IN THE TELECOMMUNICATIONS INDUSTRY REPORT ON THE STATUS OF COMPETITION

IN THE TELECOMMUNICATIONS INDUSTRY REPORT ON THE  STATUS  OF COMPETITION
As of
December 2009
REPORT ON THE STATUS OF COMPETITION
IN THE
TELECOMMUNICATIONS
INDUSTRY
FLORIDA PUBLIC SERVICE COMMISSION
Report on the Status
of Competition
in the
Telecommunications
Industry
As of December 31, 2009
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, Florida Statutes, and the Telecommunications
Act of 1996 .................................................................................................................... 8
1. Chapter 364, Florida Statutes............................................................................. 8
2. Federal Telecommunications Act of 1996......................................................... 8
B. Methodology ................................................................................................................. 9
Chapter II. Communications Market Overview........................................................................... 11
A. Economy ..................................................................................................................... 11
B. Incumbent Carriers...................................................................................................... 11
1. Mergers / Acquisitions..................................................................................... 14
a.
b.
c.
d.
Embarq / CenturyTel............................................................................ 14
CenturyLink / Qwest............................................................................ 15
Birch / Cleartel ..................................................................................... 15
Windstream / NuVox ........................................................................... 16
C. Wireless....................................................................................................................... 16
D. VoIP ............................................................................................................................ 18
E. Broadband.................................................................................................................... 19
F. Regulatory Factors....................................................................................................... 20
1. Federal.............................................................................................................. 20
2. State.................................................................................................................. 21
Chapter III. Status of Wireline Competition In Florida............................................................... 23
A. Wireline Access Lines In Florida................................................................................ 23
1. 2009 Summary of Results................................................................................ 23
2. Factors Contributing to Access Line Decline .................................................. 23
3. CLEC Market Composition ............................................................................. 24
i
B. Wireline Market Share and Access Lines ................................................................... 24
1. CLEC Market Share......................................................................................... 25
a. Florida .................................................................................................. 25
b. National................................................................................................ 27
2. Access Line Overview ..................................................................................... 28
3. CLEC Market Penetration by ILEC Territory ................................................. 31
4. Competitive Presence by Exchange................................................................. 32
C. Competitive Market Trends ........................................................................................ 33
1. Residential Access Line Trends....................................................................... 33
2. Business Access Line Trends........................................................................... 35
D. Rural Access Line Trends ........................................................................................... 36
1. Residential Access Lines ................................................................................. 36
2. Business Access Lines ..................................................................................... 36
E. Prepaid Telecommunications Services........................................................................ 37
F. Pay Telephone Services............................................................................................... 37
Chapter IV. Wireless, VoIP, and Broadband............................................................................... 39
A. Wireless....................................................................................................................... 39
1. Wireless-Only Households .............................................................................. 43
2. Florida Trends.................................................................................................. 43
B. Voice over Internet Protocol ....................................................................................... 47
1. National Market ............................................................................................... 47
a. Facilities-Based VoIP Providers .......................................................... 48
b. Over-the-Top VoIP Providers.............................................................. 49
2. Florida Market ................................................................................................. 51
a. Facilities-Based VoIP Providers .......................................................... 52
b. Over-the-Top VoIP Providers.............................................................. 52
C. Broadband ................................................................................................................... 52
1. National Broadband Trends ............................................................................. 53
a. National Broadband Subscribership..................................................... 53
ii
b. Broadband Speeds................................................................................ 56
2. Florida Broadband Trends ............................................................................... 56
3. Broadband Technology.................................................................................... 58
a.
b.
c.
d.
e.
Fiber Optics.......................................................................................... 58
DSL ...................................................................................................... 58
Cable Broadband.................................................................................. 59
Wireless................................................................................................ 59
Satellite................................................................................................. 61
Chapter V. Discussion of Chapter 364, F.S., Requirements........................................................ 63
A. Introduction................................................................................................................. 63
B. Statutory Issues ........................................................................................................... 64
1. The impact of competition on the availability of universal service................. 64
2. The ability of competitive providers to make equivalent service available..... 65
a.
b.
c.
d.
e.
Perceived Barriers to Competition ....................................................... 66
Competitive Services ........................................................................... 67
CLEC Investment................................................................................. 67
CLEC Complaints Against ILECs ....................................................... 68
Comments by Incumbents.................................................................... 68
3. The ability of customers to obtain equivalent services at comparable rates,
terms, and conditions ....................................................................................... 69
4. The impact of price regulation on the maintenance of affordable and reliable
services............................................................................................................. 72
5. Definition of basic local telecommunications services.................................... 73
6. Other information and recommendations that may be in the public interest ... 74
Chapter VI. State Activities ......................................................................................................... 77
A. ILEC Service Quality.................................................................................................. 77
1. 2009 Service Quality Evaluation Reports........................................................ 78
2. Service Guarantee Programs............................................................................ 79
B. Competitive Market Oversight.................................................................................... 80
1.
2.
3.
4.
5.
6.
AT&T Request for Waiver of Rule 25-4.040(2), F.A.C.................................. 80
Comcast / TDS Telecom Arbitration ............................................................... 81
Rulemaking to Implement Changes to Section 364.04, F.S. ........................... 81
Bright House / Verizon Arbitration ................................................................. 81
DeltaCom / Hypercube Access Charge Dispute .............................................. 82
AT&T Florida / Sprint Nextel Interconnection Agreement Dispute ............... 82
iii
7. AT&T Florida / Sprint Nextel Arbitration....................................................... 82
8. Qwest’s Discrimination Complaint.................................................................. 83
9. dPi Teleconnect Promotional Credits Complaint ............................................ 84
10. AT&T Promotional Credits Complaints........................................................ 84
11. Wholesale Performance Measurement Plans................................................. 84
C. Broadband Grants Activity.......................................................................................... 85
D. State Legislation.......................................................................................................... 86
1.
2.
3.
4.
SB 814 Lifeline ................................................................................................ 86
HB 1377 Telecommunications Regulation...................................................... 87
HB 163 E911 Fees for Prepaid Wireless Service ............................................ 87
SB 742 Public Safety Telecommunicators / E911........................................... 88
Chapter VII. Federal Activities.................................................................................................... 89
A. Broadband ................................................................................................................... 89
1. National Broadband Plan ................................................................................. 89
2. Broadband Data Collection.............................................................................. 90
3. Network Neutrality and Internet Network Management ................................. 90
B. Universal Service ........................................................................................................ 91
1.
2.
3.
4.
5.
6.
FCC’s Response to Court’s Remand of High-Cost Rules ............................... 92
Reform of Universal Service and Intercarrier Compensation.......................... 93
Separate High-Cost Support for Nonrural Insular Carriers ............................. 94
Effects of Merger Conditions on Competitive ETCs....................................... 94
Referral of Lifeline / Link-Up Issues to the Federal-State Joint Board........... 95
Afterhours Use of Internet Connections at Schools Receiving E-Rate
Funding ............................................................................................................ 96
C. Local Number Portability............................................................................................ 96
Appendix A. List of Certificated CLECs as of 12/31/09............................................................. 99
Appendix B. CLECs Providing Service..................................................................................... 105
Appendix C. Number of CLEC Providers In Each Exchange ................................................... 109
Appendix D. Summary of Complaints Filed By CLECS .......................................................... 117
Appendix E. Florida Lifeline Eligibility Criteria....................................................................... 119
Glossary ...................................................................................................................................... 121
iv
List of Tables and Figures
Figure E-1.
Figure E-2.
Access Line Composition by Company Type ........................................................ 3
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 3-8.
Figure 3-9.
Figure 3-10.
Figure 3-11.
Florida CLEC Market Share ................................................................................. 25
Florida Residential & Business CLEC Market Share........................................... 26
Florida CLEC Market Share by ILEC Service Territory...................................... 27
Florida Access Line Trends .................................................................................. 28
Florida CLEC Lines.............................................................................................. 30
Florida CLEC Residential & Business Market Share by ILEC Service
Territory ................................................................................................................ 31
Florida Residential Line Trends by ILECs and CLECs........................................ 33
Percent Change of Florida Residential Access Lines by ILECs and CLECs ....... 34
Florida Business Line Trends by ILECs and CLECs ........................................... 35
Percent Change of Florida Business Access Lines by ILECs and CLECs ........... 36
Figure 4-1.
Figure 4-2.
Figure 4-3.
Figure 4-4.
Figure 4-5.
Figure 4-6.
Figure 4-7.
Figure 4-8.
U.S. Wireless Industry Subscriber Growth Rates................................................. 42
Wireless Subscription as Percentage of Population.............................................. 44
Wireless Subscription Levels Throughout Florida ............................................... 45
Florida Local Exchange Access Lines and Florida Wireless Subscriptions......... 46
Estimated Florida Residential VoIP Access Lines ............................................... 51
Demographics of Home Broadband Use .............................................................. 54
Why Respondents Do Not Have Broadband ........................................................ 55
Internet Subscription by Technology.................................................................... 62
Figure 5-1.
Figure 5-2.
Figure 5-3.
Figure 5-4.
Telephone Service Penetration: Florida vs. Nation ............................................. 64
2009 Telephone Penetration by Income: Florida vs. Nation ............................... 65
Barriers to Competition Reported by CLECs ....................................................... 66
CLEC Complaints Filed Against ILECs............................................................... 68
Table 3-1.
Table 3-2.
Table 3-3.
Summary of CLEC Residential Access Line Providers ....................................... 24
Florida Access Line Comparison.......................................................................... 29
Florida Exchanges with the Most CLEC Providers.............................................. 32
Table 4-1.
Wireless Provider Coverage by Population .......................................................... 39
Table 5-1.
Table 5-2.
CLEC Providers by Florida Exchange.................................................................. 70
Local Rates for Selected Florida CLECs and ILECs............................................ 71
Table 6-1.
Section-by-Section Analysis of HB 1377 ............................................................. 87
Table 7-1.
2008 Federal Universal Service Programs in Florida ........................................... 92
v
vi
List of Acronyms
3G
4G
ADA
ARRA
ADSL
ARMIS
BDIA
BEBR
BIP
BTOP
Bus
CAF
C.F.R.
CLEC
CMRS
DCF
DMS
DOCSIS
DOH
DSL
ETC
F.A.C.
FCC
FCTA
FiOS
FNPRM
FPSC
F.S.
FTTH
FTTN
Gbps
IBEC
ILEC
interMTA
IP
ITS
IXC
kbps
LEC
LNP
LTE
MB
Third Generation (wireless)
Fourth Generation (wireless)
Americans with Disabilities Act
American Recovery and Reinvestment Act
Asynchronous Digital Subscriber Line
Automated Reporting Management Information System
Broadband Data Improvement Act
Bureau of Economic and Business Research
Broadband Initiatives Program
Broadband Technology Opportunities Program
Business
Connect America Fund
Code of Federal Regulations
Competitive Local Exchange Company
Commercial Mobile Radio Service
Department of Children and Families
Department of Management Services
Data Over Cable Service Interface Specification
Department of Health
Digital Subscriber Line
Eligible Telecommunications Carrier
Florida Administrative Code
Federal Communications Commission
Florida Cable Telecommunications Association
Verizon’s trademark name for its fiber-to-the-home package of services
Further Notice of Proposed Rulemaking
Florida Public Service Commission, the Commission
Florida Statutes
Fiber to the Home
Fiber to the Node
Gigabits per second
International Broadband Electric Communications
Incumbent Local Exchange Company
Refers to traffic between the Metropolitan Trading Areas (MTAs)
Internet Protocol
Indiantown Telephone Company
Interexchange Company
kilobits per second
Local Exchange Company
Local Number Portability
Long Term Evolution
Megabytes
vii
Mbps
NARUC
NBP
NFBA
NOI
NPRM
NTIA
OPC
PRTC
Res
SGP
TDS
TRRO
UNE
USF
VoIP
VRS
WiMAX
Megabits per second
National Association of Regulatory Utility Commissioners
National Broadband Plan
North Florida Broadband Authority
Notice of Inquiry
Notice of Proposed Rulemaking
National Telecommunications and Information Administration
Office of Public Counsel
Puerto Rico Telephone Company
Residential
Service Guarantee Program
TDS Telecom / Quincy
Triennial Review Remand Order
Unbundled Network Elements
Universal Service Fund
Voice over Internet Protocol
Video Relay Service
Worldwide Interoperability for Microwave Access
viii
Executive Summary
This report fulfills the statutory requirements set forth in Section 364.386 and Section
364.161(4), Florida Statutes (F.S.), which require 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. The statute requires that the Commission
address specific topic areas within the realm of competition. On February 16, 2010, data
requests were sent to the 10 incumbent local exchange companies (ILECs) and 301 competitive
local exchange companies (CLECs) certificated by the Commission to operate in Florida,
requesting data as of December 31, 2009.
Analysis of the data produced the following conclusions:
•
Local competition has had little, if any, impact on the availability of universal service
and that residential customers continue to have options for telephone service.
•
While some CLECs have been able to provide functionally equivalent service,
intermodal competition has made competing in the wireline telecommunications
market more difficult.
•
Florida customers are able to obtain functionally equivalent services at comparable
rates, terms, and conditions.
•
Rate increases, in general, have had a negligible impact on the overall affordability of
telephone service.
•
The Commission finds no need to recommend changes to the definition of basic local
service at this time.
Wireline Competition
The following data relate exclusively to the ILEC and CLEC wireline market and do not
reflect the number of wireless and Voice over Internet Protocol (VoIP) subscribers in Florida.
Overall, the residential market, which accounts for 55 percent of all access lines, is slightly larger
than the business market in Florida. The report addresses changes in the telecommunications
market for the period January 1, 2009, through December 31, 2009. Significant findings relating
to the wireline market as of December 2009 include:
CLEC Market Share
•
CLECs provided service with a total (residential and business) market share of 14
percent, an increase from 12 percent in December 2008.
•
CLEC residential market share increased to 4 percent, up from 3 percent in December
2008.
1
•
CLEC business market share remained at 25 percent in 2008 and 2009.1
CLEC Access Lines
•
CLEC business lines accounted for 83 percent of all CLEC access lines in 2009.
•
Total CLEC access lines decreased by 2 percent from December 31, 2008 to
December 31, 2009. This percentage reflects a 32 percent increase in residential lines
and a decrease in business lines of 7 percent.
•
CLEC Residential access lines increased 32 percent for the CLECs in 2009.
•
While the market share of CLEC business lines remained the same from December
31, 2008 to December 31, 2009, access lines decreased 7 percent in 2009.
ILEC Access Lines
•
ILEC residential lines accounted for 61 percent of all ILEC access lines in 2009.
•
Total ILEC access lines decreased by 12 percent from December 31, 2008 to
December 31, 2009. This percentage reflects a 15 percent decrease in residential
lines and a 7 percent decrease in business lines.
•
Residential access lines decreased 16 percent for AT&T, 17 percent for Verizon, and
12 percent for CenturyLink from December 31, 2008 to December 31, 2009.
•
Residential access lines decreased 4 percent for the rural ILECs from December 31,
2008 to December 31, 2009. This decline followed a 7 percent decrease in lines from
December 2007 to December 2008.
•
AT&T, Verizon, and CenturyLink experienced a decrease in business access lines
between 2008 and 2009, while the rural ILECs showed a slight increase from 2008 to
2009.
1
Since 2007, access lines of the ILEC-affiliated CLECs (and those of the CenturyLink-affiliated CLEC) are
accounted for by assigning them as ILEC lines if they serve customers within the affiliated ILEC territory or CLEC
lines if they serve customers outside the affiliated ILEC territory.
2
Figure E-1. Access Line Composition by Company Type
Source: Responses to FPSC data requests (2010)
Figure E-2. Access Line Composition for Residential & Business Line Types
Source: Responses to FPSC data requests (2010)
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
and VoIP customers in Florida dwarfs the number of wireline access lines served by CLECs.
Forty-seven CLECs reported providing VoIP service and supplied VoIP line data in response to
3
the 2010 FPSC Local Competition data request. Three ILECs furnished VoIP data. Highlights
relating to VoIP, wireless, and broadband services include:
Wireless
•
Approximately 16.2 million wireless handsets were in service in Florida as of
December 2008, the most current data available.2
•
The Centers for Disease Control (CDC) estimates that nearly 24.5 percent of U.S.
households are wireless-only as of December 2009.3
•
Prepaid market share grew to 20.9 percent in 2009, representing a growth rate that
was nearly 4 times greater than post-paid wireless phone plans.4
VoIP
•
An estimated 1.8 million residential VoIP subscribers were in Florida as of December
2009, an increase of 12.5 percent over the 1.6 million estimated in 2008.
•
Forty-seven CLECs and 3 ILECs voluntarily reported 252,207 VoIP lines to the
FPSC in response to its 2010 Local Competition data request.
•
The Florida Cable Telecommunications Association (FCTA) reported 1.4 million
residential cable digital voice (VoIP) subscribers as of December 2009, an increase of
15 percent from the number reported for December 2008.
Broadband
•
Federal Communications Commission (FCC) statistics show that Florida’s broadband
connections reached approximately 6.7 million as of December 2008.5
•
Over half of those connections are at download speeds of 3 Mbps or greater;
however, fewer than 10 percent of those connections are greater than or equal to 10
Mbps.
2
FCC, "Local Telephone Competition: Status as of December 31, 2008,"June 2010, Table 17,
<http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-299052A1.pdf>, accessed on July 8, 2010.
3
S.J. Blumberg, J.V. Luke, “Wireless Substitution: Early Release of Estimates From the National Health Interview
Survey, July - December 2009,” December 16, 2009, p. 1,
<http://www.cdc.gov/nchs/data/nhis/earlyrelease/wireless201005.pdf>, accessed on May 12, 2010.
4
Craig Moffet, “Wireless 2010: Like Déjà vu, All Over Again Industry Growth Now Below 3 percent, and
Estimates (Again) Look Too High,” Bernstein Research, February 26, 2010,
<http://reports.bernsteinresearch.com/researchlinks/view.aspx?eid=xzB2wBUF31cKyEnY7cnXBoNUPcAFcejNfPrt
WnFC6hUPBkdjbKQ7Gi2gmPiBF9rs>, accessed on March 12, 2010.
5
FCC, “High-Speed Services for Internet Access: Status as of December 31, 2008,” released February 2010, Table
14, <http://www.fcc.gov/Daily_Releases/Daily_Business/2010/db0212/DOC-296239A1.pdf>, accessed April 19,
2010.
4
•
Residential subscribership in Florida reached 63 percent as of December 31, 2008,
which is 4 percent below the current national average.6
•
There are 93 providers of high-speed Internet access in Florida, including 44 digital
subscriber line (DSL) providers, 19 cable providers, 31 fiber providers, and 6 mobile
wireless providers.7
•
Wireless broadband services represent the fastest growing segment of the broadband
market.
Florida’s communications market continues to exhibit competitive characteristics.
Estimates of wireless-only households have increased from prior years, and in the most recent
reporting period, Florida cable companies expanded the number of VoIP customers served.
These facts, coupled with continued residential access line losses by ILECs, suggest an active
market for voice communications services in many areas of Florida.
6
7
Ibid.
The sum of the individual parts exceeds the total because of overlap of service offerings.
5
6
Chapter I. Introduction and Background
Chapter 364, Florida Statutes (F.S.), establishes the basis by which the Florida Public
Service Commission (FPSC or the Commission) regulates wireline telecommunications
companies. Commission oversight is primarily focused on traditional local telephone
companies, known as incumbent local exchange companies (ILECs). Competitors to the ILECs,
known as competitive local exchange companies (CLECs), and interexchange companies (IXCs)
are subject to minimal regulation.
The Commission does not regulate wireless
telecommunications, broadband services, 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., requires that the report
address the following six issues:
1. The overall impact of local exchange telecommunications competition on the
continued availability of universal service.
2. 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.
3. The ability of customers to obtain functionally equivalent services at comparable
rates, terms, and conditions.
