NOTICES
Tentative Order Regarding the Commission's Plan to Implement a One-Year Time Frame for Inactive Telecommunication Carriers to Provide Service on an Annual Basis Within the Commonwealth; Implementation of the Telecommunications Act of 1996
[42 Pa.B. 1486]
[Saturday, March 17, 2012]Public Meeting held
March 1, 2012Commissioners Present: Robert F. Powelson, Chairperson; John F. Coleman, Jr., Vice Chairperson; Wayne E. Gardner; James H. Cawley; Pamela A. Witmer
Tentative Order Regarding the Commission's Plan to Implement a One-Year Time Frame for Inactive Telecommunication Carriers to Provide Service on an Annual Basis Within the Commonwealth of Pennsylvania; Doc. No. M-2011-2273119
Implementation of the Telecommunications Act of 1996; Doc. No. M-00960799
Tentative Order By the Commission:
Before the Commission for consideration is the proposed implementation of a one-year timeframe requirement for telecommunication carriers1 to actively provide service on an annual basis to customers2 within the Commonwealth of Pennsylvania. The Commission proposes that the timeframe, for new applicants, would begin on the entry date of an order or issuance of a Secretarial Letter that formally grants a certificate of public convenience (CPC) from the Commission. The Commission believes that it is sound public policy for carriers to hold CPCs for a limited period of time without providing service to customers. The Commission further believes that a one-year timeframe should provide new entrants ample opportunity to begin offering services to customers without creating a barrier to entry. Additionally, this requirement will help the Commission maintain a current list of active carriers and what services they provide.
By this Tentative Order, we establish a 20-day comment and a 10-day reply comment period dating from publication in the Pennsylvania Bulletin. Technical Utility Services (TUS) and the Law Bureau are instructed to prepare a final recommendation following review of the Comments and Reply Comments.
Background
On June 3, 1996 and September 9, 1996, the Commission entered Orders (Implementation Orders) at Docket No. M-00960799 implementing provisions of the Telecommunications Act of 1996 (TA-96) in Pennsylvania. In the Implementation Orders, the Commission set forth various requirements in accordance with TA-96, such as a fitness affidavit and a proposed tariff, for telecommunications carriers to apply for a CPC. However, at that time, the Commission did not establish a mandatory timeframe requirement for a carrier to begin to provide service to wholesale and/or retail customers upon receipt of its CPC.
As the telecommunications market has progressed, many new carriers have applied and been granted CPCs in accordance with the Commission's procedures and the applicable federal guidelines. However, the Commission has recently found that not requiring initiation of service within a specified timeframe has resulted in certified carriers either not providing service to customers at all or remaining inactive for several years. During a technical staff inquiry3 in November 2008, staff found that a significant number4 of telecommunications carriers had reported zero access lines and zero revenues. Consequently and upon further review, it appeared that a significant number of these carriers were not utilizing their CPCs to provide service to the public.
Discussion
With no specified timeframe to begin offering services to the public or just simply complying with our reporting requirements by filing reports that indicate an ''inactive'' status, a carrier is essentially not utilizing its CPC to offer telecommunications services to the public.
First, the Commission believes that establishing a one-year timeframe for carriers to start providing telecommunications services for which they have obtained the requisite operational authority and a relevant certificate of public convenience does not qualify as a barrier to entry as prescribed by the federal Telecommunications Act of 1996 (TA-96). See generally 47 U.S.C. § 253(a). We view the proposed one-year requirement as consistent with our authority under the Public Utility Code (Code) and TA-96 over entry procedures for telecommunications carriers. Of note, the Commission exercised its authority over entry procedures, initially, with our Implementation Orders. We further note that other states' actions, as described below, with one-year timeframes have not had the requirement challenged as a barrier to the entry guideline that is incorporated in the TA-96.5 Likewise, the Commission believes that any similar timeframe requirement will not violate 47 U.S.C. § 253(a), since a carrier is still able to obtain certification and provide service. The timeframe requirement simply insures that the carrier is able to provide service to customers shortly after it receives its certification from the Commission. Therefore, we believe that our action today complies with TA-96 as well as our own implementation orders.
Second, the Commission has reviewed procedures used by other state commissions that have established a specific timeframe for carriers to actively provide service. For instance, under the Michigan Telecommunications Act Sec. 302(1)(a)6 a carrier has a one-year requirement to start doing business. Missouri operates under revised statutes7 which state that after one year of not providing service, the carrier's certificate becomes null and void. In addition, the Idaho Public Utilities Commission has a one-year requirement for carriers to be ''open for business'' as stated in each commission order8 granting certification. And finally, the California Public Service Commission requires carriers to provide service within one year or the certificate expires.9
The Commission envisions a two-part process to implement the timeframe requirement: one for existing carriers that are certificated as of the date that the one-year requirement becomes effective and one for new carriers that receive Commission certification after the one-year requirement is effective. For existing carriers, the Commission will identify those telecommunications carriers that appear to not have provided service in Pennsylvania since receiving their CPC. This identification will occur as of the effective date of the one-year requirement. The Commission will identify these inactive carriers by monitoring the data found in various reports filed with the Commission such as annual financial reports, TRS reports, fiscal assessment reports, and telephone number utilization reports.10 The Commission will then issue a secretarial letter to any telecommunications carrier deemed inactive. This letter will advise the carrier of the newly established one-year timeframe requirement and that they have one year from the date of the letter to provide proof that they are providing services to customers.
