of the Subcommittee meetings held from July--September, 1998.

Discussion

   As the members of the Subcommittee began reviewing the EAS regulations, it became apparent that the discussion continually centered around and focused on the biennial traffic usage studies. The biennial traffic usage studies measure the interexchange toll traffic over both intraLATA and interLATA routes. Industry representatives expressed their concern that with the increasing level of competition in the local service market, it is becoming difficult to expend scarce competitive resources on this reporting obligation. As a greater number of companies enter local and toll markets, the sources from which data must be gathered and aggregated increases, as well as the complexity, ready availability and cost of gathering that data.

   With the increased level of competition in the local service market, there is a blurring of the distinction between local and toll calls. An Incumbent Local Exchange Carrier's (ILEC) local calling area has been subject to regulation, but Competitive Local Exchange Companies (CLECs) have the option to expand that local calling area. As that occurs, it becomes difficult to compare and analyze traffic over a particular route when one company charges toll rates for that route and another considers it a local call. For these and other reasons, traffic usage studies submitted by ILECs, may not reflect complete or accurate data.

   Consumer representatives on the Subcommittee also expressed the opinion that with increasing competition it becomes difficult to obtain accurate EAS studies. The competitive entry by CLECs and IXCs (Interexchange Carriers) in the local and intraLATA toll markets has made it more difficult to conduct meaningful studies.

   While there was agreement among the Subcommittee members concerning the inaccuracy of the biennial traffic usage studies, and that competition is designed to provide consumers with a greater variety of local or toll calling plans, there was disagreement concerning whether the Commission should phase out the current EAS regulations. Further, there was a fundamental difference how the issue was perceived: some members viewed the source of consumer complaints as a toll problem--''my toll bill is too high.'' Others viewed the source of consumer complaints as a local problem--''my local calling area is too small.''

   Certain members suggested that with local or toll competition, there is no longer a need for maintaining the regulations. With the growing number of carriers, each with a different market share, not all carriers will have the same cross section of customers and thus the same community of interest. These members also maintained that robust toll competition will alleviate the need for the current EAS regulations.

   Other representatives argued that local and toll competition has not yet provided an alternative means of responding to extended area service needs. The number of CLECs that offer local service areas that differ from those offered by the ILECs, remains extremely low. In fact, CLECs have had little success in even penetrating the ILECs' service territories; and in the majority of ILEC territories, there is no local competition.

   Focusing on the issue of the preparation of complete and meaningful traffic usage studies, remained the point of consensus. Current traffic studies do not include all intraLATA traffic and dial-around calls, which has led to possibly incomplete and inaccurate traffic usage studies. This led to the agreement by the members that the periodic mandatory traffic usage studies in their current form, should be suspended pending the resolution of all traffic study issues.

   This is not to suggest that there was agreement for eliminating the requirement that traffic usage studies ever be conducted. The agreement was to end the mandatory biennial traffic usage studies by all LECs. The Commission should reserve the ability to require a traffic usage study in the context of a formal complaint process. It is suggested that if an ALJ concludes that there is a strong community of interest demonstrated, an updated traffic usage study may be ordered.

   When traffic usage studies are conducted, competitively neutral guidelines for the submission and aggregation of the data are necessary. With increasing competition, carriers do not want to provide their competitors with their intraLATA and interLATA toll usage data. It is inappropriate for carriers to provide competitively sensitive, customer-specific information to competitors. This led to the consensus among the members that there should be a competitively-neutral aggregator of the data. Commission staff was identified as the most logical choice, given staff expertise to aggregate and analyze such data.

   Finally, while the Subcommittee is recommending that the biennial traffic usage studies be suspended, it will evaluate how to conduct more accurate traffic usage studies. Given the limited time frame that the Subcommittee had to review the current requirements, the Subcommittee will in the coming months continue to evaluate and analyze how more meaningful traffic usage studies can be produced.

Subcommittee Recommendations

   1.  Continue application of the Extended Area Service Regulations with the exception of conducting the biennial traffic usage studies. Suspend the biennial traffic usage studies until the Monitoring and Reporting/Subscribership Subcommittee further recommends how to conduct more accurate traffic usage data.

   2.  While the Monitoring and Reporting/Subscribership Subcommittee evaluates the accuracy and usefulness of traffic usage data collection, the current toll traffic usage studies from 1997 should be utilized. However, in a formal complaint process, it is suggested that if an Administrative Law Judge concludes that there is a strong community of interest demonstrated, a more current traffic usage study may be ordered.

   3.  The Monitoring and Reporting/Subscribership Subcommittee will evaluate the accuracy and usefulness of the data contained in the traffic usage studies, determine how to conduct more accurate traffic usage studies, and review the regulations and the need for additional revisions.

[Pa.B. Doc. No. 99-606. Filed for public inspection April 9, 1999, 9:00 a.m.]


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