4. The overall impact of price regulation on the maintenance of reasonably affordable
and reliable high-quality telecommunications services.
5. What additional services, if any, should be included in the definition of basic local
telecommunications services, taking into account advances in technology and market
demand?
6. Any other information and recommendations that may be in the public interest.
A 1997 amendment to Section 364.161(4), F.S., also requires a summary of all
complaints filed by CLECs against ILECs. The list of complaints is found in Appendix D on
page 117.
As of December 31, 2009, 10 ILECs and 301 CLECs were certificated by the
Commission to operate in Florida. Of the 301 certificated CLECs, only 128 provided service.
7
A.
Provisions and Goals of Chapter 364, Florida Statutes, and the
Telecommunications Act of 1996
1. Chapter 364, Florida Statutes
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.”
CLECs are subject to minimal Commission oversight. Each CLEC is required to file a
price list if it offers basic local telecommunications service. In addition, Section 364.337(2),
F.S., states in part, “The basic local telecommunications service provided by a competitive local
exchange telecommunications company must include access to operator services, ‘911’ services,
and relay services for the hearing impaired.” If a CLEC provides basic local telecommunications
services, the company must provide a flat-rate pricing option for that service. The statute states
that “mandatory measured service for basic local telecommunications services shall not be
imposed.”
In 2009, the Florida Legislature revised parts of Chapter 364, F.S., to further streamline
the oversight of ILECs by the FPSC. The new law redefined basic service to include only singleline flat-rate residential service without any additional features, either priced individually or as
part of a combination of services (including unregulated services such as wireless or video
services). Flat-rate, single-line business subscribers and multi-line residential subscribers are no
longer considered basic service customers. In addition, the statute no longer requires companies
to file tariffs, now referred to as schedules, with the FPSC. Companies are now permitted to
publish electronic schedules containing rates, terms, and conditions of service.
2. Federal Telecommunications Act of 1996
The federal Telecommunications Act of 1996 (the 1996 Act or Act) established a national
framework to enable CLECs to enter the local telecommunications marketplace. The Federal
Communications Commission’s (FCC’s) Local Competition Order specified that opening the
local exchange and exchange access markets to competition was “intended to pave the way for
enhanced competition in all telecommunications markets.”8 The FCC expected opening markets
to “blur traditional industry distinctions and bring new packages of services, lower prices, and
increased innovation to American consumers.” Not only have CLECs entered the local market,
but less traditional providers, such as cable, wireless, and broadband communications providers,
have also entered this market using their own facilities for new technologies to compete against
traditional wireline providers for a share of the market.
8
FCC 96-325, CC Docket No. 96-95, Implementation of the Local Competition Provisions in the
Telecommunications Act of 1996, First Report and Order, released August 8, 1996, ¶ 4.
8
The 1996 Act established three methods by which CLECs could enter the local exchange
market: resale, leasing of unbundled network elements (UNEs), and investing in their own
facilities. CLECs must either use an ILEC’s local loops, build their own facilities, purchase or
lease facilities from other CLECs, or enable facilities currently in place (for example, cable
networks) to provide local telephone service. The 1996 Act did not address market entry
strategies for non-wireline competitors.
B. Methodology
As in prior years, the Commission prepared this report using responses by CLECs and
ILECs to the Commission’s data requests. Commission staff also used additional resources,
including FCC reports, industry reports, and financial analyses.
The response rate for CLECs for this report was 98 percent. The response rate for ILECs
remains steady at 100 percent. Companies that did not respond by April 7, 2010, were mailed a
second reminder letter. Commission staff also telephoned and e-mailed the CLECs that did not
respond as of the April 15 deadline. Enforcement actions are underway against CLECs that did
not respond to the 2010 data request. It is unlikely that a 100 percent CLEC response rate can be
achieved because some CLECs go out of business but do not notify the Commission; however,
the Commission’s goal is to achieve a response rate as close to 100 percent as possible.
The analyses that follow are based on the information provided by the ILECs and the
reporting CLECs. As in previous years, precise market share calculations are not possible
because some CLECs failed to respond. The FPSC believes the collective market share of the
CLECs failing to file is statistically insufficient to have a significant effect on the analyses.
The Commission recognizes the limitations of data-gathering efforts from wireless, VoIP,
and broadband providers. While some providers of these services voluntarily furnished data to
enhance the accuracy of this report, these providers are beyond the jurisdiction of the
Commission and cannot be compelled to contribute.
9
10
Chapter II. Communications Market Overview
A. Economy
The recession that began in the second half of 2008 continued through the first half of
2009, affecting all sectors of the economy, including telecommunications. During the first
quarter of 2009, the economy contracted 6.4 percent (as measured by gross domestic product),
but by the second quarter of 2009, the contraction had slowed to 0.7 percent.9 While the
economy began to grow again in the third and fourth quarters of 2009, consumer confidence and
unemployment limited economic growth.
Florida’s economy has continued to struggle throughout 2009. The unemployment rate
in Florida was worse than the national average during each month of 2009, and the disparity has
widened in the first four months of 2010.10 In April 2010, the unemployment rate in Florida
reached 12 percent, compared to the national average of 9.9 percent.
After a one-year decline, Florida’s population is estimated to have increased by 23,000
residents by April 1, 2010, compared to a year earlier.11 Population statewide dropped in 2009,
for the first time in more than half a century, by about 57,000 residents. Population experts at
the University of Florida’s Bureau of Economic and Business Research (BEBR) suggest that the
decline appears to be a one-year event triggered by the recession. BEBR estimates that Florida’s
population will have grown to about 18.8 million in 2010.
During 2009, many consumers sought to reduce discretionary spending by forgoing the
purchase of some products or services, including telecommunications and information services.
The economy was likely a contributing factor to Florida ILECs losing approximately 1 million
access lines, or roughly 11 percent of their wireline market in 2008 and then again in 2009. By
comparison, competitive carriers lost approximately 21,000 access lines in 2009. This loss
represents a two percent decline in the CLEC wireline market. Nationally, AT&T and Verizon
have offset some access line losses through increased wireless subscriptions.
B. Incumbent Carriers
AT&T, CenturyLink, and Verizon are the largest ILECs providing wireline service in
Florida. All of these providers continued to experience access line losses in both the residential
and business sectors of the national wireline market in 2009. Verizon and AT&T are also the
largest wireless carriers nationwide. Each increased wireless subscribership in 2009, but at a
9
“Gross Domestic Product, 1st quarter 2010 (advanced estimate),” U.S. Department of Commerce, Bureau of
Economic Analysis News Release, April 30, 2010, <http://www.bea.gov/newsreleases/national/gdp/2010/pdf/
gdp1q10_adv.pdf>, accessed on May 17, 2010.
10
United States Department of Labor, Bureau of Labor Statistics,
<http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LASST12000003>, &
<http://data.bls.gov/PDQ/servlet/SurveyOutputServlet?data_tool=latest_numbers&series_id=LNS14000000>,
accessed on May 21, 2010.
11
Cathy Keen, “Florida expected to start adding residents again after population decline,” University of Florida
News, March 2, 2010, <http://news.ufl.edu/2010/03/02/florida-population-4/>, accessed on May 24, 2010.
11
reduced rate from the previous year. Various market analysts have begun to question whether
wireless subscriptions and revenues, including wireless data, will continue to grow enough to
offset wireline revenue losses.12, 13 As carriers struggle to find market segments of potential
growth, many have looked inward for more efficient ways to provide service with fewer
employees. AT&T ended 2009 with 281,000 employees,14 while Verizon had 223,000
employees.15 Collectively, the remaining national large wireline carriers employ another half a
million. But over the past 2 years, AT&T and Verizon have eliminated a combined 54,000
positions according to analysts at Bernstein Research.16 It is unclear if these reductions will
adversely affect customer service and service quality in the intermediate to long-term.
Nationally, AT&T reported losses of approximately 6 million local phone lines from the
end of 2008 to the end of 2009. Residential lines fell 13.8 percent during this period and
business lines dipped 7.8 percent.17 Despite these access line losses and the recession, nationally
AT&T experienced only a 0.8 percent reduction in operating revenues for 2009 due to revenues
from wireless and data services.18 AT&T’s mobile phone revenue increased 10 percent, or $4.5
billion, from 2008 to 2009. Revenue from the mobile phone market represents 40 percent of the
company’s overall earnings.19 Total operating revenues for the first quarter of 2010 increased by
less than one percent when compared to the first quarter of the previous year.20 In Florida,
residential lines fell by 16 percent for AT&T, and business lines dropped 9.9 percent.21
Similarly, Verizon lost approximately 3.6 million access lines nationally in 2009.22
However, Verizon increased its number of wireline broadband subscribers by 6.3 percent and
increased the number of FiOS TV customers by 49 percent to almost 3 million nationwide.23
With its acquisition of Alltel, Verizon Wireless became the largest wireless service provider in
12
Craig Moffett, “Weekend Media Blast: The Process of Elimination,” Bernstein Research, April 30, 2010.
Eric Savitz, “U.S. Wireless Voice Market Hits Saturation Point, Auriga Says,” Tech Trader Daily, March 30,
2010, <http://blogs.barrons.com/techtraderdaily/2010/03/30/us-wireless-voice-market-hits-saturation-point-aurigasays/>, accessed on May 26, 2010.
14
AT&T Form 10-K, December 31, 2009, p. 7, <http://www.sec.gov/Archives/edgar/data/732717/00007327171
0000013/ye09_10k.htm>, accessed on May 24, 2010.
15
Verizon Communications Inc., Form 10-K, December 31, 2009, p. 3 <http://www.sec.gov/Archives/edgar/data/
732712/000119312510041685/d10k.htm>, accessed on May 24, 2010.
16
Craig Moffett, “Weekend Media Blast: The Process of Elimination,” Bernstein Research, April 30, 2010.
17
AT&T Form 10-K, December 31, 2009, Exhibit 13, p. 11,
,http://www.sec.gov/Archives/edgar/data/732717/000073271710000013/ex13.htm., accessed on May 24, 2010.
18
Ibid, p. 2.
19
AT&T Form 10-K, December 31, 2009, p. 6,
<http://www.sec.gov/Archives/edgar/data/732717/000073271710000013/ye09_10k.htm>, accessed on May 24,
2010.
20
AT&T Inc., Form 10-Q, March 31, 2010, p.2, <http://www.sec.gov/Archives/edgar/data/732717/0000732717100
00033/att1q10.htm>, accessed on May 24, 2010.
21
Responses to Local Competition Data Request for 2009 and 2010.
22
Verizon Communications Inc., Form 10-K, December 31, 2009, EX-13, Operating Revenues and Selected
Operating Statistics <http://www.sec.gov/Archives/edgar/data/732712/000119312510041685/dex13.htm>, accessed
on May 24, 2010.
23
Verizon Communications Inc., Form 10-K, December 31, 2009, EX-13, Operating Revenues and Selected
Operating Statistics, <http://www.sec.gov/Archives/edgar/data/732712/000119312510041685/dex13.htm>, accessed
on May 24, 2010.
13
12
the United States in terms of the total number of customers and revenues.24 During 2009,
revenues from wireless services offset declining revenue in the traditional wireline voice market.
As a result, Verizon’s total annual revenues for 2009 increased 10.7 percent from 2008.25 Its
total operating revenues for the first quarter of 2010 increased approximately one percent when
compared to first quarter 2009.26 In Florida, Verizon experienced access line losses that are
comparable to those of AT&T in the residential and business markets in terms of percent lost.27
CenturyLink lost approximately 700,000 switched access lines in the U.S. in 2009 from
the total a year earlier.28 This figure represents an approximate 9 percent loss in access lines.
Unlike AT&T and Verizon, CenturyLink relies on reselling wireless and video services provided
by other companies.29 However, CenturyLink has purchased 69 wireless spectrum licenses
nationwide and is considering developing its own wireless voice and data service capabilities.30
CenturyLink reports that a trial phase of its wireless network will begin in late 2010 or early
2011. CenturyLink’s residential access line loss in Florida was 12 percent, and access line losses
for business fell by 9 percent.31
Each rural carrier also experienced contraction in their respective service areas. Rural
carriers in Florida saw their residential access lines fall by 4 percent in 2009.32 In Florida,
Windstream is the largest of the “rural” ILECs. As of December 31, 2009, Windstream served
more than 3 million communications customers in 16 states. Additionally, Windstream provides
data services to approximately 1.1 million high-speed Internet access customers.33 Windstream’s
access lines nationwide increased less than 1 percent in 2009, when most wireline carriers lost
access lines.34 The company also reported that total operating revenues for the first quarter of
2010 increased by 12 percent when compared to the previous year.35
In contrast, FairPoint Communications (FairPoint) has had significant financial problems.
FairPoint is a rural carrier serving 18 states and has more than 39,000 access lines in Florida.
FairPoint’s financial problems stem primarily from its acquisition of exchanges from Verizon in
24
Verizon Communications Inc., Form 10-K, December 31, 2009, p. 3, <http://www.sec.gov/Archives/edgar/data/
732712/000119312510041685/d10k.htm>, accessed on May 24, 2010.
25
Verizon Communications Inc., Form 10-K, December 31, 2009, EX-13, p. 1, <http://www.sec.gov/Archives/edgar
/data/732712/000119312510041685/dex13.htm>, accessed on May 24, 2010.
26
Verizon Communications Inc., Form 10-Q, March 31, 2010, p. 2, <http://www.sec.gov/Archives/edgar/data/
732712/000119312510096291/d10q.htm>, accessed on May 24, 2010.
27
Response to Local Competition Data Request for 2009 and 2010.
28
Embarq Form 10-K, December 31, 2008, p. 23, < http://www.sec.gov/Archives/edgar/data/1350031/0001193125
09028860/d10k.htm>, accessed on May 24, 2010, and CENTURYTEL INC Form 10-K, December 31, 2009, p. 8,
<http://www.sec.gov/Archives/edgar/data/18926/000001892610000004/form10k.htm>, accessed on May 24, 2010.
29
CENTURYTEL INC Form 10-K, December 31, 2009, p. 31, <http://www.sec.gov/Archives/edgar/data/18926/
000001892610000004/form10k.htm>, accessed on May 24, 2010.
30
Ibid, p 12.
31
Response to Local Competition Data Request for 2009 and 2010.
32
Ibid.
33
Windstream Corp., Form 10-K, December 31, 2009, p. 2, < http://www.sec.gov/Archives/edgar/data/1282266/000
119312510038834/d10k.htm >, accessed on May 24, 2010.
34
Ibid, p. F-7.
35
Windstream Corp., Form 10-Q, March 31, 2010, p.2, < http://www.sec.gov/Archives/edgar/data/1282266/
000119312510110935/d10q.htm>, accessed on May 24, 2010.
13
Maine, New Hampshire, and Vermont in 2007.36 On May 5, 2009, FairPoint stated in its first
quarter 2009 Report that it was, “considering engaging a financial advisor to evaluate its current
capital structure and to explore options with respect to a potential restructuring.” Five months
later, FairPoint Communications filed for Chapter 11 bankruptcy protection.37 FairPoint has
asserted that the day-to-day operations of the company will not be affected.
Despite the decline in wireline access lines and revenues, and the growing emphasis on
wireless revenues for AT&T and Verizon, wireline telecommunications remains the gold
standard for service quality and reliability. Cable and wireless carriers are still working to
harden their networks against natural and manmade disasters that traditional wireline networks
have, in many cases, sustained more effectively. Moreover, wireless carriers continue to be
heavily dependent on the ILECs’ wireline network, as the majority of wireless call transport
occurs over the wireline network, not over wireless facilities, a function commonly referred to as
backhaul. While the sustainability of the wireline network appears to be tenuous, it remains a
crucial element in the mix of communications technologies of the modern day.
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.38 By comparison, 54 mergers and acquisitions occurred in 2009.39 This figure
represents a decline of 14 percent from the previous year. Notable transactions of interest to
Florida for 2009 are described below.
a. Embarq / CenturyTel
On October 26, 2008, CenturyTel, Inc. (CenturyTel) agreed to acquire Embarq in a stockfor-stock transaction. By the end of 2008, CenturyTel operated approximately 2 million
telephone access lines, primarily in rural areas and small to mid-size cities in 23 states. More
than 68 percent of CenturyTel’s lines are located in Missouri, Wisconsin, Alabama, Arkansas,
and Washington.40 Embarq serves approximately 5.7 million access lines nationwide, with a
significant presence in Florida, North Carolina, Nevada, and Ohio.41 By the end of 2008,
Embarq had 1.5 million access lines in Florida.42 All of the affected 33 state regulatory agencies
36
FairPoint Communication, Form 10-Q/A, September 30, 2009, p. 16, < http://www.sec.gov/Archives/edgar/data/
1062613/000104746910004505/a2196978z10-qa.htm>, accessed on May 24, 2010.
37
“FairPoint Reaches Agreement with Bank Lenders – Initiates Voluntary Chapter 11 Proceeding,” FairPoint News
Release, October 26, 2009, <http://fairpoint.com/Images/10%2026%202009%20FP%20Balance%20Sheet%20
Restructuring%20NR%20-%20FINAL_tcm52-7983.pdf >, accessed on May 24, 2010.
38
FCC, “2006 Completed Domestic Section 214 Transfer of Control Transactions,”
<http://www.fcc.gov/wcb/cpd/214Transfer/214completed2006.html>, accessed on March 16, 2010.
39
FCC, “2009 Completed Domestic Section 214 Transfer of Control Transactions,” <http://www.fcc.gov/wcb/
cpd/214Transfer/214completed2009.html>, accessed on March 16, 2010.
40
CenturyTel, Inc., Form 10-K, December 31, 2008, p. 4, <http://www.sec.gov/Archives/edgar/data/
18926/000001892609000008/form10-k.htm>, accessed on June 12, 2009.
41
Embarq Corporation, Form 10-K, December 31, 2008, pp. 2-3, <http://www.sec.gov/Archives/edgar/data/
1350031/000119312509028860/d10k.htm>, accessed on April 20, 2009.
42
Embarq’s Redacted Response to FPSC’s 2009 ILEC Local Competition Data Request.
14
have approved the merger.43 The FPSC approved the joint application for the transfer of control
of Embarq to CenturyTel on March 23, 2009.44 The FCC approved the merger with conditions
on June 25, 2009.45 The merged company agreed not to increase special access rates for one
year to provide CLECs with a period of stability in their interconnection agreements. The
broadband commitment promises 100 percent coverage for single-line residential and business
lines within 3 years.46 Ninety percent of its broadband commitment is to be achieved using
wireline technologies, while the remaining ten percent of consumers will have access to
broadband services using alternative technologies including satellite and terrestrial wireless
broadband technologies. The wireline broadband speed commitments include promises to reach
87 percent of lines with 1.5 Megabits per second (Mbps) service and 78 percent of lines with 3
Mbps service within 2 years.47 The newly merged company is called CenturyLink.48
b. CenturyLink / Qwest
The boards of directors of both CenturyLink and Qwest Communications Company, LLC
(Qwest) announced on April 22, 2010, approval of an agreement under which CenturyLink
would acquire Qwest in a tax-free, stock-for-stock transaction.49 As of December 31, 2009,
CenturyLink and Qwest served local markets in 37 states with approximately 17 million access
lines, 5 million broadband customers, 1.4 million video subscribers, and 850,000 wireless
consumers. The transaction is subject to regulatory approvals from the Department of Justice,
the FCC, and affected state public service commissions. The transaction is subject to the
approval of CenturyLink and Qwest shareholders. The companies anticipate finalizing the
merger in the first half of 2011.
c. Birch / Cleartel
In May 2009, Birch Communications announced a definitive agreement to acquire the
customers and network assets of Cleartel Communications, both CLECs.50 There were over
43
Kevin Olin, “CenturyTel and Embarq Receive All Necessary State Approvals for Merger,” Embarq Press Release,
May 29, 2009, <http://www.centurytelembarqmerger.com/pdf/pressreleases/WA%20and%20PA%20FINAL%205_
29_09.pdf>, accessed on June 1, 2009.
