Tentative Order [31 Pa.B. 6878] Public Meeting held
November 30, 2001Commissioners Present: Glen R. Thomas, Chairperson; Robert K. Bloom, Vice-Chairperson; Aaron Wilson, Jr.; Terrance J. Fitzpatrick
Interim Guidelines Establishing Local Service Provider Abandonment Process for Jurisdictional Telecommunication Companies; Doc. No. M-00011582F0004
Tentative Order By the Commission:
On November 30, 19841 , the Commission first promulgated Chapter 64, ''Standards and Billing Practices for Residential Telephone Service.'' 52 Pa. Code §§ 64.1--64.213. These regulations have been amended several times and since 1984 there has been a significant increase in the number of competitors in the Pennsylvania telecommunications market. In 1993, competition in the local telecommunications markets in Pennsylvania was initiated through the enactment of Chapter 30 of the Public Utility Code, 66 Pa.C.S. §§ 3001--3009. Moreover, the Telecommunications Act of 1996 mandated the opening of local telephone service competition on a national level.2
To comply with certain aspects of the TA-96, the Commission has implemented a streamlined application process to modify traditional entry procedures applicable to telecommunication carriers. This was accomplished by Commission Order adopted at the Public Meeting of May 23, 1996 (Docket No. M-00960799, Order entered June 3, 1996). These entry procedures apply to all interexchange carriers and local exchange carriers, whether they are facilities-based, interconnected or reseller competitive local exchange carriers (CLECs). 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. Although the applicant must swear and affirm its ability and commitment to provide service in full compliance with all provisions of Pennsylvania law (fitness affidavit), the new carrier is not required to post a bond. Given the changing landscape, new problems have developed with the new players in the telecommunications industry. In particular, with the minimal entry requirements for carriers, the Commission has experienced problems with non facilities-based carriers who neglect to comply with our regulatory provisions including the abandonment process.
CLECs who 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 defacto abandonment of service by the CLEC. The Commission's rules under Chapter 64 do not cover abandonment of utility services nor do they address the notification of the end-use customers. However, a utility's obligations under the Public Utility Code with regard to abandoning service are very clear.
A Pennsylvania public utility company cannot lawfully abandon service to the public without first obtaining a Commission-issued certificate of public convenience authorizing the abandonment of utility service. Re Megargel's Golf, Inc., 59 Pa. P.U.C. 517 (1985); Application of Citizens Mutual Water Co., 37 Pa. P.U.C. 387 (1959). Section 1102(a)(2) of the Public Utility Code, 66 Pa.C.S. § 1102(a)(2), specifically enumerates this act of abandoning service as requiring prior approval evidenced by a certificate. See also, 52 Pa. Code §§ 1.43 and 3.551 (Commission's regulations on application filings). The Commission has established the following precedent with respect to this legal obligation:
A public utility seeking permission to abandon service must satisfy the same statutory burden of proof as the applicant for initial service rights; namely, that the issuance of the certificate is 'necessary, or proper for the service, accommodation, convenience, or safety of the public.' Section 203 of the Public Utility Law, 66 P. S. § 1123. The 'public' referred to in § 203 is the actual and potential users of a particular public utility service. . . .
Re Ridgeville Water Co., 51 Pa. P.U.C. 58, 59 (1977)3 ; Re Estate of A. R. Burkett, 55 P.U.C. 162 (1981). In conformity with Section 1103 of the Public Utility Code, 66 Pa.C.S. § 1103, the Commission may impose just and reasonable conditions on a public utility's abandonment of service. Re Bald Eagle Water Co., 76 Pa. P.U.C. 556 (1992) (as a condition of being authorized to abandon service, a public utility paid customer $3,500 to dig a well on customer's property as an alternative to utility's residential water service). Furthermore, the Commission will consider, inter alia, the availability and adequacy of alternative service in determining whether to authorize a utility's abandonment of service. Megargel's, 59 Pa. P.U.C. at 522; Re Valley View Water Co., 55 Pa. P.U.C. 466 (1982).
Practically speaking, some of these considerations are not relevant to the problem of CLEC terminations--if the ILEC intends on terminating wholesale service to the CLEC, our resolution of an abandonment application on the merits is essentially a perfunctory exercise. As we have already discussed, the problem we experience as regulators is making sure that customers are notified of the impending termination of their residential telephone service and have an opportunity to apply for service with another service provider.
