RULES AND REGULATIONS
Title 52--PUBLIC UTILITIES
PENNSYLVANIA PUBLIC UTILITY COMMISSION
[52 PA. CODE CH. 63]
[35 Pa.B. 2289] [L-00030165]
Establishing Local Service Provider Abandonment Process for Jurisdictional Telecommunications Companies The Pennsylvania Public Utility Commission, on January 13, 2005, adopted a final rulemaking order establishing an orderly process to follow when a local service provider abandons local telephone service.
Executive Summary
The advent of competition in the local telephone market in Pennsylvania has created situations that the Commission's current regulations do not address. To comply with certain aspects of the Telecommunications Act of 1996, the Commission implemented a streamlined application process to modify traditional entry procedures applicable to telecommunications carriers. Specifically, the Commission's telecommunication procedures allow new entrants to commence service upon filing and service of the application, which must contain an interim tariff. These entry procedures apply to all carriers whether they are facilities-based, interconnected or reseller competitive local exchange carriers (CLECs). CLECs that are not facilities-based and rely either completely or partially for their underlying service on the incumbent local exchange carrier (ILEC) are considered resellers. If the CLEC fails to pay the underlying ILEC for the service it resells to its end-use customers, the CLEC's wholesale telephone service will be terminated. This results in the termination of dial tone service to the end-use customer--effectively a de facto abandonment of service by the CLEC. Although a public utility must seek prior approval to abandon service, the Commission's rules under Chapters 63 and 64 (relating to telephone service and standards and billing practices for residential telephone service) do not cover abandonment of utility services nor do they address the notification of the end-use customers.
In April 2002, recognizing the need for both short-term and long-run solutions to problems associated with de facto abandonment, the Commission approved Interim Guidelines addressing the issues raised by this regulatory oversight. Later in 2002, the Commission held collaborative sessions that involved telecommunications carriers and other interested parties in discussions of the issues. The collaborative participants addressed proposals for regulations and proposed solutions to the problems created by the changing telecommunications marketplace.
By Order entered on December 23, 2003 at Docket No. L-00030165, the Commission adopted a Proposed Rulemaking Order to amend 52 Pa. Code Chapter 63, consistent with the order and recommendations of the collaborative participants, the Bureau of Consumer Services and the Law Bureau. See 34 Pa.B. 1795 (April 3, 2003). The intent of the proposed rulemaking is to promulgate regulations to establish general rules, procedures, and standards to provide for an orderly process when a local service provider exits the market. By Order entered September 16, 2004, the Commission adopted a Final Rulemaking Order.
Verizon Pennsylvania, Inc. and Verizon North, Inc. (collectively Verizon) submitted comments to IRRC that opposed the Final Rulemaking Order. On November 17, 2004, the Commission notified IRRC that the agency was withdrawing the regulation from consideration. On December 3, 2004, the Commission issued a Secretarial Letter notifying interested parties that the Commission may amend its Final Rulemaking Order to address the comments submitted to IRRC by Verizon and any replies received pursuant to the notice. Replies were received from United Telephone Co. of Pennsylvania d/b/a Sprint and the OSBA. On January 13, 2005, the Commission adopted a Revised Final Rulemaking Order which addressed Verizon's and the parties' concerns.
The final regulations apply to all local service providers (LSPs) and network service providers (NSPs) operating in Pennsylvania. The final regulations will provide for an orderly process when a NSP intends to embargo and terminate service to a LSP, when the Commission has issued an order to revoke a LSP's certificate of public convenience and when a LSP has filed an application to abandon a certificate of public convenience for the provision of local service. In particular, the regulations will ensure that customers do not lose service when their LSP exits the market and customers are provided ample notice and the opportunity to select a new LSP of their choice. Moreover, the regulations will ensure that an abandoning LSP provides sufficient network information so that customers are able to be migrated seamlessly and also that an abandoning LSP coordinates with 9-1-1 service providers and the North American Numbering Plan Administrator. Finally, the regulations apply to a LSP that provides local service to residential or business customers.
Regulatory Review
Under section 5(a) of the Regulatory Review Act (71 P. S. § 745.5(a)), on March 18, 2004, the Commission submitted a copy of the notice of proposed rulemaking, published at 34 Pa.B. 1795 (April 3, 2004), to the Independent Regulatory Review Commission (IRRC) and the Chairpersons of the House Committee on Consumer Affairs and the Senate Committee on Consumer Protection and Professional Licensure for review and comment.
Under section 5(c) of the Regulatory Review Act, IRRC and the Committees were provided with copies of the comments received during the public comment period, as well as other documents when requested. In preparing the final-form rulemaking, the Department has considered all comments from IRRC, the House and Senate Committees and the public.
Under section 5.1(j.2) of the Regulatory Review Act (71 P. S. § 745.5a(j.2)), on March 9, 2005, the final-form rulemaking was deemed approved by the House and Senate Committees. Under section 5.1(e) of the Regulatory Review Act, IRRC met on March 10, 2005, and approved the final-form rulemaking.