44
FPSC Order No. PSC-09-0126-PAA-TP, issued March 3, 2009 in Docket No. 080692-TP, In re: Joint application
for approval of indirect transfer of control of telecommunications facilities by Embarq Corporation, CenturyTel,
Inc., Embarq Florida, Inc., and Embarq Payphone Services, Inc.
45
FCC 09-54, WC Docket No. 08-238, Applications Filed for the Transfer of Control of Embarq Corporation to
CenturyTel, Inc., Memorandum Opinion and Order, June 25, 2009,
<http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-09-54A1.pdf>, accessed June 25, 2009.
46
Ibid, Appendix C.
47
Ibid.
48
“CenturyTel and EMBARQ Receive All Necessary State Approvals for Merger,” CenturyTel Press Release, May
29, 2009, <http://ir.centurytel.com/phoenix.zhtml?c=112635&p=irol-newsArticle_Print&ID=1293827&highlight=>,
accessed on June 1, 2009.
49
“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 22, 2010.
50
Allan Samson, “Birch Communications Announces Acquisition of Cleartel Communications’ Customer and
Network Assets,” Birch Communications Press Release, May 12, 2009,
<http://www.birch.com/about/05122009.aspx>, accessed on June 3, 2009.
15
50,000 business and residential Florida access lines included in the acquisition.51 Cleartel
subsidiaries include Supra Telecommunications and Information Systems, predominately located
in South Florida. The FCC approved the acquisition on July 2, 2009.52
d. Windstream / NuVox
On November 3, 2009, Windstream Corporation announced that it had entered into an
agreement to acquire NuVox, Inc., a privately held competitive local exchange carrier.53
Windstream, an ILEC in northeast Florida, provides local service in 15 other states, primarily in
rural areas.54 Nationwide, Windstream provides local and long distance telephone services to
approximately 3 million residential and business access lines.55 NuVox offers service primarily
to business customers in small and medium-sized markets throughout 16 contiguous Midwestern
and Southeastern states, including Florida. NuVox is the largest competitive local exchange
carrier in Florida. The acquisition by Windstream will give the company access to consumers in
several cities outside of its incumbent service area.56
C. Wireless
Wireless technology has transitioned from being a tool to transmit voice communication
to a broadband service capable of delivering voice, video, and data. The recent growth in the
wireless sector is attributable primarily to the sale and use of smartphones and the increasing
popularity of prepaid subscriptions. Applications and software for use with smartphones
continue to evolve. Wireless technology has made it possible to manage entire businesses
through one handheld wireless device.
To compensate for the growing use of data transfer through wireless channels, carriers
are working to increase the speed and capacity of their networks. Third Generation (3G) and
Fourth Generation (4G) networks are industry standards now considered necessary to compete in
the wireless data arena and network operators are progressing with network upgrades to meet
growing demand.
Nationally, subscriptions to wireless services more than doubled in the last 8 years, rising
from 40 percent of the population having a wireless handset in service as of June 2001 to 85
51
Responses to the FPSC 2009 Local Competition data request by subsidiaries of Cleartel Communications.
FCC Public Notice, Notice of Domestic Section 214 Authorization Granted, WC Docket No. 09-67, DA 09-1501,
released July 2, 2009, <http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-09-1501A1.doc>, accessed on March
19, 2010.
53
“Windstream to acquire NuVox,” Windstream News Release, November 3, 2009,
<http://www.technologycouncil.com/wp-content/uploads//2009/11/NuVox-Release.pdf>, accessed on March 18,
2010.
54
FCC, Public Notice, WC Docket No. 09-211, DA 09-2523, released December 2, 2009,
<http://hraunfoss.fcc.gov/edocs_public/attachmatch/DA-09-2523A1.pdf>, accessed on March 18, 2010. Those
states are Alabama, Arkansas, Georgia, Kentucky, Mississippi, Missouri, Nebraska, North Carolina, New York,
New Mexico, Ohio, Oklahoma, Pennsylvania, South Carolina, and Texas.
55
Ibid.
56
Windstream ILEC / CLEC Map, <http://www.windstream.com/images/maps/coverage_maplarge.jpg>, accessed
on March 18, 2010. Those cities include Destin, Fort Myers, Ft. Lauderdale, Jacksonville, Maitland, Miami,
Orlando, Sarasota, Tampa, West Palm Beach, and Winter Haven.
52
16
percent as of December 2008.57 With near market saturation for wireless subscription service,
carriers have a shrinking pool of new wireless customers from which to pull. Because of these
limitations, carriers are striving to provide the latest technology available to lure existing
wireless customers from competing carriers. The technology-derived capabilities of wireless
handsets have spurred increased usage of text and data services. CTIA, the international wireless
carrier association, reported that in the last half of 2009, consumers used more than 1.1 trillion
voice minutes and sent almost 5 billion text messages. Wireless service providers garnered
$41.5 billion in revenue from data services in 2009, a 29.6 percent increase from 2008 data
revenues.58 The industry, however, experienced a decline in the rate of growth for data revenues
of approximately 25 percent from the prior year.
Overall revenue growth within the wireless market has also slowed in the past year,
growing only 2.9 percent.59 Usage of wireless data services is increasing faster than the revenue
stream from those services. Industry analysts predict that overall revenue growth in 2010 will
decrease to approximately 2.7 percent.60 Because wireless revenues are not keeping pace with
the consumption of wireless data services, some analysts expect that carriers will soon release
new pricing plans for data usage, including tiered pricing plans.61 Verizon Wireless, for
example, currently offers a tiered data plan. Its basic multimedia plan includes 25 Megabytes of
data for $9.99 per month, while its premium data plan offers unlimited data for $29.99 per
month.62 Changes in pricing of data services may enable wireless carriers to slow or stop the
current decline in revenue growth. AT&T now offers similar options with their DataPlus and
DataPro plans. 63
In addition to recovering revenue, tiered data plans address the depleting amount of
spectrum that is available for commercial use. The Obama administration is proposing to
transfer 500 megahertz of spectrum from federal and private use to primarily commercial use
over the next 10 years. That is nearly double the amount that is currently available. The
proposal coincides with the FCC’s National Broadband Plan (NBP or Plan). Portions of the plan
57
FCC, "Local Telephone Competition: Status as of December 31, 2008,"June 2010, Table 17,
<http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-299052A1.pdf>, accessed on July 8, 2010.
58
“CTIA – The Wireless Association® Announces Semi-Annual Wireless Industry Survey Results April 1, 2009,”
CTIA Press Release, April 1, 2009, <http://www.ctia.org/media/press/body.cfm/prid/1811>, accessed on March 14,
2010; “Wireless Quick Facts Year-End Figures,” CTIA, April 13, 2010, <http://www.ctia.org/advocacy/research/
index.cfm/AID/10323>, accessed on May 21, 2010>, accessed on May 21, 2010.
59
“CTIA Semi-Annual Wireless Industry Survey,” CTIA Press Release, March 23, 2010,
http://www.ctia.org/media/press/body.cfm/prid/1936, accessed on May 21, 2010.
60
Craig Moffet, “Wireless 2010: Like Déjà vu, All Over Again . . . Industry Growth Now Below 3%, and Estimates
(Again) Look Too High,” Bernstein Research, February 26, 2010, p. 1
<http://reports.bernsteinresearch.com/researchlinks/view.aspx?eid=xzB2wBUF31cKyEnY7cnXBoNUPcAFcejNfPrt
WnFC6hUPBkdjbKQ7Gi2gmPiBF9rs>, accessed on March 12, 2010.
61
Wailin Wong, “Mobile phone usage keeps growing,“ LA Times, March 25, 2010, <latimes.com/business/la-fitexts25-2010mar25,0,7410035.stor>, accessed on March 26, 2010.
62
Verizon Wireless, FamilyShare Plans, <http://www.verizonwireless.com/b2c/splash/planfamily.jsp.>, accessed on
May 27, 2010.
63
“AT&T Announces New Lower-Priced Wireless Data Plans to Make Mobile Internet More Affordable to More
People,” AT&T Press Release, June 2, 2010, <http://www.att.com/gen/press-room?pid=17991&cdvn
=news&newsarticleid=30854&mapcode=financial|Wireless>, accessed on June 14, 2010.
17
will require congressional approval, but if successful, will improve data and video transfers via a
wireless connection.64
Prepaid wireless service continues to attract consumers looking for value. Growth in the
prepaid market is expected to continue in 2010 at a rate of 18.2 percent. In contrast, post-paid
subscriber growth in 2010 is estimated to reach only 1.2 percent.65 Prepaid wireless providers
are expected to continue exerting pricing pressure on larger post-paid competitors.
D. VoIP
Voice over Internet Protocol (VoIP) services provided by cable companies, traditional
ILECs via fiber-to-the-home (FTTH) and fiber-to-the-node technologies, and providers of overthe-top services66 comprise the market for Internet Protocol (IP) or IP-based voice services.
AT&T and Verizon have upgraded their distribution infrastructure to fiber in order to provide
interactive digital services, including voice, but the cable companies continue to have an edge in
this segment of the communications market.
Nearly 65 percent of all Americans subscribe to some sort of broadband service and
nearly 85 percent subscribe to cable television service. The proliferation of bundled service
offerings has complicated the decision on what type of voice service best meets consumers’
needs. Factors such as mobility, broadband download speed, video clarity and choice, and
ultimately price, are more influential than before. At least in part, upgraded video products,
faster download speeds, and competitive bundled pricing arrangements have made cable
providers the dominant VoIP providers. As a result, consumers who view wireline, wireless, and
VoIP service as relative substitutes are likely to make the selection of preferred service provider
on the basis of something other than the characteristics of voice service. The fact that Comcast
became the third largest residential voice provider in late 2008 underscores the importance of
offering consumers a competitively priced bundled service package.
Verizon and AT&T now offer digital service packages comparable to cable offerings via
their FiOS and U-verse fiber-based services. These service offerings are not available in all
areas of their respective service territories, and each company has indicated that its capital
expenditures for fiber network upgrades are winding down. Cable providers managed to add
approximately 2.6 million voice customers nationwide in 2009, despite increased competition
64
Edward Wyatt, “Broadband Availability to Expand,” The New York Times, June, 27, 2010, <
http://www.nytimes.com/2010/06/28/technology/28broadband.html>, accessed on July 2, 2010.
65
Craig Moffet, “Wireless 2010: Like Déjà vu, All Over Again . . . Industry Growth Now Below 3%, and Estimates
(Again) Look Too High,” Bernstein Research, February 26, 2010, p. 8,
<http://reports.bernsteinresearch.com/researchlinks/view.aspx?eid=xzB2wBUF31cKyEnY7cnXBoNUPcAFcejNfPrt
WnFC6hUPBkdjbKQ7Gi2gmPiBF9rs>, accessed on March 12, 2010.
66
The term over-the-top in this report refers to voice providers that rely on the public Internet for transport of the
service.
18
from AT&T’s and Verizon’s digital services.67 AT&T added approximately 764,000 U-verse
Voice customers, and Verizon added 952,000 FiOS customers in 2009.68, 69
Over-the-top providers are much harder to gauge. Vonage, among the most well known
providers of this type, reported nationwide subscriber losses for the second straight year in 2009.
Skype and Google, the other most popular providers in this category, report significant
subscribership worldwide, but neither company reports subscribership data in a way that makes
reasonable comparisons possible. Furthermore, much of the traffic carried by Skype and Google
is considered peer-to-peer traffic and never reaches the public switched telecommunications
network.70 Some analysts believe that over-the-top services are more likely to be complementary
to other types of voice services rather than a substitute for them.
E. Broadband
The FCC released its National Broadband Plan outlining recommendations for updating
U.S. broadband infrastructure and increasing the number of Americans with high-speed Internet
access. The Plan establishes national goals for the deployment of broadband as well as
identifying critical steps necessary to achieve the stated goals. A primary goal enumerated in the
Plan is to provide broadband access to at least 100 million U.S. homes with actual download
speeds of at least 100 Mbps and actual upload speeds of at least 50 Mbps by 2020. The FCC and
the Department of Energy have already initiated proceedings to begin implementing aspects of
the Plan. Broadband usage and technologies continue to evolve as government policies develop.
Wireless broadband services continue to represent a significant and growing portion of
the data market. The wireless industry executives and analysts reported that in 2009 the amount
of data in text, e-mail messages, streaming video, music, and other services on mobile devices
surpassed the amount of voice traffic carried on wireless phones. Research over the past 2 years
has shown that the number of voice minutes per wireless user has fallen, whereas the number of
text messages per user increased by nearly 50 percent.71
The largest provider of FTTH technology, Verizon, has announced that it is winding
down its FiOS deployment, which will reach 18 million households by the end of 2010. Small,
independent telecommunications companies, broadband service providers, cable companies, and
municipalities have deployed FTTH service to more than 1.4 million homes across North
67
National Cable & Telecommunications Association, “Industry Data: Cable Phone Subscribers 1998-2009 (as of
December 2009),” <http://www.ncta.com/StatsGroup/OperatingMetric.aspx>, accessed on May 21, 2010.
68
AT&T, “Fourth Quarter Wireline Operational Highlights,” January 28, 2010, <http://www.att.com/gen/pressroom?pid=4800&cdvn=news&newsarticleid=30429>, accessed on February 1, 2010.
69
Verizon, “Q4 Investor Quarterly,” January 26, 2010, p. 18, <http://investor.verizon.com/financial/
quarterly/vz/4Q2009/4Q09Bulletin.pdf>, accessed on May 24, 2010.
70
Peer-to-peer traffic requires that both the called party and the calling party be online in order to converse.
71
Jenna Wortham, “Cellphones Now Used More for Data Than for Calls,” New York Times, May 13, 2010,
<http://www.nytimes.com/2010/05/14/technology/personaltech/14talk.html>, accessed May 25, 2010.
19
America.72 Over 750 mostly small, independent companies in North America are replacing their
copper lines with FTTH.73
Although fiber provides the arguably fastest broadband medium, its high cost and
relatively limited availability has allowed cable providers to gain an edge over the major
telecommunications companies. Most traditional telecommunications providers, including
AT&T and Verizon, are still reliant on digital subscriber line (DSL) service to serve the bulk of
their broadband subscribers and the companies’ DSL numbers have been decreasing as their
fiber-based products become available. Verizon lost 405,000 DSL customers in 2009, and
AT&T’s DSL customer base shrank by 407,000 the same year. The 2 largest cable companies,
Comcast and Time Warner Cable, now have 62 percent of the broadband subscribers served by
the 4 largest broadband providers, Comcast, Time Warner Cable, AT&T, and Verizon.74
F. Regulatory Factors
Changes to state and federal regulatory policy, as well as to state and federal law,
continue to influence telecommunications markets. Immediate measurable effects on the Florida
telecommunications market may not result from such changes, but significant impacts may
eventually appear.
1. Federal
In the first half of 2009, the FCC focused its efforts primarily on the digital television
transition. While the original transition date was February 17, 2009, Congress pushed it back to
June 12, 2009. During the transition, the FCC did not address a number of long outstanding
controversial reform measures, such as intercarrier compensation (ICC) and universal service.
This delay may have been exacerbated by the fact that two of the five Commissioners vacated
the Commission before the end of January. A third Commissioner left to head the Rural Utilities
Service in June. The FCC focused on non-controversial issues until the vacancies were filled
later in 2009.
The FCC shifted its focus for the second half of the year to address a Congressional
mandate to develop a national broadband plan. To develop the Plan, the FCC held 36 public
workshops and 9 public hearings. Issues raised during the workshops and hearings were further
refined and addressed through 31 public notices. The recommendations within the Plan are not
self-effectuating; the proposals within the purview of the FCC (as opposed to Congress,
executive branch agencies, and state and local governments) will likely proceed through the
standard rulemaking process where the FPSC and other interested parties can comment on
specific issues. The FCC has released a schedule of 63 proceedings that it intends to initiate
72
David St. John, “Survey: Hundreds of Local Telecoms Already Upgrading to Gigabit-Enabled Fiber Networks,”
FTTH Council Press Release, April 3, 2010, <http://www.ftthcouncil.org/en/newsroom/2010/04/14/surveyhundreds-of-local-telecoms-already-upgrading-to-gigabit-enabled-fiber-net>, accessed on June 10, 2010.
73
Ibid.
74
Craig Moffett, “Weekend Media Blast: The Process of Elimination,” Bernstein Research, April 30, 2010,
<http://reports.bernsteinresearch.com/researchlinks/View.aspx?eid=hvGc2w94rvWA8mSTcwVwTIKIYrYA%2bqk
R4pJNYsGWjsHgIJ9c32pKLVDhbM%2fCmls6>, accessed May 25, 2010.
20
before the end of 2010 relating to recommendations within the Plan. The Department of Energy
has initiated a broadband-related proceeding on smart grid in furtherance of the goals of the
plan.75
2. State
Two significant statutory changes became effective in 2009 that impacted FPSC rules
governing local exchange telecommunications carriers in Florida. First, as of January 1, 2009,
the carrier-of-last-resort obligation ended. The obligation had been imposed on all ILECs and
required them to furnish basic local exchange telecommunications service within a reasonable
time period to any person requesting such service within the company’s service territory. Rules
relating to this obligation were modified or repealed accordingly.
Second, effective July 1, 2009, revisions to Chapter 364, F.S., redefined basic local
telecommunications service. The Commission updated its service quality rules in accordance
with the new definition of basic local telecommunications service in October 2009.76
75
Federal Register, Department of Energy, Request for Information, “Implementing the National Broadband Plan by
Empowering Consumers and the Smart Grid: Data Access, Third Party Use, and Privacy,” Volume 75, No. 90, May
11, 2010, pp. 26203-26206.
76
FPSC Order No. PSC-09-0659-FOF-TP and Order No. PSC-09-0660-FOF-TP, Docket No. 080641-TP, In re:
Initiation of rulemaking to amend and repeal rules in Chapters 25-4 and 25-9, Florida Administrative Code (F.A.C.),
pertaining to telecommunications.
21
22
Chapter III. Status of Wireline Competition In Florida
A. Wireline Access Lines In Florida
1. 2009 Summary of Results
Since 2001, total traditional wireline access lines, ILEC and CLEC combined, have
declined 38 percent, from approximately 12 million in 2001 to 7.5 million as of December
2009.77 The decline began in 2001, and has occurred each year except for a slight gain in 2004.
From 2001 through December 2009, combined wireline residential access lines have declined by
51 percent, or 4.3 million lines, to a combined CLEC and ILEC total of 4.1 million.78 A decline
of more than 651,000 residential lines occurred in 2009.
From May 2001 to December 2009, combined ILEC and CLEC business access lines
have decreased by 399,000 lines to a total of 3.3 million lines, a decrease of 11 percent. Between
June 2001 and June 2006, business access lines increased slightly each year. Business access
lines began to decline and decreased by more than 265,000 lines, or 7 percent, between
December 2008 and December 2009. AT&T, Verizon, and CenturyLink all experienced
business access line losses in 2009. During the same time period, CLECs lost more than 63,000
business lines, representing a decrease of 7 percent.
The composition of ILEC and CLEC access lines served has also undergone a noticeable
shift since 2001. As of December 2009, total ILEC business lines were 39 percent of total ILEC
lines served, compared to 28 percent in 2001. CLEC business access lines were 83 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 VoIP services in lieu of traditional wirelines. The current recession has also
contributed to the decline. In addition, other factors such as the prevalence of bundled pricing
packages and the influence of services such as broadband, video, and mobility on the selection of
a voice service provider are contributing to the decline in residential wireline access lines.
As addressed more thoroughly in Chapter IV, both VoIP and wireless service are popular
choices across the nation and in Florida. The FPSC estimates 1.8 million residential VoIP
subscribers reside in Florida as of December 2009. The FCC reports that approximately 16.2
million wireless handsets are in use in Florida as of December 2008.79 Wireless and VoIP
service are increasingly popular among business customers as well and are, in part, responsible
for the business line decline.
