[27 Pa.B. 3217]
[Continued from previous Web Page]
A. Existing Competitive IXC Services 1. Except as determined otherwise by the Commission, IXCs shall file informational tariffs with the Commission for their competitive services.
2. Changes for existing competitive services may be filed on one day's notice. Such changes shall become effective as filed, without further action of the Commission. The filing shall indicate that the changes are for an existing competitive service.
3. IXCs shall not be permitted to deaverage standard Message Toll Service rates unless authorized to do so by the Commission.
B. IXC Service to Aggregator Telephones 1. An IXC may file an operator assisted or calling card services, tariff to become effective on 14 days notice. If the tariff filing purports to increase any rates and/or surcharges associated with the offered operator assisted or calling card services, the IXC will include a detailed explanation and adequate justification for the requested change in rates and/or surcharges.
2. Within 10 working days of the filing, the Office of Special Assistants will conduct a review of the filing and either (a) approve the tariff as filed, or (b) issue a memorandum stating why the tariff should be modified or rejected altogether. The Office of Special Assistants will serve the IXC in question with a copy of its memorandum within the 10 working day review period using all reasonable means including but not limited to facsimile transmission equipment.
3. The IXC will have 7 days to respond to the Office of Special Assistants memorandum in the event that the IXC does not agree with the memorandum assessment that the IXC tariff filing should be modified or rejected. The IXC's response should be filed with the Commission within the 7-day period and a copy of the response should be independently forwarded on a timely basis to the Office of Special Assistants.
4. Upon receipt of the IXC's response, the Office of Special Assistants will present this matter for the Commission's consideration during the Commission's next available Public Meeting. The IXC tariff filing will be deemed suspended until the Commission formally rules on the matter.
5. In the event that the IXC agrees with the Office of Special Assistants' original assessment, the IXC will file the appropriate tariff supplements in order to effectuate the modified tariff filing, to become effective upon 1 day's notice.
C. New IXC Services 1. New IXC services will be deemed to be competitive unless the Commission later finds that the particular IXC service is noncompetitive in accordance with the provisions of 66 Pa.C.S. § 3008(c) (relating to interexchange telecommunications and carrier) and further guidance hereinafter contained in this Order.
2. A new IXC service is one that has not been previously offered by the IXC that is filing the service and which is not an adjunct to or modification of an existing service.
3. IXCs may file new services to become effective on 14 days notice to the Commission.
4. The initial filing shall clearly indicate that the filed tariffs are for a new IXC service.
5. As part of a new service filing, the IXC shall submit information, duly verified, regarding the safety, adequacy, reliability and privacy of the service.
6. Within 10 working days of the filing, the Office of Special Assistants will conduct a review of the filing and either (a) approve the tariff as filed, or (b) issue a memorandum stating why the tariff should be modified or rejected altogether. The Office of Special Assistants will serve the IXC in question with a copy of its memorandum within the 10 working day review period using all reasonable means including but not limited to facsimile transmission equipment.
7. The IXC will have 7 days to respond to the Office of Special Assistants memorandum in the event that the IXC does not agree with the memorandum assessment that the IXC tariff filing should be modified or rejected. The IXC's response should be filed with the Commission within the 7-day period and a copy of the response should be independently forwarded on a timely basis to the Office of Special Assistants.
8. Upon receipt of the IXC's response, the Office of Special Assistants will present this matter for the Commission's consideration during the Commission's next available Public Meeting. The IXC tariff filing will be deemed suspended until the Commission formally rules on the matter.
9. In the event that the IXC agrees with the Office of Special Assistants' original assessment, the IXC will file the appropriate tariff supplements in order to effectuate the modified tariff filing, to become effective upon 1 day's notice.
D. Reclassification of IXC Services 1. For good cause shown, the Commission may institute an investigation of the competitiveness of a service provided by an IXC under the premises of 66 Pa.C.S. § 3008(c), the related provisions of this Order and established procedures of practice and procedure before the Commission. Such investigation will be performed either within the scope of a Commission investigation conducted under 66 Pa.C.S. § 331(a) (relating to powers of commission and administrative law judges) or upon consideration of a complaint filed under 66 Pa.C.S. § 701 (relating to complaints).