Public Meeting
held January 13, 2005Commissioners Present: Wendell F. Holland, Chairperson; Robert K. Bloom, Vice Chairperson; Glen R. Thomas, Recusing; Kim Pizzingrilli
Rulemaking Re Establishing Local Service Provider Abandonment Process for Jurisdictional Telecommunication Companies; L-00030165
Revised Final Rulemaking Order By the Commission:
On December 23, 2003, the Commission entered a Proposed Rulemaking Order to promulgate a regulation to establish general rules, procedures, and standards to provide for an orderly process when a local service provider exits the market. The proposed regulation applies to all local service providers (LSPs) and network service providers (NSPs) operating in Pennsylvania. The proposed regulation will provide for an orderly process when a NSP intends to terminate service to a LSP, when the Commission has issued an order to revoke a LSP's certificate of public convenience, and when a LSP has filed an application to abandon a certificate of public convenience for the provision of local service.
The December 23, 2003 Order was published April 3, 2004 at 34 Pa. B. 1795. The Commission received written comments from the Independent Regulatory Review Commission (IRRC), MCI WorldCom Network Services, Inc. (MCI), AT&T Communications of Pennsylvania, LLC. (AT&T) and Verizon Pennsylvania Inc. (Verizon). At Public Meeting on September 10, 2004 the Commission adopted the Final Rulemaking Establishing Local Service Provider Abandonment Process for Jurisdictional Telecommunication Companies. The Final Rulemaking Order which was entered September 16, 2004, discussed the comments and set forth, in Annex A, regulations.
On October 15, 2004, the Commission submitted the final rulemaking to the Independent Regulatory Review Commission (IRRC) and legislative standing committees. The regulation was scheduled for consideration and action at IRRC's Public Meeting on November 18, 2004.
Verizon Pennsylvania Inc. and Verizon North Inc. (collectively Verizon) submitted comments to IRRC that opposed the Final Rulemaking Order. Verizon's comments to IRRC were accompanied by proposed language revisions to the regulations. On November 17, 2004, the Commission notified IRRC that the agency was withdrawing the subject regulation from consideration.
On December 3, 2004, the Commission issued a Secretarial Letter notifying interested parties that we may amend our September 16, 2004 Final Rulemaking Order, pursuant to Section 703(g) of the Public Utility Code, to address the comments submitted to IRRC by Verizon and any replies received pursuant to the notice. The Commission received written replies from United Telephone Company of Pennsylvania d/b/a Sprint (Sprint) and the Office of Small Business Advocate (OSBA). The comments of Verizon and replies of Sprint and OSBA will be discussed in the sections pertaining to their subject matter.
General Comments of Feasibility, Implementation Procedures, Economic Impact and Reasonableness
IRRC provided comments about some general aspects of the proposed regulations that were not identified with particular sections. We shall address these comments here. IRRC commented that the proposed regulations require the abandoning LSP to perform multiple functions over a period of several months. They commented that further protection of the end-use customer is needed if that process breaks down and that the final-form regulation should include provisions to reassign functions if the abandoning LSP is unable to, or fails to, perform its required duties.
The final-form regulations address IRRC's concerns by dramatically shortening the required timeframe in which a NSP is required to notify the LSP in advance of the termination date. This timeframe had been shortened from 110 days to 45 days. This shortened timeframe should enable a LSP to perform its required duties more quickly, thus providing for a more feasible process. At the same time, we think that we have struck a reasonable balance of protections for the LSP through dispute provisions and have maintained a 20-day period for end-user customers to shop for a new LSP.
IRRC's comment to include provisions in the regulations to reassign functions in the event the abandoning carrier is unable to, or fails to, perform its required duties is a more difficult issue to address in formal regulations. The Commission is promulgating these regulations precisely because some LSPs have abandoned service without providing customer notice. The final-form regulations are meant to send the message that such irresponsible actions to exit the market are not acceptable and to lay out a reasonable process to exit the market. All too frequently the Commission, with the assistance of the NSP, has had to serve in the backup role and notify customers when the abandoning LSP failed to do so. We do not view this to be the proper role of the Commission or the NSP. At the same time, the Commission does not believe there exists another entity that should be required to notify customers because the abandoning carrier has failed to do so. Finally, we believe that to incorporate a backup provision into the regulation may inadvertently invite its use which would be in conflict with sending the message that it is the abandoning carrier's responsibility to exit the market in a responsible manner. We have, however, incorporated provisions into the final-form regulations for the NSP to extend the wholesale customer's termination date should the Commission determine that a significant number of end-user customers have yet to select a new LSP by the scheduled abandoning carrier's exit date. We will continue to be vigilant to make sure that customers are notified when a LSP abandons services.
A second general comment from IRRC about the proposed regulations noted that the regulation should address how implementation of the new regulatory requirements will affect existing and future interconnection agreements and whether the regulations supercede existing agreements. In our view, the overlap in interconnection agreement provisions and the content of the final-form regulations occurs in four general areas: payment default provisions, bill dispute provisions, dispute rights with the Commission, and the advance notice time period that is required for a NSP to terminate a LSP's service. Our review of interconnection agreements revealed that the more recent interconnection agreements have payment default notice provisions, bill dispute provisions and provisions for a NSP to seek the Commission's intervention to resolve a dispute. In preparing the final-form regulations, we have strived to strike a balance between incorporating reasonable provisions of interconnection agreements where they exist and making sure that the regulations provide basic provisions for adequate notice of billing disputes and payment defaults, reasonable time periods to resolve the issues, and the timely filing of disputes with the Commission. We reiterate the message contained in the proposed regulations that it is our desire that the entities seek to resolve their differences and incorporate whatever provisions they feel are necessary into their interconnection or other agreements and only seek the Commission's involvement in dispute resolution as a last resort. We have included what we view as basic provisions to resolve differences in the regulations to foster resolution between the entities so that if the Commission is asked to resolve disputes we can facilitate a quick resolution knowing that the basic processes have already taken place.