77
VoIP connections reported by CLECs are not included in wireline CLEC market share analyses.
Market share calculations for 2007 were adjusted to correct a misclassification of lines. The impact on the
business market share was immaterial.
79
FCC, "Local Telephone Competition: Status as of December 31, 2008,"June 2010, Table 17,
<http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-299052A1.pdf>, accessed on July 8, 2010.
78
23
3. CLEC Market Composition
Table 3-1 shows a distribution for 2008 and 2009 of the number of CLECs by ranges of
residential access lines served. Three CLECs serve more than 20,000 residential access lines,
representing approximately 58 percent of the CLEC residential market for 2009. Only 1 CLEC
serves between 10,000 and 20,000 residential access lines. The 4 largest residential providers
constitute 68 percent of the CLEC residential market. The remaining CLECs represent 32
percent of the residential CLEC market. There are 53 CLECs that serve fewer than 1,000
residential access lines each.
Despite the increase in residential access lines served by CLECs, the number of CLECs
reporting access line data decreased from 74 in 2008 to 71 in 2009. The distribution of
residential access lines provided by CLECs has become more top heavy, with 68 percent of lines
served by 4 providers in 2009 compared to 61 percent served by the top four in 2008.
Table 3-1. Summary of CLEC Residential Access Line Providers
Number of Lines
20,000 +
2008
% of Total
Number of
CLEC Res
Providers
Lines
2
47%
2009
% of Total
Number of
CLEC Res
Providers
Lines
3
58%
10,000 - 20,000
1
8%
1
10%
1,000 - 10,000
18
32%
14
25%
Less than 1,000
53
13%
53
7%
Source: Responses to FPSC data requests (2009-2010)
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, 2009.80
Graphic 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.
80
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.
24
1. CLEC Market Share
a. Florida
Calculations based on responses to the Commission’s data request indicated the overall
CLEC market share was 14 percent as of December 2009. Figure 3-1 provides the CLEC market
share percentages for total access lines (combined residential and business lines) from 2003
through 2009.
Figure 3-1. Florida CLEC Market Share
20%
18%
17%
17%
16%
15%
14%
12%
11%
10%
5%
0%
Jun-03
Jun-04
Jun-05
Jun-06
Source: Responses to FPSC data requests (2003-2010)
25
Dec-07
Dec-08
Dec-09
Figure 3-2 shows the CLEC residential and business market shares for the same period.
•
CLEC residential market share increased to 4 percent, up from 3 percent in 2008.
•
CLEC business market share remained steady at 25 percent.
The market share percentages mask the fact that both ILEC and CLEC business access
lines declined over the reporting period. CLECs showed an increase in residential access lines in
2009 and continue to increase their share of a smaller residential wireline market from 2008
levels.
Figure 3-2. Florida Residential & Business CLEC Market Share
40%
34%
35%
30%
30%
33%
30%
25%
23%
25%
25%
20%
15%
10%
9%
10%
9%
7%
3%
5%
3%
4%
0%
Jun-03
Jun-04
Jun-05
Jun-06
Residential
Business
Source: Responses to FPSC data requests (2003-2010)
26
Dec-07
Dec-08
Dec-09
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
2006 through 2009. CLEC market share increased in AT&T’s and Verizon’s territories but
decreased slightly in CenturyLink’s territory. CLEC market share remained relatively
unchanged from last year in rural ILEC territories.
Figure 3-3. Florida CLEC Market Share by ILEC Service Territory
25%
21%
20%
16%
15%
15%
13%
12%
15%
15%
13%
10%
9%
9%
8%
8%
5%
2% 2% 2% 2%
0%
AT&T
Verizon
Jun-06
CenturyLink
Dec-07
Dec-08
Rural ILECs
Dec-09
Source: Responses to FPSC data requests (2006-2010)
b. National
According to the FCC’s most recent report on local competition, the nationwide CLEC
market share was 27 percent as of December 31, 2008. The FCC reports Florida’s CLEC market
share at 27 percent as of December 2008.81 The December 2008 FCC Local Competition Report
is the first report that includes VoIP subscriber lines in the market share calculations. This
accounts for the majority of the difference in market share totals calculated by the Commission.
81
FCC, "Local Telephone Competition: Status as of December 31, 2008,"June 2010, Table 11,
<http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-299052A1.pdf>, accessed on July 8, 2010.
27
2. Access Line Overview
Local exchange companies were serving approximately 7.5 million lines in Florida as of
December 31, 2009, a decline of 4.6 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
8.3
8.1
Access Lines (millions)
7
7.9
7.6
7.2
6.7
6
5.7
5
4.8
4
4.2
3
3.7
3.7
4.3
4.2
3.8
3.8
3.6
4.1
3.3
2
1
0
Jun-01
Jun-02
Jun-03
Jun-04
Jun-05
Total Residential
Jun-06
Total Business
Source: Responses to FPSC data requests (2001-2010)
28
Dec-07
Dec-08
Dec-09
Table 3-2 displays the residential and business access line counts for ILECs and CLECs
from 2007 to 2009. Between December 2008 and December 2009:
•
Total access lines in Florida decreased by 11 percent.
•
Total ILEC access lines decreased by 12 percent, reflecting a 15 percent decrease in
residential lines and a 7 percent decrease in business lines.
•
Total CLEC access lines decreased by 2 percent.
•
ILEC business access lines accounted for 39 percent of total ILEC lines in December
2009, compared to 28 percent in June 2001.
•
CLEC business access lines accounted for 83 percent of total CLEC lines in
December 2009, compared to 64 percent in June 2001.
Over the past 3 years:
•
Total access lines in Florida decreased by 21 percent.
•
Total ILEC access lines decreased by 23 percent.
•
Total CLEC access lines decreased by 6 percent.
Table 3-2. Florida Access Line Comparison
Res
Bus
Total
Res
Bus
Total
Res
Bus
Total
Change
from
2007
5,428,994
2,928,128
8,357,122
4,654,512
2,702,144
7,356,656
3,960,176
2,500,229
6,460,405
-23%
185,586
894,806
1,080,392
131,725
899,992
1,031,717
174,467
836,204
1,010,671
-6%
5,614,580
3,822,935
9,437,514
4,786,237
3,602,136
8,388,373
4,134,643
3,336,433
7,471,076
-21%
Dec-07
ILECs
CLECs
Total
Dec-08
Source: Responses to FPSC data requests (2008-2010)
29
Dec-09
Figure 3-5 graphically displays CLEC residential and business access line counts from
2005 to 2009.
•
CLEC residential access lines increased by over 42,000 from December 2008 to
December 2009, a 32 percent increase.
•
CLEC business access lines declined by more than 63,000 from December 2008 to
December 2009, a 7 percent loss.
•
CLEC business access lines as a percentage of the total decreased to 83 percent, a 4
percent decline from 2008.
Figure 3-5. Florida CLEC Lines
2,500,000
2,086,031
2,000,000
1,500,000
1,870,315
1,456,162
1,417,276
1,080,392
1,031,717
894,806
899,992
1,000,000
1,010,671
836,204
629,869
453,039
500,000
185,586
131,725
174,467
0
Jun-05
Jun-06
Residential
Dec-07
Business
Source: Responses to FPSC data requests (2005-2010)
30
Dec-08
Total
Dec-09
3. CLEC Market Penetration by ILEC Territory
Figure 3-6 displays the CLEC residential and business wireline market share by ILEC
territory for 2008 and 2009. CLEC residential market share increased in AT&T’s and Verizon’s
territories and remained relatively static in the territories of CenturyLink and the rural ILECs.
CLEC business market share increased in AT&T's and Verizon’s territories but decreased in
CenturyLink’s territory and the territories of the rural ILECs. CLECs have their highest
penetration rates in the business market, with a 34 percent share in Verizon’s territory, a 25
percent share in AT&T’s territory, and a 20 percent share in CenturyLink’s territory. A more
thorough analysis of factors influencing where CLECs choose to offer services is contained in
Chapter V, subsection B., 2., pg 65.
Figure 3-6. Florida CLEC Residential & Business Market Share
by ILEC Service Territory
45%
40%
33% 34%
35%
30%
24%
25%
25%
21% 20%
20%
15%
10%
5%
6%
5%
4%
1%
3%
2%
1% 1%
1% 1%
0%
AT&T
Verizon
Res Dec-08
CenturyLink
Res Dec-09
Bus Dec-08
Source: Responses to FPSC data requests (2009-2010)
31
Bus Dec-09
Rural ILECs
4. Competitive Presence by Exchange
Table 3-3 lists five Florida exchanges in AT&T’s territory with the greatest number of
CLEC providers. Verizon’s Tampa exchange and CenturyLink’s Tallahassee exchange are listed
for comparison. The number of CLEC residential providers decreased from 2008 levels in all
seven exchanges, while the number of CLEC business providers remained relatively stable from
2008 to 2009 in all exchanges. The number of overall providers decreased in six of the seven
exchanges.
Table 3-3. Florida Exchanges with the Most CLEC Providers
Exchange
Miami
Orlando
Fort Lauderdale
West Palm Beach
Jacksonville
Tampa (Verizon)
Tallahassee (CenturyLink)
Rank by
Total Access
Lines
1
6
4
5
3
Dec-08
49
47
47
47
42
Dec-09
44
37
38
42
38
Dec-08
50
51
47
44
42
Dec-09
51
47
49
45
43
Dec-08
78
77
72
69
64
Dec-09
77
68
72
68
63
2
10
22
23
18
14
34
23
35
23
48
41
46
34
Residential
Source: Responses to FPSC data requests (2009-2010)
32
Business
Total CLECs
C. Competitive Market Trends
1. Residential Access Line Trends
Figure 3-8 displays the residential access line trends separately for AT&T, Verizon,
CenturyLink, the rural ILECs, and the CLECs. AT&T, Verizon, CenturyLink, and the
aggregated rural ILECs reported a decline in residential access lines. CLECs in the aggregate
reported an increase in total residential access lines in December 2009 after years of decline.
CLEC residential access lines grew by over 42,000 lines between December 2008 and December
2009.
Figure 3-8. Florida Residential Line Trends
by ILECs and CLECs
4,000
3,500
3,599
3,437
Access Lines (thousands)
3,000
3,094
2,500
2,633
2,213
2,000
1,488
1,500
1,326
1,135
1,411
1,000
985
1,321
1,073
630
918
453
500
143
134
Jun-05
Jun-06
186
127
867
118 132
766
174
113
0
AT&T
Verizon
Dec-07
CenturyLink
Dec-08
Rural ILECs
Dec-09
CLECs
Source: Responses to FPSC data requests (2005-2010)
Analysis of exchange level residential access line data reveals:
•
CLECs gained residential access lines in 103 of 276 exchanges in 2009.
o Gains exceeded 100 access lines in 43 exchanges.
•
CLECs lost residential access lines in 122 out of 276 exchanges.
o Losses exceeded 100 access lines in 13 exchanges and 1,000 access lines in 3
exchanges.
33
•
ILECs lost residential access lines in all but 5 exchanges statewide.
o Losses exceeded 1,000 access lines in 53 AT&T exchanges, 33 CenturyLink
exchanges, and 18 Verizon exchanges.
o Losses exceeded 10,000 access lines in 9 AT&T exchanges, 1 CenturyLink
exchange, and 3 Verizon exchanges.
Figure 3-9 presents the percentage changes of residential lines for the ILECs and CLECs.
ILEC residential access lines declined for AT&T, Verizon, CenturyLink, and the rural ILECs at
approximately the same rate in 2009 as in 2008. CLECs experienced a 32 percent increase from
December 2008 to December 2009, compared with a 29 percent drop from December 2007 to
December 2008.
Figure 3-9. Percent Change of Florida Residential Access Lines
by ILECs and CLECs
40%
32%
30%
20%
10%
0%
-10%
-4%
-5%
-7%
-10%
-20%
-15%-14%-13%
-14%
-19%
-30%
-12%
-16% -17%
-29%
-40%
-50%
-60%
-59%
-70%
Jun 06 - Jun 07
AT&T
Dec 07 - Dec 08
Verizon
CenturyLink
Rural ILECs
Source: Responses to FPSC data requests (2006-2010)
34
Dec 08 - Dec 09
CLECs
2. Business Access Line Trends
Figure 3-10 displays the business line trends for AT&T, Verizon, CenturyLink, the rural
ILECs, and CLECs. AT&T, Verizon, and CenturyLink experienced a decrease in business
access lines between 2008 and 2009 while the rural ILECs showed a slight increase from 2008 to
2009. Losses for AT&T, Verizon, and CenturyLink were 9.9, 11.6, and 8.9 percent,
respectively. CLEC business access lines again declined after showing an increase in 2008. The
percentage change went from a 1 percent increase in 2008 to a 7 percent decline in 2009.82
Figure 3-10. Florida Business Line Trends by ILECs and CLECs
2,000
1,800
Access Lines (thousands)
1,600
1,702
1,739
1,841
1,456
1,699
1,417
1,400
1,530
1,200
900
1,000
836
800
600
400
200
526
560
503
502
895
536
497
496
452
403
115
63
55
456
108
Jun-05
Jun-06
Dec-07
Dec-08
AT&T
Verizon
58
0
CenturyLink
Rural ILECs
Dec-09
CLECs
Source: Responses to FPSC data requests (2005-2010)
82
Reclassification of ILEC-affiliated CLEC lines as ILEC lines accounts for 12 percent of the loss of CLEC
business lines between June 2006 and December 2007.
35
Figure 3-11 displays the annual percentage changes for business lines for ILECs and
CLECs.
Figure 3-11. Percent Change of Florida Business
Access Lines by ILECs and CLECs83
25%
15%
5%
-5%
6%
6%
1%
-1%
-4%
-8%
-15%
-7%
-8%
-10% -12%
-13%
-9%
-7%
-25%
-35%
-37%
-45%
Jun 06 - Dec 07
AT&T
Dec 07 - Dec 08
Verizon
CenturyLink
Rural ILECs
Dec 08 - Dec 09
CLECs
Source: Responses to FPSC data requests (2006-2010)
D. Rural Access Line Trends
Total rural ILEC access lines increased by approximately 1,400 from December 2008 to
December 2009, a 1 percent increase. Rural ILECs experienced access line growth for business
access lines despite a decline in residential access lines.
1. Residential Access Lines
Rural residential access lines declined by almost 5,000 lines from December 2008 to
December 2009, a 4 percent decline. Each rural ILEC experienced some residential access line
decline. Frontier and Smart City reported the greatest percentages of residential access line loss.
2. Business Access Lines
Rural business access lines increased by more than 6,000 lines from December 2008 to
December 2009, a 6 percent increase. FairPoint and Windstream, the two largest rural ILECs,
reported gains in business access lines, while all other rural ILECs reported losses in business
access lines.
83
The percentage change of business lines from December 2007 to December 2008 for the rural ILECs is not
applicable as there was a change in the manner in which data was reported for one company.
36
E. Prepaid Telecommunications Services
A segment of the market is served by CLECs that provide only prepaid services. CLECs
that provide only prepaid residential wireline telephone service account for 16 of the 67 CLECs
with fewer than 10,000 access lines, or 24 percent. Prepaid-only carriers serve 28 percent of the
access lines of those carriers below 10,000 lines and 9 percent of total residential CLEC access
lines.
F. Pay Telephone Services
Based on the most recent data available to the FPSC, the pay telephone industry in
Florida has undergone significant contraction in the availability of pay telephone service during
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 18 percent, from 20,000 in December 2008 to 16,500 in the past year. The
number of certificated pay telephone service providers in Florida has dropped 20 percent, from
183 as of December 2008 to 146 in December 2009. These trends are an inevitable result of the
significant growth in wireless services during this period.
In a recent proceeding before the FCC relating to Lifeline, a variety of organizations
including the Salvation Army, Habitat for Humanity, Hubbard House, and the American Public
Communications Council (APCC) expressed support for continued public pay telephone
availability.84
84
APCC’s Comments to FCC’s Public Notice “Comment Sought on TracFone Request for Clarification of
Universal Service Lifeline Program ‘One-per-Household’ Rule as Applied to Group Living Facilities,” WC Docket
No. 03-109, DA 09-2257, released October 21, 2009; see also APCC Comments, dated November 20, 2009,
<http://www.apcc.net/files/public/APCC-TracFone-comments_as-filed112009.pdf>, accessed on March 26, 2010.
37
38
Chapter IV. Wireless, VoIP, and Broadband
A. Wireless
In recent years, the wireless handset has transitioned from being a voice communications
device to an always-connected mini computer that will fit into your pocket. The growth in
applications and technology has spurred investment into faster and more capable infrastructure.
Fourth Generation or 4G technology is becoming the industry standard of choice in order to meet
increasing demand from mobile devices, including laptops with wireless cards. In fact, the FCC
reported that 90 percent of the U.S. population had a mobile device capable of voice
communication by the end of 2008.85 Wireless providers are investing in necessary
infrastructure upgrades to meet growing demand and remain competitive. Wireless coverage is
also increasing. Table 4-1 gives a national analysis of the number of carriers providing service
by population.86
Table 4-1. Wireless Provider Coverage
by Population
Population % of Population # of Providers
284 million
99.6
1
281 million
98.6
2
272 million
95.8
3+
Source: FCC, “14th Annual Report on Mobile Wireless
Competition”
According to the FCC, 86 percent of the geographic area of the U.S. meets the definition
of a rural area (counties with a population density of 100 people or fewer per square mile).
Approximately 21 percent of the U.S. population lives in these areas. Geographic analysis
indicates that 98.5 percent of the rural population is served by at least one wireless carrier.87
While growth in the wireless sector has continued, the market is likely nearing the end of
its expansionary phase. According to analysts with Bernstein Research, wireless subscription
85
FCC, “14th Annual Report on Mobile Wireless Competition,” p. 5, <http://hraunfoss.fcc.gov/
edocs_public/attachmatch/FCC-10-81A1.pdf>, accessed on May 21, 2010.
86
Ibid, p. 89.
87
Ibid, p. 18.
39
reached 91 percent of the population nationwide by year-end 2009, up from 87 percent at the end
of 2008.88
While subscription has reached a high saturation point and growth potential is minimal,
use of text and data services saw large increases. CTIA, the international wireless carrier
association, reported that in the last half of 2009 consumers used more than 1.1 trillion minutes
and sent almost 5 billion text messages. Wireless service providers garnered $41.5 billion in
revenue from data services in 2009, a 29.6 percent increase from 2008 data revenues.89, 90
However, data revenues experienced a 25 percent decline in the rate of growth from the prior
year. Despite total handset shipment decreases, Wi-Fi enabled handsets increased 20 percent in
2009, and are expected to account for a quarter of all handsets shipped by 2012.91 CTIA
reported that, as of the end of 2009, more than 257 million data-capable devices were in
circulation.92 The FCC reported 67 new smartphones were introduced in 2008 and 2009. In
contrast, wireless voice minutes of use declined for the first time in 11 years, suggesting that
some text and data services are, to some degree, replacing the use of wireless voice service.93
While wireless services experienced a large increase in usage, wireless revenues
increased only 3.3 percent, or $77 million, in 2009. Industry analysts predict that revenue
growth in 2010 will decrease approximately 2.7 percent. Total wireless revenues are not keeping
pace with consumption of wireless data services. Analysts speculate that changes in pricing of
data services may enable wireless carriers to slow or stop the current decline in revenue
growth.94 Initially, data plans were offered on an unlimited basis for one set price. The tiered
data plan concept currently offered by Verizon Wireless and AT&T offers customers a specific
amount of data usage on an escalated scale that coincides with escalated prices. For example,
Verizon offers 25 megabytes (MB) of data usage for $9.99 with a 20¢ charge for every MB used
that is over the 25 MB allowance. They also offer an unlimited data option for $29.99. AT&T
88
Craig Moffet, “Wi Telco '10: What a Difference a Year Makes. Upgrading VZ &
Sector to Neutral; A Deep Dive into the iPhone and Fed Rates,” Bernstein Research, February 9, 2010,
<http://reports.bernsteinresearch.com/researchlinks/View.aspx?eid=Gqmr7JNbTDWM9SeLVPGmqXR8bv6Yy%2f
AxhbJsEuGOIgg1CcyMBJ%2bPk8lo0S6SzDy%2b>, accessed on March 12, 2010.