2. In conducting such an investigation the Commission may consider:
a. Evidence of ease of market entry in the relevant IXC service market;
b. The presence of other telecommunications carriers in the relevant IXC service market;
c. The ability of competitor telecommunications carriers to offer the service at competitive prices, terms and conditions;
d. The availability of like or substitute telecommunications services in the relevant geographic area; and
e. Any other factors deemed relevant by the Commission.
3. If, after notice and hearing, the Commission finds that the IXC service is not competitive, the Commission may reclassify the service as noncompetitive. If an IXC believes that a service reclassified as noncompetitive has become competitive, it may petition the Commission to reclassify the service anew as competitive under the applicable standards contained herein.
E. IXC Annual Reporting Requirements 1. On or before May 31 of each calendar year, IXCs operating or otherwise conducting business activities in the Commonwealth of Pennsylvania shall submit on a proprietary basis to the Commission's Office of Special Assistants an annual report for the preceding calendar year.
2. This annual report shall contain aggregate total revenue and traffic volume data in minutes of use (MOUs) of the IXC's intrastate operations during the preceding calendar year. In addition, to the extent that such data are available, they should be disaggregated in the following broad service categories:
a. Services corresponding to the ordinary Message Toll Service (MTS), inclusive of operator assisted and calling card services.
b. Services corresponding to outbound Wide Area Telecommunications Services (outbound WATS).
c. Services corresponding to inbound WATS or ''800'' type services.
d. Private line or dedicated communication path services.
e. Dedicated network type services inclusive of virtual network type services.
3. On or before May 31 of each calendar year, AT&T Communications of Pennsylvania, Inc., is required to furnish to the Commission's Office of Special Assistants a copy of its annual report for the preceding calendar year that is filed with the Federal Communications Commission (FCC), until such time as the FCC discontinues its requirement for such annual report, or its required provision to this Commission is deemed unnecessary by a future Commission Order. The AT&T filing with this Commission will be in the public domain to the extent that the corresponding filing with the FCC is also in the public domain.
Re: Interexchange Carrier Regulation Under Chapter 30 of the Public Utility Code, Declaratory Order entered on January 10, 1995, Annex A.
Since the implementation of its Interim Guidelines for the regulation of IXCs under Chapter 30, this Commission and its staff have processed and are processing numerous IXC tariff filings. Certain actions that we have already taken in respect to certain IXC tariff filings have further clarified the implementation of our Interim Guidelines, and have accorded the requisite flexibility to our IXC regulation under 66 Pa.C.S. Chapter 30. On March 31, 1995, we entered an Order in Pennsylvania Public Utility Commission v. AT&T Communications of Pennsylvania, Inc., Docket No. M-00940503F0095, which disposed of an AT&T tariff filing that implemented toll rate discounts for intraLATA calls that originate from end-user customers within the service territory of Bell Atlantic-Pennsylvania, Inc. (Bell Atlantic-Pa. or Bell). In permitting the AT&T tariff to go into effect, we observed that:
Simply determining that the AT&T Supplement deaverages some rates does not bind the Commission. The Commission can approve the AT&T Supplement without hearings or an investigation and with the full understanding that this Supplement may fit the technical definition of rate deaveraging. The Chapter 30 law authorizes the Commission to allow deaveraging.
We went on to note that:
What would cause great concern and should require a much stronger review would be the increase of rates in one customer class or geographic area to make up revenue losses resulting from the decrease in rates for some other customer class or geographic area. AT&T has not attempted in this instance to make up a potential revenue loss for intraLATA toll calls of Bell Atlantic-Pa. customers by increasing its [AT&T's] rates to customers in the service territories of other local exchange telephone companies.
Pennsylvania Public Utility Commission v. AT&T Communications of Pennsylvania, Inc., Docket No. M-00940503F0095, Order entered March 31, 1995, at 6.
Since the adoption of the Interim Guidelines, we have formulated more flexible criteria for the evaluation of rate changes that involve what we originally defined in the Interim Guidelines and in our Proposed Rules as noncompetitive IXC services under the premises of 66 Pa.C.S. § 3008(a)(1). In deciding on an AT&T proposed surcharge increase for operator dialed calling cards, we stated:
We must observe that AT&T is seeking to adjust its intrastate surcharge for operator dialed calling card calls to the corresponding interstate level. AT&T's interstate surcharge for operator dialed calling card calls has been reviewed and approved by the Federal Communications Commission (FCC). In addition, no complaints have been filed against AT&T's proposed increase to its intrastate surcharge level that is the subject of the instant proceeding. Furthermore, AT&T's alignment of its intrastate and interstate surcharge levels for this particular service will prevent customer confusion that is created by multiple jurisdictional pricing structures and will lead to greater efficiencies for AT&T's operations.