In our review of the interconnection agreements as to the time period accorded from the NSP notice of termination to the termination date, we note that the regulations require 45 days advance notice whereas the interconnection agreements typically contain a 30-day notice period. We have developed the 45-day requirement allowing for up to 10 days after NSP notification for the abandoning LSP to develop and file their abandonment plan with the PUC and develop their customer notice, allowing up to five days for the notice of abandonment to reach end-user customers, allowing up to 20 days for end-user customers to shop and choose a new LSP, and allowing up to 10 days for customer migration to the new LSP. As noted above, we have dramatically reduced the overall time period from 110 days to 45 days but do not believe less than 45 days allows adequate time for these necessary events to take place.
In general, we note that where provisions of interconnection or other agreements are inconsistent with the regulatory requirements in the final-form regulations, the provisions of regulations supercede the existing agreements, if such regulations are not inconsistent with the provisions of Telecommunications Act of 1996 (TA-96). 47 U.S.C. section 261(b). Certainly some interconnection agreements have additional provisions that go beyond those contained in the regulations and we view them as accepted upon Commission approval of the agreements.
§ 63.301. Statement of Purpose and Policy
We received comments on this section from IRRC and Verizon. We have also made minor wording revisions to add clarity or to reflect changes made in other parts of the Annex. Under § (a)(1) of the Purpose, we eliminated the reference to embargo consistent with our removal of any reference to embargo in the Annex. In § (a)(2), we adopted IRRC's comment and added the words ''any of'' to specify that the regulations apply to any of the circumstances noted under (i)(iii). Under § (a)(2)(i), we substituted the word ''interconnection'' for ''service'' to clarify that the NSP is intending to terminate a LSP's interconnection agreement rather than a service agreement.
Based on Verizon's comments, we deleted § (3) that read to ''Ensure that customers do not lose service when their LSP exits the market.'' This revision is accompanied by another revision recommended by Verizon to new § (3) whereby we added language stating ''and thereby not lose local service when the LSP exits their market.'' These revisions reflect our approach to abandonment whereby we seek to provide customers advance notice of abandonment and an opportunity to select another LSP. In some cases, customers may receive a second notice if they have not responded to a first notice. However, absent a customer responding to an abandonment notice and selecting a new LSP, we cannot ensure that the abandoning LSP will maintain service indefinitely and that unresponsive end-user customers will never lose local service. Under subsection (b), Application, we have revised (2) to clarify that the subsection applies to wholesale ''local'' service versus the more generic ''telephone'' service as recommended by IRRC. We have also eliminated the reference to ''embargo'' and added clarifying language that the NSP is terminating the LSP's service ''for breach of an interconnection agreement.''
§ 63.302. Definitions
We have made several changes to this section based on comments by IRRC, Verizon and our own efforts to add clarity to the regulations. IRRC noted that the definition of Local Service Provider included undefined terms such as ''unbundled network elements'' and recommended that these terms be defined in the final-form regulations. In response to IRRC's comments we have added definitions for ''UNE (unbundled network element), UNE-L (local loop) and UNE-P (UNE-platform).'' Based on our own analysis, we have added definitions for the terms ''Full Facilities,'' ''Interconnection Agreement,'' ''NANPA,'' ''Preferred Carrier Freeze'' and ''Resale'' to add clarity for terms used in the regulations.
Comments provided by Verizon were the basis for deleting two definitions of terms that were used and defined in the proposed regulations but do not appear in the final-form regulation. We have deleted the definition of ''Default LSP'' consistent with removing the default LSP provisions and we have deleted the definition of ''Embargo'' as the embargo provisions that were in the proposed regulations were replaced by ''Pre-Termination Provisions'' that do not refer to the term embargo.
The definitions that appear in the final-form regulations also contain several revisions based on comments from the parties. IRRC questioned whether the phrase ''in a service area'' was needed in the definition of abandoning LSP. We concluded that the phrase was not necessary and removed it from the definition. IRRC also commented that the definition of ''NSP-Network Service Provider'' contains the undefined term ''carrier.'' We have replaced the term ''carrier'' with ''telecommunications provider'' in the definition of NSP and removed the term ''carrier'' from the final-form regulations.
IRRC commented that the terms ''NLSP (new local service provider),'' and ''OLSP (old local service provider)'' that appeared under the definition of ''LSP-local service provider'' should have stand alone definitions. We addressed IRRC's comments by deleting this reference under the definition of LSP. The term ''OLSP'' was only used in this definition but not elsewhere in the regulation and therefore was unnecessary. We chose to delete the term ''NLSP'' and replace it with ''new LSP,'' thereby eliminating an abbreviation that could potentially be confused with NSP (network service provider). We believe that the term ''new LSP'' will be understood in the context of the regulation which generally addresses the need for customers to find another or new LSP to replace their abandoning LSP.