Also, after the timeframe requirement is established, Commission orders granting operational authority and certification to new applicants offering telecommunications services will include language informing the applicant of the one-year timeframe requirement that begins on the date of entry of the order granting operational authority and certification. In addition, it is in the public interest to permit new entrants providing telecommunications service to request an extension of the one-year timeframe requirement. The Commission will review those requests on a case-by-case basis and extensions will only be granted for good cause shown. The extension period will be a maximum of six (6) months and the carrier must provide data to show proof of doing business or actively engaging in efforts to initiate the provision of its services, e.g., engaging in good faith negotiations for obtaining requisite interconnection agreements. Furthermore, an ordinary change in the operational or business circumstances of the inactive carrier, e.g., a pending merger with another carrier already operating within the Commonwealth, can easily be explained to the Commission on a proprietary or non-proprietary basis. In addition, a written explanation must be submitted if a carrier offers nontraditional11 services and submits zeros on the aforementioned reports which may indicate an ''inactive'' status.
Carriers that do not offer service by the Commission deadlines described above or, if applicable, do not receive an extension of time to offer service will first be given an opportunity to abandon service, consistent with our regulations at 52 Pa. Code §§ 63.301—63.310. Those carriers that do not elect to proceed with voluntary abandonment will undergo the existing default procedures currently in place by the Commission. This process entails a default order revoking the certificate followed by publication in the Pennsylvania Bulletin for comment and notification purposes.
In either case, an abandonment fee of $350 will be assessed to those carriers who do not comply with the one-year timeframe requirement. This fee will be assessed to prevent carriers from abusing the Commission's process. This fee can be waived if a written and valid explanation is given.
Any carrier that loses its certification would be required to repeat the entire application and approval process again, including payment of the entry application fee and any outstanding fees.
Furthermore, the Commission will continue to monitor carriers on an ongoing basis using the same method, as described herein, to ensure certificated carriers are operational and continuing to provide service to customers. Consequently, if any telecommunications carrier that has provided service in the past becomes inactive for one year, it will receive a secretarial letter establishing a 90-day period to submit proof of service. If the carrier does not provide proof of service it will be deemed inactive and will undergo the default procedure currently established by the Commission.
Conclusion
Based on the foregoing, the Commission anticipates requiring telecommunications carriers to be actively engaged in providing services on an annual basis within the Commonwealth of Pennsylvania. By this action, the Commission will have a more complete list of active carriers and better understanding of when and how telecommunications carriers serve customers within the Commonwealth. In addition, on a going forward basis, we expect this process to, ultimately, save Commission resources by eliminating time spent processing default orders that become necessary to address the issues associated with inactive carriers. Upon adoption of this tentative order and the expiration of the comment periods, the Commission will issue a secretarial letter to inform all telecommunications carriers (with the exception of incumbent local exchange carriers) of the new timeframe requirement. Those who oppose this action may file comments addressing their concerns; Therefore,
It Is Ordered That:
1. This Tentative Order is to be published in the Pennsylvania Bulletin and a copy be served on the Pennsylvania Emergency Management Agency, the Office of Consumer Advocate, and the Office of Small Business Advocate.
2. A copy of this Tentative Order be published on the Commission's web site.
3. Comments shall be submitted addressing the issues within 20 days of the publication of this Order in the Pennsylvania Bulletin. Reply comments also can be submitted within 10 days after the close of the comment period.
4. If no comments are received within 20 days of publication in the Pennsylvania Bulletin, the Tentative Order shall become final without further Commission action.
5. If comments are received, Technical Utility Services and the Law Bureau shall prepare a joint recommendation following review of the Comments and Reply Comments.
ROSEMARY CHIAVETTA,
Secretary
[Pa.B. Doc. No. 12-520. Filed for public inspection March 16, 2012, 9:00 a.m.] _______
1 Telecommunications carrier for purposes of this Order is any carrier approved to provide service as a CLEC, CAP, or IXC.
2 Customers can be either wholesale or retail.
3 Staff's inquiry included a data request which was a result of numerous carriers filing zeros on reports required for the annual recalculation of the Telecommunications Relay Service (TRS) surcharge.
4 Fifty-eight of the 190 carriers that filed the TRS Annual Access Line Reports in 2007 filed zero access lines.
5 Telecommunications Act of 1996 § 253. REMOVAL OF BARRIERS TO ENTRY: (a) IN GENERAL—No State or local statute or regulation, or other State or local legal requirement, may prohibit or have the effect of prohibiting the ability of any entity to provide any interstate or intrastate telecommunications service. 47 U.S.C. § 253(a).
6 Michigan Telecommunications Act, Mich. Comp. Laws § 484.2302(1), which provides that after notice and hearing, the [Michigan] commission shall approve an application for a license if the commission finds both of the following: (a) The applicant possesses sufficient technical, financial, and managerial resources and abilities to provide basic local exchange service within the geographic area of the license and that the applicant intends to provide service within 1 year from the date the license is granted.
7 MO REV. STAT. § 392.410.5; The commission . . . . Unless exercised within a period of one year from the issuance thereof, authority conferred by a certificate of service authority or a certificate of public convenience and necessity shall be null and void.
8 For example, see In The Matter Of The Application Of Millennium Networks, LLC For A Certificate Of Public Convenience And Necessity To Provide Local Exchange Telecommunications Services; Idaho Public Utilities Commission Case No. MNL-T-09-01; Order No. 31027.
9 For example, see California Public Utilities Commission Order Approving Application No. 09-07-004 for CVC CLEC, LLC, August 12, 2010.
10 A carrier with multiple types of authority in Pennsylvania (for example, a carrier certificated in the Commonwealth as a CLEC, CAP, and IXC) will not be considered ''inactive'' as long as it provides service under at least one type of authority.
11 By nontraditional the Commission refers to certain services including VoIP, competitive 911/E911 services, or competitive tandem switching services, etc. This list may not be all inclusive of the number of nontraditional services offered by telecommunications carriers operating within Pennsylvania.
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