Competition in the Telecommunications Industry

Competition in the Telecommunications Industry
Report on the Status of
Competition in the
Telecommunications
Industry
AS
OF
DECEMBER
31 ,
2010
Florida Public Service Commission
Division of Regulatory Analysis
Table of Contents
List of Tables and Figures............................................................................................................... v
List of Acronyms .......................................................................................................................... vii
Executive Summary ........................................................................................................................ 1
Chapter I: Introduction and Background ....................................................................................... 7
A. Provisions and Goals of Chapter 364, F.S. ................................................................... 7
1. Chapter 364, F.S. ............................................................................................... 7
2. Recent Changes to Chapter 364, F.S. ................................................................ 8
Chapter II. Wireline Market Overview.......................................................................................... 9
A. Economy ....................................................................................................................... 9
B. Incumbent Carriers...................................................................................................... 10
1. Mergers / Acquisitions..................................................................................... 12
a. CenturyLink / Qwest ............................................................................ 12
b. AT&T / T-Mobile ................................................................................ 12
c. CLEC Transactions .............................................................................. 13
Chapter III. Status of Wireline Competition In Florida............................................................... 15
A. Wireline Access Lines In Florida................................................................................ 15
1. 2010 Summary of Results................................................................................ 15
2. Factors Contributing to Access Line Decline .................................................. 15
3. CLEC Market Composition ............................................................................. 16
B. Wireline Market Share and Access Lines ................................................................... 16
1. CLEC Market Share......................................................................................... 17
a. Florida .................................................................................................. 17
b. National................................................................................................ 19
2. Access Line Overview ..................................................................................... 20
3. CLEC Market Penetration by ILEC Territory ................................................. 23
4. Competitive Presence by Exchange................................................................. 24
C. Competitive Market Trends ........................................................................................ 25
1. Residential Access Line Trends....................................................................... 25
i
2. Business Access Line Trends........................................................................... 26
D. Rural Access Line Trends ........................................................................................... 27
E. Prepaid Telecommunications Services........................................................................ 27
F. Pay Telephone Services............................................................................................... 27
G. Competitive Market Analysis and Statutory Issues .................................................... 27
1. The ability of competitive providers to make functionally equivalent local
exchange services available to both residential and business customers at
competitive rates, terms, and conditions. ......................................................... 28
2. The ability of consumers to obtain functionally equivalent services at
comparable rates, terms, and conditions. ......................................................... 29
3. The overall impact of competition on the maintenance of reasonably
affordable and reliable high-quality telecommunications services.................. 30
4. A listing and short description of any carrier disputes filed under Section
364.16, F.S. ...................................................................................................... 32
Chapter IV. Wireless, VoIP, and Broadband............................................................................... 33
A. Wireless....................................................................................................................... 33
1. Wireless-Only Households .............................................................................. 35
2. Florida Trends.................................................................................................. 35
B. Voice over Internet Protocol (VoIP) ........................................................................... 36
1. National Market Analysis ................................................................................ 37
a. Facilities-Based VoIP Providers .......................................................... 37
b. Over-the-Top VoIP Providers.............................................................. 39
2. Florida Market ................................................................................................. 40
C. Broadband ................................................................................................................... 41
1. National Broadband Trends ............................................................................. 41
2. Florida Broadband Trends................................................................................ 42
3. Technology and Innovation Trends ................................................................. 44
a. Netflix and Data Caps .......................................................................... 44
b. 4G LTE ................................................................................................ 45
Chapter V. State Activities .......................................................................................................... 47
A. Intercarrier Disputes.................................................................................................... 47
ii
1.
2.
3.
4.
5.
6.
7.
8.
9.
Bright House / Verizon Arbitration ................................................................. 47
Qwest’s Discrimination Complaint.................................................................. 47
AT&T Florida / Sprint Nextel Arbitration....................................................... 47
AT&T / LifeConnex Dispute ........................................................................... 48
ADT / AT&T Dispute...................................................................................... 49
Bright House / Verizon Access Charge Complaint ......................................... 49
Easy Telephone / AT&T Dispute .................................................................... 50
Express Phone / AT&T Disputes..................................................................... 50
Wholesale Performance Measurement Plans................................................... 51
B. Florida Broadband ARRA Projects............................................................................. 52
C. State Legislation.......................................................................................................... 53
Chapter VI. Federal Activities ..................................................................................................... 55
A. Universal Service ........................................................................................................ 55
1. Reform of Universal Service and Intercarrier Compensation.......................... 55
2. Reform of Lifeline and Link-Up...................................................................... 56
3. Afterhours Use of Internet Connections at Schools Receiving E-rate
Funding ............................................................................................................ 58
4. Mobility Fund .................................................................................................. 58
B. Broadband .................................................................................................................... 59
1. National Broadband Plan ................................................................................. 59
2. Broadband Data Collection.............................................................................. 60
3. Network Neutrality and Internet Network Management ................................. 60
C. Funding for Video Relay Service................................................................................ 61
Appendix A. List of Certificated CLECs as 12/31/10 ................................................................. 63
Appendix B. Number of CLEC Providers In Each Exchange ..................................................... 69
Appendix C. Summary of Complaints Filed By CLECs ............................................................. 77
Appendix D. Florida Lifeline Eligibility Criteria ........................................................................ 81
Glossary ........................................................................................................................................ 83
iii
iv
List of Tables and Figures
Figure E-1. Access Line Composition by Company Type ............................................................ 3
Figure E-2. Access Line Composition for Residential & Business Line Types............................ 3
Figure 3-1.
Figure 3-2.
Figure 3-3.
Figure 3-4.
Figure 3-5.
Figure 3-6.
Figure 3-7.
Figure 3-8.
Figure 3-9.
Florida CLEC Market Share ..................................................................................... 17
Florida Residential & Business CLEC Market Share ............................................... 18
Florida CLEC Market Share by ILEC Service Territory .......................................... 19
Florida Access Line Trends ...................................................................................... 20
Florida CLEC Lines .................................................................................................. 22
Florida CLEC Residential & Business Market Share by ILEC Service Territory.... 23
Florida Residential Line Trends by ILECs and CLECs............................................ 25
Florida Business Line Trends by ILECs and CLECs................................................ 26
Telephone Service Penetration: Florida vs. Nation.................................................. 31
Figure 4-1.
Figure 4-1.
Figure 4-2.
Figure 4-3.
Cable VoIP Residential Subscriber Lines ................................................................. 38
Estimated Florida Residential VoIP Access Lines.................................................... 40
Broadband Subscription by State .............................................................................. 43
Broadband Usage Types During Peak Hours............................................................ 44
Table
Table
Table
Table
Summary of CLEC Residential Access Line Providers ........................................... 16
Florida Access Line Comparison ............................................................................. 21
Florida Exchanges with the Most CLEC Providers.................................................. 24
CLEC Providers by Florida Exchange ..................................................................... 30
3-1.
3-2.
3-3.
3-4.
Table 6-1. 2009 Federal Universal Service Programs in Florida............................................... 55
v
vi
List of Acronyms
3G
4G
ARRA
Bus
CAF
CDC
CLEC
DSL
ETC
FCC
FiOS
FPSC
F.S.
Gbps
ICA
ILEC
IP
kbps
LEC
LTE
Mbps
NBP
NFBA
NOI
NPRM
NTIA
PURC
Res
USF
VoIP
VRS
Third Generation (wireless)
Fourth Generation (wireless)
American Recovery and Reinvestment Act
Business
Connect America Fund
Centers for Disease Control
Competitive Local Exchange Company
Digital Subscriber Line
Eligible Telecommunications Carrier
Federal Communications Commission
Verizon’s trademark name for its fiber-to-the-home package of services
Florida Public Service Commission, the Commission
Florida Statutes
Gigabits per second
Interconnection agreements
Incumbent Local Exchange Company
Internet Protocol
kilobits per second
Local Exchange Company
Long Term Evolution
Megabits per second
National Broadband Plan
North Florida Broadband Authority
Notice of Inquiry
Notice of Proposed Rulemaking
National Telecommunications and Information Administration
University of Florida’s Public Utility Research Center
Residential
Universal Service Fund
Voice over Internet Protocol
Video Relay Service
vii
viii
Executive Summary
This report fulfills the statutory obligations set forth in Section 364.386, Florida Statutes
(F.S.), which requires the Florida Public Service Commission (the Commission or FPSC) to
report on “the status of competition in the telecommunications industry” to the Legislature by
August 1 of each year. 1 The Commission is required to address specific topic areas within the
realm of competition. On February 16, 2011, information requests were sent to the 10 incumbent
local exchange companies (ILECs) and 287 competitive local exchange companies (CLECs)
certificated by the Commission to operate in Florida, as of December 31, 2010.
Analysis of the data produced the following conclusions:

Many CLECs reported offering a variety of services and packages comparable to
those offered by ILECs. This factor contributes to the conclusion that competitive
providers are able to offer functionally equivalent services to both business and
residential customers.

The continued decrease in both business and residential ILEC access lines
demonstrates customers are finding reasonable pricing packages and functionality
with CLECs, cable providers, and wireless providers.

Based on the continued growth of interconnected Voice over Internet Protocol (VoIP)
services and wireless-only households, network reliability of non-ILEC providers is
sufficient to satisfy customers. The FCC reported telephone penetration rate of 94
percent suggests that the overwhelming majority of Florida residents are able to
afford telephone service. 2 The number and variety of competitive choices among all
types of service providers and recent high customer satisfaction rates for
interconnected VoIP providers suggests that competition is having a positive impact
on the telecommunications market in Florida.
Wireline Competition
The following data relates exclusively to the ILEC and CLEC wireline market and does
not reflect the number of wireless and VoIP subscribers in Florida. Overall, the residential
market, which accounts for 54 percent of all access lines, is slightly larger than the business
market in Florida. This report addresses changes in the telecommunications market for the
period January 1, 2010, through December 31, 2010. Significant findings relating to the wireline
market as of December 2010 include:
1
The 2011 Florida Legislature amended Chapter 364, F.S., and those changes became effective July 1, 2011. Some
of those amendments affect the form of this and future editions of this report. A more thorough discussion of the
changes affecting the report appears in Chapter I.
2
FCC, “Telephone Subscribership in the United States as of July 2010,” May 2011, Table 2, <http://
transition.fcc.gov/Daily_Releases/Daily_Business/2011/db0519/DOC-306752A1.pdf>, accessed on May 31, 2011.
1
CLEC Market Share

CLECs’ market share of all wireline access lines in (residential and business) in
Florida increased to 20 percent as of December 2010, from 14 percent as of
December 2009.

CLEC residential market share decreased to 4 percent from 5 percent in 2009. 3

CLEC business market share increased to 39 percent from 25 percent in 2009. 4
CLEC Access Lines

CLEC business lines accounted for 89 percent of all CLEC access lines in 2010.

Total CLEC access lines increased by 27 percent from December 31, 2009 to
December 31, 2010.
o CLEC residential access lines decreased by 27 percent.
o CLEC business access lines increased by 40 percent.
ILEC Access Lines

ILEC residential lines accounted for 65 percent of all ILEC access lines in 2010.

Total ILEC access lines decreased by 20 percent from December 31, 2009 to
December 31, 2010.
o ILEC residential lines decreased by 15 percent.
o Residential access lines decreased 17 percent for AT&T, 17 percent for Verizon,
9 percent for CenturyLink, and 4 percent for the rural ILECs from December 31,
2009 to December 31, 2010.
o ILEC business lines decreased by 27 percent.
o Business access lines decreased by 36 percent for AT&T, 17 percent for Verizon,
10 percent for CenturyLink, and 5 percent for rural ILECs between 2009 and
2010.
3
CLEC residential data as of December 2009 was recalculated for the 2011 edition of this report due to a provider
reporting error.
4
The methodology for counting ILEC-affiliated CLEC access lines in the affiliated ILEC’s territory changed
starting with the 2008 report. The access lines of a CLEC related to AT&T, Verizon, or CenturyLink are accounted
for as competitive lines only when those access lines are outside of the parent company’s footprint.
2
Figure E-1. Access Line Composition by Company Type
Total Market Share
CLEC Market Composition
ILEC Market Composition
Res
11%
Res
65%
CLEC: 20%
ILEC: 80%
Bus
35%
Bus
89%
Source: Responses to FPSC data requests (2011)
Figure E-2. Access Line Composition for Residential & Business Line Types
Total Market Composition
Res Market Share
Bus Market Share
CLEC
4%
Res: 54%
Bus : 46%
CLEC
39%
ILEC
61%
ILEC
96%
Source: Responses to FPSC data requests (2011)
Intermodal Competition
Wireless and VoIP services compete with traditional wireline service and represent a
significant portion of today’s communications market in Florida. Broadband service also
provides the basis for some VoIP services. These three services are not subject to FPSC
jurisdiction, and Florida-specific data are not readily available. However, the number of wireless
handsets in service and VoIP customers in Florida far exceeds the 1.3 million wireline access
lines served by CLECs. Four ILECs and 46 CLECs furnished VoIP data. Highlights relating to
wireless, VoIP, and broadband services include:
3
Wireless

Approximately 16.9 million wireless handsets were in service in Florida as of June
2010, the most current data available. 5

The Centers for Disease Control (CDC) estimates that nearly 29.7 percent of U.S.
households were wireless only as of December 2010. 6

The percentage of Florida adults living in wireless-only households reached 27.3
percent for the period July 2009 – June 2010, compared to 22.9 percent estimated for
the July 2008 – June 2009 period. 7
VoIP

An estimated 2 million Florida residential VoIP subscribers were reported as of
December 2010, an increase of 11 percent over the 1.8 million estimated in 2009.

Forty-six CLECs and 4 ILECs voluntarily reported 578,346 VoIP lines to the FPSC in
response to the 2011 data request. This figure is nearly twice the number reported for
2009.

The Florida Cable Telecommunications Association reported 1.7 million residential
cable digital voice (VoIP) subscribers as of December 2010, an increase of 20 percent
from the number reported for December 2009.
Broadband

Federal Communications Commission (FCC) statistics show that Florida's broadband
connections reached approximately 9.8 million as of June 2010, an increase of 33
percent from the 7.4 million reported as of June 2009. 8, 9
5
FCC, “Local Telephone Competition: Status as of June 30, 2010,” March 2011, Table 17,
<http://www.fcc.gov/Daily_Releases/Daily_Business/2011/db0321/DOC-305297A1.pdf >, accessed on March 24,
2011.
6
Stephen J. Blumberg, Julian V. Luke, “Wireless Substitution: Early Release of Estimates From the National
Health Interview Survey, July – December 2010,” June 8, 2011, pp. 1-3, <
http://www.cdc.gov/nchs/data/nhis/earlyrelease/
wireless201106.pdf>, accessed on June 10, 2011.
7
Stephen J. Blumberg, Julian V. Luke, “Wireless Substitution: State-level Estimates From the National Health
Interview Survey, January 2007-June 2010,” National Center for Health Statistics, April 20, 2011,
<http://www.cdc.gov/nchs/data/nhsr/nhsr039.pdf>, accessed on April 21, 2011.
8
FCC, “High-Speed Services for Internet Access: Status as of June 30, 2010,” released March 2011, Table 18,
<http://transition.fcc.gov/Daily_Releases/Daily_Business/2011/db0520/DOC-305296A1.pdf>, accessed May 31,
2011.
9
FCC, “High-Speed Services for Internet Access: Status as of June 30, 2009,” released September 2010, Table 18,
<http://transition.fcc.gov/Daily_Releases/Daily_Business/2010/db0902/DOC-301294A1.pdf>, accessed May 31,
2011.
4

Approximately 43 percent of those connections are at download speeds of 3 Mbps or
greater and 20 percent of those connections have download speeds that are greater
than or equal to 10 Mbps. 10

Residential subscribership in Florida reached 70 percent as of June 2010, 6 points
above the national subscribership level of 64 percent. 11