Similarly, our Interim Guidelines for the regulation of IXCs under the provisions of the Chapter 30 law, do not clearly require AT&T to justify its proposed rate change with cost-of-service information.
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It appears that AT&T has provided sufficient justification for its proposed increase in the surcharge that is applicable for operator dialed calling card calls. Thus, AT&T's proposed tariff filing will be permitted to become effective as filed. Furthermore, any unresolved legal and/or technical issues, including a final determination on whether the AT&T service at issue here and/or any other related services are competitive, should be assigned for examination, resolution and final disposition in our rule making regarding the future regulation of IXCs under the Chapter 30 law in Docket No. L-00940099[.]
Pennsylvania Public Utility Commission v. AT&T Communications of Pennsylvania, Inc., Docket No. R-00953364, Order entered June 8, 1995, at 6.
We took similar action in regards to certain proposed surcharge increases for the various Sprint Communications Company LP (Sprint) FONCARD calling card services products. We stated that:
Under our new approach for evaluating this type of IXC rate changes for noncompetitive services, we will not adhere to a strict cost-justification standard of review for IXC calling card services and products and the associated rate change proposals...
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In the instant filing, Sprint wishes to align the surcharge levels for FONCARD calling card calls that are made within the parameters of Sprint's various long-distance services. We believe that such a surcharge alignment will assist Sprint to attain necessary administrative efficiencies in the offering of its FONCARD calling card service products. Furthermore, the surcharge levels proposed by Sprint for its FONCARD calling card service products will approximate the surcharge levels for generally similar calling card service products of other IXCs such as AT&T.
Pennsylvania Public Utility Commission v. Sprint Communications Company, L.P., Docket No. R-00953388, Order entered June 9, 1995, at 4.
It should be pointed out that our actions have significantly lessened the burden of review of IXC noncompetitive service tariff filings and associated rate changes by the responsible staff bureaus of the Commission. Noncompetitive rate and surcharge decreases that are proposed by the IXCs for their noncompetitive services are approved as routine matters, while proposed rate and surcharge increases that fulfill the flexible evaluation criteria enumerated above, are approved within the abbreviated review time frames contained in the Interim Guidelines.
3. Other Commission Actions
Since the time that our IXC 66 Pa.C.S. Chapter 30 Interim Guidelines were adopted and we commenced the promulgation of the associated regulations, the telecommunications industry has been undergoing a dramatic change both within our nation and within Pennsylvania. On October 4, 1995, we introduced local exchange competition in Pennsylvania through the certification of the first four competitive local exchange carriers (CLECs) at the Application of MFS Intelenet of Pennsylvania, Inc. et al., proceeding at Docket No. A-310203F0002 et al. (MFS I). On December 14, 1995, with our Order at Docket No. I-00940034, we have moved to establish intra-LATA toll ''1+'' dialing parity--or ''1+'' intraLATA toll presubscription-- and increased intraLATA toll services competition within this Commonwealth. In that Order we observed and ordered that:
We agree with the ALJ recommendation that LECs should have some pricing flexibility to react to the marketplace in an intraLATA presubscription environment. The ALJ, at Ordering Paragraph No. 8 of the R.D. [Recommended Decision], recommends that the Commission establish procedures for expedited review and approval of LEC's proposed tariff changes. We believe that the procedures established by this Commission relative to the review and approval of IXC services at Docket Nos. M-00930496 and L-00940099 are appropriate and, as such, they will be utilized in our review of intraLATA toll tariffs. We keep in mind that the underlying cost of service/cost allocation methodology should be consistent with this Opinion and Order and the findings in our Universal Service Investigation.
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[T]o provide the local exchange carriers pricing flexibility to meet competitive pressures in a presubscribed intraLATA environment, the procedures established by this Commission relative to the review and approval of IXC services at Docket Nos. M-00930496 and L-0094009 are appropriate and should be used consistent with this Opinion and Order and the findings in the Universal Service Investigation.