In contemplation of this situation, the Commission is proposing to adopt interim guidelines pending the promulgation of formal regulations to provide for an orderly process of customer notification and call center support when a local service provider of local telephone service abandons the provisions of service to residential and small business customers. A copy of the Interim Guidelines is attached as Annex A and by way of this Tentative Order we hereby seek comments by interested parties.
Specifically, we seek comment on the sufficiency of the contents of the embargo notice and the termination notice from the underlying carrier to the local service reseller, and the contents of the customer abandonment notices. We also seek comment on the time periods we propose for the local service provider obligations for abandonment. We are particularly interested in the deposit posting requirements of a surety bond or letter of credit with respect to the amounts and whether the requirements will ensure compliance with the process for customer notification and call center access when abandoning service. Furthermore, we are concerned that the application of preferred carrier freezes might inhibit customers from switching to a new carrier. Therefore, we seek comment as to whether we need provisions to have preferred carrier freezes routinely removed once the abandonment notices to customers are sent so that customers can quickly migrate to a new carrier.
Finally, we seek comments on the terms and definitions proposed for use in the proposed Interim Guidelines. For example, the proposed Interim Guidelines define and use the term ''local service provider'' instead of ''local exchange company'' or ''LEC,'' the terms used in Chapter 64.
Also, the Commission previously has established a regulatory definition of ''small business customers'' for electric and natural gas service. However, the Commission has not yet incorporated in its regulations a definition of ''small business customer'' for telecommunication service. See 52 Pa. Code §§ 54.2 and 54.152 (electric generation service) and §§ 62.32 and 62.72 (natural gas service). To correct this omission, a definition for ''small business customer'' for the purpose of the provision of telecommunications services is proposed herein and is defined as ''a customer with three or fewer access lines not used for residential service.''
These changes are proposed to reflect the reality of the current competitive market, and it is the Commission's intention to replace current Chapter 64 definitions with these updated terms. Again, comments are especially requested on these proposed changes.
Conclusion
We are hereby proposing by this Tentative Order Interim Guidelines to be in effect pending the promulgation of final regulations at a separate docket. These guidelines, when finalized after the receipt of public comment, are intended to provide guidance to local service providers and underlying carriers when addressing the abandonment process.
To accommodate public comment on these tentative interim guidelines, we will direct that this order be published in the Pennsylvania Bulletin and will establish a 10-day comment period from the date of publication. We urge that all interested persons file comments as soon as possible. Note that reply comments will not be permitted. Accordingly, comments should address all relevant issues including the identification of the additional costs, if any, that are anticipated to be incurred by the industry to comply with these interim guidelines. Additional costs are those that are in excess of the current costs to comply with similar existing State and Federal requirements; Therefore,
It Is Ordered That:
1. Voluntary Interim Guidelines following this Tentative Order are hereby proposed to provide for an orderly process of customer notification and call center support when a local service provider of local telephone service abandons the provisions of service to residential and small business customers. These guidelines, once finalized, are intended to remain in place pending the conclusion of a formal rulemaking to promulgate mandatory regulations.
2. This Tentative Order, including Annex A, be published in the Pennsylvania Bulletin and that a comment period ending 10 days after the Tentative Order's published date is hereby established.
3. Written comments, an original and 15 copies, shall be submitted to the Secretary, Pennsylvania Public Utility Commission, P. O. Box 3265, Harrisburg, PA 17105-3265. A copy of these comments should be submitted at that same address to the technical and legal contact persons listed below, and to Sherri DelBiondo, Regulatory Coordinator. No reply comments will be permitted. A diskette containing the comments in electronic format must also be submitted. Comments should specifically reference the docket number of this Tentative Order.
4. A copy of this order and any accompanying statements of the Commissioners be served upon all jurisdictional local exchange carriers, the Pennsylvania Telephone Association, the Pennsylvania Cable and Telecommunication Association, the Office of Consumer Advocate, the Office of Small Business Advocate, and the Office of Trial Staff, posted on the Commission's website at puc.paonline.com and shall be made available to all other interested parties.
5. The contact persons for this matter are Wayne Williams, Consumer Services, (717) 787-7137 and Terrence J. Buda, Law Bureau, (717) 787-5755.