There are 98 providers of high-speed Internet access in Florida, including 46 digital
subscriber line (DSL) providers, 18 cable providers, 34 fiber providers, and 7 mobile
wireless providers, as of June 2010. 12
10
FCC, “High-Speed Services for Internet Access: Status as of June 30, 2010,” released March 2011, Table 18,
<http://transition.fcc.gov/Daily_Releases/Daily_Business/2011/db0520/DOC-305296A1.pdf>, accessed May 31,
2011, Table 20.
11
Ibid, Table 16.
12
Ibid, Table 23.
5
6
Chapter I: Introduction and Background
Chapter 364, F.S., sets forth the principles by which the FPSC regulates wireline
telecommunications companies. Commission oversight is primarily focused on traditional local
telephone companies, ILECs. Competitors to the ILECs, known as CLECs, and interexchange
companies are subject to minimal retail regulation. 13 The Commission does not regulate
wireless, broadband, or VoIP services.
Chapter 364, F.S., requires the Commission to prepare and deliver a report on “the status
of competition in the telecommunications industry” to the President of the Senate, the Speaker of
the House of Representatives, and the majority and minority leaders of the Senate and the House
of Representatives on August 1 of each year. Section 364.386, F.S., as amended by the 2011
Florida Legislature, requires that the report address the following four issues:
1. The ability of competitive providers to make functionally equivalent local exchange
services available to both residential and business customers at competitive rates,
terms, and conditions.
2. The ability of customers to obtain functionally equivalent services at comparable
rates, terms, and conditions.
3. The overall impact of competition on the maintenance of reasonably affordable and
reliable high-quality telecommunications services.
4. A list and short description of any carrier disputes filed under Section 364.16, F.S.
As of December 31, 2010, 10 ILECs and 287 CLECs were certificated by the
Commission to operate in Florida.
A. Provisions and Goals of Chapter 364, F.S.
1. Chapter 364, F.S.
In 1995, the Florida Legislature amended Chapter 364, F.S., to allow for competition in
the state’s local telecommunications markets. The Legislature found that “the competitive
provision of telecommunications services, including local exchange telecommunications service,
is in the public interest and will provide customers with freedom of choice, encourage the
introduction of new telecommunications services, encourage technological innovation, and
encourage investment in telecommunications infrastructure.”
13
The 2011 Florida Legislature passed legislation, effective July 1, 2011, that eliminated FPSC regulatory oversight
of intrastate interexchange carriers, with the exception that those carriers remain subject to section 364.02(12) and
(13), and section 364.163, F.S., pertaining to intercarrier compensation and network access services.
7
2. Recent Changes to Chapter 364, F.S.
The 2011 Florida Legislature amended Chapter 364, F.S., and some of those changes will
directly affect the form of this and future reports. The Commission may no longer request access
line data by exchange (local calling scope) from local exchange telecommunications companies
(LECs). In addition, Section 364.386, F.S., contained six issues the Commission report was
required to address and the amended statutes have only four issues to be addressed. The statutes
previously required the Commission to provide a summary of all complaints filed by CLECs
against ILECs. The amended statute requires a list and short description of all carrier disputes
filed under new Section 364.16, F.S.
The amended statutes became effective July 1, 2011. Pursuant to Section 364.386, F.S.,
the Commission is required to make an annual request to local exchange telecommunications
providers, on or before March 1 of each year, for the data required to complete the report. A
provider of local exchange telecommunications service is required to file its response with the
Commission on or before April 15 of each year. The FPSC data request was mailed on February
16, 2011, and responses were due April 15, 2011. Since the amended statutes were not in effect
at the time the request was sent and responses were received, local telecommunications
companies were expected to provide local access line data, including exchange location
information. This report includes an analysis of that data, however, future reports will not
contain exchange level analysis.
8
Chapter II. Wireline Market Overview
A. Economy
General economic conditions improved across the country in 2010 as the recovery from
the major recession, which officially ended in 2009, continued. Gross Domestic Product, which
measures the market value of all final goods and services produced, increased by 2.9 percent for
the 6 quarters ending December 2010. 14 Unemployment figures remained high through 2010,
peaking at 9.8 percent in April and finishing the year at 9.4 percent in December. 15 Two factors
account for a less than robust recovery: (1) the collapse of the housing market and, (2) a slow
rebound in consumer spending. 16 With an abundance of available housing, residential
investment in homes during 2010 was significantly below typical investment levels following
previous major recessions. With unemployment rates remaining high, housing values dropping,
and lingering employment insecurity, consumers increased personal savings from slightly below
2 percent of income in 2007, to roughly 6 percent in the first year of recovery. 17 While efforts to
repair household monetary balance sheets bodes well for the future, such consumer behavior
tends to restrain overall economic recovery. 18
Florida’s economy continued to struggle throughout 2010. The unemployment rate in
Florida was higher than the national average during each month of 2010 and reached 12 percent
in December. 19 Personal income in Florida improved slightly throughout 2010.
The population in Florida increased by 0.7 percent in 2010 following a 0.5 percent
increase in 2009. This increase contrasts with more robust growth figures earlier in the decade,
which peaked at 2.3 percent in 2005. According to 2010 U.S. Census data, Florida experienced a
population growth of 17.6 percent from 2000 to 2010, reaching 18.8 million. 20 Florida’s growth
exceeded the national population growth of 9.7 percent for the decade. 21
14
Lacker, Jeffery M., “Economic Outlook, April 2011,” EconSouth Federal Reserve Bank of Richmond, Volume
12, No. 4, Fourth Quarter 2010, < http://www.richmondfed.org/press_room/speeches/president_jeff_lacker/2011/
lacker_speech_20110414.cfm>, accessed on May 23, 2011.
15
Unemployment Rate, U.S. Bureau of Labor Statistics, <http://data.bls.gov/pdq/SurveyOutputServlet>, accessed on
May 24, 2011.
16
Lacker, Jeffery M., “Economic Outlook, April 2011,” EconSouth Federal Reserve Bank of Richmond, Volume
12, No. 4, Fourth Quarter 2010, < http://www.richmondfed.org/press_room/speeches/president_jeff_lacker/2011/
lacker_speech_20110414.cfm>, accessed on May 23, 2011.
17
Ibid.
18
Hammill, Mike, “Good News, Bad News in 2010 Color Outlook for 2011,” Federal Reserve Bank of Atlanta.
Fourth Quarter 2010, <http://www.frbatlanta.org/documents/pubs/econsouth/10q4_national.pdf>, accessed on May
23, 2011.
19
U.S. Department of Labor, Bureau of Labor Statistics, <http://data.bls.gov/pdq/SurveyOutputServlet>, accessed
on May 24, 2011.
20
“Florida growth outpaces national trend,” Bureau of Economic & Business Research, University of Florida,
March 21, 2011, <http://www.bebr.ufl.edu.edu/news/florida-growth-outpaces-national-trend>, accessed on May 24,
2011.
21
2010 Census Data: Apportionment Data, <http://2010.census.gov/2010census/data/>, accessed on May 24, 2011.
9
The economy was likely a contributing factor to Florida ILECs losing approximately
900,000 access lines, or roughly 12 percent of their wireline market in 2009, and 1.2 million, or
approximately 20 percent, in 2010.
B. Incumbent Carriers
The three largest ILECs providing wireline service in Florida are AT&T, CenturyLink,
and Verizon. These providers continued to experience access line losses in the national wireline
market in 2010. Two of these carriers, Verizon and AT&T, are also the largest wireless carriers
nationwide and both increased national wireless subscribership in 2010. Some of the declines in
access lines are the result of substitution of one service type for another from the same provider.
For example, both Verizon and AT&T have reported increased subscription of digital voice
services provided via VoIP as consumers transition from traditional circuit switched services to
digital services. One analyst noted that Verizon alone had added more digital voice customers
nationally (326,000), than Comcast and Time Warner Cable combined (250,000) in the third
quarter of 2010. 22
Nationally, AT&T reported losses of approximately 5.7 million local access lines from
the end of 2009 to the end of 2010. AT&T’s residential lines fell 14.6 percent during this period
while business lines declined by 7.5 percent. 23 The company attributed the access line declines
to economic pressures and increased competition. AT&T’s strategy has been to offset these line
losses by increasing non-access-line-related revenues from customer connections for data, video,
and voice. 24 For 2010, AT&T’s total operating revenues increased by $1.7 billion despite access
line losses. In Florida, AT&T’s residential lines decreased by 17 percent, and business lines
dropped 30 percent. 25 By comparison, Verizon lost access lines and also had a decline in
operating revenue. 26 For 2010, Verizon’s access lines declined by about 8 percent. This
represents a slower rate of access line loss than in 2009, when Verizon lost 10 percent of its
access lines. Between 2008 and 2009, Verizon saw its total operating revenue increase by $10
billion (or about 10 percent), while in 2010, Verizon experienced a total operating revenue
decrease of $1 billion (or about 1 percent). 27 Verizon did, however, report growth in both their
FiOS Internet and FiOS TV subscribers of 24 percent and 26 percent, respectively. 28 In Florida,
22
Bernie Arnason, “Telcos Revive Battle Against Cable for Residential Voice” Telecompetitor, May 5, 2011,
<http://www.telecompetitor.com/telcos-revive-battle-against-cable-for-residential-voice/>, accessed on May 11,
2011.
23
AT&T Inc., 2010 Annual Report, p. 39, <http://www.att.com/Common/about_us/annual_report/pdfs/
ATT2010_Full.pdf >, accessed on April 22, 2011.
24
AT&T Inc. Form 10-K, December 31, 2010, Exhibit 13, p. 9, <http://sec.gov/Archives/edgar/data/732717/
000073271711000014/ex13.pdf>, accessed on April 22, 2011.
25
Responses to the FPSC Local Competition Data Request for 2010 and 2011.
26
Verizon Communications Inc., Form 10-K, December 31, 2010, Exhibit 13, <http://sec.gov/Archives/edgar/data/
732712/000119312511049476/dex13.htm>, accessed on April 24, 2011.
27
Verizon Communications Inc, 2010 Annual Report, p. 42, <http://www22.verizon.com/investor/investorconsump/groups/public/documents/investorrelation/2010_annualreport_quicklinks.pdf>, accessed on April 24,
2011.
28
Verizon Communications Inc., Form 10-K, December 31, 2010, Exhibit 13,
<http://sec.gov/Archives/edgar/data/732712/000119312511049476/dex13.htm>, accessed on April 24, 2011.
10
Verizon experienced reductions in residential and business access lines of 17 percent and 13
percent, respectively. 29
CenturyLink lost approximately 535,000 switched access lines in the U.S. in 2010. 30
This figure represents an approximate 8 percent loss in access lines. Despite these losses in
access lines, operating revenues increased by 42 percent from last year to $7 billion. 31 Unlike
AT&T and Verizon, CenturyLink relies on reselling wireless and video services provided by
other companies. 32 However, CenturyLink has purchased 69 wireless spectrum licenses
nationwide and is considering developing its own wireless voice and data service capabilities.33
CenturyLink’s access line loss in Florida totaled 9 percent for both the residential and business
sectors. 34
The seven remaining smaller ILECs in Florida also experienced business contraction in
their respective service areas. 35 Rural carriers in Florida saw residential access lines fall by 4
percent in 2010, 36 about the same decline reported in the previous year. In Florida, Windstream
is the largest of the “rural” ILECs. As of December 31, 2010, Windstream reported
approximately 3.3 million access lines in 29 states. Windstream also provides data services to
approximately 1.3 million high-speed Internet access customers. 37 Nationally, Windstream did
see access line growth this year, primarily as a result of its acquisition of other
telecommunications carriers. 38 After removing the impact of acquired consumer lines,
Windstream also experienced a decrease of residential access lines nationally of 82,000, or 4.2
percent during 2010. Similarly, after removing the impact of acquired business lines, business
lines decreased 37,000, or 3.9 percent during 2010. 39 Total revenues, absent acquired
businesses, were also lower than last year for Windstream. 40 Including the acquired businesses,
however, total revenues increased 24 percent over the previous year.
29
Responses to the FPSC Local Competition Data Request for 2010 and 2011.
CenturyLink, Form 10-K, December 31, 2010, p. 8, <http://sec.gov/Archives/edgar/data/18926
/000001892611000006/file10k.htm>, accessed on April 26, 2011.
31
Ibid, p. 54.
32
Ibid, p. 12.
33
Ibid, p. 11.
34
Responses to FPSC Local Competition Data Request for 2010 and 2011.
35
The companies included in the rural ILEC calculations are ITS Telecommunications Systems, Inc., Northeast
Florida Telephone Company d/b/a NEFCOM, Windstream Florida, Inc., Quincy Telephone Company d/b/a TDS
Telecom/Quincy Telephone, GTC, Inc. d/b/a FairPoint Communications, Smart City Telecommunications LLC
d/b/a Smart City Telecom, and Frontier Communications of the South, LLC.
36
Ibid.
37
Windstream Corp., Form 10-K, December 31, 2010, p. 2, <http://sec.gov/Archives/edgar/data/
1282266/000119312511042169/d10k.htm>, accessed on April 28, 2011.
38
During 2010, Windstream purchased the following telecommunication carriers: NuVox, Iowa Telecom, and QComm.
39
Windstream Corp., Form 10-K, December 31, 2010, p. F-3, <http://sec.gov/Archives/edgar/data/
1282266/000119312511042169/d10k.htm>, accessed on April 28, 2011.
40
Windstream 2010 Annual Report, Proxy Statement and Form 10-K, December 31, 2010, pp. F7 – F10,
<http://sec.gov/Archives/edgar/vprr/11/9999999997-11-007157>, accessed on May 10, 2011.
30
11
Throughout 2010, FairPoint Communications (FairPoint) was reorganizing under Chapter
11 bankruptcy protection. 41 FairPoint is a rural carrier serving 18 states and has more than
37,000 access lines in Florida. 42 Florida represents FairPoint’s fourth largest market in terms of
access lines. FairPoint’s financial problems were primarily a result of its acquisition of
exchanges from Verizon in Maine, New Hampshire, and Vermont in 2007. 43 In January 2011,
FairPoint emerged from bankruptcy protection. 44 The bankruptcy proceeding has allowed
FairPoint to eliminate a substantial amount of its debt from the Verizon acquisitions. 45
1. Mergers / Acquisitions
Approval of merger and acquisition petitions for telecommunications carriers peaked
nationally in 2006 with more than 90 communications companies consolidating their
operations. 46 By comparison, 79 mergers and acquisitions occurred in 2010. 47 This figure
represents an increase of 46 percent from the previous year. Recent transactions of interest to
Florida are described below.
a. CenturyLink / Qwest
On April 22, 2010, the boards of directors of CenturyLink and Qwest Communications
Company, LLC, (Qwest) announced approval of an agreement under which CenturyLink would
acquire Qwest. The merger 48 was completed on April 1, 2011. 49 The result of this merger
created the third largest telecommunications company in the United States, providing service in
37 states, including Florida.
b. AT&T / T-Mobile
AT&T Inc. and Deutsche Telekom AG announced on March 20, 2011, that they entered
into an agreement under which AT&T will acquire T-Mobile USA from Deutsche Telekom in a
transaction valued at approximately $39 billion. According to AT&T’s press release, the
acquisition of T-Mobile USA provides wireless network assets to add capacity sooner than any
41
FairPoint Comm., Form 10-K, December 31, 2010, p. 6, <http://sec.gov/Archives/edgar/data/1062613/
000095012311031500/g26634e10vk.htm>, accessed on May 11, 2011.
42
Response to Local Competition Data Request for 2011.
43
Ibid, p. 10.
44
Ibid, p. 11.
45
Ibid, p. 34.
46
FCC, “2006 Completed Domestic Section 214 Transfer of Control Transactions,”
<http://www.fcc.gov/wcb/cpd/214Transfer/214completed2006.html>, accessed on April 20, 2011.
47
FCC, “2009 Completed Domestic Section 214 Transfer of Control Transactions,”
<http://www.fcc.gov/wcb/cpd/214Transfer/214completed2010.html>, accessed on April 20, 2010.
48
“CenturyLink and Qwest Agree to Merge,” CenturyLink / Qwest Joint Press Release, April 22, 2010,
<http://www.centurylinkqwestmerger.com/downloads/pressreleases/CenturyLink%20Qwest%20Merger%20Press%
20Release%204-22-2010.pdf>, accessed on April 20, 2011.
49
“CenturyLink and Qwest Complete Merger,” CenturyLink News Release, April 1, 2011
<http://www.centurylinkqwestmerger.com/downloads/news/CTL%20Merger%20Close%20Release%
20FINAL.pdf>, accessed on April 20, 2011.
12
other alternative. 50 This transaction quickly provides the spectrum and network efficiencies
necessary for AT&T to address impending spectrum shortages in key markets driven by growth
in mobile broadband traffic.
The acquisition, if approved, would make AT&T the largest wireless carrier in the United
States. With the addition of T-Mobile’s 34 million customers, AT&T will have approximately
130 million wireless customers. By comparison, the next largest carrier, Verizon Wireless, has
approximately 101 million wireless customers. The acquisition is expected to close in
approximately 12 months. AT&T has also committed to expand 4G LTE (Fourth Generation
Long Term Evolution) deployment to 97 percent of the population in the United States to
increase mobile broadband speeds. 51, 52
c. CLEC Transactions
On April 11, 2011, Level 3 Communications, Inc. (Level 3) and Global Crossing Limited
announced an agreement under which Level 3 will acquire Global Crossing in a stock-for-stock
transaction. Level 3’s current footprint is focused largely in North America with a European
presence as well. In Florida, Level 3 is the eleventh largest competitive local exchange carrier
based on access lines.
EarthLink, Inc. (EarthLink), an IP infrastructure and services company, completed
acquisitions of three telecommunications companies between December 2010 and April 2011.
The first, ITC^DeltaCom, was acquired by EarthLink in the fourth quarter of 2010. 53
ITC^DeltaCom operates a fiber optic network in the southeast United States. Earthlink acquired
STS Telecom, which provides voice, data, and Internet services to small and medium-sized
business customers in Florida and Georgia. The acquisition was completed in March 2011. 54
STS Telecom's customer base overlaps with EarthLink’s fiber network in south Florida,
providing additional capacity. Finally, the acquisition of One Communications Corporation was
completed in April 2011. With the completion of these transactions, the EarthLink Business IP
network now spans over 28,000 route miles across 27 states. 55
50
“AT&T to Acquire T-Mobile USA From Deutsche Telekom,” AT&T News Release March 20, 2011
<http://www.att.com/gen/press-room?pid=19358&cdvn=news&newsarticleid=31703&mapcode=
corporate|financial>, accessed on April 20, 2011.
51
“AT&T And T-Mobile USA: The Future Of Mobile Broadband,” Factsheet, updated April 21, 2011,
<http://www.mobilizeeverything.com/documents/Factsheet.pdfm>, accessed June 27, 2011.
52
4G LTE is different from previous wireless protocols because it is IP based and designed for data, rather than
voice traffic.
53
“EarthLink Completes ITC^DeltaCom Acquisition,” EarthLink New Release, December 8, 2010,
<http://www.earthlink.net/about/press/pressrelease.faces?id=823>, accessed on April 21, 2011.
54
“EarthLink Completes Acquisition of STS Telecom Adds Hosted VoIP Expertise to EarthLink Business Product
Portfolio,” EarthLink New Release, March 2, 2011, <http://www.earthlink.net/about/press/
pressrelease.faces?id=838>, accessed on April 21, 2011.
55
“EarthLink Completes Acquisition of One Communications,” EarthLink New Release, April 1, 2011,
<http://www.earthlink.net/about/press/pressrelease.faces?id=840>, accessed on April 21, 2011.
13
14
Chapter III. Status of Wireline Competition In Florida
A. Wireline Access Lines In Florida
1. 2010 Summary of Results
During 2010, total traditional wireline access lines for ILEC and CLEC combined
declined 13 percent, from approximately 7.4 million in 2009, to 6.4 million as of December
2010. 56 The decline of wireline access lines began in 2001 and the cumulative decline reached
47 percent through 2010. Residential wireline access lines declined by 16 percent, or 652,762
access lines, in 2010. 57 From 2001 through December 2010, combined wireline residential
access lines have declined by 58 percent, or 4.9 million lines. 58
Total wireline business access lines, ILEC and CLEC combined, decreased by more than
330,000 lines, or 10 percent, between December 2009 and December 2010. The net decline was
comprised of a decrease of 658,000 ILEC business lines and an increase of 328,000 CLEC
business access lines (a 40 percent increase in CLEC business lines). AT&T, Verizon, and
CenturyLink all experienced business access line losses in 2010. From May 2001 to December
2010, total wireline business (ILEC and CLEC) access lines decreased by 767,000 lines to a total
of 3 million lines, a decline of 21 percent. The decline of business access lines has not been
consistent over that entire period. Between May 2001 and June 2006, total wireline business
access lines increased slightly each year.
The composition of ILEC and CLEC access lines served has also undergone a noticeable
shift since 2001. As of December 2010, total ILEC business lines were 35 percent of total ILEC
lines served, compared to 28 percent in 2001. CLEC business access lines were 89 percent of
total CLEC access lines served, compared to 64 percent in 2001.
2. Factors Contributing to Access Line Decline
The primary reason for the decline in residential access lines is the increase of wirelessonly households and subscribers to VoIP services, including fiber-based digital voice service, in
lieu of traditional wirelines. The persistently weak economy has also contributed to the decline;
however, other factors have also had an impact on the decline. The increasing demand for
mobility and for more data intensive services like video is changing the way consumers think
about voice services and influencing product selection. Pricing strategies that bundle broadband,
mobility, and voice services together are contributing to the continuing decline in residential
wireline access lines.
56
VoIP connections reported by CLECs and cable companies are not included in wireline CLEC market share
analyses.
57
CLEC residential data as of December 2009 was recalculated for the 2011 edition of this report due to a provider
reporting error.
58
Market share calculations for 2007 were adjusted to correct a misclassification of lines. The impact on the
business market share was immaterial.
15
As addressed more thoroughly in Chapter IV, both VoIP and wireless services are
popular choices across the nation and in Florida. The FPSC estimates 2 million residential
interconnected VoIP subscribers reside in Florida as of December 2010. The FCC reports that
approximately 16.9 million wireless handsets were in use in Florida as of June 2010. 59 Wireless
and VoIP services are increasingly popular among business customers as well, and are
responsible for a portion of the business line decline.
3. CLEC Market Composition
Table 3-1 shows a distribution for 2009 and 2010 of the number of CLECs by ranges of
residential access lines served. The 3 largest residential providers constitute 68 percent of the
CLEC residential market. The remaining CLECs represent 32 percent of the residential CLEC
market. There are 49 CLECs that serve fewer than 1,000 residential access lines each. The
number of CLECs reporting access line data decreased from 72 in 2009 to 64 in 2010.
Table 3-1. Summary of CLEC Residential Access Line Providers
Number of Lines
2009
2010
% of Total
% of Total
Number of
Number of
CLEC Res
CLEC Res
Providers
Providers
Lines
Lines
20,000 +
4
64
2
60
10,000 - 20,000
1
10
1
8
1,000 - 10,000
14
20
12
25
Less than 1,000
53
6
49
7
Source: Responses to FPSC data requests (2010-2011)
B. Wireline Market Share and Access Lines
Charts and graphs in this section of the report show a gap in 2007 data due to a statutory
change in the timeline of this report. Data collected for this year’s edition of the report are as of
December 31, 2010. 60
Figures and tables are arranged to provide market share (expressed as a percentage) and
actual line counts (presented as raw numbers). Market share data are presented first, followed by
actual line counts.
59
FCC, “Local Telephone Competition: Status as of June 30, 2010,” March 2011, Table 17,
<http://transition.fcc.gov/Daily_Releases/Daily_Business/2011/db0321/DOC-305297A1.pdf>, accessed on March
30, 2011.
60
The methodology for counting ILEC-affiliated CLEC access lines in the affiliated ILEC’s territory changed
starting with the 2008 report. The access lines of a CLEC related to AT&T, Verizon, or CenturyLink are accounted
for as competitive lines only when those access lines are outside of the parent company’s footprint.
16
1. CLEC Market Share
a. Florida
Calculations based on responses to the Commission’s data request indicated the overall
CLEC market share was 20 percent as of December 2010. The large increase can be attributed to
the number of business lines that the CLECs gained in 2010. Figure 3-1 provides the CLEC
market share percentages for total access lines (combined residential and business lines) from
2004 through 2010.
Figure 3-1. Florida CLEC Market Share
25%
20%
20%
18%
17%
17%
15%
14%
12%
11%
10%
5%
0%
2004
2005
2006
2007
Source: Responses to FPSC data requests (2005-2011)
17
2008
2009
2010
Figure 3-2 shows the CLEC residential and business market shares for 2004 to 2010.

CLEC residential market share decreased, falling from 5 percent as of December
2009 to 4 percent as of December 2010.

CLEC business market share increased to 39 percent from 25 percent in 2009.
Figure 3-2. Florida Residential & Business CLEC Market Share
45%
39%
40%
34%
35%
33%
30%
30%
25%
25%
25%
23%
20%
15%
10%
10%
9%
7%
5%
5%
3%
3%
4%
0%
2004
2005
2006
2007
Residential
2008
Business
Source: Responses to FPSC data requests (2005-2011)
18
2009
2010
Figure 3-3 displays the CLEC market share of combined residential and business lines
within the service territories of AT&T, Verizon, CenturyLink, and the combined rural ILECs for
2007 through 2010. CLEC market share increased in each ILEC territory with the largest
increases reported in AT&T’s and CenturyLink’s territories.
Figure 3-3. Florida CLEC Market Share by ILEC Service Territory
25%
23%
20%
20%
16%
15%
15%
15%
13%
14%
13%
12%
10%
9%
8%
8%
5%
5%
2% 2% 2%
0%
AT&T
Verizon
Dec-07
CenturyLink
Dec-08
Dec-09
Rural ILEC
Dec-10
Source: Responses to FPSC data requests (2008-2011)
b. National
The FCC reports Florida’s CLEC market share at 36 percent as of June 2010. 61 The FCC
started including VoIP subscriber lines in the market share calculations with its December 2008
Local Competition Report. The inclusion of VoIP subscriber lines account for the majority of
the difference in market share totals calculated by the FPSC compared to those reported by the
FCC.
61
FCC, "Local Telephone Competition: Status as of June 30, 2010," March 2011, Table 11,
<http://transition.fcc.gov/Daily_Releases/Daily_Business/2011/db0321/DOC-305297A1.pdf>, accessed on March
31, 2011.
19
2. Access Line Overview
Local exchange companies were serving approximately 6.4 million lines in Florida as of
December 31, 2010, a decline of 5.5 million lines from June 30, 2001. As Figure 3-4 illustrates,
the number of residential lines has declined every year since 2001. The number of business lines
continues to decline, after a slight increasing trend from 2001 through 2006.
Figure 3-4. Florida Access Line Trends
9
8
8.1
7.9
7.6
Access Lines (millions)
7
7.2
6.7
6
5.7
5
4.8
4
4.2
3.8
3.8
3.7
3
4.3
4.2
4.2
3.5
3.5
3.3
2.9
2
1
Residential
Source: Responses to FPSC data requests (2003-2011)
20
Business
Jan-11
Dec-09
Jul-10
Jan-10
Dec-08
Jul-09
Jan-09
Dec-07
Jul-08
Jan-08
Jul-07
Jun-06
Jan-07
Jul-06
Jun-05
Jan-06
Jul-05
Jun-04
Jan-05
Jul-04
Jun-03
Jan-04
Jul-03
Jun-02
Jan-03
Jul-02
Jan-02
0
Dec-10
Table 3-2 displays the residential and business access line counts for ILECs and CLECs
from 2008 to 2010. Between December 2009 and December 2010:

Total access lines in Florida decreased by 13 percent.

