Case Background
On
April 7, 2017, BellSouth Telecommunications, LLC d/b/a AT&T Florida (AT&T
Florida or Company) filed a petition with the Florida Public Service Commission
(Commission) for partial relinquishment of its Eligible Telecommunications
Carrier (ETC) designation in its service territories in Florida, effective
October 12, 2017. AT&T Florida is an incumbent local exchange carrier
(ILEC) in Florida. On October 14, 1997, the Commission designated AT&T
Florida as an ETC in its ILEC service territory pursuant to 47 USC 214(e)(2)
and Section 364.10(2), Florida Statutes (1997). ETC designation is a requirement for
telecommunications carriers to receive federal Universal Service Funds (USF)
for the Lifeline and High Cost programs. The Lifeline program enables
low-income households to obtain and maintain telephone service by providing
qualifying households with discounts on their monthly telephone bills. The High
Cost program, known as the Connect America Fund (CAF), helps carriers provide voice
and broadband service in remote and underserved communities.
Initially,
the goal of the High Cost program was to subsidize voice telephone networks in
rural and remote areas. However, the Federal Communications Commission (FCC)
has restructured the program by shifting the focus of universal service from
supporting voice networks to supporting and expanding broadband availability. For price cap providers like AT&T
Florida, the restructured CAF program is referred to as the Connect America
Fund II (CAF II) and provides support that is based on a model that estimates the
cost to provide voice and broadband services in high-cost areas where
unsubsidized carriers are not providing comparable services.
AT&T
Florida has accepted the FCC’s offer for CAF II funding. According to the Company,
this decision will enable AT&T Florida to provide broadband in high cost,
primarily rural areas in Florida. Unlike past USF subsidies, CAF II funding is
available specifically by census blocks rather than by larger areas like wire
centers and service territories. This change was implemented by the FCC to
ensure that high cost support reaches its targeted areas and is not used to
support broadband in areas where the subsidy is not needed.
AT&T
Florida’s acceptance of CAF II funding obligates the Company to remain an ETC
in the CAF II census blocks for the duration of the funding term and to offer
Lifeline discounts to eligible customers who reside in those census blocks. Thus, by its petition, AT&T Florida is
seeking only partial relinquishment of its ETC designation in its service
territories in Florida. AT&T Florida seeks to retain its ETC designation in
the CAF II census blocks (the retained area) identified in Attachment B and
relinquish its ETC designation in all other portions of its remaining service
territory (the relinquishment area), where it is no longer eligible for high
cost universal service support.
AT&T
Florida states Commission approval of its petition will not affect the
availability of any AT&T Florida’s legacy voice services in Florida. The Company
will continue to offer and provide legacy voice services across its entire
service territory, including in the relinquishment area. The Company will also
continue to comply with all applicable federal and state service obligations
across its entire service territory, including the relinquishment area.
At
the end of 2016, AT&T Florida had 176 Lifeline customers in the retained
area and 7,219 in the relinquishment area. At the time of the petition,
AT&T Florida was serving less than one percent of all the Lifeline
subscribers in Florida. AT&T Florida asserts customers have been replacing
AT&T’s traditional wireline residential voice services with wireless, Voice
over Internet Protocol and other competitive options. Consequently, AT&T
Florida states that this change in the telecommunications market has led to its
request for relinquishment.
This
is a case of first impression since AT&T Florida is the first ILEC to
request ETC relinquishment in Florida. The Commission is vested in jurisdiction
in this matter, pursuant to Section 364.10, Florida Statutes, and 47 CFR
§54.205.
Discussion
of Issues
Issue 1:
Should the Commission approve AT&T Florida’s
request for partial relinquishment of its ETC designation?
Recommendation:
Yes. The Commission should approve AT&T Florida’s
request for partial relinquishment of its ETC designation. (Deas, Curry,
Wooten, Murphy, Cuello)
Staff Analysis:
An ETC is entitled to
relinquish its ETC designation pursuant to 47 CFR §54.205(a), which provides:
A state commission shall permit an eligible
telecommunications carrier to relinquish its designation as such a carrier in
any area served by more than one eligible telecommunications carrier. An
eligible telecommunications carrier that seeks to relinquish its eligible
telecommunications carrier designation for an area served by more than one
eligible telecommunications carrier shall give advance notice to the state
commission of such relinquishment.