Investigation Into IntraLATA Interconnection Arrangements, Docket No. I-00940034, Order entered December 14, 1995, at 18 and Ordering ¶9, at 22 (hereinafter referenced as the Presubscription Order).
The Federal Telecommunications Act of 1996 (Federal Act or Act) was enacted into law on February 8, 1996. This Commission has proceeded to implement various directives of the Federal Act, including the adoption of more flexible market entry procedures for telecommunications carriers under our jurisdiction, and adjudicating various proceedings related to various issues of competition and interconnection in the local exchange services markets. In addition, we have made various pronouncements in our Orders in a number of proceedings that address the implementation of the Federal Act. See generally, In re Implementation of the Telecommunications Act of 1996, Docket No. M-00960799, Order entered June 3, 1996; Order on Reconsideration entered September 9, 1996 (hereinafter referenced as the Implementation Order).
For example, in our June 3, 1996, Implementation Order we removed the restriction regarding the joint marketing of CLEC local and toll services that had originally been put in place with our October 4, 1995, Order in the MFS I proceeding at Docket No. A-310203F0002 et al. We characteristically stated that:
As to ''joint package'' marketing restrictions, in our October 4, 1995, order at A-310203,F.002 we stated that, ''Upon the grant of co-carrier status pursuant to this Opinion and Order, MFS [and other CLECs] shall be subject to the same restrictions on interLATA toll service packaging . . . applicable to the other LECs in Pennsylvania absent a specific waiver.'' Such a marketing restriction was designed to obviate the advantages of CLEC ''joint marketing'' activities for local, intraLATA and interLATA toll services, since certain ILECs, including Bell, were prohibited from providing interLATA toll services.
The purpose of past imposition of marketing restrictions on LEC long distance reseller affiliates was to decrease any competitive advantage over other long distance carriers an LEC affiliated reseller had with the LEC's customers--particularly since in a monopoly setting the LEC completely controls the presubscription interexchange (PIC) process and has the ability to influence consumer decisions through incomplete or inaccurate disclosure. Upon further review, it appears to us that such a concern becomes less significant as local competition develops. Furthermore, we must keep in mind that in a competitive environment our objective is to decrease regulation for all carriers rather than impose existing requirements on new carriers, except where the requirements are imposed by statute or remain necessary to the public interest.
Of course, we have a desire to treat all carriers competing in a given market fairly. However, pertaining to marketing restrictions, such an objective can be achieved by eliminating any relevant marketing restrictions on an LEC or its affiliate at the time a competing local carrier or carriers enters the LEC's service territory. Such an approach is consistent with both principles of fairness and our desire to reduce regulation where appropriate. Accordingly, we will adopt such an approach in the future and will not impose mandatory restrictions on CLECs entering LEC service territories.
Implementation Order entered June 3, 1996, at 21-22, and Ordering ¶¶2, 3 at 51, footnote omitted.
In the same Implementation Order, however, we maintained certain restrictions on the joint marketing of services by a CLEC that is also a provider of interLATA services in accordance with the relevant provisions of section 271(e)(1) of the Federal Act that provides as follows:
Until a Bell operating company is authorized under subsection (d) to provide interLATA services in an in-region state, or until 36 months have passed since the date of enactment of the Telecommunications Act of 1996, whichever is earlier, a telecommunications carrier that serves greater than 5% of the Nation's presubscribed access lines may not jointly market in the State telephone exchange service obtained from such company under section 251(c)(4) with interLATA services offered by that telecommunications carrier.
Implementation Order entered June 3, 1996, at 22-23.
We have reaffirmed our willingness to provide pricing flexibility for the toll services of incumbent local exchange carriers (ILECs) once intraLATA toll ''1+'' dialing parity is implemented, even if the ILEC toll services are not classified as competitive under the relevant provisions of 66 Pa.C.S. Chapter 30. In our Order disposing of the 66 Pa.C.S. Chapter 30 petition for alternative regulation and network modernization by Commonwealth Telephone Company, we stated the following:
Upon consideration of the record in this proceeding, we note that CTC correctly points out that in the IntraLATA Presubscription Order at Docket No. I-00940034 (Order issued December 14, 1995) the Commission stated that the procedures for review and approval of interexchange services at Docket Numbers M-930496 and L-940099 will be used for the review of LEC intraLATA toll Tariffs (Order, p. 18). These abbreviated procedures should be adopted for intraLATA toll filings that CTC may file once intraLATA presubscription becomes effective on July 1, 1997. The IntraLATA Presubscription Order did not adopt these abbreviated procedures for other LEC filings such as intraLATA private line or local vertical services, as CTC has proposed in its Plan. One day notice of tariff filings for intraLATA private line and local vertical services is expressly rejected unless and until such services are designated as competitive.