89
“CTIA – The Wireless Association® Announces Semi-Annual Wireless Industry Survey Results April 1, 2009,”
CTIA Press Release, April 1, 2009, <http://www.ctia.org/media/press/body.cfm/prid/1811>, accessed on March 14,
2010. “Wireless Quick Facts Year-End Figures,” CTIA, April 13, 2010, <http://www.ctia.org/advocacy/research/
index.cfm/AID/10323>, accessed on May 21, 2010>, accessed on May 21, 2010.
90
“Wireless Quick Facts Year-End Figures,” CTIA Press Release, April 13, 2010,
<http://www.ctia.org/advocacy/research/
index.cfm/AID/10323>, accessed on May 21, 2010>, accessed on May 21, 2010.
91
“A Quarter of all Handsets shipped will be Wi-Fi Enabled by 2012,” In-stat Market Alert, In-Stat, March 22,
2010.
92
“CTIA – The Wireless Association® Announces Semi-Annual Wireless Industry Survey Results April 1, 2009,”
CTIA Press Release, April 1, 2009, <http://www.ctia.org/media/press/body.cfm/prid/1811>, accessed on March 14,
2010.
93
Ibid, p. 10.
94
Wailin Wong, “Mobile phone usage keeps growing,“ LA Times, March 25, 2010, <latimes.com/business/la-fitexts25-2010mar25,0,7410035.story>, accessed on March 26, 2010.
40
offers 200 MB of data usage for $15, 2 gigabytes of data usage for $25, and no longer offers an
unlimited data plan.95, 96
In addition to recovering revenue, tiered data plans address the depleting amount of
spectrum that is available for commercial use. President Obama, in a Presidential Memorandum
released June 26, 2010, proposed to transfer 500 megahertz of spectrum from federal and private
use to primarily commercial use over the next 10 years. That is nearly double the amount that is
currently available. The proposal coincides with the FCC’s National Broadband Plan. Portions
of the proposal will require congressional approval, but if successful, will improve data and
video transfers via a wireless connection.97
95
Verizon Wireless, FamilyShare Plans, <http://www.verizonwireless.com/b2c/splash/planfamily.jsp.>, accessed on
May 27, 2010.
96
“AT&T Announces New Lower-Priced Wireless Data Plans to Make Mobile Internet More Affordable to More
People,” AT&T Press Release, June 2, 2010, <http://www.att.com/gen/press-room?pid=17991&cdvn
=news&newsarticleid=30854&mapcode=financial|Wireless>, accessed on June 14, 2010.
97
Office of the Press Secretary, ”Presidential Memorandum: Unleashing the Wireless Broadband Revolution,” The
White House, June 28, 2010, <http://www.whitehouse.gov/the-press-office/presidential-memorandum-unleashingwireless-broadband-revolution>, accessed on July 16, 2010.
41
Prepaid wireless plans continued to attract consumers in an unsteady economy by
offering low-priced service without a long-term commitment. In the fourth quarter of 2009,
prepaid and reseller wireless market share had increased to 20.9 percent, up from 13.1 percent in
the fourth quarter of 2008. Market analysts for Bernstein Research expect growth in the prepaid
market to continue in 2010 at a rate of 18.2 percent. In contrast, post-paid market share
increased only 2.1 percent for the same period as seen in Figure 4-1. Expected post-paid
subscriber growth in 2010 is estimated to reach only 1.2 percent.98
Percentage of Year-Over-Year Subscriber Growth
Figure 4-1. U.S. Wireless Industry Subscriber Growth Rates
35.0
29.1
30.0
26.8
26.5
22.9
25.0
20.9
19.4
18.4
20.0
15.0
16.3
18.0
13.1
11.4
10.8
10.6
9.7
8.6
7.9
7.1
10.0
5.0
16.9
15.4
8.3
8.0
7.7
7.0
6.3
5.7
5.1
5.9
5.9
4.3
3.7
-0.1
Q1
2007
Q2
2007
Q3
2007
Q4
2007
Q1
2008
Post-paid
Q2
2008
Q3
2008
Q4
2008
Pre-paid & reseller
Q1
2009
5.6
5.3
5.9
2.9
2.3
2.1
Q2
2009
Q3
2009
Q4
2009
Total
Source: Company reports, Bernstein Research estimates and analysis
The 2 largest carriers, AT&T and Verizon Wireless, share 60 percent of the total number
of wireless subscribers and revenues and accounted for 14.1 million net additions in 2009. These
carriers tend to focus on technology and the upper end of the market as their plans are more
expensive. Comparatively, the next 2 largest carriers, T-Mobile USA (T-Mobile) and Sprint
Nextel Corporation (Sprint Nextel), lost subscribers in 2008 and gained only 827,000 subscribers
in 2009. Each of these companies markets traditional post-paid services and prepaid offerings
that focus on unlimited access and appear to appeal to those customers who are more budget
conscious. Considering the success of prepaid wireless plans, these companies may be losing
98
Craig Moffet, “Wireless 2010: Like Déjà vu, All Over Again Industry Growth Now Below 3 percent, and
Estimates (Again) Look Too High,” Bernstein Research, February 26, 2010,
<http://reports.bernsteinresearch.com/researchlinks/view.aspx?eid=xzB2wBUF31cKyEnY7cnXBoNUPcAFcejNfPrt
WnFC6hUPBkdjbKQ7Gi2gmPiBF9rs>, accessed on March 12, 2010.
42
subscribers from their post-paid offerings. Churn rates of T-Mobile and Sprint Nextel are twice
those of AT&T’s and Verizon’s.99
1. Wireless-Only Households
Wireless-only households continued to increase in 2009. The Centers for Disease
Control recently reported that wireless-only households reached 24.5 percent as of December
2009, an increase from 20.2 percent as of December 2008. In addition, the report concluded that
14.9 percent of U.S. households with both a landline and wireless phone received most calls via
a wireless phone. The Centers for Disease Control reported that of those surveyed:
•
48.6 percent of adults between the ages of 25 and 29 live in wireless-only households.
•
Non-Hispanic white adults (21 percent) are more likely to keep a landline compared
to Hispanic adults (30.4 percent).
•
Adults in the Midwest (25.6 percent) are more likely to live in wireless-only
households than adults in other parts of the country.
•
37.8 percent of adults between the ages of 18 and 24 represent the largest segment of
the population that is wireless only.100
2. Florida Trends
Florida wireless subscription trends mirror those of the U.S. Florida subscriptions grew
from December 2007 to December 2008, but continued the trend of a decreased rate of growth
over time. Florida experienced an increase of 553,000 subscribers during that time period, a 4
percent increase, compared to a 6 percent increase from December 2006 to December 2007.
Total wireless subscribers in Florida, as of December 2008, reached 16.2 million handsets.101
99
FCC, “14th Annual Report on Mobile Wireless Competition,” p. 9, <http://hraunfoss.fcc.gov/
edocs_public/attachmatch/FCC-10-81A1.pdf>, accessed on May 21, 2010.
100
S.J. Blumberg, J.V. Luke, “Wireless Substitution: Early Release of Estimates From the National Health
Interview Survey, July - December 2009,” December 16, 2009, p. 1,
<http://www.cdc.gov/nchs/data/nhis/earlyrelease/wireless201005.pdf>, accessed on May 12, 2010.
FCC, "Local Telephone Competition: Status as of December 31, 2008,"June 2010, Table 17,
<http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-299052A1.pdf>, accessed on July 8, 2010.
43
Total subscribership results as of December 2008 show that Florida exceeds the national
subscription level by 2 percent, as seen in Figure 4-2; however, this difference is the smallest
since 2001. Initially, Florida was ahead of the nation in adopting wireless technology, but now
that subscription levels are getting closer to market saturation points, the overall growth is
declining. Figure 4-2 suggests that Florida is ahead of the nation in the inevitable slowing of
wireless subscription growth.102
Figure 4-2. Wireless Subscription as Percentage of Population
100%
90%
84%
79%
Percentage of Population
80%
60%
60%
50%
40%
52%
46%
87%
86%
85%
84%
83%
79%
73%
71%
69%
70%
86%
65%
57%
51%
45%
40%
30%
20%
10%
0%
June-01 June-02 June-03 June-04 June-05 June-06 June-07 Dec-07 June-08 Dec-08
Florida
Nation
Source: FCC, Local Telephone Competition: Status as of June 30, 2008; U.S. Census
Bureau, State Population Estimates
102
Ibid.
44
Wireless subscription levels vary across the state of Florida. The FCC surveyed some of
the largest cities in Florida and found that only one area (Sarasota/Bradenton) was below the
statewide average of 86 percent as of June 2008. Figure 4-3 depicts the subscribership rate in
different areas throughout the state.103
Figure 4-3. Wireless Subscription Levels
Throughout Florida
Source: FCC, “14th Annual Report on Mobile Wireless Competition”
103
FCC, “14th Annual Report on Mobile Wireless Competition,” Table C-3, <http://hraunfoss.fcc.gov/
edocs_public/attachmatch/FCC-10-81A1.pdf>, accessed on May 21, 2010.
45
Figure 4-4 shows that Florida wireless subscriptions have continued to surpass Florida
wireline access lines. The number of wireless handsets in Florida has increased significantly
over the number of wireline access lines in the state, and the gap continues to widen. Local
exchange company access lines in Florida have declined 25 percent since the end of 2005, while
wireless subscriptions have increased by 29 percent during the same time period.104 Wireless
handsets outnumbered wireline access lines by 7.8 million as of December 2008.105, 106 Florida
wireless subscribership increased by 3.4 million subscribers from December 2005 to December
2008.107
Figure 4-4. Florida Local Exchange Access Lines and
Florida Wireless Subscriptions
18.0
15.3
16.0
Access Lines (millions)
14.0
15.6
15.8
16.2
14.2
12.0
11.8
11.8
11.9
12.6
12.0
11.8
10.0
11.5
11.0
10.3
9.8
8.0
8.6
6.0
9.4
8.4
7.5
7.5
4.0
2.0
0.0
Jun-01 Jun-02 Jun-03 Jun-04 Jun-05 Jun-06 Jun-07 Dec-07 Jun-08 Dec-08 Dec-09
FL Wireless Subscription
FL Local Exchange Company Lines
Source: FCC, Local Telephone Competition: Status as of December 31, 2008;
Response to FPSC data requests (2001–2010)
104
FCC, "Local Telephone Competition: Status as of December 31, 2008,"June 2010, Table 17,
<http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-299052A1.pdf>, accessed on July 8, 2010.
105
FCC, "Local Telephone Competition: Status as of December 31, 2008,"June 2010, Table 11,
<http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-299052A1.pdf>, accessed on July 8, 2010.
106
FPSC, responses to 2001-2008 Local Competition data requests.
107
FCC, "Local Telephone Competition: Status as of December 31, 2008,"June 2010, Table 17,
<http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-299052A1.pdf>, accessed on July 8, 2010.
46
B. Voice over Internet Protocol
Yankee Group market research estimates 24.5 million VoIP connected households in the
U.S. for year-end 2009. This includes cable, over-the-top providers, and FTTH subscribers.
This compares to year-end totals of 129,000 VoIP-connected households in 2003.108
Data collected by the FPSC show an estimated 1.8 million Florida residential consumers
subscribe to VoIP service. An estimate for the Florida business VoIP market is not available
because of limited response data. Information from company press releases, financial reports,
and market research reveals that VoIP business subscription is rapidly expanding. Cox
Communications, for example, was the first cable company to reach $1 billion in business
revenues in 2010 and anticipates $2 billion within 6 years.109 About 80 percent of the 250,000
business customers served by Cox have fewer than 20 employees, but in the near future, the
company expects to aggressively pursue businesses in the 20- to 99-employee range. Market
research compiled by In-Stat forecasts VoIP penetration to reach 79 percent of U.S. businesses
by 2013, compared to 42 percent at the end of 2009.110 This projected growth reflects
recognition that IP-based service can produce cost savings as well as service flexibility.
1. National Market
Market research firm Pike & Fischer forecasts that the number of VoIP-connected
households will exceed 25 million in the U.S. by the end of 2010, with growth at about 14
percent annually over the next few years. Yankee Group reports a more optimistic estimate of
33.5 million by the end of 2010.111 These estimates suggest continued strong but slower growth
for cable VoIP subscribers. The continued decline in traditional wireline access lines and
increases in wireless-only households casts some doubt on the long term growth potential for
cable VoIP service. The fact that voice is not the primary service offering for cable companies
could be a mitigating factor. There are likely to be relatively fewer voice-only cable VoIP
subscribers than voice-only subscribers of traditional wireline providers. Significantly lower
churn rates for customers subscribing to bundled services may suggest that cable providers are
somewhat less susceptible to wireless substitution than their traditional wireline counterparts.112
108
“U.S. VoIP Consumer Forecast, December 2003-2013,” Yankee Group Research, Inc., received by e-mail on
March 10, 2010.
109
Jeff Baumgartner, “Cox Targets $2B in Biz Revenues,” Cable Digital News, December 3, 2009,
<http://www.lightreading.com/document.asp?doc_id=185383&site=cdn>, accessed on February 9, 2010.
110
“VoIP Penetration Forecast to Reach 79% of U.S. Businesses by 2013,” In-Stat Market Alerts, February 2, 2010,
<http://www.instat.com/press.asp?ID=2720&sku=IN1004350CT>, accessed on February 2, 2010.
111
“Residential VoIP Market Outlook,” Pike & Fischer, Inc., October 2008,
<http://www.pf.com/marketResearchPDInd.asp?repId=630>, accessed on January 11, 2010.
112
“U.S. VoIP Consumer Forecast,” Yankee Group Research, Inc., December 2003-2013,” received by e-mail on
March 10, 2010.
47
a. Facilities-Based VoIP Providers
Cable companies continue to have the largest share of the facilities-based VoIP market
with a reported 22.2 million cable voice subscribers at the end of 2009.113 Based on the number
of subscribers, nationwide the top cable VoIP telephony providers are:
• Comcast Corporation
7.6 million subscribers114
• Time Warner Cable
4.2 million subscribers115
• Cablevision Systems Corporation
2.1 million subscribers116
• Cox Communications
0.7 million subscribers117, 118
Comcast is the third-largest residential telephone service provider in the U.S., exceeded
only by AT&T and Verizon.119 Despite the weak economy, Comcast added 1.2 million VoIP
subscribers in 2009 and remains the leading facilities-based VoIP provider based on subscriber
numbers. The growth rate slowed, however, as Comcast added only 243,000 VoIP subscribers in
the fourth quarter of 2009, down 29 percent compared to fourth quarter 2008.120 Comcast net
additions for the first quarter of 2010 increased 13 percent from the previous quarter despite
continued concerns about the growing number of wireless-only households.121
Though cable companies currently dominate the residential VoIP market, traditional
wireline telephone companies have responded with their own facilities-based VoIP services, in
particular, VoIP associated with fiber-based services. An estimated 1.1 million VoIP subscribers
113
National Cable & Telecommunications Association, “Industry Data: Operation Metrics (as of December 2009,”
<http://www.ncta.com/StatsGroup/OperatingMetric.aspx>, accessed on May 21, 2010.
114
Comcast Corporation, “Comcast Reports Fourth Quarter and Year End 2009 Results,” February 3, 2010,
<http://www.cmcsk.com/releasedetail.cfm?ReleaseID=442388>, accessed on March 12, 2010.
115
Time Warner Cable, Inc., Form 10-K, Fourth Quarter 2009 Results, February 19, 2010,
<http://ir.timewarnercable.com/phoenix.zhtml?c=207717&p=irol-sec>, accessed on March 12, 2010.
116
Cablevision Systems Corporation, “Fourth Quarter and Full Year 2009 Results,” February 25, 2010,
<http://phx.corporate-ir.net/External.File?item=UGFyZW50SUQ9MzMzOTN8Q2hpbGRJRD0tMXxUeX
BlPTM=&t=1>, accessed on March 12, 2010.
117
Cox, “Join More than 2.5 Million Phone Customers Saving with Cox,”
<http://ww2.cox.com/residential/centralflorida/phone.cox>, accessed on February 3, 2010.
118
On February 4, 2010, an e-mail from Cox notes that the breakdown of circuit-switched versus VoIP customers
cannot be provided based on competitive and other business reasons. Therefore, the estimated 1.83 million circuitswitched customers as of July 2008 reported last year has been used for this report.
119
Comcast Investor Relations Homepage, “Comcast Now the Third Largest Residential Phone Services
Provider in the U.S.,” March 11, 2009,
<https://www.comcast.com/About/PressRelease/PressReleaseDetail.ashx?PRID=844>, accessed on February 10,
2010.
120
Comcast Corporation, “Comcast Reports Fourth Quarter and Year End 2009 Results,” February 3, 2010,
<http://www.cmcsk.com/releasedetail.cfm?ReleaseID=442388>, accessed on March 12, 2010.
121
Bernstein Research, “Comcast: Torrent of Case,” April 28, 2010, p.1-3,
<http://reports.bernsteinresearch.com/researchlinks/view.aspx?eid=%2fOYF%2fDE%2fVzli01et0RBibf9awiD70so
UtvgaKLEyxuJaBnam2YI%2fVYZiGvD5f1Jz>, accessed on May 19, 2010.
48
were served through FTTH technology at the end of 2009.122 As of year-end 2009, AT&T also
reported that more than three-fourths of its 2.1 million U-verse TV subscribers have a triple- or
quad-play (voice, video, data, and wireless) services package.123 The reported number of
subscribers to U-verse bundles translates to approximately 1.6 million U-verse Voice (not
considered a FTTH service) subscribers. Verizon announced that it was offering a FiOS Digital
Voice service, a VoIP product, in June 2010 in 12 states including Florida. FiOS Digital Voice
service runs over Verizon’s private fiber optic network and offers 21 calling features.124 Verizon
provides its FiOS Internet TV service in 16 states and it will be available to 18 million customers
by the end of 2010. The deployment of fiber, in order to facilitate digital end user services by
both AT&T and Verizon, slowed in 2009. Both companies are nearing completion of their stated
fiber deployment plans related to U-verse and FiOS services. As fiber deployment for both
companies winds down, further deceleration of customer growth for FiOS and U-verse
customers (including residential VoIP customers) appears likely.125
b. Over-the-Top VoIP Providers
Over-the-top VoIP providers offer low-priced telephone services for consumers that
already subscribe to broadband Internet access.126 Service reliability and call quality are
sometimes compromised, however, because over-the-top VoIP providers route calls over the
public Internet rather than private IP-managed networks. The price advantage over facilitiesbased VoIP providers seems to be sufficient enough to attract significant numbers of consumers.
Various providers offer over-the-top VoIP services including Vonage, Packet8, Skype,
magicJack,127 and Google. The Yankee Group estimates 3.6 million consumers had subscribed
to over-the-top interconnected VoIP services at the end of 2009.128
Vonage, Packet8, magicJack, Skype, and Google are the leading over-the-top VoIP
providers based on the number of subscribers. Skype is not currently a publicly traded company,
and U.S. specific subscription data is not generally available, thus making conclusions regarding
market sector growth and market share ambiguous. For those companies whose subscription
122
Yankee Group Research, Inc., “U.S. VoIP Consumer Forecast,” December 2003-2013, received on March 10,
2010.
123
AT&T, “Fourth Quarter Wireline Operational Highlights,” January 28, 2010, <http://www.att.com/gen/pressroom?pid=4800&cdvn=news&newsarticleid=30429>, accessed on February 1, 2010.