A final comment on the definition of LSP that was provided by IRRC pertained to the term ''nonjuris- dictional services'' being undefined. Upon review, we determined that the entire sentence that contained the term ''nonjurisdictional services'' was unnecessary and did not add clarity in the context of this regulation and we therefore deleted ''§ (ii) A LSP may also provide other telecommunication services, as well as nonjurisdiction services.''
Verizon commented that the definition of acquiring LSP should specify that the acquiring LSP ''voluntarily'' undertakes to provide local service. Therefore we have inserted the word ''voluntarily'' into the definitions of acquiring LSP as suggested.
Finally, IRRC commented that we should be consistent in the use of ''Local Service'' which is defined in the regulation. We have adopted their comment and deleted the use of ''Telephone Service'' and ''Telecommunications Service'' where local service is appropriate.
§ 63.303 NSP Embargo Process
We received very significant, substantive comments about the NSP Embargo Process in the proposed regulations. These comments led us to re-evaluate the need for, and form of, the embargo process that was designed to precede the NSP issuing a termination notice to a LSP (wholesale customer).
We realize there are very important issues in this pre-termination process, among them fairness, due process, potential financial exposure for the NSP as well as due consideration for the customers who may ultimately be impacted. Among the significant, substantive comments were those filed by Verizon, AT&T, MCI and IRRC. Verizon commented that we should not require an embargo process per se, but in it's place maintain the ability of the Commission to extend the NSP's termination date for the LSP if necessary. AT&T commented that the 10-day embargo notice is too short and the rules should defer to the interconnection agreements for dispute and notice provisions. MCI also noted that the embargo period is too short and that we should require that a 30-day embargo period precede the delivery of a termination notice from the NSP. IRRC also commented that the 10-day embargo period is short. IRRC, in general comments, also noted that the time frames and requirements in the proposed regulations may differ from existing agreements between the LSP and NSP and questioned how implementation of the regulations will affect interconnection agreements.
We examined several interconnection agreements filed with the Commission over the past few years to determine if and how they addressed pre-termination embargo provisions, payment defaults, dispute rights and termination notice periods. Our review determined that embargo provisions were not typically contained in the interconnection agreements. We noted that recent interconnection agreements contain more developed pre-termination billing dispute resolution and NSP payment default provisions including general dispute provisions. However, the provisions lacked the degree of consistency among agreements that would have enabled the Commission to defer to the agreements in lieu of regulatory provisions or to incorporate a set of basic provisions in the regulations that would always be consistent with all existing interconnection agreements. At the same time, we are interested in the NSPs and LSPs having basic, reasonable provisions to identify and potentially resolve differences among themselves prior to seeking the Commission's intervention to resolve disputes or impacting the service provided to customers.
Our resolution to the comments provided about the proposed embargo process and our review of pre-termination processes in interconnection agreements is twofold. First, we will not incorporate an embargo process in the final-form regulations as initially proposed. Doing so may be perceived as adding a whole new set of pre-termination provisions that are not currently an agreed upon part of the process. Second, we will replace the proposed NSP Embargo Process with Pre-Termination Provisions containing Wholesale Customer Billing Dispute Resolution and NSP Payment Default Resolution Processes. These processes should provide reasonable due process provisions for handling the types of circumstances that are likely to give rise to NSPs serving LSPs with termination notices and requests for dispute resolution before the Commission.
While we have deleted the NSP Embargo Process from the final-form regulations, we have maintained many of the specific provisions of the embargo process in the two new pre-termination processes we have replaced the embargo process with. We have also considered many of the comments provided in response to the proposed embargo process, as well as some of the pertinent comments to § 63.304, NSP Termination process for wholesale customers, as applicable to the new pre-termination processes.
Wholesale Customer Billing Dispute Resolution Process
For the new section § 63.303(a) we accord wholesale customers the opportunity to dispute NSP charges prior to the NSP terminating service. As we noted above, most interconnection agreements contain such provisions. Our new language in § (a) contains the provision that ''a wholesale customer is obligated to pay amounts not under complaint or dispute'' so that filing a dispute on a portion of charges does not become grounds for not meeting the payment obligation of charges unrelated to the dispute. Provisions (1) and (2) are consistent with language contained in the proposed regulation at §§ (c)(i) and (c)(ii) pertaining to the use of written notices being sent to the NSP's designee. Provision (3) responds to IRRC's comment to the proposed regulations at §§ 63.303(c)(2) that a notice should require a breakdown of the amount owed. Provision (4) language requiring the NSP to provide the wholesale customer with a written acknowledgement of the wholesale customer's written billing dispute responds to IRRC's comments to the proposed regulations at § 63.304(a) as to how a wholesale customer will be notified of a properly filed dispute with the NSP. Provision (5) responds to comments from IRRC and MCI that 10 days to respond to an embargo notice is too short of a time frame. Therefore we have provided for 30 calendar days to resolve the dispute. We have also provided that the NSP shall not pursue termination during the resolution period for the disputed amounts similar to language contained in the proposed regulations at § 63.304(a)(3). Provision (6) in the billing dispute resolution process accords dispute rights with the Commission after the NSP and wholesale customer have attempted to resolve the dispute. The Commission dispute rights respond to IRRC's comments to § 63.303(a) in the proposed regulations where IRRC asks what remedy does the wholesale customer have if they disagree with the NSP that the interconnection agreement terms have not been upheld by the wholesale customer.