Petition of Commonwealth Telephone Company for an Alternative Regulation and Network Modernization Plan, et al., Docket Nos. P-00961024 & P-00961081, Order entered January 17, 1997, at 175 (hereinafter referenced as the Commonwealth Ch. 30 Order).2
It should be noted that on February 19, 1997, AT&T filed a Petition for Clarification of our Commonwealth Chapter 30 Order. AT&T's Petition, which is still pending before the Commission, seeks clarification on the exact parameters under which Commonwealth Telephone Company (CTC) will be permitted to change its intraLATA toll service rates under the procedures that apply to IXC tariff changes in the instant Dockets. CTC filed its Answer to AT&T's Petition on March 3, 1997.
B. Rulemaking Issues & Associated Comments
The major commenting parties to the instantly proposed rulemaking were AT&T and MCI. Their comments, as well as the comments of other interested parties and those of IRRC are discussed below on the basis of major issues that are present in this rulemaking.
1. Definition of ''Service to Aggregator Telephones''
AT&T, MCI, IRRC and commenting Legislators, have urged the Commission to change its proposed definition of ''Service to Aggregator Telephones.'' AT&T argues that the definition at proposed 52 Pa. Code § 63.102 should not include operator and calling card services offered by facilities-based, long-distance carriers. AT&T offers the following argument in support of its position:
To be consistent with the intent of the Legislature and the statutory language, the PUC should adopt the statutory definition of service to ''aggregator telephones'' in the regulations and clarify that the definition does not extend to generally applicable operator and calling card services provided by facilities-based carriers (or as the PUC has referred to them, ''interexchange transporters,'' 52 Pa. Code § 63.112).
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The definition offered by AT&T would allow the PUC to continue its regulation of AOS [Alternative Operator Service] rates (because they apply directly to transient telephones) without burdening facilities-based carriers with unnecessary regulation of highly competitive, voluntary services. Because the rates filed by AT&T and other carriers are market-driven, their levels will be controlled by competitive forces, requiring no further regulatory oversight. If the Commission so chooses, the rates of the facilities-based carriers can continue to be used as the basis for a ''cap,'' without inappropriately characterizing them as ''noncompetitive,'' ''service to aggregator telephones.''
The PUC should also exclude ''prepaid debit cards'' from its definition of ''interexchange service to aggregator telephones.'' This type of payment method for long distance calling is perhaps the most competitive of all; every telecommunications carrier appears to be offering them and they can be purchased at convenience or grocery stores. Competition will assure that prices for this long distance calling payment method will be competitive (if one carrier's rates are too high, customer's can easily switch to another provider)...
Again, the PUC Order acknowledged that prepaid debit cards are highly competitive (25 Pa.B. 1425), but concluded that they should be characterized as ''noncompetitive'' service to aggregator telephones apparently because the surcharge for this service will affect the AOS ''rate cap.'' But, if the service as offered by facilities-based carriers is generally available (as it is), highly competitive (as it is), and not confined to use at aggregator telephones (as it is not) then it should not be declared noncompetitive merely because the Commission has an interest in regulating the rates of other providers of the service (AOS's).
AT&T Comments at 5-7, emphasis in the original.
MCI generally echoes AT&T's comments and IRRC offers the following discussion:
AT&T. . . and MCI. . . claim that the criteria for noncompetitive service do not apply to operator and credit card services offered by facilities-based companies such as their own. They argue that the intent of Act 67 [Chapter 30] was to allow the PUC to regulate ''Alternative Operator Services'' (AOS) provided at aggregator telephones. The FCC and PUC use the term ''operator service providers'' (OSP) for the companies that provide these services. OSPs operate as resellers who control access to interexchange service via aggregator telephone. AT&T and MCI also claim that there is no reason to regulate their credit card services since they are highly competitive.