Total ILEC access lines decreased by 20 percent, reflecting a 16 percent decrease in
residential lines and a 27 percent decrease in business lines.

Total CLEC access lines increased by 27 percent.

ILEC business access lines accounted for 35 percent of total ILEC lines in December
2010, compared to 28 percent in June 2001.

CLEC business access lines accounted for 89 percent of total CLEC lines in
December 2010, compared to 64 percent in June 2001.
Table 3-2. Florida Access Line Comparison
Dec 2008
ILECs
CLECs
Total
Dec 2009
Dec 2010
Change
from
2009
Res
Bus
Total
Res
Bus
Total
Res
Bus
Total
4,654,512
2,644,821
7,299,333
3,960,176
2,433,601
6,393,777
3,360,755
1,775,197
5,135,952
131,725
899,992
1,031,717
196,214
829,176
1,025,390
142,873
1,157,110
1,299,983
27%
4,786,237
3,544,813
8,331,050
4,156,390
3,262,777
7,419,167
3,503,628
2,932,307
6,435,935
-13%
Source: Responses to FPSC data requests (2009-2011)
21
-20%
Figure 3-5 graphically displays CLEC residential and business access line counts from
2006 to 2010.

CLEC residential access lines decreased by over 53,000 from December 2009 to
December 2010, a 27 percent decrease.

CLEC business access lines increased by approximately 328,000 from December
2009 to December 2010, a 40 percent gain.
Figure 3-5. Florida CLEC Lines
2,000,000
1,500,000
1,870,315
1,417,276
1,299,983
1,157,110
1,080,392
1,000,000
894,806
1,031,717
1,025,390
899,992
829,176
500,000
453,039
196,214
185,586
131,725
142,873
0
Jun-06
Dec-07
Dec-08
Residential
Business
Source: Responses to FPSC data requests (2007-2011)
22
Dec-09
Total
Dec-10
3. CLEC Market Penetration by ILEC Territory
Figure 3-6 displays the CLEC residential and business wireline market share by ILEC
territory for 2009 and 2010. CLEC residential market share increased in AT&T’s and the rural
ILECs’ territories and decreased in the territories of Verizon and CenturyLink.
CLEC business market share increased significantly in AT&T's and the rural ILECs’
territories, but decreased in Verizon’s and CenturyLink’s territories. CLECs have their highest
penetration rates in the business market, with a 46 percent share in AT&T’s territory and a 42
percent share in the rural ILECs territories.
Figure 3-6. Florida CLEC Residential & Business Market Share
by ILEC Service Territory
50%
46%
45%
42%
40%
34%
35%
30%
25%
23%
25%
20%
20%
15%
9%
10%
6%
5%
4%
2%
3% 3%
1%
1%
1% 0%
0%
Dec-09
Dec-10
AT&T
Dec-09
Dec-10
Dec-09
Verizon
Dec-10
CenturyLink
Res
Bus
Source: Responses to FPSC data requests (2010-2011)
23
Dec-09
Dec-10
Rural ILEC
4. Competitive Presence by Exchange
Table 3-3 lists the five Florida exchanges in AT&T’s territory with the greatest number
of CLEC providers reporting access lines. 62 Verizon’s Tampa exchange and CenturyLink’s
Tallahassee exchange are listed for comparison. The number of CLEC residential providers
decreased from 2009 levels in all but one exchange, while the number of CLEC business
providers remained relatively stable from 2009 to 2010 in all exchanges. The number of overall
providers decreased in five of the seven exchanges.
Table 3-3. Florida Exchanges with the Most CLEC Providers
Exchange
Miami
West Palm Beach
Orlando
Fort Lauderdale
Jacksonville
Tampa (Verizon)
Tallahassee (CenturyLink)
Rank by Total
Access Lines
1
6
5
3
4
2
10
Residential
Dec-09
Dec-10
44
37
42
38
37
31
38
32
38
36
18
14
13
14
Business
Dec-09
Dec-10
51
46
45
45
47
45
49
45
43
44
35
23
40
23
Total CLECs
Dec-09
Dec-10
77
71
68
64
68
63
72
61
63
61
46
34
46
34
Source: Responses to FPSC data requests (2010-2011)
62
Changes to Section 364.386, F.S., effective July 1, 2011, no longer required the FPSC to report on the status of
competition at the exchange level; however, the data for the 2010 reporting year was received prior to the statutory
change and analysis of the data is included in this year’s report.
24
C. Competitive Market Trends
1. Residential Access Line Trends
Figure 3-7 displays the residential access line trends separately for AT&T, Verizon,
CenturyLink, the rural ILECs, and the CLECs. All companies reported a decline in residential
access lines from December 2009 to December 2010.
Figure 3-7. Florida Residential Line Trends
by ILECs and CLECs
4,000
3,500
3,437
3,094
Access Lines (thousands)
3,000
2,633
2,500
2,213
1,830
2,000
1,500
1,326
1,135
1,000
985
1,321
867
789
1,073
918
453
500
186
134
132
118
127
766
196
113
633
143
108
0
Dec-05 Jun-06
Jun-06 Dec-06 Jun-07 Dec-07
Dec-07 Jun-08 Dec-08
Dec-08 Jun-09 Dec-09
Dec-09 Jun-10 Dec-10
Dec-10 Jun-11
AT&T
Verizon
CenturyLink
Rural ILEC
CLECs
Source: Responses to FPSC data requests (2007-2011)
Analysis of exchange level residential access line data reveals:

CLECs gained 100 or more residential access lines in 11 of 276 exchanges in 2010.

CLECs lost 100 or more residential access lines in 49 of 276 exchanges.

ILECs lost residential access lines in all but 4 of 276 exchanges statewide.
o Losses exceeded 1,000 access lines in 53 of 93 AT&T exchanges, in 26 of 104
CenturyLink exchanges, and in 18 of 25 Verizon exchanges.
o Losses exceeded 10,000 access lines in 9 AT&T exchanges and in 3 Verizon
exchanges.
25
ILEC residential access lines declined for AT&T, Verizon, CenturyLink, and the rural
ILECs at approximately the same rate in 2010 as in 2009. CLECs experienced a 27 percent
decrease in residential access lines from December 2009 to December 2010, compared with a 49
percent gain from December 2008 to December 2009.
2. Business Access Line Trends
Figure 3-8 displays the business line trends for AT&T, Verizon, CenturyLink, the rural
ILECs, and CLECs. AT&T, Verizon, CenturyLink, and the rural ILECs experienced a decrease
in business access lines between 2009 and 2010. Losses for AT&T, Verizon, and CenturyLink
were 36, 16, and 9 percent, respectively. CLEC business access lines increased dramatically in
2010. The percentage change went from a 7 percent decline in 2009 to a 40 percent increase as
of December 2010. Ninety-seven percent of the CLEC business access line gains for 2010 were
in AT&T’s territory.
Figure 3-8. Florida Business Line Trends by ILECs and CLECs 63
2,000
1,800
1,841
1,739
1,699
1,530
1,600
Access Lines (thousands)
1,417
1,400
1,157
1,200
981
900
895
1,000
836
800
600
400
536
502
560
496
497
456
452
403
200
63
55
51
48
409
340
45
0
Dec-05 Jun-06
Jun-06 Dec-06 Jun-07 Dec-07
Dec-07 Jun-08Dec-08
Dec-08 Jun-09 Dec-09
Dec-09 Jun-10 Dec-10
Dec-10 Jun-11
AT&T
Verizon
CenturyLink
Rural ILEC
CLECs
Source: Responses to FPSC data requests (2007-2011)
63
Reclassification of ILEC-affiliated CLEC lines as ILEC lines accounted for 12 percent of the loss of CLEC
business lines between June 2006 and December 2007.
26
CLECs have traditionally targeted medium and large businesses by offering lower prices
and advanced services. In addition, cable companies offering interconnected VoIP service and
cable modem service are making inroads in the small and medium business market. However,
the Commission is not aware of any particular factor that would explain the large gain in
business access lines by CLECs during 2010. It is possible that reporting errors contributed to
the large changes in reported lines. For example, the Commission has seen a growing number of
companies that do not distinguish between switched access lines and VoIP access lines. While
Commission staff has been diligent in following up with companies and analyzing FCC data, it
has been unsuccessful in determining the exact cause of the data anomalies.
D. Rural Access Line Trends
Total rural ILEC access lines decreased by approximately 7,500 lines from December
2009 to December 2010, a 20 percent decrease. Rural ILECs experienced access line decline in
the residential market of 5 percent and business markets of 4 percent.
Rural residential access lines declined by almost 5,000 lines and rural business declined
by approximately 2,500 lines, from December 2009 to December 2010. Each rural ILEC, with
the exception of Smart City, experienced some residential access line decline. Smart City
reported a minimal increase in residential lines. During the same time period, all rural ILECs
reported a slight loss in business access lines.
E. Prepaid Telecommunications Services
There are 18 CLECs that provide only prepaid services. Prepaid-only carriers typically
target high-risk consumers and businesses. Nearly 15 percent of all CLECs providing service in
Florida are prepaid only carriers. The largest prepaid-only carrier serves 44 percent of all CLEC
residential access lines. Of carriers serving less than 10,000 access lines, prepaid-only carriers
account for 47 percent of lines served.
F. Pay Telephone Services
The pay telephone industry and the availability of pay telephone service in Florida have
undergone significant contraction over the past several years. Current industry estimates
provided by the Florida Public Telecommunications Association indicate that the number of
Florida pay telephones has dropped approximately 50 percent, from 16,500 as of December 31,
2009, to 8,300 as of December 31, 2010. The number of certificated pay telephone service
providers in Florida has dropped 23 percent, from 146 as of December 31, 2009, to 113 as of
December 31, 2010.
G. Competitive Market Analysis and Statutory Issues
The 2011 Florida Legislature amended Chapter 364, F.S., and the amended sections
became effective July 1, 2011. Some of those changes directly affect the form of this report.
Section 364.386, F.S., previously contained six issues the Commission was required to address in
its annual report on telecommunications competition. The amended statutes have only four
27
issues the report must address. The new issues emphasize analysis of the impact of competition
and regulatory changes on the telecommunications market.
1. The ability of competitive providers to make functionally equivalent local
exchange services available to both residential and business customers
at competitive rates, terms, and conditions.
While the total number of access lines in Florida decreased by 13 percent, the CLECs’
lines actually increased 27 percent between December 2009 and December 2010. Total CLEC
market share also rose in Florida in 2010, increasing from 14 percent in 2009 to 20 percent in
2010. The increase is mostly due to an increase in CLEC business access lines, now accounting
for 89 percent of total CLEC access lines. In addition, wireless and VoIP subscribers continued
to increase in 2010, to 16.9 million wireless subscribers (handsets in service) and nearly 2
million residential interconnected VoIP subscribers. This data would suggest that CLECs, VoIP,
and wireless carriers are able to provide functionally equivalent services to residential and
business customers at rates, terms, and conditions acceptable to consumers. The number of
CLECs offering a variety of services also points to the provision of services at comparable terms.
Other services offered by the 121 CLECs that reported providing local service include:

Bundles including services other than local voice (33 CLECs)

VoIP (46 CLECs)

Prepaid Service (28 CLECs)

Broadband Internet Access (24 CLECs)

Fiber to end users (11 CLECs)

Video Service (54 CLECs)
The majority of CLECs reported no barriers to competition in the comment portion of the
survey; however, several mentioned an inability to work effectively with Verizon and AT&T to
take care of customers’ needs. Other barriers to competition mentioned by CLECs were
deregulation of ILECs and the inability to charge rates that are competitive with ILEC rates, due
to the cost of wholesale service.
Conclusion: The majority of CLECs did not report any significant barriers to
competition. Subscribers to CLEC, VoIP, and wireless services increased significantly in 2010,
giving customers an increased opportunity to seek out services from providers other than
traditional ILECs. Many CLECs reported offering a variety of services and packages
comparable to those offered by ILECs. All of these factors contribute to the conclusion that
competitive providers are able to offer functionally equivalent services to both business and
residential customers.
28
2. The ability of consumers to obtain functionally equivalent services at
comparable rates, terms, and conditions.
Customers may obtain functionally equivalent services via wireline telephony, wireless
telephony, or VoIP. The primary focus of this report is the provision of wireline
telecommunications by ILECs and CLECs, which submit responses to the FPSC’s annual data
request. As of December 31, 2010, 121 CLECs reported providing local voice service in contrast
to 128 CLECs as of December 31, 2009, continuing a gradual decline in the number of CLECs
providing service. CLECs can offer service through resale of an ILEC’s or a CLEC’s wholesale
services, by using its own facilities, by leasing portions of its network from an ILEC, or a
combination of any of these methods. According to the FCC, 36 percent of the total Florida
access lines are provided by companies other than ILECs, with 34 percent of residential and 39
percent of business customers choosing to use a provider other than an ILEC. 64
As of December 31, 2010, 16 of the 276 exchanges in Florida had no CLECs offering
service compared to 15 exchanges with no CLECs as of December 31, 2009. 65 Table 3-4 lists
selected exchanges, the ILEC serving that exchange, the total number of CLEC lines in that
exchange, and the total number of CLECs offering service in that exchange as of December 2009
and 2010. A complete list of exchanges along with the number of CLECs providing service in
each exchange can be found in Appendix B. The exchanges listed in Table 3-4 were arbitrarily
selected to reflect a broad range based on the number of lines. In the exchanges listed, access
lines overall decreased by 94,763 lines, although lines increased in several exchanges, as did the
number of competitive providers. The largest number of lines served by CLECs continues to
occur in the largest exchanges. The 27 percent decline in ILEC business lines between
December 2009 and December 2010 suggests business customers have the ability to find
reasonable pricing packages with CLECs and other providers such as cable and in some cases,
wireless. Residential ILEC lines also decreased 16 percent in Florida during the same period,
while nationally, wireless-only households continued to grow, reaching 29.7 percent. 66 In
addition, as reported in Chapter IV of this report, there are approximately 2.2 million
interconnected VoIP subscribers in Florida. 67 These and other factors demonstrate that
customers are able to find comparable services at reasonable prices through wireless, CLEC, and
VoIP providers.
64
FCC, "Local Telephone Competition: Status as of June 30, 2010," March 2011, Tables 8 and 9,
<http://transition.fcc.gov/Daily_Releases/Daily_Business/2011/db0321/DOC-305297A1.pdf>, accessed on
March 30, 2011. Note: The referenced access lines consist of switched access lines as well as VoIP subscriber
lines.
65
The 16 exchanges without CLEC service are Bristol, Raiford, Walnut Hill, Jennings, Keaton Beach, Dowling
Park, Blountstown, Hosford, East Point, Wellborn, Florida Sherriff’s Boy Ranch, Paxton, Luraville, Kingsley Lake,
Orange Springs, and Carrabelle.
66
Stephen J. Blumberg, Julian V. Luke, “Wireless Substitution: Early Release of Estimates From the National
Health Interview Survey, July – December 2010,” June 8, 2011, pp. 1-3, <
http://www.cdc.gov/nchs/data/nhis/earlyrelease/
wireless201106.pdf>, accessed on June 10, 2011.
67
FCC, “Local Telephone Competition: Status as of June 2010,” Table 9 and Table 10, March 2011,
<http://transition.fcc.gov/Daily_Releases/Daily_Business/2011/db0321/DOC-305297A1.pdf>, accessed May 31,
2011.
29
Table 3-4. CLEC Providers by Florida Exchange
ILEC
Exchange
Total Number CLEC Access
Lines
2009
Windstream
Windstream
TDS Telecom
CenturyLink
CenturyLink
CenturyLink
Verizon
Verizon
Verizon
Verizon
Verizon
AT&T
AT&T
AT&T
AT&T
AT&T
Jasper
Callahan
Quincy
Crawfordville
Leesburg
Tallahassee
Mulberry
Zephyrhills
Lakeland
St. Petersburg
Tampa
Jay
Gulf Breeze
Gainesville
Orlando
Miami
2010
14
82
195
148
1,098
8,764
444
1,308
9,786
29,674
104,968
78
813
9,630
68,241
139,375
32
37
84
92
840
8,568
510
1,399
11, 306
32,833
110,951
69
833
9,255
115,234
169,945
Number of CLECs
Offering Services
2009
2010
2
4
1
16
23
34
16
20
26
35
47
16
24
49
69
78
3
3
1
14
22
34
17
19
28
32
46
15
26
49
63
71
Source: Responses to FPSC data requests (2010-2011)
Conclusion: The continued decrease in both business and residential ILEC access lines
and the increase in CLEC business lines demonstrates that customers are finding comparably
priced packages and functionality with CLECs, cable providers, and wireless providers.
3. The overall impact of competition on the maintenance of reasonably
affordable and reliable high-quality telecommunications services.
The FCC reported that 94 percent of Florida households had telephone service as of July
2010, slightly lower than the national penetration rate of 96 percent. 68 As shown in Figure 3-9,
the Florida telephone penetration rate has consistently been below the national penetration rate,
and the gap has varied from as little as one percent in 2003, to as much as four percent in 2009.
The gap persists despite successful efforts in recent years by Florida carriers and FPSC to make
Lifeline and Link-Up benefits more accessible to eligible low-income consumers. The majority
of Florida residents have a choice between several non-ILEC providers, with 85 percent of
Florida zip codes having ten or more providers for telephone service. Only 1 percent of the
Florida population has no access to a non-ILEC provider. 69
68
FCC, “Telephone Subscribership in the United States as of July 2010,” May 2011, Table 2, <http://
transition.fcc.gov/Daily_Releases/Daily_Business/2011/db0519/DOC-306752A1.pdf>, accessed on May 31, 2011.
69
Ibid, Table 20.
30
Figure 3-9. Telephone Service Penetration: Florida vs. Nation
99%
97%
96%
96%
95%
95%
96%
94%
96%
95%
95%
94%
95%
95%
93%
93%
93%
94%
94%
94%
93%
92%
92%
91%
91%
92%
92%
Florida
M
ar
-1
1
M
ar
-1
0
M
ar
-0
9
M
ar
-0
8
M
ar
-0
7
M
ar
-0
6
M
ar
-0
5
M
ar
-0
4
M
ar
-0
3
M
ar
-0
2
M
ar
-0
1
M
ar
-0
0
M
ar
-9
9
89%
Nation
Source: FCC, Telephone Penetration by Income by State
The CDC released a report on wireless substitution for the period from January through
June 2010 and found that 27.3 percent of adults in Florida live in wireless-only households.
Orange County had the highest wireless-only penetration rate in Florida at 34 percent. The CDC
report found 12 percent of Florida adults living in households with only a wireline phone and 1.8
percent of Florida adults living without any kind of telephone service. 70 This data points to the
conclusion that most Florida households are able to afford telephone service and have access to a
variety of service providers, including ILECs, CLECs, VoIP, and wireless. This data also
supports the fact that many consumers choose to subscribe to more than one type of telephone
service.
Historically, regulatory reliability standards have applied to landline telecommunications
service making it the most reliable of telecommunications services. Reliability in landline
networks is no longer insured as many states, including Florida, have eliminated service quality
standards. In an annual survey conducted by JD Power and Associates, the cable companies
Bright House Networks and Cox Communications ranked above traditional wireline carriers in
customer satisfaction in the southern United States for the provision of residential telephone
service. 71 The survey results add further credence to the idea that interconnected VoIP is viewed
as a reliable alternative to traditional wireline service. Given the continued growth of
70
Stephen J. Blumberg, Julian V. Luke, “Wireless Substitution: State-Level Estimates from the National Health
Interview Survey, January 2007-June 2010,” April 20, 2011, pp. 7-11, <http://www.cdc.gov/nchs/data/nhsr/
nhsr039.pdf>, accessed on May 31, 2010.
71
“Customer Service Support Initiatives Help to Drive Industry-Wide Satisfaction Gains Among Residential
Telephone Customers,” J.D. Power and Assoc. Press Release, September 15, 2010, <http://businesscenter.
jdpower.com/news/pressrelease.aspx?ID=2010184>, accessed May 31, 2011.
31
interconnected VoIP and wireless-only households and the continued erosion of landline access
lines, it appears that the reliability of these alternatives is acceptable to consumers. Moreover,
mobility, pricing, and the demand for data-based services are consumer preference factors that
may be changing how consumers view reliability.
Conclusion: Based on the continued growth of interconnected VoIP and wireless-only
households and the ongoing erosion of landline access lines, network reliability of non-ILEC
providers appears to be sufficient. The telephone penetration rate of 94 percent supports the
conclusion that the overwhelming majority of Florida residents are able to afford telephone
service. The number and variety of competitive choices among all types of service providers and
recent high customer satisfaction rates for interconnected VoIP providers suggests that
competition is having a positive impact on the telecommunications market in Florida.
4. A listing and short description of any carrier disputes filed under
Section 364.16, F.S. 72
Conclusion: This information can be found in Appendix C.
72
As of the release date of this report, amended Section 364.16, F.S., will only have been in effect one month. For
that reason, the referenced table reports those disputes previously required by the statute as well as those that are
required by the amended statute.
32
Chapter IV. Wireless, VoIP, and Broadband
A. Wireless
The communications market, including voice and data, has become dominated by
wireless technology. Smartphone adoption has continued to expand and wireless devices have
been packed with increasing capabilities. Application developers have been creating more
applications of greater complexity to take advantage of this increased capability. Included
among those capabilities are live streaming of mobile video and video on demand. Smartphones
accounted for 75 percent of net additions in 2010 and now represent 26 percent of the wireless
market as measured by type of device. 73 One limiting factor is network capability, which
includes both spectrum availability and backhaul capability. Greater demand for mobile
bandwidth has led carriers to invest in their infrastructure at a higher rate than ever before. InStat, a market research firm, anticipates that it will take $117 billion in backhaul investment by
2014, an increase of 41 percent from 2009, to create an effective network that can keep up with
data demands. 74 AT&T is also using its wireless networks to resell service to other providers,
such as TracFone, and to connect to other types of devices, such as e-readers. Combined, these
services accounted for 74 percent of AT&T’s wireless additions in 2010. Given the increased
demand on AT&T’s network from non-phone devices, reselling, and the application friendly
iPhone, it is no surprise that AT&T’s capital expenditures increased by 14.9 percent in 2010. 75
The need for data services also led Sprint to announce the shutdown of the Nextel
network it acquired in 2005. The network was not designed for smartphone use as it does not
support fast data transfers. Since 2005, the number of consumers that use the Nextel network has
decreased by seven million subscribers. Currently, one-third of the remaining 11 million
consumers on that network are prepaid Boost Mobile subscribers. 76
Verizon Wireless (Verizon) began offering Apple’s iPhone 4 to its customers for the first
time in February 2011. Critics have suggested that Verizon may experience network issues due
to the increase in demand for data transfers related to the iPhone. However, Verizon has thus far
avoided any serious network problems related to iPhone use. In anticipation of high data
demand, Verizon invested in Long Term Evolution (LTE) technology. The performance of
Verizon’s LTE network has thus far exceeded the company’s expectations, achieving 10 Mbps
73
Bernstein Research, “Quick Take – Verizon: Separating the Secular from the Cyclical in 4Q Results and is that
worth 17x earnings,” January 25, 2011, pp.1-2.
< http://reports.bernsteinresearch.com/researchlinks/View.aspx?eid=mNrwRkRbpnh9a5%2fQOR%2foBA1
%2foIRN0tDlnpNnXNl0%2fRIjhZekgWrMTaXrBvBoL6hy>, accessed on January 25, 2011.
74
“Big and Getting Bigger: Wireless Backhaul Expenditures to Grow 41% by 2014,” In-stat Market Alert, In-Stat,
September 15, 2010.
75
Bernstein Research, “Quick Take – AT&T: The Twilight of Monogamy,” January 27, 2011, p. 1,
< http://reports.bernsteinresearch.com/researchlinks/view.aspx?eid=mAxpoaR%2bM02RWqe0Y7McFIp
YZmm3g5s6q7drngNd7AJh3hpLdSG1sZrDgtEp4dHI>, accessed on January 27, 2011.
76
Peter Svensson, “Sprint to start phasing out Nextel network in 2013,” USAToday.com, December 6, 2010,
<http://www.usatoday.com/tech/news/2010-12-06-Sprint-Nextel_N.htm>, accessed on April 13, 2011.
33
speeds and higher. 77 Verizon’s smartphone adoption was just 26 percent before the introduction
of the iPhone, while AT&T’s smartphone penetration was 61 percent. 78, 79 AT&T has offered
the iPhone since 2007.
The increase in demand for bigger and better networks is a problem that does not have
many solutions. The spectrum needed to operate such data intensive devices is a limited
resource. Wireless data usage is expected to grow 30 percent over the next five years. Both
texting and voice require relatively small amounts of bandwidth, while data applications,
common to smartphones, require a much greater amount of bandwidth. Recent changes to
AT&T’s and Verizon’s wireless data plans now reflect usage based pricing, ostensibly as a way
to manage usage of available spectrum. Neither AT&T nor Verizon offer unlimited smartphone
data packages to new customers. Verizon offers three options for data usage: 2 GB, 5GB, or 10
GB, charging $30, $50, and $80, respectively. 80 AT&T also offers three tiers of usage pricing
which differ by type of device. AT&T’s plans include usage amounts of 200 MB for $15, 2 GB
for $20, and 4 GB for $45. 81
News that AT&T is buying T-Mobile USA for $39 billion has raised concerns about a
potential wireless duopoly. If the merger is approved, AT&T will have 38.8 percent of wireless
subscribers. Verizon currently accounts for another 31.3 percent of wireless subscribers.
Together, they will serve 70 percent of the wireless market. The next largest company is Sprint
with 11.9 percent of the market. 82 Given the scarcity of readily available spectrum and a
sluggish economy, experts speculate that approval will be granted based on the need for
spectrum consolidation. If the merger is approved, AT&T’s earnings will go from 48 percent
wireless to approximately 55 percent wireless. 83
Wireless services fall into two major categories: pre- and post-paid service. Prepaid
wireless plans continue to attract consumers in an unsteady economy by offering low-priced
service without a long-term commitment. The prepaid market has been dominated by smaller
carriers such as Sprint and T-Mobile. In contrast to that trend, Verizon recently announced that
it is selling prepaid smartphones, including a version of Google’s Droid. The unlimited data plan
costs $30, the same price available to customers under contract. Verizon also just released a
prepaid unlimited data and text plan for $50 per month. AT&T has also started offering a
77
Christina Bonnington, “Verizon’s 4G Network Leaves Other Carriers in the Dust,” Wired.com, March 21, 2011,
< http://www.wired.com/gadgetlab/2011/03/4g-network-test/ >, accessed on May 27, 2011.
78
Bernstein Research, “Weekend Media Blast: The 9% Solution,” February 16, 2011, p.1,
<http://reports.bernsteinresearch.com/researchlinks/view.aspx?eid=lY8jlLkqbNVc4PTpWppjllvkHBCFWd9RLz09
VzDNm2A%2f6WokxDGr9DPmxU63ob0E>, accessed on April 22, 2011.
79
In this report wireless subscribers are individual wireless handsets in service and smartphone penetration refers to
the percentage of wireless handsets in service that are smartphones.
80
Verizon Wireless, http://www.verizonwireless.com/b2c/mobilebroadband/?page=plans, accessed on July 21,
2011.
81
AT&T, <http://www.wireless.att.com/cell-phone-service/cell-phone-plan-details/?q_sku=sku3830304&q_
planCategory=cat1370013#>, accesssed on July 21, 2011.
82
Ibid.
83
Bernstein Research, “AT&T (T): A New U.S. Air Force…Upgrading to Outperform, Raising Target Price to
$31,” March 24, 2011, p. 2, <http://reports.bernsteinresearch.com/researchlinks/view.aspx?eid=pQ9EQA4VTUx%
2bDCAmslRudHvhUeUFi4bxLlq8EAv%2f09koGE5q2pdM1hIeq2vVjj3N>, accessed on March 26, 2011.
34
prepaid Droid smartphone. With both AT&T and Verizon offering similar prepaid plans and
both selling versions of the iPhone, AT&T may be forced to compete on the quality of its
network. 84
1. Wireless-Only Households
Wireless-only households continued to increase in 2010. The CDC recently reported that
wireless-only households reached 29.7 percent as of December 2010, an increase of 5.2 percent
since the second half of 2009. In addition, the report concluded that 15.7 percent of U.S.
households with both a landline and wireless phone received most calls via a wireless phone.
The CDC reported that of those surveyed:

More than half of adults (53.5 percent) between the ages of 25 and 29 live in
wireless-only households.

Two thirds of adults (69.4 percent) that live with an unrelated person had only
wireless telephones.

Hispanic adults are more likely to reside in a wireless-only household (38.4 percent)
than non-Hispanic white adults (25 percent).

Adults in the South (31.1 percent) are more likely to live in wireless-only households
than adults in other parts of the country.

Of adults ages 30 to 34 years, 43.8 percent reported that they live in wireless-only
households, and 45.5 percent of adults between the ages of 18 and 24 reported that
they were living in wireless-only households. 85
2. Florida Trends
Wireless handsets in service in Florida, as of June 2010, reached 16.9 million. 86 Florida
wireless handsets in service continued to grow from June 2009 to June 2010, but at a decreasing
rate compared to previous years. The growth rate of wireless handsets has been declining since
June 2006. Florida experienced an increase of 470,000 subscribers from June 2009 to June 2010,
a 3 percent increase.
Total subscribership results as of June 2010 show that Florida exceeds the national
subscription level by 2 percent, however, this difference is the smallest since 2001. Initially,
84
Kendra Svrivastava, “Verizon Offers $50 Unlimited Prepaid Plan,” MOBILEDIA, April 28, 2011,
<http://www.mobiledia.com/news/88542.html>, accessed on May 2, 2011.
85
Stephen J. Blumberg, Julian V. Luke, “Wireless Substitution: Early Release of Estimates From the National
Health Interview Survey, July – December 2010,” June 8, 2011, pp. 1-3, <
http://www.cdc.gov/nchs/data/nhis/earlyrelease/
wireless201106.pdf>, accessed on June 10, 2011.
86
FCC, “Local Telephone Competition: Status as of June 30, 2010,” May 2011, Table 17,
<http://www.fcc.gov/Daily_Releases/Daily_Business/2011/db0321/DOC-305297A1.pdf >, accessed on March 24,
2011.
35
Florida was ahead of the nation in adopting wireless technology, but now that wireless handset
levels are getting closer to market saturation points, the overall growth is declining.
Since the fourth quarter of 2003, Florida wireless handsets in service have exceeded
Florida wireline access lines, and the gap continues to widen. Wireless handsets outnumbered
wireline access lines by 10.5 million as of June 2010. 87, 88
B. Voice over Internet Protocol (VoIP)
As VoIP technologies continue to evolve and improve, more residences and businesses in
Florida are subscribing to VoIP services. The FCC’s most recent data shows that there are
approximately 25.2 million interconnected residential VoIP subscribers and nearly 3.7 million
business subscribers nationwide as of June 2010. This represents an increase of 23 percent of
total interconnected VoIP subscribers nationwide from June 2009 to June 2010. 89, 90 The FCC
further reports approximately 2.2 million interconnected VoIP subscribers in Florida as of June
2010, an increase from 1.7 million in June 2009. 91, 92 Data collected by the FPSC shows an
estimated 2 million residential interconnected VoIP service subscribers in Florida as of
December 2010. 93 FCC data through June 2010 reports a comparable 1.9 million interconnected
residential VoIP subscribers in Florida. 94
The majority of cable VoIP subscribers are residential but cable providers are beginning
to make inroads in the business market. A report by the telecommunications market research
firm, Insight, states that business service revenues represented nearly 39 percent ($130 billion) of
the total U.S. telecommunications market in 2009. Cable operators garnered only 3 percent of
that market segment in 2009. Insight suggests that cable providers are likely to increase their
market share to 6.4 percent or $9 billion by 2014. 95
87
Ibid.
Responses to the FPSC Local Competition Data Request for 2010.
89
FCC, “Local Telephone Competition: Status as of June 2010,” Table 9 and Table 10, May 2011,
<http://transition.fcc.gov/Daily_Releases/Daily_Business/2011/db0321/DOC-305297A1.pdf>, accessed on May 31,
2011.
90
FCC, “Local Telephone Competition: Status as of June 2009,” Table 8, September 2010,
<http://transition.fcc.gov/Daily_Releases/Daily_Business/2010/db0903/DOC-301310A1.pdf >, accessed on May 31,
2011.
91
FCC, “Local Telephone Competition: Status as of June 2009,” Table 8, September 2010,
<http://transition.fcc.gov/Daily_Releases/Daily_Business/2010/db0903/DOC-301310A1.pdf >, accessed on May 31,
2011.
92
FCC, “Local Telephone Competition: Status as of June 2010,” Table 8, March 2011,
<http://transition.fcc.gov/Daily_Releases/Daily_Business/2011/db0321/DOC-305297A1.pdf>, accessed on May 31,
2011.
93
Responses to the FPSC Local Competition Data Request for 2011.
94
FCC, “Local Telephone Competition: Status as of June 2010,” Table 9, March 2011,
<http://transition.fcc.gov/Daily_Releases/Daily_Business/2011/db0321/DOC-305297A1.pdf>, accessed on May 31,
2011.
95
The Insight Research Corporation, “Cable TV Operators, Telecom Services, and the Push into the Enterprise,
2010-2015,” October 2010, <http://www.insight-corp.com/reports/enterprise10.asp>, accessed on March 14, 2011.
88
36
1. National Market Analysis
Cable companies have dominated the VoIP market in recent years, but the traditional
wireline carriers, AT&T and Verizon, have made gains with their fiber-based offerings. Other
wireline carriers, both ILECs and CLECs, have also increased their VoIP service subscriptions.
In addition, public Internet service providers, including Google and Skype, are also providing
VoIP services.
a. Facilities-Based VoIP Providers
ILECs, CLECs, and cable companies provide facilities-based interconnected VoIP
services. Cable companies continue to dominate the facilities-based VoIP market with an
estimated 23.5 million residential VoIP subscribers at the end of 2010. 96 Based on the number of
subscribers, the top U.S. cable VoIP providers are:

Comcast Corporation
8.6 million subscribers 97

Time Warner Cable
4.5 million subscribers 98

Cablevision Systems Corp.
2.9 million subscribers 99

Cox Communications
2.0 million subscribers 100
96
Yankee Group Research, Inc., “U.S. VoIP Consumer Forecast,” December 2003-2013, updated December 2009,
provided to FPSC staff via e-mail, March 14, 2011.
97
Comcast Corporation, Comcast Reports Fourth Quarter and Year End 2010 Results, February 16, 2011,
<http://www.cmcsk.com/releasedetail.cfm?ReleaseID=550450> and SEC 10-K filing <http://files.shareholder.com/
downloads/CMCSA/796600112x0xS1193125-11-47243/1166691/filing.pdf>, accessed on March 9, 2011.
98
Time Warner Cable, Inc., Form 10-K, Fourth Quarter 2010 Results, February 18, 2011,
<http://ir.timewarnercable.com/phoenix.zhtml?c=207717&p=irol-sec>, accessed on March 14, 2011.
99
Cablevision Systems Corporation, Fourth Quarter and Full Year 2010 Results, February 16, 2011,
<http://www.sec.gov/Archives/edgar/data/784681/000114036111010213/form10k.htm>, accessed on March 14,
2011.
100
Point Topic, Cox Communications – 3.825 Million Users As of June 30, 2010, November 19, 2010, <http://pointtopic.com/content/bmm/profiles/voip/Cox%20Communications%20VoIP.htm&comp_id=3249&g=9>, accessed on
March 15, 2011. Cox does not distinguish between VoIP and POTS subscribers. Thus, In-Stat’s estimated 1.83
million POTS subscribers as of July 2008, <http://www.instat.com/abstract.asp?id=288&SKU=IN0804053MBS>,
has been used to approximate the number of VoIP subscribers.
37
As seen in Figure 4-1, both Time Warner Cable and Comcast saw a decline in the number
of new residential subscribers in 2010. The growth rate for Time Warner Cable went from 47
percent in 2009 to 33 percent in 2010. 101 Comcast’s growth rate fell from 42 percent in 2009 to
10 percent in 2010. 102
Figure 4-1. Cable VoIP Residential Subscriber Lines
2,000
1,800
1,900
Subscribers (in thousands)
1,600
1,400
1,200
1,000
1,100
988
800
850
600
400
450
200
300
0
2008
2009
Comcast
2010
Time Warner Cable
Source: Comcast Reports Fourth Quarter and Year End 2010 Result (February 2010) & Time
Warner Cable, Inc., SEC Filings (2008-2010)
Wireline telephone companies also offer facilities-based VoIP services, in particular, over
fiber-based facilities. According to the Yankee Group, a market research firm, an estimated 2.9
million residential VoIP subscribers were served over fiber-to-the-home broadband connections
at the end of 2010. 103 While AT&T and Verizon continue to show losses in traditional voice
access lines, both companies have posted gains associated with their fiber-based digital voice
service offerings. AT&T reported approximately 1.7 million U-verse Voice 104 subscribers at the
101
A comparison of SEC financials.
Comcast Corporation, Comcast Reports Fourth Quarter and Year End 2010 Results, February 16, 2010,
<http://www.cmcsk.com/releasedetail.cfm?ReleaseID=550450>, accessed on March 14, 2011; also, SEC filings.
103
Yankee Group Research, Inc., “U.S. VoIP Consumer Forecast,” December 2003-2013, updated December 2009,
provided to FPSC staff via e-mail, March 14, 2011.
104
U-verse Voice is an IP-based service provided via a fiber-to-the-curb network configuration, often referred to as a
fiber-to-the-node, with a copper digital subscriber line (DSL) access line extending from the network node to the
subscriber premises.
102
38
end of 2010, a substantial increase from the 945,000 connections at the end of 2009. 105 Verizon
reported 977,000 FiOS Digital Voice subscribers at the end of first quarter 2011. 106 Verizon has
slowed new investment in deployment of its FiOS network, while it seeks to increase penetration
in areas where FiOS is already available. 107
b. Over-the-Top VoIP Providers
Over-the-top VoIP providers offer low-priced independent interconnected VoIP service,
but service reliability and call quality varies because calls are transmitted over the public Internet
rather than privately managed IP networks. 108 The price advantage enjoyed by over-the-top
providers has allowed them to attract a number of customers. VocalTec, Vonage, 8x8, Inc.,
Skype, and Google are some of the leading over-the-top VoIP providers.
Vonage, a publicly traded company, reported 2.4 million subscribers at the end of 2010, a
decline of 30,013 customers since the previous year. 109 8x8, Inc., which focuses primarily on the
business market, ended 2010 with 23,251 customers, a 20 percent increase from the previous
year. 110
Skype’s VoIP services consist of its interconnected subscription services SkypeIn and
SkypeOut, as well as its free Internet-based peer-to-peer service. Skype reported 663 million
registered users worldwide at the end of 2010, which is an increase of 40 percent from 2009.
Skype reported 25 million registered users in the U.S at the end of 2010, up 25 percent since
mid-year 2010. In the last six months of 2010, Skype’s average monthly paying users grew 11
percent, from 1.9 million to 2.1 million. 111
Google Voice had some 1.4 million registered users in October 2009, 570,000 of which
used the service seven days a week. 112 Google Voice provides call management features,
voicemail transcription via e-mail, and the ability for users to save text and voicemail messages
using a searchable online inbox.
105
AT&T 2010 Annual Report, February 11, 2010, <http://www.att.com/Common/about_us/annual_report/
pdfs/ATT2010_Full.pdf>, accessed on March 16, 2011.
106
Verizon Communications’ Financial and Operating Information, April 21, 2011
<http://www22.verizon.com/investor/investor.portal>, accessed on May 5, 2011.
107
“Broadband in America Come sooner, future: Verizon has paid dearly to build a fast network. Now it needs
customers,” The Economist, October 28, 2010, <http://www.economist.com/node/17363790>, accessed on March
16, 2011.
108
The phrase “over-the-top VoIP” refers to a VoIP service that requires a consumer to obtain broadband access
from another company.
109
Vonage Holdings Corp., 2010 Annual Report - SEC Form 10-K, February 17, 2011,
<http://ir.vonage.com/secfiling.cfm?filingID=1193125-11-38059>, accessed on March 17, 2011. Note that about
2.26 million lines (94 percent) serve U.S. subscribers and 144,293 lines serve customers in Canada and the U.K.
110
8x8, Inc., Third Quarter of Fiscal 2011 Financial Results - SEC Form 8-K, filed on January 26, 2011,
<http://investors.8x8.com/secfiling.cfm?filingID=1136261-11-45>, accessed on March 18, 2011.
111
Skype, SEC Amended Form S-1, March 4, 2011, <http://sec.gov/Archives/edgar/data/1498209/
000119312511056174/ds1a.htm>, accessed on May 20, 2011.
112
Sam Diaz, “Business Week: 1.4 Million Google Voice Users, Global Push in the Works,” BusinessWeek,
October 30, 2009, http://www.zdnet.com/blog/btl/business-week-14-million-google-voice-users-global-push-in-theworks/26813>, accessed on May 24, 2011.
39
2. Florida Market
Limitations exist in determining an accurate estimate of VoIP subscribers in Florida
because the Commission does not have jurisdiction over VoIP service. The Florida Cable
Telecommunications Association voluntarily reported residential VoIP line data for its six largest
member providers; in addition, a number of CLECs and ILECs also voluntarily responded to the
Commission’s data request. In past reports, the Commission has also provided an estimate of
over-the-top VoIP subscribers in Florida. Due to the lack of any Florida-specific data for this
market segment, a Florida estimate for 2010 is not possible. Based on a review of available data,
there are an estimated 2 million residential interconnected VoIP subscribers in Florida. FCC
data also supports a conclusion of increasing growth in business VoIP service, reporting 191,000
business interconnected VoIP subscribers as of June 2009 and 319,000 as of June 2010, an
increase of 67 percent. 113, 114
Figure 4-1 shows the number of residential interconnected VoIP lines in Florida as of
December 2010, by provider type.
Figure 4-1. Estimated Florida Residential VoIP Access Lines
2,500,000
1,696,328
2,000,000
1,415,714
1,500,000
1,233,829
1,000,000
748,143
500,000
300,000
284,550
59,037
52,885
91,320
Jun-06
Dec-07
Dec-08
135,293
0
CLEC and ILEC
Dec-09
Dec-10
Cable
Source: Responses to FPSC data requests (2007-2011)
113
FCC, “Local Telephone Competition: Status as of June 2010,” Table 10, March 2011,
<http://transition.fcc.gov/Daily_Releases/Daily_Business/2011/db0321/DOC-305297A1.pdf>, accessed on May 31,
2011.
114
FCC, “Local Telephone Competition: Status as of June 2009,” Table 10, September 2010,
<http://transition.fcc.gov/Daily_Releases/Daily_Business/2011/db0321/DOC-305297A1.pdf>, accessed on May 31,
2011.
40
The Florida Cable Telecommunications Association reports collectively from its member
companies a total of 1.7 million Florida residential cable VoIP subscribers as of December 2010.
Florida cable VoIP subscribership increased by 280,614 subscribers, or 20 percent, from a year
earlier. 115
In response to the Commission’s data request, 46 CLECs and 4 ILECs provided VoIP
line counts. These CLECs and ILECs reported 284,550 residential and 293,796 business VoIP
lines as of December 31, 2010, an increase from 135,293 residential and 116,914 business VoIP
lines reported for 2009.
C. Broadband
Interest in all things broadband related remains high for consumers and policy makers
alike. Consumers and businesses rely on Internet access for more purposes than ever before,
from simple inquiries to data storage and retrieval. More electronic devices than ever before
integrate Internet access into their functionality, including such devices as e-readers, gaming
systems, and Blu-ray video players. The demand for mobile broadband services and devices has
also continued to grow. The demand for these and other products and services is forcing service
providers and policy makers to address issues such as efficient, consumer friendly network
management practices, the provision of services to unserved and underserved areas, and
technological innovation to expand network capacity at both a national and local level.
1. National Broadband Trends
A National Telecommunications and Information Administration (NTIA) study released
in February 2011, found that more than 68 percent of U.S. households subscribe to broadband
services. The NTIA figure is a 5 percent increase from the 63 percent of subscribers the Pew
report listed for 2009. The NTIA report also found that while 68 percent of the population are
accessing broadband from their homes, an additional 4 percent are accessing it from other
locations, including work, school, public libraries, and other people’s homes. 116
Interestingly, while overall subscription did not dramatically increase, certain
demographic groups had a much higher rate of adoption than others. Broadband adoption by
African Americans increased at least 10 percent, nearly halving the gap in adoption between
Caucasians and African Americans in only one year. 117 Other notable demographic trends
include:

Households with family income ranging from $15,000 to $24,999, $25,000 to
$34,999, and $35,000 to $49,999 annually each experienced at least a 5 percent
115
Responses to the FPSC Local Competition Data Request for 2010 and 2011.
NTIA, “Expanding Internet Usage,” U.S. Department of Commerce, Washington, D.C., February 2011, p. 5.
117
Aaron Smith, “Home Broadband 2010,” Pew Internet and American Life Project, Washington, D.C., August 11,
2010, p. 2.
116
41
increase in adoption, while families with incomes of less than $15,000 and above
$50,000 experienced marginal, if any, increase. 118

Rural in-home broadband use increased 46 percentage points to reach 60 percent in
2010; however, rural in-home broadband use still lags 11 percentage points behind
that of urban households. 119

The subscription rate disparity between Americans with no high school diploma and
those with a college degree is over 55 percent.

The age 55 and older group had the highest increases in adoption of any age group,
exceeding 50 percent in 2010, an increase of 4 percentage points from 2009.

People with disabilities have broadband subscription rates of 38 percent, in contrast to
68 percent for the remainder of the population.

The state with the highest percentage of broadband adoption is Utah, with
subscription at nearly 80 percent. Mississippi has the lowest subscription rate at 52
percent. 120
Approximately 30 percent of Americans do not have access to broadband at home. The
NTIA reported that 58 percent of non-adopters cite lack of need or interest for broadband,
followed by 18 percent who say it is too expensive. 121 The Pew report found, however, that 48
percent polled were either not interested, thought the Internet was a waste of time, or simply felt
that they did not need or want broadband at home. Pew also reported that over 60 percent of
non-Internet users stated that they would not be able to access the Internet without help from
someone more knowledgeable.122
2. Florida Broadband Trends
The percentage of households with broadband access in their homes in Florida was above
the national average at 70 percent, a 2 percent increase from 2009, with 9.8 million connections
as of June 2010. The FCC reports there are 98 providers of high-speed Internet access in
Florida, including 46 DSL providers, 18 cable providers, 34 fiber providers, and 7 mobile
wireless providers. 123 The NTIA report provides state specific broadband adoption data, and
placed Florida toward the center of the list at number 22 in broadband adoption. Florida is the
leader in broadband adoption among southern states. 124
118
NTIA, “Expanding Internet Usage,” U.S. Department of Commerce, Washington, D.C., February 2011, p. 8.
Aaron Smith, “Home Broadband 2010,” Pew Internet and American Life Project, Washington, D.C., August 11,
2010, p. 8.
120
NTIA, “Expanding Internet Usage,” U.S. Department of Commerce, Washington, D.C., February 2011, p. 9.
121
Ibid, p. 35.
122
Aaron Smith, “Home Broadband 2010,” Pew Internet and American Life Project, Washington, D.C., August 11,
2010, pp. 11-12.
123
Ibid, Tables 16, 18, 20, and 23.
124
NTIA, “Expanding Internet Usage,” U.S. Department of Commerce, Washington, D.C., February 2011, p. 17.
119
42
Figure 4-2. Broadband Subscription by State
78%
78%
61%
69%
71%
75%
67%
71%
72%
75%
66%
70%
73%
69%
66%
68%
74%
67%
69%
64%
80%
69%
59%
72%
73%
60%
75%
64%
71%
75%
73%
68%
70%
58%
65%
74%
74%
72%
60%
58%
52%
63%
60%
52%
56%
69%
67%
60%
70%
73%
70%
Source: NTIA
The FCC reported that over half of the broadband subscribers in Florida are served by
data speeds that are less than 3 Mbps downstream. Just over 20 percent of those connections
exceeding 3 Mbps are also greater than or equal to 10 Mbps downstream. Most of the
subscriptions in excess of 3 Mbps are via a cable modem. Despite numerous federal and state
projects initiated to increase broadband availability and subscription, data shows that availability
of broadband has not measurably increased from 2009 to 2010, with DSL availability still at 91
percent where ILECs offer service and cable modem availability at 98 percent where cable
providers offer television service. 125
125
FCC, “Internet Access Services: Status as of June 30, 2010,” released March 2011,
<http://www.fcc.gov/Daily_Releases/Daily_Business/2011/db0321/DOC-305296A1.pdf>,
accessed on April 1, 2011.
43
3. Technology and Innovation Trends
a. Netflix and Data Caps
Streaming video content is now growing at over 200 percent per year, and a large cause
of this growth is Netflix subscribers streaming movies online. Netflix alone is estimated to be
responsible for as much as 20 percent of Internet traffic during peak hours in the U.S. For a
monthly subscription fee of only $10, consumers can stream unlimited high-definition movies. 126
At the end of 2010, Netflix had over 20 million subscribers. 127
Figure 4-3. Broadband Usage Types During Peak Hours
3%
Other
19%
3%
17%
49%
19%
Netflix
30%
10%
P2P Filesharing
Web Browsing
Real-Time Communications
Bulk Entertainment
Real-Time Entertainment
Other
Source: Global Broadband Phenomena Report: May 17, 2011, Sandvine
Netflix is emblematic of the changes in how American households are using the Internet
now that the majority of consumers have access to broadband. Approximately 30 percent of
households already have a gaming system, television, or other video capable device connected to
the Internet. The percentage of adults watching at least one program via these devices doubled
in 2010, from 5 to 10 percent. 128 With the higher bandwidth requirements of online movies and
streaming television shows, cable providers have struggled to keep networks moving smoothly
during peak hours. In 2008, Comcast was the first provider to begin imposing a monthly
download limit on residential customers to alleviate the increasing demand on its system. The
FCC attempted to block this action, but was later struck down in a federal appeals court. 129 As a
126
“The Difference Engine: Download Dilemma,” The Economist, May 6th, 2011, <http://www.economist.com/
blogs/babbage/2011/05/net_neutrality?fsrc=scn/fb/wl/bl/thedifferenceenginedownloadilemma>, accessed on May 6,
2011.
127
“Research Notes; Actionable Research on Broadband, Media & Entertainment Industries,” Leichtman Research
Group, Durham, NH, 1Q 2011, pp. 1-3.
128
Ibid.
129
“The Difference Engine: Download Dilemma,” The Economist, May 6, 2011, <http://www.economist.
com/blogs/babbage/2011/05/net_neutrality?fsrc=scn/fb/wl/bl/thedifferenceenginedownloadilemma>, accessed on
May 6, 2011.
44
result, Comcast, Cox Communications, and Charter Communications currently have usage
ceilings in place. AT&T also began to implement usage caps as of May 2, 2011, for its U-verse
and DSL customers. By comparison, Verizon has managed to avoid placing similar limitations
on its fixed line fiber product, FiOS. Currently, 56 percent of America’s fixed-line broadband
subscribers have some kind of cap on their data usage, whether overages cause a consumer to
incur fees or generate a warning. 130
b. 4G LTE
The era of bandwidth intensive mobile broadband arrived with the rollout of LTE
technology, first by MetroPCS in the fall of 2010, 131 followed by Verizon Wireless in December
2010. 132 Verizon Wireless released its first 4G LTE powered Smartphone, the HTC
“Thunderbolt,” in March 2011, with advertised speeds of up to 12 Mbps.133 While T-Mobile and
AT&T have advertised products associated with 4G, both networks are actually advanced 3G
networks; and the Verizon Wireless network is fully 4G. AT&T has announced its transition to
LTE technology once it completes expansion of its 3G network. LTE is considered by many to
be a “4G” technology, both because it is faster than 3G and because it uses an “all-IP”
architecture where everything (including voice) is handled as data, similar to the Internet. 134
AT&T has announced plans to begin upgrading its network to LTE in mid-2011 and will
complete deployment by the end of 2013, the same time announced by Verizon.135
Verizon Wireless has initiated a program to facilitate the deployment of 4G LTE
infrastructure throughout North America for use by its customers. The Verizon Wireless LTE in
the Rural America program was launched in February 2011, and immediately generated interest
from over 250 rural carriers. Verizon Wireless works with rural carriers to build and operate 4G
LTE networks using the rural carriers’ tower, and backhaul assets; Verizon Wireless integrates
its equipment and spectrum with the rural carriers’ assets. This way, the rural carriers’
customers are able to access the latest mobile broadband technology, and Verizon’s customers
can roam on 4G LTE networks in the rural carriers’ service territories. 136 As of the end of April
130
Todd Spangler, “Usage Caps Will Now Apply to 56% of Broadband Users,” Multichannel News, April 29, 2011,
<http://www.multichannel.com/article/print/467475Usage_Caps_Will_Now_Apply_To_56_Of_Broadband_Users.p
hp>, accessed on May 2, 2011.
131
“MetroPCS Launches First 4G LTE Services in the United States and Unveils World’s First Commercially
Available 4G LTE Phone,” MetroPCS Press Release, September 21, 2010, <http://www.metropcs.com/
presscenter/articles/mpcs-news-20100921.aspx>, accessed on May 5, 2011.
132
LTE Information Center, <http://news.vzw.com/LTE/Overview.html>, accessed May on 9, 2011.
133
Bernie Arnason, “Verizon Sets HTC Thunderbolt Launch, First 4G LTE Smartphone,” Telecompetitor, March
15, 2011, <http://www.telecompetitor.com/verizon-sets-htc-thunderbolt-launch-first-4g-lte-smartphone/>, accessed
on May 9, 2011.
134
LTE, Glossary, <phonescoop.com, http://www.phonescoop.com/glossary/term.php?gid=355>, accessed on June
7, 2011.
135
Jason Hiner, “How AT&T and T-Mobile Conjured 4G Networks Out of Thin Air,” Techrepublic, January 12,
2011, <http://www.techrepublic.com/blog/hiner/how-at-t-and-t-mobile-conjured-4g-networks-out-of-thin-air/7361>,
accessed on May 10, 2011.
136
“Verizon to Roll out LTE to Rural Communities in the South and Midwest,” Intomobile.com, February 15, 2011,
<http://www.intomobile.com/2011/02/17/verizon-to-roll-out-lte-to-rural-communities-in-the-south-andmidwest/2/>, accessed on May 10, 2011.
45
2011, at least nine rural carriers, including rural mobile and landline providers, have partnered
with Verizon Wireless. 137
137
Jesse Ward, “Verizon Wireless Expands LTE in Rural America Program to 8 Partners,” NCTA, April 18, 2011,
<http://www.ntca.org/new-edge/wireless/verizon-wireless-expands-lte-in-rural-america-program-to-8-partners>,
accessed on May 10, 2011.
46
Chapter V. State Activities
A. Intercarrier Disputes
1. Bright House / Verizon Arbitration
Bright House Networks Information Services Florida, LLC, (Bright House) filed a
petition for arbitration with Verizon Florida, LLC, on November 3, 2009, pursuant to state and
federal law. 138 Initially, over 40 issues were in dispute, including billing, compensation, and
pricing issues; however, through negotiations, the parties resolved all but 8 issues prior to
hearing. An order was issued on December 3, 2010, requiring the parties to file their
interconnection agreement (ICA), incorporating the Commission’s decisions on the 8 remaining
issues, within 45 days. The parties filed their ICA incorporating the Commission's rulings and
the docket has been closed.
2. Qwest’s Discrimination Complaint
Qwest Communications Company, LLC (Qwest), filed a complaint on December 11,
2009, regarding rate discrimination in connection with the provision of intrastate switched access
services, against a large number of CLECs. 139 On October 22, 2010, the Commission granted
Qwest leave to file an amended complaint.
Qwest seeks relief from all parties for engaging in unlawful rate discrimination.
Specifically, Qwest alleges that by extending contracts to other interexchange carriers’ for
switched access, advantages were withheld from Qwest. The complaint further alleges that all
parties have failed to abide by their pricelists, and charged Qwest more for switched access than
other similarly situated interexchange companies. The Commission has addressed several
procedural filings in this docket. While an issue identification meeting has been scheduled,
several CLECs have recently filed joint motions to stay and dismiss the proceeding asserting the
Commission lacks jurisdiction to hear the complaint based on recent changes in Florida statutes.
The motions will be addressed in the near future.
3. AT&T Florida / Sprint Nextel Arbitration
On April 9, 2010, AT&T filed two petitions for arbitration, one with Sprint
Communications Company L.P., a CLEC, and the other with Nextel Partners, a wireless
138
Docket No. 090501-TP, In re: Petition for arbitration of certain terms and conditions of an interconnection
agreement with Verizon Florida, LLC, by Bright House Networks Information Services (Florida), LLC.
139
Docket No. 090538-TP, In re: Amended Complaint of Qwest Communications Company, LLC against
MCImetro Access Transmission Services (d/b/a Verizon Access Transmission Services); XO Communications
Services, Inc.; tw telecom of florida, l.p.; Granite Telecommunications, LLC; Broadwing Communications, LLC;
Access Point, Inc.; Birch Communications, Inc.; Budget Prepay, Inc.; Bullseye Telecom, Inc.; DeltaCom, Inc.;
Ernest Communications, Inc.; Flatel, Inc.; Lightyear Network Solutions, LLC; Navigator Telecommunications,
LLC; PaeTec Communications, Inc.; STS Telecom, LLC; US LEC of Florida, LLC; Windstream Nuvox, Inc.; and
John Does 1 through 50, for unlawful discrimination.
47
provider. 140 On July 19, 2010, an issue identification meeting was held and 93 issues were
identified as being in dispute. Direct and rebuttal testimonies were filed in accordance with the
procedural order and several rounds of discovery were conducted. In early 2011, the parties filed
a joint motion to withdraw the petitions and close the dockets. The parties hope to continue
negotiations on the issues and also have similar cases pending in other states. The Commission
granted the joint motion at its April 5, 2011 Commission Conference and the dockets were
closed.
4. AT&T / LifeConnex Dispute
AT&T filed a complaint and petition for relief against LifeConnex Telecom, LLC, f/k/a
Swiftel, LLC (LifeConnex), on January 8, 2010. AT&T sought resolution of billing disputes,
determination of the amount LifeConnex owes AT&T under the parties’ ICA, and a requirement
that LifeConnex pay that amount to AT&T. 141 AT&T alleged that LifeConnex purchased
telecommunications services from AT&T for resale to consumers. Under the terms of the ICA
and federal law, LifeConnex was authorized to receive certain discounts or promotional credits
which AT&T applies to its own customers. AT&T asserted that LifeConnex improperly
calculated the amount of discounts or credits LifeConnex was entitled to. AT&T also alleged
that LifeConnex failed to pay disputed amounts owed to AT&T, as required by the ICA. Instead
LifeConnex deducted the amounts in dispute from its payments.
In its response to AT&T’s petition, LifeConnex alleged that it was entitled under federal
law to the same discounts and promotional credits AT&T offers its own retail customers. As a
result, LifeConnex argued that AT&T owed LifeConnex significant monetary compensation,
which AT&T refused to pay. LifeConnex also suggested that this matter should either be
dismissed or held in abeyance by the Commission pending the results of similar lawsuits pending
in federal court and a petition pending at the FCC.
At its July 13, 2010 Commission Conference, the Commission addressed the dispute and
granted LifeConnex’s Request for Emergency Relief with conditions. Those conditions
included:

AT&T had the right to insist on strict compliance with the payment terms of the ICA
beginning from July 13, 2010. If LifeConnex failed to comply with the terms of the
ICA, AT&T could take action as authorized by the ICA, including suspension and/or
termination of service to LifeConnex.