6. A final order shall be issued subsequent to the receipt and evaluation of any comments filed in accordance with this Tentative Order.
JAMES J. MCNULTY,
SecretaryAnnex A Local Service Provider Abandonment Process I. Statement of Purpose.
A. Purpose. The purpose of these guidelines is as follows:
(1) To provide for an orderly process of customer notification and call center support when a local service provider of local telephone service abandons the provision of service to residential and small business customers under the following circumstances:
(a) The underlying carrier that provides part or all of the services necessary to provide local exchange carrier service is terminating the local service provider's service agreement.
(b) The Public Utility Commission issues an order to revoke the local service provider's certificate of public convenience.
(c) The local service provider seeks a certificate of public convenience to voluntarily abandon the provision of local exchange carrier service.
(2) To ensure that local service providers give adequate customer notice of the impending termination of local exchange carrier service to enable their customers to obtain service from another provider before the existing local service provider abandons service.
(3) To provide for a minimal notification deposit requirement to be paid by local service providers prior to the initiation of services to customers to ensure that there is sufficient incentives for local service providers to provide adequate customer notification and call center access when abandoning service to customers. If the local service provider fails to provide proper notice and customer support, the deposit will be used to pay the cost of customer notices about the abandonment of services and to maintain call center access for customers who have questions.
(4) To provide for an embargo process that precedes the termination of a local service provider's service agreement with an underlying carrier.
B. Application.
(1) These rules apply to any local service provider that is providing local exchange service to residential or small business customers in Pennsylvania.
(2) These rules apply to any underlying carrier that provides wholesale telephone service to a local service provider and intends to embargo or terminate the local service provider's service.
II. Definitions.
The following words and terms in these guidelines, as well as companion guidelines concerning Quality of Service, Changing Local Service Providers, and Customer Information, have the following meaning unless the context clearly indicates otherwise:
End-use customer--A customer who has his or her telephone service provided by a local service reseller.
Embargo--The refusal by an underlying carrier to process local service change requests or to initiate new local service requests, because the local service provider that is reselling its services is delinquent in the payment of those services.
Local service--Calling capacity between points within the community in which a customer lives. Local service includes the customer's local calling plan, dial tone line, touch-tone, directory assistance, Federal line cost charge, PA Relay Surcharge, Federal Universal Service Fund, local number portability, and 9-1-1 emergency service.
Local service provider--A company, such as a local exchange carrier, that provides local service and may also provide other telecommunications services.
Local service reseller--A local service provider that resells part or all of another company's wholesale telephone services to provide local service to consumers.
Small business customer--A customer with three or fewer access lines not used for residential service.
Underlying carrier--A company that owns or has access to transport and/or switching and/or other facilities and sells access to such services to a local service provider such that the local service provider can provide local service. The underlying carrier may also be a local service provider.
III. Pretermination Embargo Process.
A. Purpose.
An embargo is a pretermination process that is intended to limit the potential financial loss of the underlying carrier when a local service provider who is a local service reseller becomes delinquent in the payment for those services.
B. Authorized Reasons for an Underlying Carrier to Embargo Service.
(1) Failure to pay an undisputed delinquent amount for services necessary to provide the end-users with basic service when that amount remains unpaid for 30 days or more after the bill is rendered.
(2) Failure to abide by the terms and conditions of an interconnection agreement approved by the Public Utility Commission.
(3) Failure to comply with the terms of a payment agreement.
(4) Failure to comply with a Public Utility Commission order.
C. Unauthorized Reasons for an Underlying Carrier to Embargo Service.
(1) Nonpayment of charges unrelated to the provisions of local service. An example of a charge that if not paid cannot form the basis of an embargo is directory advertising.
(2) Nonpayment of charges not previously billed prior to the due date of the current bill.
(3) Noncompliance with a payment agreement prior to the date of payment that forms the basis of the agreement.
(4) Nonpayment of charges under complaint before the Public Utility Commission unless specifically authorized to do so by the Public Utility Commission.
(5) Nonpayment of charges where there is an open complaint about the accuracy or correctness of these charges. However, a reseller of that local exchange service is obligated to pay all amounts not legitimately under complaint.