124
Verizon, “FiOS, the Best Choice, Now Available With the Best Voice,” June 3, 2010,
<http://newscenter.verizon.com/press-releases/verizon/2010/FiOS-the-Best-Choice-Now-Available-With-the-BestVoice.html>, accessed on June 4, 2010.
125
Bernstein Research, “U.S. Telecom and U.S. Cable and Satellite: Has TelCo TV Passed Its Peak?,” March 24,
2010.
126
The phrase “over-the-top VoIP” refers to a VoIP service that requires a consumer to obtain broadband access
from another company.
127
The trade name “magicJack” uses a lowercase “m.” Note that when the company name appears in this report at
the beginning of a sentence, the “m” is capitalized.
128
Yankee Group Research, Inc., “U.S. VoIP Consumer Forecast,” December 2003-2013, received on March 10,
2010.
49
data is accessible, Vonage remains the leader, reporting 2.29 million U.S. subscribers as of
fourth quarter 2009, a decline of 19,000 customers from the previous year.129
Packet8 reported 56,547 residential and 19,407 business subscribers as of fourth quarter
2009, a decrease of 30,445 residential lines from 2008. Packet8 added 4,701 business lines in
2009 and now considers itself a “provider of innovative business solutions.”130 MagicJack
claims to have 5 million users since its service launch just 2 years ago, and the company charges
$20 for each year of service, unlike the typical monthly rates offered by other carriers.131
Skype reports more than 521 million registered users worldwide and continues its focus
on product strategies to enhance customer engagement.132 Skype offers several levels of VoIP
services including subscription services, SkypeIn and SkypeOut, which interconnect with the
public switched telecommunications network. Skype also continues to offer its free peer-to-peer
service.
Google’s free (invitation-only) Google Voice service has 1.4 million users as reported by
the company in an October 2009 filing with the FCC.133 Google Voice service provides not only
call management features, but also voicemail transcription via e-mail and the ability for users to
save text and voicemail messages via a searchable online inbox. Google plans to build ultra
high-speed, fiber-optic broadband networks in a handful of trial locations throughout the U.S. in
communities with 50,000 to 500,000 people.134 Sixty Florida communities have submitted
applications in hopes of attracting Google fiber investment.135
129
Vonage Holdings Corp., Fourth Quarter and Full Year 2009 Results, February 25, 2010,
<http://pr.vonage.com/releasedetail.cfm?ReleaseID=447133>, accessed on March 1, 2010. See also Form 10-K,
Fourth Quarter 2009 (noting that 94 percent, or 2.29 million, of the 2.43 million represents U.S. subscriber lines
with the remaining 6 percent, or 146,094, lines serving customers in Canada and the U.K.), February 26, 2010,
<http://files.shareholder.com/downloads/VAGE/838018420x0xS1193125-10-43170/1272830/filing.pdf>, accessed
on March 1, 2010.
130
8x8, Inc., Third Quarter Fiscal 2010 Results (data as of December 31, 2009), January 27, 2010,
<http://files.shareholder.com/downloads/EGHT/838084971x0x346941/6785eca2-ea16-4157-bd830b9e7c5ea446/EGHT_News_2010_1_27_General_Releases.pdf>, accessed on February 5, 2010.
131
Stephen Lawson, “magicJack harnesses femtocell for VoIP,” January 7, 2010,
<http://www.networkworld.com/news/2010/010810-magicjack-harnesses-femtocellfor.html?source=NWWNLE_nit_convergence_voip_2010-01-25>, accessed on February 5, 2010.
132
EBay, Inc., “Fourth Quarter and Full Year 2009 Results,” January 20, 2010,
<http://files.shareholder.com/downloads/ebay/825395101x0x345224/b455630d-4bb9-4ba5-adb140dcf29e82ce/eBay_Q409EarningsRelease.pdf>, accessed March 25, 2010. Skype’s comments in response to the
FCC’s National Broadband Plan at <https://www.neca.org/cms400min/NECA_Templates/Neca_Home.aspx>,
December 22, 2009, accessed on February 18, 2010 (“521 million registered users globally”).
133
Arik Hesseldahl, “How Google Voice is Growing,” BusinessWeek, October 30, 2009,
<http://www.businessweek.com/technology/content/oct2009/tc20091030_329665.htm>, accessed on February 8,
2010.
134
Jeffrey Silva, “Google As Policy Provocateur,” Medley Global Advisors, February 11, 2010; see also: Larry
Hettick and Steve Taylor, “Google to Test Ultra High-Speed Broadband Networks,” Network World, February 16,
2010, <http://www.networkworld.com/newsletters/converg/2010/021510convergence2.html>, accessed on February
19, 2010.
135
"Google Fiber to Communities: interactive map: List of government responses," Google,
<http://www.google.com/appserve/fiberfi/public/list>, accessed on May 28, 2010.
50
Vonage appears to be maintaining its lead in the over-the-top VoIP segment of the
market, although its subscriber line count at year-end 2009 decreased by 8 percent. Vonage lost
187,996 lines in 2009 compared to the 25,583 lines added in 2008.136
2. Florida Market
Some limitations exist in arriving at an accurate estimate of VoIP subscribers in Florida
because the Commission does not have jurisdiction over VoIP service. The Florida Cable
Telecommunications Association (FCTA), however, reported residential data for its six member
providers. A number of CLECs and ILECs voluntarily responded to the Commission’s data
request. Based on a review of reported data, an estimated 1.8 million residential VoIP
subscribers are in Florida as of December 2009. This total represents a 12.5 percent increase
over the 1.6 million residential VoIP subscribers as of December 31, 2008. An estimate for the
business market is not possible because of limited data. However, CLECs and ILECs reported
116,914 VoIP business lines for 2009, and some Florida cable companies provide voice services
to business customers.
Figure 4-5 shows the composition of reported Florida residential VoIP market, based on
the Commission’s estimates, as of December 2009.
Figure 4-5. Estimated Florida Residential VoIP Access Lines
2,000,000
253,000
1,800,000
275,000
1,600,000
1,400,000
1,415,714
1,233,829
1,200,000
300,000
1,000,000
748,143
800,000
275,000
600,000
400,000
300,000
200,000
59,037
91,320
135,293
Dec-08
Over-the-top
Dec-09
52,885
Jun-06
Dec-07
CLEC and ILEC
Cable
Source: Responses to FPSC data requests (2006-2010)
136
Vonage Holdings Corp., Fourth Quarter and Full Year 2009 Results, February 25, 2010,
<http://pr.vonage.com/releasedetail.cfm?ReleaseID=447133>, accessed on March 1, 2010. See also Form 10-K,
Fourth Quarter 2009 (noting that 94 percent, or 2.29 million, of the 2.43 million represents U.S. subscriber lines
with the remaining 6 percent, or 146,094, lines serving customers in Canada and the U.K.), February 26, 2010,
<http://files.shareholder.com/downloads/VAGE/838018420x0xS1193125-10-43170/1272830/filing.pdf>, accessed
on March 1, 2010.
51
a. Facilities-Based VoIP Providers
The FCTA provided a count of its member companies’ residential cable telephony
subscribers. FCTA reports that its member companies collectively have 1.4 million Florida
residential cable VoIP subscribers as of December 2009. Florida cable VoIP subscribership
increased by 181,885 subscribers from the 1.2 million reported to the FPSC as of 2008, an
increase of 14.7 percent.137 As reflected in Figure 4-5, there is a significant drop in new VoIP
customers added by cable providers from the preceding two years.
AT&T’s VoIP service, U-verse Voice, was launched in the Jacksonville area on January
26, 2009, the first market in the Southeast to obtain the service.138 AT&T expanded U-verse
Voice availability to a total of 21 Florida counties as of May 2009 from 6 counties reported in
2008.139 AT&T’s reported U-verse Voice subscribers for Florida are reflected in Figure 4-5.
In response to the Commission’s data request, 47 CLECs and 3 ILECs provided VoIP
line counts. A total of 135,293 residential VoIP lines and 116,914 business VoIP lines were
reported for 2009, a 48.2 percent increase and a 2.6 percent decrease, respectively, from 2008.
b. Over-the-Top VoIP Providers
Vonage, Skype, magicJack, and Packet8 are some of the competitive providers in this
segment of the VoIP market. Over-the-top VoIP providers are not certificated in Florida,
limiting the Commission’s ability to collect Florida-specific data. Vonage failed to file Florida
subscription data for 2009. Vonage experienced a decline in growth of approximately 8 percent
nationwide.140 Applying an 8 percent reduction to last year’s estimate of Florida over-the-top
VoIP subscribers results in an estimate of 253,000 subscribers for 2009.
Overall, the number of residential VoIP subscribers in Florida is estimated to be 1.8
million, an estimated increase of 12.5 percent from 2008. The growth in residential VoIP
subscribers has been driven primarily by the growth reported by cable VoIP providers.
C. Broadband
A general consensus among federal, state, and local governments, private industry, and
consumers recognizes the importance of broadband Internet access as a tool to improve
education, commerce, safety, and security in our daily lives. Despite that consensus, a difference
137
Florida Public Service Commission, “2009 Report on the Status of Competition in the Telecommunications
Industry,” August 1, 2009, p.47.
138
“AT&T U-verse Launches a New Kind of Home Phone Service in Jacksonville with AT&T U-verse Voice,”
AT&T Press Release, January 26, 2009, <http://www.att.com/gen/press-room?pid=4800&cdvn=news&
newsarticleid=26495>, accessed on February 16, 2009.
139
Reported to the FPSC via e-mail on May 24, 2009. U-verse Voice is available in parts of the following counties
in AT&T’s Florida footprint: Brevard, Broward, Clay, Duval, Escambia, Flagler, Indian River, Lake, Martin,
Miami-Dade, Monroe, Nassau, Osceola, Orange, Palm Beach, Putnam, Santa Rosa, Seminole, St. Johns, St. Lucie,
and Volusia.
140
Vonage Holdings Corp., Fourth Quarter and Full Year 2009 Results, February 25, 2010,
<http://pr.vonage.com/releasedetail.cfm?ReleaseID=447133>, accessed on March 1, 2010.
52
of opinion exists on the nature and extent of the shortage or lack of broadband Internet access
and how to address the shortage. Federal grant and loan programs as established by the ARRA
and other federal efforts resulting from the NBP, released by the FCC in March 2010, attempt to
address broadband availability and related issues. Additionally, in 2009 the Florida legislature
charged the Department of Management Services (DMS) with the responsibility of mapping
Florida broadband availability and developing a plan to address any shortcomings. It is
premature to conclude whether these various efforts are having a positive impact on broadband
availability and subscribership.
1. National Broadband Trends
Broadband subscription continued to increase in 2009 and early 2010, and it appears to
be leveling off. The top cable and telephone providers added slightly fewer than 4.1 million
subscribers in 2009, with cable companies adding 2.3 million, and the largest
telecommunications providers adding 1.7 million.141 The most recent study released by the Pew
Internet & American Life Project states that, by the end of 2009, the increase in broadband
subscription was only 3 percent, which is within the margin of error of the results of their
previous estimate.142 A study released by the FCC prior to the NBP shows that 67 percent of
U.S. households have a regular broadband user and 65 percent of adults use broadband from
their homes.143 Other trends in early 2010 include:
•
Bundling broadband service with cable, cellular, and other services144
•
Dramatic increases in download and upload speeds145
•
The perpetuation of the digital divide146
•
Increased usage of handheld devices or smartphones to access the Internet147
a. National Broadband Subscribership
According to a recent FCC study, 78 percent of adults are Internet users, which includes
dial-up Internet and the use of the Internet from anchor institutions and work places. Only 6
percent have dial-up connections, and 6 percent access the Internet exclusively from places other
than where they reside. While 63 percent of white, non-Hispanic Americans are broadband
141
“4.1 Million Added Broadband From Top Cable and Telephone Companies in 2009,” LRG Press Release, March
12, 2010, <http://www.leichtmanresearch.com/press/031210release.html>, accessed April 15, 2010.
142
Lee Rainie, “Internet, Broadband and Cell Phone Statistics,” Pew Internet & American Life Project, Washington,
D.C., January 5, 2010, p. 1.
143
FCC, “Broadband Adoption and Use In America,” Released February 23, 2010,
<http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-296442A1.pdf>, accessed on April 10, 2010.
144
Robert Atkinson and Ivy Schultz, “Broadband in America,” Columbia Institute for Tele-Information, New York,
NY, November 11, 2009, pp. 7-17.
145
Ibid.
146
Lee Rainie, “Internet, Broadband and Cell Phone Statistics,” Pew Internet & American Life Project, Washington,
D.C., January 5, 2010, p. 1.
147
Ibid.
53
subscribers, 52 percent of African Americans have broadband at home.148 A report published by
the National Telecommunications and Information Administration (NTIA), U.S. Department of
Commerce, found that in October 2009, 39.7 percent of Hispanics living in America were
broadband adopters, and the Pew Internet & American Life Project found that in January 2010,
47 percent of Hispanics were home broadband users. Figure 4-6 outlines some of the disparities
in broadband subscription between different demographic groups.149, 150
Figure 4-6. Demographics of Home Broadband Use
Race/Ethnicity
Age
Income
Community Type
90%
83%
76%
80%
73%
67%
70%
63%
62%
61%
64%
56%
60%
52%
47%
47%
50%
42%
40%
26%
30%
20%
10%
Ru
ra
l
Ur
ba
n
Su
bu
rb
an
Up
an
d
50
-6
4
65
30
-4
9
18
-2
9
>
$3
$3
0,0
0,
00
00
0$4
$5
9,9
0,
99
00
0$7
4,9
99
$7
5,
00
0+
Bl
ac
W
hi
te
,N
on
-H
isp
k,
an
N
ic
on
-H
isp
an
ic
H
isp
an
ic
0%
Source: Pew Internet and American Life Project (January 2010)
The NTIA study concluded that “persons with high incomes, those who are younger,
Asians and Whites, the more highly-educated, married couples, and the employed tend to have
higher rates of broadband use at home.”151 The FCC report noted that 42 percent of Americans
148
Ibid, p. 4.
NTIA, “Digital Nation: 21st Century America’s Progress Toward Universal Broadband Internet Access,”
Released February 2010, <http://www.ntia.doc.gov/reports/2010/NTIA_internet_use_report_Feb2010.pdf>,
accessed on April 10, 2010.
150
Lee Rainie, “Internet, Broadband and Cell Phone Statistics,” Pew Internet & American Life Project, Washington,
D.C., January 5, 2010, p. 4.
151
NTIA, “Digital Nation: 21st Century America’s Progress Toward Universal Broadband Internet Access,”
Released February 2010, <http://www.ntia.doc.gov/reports/2010/NTIA_internet_use_report_Feb2010.pdf>,
accessed on April 10, 2010.
149
54
with disabilities have broadband at home, and seniors continue to be the group with the lowest
rate of adoption, at 35 percent.152 Both reports concur that the main dividing lines for broadband
access are income and education. Various groups tend to use broadband for differing purposes.
For example, 83 percent of African Americans are likely to have looked for or applied for a job
online versus the 60 percent for the total population. Hispanics were most likely to use their
Internet connection to download music or keep up with news about their communities.153
Of the 35 percent who do not have high-speed Internet access in their homes, the largest
percentage cite cost as the predominant factor. Other non-adopters either do not feel that they
have the skills necessary to use broadband, or that it is not relevant to their lives. The smallest
group of those who do not have broadband access, 12 percent, indicated availability as the
reason. Most of those surveyed claimed that they would be able to afford broadband Internet
access in their home if it were priced at $25/month or less. The average monthly cost for a basic
broadband subscription is slightly over $40.154 Figure 4-7 shows the reasons respondents gave
for not having broadband in their homes.
Figure 4-7. Why Respondents Do Not Have Broadband
18%
Not Relevant
3%
4%
Can Use Somewhere Else
4%
Not Available
26%
Inadequate Computer
Lack of Skill
Too Expensive
38%
7%
Other
Source: National Telecommunications and Information Administration (February 2010)
152
FCC, “Broadband Adoption and Use In America,” released February 23, 2010,
<http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-296442A1.pdf>, accessed on April 10, 2010.
153
Ibid.
154
FCC, “Broadband Adoption and Use In America,” released February 23, 2010,
<http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-296442A1.pdf>, accessed on April 10, 2010.
55
b. Broadband Speeds
The NBP emphasizes increasing the speed of broadband services available to Americans.
FCC Chairman Julius Genachowski has set a goal to reach 100 million households with 100
Mbps download speeds by the year 2020. Google has pledged to run fiber to homes in selected
communities and will provide possible speeds of 1 Gbps.155 Research has shown, however, that
realized broadband speeds are often as much as 50-80 percent lower than what are advertised.
The U.S. ranks eighteenth among developed nations in average measured connection speeds.156
A report prepared for the FCC by the Columbia Institute for Tele-Information predicts
that by 2014, as many as 90 percent of homes in the U.S. will have access to wireline broadband
with an advertised download speed of at least 90 Mbps.157 The report also projects that wireless
broadband will be available at advertised speeds as high as 12 Mbps to 95 percent of the
population by 2013. A third option, satellite broadband, is also making strides technologically.
Several new satellites will be launched in 2011 and 2012 and will be capable of providing
broadband at 2-10 Mbps. Currently, major telecommunications companies are offering DSL
ranging from 3-50 Mbps. The majority of cable providers that have converted to DOCSIS (Data
Over Cable Service Interface Specification) 3.0 are capable of providing downstream speeds at
or above 50 Mbps, with several companies performing trials in excess of 100 Mbps.158
2. Florida Broadband Trends
Florida has already benefited from the first round of BTOP and BIP broadband stimulus
disbursements. Currently, the state has received approximately $39.2 million in federal awards
for the improvement of broadband adoption and infrastructure. Just over $30 million has gone to
the North Florida Broadband Authority (NFBA). The NFBA plans to provide high-speed
broadband services to underserved areas in 14 north central Florida counties and will connect
over 300 community anchor institutions at speeds ranging from 10 Mbps to 1 Gbps. Level 3
EON, LLC, an Internet backbone carrier operating throughout the state of Florida, also received
$2 million for improving infrastructure throughout the state, impacting approximately 180,000
households, 12,300 businesses, and 100 community anchor institutions. Miami-Dade County
Public Schools received $3.5 million to promote broadband adoption among low-income middle
school students and their families.159
The Florida DMS was awarded a federal stimulus grant through NTIA for state
broadband mapping and for state broadband data development planning (SBDD). The total cost
of the 5-year DMS project is estimated at $7.1 million with a proposed $4.9 million to be funded
by grants. DMS has received a total of $2.5 million for the first 2 years. NTIA will disburse
155
M. G. Siegler, “Help Us Google, You’re Our Only Broadband Hope,” The Washington Post, March 21, 2010,
<http://www.washingtonpost.com/wp-dyn/content/article/2010/03/21/AR2010032103679.html>, accessed on April
14, 2010.
156
David Lazarus, “‘Up to’ claims for Internet connection speeds next to worthless,” Los Angeles Times, February
26, 2010, <http://articles.latimes.com/2010/feb/26/business/la-fi-lazarus26-2010feb26> accessed on April 14, 2010.
157
Robert Atkinson and Ivy Schultz, “Broadband in America,” Columbia Institute for Tele-Information, New York,
NY, November 11, 2009, pp. 7-17.
158
Ibid.
159
Broadband USA, <www.broadbandusa.gov>, accessed on April 19, 2010.