In approving a relinquishment, state commissions must
require the remaining ETCs to ensure that existing customers will continue to
be served. 47 CFR §54.205(b), provides:
Prior to permitting a telecommunications carrier
designated as an eligible telecommunications carrier to cease providing
universal service in an area served by more than one eligible
telecommunications carrier, the state commission shall require the remaining
eligible telecommunications carrier or carriers to ensure that all customers
served by the relinquishing carrier will continue to be served, and shall
require sufficient notice to permit the purchase or construction of adequate
facilities by any remaining eligible telecommunications carrier. The state
commission shall establish a time, not to exceed one year after the state
commission approves such relinquishment under this section, within which such
purchase or construction shall be completed.
In its petition, AT&T Florida identified all of the
designated ETCs currently serving in AT&T’s service territory (Attachment
A). Staff sent a data request to each of the ETCs identified in AT&T
Florida’s petition. Staff asked each provider to verify that it is a designated
ETC in AT&T Florida service territories identified in Attachment A and to
confirm that the provider is currently providing service in those areas.
Staff has reviewed the responses and conducted additional
analysis to verify that the customers in the relinquished areas would continue
to be served. This analysis included identifying the zip codes within each wire
center listed in Attachment A. Staff then used a sample of the zip codes for
the wire centers to verify, on the ETC’s websites, that the carriers were
currently offering Lifeline service in AT&T Florida’s relinquishment area.
Based on staff’s review and analysis, staff determined that in each of AT&T
Florida’s service territories where the Company is relinquishing its ETC
designation, customers will continue to be served by one or more ETCs. Staff
also determined that the majority of the ETCs remaining in AT&T Florida’s
service territory will be wireless providers.
In its petition, AT&T Florida has asserted that its
Lifeline customers in the relinquished area will receive ample notice of the
need to select another ETC to continue receiving a Lifeline discount. This
notice will be sent to customers, via U.S. Mail, at least 60 days prior to the
effective date of the relinquishment. The notice will explain that AT&T
Florida will no longer offer a Lifeline discount and if the customer does not
choose another Lifeline provider, the customer will be charged standard prices
(including applicable surcharges, fees and taxes) for their existing AT&T
Florida services.
AT&T will also send a second notice and a bill message
at least 15 days prior to the relinquishment date. The second notice will
provide a list of Lifeline providers designated in all or part of AT&T
Florida’s service territory and a link to an AT&T website that lists those
ETCs by city/towns. The notices will also provide information on how to contact
the Universal Service Administrative Company (USAC) for a list of other ETCs in
the state and answers to general Lifeline questions. In addition, AT&T
Florida will stop enrolling customers in the Lifeline program from the
relinquished area either within five (5) days of the date the Commission’s Order
is final or August 11, 2017, whichever is later.
After reviewing AT&T Florida’s petition and the
responses to the ETC data requests, pursuant to 47 CFR §54.205(b), the
providers have verified there will be one or more ETCs remaining in AT&T
Florida’s service territory where the Company is relinquishing its ETC
designation. Therefore, customers who reside within the relinquishment area
will continue to be served by an ETC provider if AT&T Florida’s ETC
relinquishment is granted. Thus, AT&T Florida has met 47 CFR §54.205(b) requirements to relinquish
its ETC designation in its service territory where they are not receiving CAF
II funding.
Therefore, staff recommends that the Commission should approve AT&T
Florida’s petition for partial relinquishment of its ETC status. The Company
will retain ETC designation in only the areas identified in Exhibit B. All
other areas will be relinquished.
Issue 2:
Should this docket be closed?
Recommendation:
Yes. If no person whose substantial interests are
affected by the proposed agency action files a protest within 21 days of the
issuance of the order, this docket should be closed upon the issuance of a
consummating order. (Murphy, Cuello)
Staff Analysis:
At the conclusion of the protest period, if no
protest is filed this docket should be closed upon the issuance of a
consummating order.