Representatives Kathrynann Durham and David R. Wright, Chair and Minority Chair of the House Consumer Affairs Committee, support AT&T and MCI's position. Representative Wright was the sponsor of the legislation which became Act 67 and claims that the legislative intent is clear. He declares that the intent of Section 3008(a) of Act 67 was to continue PUC regulation of OSPs. Representative Wright adds: ''The intent clearly was not to further regulate facilities-based interexchange carriers especially in areas of card and operator rates.'' We find merit in the Legislator's position since even the PUC admits that the services provided by facilities-based carriers exist in a highly competitive market. A major goal of Act 67 was to allow competition to regulate prices for interexchange services rather than the PUC.
Even though the services provided by AT&T and MCI exist in a highly competitive market, the statutory arguments offered by AT&T and MCI are not convincing given the mandates and broad authority set forth for the PUC in Act 67. As it is currently written, we believe that Act 67 provides the PUC with broad authority to regulate any type of interexchange service to an ''aggregator telephone'' as a ''noncompetitive service.'' Section 3008(a) of Act 67 does not delineate between providers of the interexchange service. Act 67 contains no distinction between services provided by an OSP, a reseller or a facilities-based carrier such as AT&T. Hence, we believe the PUC has the statutory authority to regulate interexchange service to an aggregator telephone as a noncompetitive service when it is provided by OSPs or any other entity including a facilities-based carrier. However, Act 67 does not mandate that the PUC exercise this authority. Act 67 also gives the PUC the discretion to determine that services provided by interexchange carriers are ''competitive'' and that the rates for these services do not need to be regulated. Section 3002 of Act 67 defines ''competitive service'' as ''[a] service or business activity determined to be competitive under this chapter or any telecommunications service determined by the commission [PUC] to be competitive under this chapter.''
On the question of the competitive nature of services to aggregator telephones, the PUC in its preamble to the proposed rulemaking cites limitations on competition between the various types of credit or debit card and operator services provided by facilities-based companies. We understand the PUC's interest in protecting consumers. However, this goal needs to be balanced against the costs of regulating services which the PUC admits are offered in a highly competitive market. The PUC appears to be concerned by the fact that the market for interexchange credit or debit cards is not wholly competitive. A marketplace with total and perfect competition does not exist in the real world, and consumers do not always base their market choices on finding the most competitive price for a product or a service. The argument that residential consumers or others may suffer financially is not persuasive. The interexchange market provides consumers with a remedy for financial loss by allowing them to make choices between competitors. We see little to no need for regulation of rates in a competitive marketplace when consumers may exercise their own discretion to protect themselves. If they do not like the service they receive or its cost, consumers can simply switch providers. By contrast, the primary purpose of the PUC is to regulate monopolies because most utility services by their very nature restrict competition via limited choice of providers.
With regard to the reason and need for this regulation, we see merit in regulating rates for OSPs, and the legislative sponsor of Act 67 and others agree with this part of the regulation. However, we question the need for, and reasonableness of, regulating rates for credit or debit cards provided to consumers by facilities-based carriers. The PUC states that the rates for services provided by the facilities-based carriers are used as ''caps'' for rates charged by the OSPs. This is not a sufficient justification for regulation. We are confident that the PUC can devise other mechanisms for regulating the rates of OSPs. We recommend that the PUC make the determination that credit or debit cards provided to consumers by facilities-based carriers are a ''competitive service'' and amend this regulation accordingly. The PUC should eschew needless regulation and leave the marketplace to its own devices. At the same time, the PUC should not forego its duty under Act 67 to monitor the marketplace. It needs to monitor the industry in order to ascertain whether there may be a need at some future date to reclassify a service as noncompetitive or competitive.
IRRC Comments at 1-3, emphasis added.
Our rationale in formulating the proposed regulations was stated in our Declaratory Order of January 10, 1995, as follows:
We are cognizant of the fact that IXC operator assisted and calling card services are offered in a competitive environment. We are administratively aware that the IXC service offerings in this area have increased substantially in recent times, for example, end-users can now obtain prepaid debit calling cards not only through traditional IXC offerings that are on tariff with this Commission, but, also from a regular retail store. The issue remains, however, that such services can be accessed from both regular telephone and aggregator stations irrespective of the access method, for example, the end-user customer will accrue operator assisted or calling card call surcharges whether the call is made through a ''0+'' or ''1-800'' access. [footnote omitted] In addition, we are concerned that for these services price leadership patterns may emerge between major competing IXCs especially in the areas of operator assisted and calling card call surcharges. In that event, surcharges that are charged by resellers and/or AOS providers for similar services may also rise under the Commission's applicable rate cap regulations, especially for residential and small business customers, for example, for end-user customers that may not have the usage volumes and/or sophistication in obtaining operator and/or calling card services under a broader dis- count plan from the competing IXCs that would normally be available for large business users such as Carnegie Mellon.