Requiring LifeConnex to post a bond in the amount of $1.4 million by July 21, 2010.
140
Docket No. 100176-TP, In re: Petition for arbitration of interconnection agreement between BellSouth
Telecommunications, Inc. d/b/a AT&T Florida and Sprint Communications Company L.P. and Docket No. 100177TP, Petition for arbitration of interconnection agreement between BellSouth Telecommunications, Inc. d/b/a AT&T
Florida and Sprint Spectrum L.P., Nextel South Corp. and NPCR, Inc. d/b/a Nextel Partners.
141
Docket No. 100021-TP, In re: Complaint and petition for relief against LifeConnex Telecom, LLC f/k/a Swiftel,
LLC by BellSouth Telecommunications, Inc. d/b/a AT&T Florida.
48

Requiring LifeConnex to provide notice to its end use customers, within 14 days of
the receipt of written notice by AT&T, that AT&T was initiating suspension and/or
termination of LifeConnex’s service.
On July 21, 2010, LifeConnex notified the Commission that it could not post a bond for
$1.4 million and on December 10, 2010, AT&T terminated LifeConnex’s ICA. 142
5. ADT / AT&T Dispute
On November 4, 2010, American Dial Tone, Inc. (ADT) filed a Request for Emergency
Relief asking that the Commission prohibit AT&T from suspending, discontinuing, terminating,
or otherwise disrupting ADT's service in Florida pending resolution of the disputed matters.143
According to the request, the proceeding concerns: (1) the suspension of services to ADT, and
thus, the services of some 18,500 ADT retail customers, and (2) the proper interpretation of the
parties’ ICA as to whether and under what conditions, if any, ADT may provide certain
wholesale services to another CLEC.
AT&T filed its response and stated that ADT’s complaint should be dismissed because
AT&T contends it has the right under the ICA to refuse service to ADT for its unlawful use of
AT&T Florida’s residential services. AT&T argues that ADT’s “wholesale arrangement” with
its affiliate, LifeConnex violates: (1) the FPSC’s Order in Docket No. 100021-TP, (2) the
parties’ ICA, and (3) AT&T Florida’s General Subscriber Services Tariff.
On December 2, 2010, the parties entered into an agreement for AT&T to restore order
processing for ADT on its Florida resale accounts on an interim basis, pending resolution of the
dispute before the Commission. The docket remains open pending resolution of the original
disputes regarding interpretation of the ICA.
6. Bright House / Verizon Access Charge Complaint
Bright House filed a complaint on February 22, 2011, alleging Verizon Florida LLC
(Verizon) and MCI Communications Services, Inc., d/b/a/ Verizon Business Services failed to
pay Bright House’s lawful intrastate access charges for the origination and termination of
intrastate interexchange telecommunications service. 144 Bright House notes that on the date the
complaint was filed, Verizon had withheld $2.2 million, an amount Bright House contends
increases at a rate of approximately $500,000 per month.
142
In order to continue to serve its customers, LifeConnex chose to reach a wholesale arrangement with its affiliate
American Dial Tone (ADT) whereby LifeConnex would purchase service from ADT. This wholesale arrangement
was challenged by AT&T and is the subject of another docket (Docket No. 100432-TP).
143
Docket No. 100432-TP, In re: Request for emergency relief and complaint of American Dial Tone, Inc. against
BellSouth Telecommunications, Inc. d/b/a AT&T Florida to resolve interconnection agreement dispute.
144
Docket No. 110056-TP, In re: Complaint against Verizon Florida, LLC and MCI Communications Services, Inc.
d/b/a Verizon Business Services for failure to pay intrastate access charges for the origination and termination of
intrastate interexchange telecommunications service, by Bright House Networks Information Services (Florida),
LLC.
49
The Verizon companies filed a motion on March 14, 2011, requesting that the complaint
be dismissed or stayed. In its motion, Verizon alleges, among other things, that since Bright
House’s end users originate their calls using VoIP technology and Florida Statutes exempt VoIP
service from the Commission’s jurisdiction, the Commission cannot hear Bright House’s
complaint. Verizon also argues the same statute exempts intrastate interexchange
telecommunications services from the Commission’s jurisdiction. In its response, Bright House
argues Verizon selectively quotes aspects of Florida Statutes while ignoring statutory provisions
that compel the Commission to hear the matter. The Commission is expected to rule on the
motion in the near future.
7. Easy Telephone / AT&T Dispute
On March 9, 2011, Easy Telephone Services Company (Easy Telephone) filed a
complaint asking for the Commission’s assistance in resolving a billing dispute with AT&T.145
In its complaint Easy Telephone asserts that its current ICA had expired and that AT&T would
not allow it to opt into a new ICA unless Easy Telephone paid all open, disputed charges.
According to Easy Telephone, it had submitted a total of $1,632,000 in promotions-related
disputes to AT&T, which remain open and unresolved. 146
AT&T Florida filed its response to the complaint and a motion to dismiss the complaint
on March 29, 2011, stating that Easy Telephone is not entitled to any relief. AT&T argues,
among other things, that Easy Telephone admits that the parties’ ICA does not allow Easy
Telephone to withhold disputed amounts. The Commission is expected to address this matter at
a Commission Conference in the near future.
8. Express Phone / AT&T Disputes
Express Phone Service, Inc. (Express Phone) and AT&T have two significant disputes
pending before the Commission. The first is Express Phone’s March 15, 2011, emergency
complaint requesting emergency relief to avoid customer disconnection. The emergency
complaint states that on March 18, 2011, AT&T intended to improperly disrupt Express Phone's
service order provisioning, and ultimately cut off all services to existing Express Phone
customers due to billing disputes arising out of the parties’ ICA. 147 The second dispute relates to
Express Phone’s allegation that AT&T failed to honor Express Phone’s request to opt into
(adopt) the ICA between AT&T and another CLEC. The alleged failure would violate the
Federal Telecommunications Act.
On April 4, 2011, AT&T filed its response arguing that Express Phone had not honored
its commitments under the ICA but instead, under the guise of a billing dispute, has stopped
145
Docket No. 110065-TP, In re: Complaint for relief by Easy Telephone Services Company against BellSouth
Telecommunications, Inc. d/b/a AT&T Florida for dispute over interpretation of interconnection agreement
regarding cash back promotions.
146
Easy Telephone was disconnected by AT&T on March 15, 2011.
147
Express Phone states that the billing disputes stem from the calculation/application of promotional credits for
resold services.
50
paying its bills contrary to ICA language which states that Express Phone must “make payment
to [AT&T Florida] for all services billed including disputed amounts.”
AT&T opposed Express Phone’s request to adopt a different agreement alleging Express
Phone had no right to switch from one ICA to another in mid-stream since the current ICA is in
effect until November 2011. At its June 14, 2011 Conference the FPSC addressed both disputes
and found that Express Phone could not adopt a different ICA because it was in material breach
of its existing ICA and that the billing disputes regarding promotional credits can only be
resolved after an evidentiary hearing is held to gather additional data. 148
9. Wholesale Performance Measurement Plans
Wholesale performance measurement plans provide a standard against which the
Commission can measure performance over time to detect and correct any degradation in the
quality of service ILECs provide to CLECs. The Commission adopted performance
measurements for AT&T in August 2001, for CenturyLink in January 2003, and for Verizon in
June 2003. Trending analysis is applied to monthly performance measurement data provided by
each ILEC.
For AT&T, the Commission approved a settlement agreement in August 2010 between
AT&T and interested parties that made revisions to the current Performance Assessment Plan.
The parties agreed that the current remedy structure was no longer appropriate based on market
conditions. Remedies that AT&T paid to the State of Florida, to maintain an appropriate
financial incentive to ensure AT&T’s level of service to CLECs, were removed from the
Performance Assessment Plan beginning in August 2010. However, the parties agreed to
increase the remedies AT&T pays directly to Florida CLECs. AT&T’s approved Performance
Assessment Plan consists of 47 measurements, of which 24 measurements have remedies applied
to them. For the calendar year 2010, AT&T paid approximately $770,107 in remedies to
CLECs.
CenturyLink’s current Performance Measurement Plan contains 36 performance
measures designed to ascertain if the ILEC is providing nondiscriminatory service to CLECs.
CenturyLink furnishes monthly performance reports to the Commission for review and
assessment. The company also prepares a monthly root cause analysis report of measurements
that have not met established standards for three consecutive months. For the 2010 calendar
year, CenturyLink’s monthly compliance with established standards has ranged from 88.6
percent to 92.2 percent.
Verizon’s current Performance Measurement Plan contains more than 40 measures.
Under this plan, Verizon furnishes monthly performance reports to the Commission for review
and assessment. For the calendar year 2010, Verizon’s monthly compliance with approved
standards ranged from 85.5 percent to 89.2 percent.
148
Docket No. 110087-TP, In re: Notice of adoption of existing interconnection, unbundling, resale, and collocation
agreement between BellSouth Telecommunications, Inc. d/b/a AT&T Florida d/b/a AT&T Southeast and Image
Access, Inc. d/b/a NewPhone, Inc. by Express Phone Service, Inc.
51
B. Florida Broadband ARRA Projects
Two programs in Florida that received funding from the Broadband Opportunities
Program under the American Recovery and Reinvestment Act (ARRA) are the North Florida
Broadband Authority (NFBA) and the Florida Rural Broadband Alliance (FRBA). The NFBA
project focuses on the build-out of middle mile infrastructure in 15 north Florida and panhandle
counties. 149 These north Florida counties constitute a Rural Area of Economic Concern as
designated by Governor Jeb Bush and for which increasing broadband access is a priority. The
NFBA plans to provide speeds of up to 1 Gbps to these areas within the next three years. The
NFBA network will cover over 154,000 households and 26,893 businesses, support community
anchor institutions, and encourage private investment in last mile infrastructure. 150
The FRBA is also focusing on middle-mile deployment and received $23.7 million to
improve access in another Rural Area of Economic Concern in central Florida and several
additional counties in northwest Florida. FRBA will be building out middle-mile infrastructure
in seven central Florida and eight northwest Florida counties. 151 While these counties represent
20 percent of the land area of Florida, according to the FRBA website, the area lags behind the
rest of the state with only 39 percent of the population having access to broadband. The FRBA
also expects to generate over 200 jobs in these rural areas of Florida. 152
The Department of Management Services also received ARRA funding for broadband
mapping. In May 2009, the initial phase of Florida’s mapping project was completed and an
interactive map showing the availability of broadband in the state went live. 153 A portion of the
mapping grant, $500,000, was to be used specifically for planning over a five-year period. A
focus of the planning grant is to research and analyze how government and anchor institutions in
Florida are using, procuring, and providing broadband services. In addition, funded analysis
should determine if there are options to optimize broadband investments through leveraging
demand aggregation. The Department of Management Services commissioned the University of
Florida’s Public Utility Research Center (PURC) to provide research that will be used to
determine how the state can most cost effectively facilitate broadband availability for certain
anchor institutions.
PURC issued its findings in a February 2011 report, Strategic Planning for Florida
Governmental Broadband Capabilities. The report found that the lack of an overall strategic
plan for broadband provision in the state led to conflicts and disagreements over who could and
should plan broadband procurement for state and local entities. 154 An additional finding shows
that the efficiency and effectiveness of governmental broadband service procurement in Florida
149
The counties include Baker, Bradford, Columbia, Dixie, Gilchrist, Hamilton, Jefferson, Lafayette, Levy,
Madison, Putnam, Suwanee, Taylor, Union, and Wakulla Counties.
150
North Florida Broadband Authority, <http://www.nfba-fl.org/Purpose.asp>, accessed on April 28, 2011.
151
Hendry, Glades, Okeechobee, Desoto, Highlands, Hardee, and Collier counties in central Florida; Calhoun,
Franklin, Gadsden, Gulf, Holmes, Jackson, Liberty and Washington counties in northwest Florida.
152
Florida Rural Broadband Alliance, <http://www.weconnectflorida.com/>, accessed on April 28, 2011.
153
The map can be accessed at http://connect-florida.org/.
154
Dave Brevitz, Herb Cash, et al, “Strategic Planning for Florida Governmental Broadband Capabilities,” Public
Utility Research Center, University of Florida, February 28, 2011, p. 86, <http://warrington.ufl.edu/purc/docs/
StrategicPlanFLGovBroadbandCapabilities.pdf>, accessed on May 31, 2011.
52
would not be significantly impacted by changes in the current delivery model. PURC found no
compelling reason to change the degree of centralization or the modes of insourcing or
outsourcing currently in practice. 155
The PURC report recommends that the state develop an overall strategic plan that covers
all governmental entities for information technology and communications needs, including
broadband. The strategic plan should include the following features:
Goals and Objectives. Set the desired outcomes for governmental use of broadband.
The goals should explain priorities for operational efficiency, value, and effectiveness of
government services and taxpayer impacts.
Service Delivery Modes. Explain how government entities would obtain broadband
services, including various forms of insourcing and outsourcing.
Collaboration and Centralization. Address how government entities may join to
procure and use broadband, identify barriers preventing collaboration, and suggest ways
to resolve or overcome those barriers.
Performance Assessment. Develop assessment plans for the implementation of the
strategic plan by various government entities and vendors and determine how those
assessments will be used to update practices. 156
Governance. Describe the division of authority and accountability to be followed across
government entities to implement the strategic plan.
C. State Legislation
CS/CS/HB 1231, the Regulatory Reform Act, was signed by Governor Scott on May 5,
2011, and became effective July 1, 2011. The bill eliminated retail regulation of local exchange
telecommunications services by the FPSC, including the elimination of rate caps on all retail
telecommunications services; elimination of telecommunications related consumer protection
and assistance duties of the FPSC; and the elimination of FPSC oversight of telecommunications
service quality. The bill also reforms the FPSC’s certification processes, authority over
intercarrier matters, and other general provisions.
Some specific areas where FPSC retail jurisdiction is reduced or eliminated include:

Repeal of the requirements to provide a flat-rate pricing option for local service and
to inform new subscribers of the least cost service option.
155
Dave Brevitz, Herb Cash, et al, “Strategic Planning for Florida Governmental Broadband Capabilities,” Public
Utility Research Center, University of Florida, February 28, 2011, p. 88, <http://warrington.ufl.edu/purc/docs/
StrategicPlanFLGovBroadbandCapabilities.pdf>, accessed on May 31, 2011.
156
Ibid, p. 86.
53

Repeal of the authority to designate wireless carriers as Eligible Telecommunications
Carriers (ETCs) for the purpose of receiving USF benefits (including Lifeline). 157

Repeal of the provision allowing ILECs to recover storm damages through a
Commission approved surcharge.

Elimination of the Commission’s authority to compel repairs, rendering
unenforceable the Commission-ordered pole inspection program.

Repeal of the requirement that the Commission disseminate information to consumers
to assist in understanding the competitive market and billing related issues.

Repeal of the requirement that the Commission provide informational materials and
conduct outreach to inform consumers of the benefits available through the Lifeline
program (the Commission may continue to do so but is no longer required).

Repeal of a specific prohibition against discriminatory pricing of telecommunications
services.

Repeal of the Commission’s authority to resolve retail billing and service complaints.

Repeal of specific consumer protection relating to cramming.

Restriction of slamming complaints to those filed by carriers against other carriers.
Statutes related to the Commission’s authority over intercarrier issues were also amended
to consolidate authority into a single section. The Commission retains authority over intercarrier
disputes, arbitrations, and interconnection agreements as well as authority over numbering issues
such as area code exhaust.
Finally, the Commission must, by August 1, 2011, initiate rulemaking to reduce the
regulatory assessment fee factor for telecommunications companies to reflect the reduction in
regulation resulting from the amendments to Chapter 364, F.S., that took affect July 1, 2011.
157
Wireless carriers seeking ETC designation in Florida must now petition the FCC for such designation.
54
Chapter VI. Federal Activities
A. Universal Service
Consumers in Florida pay significantly more into the federal USF than what is returned to
eligible service providers in Florida. 158 For this reason, the FPSC continues to actively monitor
and participate in ongoing proceedings at the FCC and with the Federal-State Joint Board on
Universal Service (Joint Board). Table 6-1 shows Florida’s estimated contribution and receipts
for 2009. Florida was a net recipient in the low-income support programs (Lifeline and LinkUp) for the first time in 2009. Low-income is one of four broad support categories that comprise
the federal universal service program.
Table 6-1. 2009 Federal Universal Service Programs in Florida
(Annual Payments and Contributions in Thousands of Dollars)
Payments to
Service
Providers
2009
Estimated
Contributions
from Consumers
2009
Estimated
Net
2009
High-Cost
$70,395
$285,907
($215,511)
($219,566)
Low Income
74,720
68,289
6,431
(30,033)
Schools & Libraries
75,933
125,116
(49,183)
(40,365)
854
4,043
(3,189)
(3,009)
$221,903
$495,839
($273,936)
($304,268)
Rural Health Care
Total 159
Estimated
Net
2008
Source: FCC Universal Service Monitoring Report, Table 1.12 (2009-2010)
1. Reform of Universal Service and Intercarrier Compensation
The FCC issued two comprehensive notices relating to the National Broadband Plan
(NBP), one in April 2010 and another in February 2011. The first notice was a combined Notice
of Inquiry (NOI) and Notice of Proposed Rulemaking (NPRM). The NOI sought comment in
three areas:

How to modify existing support mechanisms in order to transition them from voice
support to both voice and broadband support.
158
FCC, “Universal Service Monitoring Report,” CC Docket No. 98-202, released December 30, 2010, Table 1.12,
<http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-303886A3.pdf>, accessed on May 12, 2011.
159
The total contribution in this table includes approximately $12.5 million in administrative expenses for the
Universal Service Administrative Company.
55

Proposals to modify the existing voice support mechanisms in order to keep the size
of the fund in check.

The best way to target funding toward deployment of broadband networks in
unserved areas, while the FCC is considering final rules to implement the new
Connect America Fund (CAF).
The NPRM asked for comments on proposals to cut legacy universal service spending on
voice services in high-cost areas and to shift support to broadband communications. These
proposals included:

Capping the overall size of the high-cost program at 2010 levels.

Re-examining the current regulatory framework for smaller carriers in light of
competition and growth in unregulated revenues.

Phasing out support for multiple competitors in areas where the market cannot
support even one provider.
The FPSC filed comments with the FCC on August 11, 2010, in which the FPSC
supported capping the high-cost fund size for all carriers. The FPSC also urged the FCC to adopt
several other refinements that would make the fund more efficient and posture the fund for the
transition to support broadband and voice services.
On February 9, 2011, the FCC released a 289-page notice following up on its previous
NPRM related to the NBP. The FCC sought comment on proposed reforms to both the high-cost
universal service programs and intercarrier compensation (ICC) regimes. The FCC proposed
transitions that it believes will facilitate adaptation to reforms. Comments filed by the FPSC on
April 14, 2011, supported:

The transition from a voice oriented fund to one that supports both voice and
broadband.

Limitations on per line support levels.

The creation of a fund cap.

A reduction in the size of the fund when savings result from adopted reforms.
2. Reform of Lifeline and Link-Up 160
On May 4, 2010, the FCC asked the Joint Board to review the rules relating to the federal
160
The Lifeline and Link-Up programs under the Universal Service Fund provide support to qualifying low-income
consumers to ensure access to telephone service.
56
Lifeline and Link-Up programs. 161 The FCC sought changes to these programs designed to
forestall potential differences between federal and state rules that govern customer eligibility.
The FCC also asked the Joint Board to comment on best practices among states for effective
verification of customer eligibility and the use of various outreach and enrollment programs.
Finally, the FCC sought comment on expansion of the low-income program to include
broadband services, as recommended in the NBP.
On June 14, 2010, the Joint Board released a Public Notice seeking comment on these
questions. Accordingly, the FPSC filed comments in this proceeding taking the following
positions:

Supported, but did not mandate, the use of automatic enrollment processes for
Lifeline such as are used in Florida.

Supported the use of electronic certification and verification for Lifeline.

Encouraged the FCC to expand the definition of “household” to include residents of
group living facilities.
The Joint Board issued its Recommended Decision to the FCC in November 2010, urging
the FCC to encourage automatic enrollment as a best practice for all states. 162 The Joint Board
recommended that the FCC adopt uniform minimum verification procedures and sampling
criteria that would apply to all ETCs in all states. The Recommended Decision would allow
states to use different and/or additional verification procedures as long as these procedures are at
least as effective in detecting waste, fraud, and abuse as the uniform minimum required
procedures. The Joint Board also called for adoption of mandatory outreach requirements for all
ETCs that receive low-income support.
In March 2011, the FCC sought comment on the recommendations of the Joint Board as
well as on the concerns identified by the Government Accounting Office and proposals from the
NBP to reform the low-income programs. The FPSC filed comments with the FCC on April 6,
2011, addressing a number of issues including the following recommendations to:

Codify rules to facilitate the elimination of duplicative support.

Require all ETCs seeking Link-Up reimbursement to submit cost support to USAC
for the revenues they forgo in reducing their customary charges.

Fund broadband services within the Lifeline program only if the program is capped
and support is only for one service, either voice or broadband.
161
FCC 10-72, Order, CC Docket No 96-45 and WC Docket No. 03-109, released on May 4, 2010,
<http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-10-72A1.pdf>, accessed on May 5, 2010.
162
FCC 10J-3, Recommended Decision, CC Docket No. 96-45 and WC Docket No. 03-109, released on November
4, 2010, <http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-10J-3A1.pdf>, accessed on May 13, 2011.
57

Create a Lifeline database to verify consumer eligibility, track verification, and check
for duplicates to ensure greater program accountability. Require that the proposed
database be operated under strict confidentiality provisions.
3.
Afterhours Use of Internet Connections at Schools Receiving E-rate
Funding
The FCC released an order, on February 19, 2010, to waive its rules to allow schools that
receive support from the schools and libraries program (or E-rate program) to permit members of
the public to use the schools’ Internet access during non-operating hours. 163 This action was
intended to leverage universal service funding to serve a larger population at no increased cost to
the E-rate program.
Previously, FCC rules required schools to certify that they would use E-rate funded
services solely for “educational purposes.” 164 As a result, services and facilities purchased by
schools using E-rate funding remained largely unused during evenings, weekends, school
holidays, and summer breaks. The waiver of the FCC’s rules was effective through June 30,
2011, and subject to several conditions; 165 however, on September 21, 2010, the FCC released an
order making these changes permanent. 166
4. Mobility Fund
On October 14, 2010, the FCC released a NPRM seeking comment on the creation of a
Mobility Fund to build wireless networks capable of providing broadband to unserved, rural, and
insular areas. 167 The new Mobility Fund would use surrendered high-cost universal service
support from Verizon Wireless and Sprint to provide support to participating carriers. 168 As a
result, the creation of this new program would not result in growth to the federal USF. The FCC
contends that mobility gaps are a challenge for residents, public safety first responders,
businesses, public institutions, and travelers, particularly in rural areas.
This NPRM is consistent with a key recommendation of the NBP and would use $100
million to $300 million from the USF to fund the program. Under the Mobility Fund, support
would be distributed on a one-time basis using a reverse auction mechanism to target consumers
163
FCC 10-33, CC Docket No. 02-6, Order and Notice of Proposed Rulemaking, released February 19, 2010,
<http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-10-33A1.pdf>, accessed on May 5, 2010.
164
Educational purposes are defined as activities that are integral, immediate, and proximate to the education of
students.
165
These conditions are: (1) schools participating in the E-rate program are not permitted to request more services
than are necessary for “educational purposes,” (2) any community use of E-rate funded services at a school facility
is limited to non-operating hours, and (3) schools may not resell discounted services or network capacity.
166
FCC 10-175, Sixth Report and Order, CC Docket No. 02-6 and GN Docket No. 09-51, released September 28,
2010, <http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-10-175A1.pdf>, accessed on May 13, 2011.
167
FCC 10-182, Notice of Proposed Rulemaking, WT Docket No. 10-208, released October 14, 2010,
<http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-10-182A1.pdf>, accessed on May 16, 2011.
168
The FCC conditioned its merger approval for ALLTEL / Verizon Wireless and Sprint Nextel / Clearwire on the
carriers’ voluntary commitments to surrender their high-cost universal service support in equal 20 percent
increments over a period of five years from the closing date of the transactions. The amount of surrendered support
would be $100 million to $300 million.
58
in areas without advanced mobile services. 169 The FCC also asked for comment on whether to
make support available to any unserved area or to target support by making it available in a
limited set of unserved areas. Finally, the NPRM sought input on minimum performance and
coverage requirements that should be established for the service to be supported by the Mobility
Fund. The FPSC filed comments on January 13, 2011, conditioning support of the proposed
Mobility Fund only if it:

Uses only reclaimed support.