In their comments to § 63.304(a), IRRC asked how parties are to know if the dispute was properly filed and if not, what opportunities exist to correct the filing. We believe that § (a)(1) requiring a written dispute notice from the wholesale customer and § (a)(4) requiring the NSP to provide the wholesale customer with a written acknowledgement of receipt of the dispute notice accord the parties the opportunity to raise issues about the adequacy of the notices.
New provision (7) in the billing dispute resolution process is included in the final-form regulations so that disputes are timely filed with the Commission. We believe these disputes should generally precede the time when customers receive abandonment notices to prevent potential customer confusion and unnecessary migrations. Provision (8) prohibits the NSP from terminating the wholesale customer's service for matters contained in a dispute before the Commission. This language is similar to that in the proposed regulations at §§ 63.304(a)(3).
We deleted § 63.303(a), Authorized reasons for a NSP to embargo service, because we are no longer requiring a NSP embargo process. However, much of the content of this section will be transferred to § 63.304(a), Authorized reasons for a NSP to terminate service.
In comments to IRRC, Verizon stated that the dispute provisions need to be changed in order to prevent nonpaying LSPs from gaming the system to avoid collection action being taken against them by an NSP. Verizon comments that since there are no qualifications contained in the language at § 63.303(a), the regulations will encourage LSPs to game the pre-termination/termination process by raising multiple and often baseless disputes on the same invoice. Verizon wants the regulations revised to make it clear that LSPs cannot abuse the process in such a manner. Verizon notes that in compliance with their interconnection agreements, LSPs must raise billing disputes only once and can go through only one thirty-day dispute period for each invoice. Consistent with their comments Verizon recommends that the Commission add language to § 63.303(a) (Wholesale Customer Billing Dispute Resolution Process) stating that: ''Accordingly, a wholesale customer must either dispute or pay all charges on an invoice from the NSP by the due date on the invoice.''
Our review of some of the newer Verizon interconnection agreements as well as some of those dating back a few years reveals that the agreements do not contain the specific language that a wholesale customer must either dispute or pay all charges on an invoice by the due date. While the interconnection agreements do contain a section on billing, payment and disputed amounts, the language of the provisions are crafted differently from the language Verizon is proposing. If the Commission were to incorporate the specific language proposed by Verizon into the regulations, the regulations may be viewed as overriding the terms of existing interconnection agreements that would significantly alter the rights of the parties. This is precisely the result that Verizon objects to in their comments to IRRC regarding the pre-termination/termination process elsewhere in the regulations.
We disagree with Verizon that by incorporating a provision that wholesale customers shall have the opportunity to dispute charges for the provision of service with the NSP that the regulations therefore encourage LSPs to game the process by raising multiple and baseless disputes on the same invoice. The dispute process provision is a common and useful provision contained in interconnection agreements, including those between Verizon and numerous LSPs. If Verizon wishes to have qualifications regarding the legitimacy of disputes, the timeframes in which they should be raised and the number of disputes per invoice, then we encourage Verizon to include such specificity in its interconnection agreements.
We wish to emphasize that the Commission and its regulations do not support attempts by LSPs to game the pre-termination/termination process to avoid paying the NSP for services provided and accurately billed. In lieu of adopting the language proposed by Verizon for § 63.303(A), which may go beyond the language in interconnection agreements, we will add clarifying language to the regulation that ''Disputes shall be raised by a LSP on a timely basis consistent with the language in applicable interconnection agreements.'' We will also revise the wording in 63.303(A) to read that ''a wholesale customer is obligated to pay amounts not under dispute'' rather than not under ''complaint or dispute'' consistent with Verizon's comments to IRRC.
NSP Payment Default Resolution Process
The second pre-termination process we added to the final-form regulations in place of the embargo process is the NSP Payment Default Resolution Process. Our review of several interconnection agreements revealed that most agreements contained such provisions. We included this section to ensure that the parties are aware of payment defaults and seek to engage in a reasonable process to resolve them prior to the NSP terminating the wholesale customer's service or filing a complaint with the Commission to resolve a payment default dispute. The provisions in § (b)(1--2) are similar to those contained in the proposed regulations in § 63.303(c)(1--2) but we have substituted the words ''payment default'' or ''default notice'' for the words ''embargo'' or ''embargo notice.'' In response to IRRC's question in their comments to § 63.303(a) as to who makes the determination that the wholesale customer has failed to abide by the agreement, we note that the NSP makes that initial determination and communicates that by providing the wholesale customer with a written notice of payment default.
We have revised the language in § (2)(i) to note that the payment default notice shall contain the specific accounts and invoices that are in default consistent with IRRC comments to § 63.303(c) in the proposed regulations pertaining to the embargo notice requiring a breakdown of the amount owed. We have added provisions in § (2)(ii) and (iii) in response to IRRC and MCI's comments that a notice should include the exact reason for the NSP's notification and any possible ways of curing the default. Provision (iv) is the same as that contained in the proposed regulations at § 63.303(c)(2)(iii) with the exception that we deleted the reference to ''embargo issuing.''
New provision (3) responds to comments from IRRC and MCI that 10 days to respond to an embargo notice is too short of a time frame. Therefore, we have provided for 30 calendar days to resolve the payment default. The language in provision (4) requiring the wholesale customer to provide the NSP with written confirmation of receipt of the NSP's payment default notice is intended to ensure that both parties are aware of the payment default situation and the need to take action to resolve the problem in a timely manner.