Although operator assisted and calling card services could be classified into those used by residential and business customers respectively, this approach is not without problems. For example, as mentioned before, a ''residential'' classification for these services may also encompass small business users who cannot avail themselves of broader IXC service packages at a discount.
It also appears that the major IXCs participating in the instant proceeding are more interested in being able to rapidly offer additional operator assisted and calling card services options and features rather than engaging in a lengthy proceeding designed to ascertain whether these services are competitive or noncompetitive under the premises of the Chapter 30 law. Both AT&T and MCI indicated during the public forum discussion that regulatory forbearance for operator assisted and calling card service offerings is a potentially acceptable possibility.
We believe that a policy of absolute forbearance for IXC operator assisted and calling card service tariff filings will simply preserve our jurisdiction to investigate such filings on a post facto basis, for example, after those tariff filings would have gone into effect. Such investigations, depending on the task and workload priorities and assignments of the Commission and its staff may or may not commence and conclude on a timely basis. Furthermore, if such investigations were to produce formal rulings necessitating credits or refunds to affected end-user customers, such credits or refunds would be difficult to accomplish with reasonable timeliness, equity and low administrative cost to the Commission and the IXCs concerned if they were to be distributed to end-user members of the transient public.
Thus, we prefer to maintain our existing mode of regulation over the IXC operator assisted and calling card services of IXCs, inclusive of prepaid debit calling cards. We will, however, shorten the notice period relating to the associated tariff filings from the current interval of 30 days to 14. In addition, we will delegate the necessary authority to the Office of Special Assistants in order to expedite the processing of such filings...
Declaratory Order at 23-24.
As IRRC's comments point out, ''Section 3008(a) of Act 67 does not delineate between providers of the interexchange service'' to an ''aggregator telephone,'' and that Act 67 ''contains no distinction between services provided by an OSP, a reseller or a 'facilities-based' carrier such as AT&T.'' Thus, IRRC believes that ''the PUC has the statutory authority to regulate interexchange service to an aggregator telephone as a 'noncompetitive service' when it is provided by OSPs or any other entity including a 'facilities-based' carrier.'' IRRC Comments at 2. We are obviously in agreement with the IRRC analysis. Not only do the IRRC comments delineate the scope of our statutory authority in regulating IXC noncompetitive services, but, they also underscore an additional important point. The language of Chapter 30 regarding the scope of our statutory authority to regulate noncompetitive IXC services is competitively neutral. It only follows that the promulgation and application of any rules regarding our regulation of IXC noncompetitive services must follow this important principle. Indeed, the concept of competitive neutrality permeates a multitude of activities and proceedings in the arena of telecommunications regulation both within this Commission's jurisdiction, in the respective jurisdictions of other state utility regulatory bodies, and the interstate jurisdiction.
We believe that the approach suggested by AT&T, MCI and IRRC, will violate the principle of competitive neutrality. Essentially, this approach will remove services such as the operator services of the facilities-based IXCs from this Commission's regulatory scrutiny. At the same time, however, the same services of other carriers (including resellers) will remain under the regulatory purview of this Commission if AT&T's proposals were to be adopted. Adoption of the AT&T/MCI proposals could potentially lead to the formation of ''price leadership'' rate ceilings for certain services which other carriers (especially resellers) could follow under our own ''rate cap'' rules. This scenario would not lead to more vigorous price competition among the IXCs and, thus, would not result in increased consumer and social economic welfare. In addition, the AT&T/MCI proposed distinction between facilities-based and other telecommunications carriers could become increasingly unenforceable over time.