D. Embargo Notification Process.
(1) Ten (10) days prior to the initiation of the embargo, the underlying carrier must issue a written notice of embargo to the local service reseller using the following procedures:
(a) The embargo notice is to be sent by first class mail.
(b) The notice to the reseller is to be addressed to the person designated to receive such notices.
(c) A copy of the 10-day notice of embargo is to be sent to the Secretary of the Public Utility Commission and the Public Utility Commission's Bureau of Consumer Services.
(2) Content of an embargo notice to a local service reseller shall include the following:
(a) Date that the embargo will start. The starting date given for the embargo cannot be less than ten days from the date the notice is mailed.
(b) Amount owed which forms the grounds for the embargo.
(c) Contact information for the company issuing the embargo notice where the reseller should call to make arrangements to pay the bill.
(d) A statement that if the bill is not paid on the date identified or other acceptable arrangements are not made that a termination notice will be issued.
IV. Underlying Carrier Termination Process for Local Service Resellers.
A. Termination Process Initiation. An underlying carrier is permitted to initiate the termination process of any local service reseller if by the expiration date of the embargo notice the reseller has not either made payment in full or entered into a mutually acceptable agreement for payment of the outstanding debt. An underlying carrier is not permitted to initiate termination when an account is under complaint. If at any time during the termination process a properly filed complaint is entered, the underlying carrier must suspend the termination process.
B. Contents of Termination Notice.
(1) A termination notice from the underlying carrier to the local service reseller must include the following:
(a) The date of the notification.
(b) The date services will be terminated unless payment is received or there is a mutually acceptable payment arrangement.
(c) The amount owed.
(d) A contact number for the underlying carrier.
(e) A copy of the notice must be provided to the Public Utility Commission's Secretary's Office, Bureau of Consumer Services and the Law Bureau.
V. Initiation of Abandonment.
The abandonment of a local service provider may be initiated by an underlying carrier, by an order of the Public Utility Commission which revokes the local service provider's certificate of public convenience, or by the local service provider itself upon proper application to the Public Utility Commission.
A. Underlying Carrier Initiation.
(1) An underlying carrier that intends to terminate the service of a local service reseller that serves residential and/or small business customers shall provide prior notice of termination to the local service provider and the PUC electronically and by first class mail 40 business days in advance of the scheduled termination.
(2) If the local service reseller fails to timely notify its end-use customers of the impending abandonment of service within 5 days after receiving the underlying carrier termination notice, the underlying carrier will extend the local service reseller's termination date until such time as the end-use customers can be properly notified.
(3) The extension should give end-use customers time to implement a change of local service provider so that their local service is continued in an uninterrupted manner.
B. Public Utility Commission Initiation.
The Public Utility Commission may initiate the abandonment of a local service provider's service through the issuance of a Commission order that revokes the local service provider's certificate of public convenience.
C. Local Service Provider Initiation. A local service provider may initiate the voluntary abandonment of its local service provision by filing with the Public Utility Commission an application to abandon service.
D. Local Service Provider Obligations for Abandonment.
(1) Upon receiving the prior electronic notice of termination from the underlying carrier, or upon the date the Public Utility Commission's order revoking the local service provider's certificate of public convenience becomes final, or upon the date the local service provider is issued a certificate of public convenience to voluntarily abandon its service provision, the local service provider shall have the following obligations:
(a) Within three business days prepare a written customer abandonment notice consistent with this order to be sent to all the local service provider's customers.
(b) Within three business days prepare a mailing list containing the names and addresses of current customers who are to receive the abandonment notice.
(c) Within four business days send by U.S. first class mail all its residential and small business customers the notice of abandonment.
(d) Within five business days send the Secretary of the Public Utility Commission and the Public Utility Commission's Bureau of Consumer Services the following via electronic mail:
(i) A copy of the abandonment notice that was sent to customers.
(ii) A confirmation letter that all residential and small business customers have been sent an abandonment notice.
(e) Within 6-business days send the Secretary of the PUC and the PUC's Bureau of Consumer Services the following via U.S. first-class mail:
(i) A copy of the abandonment notice that was sent to customers.
(ii) A confirmation letter that all residential and small business customers have been sent an abandonment notice.
(iii) A copy of the mailing list of customers that were mailed the notice.
(f) The local service provider is required to maintain call center access for customers who have questions for 35 business days after the date the notices have been sent to customers.