56
funding for the remaining three years by September 2010. DMS has hired Connected Nation to
create a map detailing broadband availability throughout the state and has named the program
Connect Florida.160 The award for SBDD of $500,000 was included in the first disbursement
and can be used over a 5-year grant window. The focus of the planning grant is to research and
analyze how government in Florida is using, procuring, and providing broadband services to
determine if there are options to optimize broadband investments.161
In the spring of 2010 the Connect Florida program released the results of a survey on
broadband adoption and use with Florida specific data.162 The survey of 1,200 randomly
selected participants revealed that 81 percent of Florida residents have a home computer, and 67
percent access broadband from their home. The majority of survey respondents who were
without a computer said that they felt that they did not need one, or were unaware of why they
needed one. Only 5 percent of survey respondents claimed that broadband was unavailable at
their residences, and 3.8 percent of Florida households do not have terrestrial fixed broadband
access. The survey also discovered that 39 percent of Florida residents use their broadband
connection to contact state government online.163
The latest FCC High-Speed Services for Internet Access report includes state-by-state
data as of December 31, 2008. The following highlights pertain to broadband subscribership in
Florida:
•
6.7 million total high speed Internet connections are in the state of Florida, including:
o
o
o
o
•
247,000 fiber connections
2.8 million cable connections
2 million DSL connections
1.5 million wireless connections
More than half of those connections are at download speeds of 3 Mbps or greater.
o Less than 10 percent of those connections are greater than or equal to 10 Mbps.
•
93 providers of high-speed Internet access are in Florida, including 44 DSL providers,
19 cable providers, 31 fiber providers, and 6 mobile wireless providers.164
•
The residential broadband subscribership percentage in Florida was 63 percent, which
is 4 percent below the current national average.165
160
Connect Florida, <http://www.connect-florida.org/>, accessed on April 19, 2010.
Department of Management Services, Broadband Initiative (ARRA),
<http://dms.myflorida.com/suncom/broadband_initiative_arra>, accessed on May 3, 2010.
162
Connect Florida Residential Technology Assessment Results, March-April 2010.
163
Ibid.
164
The sum of the individual parts exceeds the total because of overlap of service offerings.
165
FCC, “High-Speed Services for Internet Access: Status as of December 31, 2008,” Released February 2010,
<http://www.fcc.gov/Daily_Releases/Daily_Business/2010/db0212/DOC-296239A1.pdf>, accessed April 19, 2010.
161
57
3. Broadband Technology
a. Fiber Optics
The only major U.S. telephone company deploying fiber all the way to the home is
Verizon, and its deployment of FiOS-related infrastructure is nearing completion. The roll out of
FiOS services will now be extended predominantly to areas where video franchise agreements
have been secured. Some franchise negotiations, however, are still taking place in some smaller
communities in New York, Massachusetts, and Pennsylvania. Verizon provides FTTH television
and Internet access services in 16 states, and the goal is to reach 18 million households by the
end of 2010. Verizon reported 3.32 million Internet access subscribers as of year-end 2009. The
total estimated cost for deployment of FiOS made in 2007 was $23 billion, since connecting fiber
to a home can cost over $1,000. FTTH is the only technology with the potential to provide
customers with speeds approaching what are available in countries such as Japan and South
Korea.166
Although Verizon is the only major carrier installing FTTH, several small, independent
telecommunications carriers also deploy FTTH technology. These companies serve over 1.4
million homes with “gigabit-enabled, all fiber service.”167 As many as 750 providers are
replacing copper lines with FTTH connections in North America to remain competitive against
the larger cable and telephone companies. More than 65 percent of small, independent
telecommunications companies surveyed by the FTTH Council said that they were “very likely”
to make the upgrade to FTTH.168
As of March 2009, a total of 14.9 million homes in the U.S. had access to some type of
fiber-based connection. AT&T has unveiled plans to make its fiber offering available to 30
million living units with its fiber offering, called U-verse, by 2011.169 Google has announced
plans to enter the fiber business as well, and expects to deploy fiber to somewhere between
50,000 and 500,000 homes in communities that are selected through an application process.170
b. DSL
Since the length of the copper wire limits the speed of DSL connections, companies have
been utilizing a hybrid of fiber and copper wires to bolster their DSL speeds for many years. As
a result, discussing DSL and fiber deployments as entirely separate technologies is difficult. As
of the second quarter of 2009, Verizon had 6 million copper-fed DSL connections in the U.S.
166
Associated Press, “Verizon Winds Down Expensive FiOS Expansion,” March 26, 2010, Technology Review,
<http://www.technologyreview.com/wire/24892/?a=f>, accessed on April 20, 2010.
167
Andrew Burger, “FTTH Now Available to 16% of North American Homes,” April 14, 2010, Telecompetitor,
<http://www.telecompetitor.com/ftth-now-available-to-16-of-north-american-homes-small-carriers-quite-active>,
accessed April 20, 2010.
168
Ibid.
169
Robert Atkinson and Ivy Schultz, “Broadband in America,” Columbia Institute for Tele-Information, New York,
NY, November 11, 2009, pp. 7-17.
170
Bernie Arnason, “Google Building Its Own FTTH Network, Wants Community Volunteers,” February 10, 2010,
Telecompetitor, <http://www.telecompetitor.com/google-building-its-own-ftth-network-wants-communityvolunteers/>, accessed April 19, 2010.
58
compared to AT&T’s 14 million, and Qwest’s 3 million. DSL does have the benefit of being
marginally less expensive than cable, wireless, or fiber-based broadband offerings in most cases.
Verizon, AT&T, Qwest, and other carriers offer low-speed tiers of DSL between $20 and $30
per month, whereas low-cost plans offered by several of the largest cable providers using hybrid
fiber-coaxial cable are more likely to be in the $30 to $60 range.171
AT&T has announced it plans to continue expanding its DSL service areas with
traditional copper-fed DSL service. It expects to pass over 16 million homes by the end of 2010
with speeds reaching up to 6 Mbps. As of the first quarter of 2009, Qwest was providing DSL
connections to 2.9 million subscribers, including customers in some of the most “rural, rugged,
and least populated areas in the continental United States.” Verizon is divesting a large portion
of its DSL lines, and reported a significant decrease in DSL-based high-speed Internet
connections in the second quarter of 2009. The total number of Verizon’s DSL subscribers is
projected to continue declining over the next five years, as the company continues to focus more
on its fiber broadband offering. Verizon’s DSL broadband has download speeds of up to 7 Mbps
and is available in 24 states and the District of Columbia.172 Windstream, a smaller
telecommunications provider, will continue to provide its DSL service to just over 1 million
customers in 16 states. Windstream’s DSL broadband service ranges from 3 to 12 Mbps in most
places, but 25 Mbps service is available in Lexington, Kentucky, where Windstream is currently
in the process of testing 50 Mbps service.173
c. Cable Broadband
Most of the large cable companies are converting to DOCSIS 3.0, which will provide
subscribers with potential download speeds in excess of 50 Mbps. Some cable providers have
begun advertising download speeds of 100 Mbps or higher. Comcast, the nation’s largest cable
company, has a top upstream speed offering of 10 Mbps and is currently testing services capable
of up to 120 Mbps upstream. The company anticipates being finished with the transition to
DOCSIS 3.0 before the end of 2010. The cost to companies that upgrade is between $10 to $15
per customer. Analysts have reported the expectation that nearly all of the 92 percent of homes
passed by cable will have access to the new format by 2013. Cable broadband service is
currently used by 37 percent of U.S. households.174
d. Wireless
A major cornerstone of the FCC’s NBP is the viability of wireless broadband as a major
competitor with DSL, fiber-based, and cable broadband service. However, some analysts believe
wireless broadband is more likely to be complementary to wired broadband, rather than a
competitive substitute.175 Only about 4 percent of the U.S. population currently has the choice
171
Robert Atkinson and Ivy Schultz, “Broadband in America,” Columbia Institute for Tele-Information, New York,
NY, November 11, 2009, pp. 17-19.
172
Verizon High Speed Internet, <http://www22.verizon.com/Residential/HighSpeedInternet/Plans/Plans.htm>,
accessed June 10, 2010.
173
Robert Atkinson and Ivy Schultz, “Broadband in America,” Columbia Institute for Tele-Information, New York,
NY, November 11, 2009, pp. A1-A43.
174
Ibid, pp. 19-22.
175
Ibid, pp. 20-34.
59
between 3 or more broadband providers,176 but analysts predict that by the end of 2013, 53
percent of the U.S. population over the age of 14 will use either a 3G or 4G wireless service.177
Sprint Nextel uses WiMAX (Worldwide Interoperability for Microwave Access)
technology that is capable of average download speeds comparable to residential cable and DSL
connections.178 As one of the companies pioneering 4G wireless in 2008, Sprint Nextel has
deployed its 4G WiMAX network in many major metropolitan areas and will continue to do so
throughout 2010. Clearwire, which merged its network with Sprint Nextel’s in late 2008, also
uses 4G WiMAX technology and is providing service in 27 markets with speeds between 3 and 6
Mbps downstream. WiMAX, when used as a stand alone broadband service for the home, is
priced competitively with fiber and cable offerings, averaging $39 per month.179
AT&T utilizes a technology similar to WiMAX for its Wi-Fi hotspots, which have been
gaining popularity. In 2009, there were 85.5 million Wi-Fi connections nationwide, the
overwhelming majority (73 percent in the fourth quarter of 2009) of which were made by Wi-Fi
enabled smartphones and integrated devices. Wi-Fi service is available in more than 20,000
hotspots.180 Throughout 2009 and 2010, AT&T will be completing upgrades to its 3G network
in order to make increased speeds of approximately 7.2 Mbps available to 80 million wireless
customers. In 2011, AT&T will begin deploying Long Term Evolution (LTE) which will
eventually be capable of speeds in excess of 20 Mbps.181
Verizon Wireless has announced plans to deploy LTE in 25 to 30 markets by the end of
2010, and predicts that LTE 4G service will be available to its entire coverage area by 2013.
Verizon Wireless is currently in talks with local rural carriers to provide access to its 4G wireless
spectrum. If an agreement is reached, local rural carriers would lease licensed spectrum from
Verizon Wireless, and sell the 4G services to their customers. If successful in its negotiations,
Verizon would be able to cover more of the U.S. with its LTE technology.182 The 4G network
will be capable of speeds ranging from 4 to 12 Mbps. Because of the way wireless broadband
spectrum is shared, however, it is unlikely that those speeds will be attainable during peak hours
or when systems are overloaded with too many subscribers using bandwidth-intensive
applications. The monthly cost to consumers varies between $10 to $30 per month for access to
mobile data. This fee is added on top of a subscriber’s regular wireless phone bill.
176
Marguerite Reardon, “Can 4G Wireless Take on Traditional Broadband?” CNN.com, March 23, 2010,
<http://www.cnn.com/2010/TECH/03/23/cnet.4g.wireless.clearwire/index.html>, accessed on March 24, 2010.
177
Robert Atkinson and Ivy Schultz, “Broadband in America,” Columbia Institute for Tele-Information, New York,
NY, November 11, 2009, pp. 20-34.
178
Robert Atkinson and Ivy Schultz, “Broadband in America,” Columbia Institute for Tele-Information, New York,
NY, November 11, 2009, pp. A1-A43.
179
Ibid.
180
“AT&T Wi-Fi Handles More Than 85 Million Total Connections in 2009, More Than Four Times 2008,” AT&T
Press Release, January 25, 2010, <http://www/att/com/gen/pressroom?pid=4800&cdvn=
news&newsarticleid=30433>, accessed on March 15, 2010.
181
Robert Atkinson and Ivy Schultz, “Broadband in America,” Columbia Institute for Tele-Information, New York,
NY, November 11, 2009, pp. A1-A43.
182
Naraj Sheth, “Verizon in Talks With Rural Firms,” The Wall Street Journal, May 13, 2010,
<http://online.wsj.com/article/SB10001424052748703339304575240200909761376.html?mod=WSJ_Tech_LEFTT
opNews#printMode>, accessed on June 10, 2010.
60
e. Satellite
Satellite technology remains the most feasible way to provide broadband Internet access
services to the most remote and difficult-to-serve locations. Traditionally, there are some
drawbacks to satellite broadband, including cost, speed, and latency issues. However, in 2011,
several new satellites will be launched that may change that reputation permanently, and put
satellite broadband on more equal footing with traditional wireline broadband service. These
new satellites will have 100 Gbps of capacity and allow broadband subscribers to achieve speeds
from 2-10 Mbps. ViaSat’s ViaSat-1 satellite will have the capacity to serve 2 million customers
across the U.S. Hughes has announced plans to launch a similar satellite in the first quarter of
2012 that it claims will provide subscribers with download speeds from 5 to 25 Mbps and have
the capacity to serve a similar number of subscribers as the ViaSat satellite. These new satellites
also have the potential to reduce the cost of satellite data transmission.183
There are only a handful of companies currently offering satellite broadband, including
EchoStar, Gilat, StarBand, Hughes, ViaSat, and WildBlue. All of these require the customer to
purchase a satellite dish at prices ranging from $150-$300. Current monthly subscription rates
vary from $50 to $100 with speeds from 512 kbps to 1.5 Mbps.184
183
Robert Atkinson and Ivy Schultz, “Broadband in America,” Columbia Institute for Tele-Information, New York,
NY, November 11, 2009, pp. 20-34.
184
Robert Atkinson and Ivy Schultz, “Broadband in America,” Columbia Institute for Tele-Information, New York,
NY, November 11, 2009, pp. A1-A43.
61
Figure 4-8 breaks down the percentages of commonly used broadband technology types.
It is clear that while the overall numbers of broadband subscribers increased each year in all
groups, cable broadband continues to dominate the industry by nearly 10 percent, even when
fiber broadband subscribers are grouped together with traditional DSL broadband service. It will
be interesting to see if the next few years bring a dramatic decrease in non Internet households as
government initiatives come into effect and technology improves.
Figure 4-8. Internet Subscription by Technology
100%
90%
20%
19%
19%
14%
12%
80%
70%
16%
60%
50%
28%
29%
31%
40%
30%
20%
35%
37%
39%
2008
2009
2010
10%
0%
Cable
Telco (DSL and Fiber)
Dialup & Other
Source: Columbia Institute of Tele-Information (November 2009)
62
Non-Internet Households
Chapter V. Discussion of Chapter 364, F.S., Requirements
A. Introduction
Section 364.386(1), F.S., requires the Commission to address the following six points in
its evaluation of the status of local wireline telecommunications competition in Florida:
1. The overall impact of local exchange telecommunications competition on the
continued availability of universal service.
2. 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.
3. The ability of customers to obtain functionally equivalent services at comparable
rates, terms, and conditions.
4. The overall impact of price regulation on the maintenance of reasonably affordable
and reliable high-quality telecommunications services.
5. What additional services, if any, should be included in the definition of basic local
telecommunications services, taking into account advances in technology and market
demand?
6. Any other information and recommendations that may be in the public interest.
The FPSC sent data requests to all CLECs and ILECs certificated as of February 16,
2010, designed to address these and other issues. The request included a qualitative
questionnaire, which sought information on various service offerings of ILECs and CLECs.
Information was requested relating to Florida-specific capital investments, barriers to entry,
information on intermodal competition, and other comments. There was also space for general
comments on the status of competition in Florida. This chapter addresses the statutory questions
and summarizes the responses provided by CLECs and ILECs to the qualitative questions.
The Commission recognizes that for many consumers, wireless and VoIP services are
substitutes for traditional wireline services. Only wireline telecommunications providers are
under the regulatory authority of the Commission. The Commission is, therefore, unable to
gather certain types of information from providers of nonjurisdictional services since wireless
carriers and providers of VoIP service are not obligated to provide data. A number of VoIP
providers have voluntarily provided line counts. With this partial information, the Commission’s
ability to present a complete analysis of the required statutory issues is limited. Through sources
available in the public domain, the FPSC is able to reach what it believes are reasonable
conclusions regarding wireless and VoIP service providers.
63
B. Statutory Issues
1. The impact of competition on the availability of universal service
Universal service refers to the longstanding policy that a specified set of
telecommunications services should be available to all customers at affordable rates. Section
364.025, F.S., provides a number of guidelines designed to maintain universal service objectives
with the introduction of competition in the local exchange market. However, the carrier-of-lastresort obligation, a traditional element of universal service, sunset as of January 1, 2009.
According to the FCC, 93 percent of Florida’s households had access to voice
communications service in the home as of November 2009.185 Figure 5-1 shows the annual
percentage of telephone penetration as of March of each year since 2001, and reflects a drop of 2
percent in 2009 from the 2008 level. Income is a significant factor in predicting telephone
subscribership, as shown in Figure 5-2. Eighty-three percent of Florida households with total
incomes of less than $10,000 have voice communication service, compared to 96 percent of
households with incomes of more than $40,000. Florida penetration rates in the lowest income
group dropped to 84 percent in 2009 from 89 percent in 2008. This decrease is probably
reflective of a continuing weak economy.
Figure 5-1. Telephone Service Penetration: Florida vs. Nation
99%
97%
96%
96%
95%
95%
96%
95%
94%
95%
94%
95%
95%
93%
93%
93%
94%
94%
93%
92%
92%
91%
92%
92%
91%
Florida
-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
M
ar
-0
3
-0
2
M
ar
-0
1
M
ar
-0
0
M
ar
M
ar
-9
9
89%
Nation
Source: FCC, Telephone Penetration by Income by State
185
FCC, “Telephone Penetration by Income by State (Data through March 2009),” Released May 2010,
<http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-297986A1.pdf>, accessed May 12, 2010.
64
Figure 5-2. 2009 Telephone Penetration by Income: Florida vs. Nation
100%
95%
98%
97%
97%
95%
95%
$20K-$30K
$30K-$40K
96%
95%
92%
90%
90%
85%
84%
80%
75%
Less than $10K
$10K-$20K
Florida 2009
$40K or More
Nation 2009
Source: FCC, Telephone Penetration by Income by State
Conclusion: FCC telephone subscribership data for Florida reflected a decline from 95
percent in 2002 to 91 percent in 2005. This decline was followed by an increase in Florida
telephone subscribership which increased to 94 percent in 2007 and 2008. As of March 2009,
subscribership has declined by 2 percentage points to 92 percent. This decline is likely related to
the high rate of unemployment in the state with the recent economic downturn. The FPSC
concludes that local exchange competition has had little, if any, impact on the availability of
universal service. Moreover, based on data presented in Chapters III and IV, competition for
residential customers appears to be greater and more far reaching than in previous years.
2. The ability of competitive providers to make equivalent service available
The size of a particular market and subscriber density are key factors affecting a carrier’s
market entry decision. As a result, more competitive carriers are offering service in urban areas
than in rural areas. Provisions in the 1996 Act require that ILECs provide UNEs to requesting
carriers. The 1996 Act allows rural ILECs to be exempted from providing UNEs or
interconnection under certain circumstances.186 AT&T, Verizon, and CenturyLink are the only
three ILECs in Florida that are not considered rural, and therefore are not exempt. Since UNEs
and resale of an ILEC’s services at a wholesale discount are presently not required in Florida’s
rural ILEC service areas, wireline CLECs considering entry in a rural area may face higher costs
as compared to entry in a nonrural area.
186
Section 251(f) of the Federal Communications Act of 1934, as amended.
65
a. Perceived Barriers to Competition
To evaluate the ability of competitive wireline carriers to provide service, the
Commission surveyed all certificated CLECs. CLECs were asked to discuss any perceived
barriers to competition in Florida and describe any significant obstacles that might impede the
growth of local competition in the state. Twenty-seven CLECs reported barriers to competition;
the primary issues identified by the respondents are shown in Figure 5-3.
Figure 5-3. Barriers to Competition Reported by CLECs
UNE Rates
19%
Other
19%
TRRO
4%
Interconnection
7%
Service
15%
Pricing
36%
Source: Responses to 2010 FPSC data requests
Pricing. The most frequently reported barrier to entry reported by CLECs was pricing.
CLECs reported that ILECs were offering promotional rates to the CLECs’ retail customers that
were below wholesale rates available to CLECs.
UNE Rates. High pricing of UNEs was the second most commonly reported type of
barrier to entry. CLECs alleged that unjust fees and UNE rates made competing with ILECs
economically unfeasible.
Service. Several CLECs reported service problems as a barrier to entry. This category
includes allegations of poor service from ILECs to CLECs and to CLECs’ customers. Issues
reported include ILEC delays in processing orders and resolving service issues.