Based on our earlier discussion about deleting the embargo process we have eliminated proposed § 63.303(b), Unauthorized reasons for a NSP to embargo service and (c), Embargo notification provisions. The content of these subsections will be transferred, where applicable, to § 63.304(a), Authorized reasons for a NSP to terminate service and § 63.304(c), Termination notice provisions.
§ 63.304 NSP Termination Process for Wholesale Customers
In their comments, MCI noted that they were not clear whether the termination process is different from the embargo process. The embargo process in the proposed regulations was a pre-termination process that after 10 days led into the termination process. In the proposed regulations we advanced § 63.303(a), Authorized reasons for a NSP to embargo service and (b), Unauthorized reasons for a NSP to embargo services as major parts of the overall NSP embargo process. To the extent that the embargo process preceded and led into the termination process, the authorized and unauthorized reasons for embargoing services applied to termination as well. In the final-form regulations we eliminated the embargo process per se and substituted two new pre-termination processes. However, we believe that the authorized and unauthorized reasons that formerly were applied to embargoes should now apply to the NSP termination, and therefore, we have transferred the provisions that appeared in § 63.303(a) and (b) of the proposed regulations into § 63.304 NSP termination process for wholesale customers. In response to MCI's comment, the pre-termination (formerly embargo) and termination processes should now be distinct.
In § 63.304(a) we adopted language formerly in § 63.303(a). In § 63.304(a)(1) we added language in response to IRRC's comment to § 63.303(a) that we should clarify when the 30-day period begins. We have specified that the period begins 30 days after the ''date of the bill.'' We also respond to IRRC's comment to § 63.305 about not initiating abandonment when a dispute has been filed by adding language restricting termination if the bill has been disputed in accordance with § 63.303(a) or (b).
The provisions in § 63.304(a)(2) were transferred from § 63.303(a)(2) of the proposed regulations with the addition of clarifying language recommended by Verizon about ''other governing'' agreements provided that such agreements have been approved by the Commission. The remaining provisions in § 63.304(a)(3 & 4) are transferred from § 63.303(a)(3 & 4) of the proposed regulations.
The provisions in § 63.304(b)(1--4) are transferred from § 63.303(b)(1--4) of the proposed regulations with the language in § (b) being revised to apply to unauthorized reasons for a NSP to ''terminate'' service rather than ''embargo'' service. We deleted § 63.303(b)(5) because similar language now appears in § 63.303(a).
We have expanded § 63.304 to include new language in § (c), Termination notice provisions, and incorporate language from § 63.304(b), Termination notice from the proposed regulations. In § (c)(1) we have directed that a NSP shall provide a wholesale customer with a written notice at least 45 calendar days prior to the termination date. In subsection (c)(2--4) we have transferred language from § 63.303(c)(i--iii) pertaining to sending an ''embargo'' notice and modified the language to now pertain to sending the ''termination'' notice. In subsection (c)(2) we have substituted the words ''interconnection or other governing'' for ''service'' agreement based on comments from Verizon. We eliminated the subheading (b), Termination notice from the proposed regulations and renumbered subsection (b)(1) to be (c)(5). We adopted the same language that was in the proposed regulations at § 63.304(b)(1)(i--iv) under the final-form regulations at § 63.304(c)(5)(i--iv) that pertains to the information to be included in a termination notice. The provision that was in § 63.304(b)(2) about the Commission being provided with a copy of the termination notice is now at § 63.304(c)(4).
We deleted proposed § 63.304(a), Termination process initiation, because we have included similar language noting when a NSP is authorized and not authorized to terminate a wholesale customer's service under § 63.304(a)(5) and (8). Language noting that termination cannot proceed if the grounds for the termination are disputed with the NSP or the Commission is contained in § 63.303(a)(5) and (8).
In comments to IRRC, Verizon opposed a provision in the regulations at §§ 63.303(B)(1) which requires a NSP to first issue a payment default notice to a nonpaying LSP at least 30 days before sending a termination notice. As required in § 63.304(C), the termination notice must be provided to the LSP at least 45 calendar days prior to the effective date of the intended termination. Verizon proposed that the requirement for the thirty day payment default resolution period that precedes the 45-day termination period not be mandated in all cases. Instead, Verizon requests the option, where its interconnection agreements with the LSP permit, to send a single notice specifying a shorter period than the combined 75 days for the default and termination notices. In their comments, Verizon proposed to maintain the minimum 45-day termination period that is consistent with § 63.304(C). Verizon avers that in some cases, the combined default/termination notice process would allow for more effective collection of past due balances. Specific language is offered by Verizon in their comments:
Combined Default/Termination Notice Notwithstanding any contrary provision in §§ 63.303 and 63.304, where authorized by the provisions of its interconnection or other agreement with a wholesale customer, an NSP may provide the wholesale customer with a single notice of default and of termination that specifies that termination will occur in less than the minimum 75 calendar days provided for in §§ 63.303 and 63.304, provided that such termination will occur in not less than the 45-day termination period provided for in § 63.304.
