NOTICES
Final Order Regarding Plan to Implement a One-Year Timeframe for Inactive Telecommunication Carriers to Provide Service on an Annual Basis Within the Commonwealth; Implementation of the Telecommunications Act of 1996
[42 Pa.B. 4999]
[Saturday, August 4, 2012]Public Meeting held
July 19, 2012Commissioners Present: Robert F. Powelson, Chairperson; John F. Coleman, Jr., Vice Chairperson; Wayne E. Gardner; James H. Cawley; Pamela A. Witmer
Final Order Regarding the Commission's Plan to Implement a One-Year Timeframe 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
Final Order By the Commission:
By Tentative Order entered on March 1, 2012, the Commission sought comments regarding 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 believes that it is sound public policy for carriers not to hold Certificates of Public Convenience (CPCs) for an extended period of time without providing service to customers. This order constitutes the final order necessary for implementation of a timeframe requirement for telecommunication carriers to actively provide service on an annual basis to customers.
Background
In the Implementation Orders,3 the Commission set forth various requirements in accordance with the Telecommunications Act of 1996 (TA-96), such as a financial fitness affidavit and a proposed tariff, for telecommunications carriers to apply for a CPC. However, 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. The Commission has recently discovered that not requiring initiation of telecommunications service to customers within a specified timeframe has resulted in certified carriers not providing service at all or remaining inactive for several years.
Thus, by a Tentative Order approved on March 1, 2012, the Commission proposed to implement a one-year time requirement for telecommunications carriers to actively provide service on an annual basis to customers. As set forth in the Order, the Commission outlined a two-part process to implement the time frame requirement: one for existing carriers that are certificated as of the date the one-year requirement is effective and one for new entrants that receive Commission certification after the one-year requirement is effective.
We believe that a one-year timeframe should provide new entrants ample opportunity to begin offering services to customers without creating a barrier to entry. However, within the Tentative Order, the Commission proposed to allow new entrants receiving certification after the one-year requirement is effective who have not provided telecommunications services to customers for twelve consecutive months the option of asking for a six-month extension of the one-year timeframe requirement. Alternatively, carriers were also given the option of voluntarily abandoning their CPC or going through the Commission's established process to revoke the CPC. The Tentative Order was published in the Pennsylvania Bulletin on March 17, 2012.4 Comments were due 20 days after publication and reply comments 10 days following the comment deadline.
Discussion
The Commission received two comments regarding the Tentative Order entered on March 1, 2012, and no reply comments.
On April 6, 2012, the Broadband Cable Association of Pennsylvania (BCAP) commented that the proposed timeframe requirement, even with a six-month extension, which is a total of 18 months altogether, may not be long enough for a carrier to provide service to customers if the company is involved in lengthy negotiations of interconnection agreements or other commercial interconnection arrangements. BCAP stated, ''[a]s the Commission suggests, even when both parties proceed in good faith, multiple disputed issues can lead to protracted negotiations and sometimes to lengthy litigation.''5 BCAP requests the proposed procedure be revised so competitive local exchange carriers (CLECs) can seek and be granted multiple extensions for good cause shown.6
Disposition: The proposed timeframe requirement is not meant to create a barrier to entry but to ensure that customers are provided with competitive choices in an expedient and timely basis. Because we recognize there are circumstances where interconnection issues can lead to lengthy delays, the Tentative Order was designed with an option whereby new entrant receiving certification after the one-year requirement is effective may request, for good cause, a six-month extension of the 1-year time frame to initiate service to customers. Thus, the timeframe outlined in the Tentative Order has already taken into consideration the length of time needed for negotiations and/or litigation to occur. Nevertheless, we propose in this Order to permit a new entrant receiving certification after the one-year requirement is effective to request one additional six-month extension after the initial six-month extension has expired. The Commission will review the inactive carrier's request for an additional extension on a case-by-case basis and may allow the additional extension provided that the inactive carrier submits proof of active good faith interconnection negotiations or relevant litigation.
The second comment was filed on April 9, 2012, on behalf of the Health Group Telecommunications (HGT or the Company), which is certified as a CLEC and interexchange carrier (IXC) Reseller in Pennsylvania. HGT has no facilities of its own. The Company proposed in its comments that rather than having an inactive carrier surrender its CPC, the company's CPC would be transitioned into an ''inactive'' status and the Commission can then charge a fee to maintain this status. HGT explains that ''there may be legitimate business and practical reasons for [sic] why a carrier would wish to retain its certificates of authority even though it may not be actively providing telecommunications services.''7 HGT explains that it is not currently offering nor has it ever offered telecommunications services.8 Instead, HGT negotiates discounted billing arrangements with carriers on behalf of its select non-profit community hospital clients. HGT further states that it uses its CPC in negotiations to ensure that its clients receive the most cost effective services necessary. The Company is concerned that if it is required to surrender its CPC, then it would no longer be ''at the ready''9 and able to negotiate cost effective and high quality services for its clients. HGT opines that if it would need to re-apply for certification, it would not be able to provide services until final approval of the application which HGT claims would take five to nine months depending on the authority sought.