As it has been previously stated, we intend to extend the same procedures for intraLATA toll service rate changes to LECs upon their respective implementation of intraLATA ''1+'' dialing parity. In addition, CLECs may avail themselves of the same procedures under the same criteria and standards. We are already administratively aware that certain CLECs are facilities-based while others exist in the marketplace by being resellers. Yet other carriers have a mixed mode existence through their partial ownership and operation of facilities and their simultaneous reliance on leased or resold facilities and/or services from yet other carriers. Thus, as we move further into the future of the telecommunications industry transition and competition, the lines between the various categories of carriers are becoming increasingly blurred.3 This is especially true when there is an attempt to impose a regulatory ''bright dividing line'' between facilities-based and nonfacilities-based carriers.4 Thus, we intend to continue regulating IXC noncompetitive services to aggregator telephones without any distinction as to the nature of the provider. This approach will preserve the existing ''rate cap'' regulation of reseller IXCs while enabling us to better monitor and police the rate movements of services to aggregator telephones. We further believe that live and automated operator services continue to be at the core of IXC noncompetitive services to aggregator telephones and that such services should continue to be subject to our regulatory scrutiny, albeit in such a manner that would not harm the legitimate competitive interests of the participants in the relevant services markets.5
We believe, however, that our definition of interexchange service to aggregator telephones should exclude prepaid debit calling card services. The AT&T/MCI comments in this regard are indeed persuasive. End-users can obtain prepaid debit calling cards from a number of providers and not only from telecommunications carriers that are under our jurisdiction. In that respect, the exercise of our jurisdiction and our efforts in protecting the public interest and end-users of telecommunications services, can best be directed in areas where our regulatory oversight will be of the most social benefit at the least administrative cost to this agency. Thus, IXCs with tariffed prepaid calling card services in their tariffs can file changes to such tariffs for informational purposes only. Such tariff changes will be permitted to become effective on 1-day's notice.
2. Definition of ''Working Days''
AT&T argues, and IRRC concurs, that the definition of ''working days'' contained in the proposed § 63.102, should be aligned with the existing definition of ''days'' already in place in the Commission's existing regulations at 52 Pa. Code § 1.12. AT&T Comments at 7, IRRC Comments at 3. These comments have merit. However, in order to conserve the Commission's own resources, the periods of staff review in our proposed regulations shall be modified accordingly from ''10 working days'' to ''14 days.'' Similarly, the notice periods relating to the effective dates of the IXC tariff supplement filings contemplated in our proposed regulations should be lengthened from ''14 days'' to ''16 days.'' We believe that these time periods will ensure adequate opportunity for agency review of and action on the associated IXC filings without placing unnecessary administrative impediments and delays on the IXCs.
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2 Our January 24, 1997, Order at Docket No. A-310203F0002 Application of MFS Intelenet of Pennsylvania, Inc., et al. and Docket No. I-00940034, Investigation Into IntraLATA Interconnection Arrangements, extended the original ''1+'' intraLATA toll dialing parity implementation deadline for LECs with more than 250,000 access lines to July 31, 1997. The originally mandated deadline of ''1+'' intraLATA toll dialing parity implementation for LECs with less than 250,000 access lines is on December 31, 1997, and remains unchanged.
3 It should be noted that the AT&T/MCI position was formulated prior to the enactment of the Federal Telecommunications Act of 1996, and while AT&T and MCI were formulating their respective business plans for their entry into the local exchange services markets. Currently, both AT&T and MCImetro Access Transmission Services, Inc., have been certified as CLECs by this Commission and are vigorous participants in various proceedings relating to local interconnection. Assuming that AT&T were to operate as a CLEC on the basis of ''pure resale,'' under the premises of its own proposal in the instant proceeding, ''CLEC-reseller'' AT&T could find itself in the unenviable position of having its noncompetitive services to aggregator telephones subjected to more regulatory scrutiny than that potentially applied to Bell Atlantic-Pennsylvania, Inc.'s -- AT&T's ILEC competitor -- corresponding services since Bell would be classified as a ''facilities-based'' carrier or ''interexchange transporter''
4 Such ''dividing lines'' will continue to blur as various telecommunications carriers utilize both their own networks and ''unbundled elements'' from the networks of other carriers for the provision of services to end-users.
5 AT&T's Comments plainly suggest that the definition of interexchange service to aggregator telephones should include ''live and automated operator services.'' AT&T Comments, recommended amendments to proposed 52 Pa. Code § 63.102, Appendix A, at 19.
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