In replies submitted pursuant to our Secretarial Letter, Sprint supported Verizon's position for a combined default/termination notice. Sprint comments that the instant rulemaking should not mandate two separate notices before the NSP can terminate service to the LSP. In Sprint's view, if the NSP and the LSP have an interconnection agreement that includes a minimum 45-day default/termination period in total, then the notice arrangements agreed to by those contracting parties should apply in lieu of the proposed rules. Sprint also comments that if the NSP and the LSP do not have an interconnection agreement, then the proposed rules should be modified such that a single 45-day minimum default/termination period is required.
We initially incorporated the pre-termination payment default resolution process in the rules so that the parties would use the notice provision to trigger discussion and hopefully resolution of payment defaults prior to the NSP terminating the LSP's wholesale service. Thirty-day payment default provisions were common elements of Verizon interconnection agreements approved by the Commission. In fact, the majority of the Verizon interconnection agreements approved by the Commission over the past few years contained such provisions. Based on the history, we saw no conflicts between the rules and Verizon interconnection agreements.
However, the most recent Verizon interconnection agreements no longer contain the separate payment default notice provisions. Based on past experience, Verizon has revised their interconnection agreement terms in favor of a shorter process when a LSP has defaulted on payment terms. Accordingly, we will revise the regulations as suggested by Verizon and supported by Sprint to allow for a combination default/termination process when applicable interconnection agreements contain such provisions. We will adopt the language proposed by Verizon, with minor changes reflecting proper regulatory language, to accommodate this option and insert it as § 63.304(D).
We will not make further revisions to the rules as proposed by Sprint for cases where the NSP and LSP do not have an interconnection agreement. We will decline to require a single 45-day minimum default/termination period where there is no interconnection agreement stating that the parties agree to such a provision.
§ 63.305 Initiation of Abandonment
We have revised wording in the opening sentence of the section to clarify that the LSP shall initiate abandonment of service when a ''LSP receives a notice from the NSP'' of a termination of a LSP's service. In response to comments from IRRC and MCI, we note that the NSP's termination shall be consistent with the dispute provisions contained in § 63.303. We have also added language to address the situation where a LSP has applied to the Commission to abandon ''some or all of a LSP's local service customers.'' This language allows for situations involving a partial abandonment where a LSP may wish to cease serving some customers but not others. AT&T comments that the reference to ''some'' of its local customers should be deleted because the rules could be construed to apply when the LSP is not abandoning the market, but rather is simply managing its products by terminating certain offerings that may be replaced with improved or newer products. We want to clarify that the rules apply to abandonment as defined in § 63.302 where a LSP will cease to provide local service to existing customers. If AT&T, in managing its products and offerings, will cease to provide local service to some or all of its customers, then these rules apply.
In § 63.305(1)(i), we clarify that the LSP ''is a wholesale customer'' of the NSP. We have also added language that the NSP notice to the LSP should be provided electronically and by first class mail ''unless other methods of delivery have been agreed to as part of the interconnection or other governing agreement between the NSP and LSP'' consistent with comments provided by Verizon. We also note that the notice should be provided in not less than ''45'' calendar days in advance of the scheduled termination consistent with shortening our overall time frame for abandonment. In § 63.305(1)(ii), we clarify language that the Commission may require an extension of the LPS's termination date until the LSP's customers ''have been properly notified.'' We have also revised the time period that a LSP shall file an application with the Commission from 90 days to 35 days consistent with shortening our overall time frame. IRRC comments that the LSP should file an application to abandon service whether or not ''financial or operational data indicates there is a likelihood that the LSP may be unable to provide service to some or all of its customers.'' In response to IRRC's comment, we have deleted this qualifying language at the end of § 63.305(3).
§ 63.306. Abandoning LSP Obligations for Abandonment
AT&T comments that this entire section of the regulations should be deleted and instead the Commission should rely on the Federal Communication Commission's (FCC) streamlined process. We disagree with AT&T on the lack of need for the provisions in this section and note that the FCC's streamlined process only pertains to situations in which customers will be transferred to an acquiring LSP. While we are hopeful that abandoning LSP's will seek to make arrangements with an acquiring LSP, we cannot be certain that this will always be the case.
In § 63.306(a) we have substituted ''LSP'' for the word ''carrier'' as requested by IRRC. In subsection (b) we changed the time when an abandoning LSP must file an abandonment plan with the Commission from 90 to 35 calendar days in advance of abandoning service consistent with our overall reduction in the abandonment time frame. We have substituted the word ''facilitate'' for ''ensure'' in subsection (b)(3) as an abandoning LSP may not be able to ensure continuation of service when customers do not respond to abandonment notices and select a new LSP.
In § 63.306(b)(5), we revised the language to provide the Commission a list of customers that will be abandoned rather than a plan to do so at a later date. The revision is consistent with shortening the overall time frame for abandonment. In subsection (b)(6), we deleted references to ''a draft of'' the notice that is ''an initial letter'' to be sent to customers thereby leaving the requirement to provide the Commission with ''the notice that is to be sent to customers.'' With the overall shortened abandonment time frame, the customers will be receiving one termination notice unless the Commission requires a second notice subject to the provisions at new § 63.310(b).