Is non-recurring in nature.

Does not increase the overall size of the USF.

Addresses the statutory definition issues within the Telecommunications Act prior to
distributing support. 170
B. Broadband
1. National Broadband Plan
The FCC claims in its NBP progress report that 80 percent of its goals for first year
implementation have been accomplished. 171 Most of the actions to date consist of releasing
documents, requesting comment on rule changes, and conducting workshops and forums. One of
the most notable documents released was an NPRM outlining a comprehensive overhaul of the
USF. The FCC has also been working on developing a nationwide public safety network and
wireless 911 capabilities in accordance with the NBP.
In the first quarter of 2011, FCC Chairman Genachowski was focused on a perceived
wireless spectrum shortage and is making an effort to garner public support for steps to
reallocate spectrum as outlined in the NBP. In a speech before the Telecommunications Industry
Association on May 9, 2011, Chairman Genachowski referred to spectrum as the “oxygen that
ultimately sustains the mobile revolution,” and mentioned that smartphones place 24 times more
demand on existing spectrum than older “feature phones.” Electronic tablets, such as iPads, use
120 times as much spectrum. Reallocation of existing and unused spectrum is a key aspect of the
NBP, which calls for broadcasters to make available significant portions of their spectrum
holdings to accommodate increasing demand for wireless broadband services.
169
A reverse auction is an auction in which potential service providers bid for support by proposing the lowest
amount of funding they would require to serve areas that are currently unserved.
170
47 U.S.C. § 254(c)(1).
171
A complete list of FCC completed actions by the FCC relating to the NBP can be found at
http://www.broadband.gov/plan/broadband-progress-report.html.
59
2. Broadband Data Collection
On February 17, 2011, the NTIA released the National Broadband Map. 172 The map
includes data collected from every U.S. state and territory and includes 25 million searchable
records that display broadband technologies, speeds, providers, and availability. There is a
legislative mandate for continued research and for the data contained within the map to be
updated every six months. The map shows that 5 to 10 percent of the population lacks access to
broadband at speeds necessary to perform basic online activities such as streaming video and
downloading images. The map was created using state grants from the Broadband Data
Improvement Act. 173 Each state was given funds in order to collect broadband data and
construct a state broadband map. 174
3. Network Neutrality and Internet Network Management
In October 2009, the FCC released an NPRM seeking comment on proposed rules for
maintaining an open and free Internet. 175 While the FCC was reviewing stakeholder comments
and further developing the public record on Open Internet and Net Neutrality issues, the U.S.
Court of Appeals, D.C. Circuit, sided against the FCC in a case involving Comcast. The court
ruled that the FCC’s attempt to penalize the cable operator for prioritizing different types of
traffic, in what the FCC believed to be a “discriminatory” fashion, was beyond the scope of its
authority. 176 On December 21, 2010, the FCC adopted a Report and Order In the Matter of
Preserving the Open Internet / Broadband Industry Practices which established rules to codify
the FCC’s existing principles relating to an open Internet, otherwise known as Network
Neutrality. Those principles are transparency, no blocking of content, no unreasonable
discrimination, and reasonable network management. 177
Immediately thereafter, Verizon Communications and MetroPCS filed lawsuits
contesting the principles of Network Neutrality stating that the FCC does not have the authority
“to impose or enforce rules governing traffic management on their networks.” Providers contend
that they should be able to manage their network traffic, especially certain bandwidth intensive
applications and at peak times, to maintain network performance. The FCC and consumers
believe, however, that providers may use this ability to intentionally degrade services that
compete with their offerings and limit the open and free nature of the Internet which has fostered
innovation and economic growth. Despite the fact that the Order had not yet been published in
the Federal Register, the companies pursued the suits in a time frame that would land the case in
172
The National Broadband Map can be accessed at http://broadbandmap.gov/technology.
NTIA, “Commerce’s NTIA Unveils National Broadband Map and New Broadband Adoption Survey Results,”
February 17, 2011, <http://www.ntia.doc.gov/press/2011/NationalBroadbandMap_02172011.html>, accessed on
May 15, 2011.
174
The interactive broadband map for the State of Florida can be located at http://connect-florida.org/.
175
The FCC Open Internet NPRM can be downloaded from http://www.openinternet.gov/get-informed.html.
176
Comcast Corporation v. FCC, U.S. Court of Appeals, D.C. Circuit, No. 08-1291, April 6, 2010, <http://
www.cadc.uscourts.gov/internet/opinions.nsf/EA10373FA9C20DEA85257807005BD63F/$file/08-12911238302.pdf>, accessed on May 19, 2010.
177
FCC, “In the Matter of Preserving the Open Internet / Broadband Industry Practices,” GN Docket No. 09-191,
released December 23, 20101, <http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-10-201A1.pdf>, accessed
on May 19, 2011.
173
60
front of the same court that had sided against the FCC in the Comcast case. On April 5, 2011,
the U.S. Court of Appeals, D.C. Circuit, dismissed the suits as premature. 178
C. Funding for Video Relay Service
On June 28, 2010, the FCC released a NOI regarding Video Relay Services (VRS). 179
VRS allows persons with hearing or speech disabilities to use American Sign Language over the
Internet to communicate in near real time. 180 The Notice sought comment on ideas to make the
VRS program work better for those who could receive benefit as well as those who pay into it.
Among other issues, the FCC sought comments on whether states should be required to pay the
intrastate costs of VRS. At this time, Florida does not pay for any VRS costs. All VRS costs are
paid out of the interstate Telecommunications Relay Service Fund. If the costs are transferred
from the interstate fund to the intrastate fund, Florida will be responsible for an estimated
additional amount of $32 million a year. Current Florida statutes establish a $0.25 per access
line, per month cap on the amount of the Telecommunications Relay Service (TRS) surcharge.
If the FCC requires states to pay the intrastate portion of VRS costs, the TRS surcharge may
have to be increased, and if competitive bidding of VRS contracts is required, the Florida statute
providing for a single provider of TRS in Florida may have to be changed. The FPSC filed
comments on August 18, 2010, urging the FCC to consider the following points:

If the VRS becomes a mandated service of TRS, it should continue to be funded
through the Interstate TRS Fund.

If state funding of Intrastate VRS is mandated, it should not occur until the FCC
resolves the fraudulent use of VRS.

The jurisdictional separation issues must be resolved before determining the
jurisdictional costs and associated funding of VRS.