HGT suggests, for the above reasons, that the Commission allow carriers an option of an inactive status. The Company realizes that such an option could likely incur costs for the Commission to monitor carriers that ''are not receiving any jurisdictional revenue upon which the Commission can levy an assessment pursuant to 66 Pa.C.S. § 510.''10 Therefore, the Commission should institute a reasonable fee for those carriers that take the inactive option. HGT avers a $1,000 fee per year might be reasonable for this option. The Company also states that the Commission should simplify the reporting requirements for inactive carriers in order to reduce the regulatory costs of the Commission.
Disposition: We disagree that there are any practical reasons for an entity to hold a CPC when it does not provide any service (or plan to provide any service) to the public. A CPC is issued for a carrier to become a public utility and provide utility service to the public whether that service is retail or wholesale. Thus, a CPC is evidence that an entity is providing utility service to the public. A CPC is not simply a bargaining chip to be used as leverage to negotiate better rates for a company or its clients.11 The Commission also disagrees with HGT's assessment that it would take the Commission five to nine months or longer to process an application for a carrier that had surrendered its CPC but then later decides to offer services in Pennsylvania again. The Commission routinely grants provisional operational authority to CLECs that seek to enter the service areas of certain incumbent local exchange carriers (ILECs), and while their respective applications are undergoing review. The routine grant of provisional operational authority also takes place for the market-entry applications of facilities-based and reseller IXCs and competitive access providers (CAPs) that seek to offer services throughout Pennsylvania. While CLEC applications for the provision of competitive services within the service areas of certain ILECs are not accorded provisional operational authority, such applications—if unopposed—are generally processed and approved within a period of three months. While HGT's desire to reduce the Commission's regulatory costs is commendable, we must make it clear that the main reason for this timeframe requirement is aimed at the public good of carriers providing service to customers in an expeditious manner once a CPC is approved. Therefore, we reject the concept of an inactive status for carriers.
Summary of Changes
Based on the comments to the Tentative Order, we have revised some aspects of the time frame requirement. We recognize the potential for lengthy negotiations of interconnection agreements or other commercial interconnection arrangements, as well as the potential for relevant litigation. Therefore, we will permit new entrants receiving certification after the one-year requirement is effective to request an additional extension of time once the initial six-month extension has expired. The Commission will review these requests on a case-by-case basis and the additional extension will only be granted for good cause shown. The carrier must provide data to show proof of engaging in good faith negotiations for obtaining requisite interconnection agreements or other commercial arrangements.
Conclusion
Based on the foregoing, the Commission requires 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 have a better understanding of when and how telecommunications carriers serve customers within the Commonwealth. Upon adoption of this final order, 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; Therefore,
It Is Ordered That:
1. Within 45 days of publication in the Pennsylvania Bulletin, the Bureau of Technical Utility Service and the Law Bureau will create a secretarial letter informing all telecommunications carriers (with the exception of incumbent local exchange carriers) of the new timeframe requirement. The date on this letter will start the one-year timeframe within which the carriers must begin service if they are currently not serving customers.
2. A new entrant receiving certification after the one-year requirement is effective may request one additional six-month extension after the initial six-month extension has expired. The Commission will review the inactive carrier's request for an additional extension on a case-by-case basis and may allow the additional extension provided that the inactive carrier submits proof of active good faith interconnection negotiations or relevant litigation.
3. Bureau of Technical Utility Service identify carriers that are not currently providing services to customers using the reports outlined in the tentative order.
4. This Final Order 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.
5. A copy of this Final Order be published on the Commission's website.
ROSEMARY CHIAVETTA,
Secretary
[Pa.B. Doc. No. 12-1482. Filed for public inspection August 3, 2012, 9:00 a.m.] _______
1 Telecommunications carrier for purposes of this Order is any carrier approved to provide service as a Competitive Local Exchange Carrier (CLEC), Competitive Access Provider (CAP), or Interexchange Carrier (IXC).
2 Customers can be either wholesale or retail.
3 Docket No. M 00960799 entered Orders of June 3, 1996 and September 9, 1996 (Implementation Orders)
4 42 Pa.B. 11.
5 Comments of the Broadband Cable Association of Pennsylvania on Tentative Order; p. 1
6 Id. at p. 2
7 Comments of Health Group Telecommunications; p. 1
8 HGT's original application indicated the company would operate as a reseller of CLEC and IXC services.
9 Comments of Health Group Telecommunications; p. 3
10 Comments of Health Group Telecommunications; p. 4
11 Apparently, HGT threatens to compete against the other carrier unless that carrier comes up with a preferred discount for the HGT clients.
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