In § 63.306(b)(7) we have deleted language requiring ''a plan for follow-up notification arrangements . . .'' for a second notice to be filed with the abandonment plan. However, we do have language in new § 63.310(b) about the LSP sending a second notice after consultation with the Commission if such notice is needed. We have inserted new language in subsection(b)(7) to require the abandoning LSP to include in their abandonment plan to be filed with the Commission ''the beginning and ending dates for the period in which customers are to shop and select a new LSP (customer choice period).'' We further specify that ''customers shall be allowed up to 20 calendar days after receiving a customer notice of abandonment to shop and select a new LSP.'' It is important for the Commission to be aware of the customer shopping and selection period in the event customers contact the PUC's call center with questions about the abandonment. We have also used this section to specify that customers are to have 20 calendar days to shop for a new LSP, consistent with the customer shopping time frame in the proposed regulations.
In § 63.306(b)(8) we added new language requiring the abandoning LSP to include in their abandonment plan ''the beginning and ending dates of the customer migration period.'' We also included language specifying that the customer migration period falls between the customer choice period and the exit date. The language at subsection (8) enabled us to delete the former (9) from the final-form regulations that required ''a date when customers shall select a carrier'' because that is contained in (7) as the ending date for the customer shopping period.
We have responded to IRRC's comments to § 63.306(b)(13) by providing definitions in § 63.302 of UNE, UNE-P, UNE-L, Full Facilities and Resale. We clarified in subsection (b)(14) that we want the abandonment plan to contain a ''list'' of customer ''names and contact information'' when the abandoning LSP is the only provider of facilities. ''Based on IRRC's comments'' we substituted ''LSP'' for ''carrier.'' In subsection (b)(15) we specified that the number of customers impacted refers to impacted by the abandonment. We deleted language in (b)(15) requiring customer service record (CSR) information. As requested in comments by IRRC, we added a reference to the provisions that describe the transfer of assets or control. We also revised the numbering in subsection (b)(16--21) on the final-form regulations.
Based on comments by Verizon and IRRC that are addressed in § 63.310, we deleted the NSP obligations to serve as the default LSP at (b)(22). We also note that IRRC's comment to § 63.306(b)(22) is no longer applicable with the deletion of (b)(22).
In § 63.306(c)(1) we have used ''New LSP'' instead of NSLP as discussed in § 63.302 pertaining to the definition of LSP. In response to IRRC's comments about a more specific reference to NENA standards we have specified that we are referring to ''recommended data standards for service providers going out of business.''
In response to comments from IRRC we revised the title of § 63.306(d)(2) to ''NANPA abandonment notice'' to be consistent with the format of paragraph (1). Verizon provided comments and suggested improved wording for § 63.306(d)(2) which we adopted. The revised wording also negated the need for subsections (d)(2)(i) and (ii). In order to be consistent with our revised overall abandonment time frame we substituted ''35'' days for ''66'' days as the minimum time that NANPA shall be provided with notice of number resources to be released.
Consistent with comments from IRRC, we deleted the word ''carrier'' and substituted ''LSP'' to refer to the abandoning LSP in § 63.306(e)(1). We also substituted ''30 calendar'' days prior to the exit date for ''60'' days as the required time to notify customers about the abandonment. In subsection (e)(2) we specify that the abandoning LSP shall provide customers with a list of ''all'' services that will no longer be provided as of the exit date. In response to comments by IRRC, customers will be directed to ''obtain whatever services they wish to have going forward'' rather than ''replace the services'' that the abandoning LSP has been providing. IRRC points out that the wording should leave customers free to add or delete services from those they have been receiving.
In response to comments from Verizon and our removal of the default provisions at § 63.310, we have removed language at subsection (e)(3) regarding automatically transferring customers to a default carrier. We have inserted new language at (e)(3) to direct the abandoning LSP to ''lift all existing preferred carrier freezes on the services to be abandoned'' so that customers with freezes do not encounter any barriers to changing their LSP.
We have made several revisions to subsection (e)(4) for clarity. In response to a comment by IRRC, we have replaced the word ''teaser'' with ''message'' on the envelope and notice. In subsection (e)(4)(ii) we require that the customer notice ''list other services provided by the LSP that will no longer be provided upon abandonment of local service.'' In subsection (e)(4)(iv), a statement to customers shall direct customers to select another LSP on or before a specific date 10 calendar days prior to the exit date rather than 30 days prior. The revised period is consistent with our reduction in the overall abandonment time frame.
We have deleted proposed subsection (e)(4)(vii) that required the abandoning LSP to provide customers with a list of alternative LSPs that serve customers in their area. IRRC questioned how such a list could be obtained and noted that in order to be competitively fair the list should be all inclusive. MCI questioned the availability of a current, reliable and accurate list and suggested that the Commission maintain such a data base. Upon review we determined that while the Commission has information about what LSPs have been certificated to serve in Pennsylvania and the areas they are certificated to serve in, we do not have current information as to where they are actually serving or accepting new customers for local service. Therefore we conclude that providing such a list is not feasible. As an alternative to providing a list to customers, we have added language to subsection (4)(v) that customers shall be notified that they can ''check their telephone directory . . .'' for information about LSPs serving their area. In subsection (e)(4)(vii) we have responded to IRRC's comments by adding language that customers can contact the abandoning LSP if they have questions, need more information ''or have a problem with changing your services.''
We have added new language at subsection (e)(4)(ix) that ''customers who have preferred carrier freezes on their accounts shall be directed to contact their new LSP to arrange for new preferred carrier freezes if they wish to have this protection going forward.''
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