If states are required to assume intrastate VRS costs, the FCC must allow time for
states to make legislative changes.
178
Amy Schatz, “Appeals Court Tosses out ‘Net Neutrality’ Lawsuits,” The Wall Street Journal, April 5, 2011,
<http://online.wsj.com/article/SB10001424052748703806304576242910270033204.html>, accessed on May 19,
2011.
179
FCC 10-111, Notice of Inquiry, CG Docket No. 10-51, released June 28, 2010, <http://hraunfoss.fcc.gov/
edocs_public/attachmatch/FCC-10-111A1.pdf >, accessed on May 17, 2011.
180
VRS replaces the TTY-to-TTY link between telecommunications relay services user and a communications
assistant with a video-to-video link, allowing a person who uses sign language to communicate with another
individual through a communications assistant who can communicate in sign language. The communications
assistant interprets the call by voicing what the user signs to the hearing individual, and signing back the hearing
individual’s responses.
61
62
Appendix A. List of Certificated CLECs as 12/31/10
**Indicates that the company did not respond to the Commission’s data request.
^^Indicates that the company is in the process of having its certificate cancelled or has a
pending bankruptcy.
360networks (USA) inc.
AboveNet Communications, Inc.
Absolute Home Phones, Inc.
Access Communications, LLC.
Access One, Inc.
Access Point, Inc.
ACN Communication Services, Inc.
^^Advantage Group of Florida
Communications, L.L.C.
Aero Communications, LLC
Affordable Phone Services, Inc.
Airespring, Inc.
ALEC, Inc.
All American Telecom, Inc.
Alternative Phone, Inc.
American Dial Tone, Inc.
**American Fiber Network, Inc.
American Telephone Company LLC
Americatel Corporation
ANEW Broadband, Inc.
Assurance Home Phone Services, Inc.
Astro Tel, Inc.
AT&T Communications of the Southern
States, LLC d/b/a AT&T
ATC Outdoor DAS, LLC
Atlantic.Net Broadband, Inc.
ATN, Inc. d/b/a AMTEL NETWORK, INC.
Backbone Communications Inc.
Baldwin County Internet/DSSI Service,
L.L.C.
Bandwidth.com CLEC, LLC
BCN Telecom, Inc.
Bellerud Communications, LLC
BellSouth Long Distance, Inc. d/b/a AT&T
Long Distance Service
BellSouth Telecommunications, Inc. d/b/a
AT&T Florida d/b/a AT&T Southeast
Benchmark Communications, LLC d/b/a
Com One
BetterWorld Telecom LLC d/b/a
BetterWorld Telecom
Birch Communications, Inc.
Birch Telecom of the South, Inc. d/b/a Birch
Telecom d/b/a Birch d/b/a Birch
Communications
Bright House Networks Information
Services (Florida), LLC
Broadband Communities of Florida, Inc.
Broadband Dynamics, L.L.C.
BroadRiver Communication Corporation
Broadstar, LLC d/b/a PrimeCast
Broadview Networks, Inc.
Broadvox-CLEC, LLC
Broadwing Communications, LLC
Brydels Communications, LLC
BT Communications Sales LLC
BTEL, Inc.
Budget PrePay, Inc. d/b/a Budget Phone
BudgeTel Systems, Inc.
BullsEye Telecom, Inc.
Business Telecom, Inc. d/b/a BTI
Campus Communications Group, Inc.
Cbeyond Communications, LLC
Centennial Florida Switch Corp.
Century Tel Fiber Company II, LLC d/b/a
LightCore, a CenturyLink limited
liability company
Cincinnati Bell Any Distance Inc.
City of Daytona Beach
City of Gainesville, a municipal corporation
d/b/a GRUCom
City of Lakeland
City of Ocala
City of Quincy d/b/a netquincy d/b/a
netquincy.com d/b/a
www.netquincy.com
Clear Rate Communications, Inc.
63
Appendix A. List of Certificated CLECs as 12/31/10
Cogent Communications of Florida LHC,
Inc.
Comcast Business Communications, LLC
d/b/a Comcast Long Distance
Comcast Phone of Florida, LLC d/b/a
Comcast Digital Phone d/b/a CIMCO, a
Division of Comcast Business Services
ComNet (USA) LLC
Comtech21, LLC
Conextel, Inc.
Convergia, Inc.
Cordia Communications Corp.
CoreTel Florida, Inc. d/b/a CoreTel
Covista, Inc.
Cox Florida Telcom, L.P. d/b/a Cox
Communications d/b/a Cox Business
d/b/a Cox
Crexendo Business Solutions, Inc.
Custom Network Solutions, Inc.
^^Cypress Communications Operating
Company, LLC
Dedicated Fiber Systems, Inc.
DeltaCom, Inc.
Dialtone Telecom, LLC
DIECA Communications, Inc. d/b/a Covad
Communications Company
Digital Express, Inc.
DIGITALIPVOICE, INC.
^^Discount Phone Services, Inc.
DPI Teleconnect, L.L.C.
DRS Training & Control Systems, LLC.
DSCI Corporation
DSL Internet Corporation d/b/a DSLi
DSLnet Communications, LLC
DukeNet Communications, LLC
Easy Telephone Services Company
ElectroNet Intermedia Consulting, Inc.
Embarq Communications, Inc. d/b/a
CenturyLink Communications
ENA Services, LLC
Enhanced Communications Network, Inc.
d/b/a Asian American Association
Entelegent Solutions, Inc.
Ernest Communications, Inc.
EveryCall Communications, Inc.
Excelacom Light, LLC.
Express Phone Service, Inc.
ExteNet Systems, Inc.
Fast Phones, Inc. of Alabama
FiberLight, LLC
First Choice Technology, Inc.
First Communications, LLC
FL CLEC LLC
FLATEL, Inc.
FlatPhone, Inc. d/b/a FlatPhone
Florida Hearing and Telephone Corporation
d/b/a Florida Hearing and Telephone
Florida Multi Media Services, Inc. d/b/a
Florida Multi Media
Florida Phone Systems, Inc.
Florida Telephone Services, LLC
Fort Pierce Utilities Authority d/b/a
GigaBand Communications
FPL FiberNet, LLC
France Telecom Corporate Solutions L.L.C.
Frontier Communications of America, Inc.
American Dial Tone
General Computer Services, Inc. d/b/a
BeCruising Telecom
Georgia Public Web, Inc.
^^Global Capacity Direct, LLC
^^Global Capacity Group, Inc.
Global Connection Inc. of America (of
Georgia)
Global Crossing Local Services, Inc.
Global Crossing Telemanagement, Inc.
Global Response Corporation
Granite Telecommunications, LLC
Great America Networks, Inc.
GTC Communications, Inc.
Harbor Communications, LLC
Home Town Telephone, LLC
Hotwire Communications, Ltd.
Hypercube Telecom, LLC
IBC Telecom Corp.
IDT America, Corp. d/b/a IDT
Image Access, Inc. d/b/a NewPhone, Inc.
inContact, Inc. d/b/a UCN
64
Appendix A. List of Certificated CLECs as 12/31/10
iNetworks Group, Inc.
Infotelecom, LLC
IntelePeer, Inc.
Intellicall Operator Services, Inc. d/b/a ILD
Intellifiber Networks, Inc.
Interactive Services Network, Inc. d/b/a ISN
Telcom
InterGlobe Communications, Inc.
International Integrated Solutions, LLC
d/b/a International Network Solutions,
LLC
Internet & Telephone, LLC
Intrado Communications Inc.
ITS Telecommunications Systems, Inc.
J C Telecommunication Co., LLC
Kenarl Inc. d/b/a Lake Wellington
Professional Centre
Kentucky Data Link, Inc.
KG Communications, LLC d/b/a KG
Communications
Kissimmee Utility Authority
Knology of Florida, Inc.
Level 3 Communications, LLC
LifeConnex Telecom, LLC
Lightspeed CLEC, Inc.
Lightyear Network Solutions, LLC
Likwid Communications, Inc.
Linkup Telecom, Inc.
Litestream Holdings, LLC
Marco Island Cable, Inc.
Maryland TeleCommunication Systems, Inc.
MassComm, Inc.d/b/a Mass
Communications
Matrix Telecom, Inc. d/b/a Matrix Business
Technologies also d/b/a Trinsic
Communications also d/b/a Excel
Telecommunications also d/b/a VarTec
Telecom also d/b/a Clear Choice
Communications
MBC Telecom LLC
MCC Telephony of Florida, LLC
McGraw Communications, Inc
Madison River Communications, LLC d/b/a
CenturyLink
Metropolitan Telecommunications of
Florida, Inc. d/b/a MetTel
Micro Comm, Inc.
Midwestern Telecommunications,
Incorporated
Mitel NetSolutions, Inc.
Momentum Telecom, Inc.
Mountain Communications, LLC
MULTIPHONE LATIN AMERICA, INC.
Navigator Telecommunications, LLC
NET TALK.COM, INC.
Network Operator Services, Inc.
Network Telephone Corporation d/b/a
Cavalier Telephone d/b/a Cavalier
Business Communications
Neutral Tandem Florida, LLC
New Edge Network, Inc. d/b/a New Edge
Networks
New Horizons Communications Corp.
New Talk, Inc.
NextG Networks of NY, Inc. d/b/a NextG
Networks East
Nexus Communications, Inc. d/b/a Nexus
Communications TSI, Inc.
Norlight Telecommunications, Inc.
Norlight, Inc. d/b/a Cinergy
Communications
Norstar Telecommunications, LLC
MCImetro Access Transmission Services
LLC d/b/a Verizon Access Transmission
Services
McLeodUSA Telecommunications Services,
LLC.
North American Telecommunications
Corporation
North County Communications Corporation
NOS Communications, Inc. d/b/a
International Plus d/b/a O11
Communications d/b/a The Internet
Business Association d/b/a I Vantage
Network Solutions
Novus Communications, Inc.
65
Appendix A. List of Certificated CLECs as 12/31/10
One Voice Communications, Inc.
OneTone Telecom, Inc.
Opextel LLC d/b/a Alodiga
Optical Telecommunications, Inc. d/b/a
HControl Corporation d/b/a SH Services
LLC
Orlando Telephone Company, Inc. d/b/a
Summit Broadband
Pac West Telecomm, Inc.
PaeTec Communications, Inc.
Peerless Network of Florida, LLC
Pelzer Communications Corporation
Phone Club Corporation
Phone XP, L.L.C.
PNG Telecommunications, Inc. d/b/a
PowerNet Global Communications d/b/a
CrossConnect d/b/a Thr!ve
Communications
Preferred Long Distance, Inc.
Primus Telecommunications, Inc.
ProfitLab, Inc.
Protection Plus of the Florida Keys, Inc.
d/b/a ENGAGE COMMUNICATIONS
Public Wireless, Inc.
QuantumShift Communications, Inc.
^^QuikVoip, LLC
Qwest Communications Company, LLC
Reliance Globalcom Services, Inc.
ReTel Communications, Inc.
Rightlink USA, Inc.
Ring Connection, Inc.
RNK Inc. d/b/a RNK Communications Inc.
Sage Telecom, Inc.
Sago Broadband, LLC
Sandhills Telecommunications Group, Inc.
d/b/a SanTel Communications
Saturn Telecommunication Services Inc.
d/b/a STS Telecom
SBC Long Distance, LLC d/b/a SBC Long
Distance d/b/a AT&T Long Distance
Servi Express Caracol d/b/a Telefonica
Express
Shands Teaching Hospital and Clinics, Inc.
Sign Language Access, Inc. d/b/a callVRS
SIP Interchange Corporation
SKYNET360, LLC
Smart City Networks, Limited
Partnership
Smart City Solutions, LLC d/b/a Smart City
Communications
**SNC Communications, LLC
Southeastern Services, Inc.
Southern Light, LLC
Southern Telecom, Inc. d/b/a Southern
Telecom of America, Inc.
Spectrotel, Inc. d/b/a One Touch
Communications d/b/a Touch Base
Communications
Sprint Communications Company Limited
Partnership
STS Telecom, LLC
Sun Tel USA, Inc.
Sunesys, LLC
T3 Communications, Inc. d/b/a Tier 3
Communications d/b/a Naples
Telephone and d/b/a Fort Myers
Telephone
Talk America Inc. d/b/a Cavalier Telephone
d/b/a Cavalier Business
Communications
TCG South Florida
TelCentris Communications, LLC
TelCove Operations, Inc.
Tele Circuit Network Corporation
Telecom Management, Inc. d/b/a Pioneer
Telephone
Teleconnect of California, LLC d/b/a
Teleconnect LLC
TeleDias Communications, Inc.
Telepak Networks, Inc.
TelOps International, Inc. d/b/a AmTel
Telovations Inc.
Telrite Corporation
Telscape Communications, Inc.
Tennessee Telephone Service, LLC d/b/a
Freedom Communications USA, LLC
Terra Nova Telecom, Inc.
The Boeing Company
66
Appendix A. List of Certificated CLECs as 12/31/10
The Other Phone Company, Inc. d/b/a
Cavalier Telephone d/b/a Cavalier
Business Communications
The Ultimate Connection, L.C. d/b/a
DayStar Communications
Think 12 Corporation d/b/a Hello Depot
Touchtone Communications Inc. of
Delaware
TQC Communications, Corp.
Trans National Communications
International, Inc.
Transparent Technology Services
Corporation d/b/a North Palm Beach
Telephone Company
Tristar Communications Corp.
tw telecom of florida l.p.
U.S. Metropolitan Telecom, LLC
US LEC of Florida, LLC d/b/a PAETEC
Business Services
US Telesis, Inc.
Utility Board of the City of Key West d/b/a
Keys Energy Services
Vanco US, LLC
VBNet, Incorporated
Velocity The Greatest Phone Company
Ever, Inc.
Verizon Florida LLC
Verizon Select Services Inc.
Vixxi Solutions Inc.
VoDa Networks, Inc.
Wholesale Carrier Services, Inc.
WiMac Tel, Inc.
Windstream NuVox, Inc.
WTI Communications, Inc.
XO Communications Services, Inc.
XYN Communications of Florida, LLC
YMax Communications Corp.
Zone Telecom, Inc.
67
68
Appendix B. Number of CLEC Providers In Each
Exchange
Exchange
Alachua
Alford
Alligator Point
Altha
Apalachicola
Apopka
Arcadia
Archer
Astor
Avon Park
Baker
Baldwin
Bartow
Belleglade
Belleview
Beverly Hills
Blountstown
Boca Raton
Boca Grande
Bonifay
Bonita Springs
Bowling Green
Boynton Beach
Bradenton
Branford
Bristol
Bronson
Brooker
Brooksville
Bunnell
Bushnell
Callahan
Cantonment
Cape Coral
Cape Haze
Carrabelle
Cedar Key
Celebration
Century
Chattahoochee
Cherry Lake
Chiefland
CLEC Residential
Providers
(Dec-09)
(Dec-10)
1
0
3
1
1
1
0
0
0
0
7
5
4
5
11
13
0
0
4
2
3
2
7
6
4
2
21
18
4
4
1
2
0
0
28
23
2
2
6
4
5
6
2
0
23
20
9
3
0
0
0
0
15
14
0
0
17
15
12
12
5
4
0
0
15
15
4
4
0
1
0
0
4
5
2
2
11
9
1
1
1
2
15
13
69
CLEC Business
Providers
(Dec-09)
(Dec-10)
1
2
5
2
0
0
1
1
1
1
20
17
14
12
6
7
3
2
13
9
5
4
9
10
18
16
20
19
14
16
11
7
1
0
39
38
5
5
7
6
22
21
5
4
29
30
23
23
1
1
0
0
7
6
1
1
20
18
14
14
14
12
4
3
13
11
17
15
8
6
0
0
6
6
7
10
5
4
1
1
3
2
10
10
Appendix B. Number of CLEC Providers In Each
Exchange
Exchange
Chipley
Citra
Clearwater
Clermont
Clewiston
Cocoa
Cocoa Beach
Coral Springs
Cottondale
Crawfordville
Crescent City
Crestview
Cross City
Crystal River
Dade City
Daytona Beach
DeBary
Deerfield Beach
Deland
DeLeon Springs
Delray Beach
Destin
DeFuniak Springs
Dowling Park
Dunnellon
East Point
East Orange
Eau Gallie
Englewood
Eustis
Everglades
Fernadina Beach
Flagler Beach
Florahome
Florida Sheriffs’ Boys Ranch
Forest
Ft. Meade
Ft. Myers
Ft. White
Ft. Pierce
Freeport
Frostproof
CLEC Residential
Providers
(Dec-09)
(Dec-10)
12
12
1
1
9
6
6
2
6
4
21
22
13
14
22
20
4
2
3
3
1
1
4
5
12
12
2
2
4
3
26
23
17
14
22
21
19
20
10
9
23
21
3
4
5
5
0
0
13
13
0
0
11
6
18
18
1
2
6
4
0
0
19
16
6
6
0
0
0
0
2
3
4
2
14
12
1
0
22
20
3
2
4
3
70
CLEC Business
Providers
(Dec-09)
(Dec-10)
10
10
1
1
34
31
16
13
10
8
25
25
19
21
26
29
6
5
13
11
1
1
13
11
7
8
14
11
14
12
32
33
15
17
30
30
21
20
7
9
30
29
17
13
11
9
0
0
10
14
0
0
13
12
26
27
17
19
13
14
3
3
16
22
11
13
1
1
0
0
8
6
8
6
26
25
1
1
23
20
5
6
10
11
Appendix B. Number of CLEC Providers In Each
Exchange
Exchange
Ft. Lauderdale
Ft. Myers Beach
Ft. Walton Beach
Gainesville
Geneva
Glendale
Graceville
Grand Ridge
Green Cove Springs
Greensboro
Greenville
Greenwood
Gretna
Groveland
Gulf Breeze
Haines City
Hastings
Havana
Hawthorne
High Springs
Hilliard
Hobe Sound
Holley-Navarre
Hollywood
Homestead
Homosassa
Hosford
Howey-in-the-Hills
Hudson
Immokalee
Indian Lake
Indiantown
Interlachen
Inverness
Jacksonville Beach
Jacksonville
Jasper
Jay
Jennings
Jensen Beach
Julington
Jupiter
CLEC Residential
Providers
(Dec-09)
(Dec-10)
38
32
4
2
7
5
30
27
4
6
2
0
12
11
4
3
12
11
1
1
4
2
3
2
0
1
3
2
13
13
7
6
1
1
18
18
16
16
0
0
0
0
11
7
14
7
31
26
28
24
1
2
0
0
1
1
2
3
3
2
0
1
2
1
1
1
2
4
19
17
38
36
0
1
11
11
0
0
10
10
16
0
0
14
71
CLEC Business
Providers
(Dec-09)
(Dec-10)
49
45
13
11
19
18
27
28
8
8
1
1
9
8
4
3
15
16
0
0
4
4
2
1
0
0
11
10
12
15
22
20
1
2
6
7
4
6
2
2
1
2
14
13
9
10
39
39
26
28
13
8
0
0
1
2
19
19
13
14
4
2
3
2
2
3
13
13
21
26
43
44
2
2
4
4
1
0
22
23
27
0
0
27
Appendix B. Number of CLEC Providers In Each
Exchange
Exchange
Keaton Beach
Kenansville
Keys
Keystone Heights
Kingsley Lake
Kissimmee
La Belle
Lady Lake
Lake City
Lake Wales
Lake Butler
Lakeland
Lake Placid
Lawtey
Lee
Leesburg
Lehigh Acres
Live Oak
Lake Buena Vista
Luraville
Lynn Haven
Macclenny
Madison
Malone
Marco Island
Marianna
Maxville
Mayo
McIntosh
Melbourne
Melrose
Miami
Micanopy
Middleburg
Milton
Molino
Monticello
Montverde
Moore Haven
Mount Dora
Mulberry
Munson
CLEC Residential
Providers
(Dec-09)
(Dec-10)
0
0
22
0
14
17
0
9
9
0
4
7
5
3
21
4
6
19
1
7
5
1
6
5
1
5
2
1
1
5
6
7
5
5
0
0
1
2
0
0
10
12
2
1
4
3
3
3
2
3
4
4
11
9
0
0
1
1
22
29
0
0
37
44
9
5
14
18
16
17
0
0
7
7
0
0
2
4
7
8
2
2
8
8
72
CLEC Business
Providers
(Dec-09)
(Dec-10)
3
0
31
6
9
27
0
9
23
0
10
25
15
10
16
14
18
17
2
18
23
2
13
25
0
10
3
2
5
5
17
17
16
17
2
2
6
7
0
1
9
10
2
3
11
7
2
2
14
13
12
9
6
5
1
1
1
1
25
27
1
1
51
46
5
6
17
17
12
12
1
1
10
7
3
5
5
3
16
11
14
15
2
2
Appendix B. Number of CLEC Providers In Each
Exchange
Exchange
Myakka
Naples
North Cape Coral
Newberry
North Naples
North Ft Myers
North Dade
North Port
New Port Richey
New Smyrna Beach
Oak Hill
Ocala
Ocklawaha
Okeechobee
Old Town
Orange Springs
Orange City
Orange Park
Orlando
Oviedo
Pace
Pahokee
Palatka
Palm Coast
Palmetto
Panacea
Panama City
Paxton
Pensacola
Perrine
Perry
Pierson
Pine Island
Plant City
Panama City Beach
Ponte Vedra Beach
Poinciana
Polk City
Pomona Park
Pompano Beach
Ponce de Leon
Port St Joe
CLEC Residential
Providers
(Dec-09)
(Dec-10)
0
1
8
7
5
2
16
16
5
5
4
4
32
30
2
2
5
3
17
13
4
2
8
8
2
2
5
5
12
11
0
0
4
4
29
21
37
31
17
12
13
14
15
15
17
15
13
7
5
4
1
1
21
17
0
0
31
27
24
22
0
0
6
8
0
0
6
4
13
12
8
6
0
1
1
3
12
7
31
26
4
3
1
0
73
CLEC Business
Providers
(Dec-09)
(Dec-10)
6
6
24
22
16
18
8
8
20
16
15
20
33
32
14
14
23
24
19
22
6
7
20
20
5
5
16
14
6
6
0
0
16
17
24
24
47
45
25
27
12
12
10
10
16
15
19
18
21
22
3
3
20
18
1
0
26
28
27
30
1
1
11
11
10
7
19
18
18
17
17
20
1
2
10
9
3
4
35
37
5
4
1
1
Appendix B. Number of CLEC Providers In Each
Exchange
Exchange
Port Charlotte
Port St. Lucie
Punta Gorda
Quincy
Raiford
Reedy Creek
Reynolds Hill
Salt Springs
San Antonio
Sanderson
Sanford
Santa Rosa Beach
Sarasota
Seagrove Beach
Sebastian
Sebring
Shalimar
Silver Springs Shores
Sanibel-Captiva Island
Sneads
Sopchoppy
Spring Lake Hills
St. Cloud
St. Johns
St. Marks
Starke
St. Petersburg
Stuart
Sunny Hills
Tallahassee
Tampa
Tarpon Springs
Tavares
The Beaches
Titusville
Trenton
Trilacoochee
Tyndall AFB
Umatilla
Valparaiso
Venice
Vernon
CLEC Residential
Providers
(Dec-09)
(Dec-10)
2
5
27
21
0
2
1
1
0
0
3
1
5
1
1
0
1
1
1
1
28
24
1
2
6
4
4
3
17
15
6
5
3
3
5
4
1
1
3
2
1
1
2
2
6
4
27
24
1
1
7
7
9
8
15
16
9
8
14
14
18
13
3
3
2
2
0
0
21
19
13
15
5
3
1
1
5
3
3
4
4
3
9
8
74
CLEC Business
Providers
(Dec-09)
(Dec-10)
17
20
28
28
18
16
0
0
0
0
18
17
0
0
5
4
8
7
1
0
31
31
8
8
27
28
6
4
16
16
15
13
9
7
11
8
11
12
5
5
2
2
9
7
19
15
26
25
2
2
12
12
29
29
25
26
4
4
23
23
36
40
23
21
14
10
0
1
19
23
8
11
7
4
0
0
8
5
13
11
22
22
5
4
Appendix B. Number of CLEC Providers In Each
Exchange
Exchange
Vero Beach
Waldo
Walnut Hill
Wauchula
Weekiwachee Springs
Weirsdale
Welaka
Wellborn
Westville
Wewahitchka
White Springs
Wildwood
Williston
Windermere
Winter Haven
Winter Garden
Winter Park
West Kissimmee
West Palm Beach
Yankeetown
Youngstown-Fountain
Yulee
Zephyr Hills
Zolfo Springs
CLEC Residential
Providers
(Dec-09)
(Dec-10)
24
19
0
1
1
0
5
3
12
17
4
1
11
10
0
0
2
4
0
0
0
0
4
2
7
8
4
4
8
6
11
7
10
9
3
2
42
38
6
5
10
7
14
10
3
1
3
2
75
CLEC Business
Providers
(Dec-09)
(Dec-10)
25
25
1
1
0
0
11
8
22
21
4
3
5
6
0
0
4
4
0
1
1
1
13
13
10
9
12
12
21
23
22
19
27
27
19
18
45
45
7
9
5
7
10
13
17
18
4
3
76
Appendix C. Summary of Complaints Filed By CLECs
Carrier
Date
Opened
Complaint
or Docket
Number
Description
Date
Closed
Resolution
AstroTel
Verizon
01/07/10
0915572T
Complaint against
Verizon involving
number portability.
02/12/10
Due to an alleged
system failure,
Verizon failed to
verify that the
primary number in a
hunt rollover group
was working properly
causing all numbers
in the group to act as
though disconnected.
Verizon restored the
service.
AT&T
Sprint PCS and
Nextel
01/08/10
100019-TP
Complaint by
AT&T requesting
enforcement of the
interMTA traffic
compensation
provisions of its
ICAs with Sprint
PCS and Nextel.
05/11/11
The Parties entered
into an agreement to
settle the dispute and
filed a joint petition
for dismissal.
AT&T
LifeConnex
f/k/a Swiftel
01/08/10
100021-TP
Complaint by
AT&T against
LifeConnex for
breaching the terms
of the parties' ICA
as it relates to
billing disputes
regarding resale
promotional
credits.
Open
The Commission
granted the parties’
motion to hold the
docket in abeyance
pending the
resolution of similar
cases in other states.
AT&T
Image Access
d/b/a New Phone
01/08/10
100022-TP
Complaint by
AT&T against
New Phone for
breaching the terms
of the parties' ICA
as it relates to
billing disputes
regarding resale
promotional
credits.
Open
The Commission
granted the parties’
motion to hold the
docket in abeyance
pending the
resolution of similar
cases in other states.
77
Appendix C. Summary of Complaints Filed By CLECs
Carrier
Date
Opened
Complaint
or Docket
Number
Description
Date
Closed
Resolution
STS Telecom
AT&T
03/25/10
100144-TP
STS filed a request
for arbitration or
mediation of an
amendment to its
ICA with AT&T to
include the
commingling of
certain section 271
elements with
certain section
251(c) (3)
elements.
10/01/10
A Joint Stipulation to
Dismiss Cause
Without Prejudice
was filed and the
docket was closed.
AT&T
Sprint
Communications
Company and
Nextel Partners
04/09/10
100176-TP
&
100177-TP
AT&T filed
separate petitions
for arbitration of
ICAs with Sprint
and Nextel. The
dockets were
consolidated to
address the 93
issues identified as
being in dispute.
04/07/11
A Joint Motion to
Withdraw the
Petitions was filed
and the dockets were
closed.
AT&T
Grande
Communications
Networks, LLC
05/11/10
100275-TP
Complaint by
AT&T for breach
of the ICA as it
related to Grande's
failure to pay the
full amount of
AT&T Florida's
invoices to Grande
for reciprocal
compensation and
transiting charges.
08/31/11
AT&T filed a Notice
of Voluntary
Dismissal of
Complaint with
Prejudice and the
docket was closed.
Grande’s Certificate
was cancelled on
October 13, 2010.
Intrado
Communications
AT&T
05/14/10
100295-TP
Complaint by
Intrado against
AT&T for failure
to comply with the
Arbitration Order
issued in Docket
No. 070736-TP.
06/08/10
Intrado filed a Notice
of Voluntary
Dismissal Without
Prejudice and the
docket was closed.
78
Appendix C. Summary of Complaints Filed By CLECs
Carrier
Date
Opened
Complaint
or Docket
Number
Description
Date
Closed
Resolution
American Dial
Tone (ADT)
AT&T
11/04/10
100432-TP
ADT filed a
Request for
Emergency Relief
asking that the
FPSC prohibit
AT&T from
disrupting ADT's
service in Florida
pending resolution
of an ICA dispute
that relates to what
services ADT may
provide to whom
under the ICA.
Open
On 12/02/10 a
Memorandum of
Understanding was
filed to memorialize
an interim agreement
that enables AT&T to
restore order
processing for ADT
on its resale accounts
on an interim basis,
pending resolution of
the disputes.
Nexus
Communications
AT&T
11/08/10
100434-TP
Complaint by
Nexus against
AT&T under the
terms of their ICA
Nexus seeks to
recover cash back
promotional
credits.
Open
On 2/28/11 a Joint
Motion to Abate was
filed which stated
that Nexus will file
an amended
complaint that
identifies the
promotions and
amounts at issue in at
least the same level
of detail as the
Amended Complaint
Nexus filed in
Louisiana. Upon the
filing of the amended
complaint, AT&T
and Nexus will file a
joint motion asking
that the Commission
hold this proceeding
in abeyance pending
the issuance of a
Commission Order in
the Consolidated
Phase of Docket Nos.
100021-TP and
100022-TP.
79
80
Appendix D. Florida Lifeline Eligibility Criteria
Eligibility for participation in the Lifeline and Link-Up programs is determined by
subscriber enrollment in any one of the following qualifying programs:
Program-Based Criteria









Temporary Cash Assistance (TCA)
National School Lunch’s Free Lunch Program
Temporary Assistance to Needy Families (TANF)
Food Stamps
Medicaid
Low-Income Home Energy Assistance Program (LIHEAP)
Supplemental Security Income (SSI)
Federal Public Housing Assistance (Section 8)
Bureau of Indian Affairs programs:
- Tribal TANF
- Head Start Subsidy
- National School Lunch Program
Income-Based Criteria

150 percent of the Federal Poverty Guidelines.
81
82
Glossary
3G
4G
911/E911
Access Line
Backhaul
Broadband
Circuit
CLEC
DSL
ETC
Exchange
Third-generation technology. Used in the context of mobile
telephone standards. 3G networks are wide area cellular telephone
networks that evolved to incorporate high-speed Internet access
and video telephony.
Fourth-generation technology. 4G is the stage of broadband
mobile communications that will supersede 3G. It is expected that
end-to-end IP and high-quality streaming video will be among
4G's distinguishing features.
Basic 911/Enhanced 911. Basic 911 systems forward all
emergency 911 calls to the appropriate public safety answering
point (PSAP). E911 systems are able to automatically forward the
caller’s location (ALI) and call back number (ANI) to the
appropriate PSAP.
The circuit or channel between the demarcation point at the
customer’s premises and the serving end or class 5 central office.
In wireless networks, the connection from an individual base
station (tower) to the central network (backbone). Typical
backhaul connections are wired high-speed data connections (T1
line, etc.), but they can be wireless as well (using point-to-point
microwave or WiMax, etc.).
A term describing evolving digital technologies offering
consumers integrated access to voice, high-speed data services,
video on demand services, and interactive information delivery
services.
A fully operational two-way communications path.
Competitive Local Exchange Company. Any company certificated
by the Florida Public Service Commission to provide local
exchange telecommunications service in Florida on or after July 1,
1995.
Digital Subscriber Line. A family of technologies (including
variations such as asynchronous DSL, high bit-rate DSL, very
high bit-rate DSL, etc.) that provides high-speed Internet access.
DSL is typically provided by traditional wireline
telecommunications companies via a copper loop to the
customer’s premises. DSL is the principal competition of cable
modems.
Eligible Telecommunications Carrier. An ETC designated under
Section 214(e), F.S., is eligible to receive specific federal
universal service support.
An ILEC’s central office or group of central offices, together with
the subscribers’ stations and lines connected thereto, forming a
local system which furnishes means of telephonic communication
without toll charges between subscribers within a specified area,
usually a single city, town, or village.
83
Glossary
FiOS
FTTC
ICA
ILEC
Intermodal
Internet Protocol (IP)
Local Loop
LTE
PSTN
Resale
Spectrum
Switched Access
FiOS is Verizon’s suite of voice, video, and broadband services
provisioned over optic cable directly to the customer premises.
FiOS can currently provide Internet access with maximum
download speed of 50 Mbps and upload speed of 20 Mbps.
Fiber-to-the-curb. A hybrid network architecture which involves
fiber optics to the curb, and either twisted pair or coaxial cable to
the premises.
Interconnection Agreement. An interconnection agreement is a
contract that establishes the rates, terms and conditions that govern
the business relationship between telecommunications companies.
Incumbent Local Exchange Company. Any company certificated
by the FPSC to provide local exchange telecommunications
service in Florida on or before June 30, 1995.
The use of more than one type of technology or carrier to transport
telecommunications services from origination to termination.
When referring to local competition, intermodal refers to
nonwireline voice communications such as wireless or VoIP.
The term refers to all the standards that keeps the Internet
functioning. It describes software that tracks the Internet address
of nodes, routes outgoing messages, and recognizes incoming
messages.
See Access Line.
Long Term Evolution. LTE is a NIP-based technology standard
for the future provision of 4G wireless services.
Public Switched Telephone Network. The PSTN is the network
that provides switching and transmission facilities to the general
public.
The 1996 Act requires ILECs to offer to its competing
telecommunications carriers, at wholesale rates, any
telecommunications service that the ILEC provides to its
customers at retail rates, so that the competing carriers can resell
the services.
In wireless, this refers to the radio portion of the electromagnetic
spectrum. The radio spectrum spans a certain, limited frequency
range. The range of frequencies useful for cell phones is small.
The FCC oversees the allocation of these frequencies in the U.S.
Sections of spectrum are called "bands.” Each of these bands are
further subdivided into blocks, and these blocks are then licensed
to individual wireless carriers.
Local exchange telecommunications company-provided exchange
access services that offer switched interconnections between local
telephone subscribers and long distance or other companies. Long
distance companies use switched access for origination and
termination of user-dialed calls.
84
Glossary
Tariff
A statement by a regulated telecommunications company that sets
out the services offered by that company. A tariff provides the
rates, terms, and conditions under which regulated services are
provided and also states the general obligations of the company
and customers. Tariffs may be subject to review by regulatory
agencies and must be followed by the common carrier to ensure
nondiscrimination between customers. In Florida, CLECs are not
required to file tariffs, but they must file price lists if they offer
basic local telecommunications service.
Telecommunications Act The federal Telecommunications Act of 1996 established a
of 1996 (the 1996 Act)
national framework to enable CLECs to enter the local
telecommunications marketplace.
TRS
Telecommunications Relay System. TRS enables a person with a
hearing or speech disability to access the nation’s telephone
system to communicate with voice telephone users through a relay
provider and a communications assistant.
U-verse
U-verse is the brand name of AT&T for a group of services
provided via Internet Protocol (IP), including television service,
Internet access, and voice telephone service. Similar to Verizon’s
FiOS service, AT&T’s U-verse is deployed using fiber optic cable.
Universal Service
This term describes the financial support mechanisms that
constitute the national universal service fund. This fund provides
compensation to telephone companies or other communications
entities for providing access to telecommunications services at
reasonable and affordable rates throughout the country, including
rural, insular, high-cost areas, and public institutions.
VRS
Video Relay Service. Video Relay Service is a form of
Telecommunications Relay Service that enables persons with
hearing disabilities who use American Sign Language to
communicate with voice telephone users through video equipment,
rather than through typed text.
VoIP
Voice over Internet Protocol. The technology used to transmit
voice conversations over a data network using Internet Protocol.
Wireline
A term used to describe the technology used by a company to
provide telecommunications services. Wireline is synonymous
with “landline” or land-based technology.
85
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