(g) The local service provider is required to maintain the provision of local service to residential and small business customers for 35 business days after the date the notices have been sent to customers.
VI. Content of Customer Abandonment Notices from Local Service Providers.
A. Customer Notice Requirements.
(1) The notice to customers about the pending abandonment of service to residential and small business customers should contain the following information and statements:
(a) A title on the envelope and the notice containing the words ''Important Notice, Loss of Local Telephone Service'' printed in bold letters with a font size of at least 14 points, conspicuously displayed so as to attract the attention of the reader.
(b) A statement: ''At this time, (local service provider name) provides you with local telephone service.''
(c) A statement: ''As of (date thirty-five business days from date of notice), (local service provider name) will no longer provide your local telephone service and you must take action.''
(d) A statement: ''To prevent the loss of your local telephone service, you must select another local telephone service provider on or before (date 25 days from date notice is sent to customer). If you act by this date there will be enough time for the new service provider you choose to start your new service before your current service ends.''
(e) A statement: ''Please remember that local telephone service is competitive. You may select any company that is offering service in your area.''
(f) A statement: ''This is the only notice (the words only notice in bold and underlined) you will receive about the loss of your local telephone service. If you have any questions or need more information, contact (local service provider contact information including a toll-free telephone number).''
VII. Local Service Provider Deposit Requirements and Disposition.
A. Deposit Posting Requirements.
(1) Local service providers are required to post a surety bond or letter of credit with the PUC to assure compliance with the customer notification and call center access guidelines when abandoning service.
(2) A local service provider will post a surety bond or letter of credit in the amount of $2,000 with the PUC at the time of application.
(3) At such time as the local service provider serves 2,500 or more access lines, the local service provider will file a surety bond or letter of credit with the PUC in the amount of $5,000.
(4) At such time as the local service provider serves 5,000 or more access lines, the local service provider will file a surety bond or letter of credit with the PUC in the amount of $10,000.
(5) At such time as the local service provider serves 10,000 access lines, the local service provider will file a surety bond or letter of credit with the PUC in the amount of $20,000.
(6) For each additional 10,000 access lines served by the local service provider over the initial 10,000 lines, the local service provider will post a surety bond or letter of credit with a value of an additional $10,000 over the prior deposit. For example, if the local service provider serves 20,000 lines, the total bond or credit requirement would be $30,000. However, the total bond or credit held will not exceed $50,000, regardless of the number of access lines served by the local service provider.
B. Deposit Disposition.
(1) Once the local service provider has abandoned service in an orderly fashion by providing customer notice and call center access as contained in these guidelines, the Commission will return the surety bond or letter of credit to the local service provider.
(2) In the event the local service provider does not provide customer notice and call center access in accordance with these guidelines, the PUC may use the proceeds of the surety bond or letter of credit to pay for the cost of providing the affected customers with notice and call center service.
Appendix A Overall Abandonment Timeframe Business
DayActivity
1 Local service reseller receives termination notice from underlying carrier; or date of PUC final order revoking local service provider's certificate of public convenience; or the local service provider receives a certificate of public convenience to abandon service. 3 Local service provider prepares abandonment notice for customers and prepares customer mailing list. 4 Local service provider sends notice to customers. 5 Local service provider provides an electronic copy of notice to PUC along with a confirmation letter that all affected customers have been sent an abandonment notice. 6 Local service provider sends PUC written notice, confirmation letter, and customer contact list. 5-9 Customers receive notice of abandonment. 10-25 Customers shop for new local service provider and make a selection. (15 days) 26-35 Time allotted for customer migration. (10 days) 35 Customer is provisioned to new local service provider. 36 Underlying carrier terminates reseller's service. (If applicable). 36 Local service provider ceases provision of local exchange service and call center support. [Pa.B. Doc. No. 01-2253. Filed for public inspection December 14, 2001, 9:00 a.m.] _______
1 15 Pa.B. 4354
2 Pub. L. No. 104-104, 110 Stat. 56, codified at 47 U.S.C.A. § 151 et seq. (TA-96).
3 Substantially the same language which appeared in section 203 of the Public Utility Law, Act of May 28, 1937, P. L. 1053 as amended, 66 P. S. § 1123, now appears at section 1103 of the Public Utility Code, 66 Pa.C.S. § 1103.