Triennial Review Remand Order (TRRO). In 2005, the FCC released its TRRO
which, among other things, established a transition period after which the ILECs would no
longer be required to unbundle local switching at wholesale prices based on the total element
long-run incremental cost methodology. This decision had the effect of increasing the price and
availability of certain UNEs to CLECs, though comparable facilities were typically offered at
market rates. Some CLECs continue to identify the high cost of interconnection directly
66
associated with the TRRO as a barrier. CLEC allegations include lack of access to certain kinds
of UNE lines, lack of ILEC cooperation in negotiating commercial agreements, and increased
costs resulting from the TRRO.
Interconnection Agreements. A few CLECs listed interconnection agreements as a
barrier to entry. CLEC allegations include ILEC refusal to negotiate and refusal by ILECs to
interconnect with CLEC networks on fair, reasonable, and nondiscriminatory terms.
Other. CLECs identified other issues as barriers that do not necessarily fit into one of
the major categories. These issues include: the variety of fees charged to the CLEC at the
initiation of CLEC service at a customer’s premises; competition from unregulated cable
companies; ILEC market power; excessive paperwork; and the existence of exclusive contracts
between developers and other communications companies.
b. Competitive Services
The Commission asked the CLECs to report what services they offer. The 128 CLECs
providing local service reported offering:
•
Bundles including services other than local voice (55 CLECs)
•
VoIP (47 CLECs)
•
Prepaid only (16 CLECs)
•
Broadband Internet access - Residential (31 CLECs)
•
Fiber to end users (10 CLECs)
•
Video Service (52 CLECs)
c. CLEC Investment
The Commission also asked the CLECs to report how much money they had invested in
their networks that directly serve Florida’s local service customers. Ranges of dollars were
provided on the CLEC questionnaire so that the CLECs did not need to report a specific dollar
amount. For this year’s report, 133 CLECs responded to this question, compared to 120 in the
previous year. Of the responses provided:
•
62 CLECs reported zero investment
•
50 CLECs reported investing $1-$249,999
•
6 CLECs reported investing $250,000-$999,999
•
15 CLECs reported investing $1 million-$10 million
67
d. CLEC Complaints Against ILECs
Pursuant to Section 364.161(4), F.S., the Commission handles CLEC complaints filed
against ILECs. As illustrated in Figure 5-4, the number of complaints has generally declined
during the past few years; however, 16 complaints were filed from January 1, 2009, to December
31, 2009. All of the complaints, generally focused on service-related issues, were resolved in
2009. The majority of the complaints (12) were filed by the same CLEC, and a list of complaints
is found in Appendix D.
Figure 5-4. CLEC Complaints Filed Against ILECs
90
81
80
70
Complaints Received
60
50
40
30
19
20
15
16
Jan 08 - Dec 08
Jan 09 - Dec 09
10
10
0
Jul 01 - Jun 02
Jun 05 - May 06
Jun 06 - Dec 07
Source: FPSC Consumer Activity Tracking System (July 2001–December 2009)
The Commission received 91 negotiated agreements and 1 request for arbitration between
January 1, 2009, and December 31, 2009, significantly fewer than the 120 negotiated agreements
the commission received the previous year. Since June 1996, the Commission has reviewed and
approved 4,458 negotiated interconnection agreements. These statistics demonstrate the general
ability of competitive providers to enter into negotiated agreements with incumbent carriers.
e. Comments by Incumbents
ILECs were also asked to provide any comments, suggestions, information, reports, or
studies that they believe to be relevant this report, including intermodal competition. Of the ten
ILECs, one filed comments. TDS Telecom/Quincy (TDS) stated:
The market area in which TDS Telecom/Quincy is considered rural, however it is
highly competitive. Residential and business customers in this very small market
area have access to any one of a number of wireless providers in addition to three
facility-based wireline competitors. Of the competitors in this market, TDS
68
Telecom is the only company that is regulated by the State of Florida, even
though one of the facility-based carriers in this market is the third largest
telephone company in the country.
Conclusion: Wireless and VoIP services have become a significant portion of the voice
communications market. Historically, the Commission has not addressed barriers to entry that
may be impacting wireless and VoIP providers. These intermodal competitors are providing
competitive alternatives to both residential and business subscribers, as evidenced by the fact that
intermodal subscribership has increased while wireline subscribership has decreased. In
addition, CLECs investing in facilities in Florida are providing a range of service options, and do
not appear to have faced insurmountable obstacles relating to interconnection issues. While
some positive growth in the number of CLECs offering service in Florida has occurred since
2007, the number of residential access lines served by CLECs declined considerably, from
730,000 access lines in 2004 to fewer than 132,000 in 2008. In 2009, CLECs experienced a
slight rebound, increasing the number of residential lines served to 174,467. While some CLECs
have been able to provide functionally equivalent service, intermodal competition has made
competing in this market more difficult.
3. The ability of customers to obtain 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, the companies subject to Commission jurisdiction.
As of December 31, 2009, 128 CLECs were providing local (voice) service in Florida in
some capacity, compared to 139 as of December 31, 2008. Appendix B lists the responding
CLECs and the methods by which each CLEC provides service. CLECs can offer service
through resale of an ILEC’s or a CLEC’s wholesale services, by using its own facilities, by
leasing UNEs from an ILEC, or through a combination of methods, including VoIP.
69
As of December 31, 2009, of the 276 exchanges in Florida, 15 exchanges have no CLECs
offering service. Twelve exchanges had no CLEC offering service as of December 31, 2008.187
Table 5-1 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 2008 and 2009. These exchanges were arbitrarily selected to reflect a range based on
the number of lines. The number of CLECs offering services decreased in 21 of the 23
exchanges represented, but CLEC access lines decreased in only 12 of the 23 exchanges. The
numbers show that CLECs are more likely to target areas with large concentrations of customers.
Table 5-1. CLEC Providers by Florida Exchange
Total Number of CLEC
Access Lines
Exchange
Jasper
Callahan
Quincy
Baker
Crawfordville
Crestview
Leesburg
Ocala
Tallahassee
Myakka
Mulberry
Bartow
Zephyrhills
Lakeland
St. Petersburg
Tampa
Jay
Chipley
Gulf Breeze
Titusville
Gainesville
Orlando
Miami
ILEC
Windstream
Windstream
TDS Telecom
CenturyLink
CenturyLink
CenturyLink
CenturyLink
CenturyLink
CenturyLink
Verizon
Verizon
Verizon
Verizon
Verizon
Verizon
Verizon
AT&T
AT&T
AT&T
AT&T
AT&T
AT&T
AT&T
2008
33
63
271
47
170
891
1,124
8,823
12,097
35
395
935
1,241
10,230
26,845
102,547
58
246
830
1,784
8,281
70,316
121,783
2009
14
82
195
40
148
879
1,098
7,259
8,764
51
428
980
1,271
9,446
29,142
102,776
67
276
805
1,523
8,915
66,825
137,250
Number of CLECs
Offering Services
2008
3
6
2
7
15
19
29
32
41
8
19
20
23
33
40
48
19
28
25
42
53
77
78
2009
2
4
1
8
16
16
23
25
34
6
15
19
19
25
34
47
15
21
23
37
48
68
77
Source: Responses to FPSC data requests (2009-2010)
187
The 15 exchanges without CLEC service are Bristol, Carrabelle, Dowling Park, East Point, Florida Sheriff's Boy
Ranch, Gretna, Hosford, Keaton Beach, Kingsley Lake, Luraville, Orange Springs, Raiford, The Beaches, Wellborn,
and Wewahitchka.
70
Customers must also be able to obtain functionally equivalent services at rates
comparable to that of the ILEC in order for meaningful CLEC competition to occur. Table 5-2
shows that customers have access to services at a variety of rates. Strategies may include overall
discounts and matching an ILEC’s price. Other CLECs have adopted a strategy of bundling
basic local service with discounted toll service and/or vertical features (call waiting, caller ID,
conference calling, etc.) to compete with ILECs.
Table 5-2. Local Rates for Selected Florida CLECs and ILECs
CLEC Rates
Residential
Access Point
American
Fiber
Business
ILEC Rates
Residential
Business
$6.30-$9.19
$17.09-$25.12
AT&T
$12.45-$13.68
$34.89-$36.75
$10.75
$29.25
AT&T
$12.45-$13.68
$34.89-$36.75
$12
$30
$16.48
$33.80
$11.50
$25.25
CenturyLink
$16.40-$17.00
$24.00-$31.00
$11.75
$24.50-$29.50
AT&T
$12.45-$13.68
$34.89-$36.75
$12.50
$28.75
$16.48
$33.80
$11.50
$25
$9.49-$11.49
$23.75-$28.72
Verizon
Knology
Orlando
Telephone
Verizon
Windstream
*Rates shown are for the lowest and highest rate groups for the most basic local service available.
The purpose is to compare CLEC rates in various ILEC footprints.
Source: Tariffs and price lists filed with the FPSC as of May 2010
The Commission asked the ILECs and CLECs for information on their bundled service
offerings, including whether they offered bundles, percentage of customers able to purchase
bundles, the percentage of customers who purchased bundled services (take rate), and if they
offered prepaid service. Of the 128 CLECs and 10 ILECs that were offering local telephone
service, 54 CLECs and all 10 ILECs reported offering bundled services.
Prepaid telephone service is a pricing strategy offered by some CLECs to consumers with
poor credit histories or to those previously disconnected due to repeated late payment or
nonpayment. This service typically gives customers local calling and 911 access in exchange for
a prepaid monthly fee, but typically the CLEC blocks long distance, 900 numbers, and directory
assistance calls. CLEC price lists indicate that prices for prepaid service range from
approximately $6.30 to $22.28 per month for residential customers, and from $17.09 to $30.00
per month for business customers. Telephone companies providing only prepaid telephone
services account for 16 of the 128 CLECs providing local service in Florida.
71
Wireless and VoIP communications services are alternatives to wireline
telecommunications services. The appeal of these alternatives is based on price as well as
convenience and the availability of unique features. Although obtaining detailed information
regarding the penetration levels of these services in Florida is difficult, as reported in Chapter IV,
a growing number of Florida households are wireless-only or subscribe to VoIP service in lieu of
wireline service. Wireless-only households have grown to about 25 percent of total households
nationwide.188 Florida’s population of college students and seasonal residents may contribute to
Florida’s continued decline in wireline subscribership because they often fall into demographics
with higher rates of wireless-only subscription.189, 190 The increasing popularity of wireless and
VoIP service also contributes to the fact that total residential access lines for Florida’s ILECs
have steadily declined since 2001.
Conclusion: Residential consumers in Florida are finding communications alternatives
to wireline services offered by ILECs. CLECs, VoIP providers, and wireless providers are
providing these alternatives. By the end of 2009, CLECs served 174,467 residential access lines.
Ninety-five percent of exchanges in Florida have at least one CLEC offering residential service;
however, fifteen exchanges have none. Customers subscribing to facilities-based VoIP services
in Florida account for approximately 1.8 million residential access lines. Wireless-only
households in Florida reached approximately 17 percent as of December 2007, and that number
is likely to be higher now.191 Consequently, the Commission concludes that Florida customers
are able to obtain functionally equivalent services at comparable rates, terms, and conditions.
4. The impact of price regulation on the maintenance of affordable and
reliable services
Prior to July 1, 2009, Section 364.051, F.S., provided that a price-cap regulated ILEC
may adjust its basic local service revenues once in a 12-month period by an amount not to
exceed the change in inflation less 1 percent. In contrast, the price increase for any nonbasic
service category could not exceed 6 percent within a 12-month period, until there is another
provider offering local telecommunications service in an exchange area. At that time, the prices
for any nonbasic service category may be increased in an amount not to exceed 20 percent within
a 12-month period. The 2009 Florida legislature passed legislation that changed the cap on the
increase from 20 to 10 percent. In addition, the new law redefined basic service to include only
single-line, flat-rate residential service without any additional features, either priced individually
or as part of a combination of services (including unregulated services such as wireless or video
188
S.J. Blumberg, J.V. Luke, “Wireless Substitution: Early Release of Estimates From the National Health
Interview Survey, July-December 2009,” May 12, 2010, p. 1,
<http://www.cdc.gov/nchs/data/nhis/earlyrelease/wireless201005.pdf>, accessed on May 13, 2010.
189
Florida Department of Education, “The Fact Book, Report for the Florida Community College System,” 2008,
p. 2, <http://www.fldoe.org/arm/cctcmis/pubs/factbook/fb2008/fb2008.pdf>, accessed on April 21, 2009.
“Florida (FL): University and College Education System, Top Five Florida College and Universities by Student
Enrollment Size,” Educational Portal, <http://education-portal.com/articles/Florida_%28FL%29%3A_
University_and_College_Education_System.html>, accessed on April 15, 2009.
190
“Vulnerable and Hard-to-Reach Population Fact Sheet: Seasonal Residents,” Nova Southeastern University, et.
al, updated October 2006, <http://www.nova.edu/allhazards/forms/seasonal_res.pdf>, accessed on April 28, 2008.
191
Ibid.
72
services). The new law became effective in July 2009.192 The following ILECs filed notices of
rate changes for basic and nonbasic exchange services between January 1, 2009, and December
31, 2009, pursuant to Section 364.051, F.S.:
•
AT&T increased basic local rates by 0.95 percent, effective October 25, 2009.
Nonbasic rates increased in the range of 0.00 percent to 6.89 percent among the
revenue categories.
•
CenturyLink increased basic local rates by 1.88 percent, effective April 1, 2009.
Nonbasic rates increased in the range of 2.40 percent to 8.45 percent among the
revenue categories.
•
Indiantown Telephone Company (ITS) increased basic local rates by 1.36 percent,
effective November 1, 2009. Nonbasic rates increased in the range of 3.22 percent to
6.00 percent among the revenue categories.
•
Northeast Florida Telephone Company increased nonbasic rates 2.98 percent among
the revenue categories.
•
Verizon increased basic local rates by 0.92 percent, effective November 1, 2009.
Nonbasic rates increased in the range of 0.08 percent to 5.07 percent among the
revenue categories.
•
Windstream increased nonbasic rates in the range of 1.15 percent to 5.60 percent
among the revenue categories.
Conclusion: The FPSC believes these rate increases and price regulation, in general,
have had a negligible impact on the overall affordability of telephone service.
5. Definition of basic local telecommunications services
The 2009 Florida Legislature modified the definition of basic local telecommunications
service and the new law became effective July 1, 2009. The new definition is:
“Basic local telecommunication service” means voice-grade, single-line, flat-rate
residential local exchange service that provides dial tone, local usage necessary to
place unlimited calls within a local exchange area, dual tone multi-frequency
dialing, and access to the following: emergency services such as “911,” all locally
available interexchange companies, directory assistance, operator services, relay
services, and an alphabetical directory listing. For a local exchange company, the
term includes any extended area service routes, and extended calling service in
existence or ordered by the Commission on or before July 1, 1995.
192
The 2009 Florida Legislature amended Section 364.051, F.S., which changed the terms of price regulation for
nonbasic services. However, the report text accurately reflects pricing conditions in effect for calendar year 2009.
73
The new definition eliminates multi-line residential and single-line business subscribers from the
definition.
According to Section 364.337(2), F.S., if a CLEC offers basic local telecommunications
service, it must include access to operator services, “911” services at a level equivalent to that of
the ILEC serving that area, and relay services for the hearing impaired. CLECs must also
provide a flat-rate pricing option for basic local telecommunications. The statute states that
“mandatory measured service for basic local telecommunications services shall not be imposed.”
The FCC has required providers of wireless and VoIP services that interconnect to the
public switched telecommunications network to provide E911 service. The FCC has an ongoing
proceeding to consider additional regulatory requirements for VoIP providers.193 While these
services provide the same or similar functionality to traditional wireline service, they do not
currently fall within the statutory definition of basic local telecommunications service.
Commercial mobile radio service (CMRS) or wireless providers are expressly exempt from the
statutory definition of a telecommunications company, and VoIP is expressly excluded from the
statutory definition of service.
Conclusion: No evidence suggests a need to recommend additions or deletions to the
definition of basic local service.
6. Other information and recommendations that may be in the public
interest
The FPSC has not set retail rates for incumbent telecommunications carriers electing
price cap regulation since state law permitted that option in 1995. In early 2009, the
Commission acknowledged the election of Frontier Communications of the South, LLC,
(Frontier) to be subject to price cap regulation pursuant to Section 364.015, F.S. Frontier was the
last remaining Florida ILEC subject to rate-of-return regulation.
The bulk of regulatory oversight under the jurisdiction of the Commission relates to
wholesale issues between carriers, Lifeline, numbering issues, regulatory compliance, service
quality jurisdiction over basic local telecommunications service customers, and consumer
complaints for service and billing. In 2009, however, the Florida Legislature passed changes to
Florida Statutes that changed the definition of basic local service. The new definition narrowly
defines basic local telecommunications service as single-line, flat-rate residential service without
the addition of nonbasic or unregulated services, either priced individually or as part of a
combination of services (including unregulated services, such as wireless or video). Service
quality jurisdiction is now limited to basic local service customers.
Entrepreneurs are finding new ways to employ technology, especially IP technology, that
creates value for the communications industry that is not necessarily end-user related.
Alternative communications technologies are increasingly juxtaposing regulated carriers with the
unregulated entities such as VoIP, wireless carriers, and other types of service providers. Some
of these companies have engaged in activities not heretofore addressed by regulatory bodies and
193
FCC, WC Docket No. 04-36, IP-Enabled Services.
74
the Commission has often found itself facing issues it has not previously considered. Most of
these issues arise in interconnection arrangements between service providers.
It is premature to make a recommendation regarding any needed statutory changes but
the Commission will continue to track workload that appears to be a result of new ways of using
technology and for which statutory authority is ambiguous.
Conclusion: There are no recommendations at this time.
75
76
Chapter VI. State Activities
A. ILEC Service Quality
ILECs are required to adhere to service quality standards as prescribed in the
Commission’s rules when providing basic local telecommunications service.194
The
Commission evaluates the service quality using a sample of the ILECs’ exchanges throughout
the state annually for large ILECs, but no more than once in four years for small ILECs.195 The
service quality standards are expressed as a percentage of compliance. For example, Rule 254.070,196 Customer Trouble Reports, states that 95 percent of all out-of-service conditions
reported by the individual subscriber shall be restored within 24 hours. In exchanges containing
more than 50,000 access lines, the out-of-service percentages are reported monthly; otherwise,
the ILEC aggregates the results and reports quarterly.197
Another standard found within the same rule involves troubles that are service-affecting.
Service-affecting troubles are of lesser severity than out-of-service conditions, and typically
relate to telephone service features such as voicemail, call forwarding, or noise on the line. In
service-affecting conditions, the ILECs are required to clear 95 percent of the troubles within 72
hours. The standard allows the ILECs to aggregate the results on a quarterly basis when the
exchange has fewer than 50,000 lines; otherwise, service-affecting troubles are reported monthly.
Revisions to Chapter 364, F.S., effective July 1, 2009, redefined basic and non-basic
local telecommunications service. Any combination of basic service along with a non-basic or
an unregulated service is considered non-basic service. The Commission updated the service
quality rules in accordance with the new definition on October 21, 2009, and the rules are now
applicable only to basic local telecommunications service, which is defined as “voice-grade,
single-line, flat-rate residential local exchange service.”198
ILEC service quality evaluation reports for Windstream, ITS, AT&T, TDS, Verizon, and
CenturyLink (formerly known as Embarq) were published in 2009.199 The service quality
evaluations published in 2009 were conducted before the revision to the statutes and revised
service quality rules became effective.
Commission rules also provide ILECs the opportunity to petition the Commission for
approval of a Service Guarantee Program (SGP) in lieu of certain service standard rule
194
Chapter 25-4, Florida Administrative Code (F.A.C.).
Small ILECs are ITS, Frontier, FairPoint, Smart City, TDS Telecom, Northeast Florida Telephone Company, and
Windstream.
196
Service Quality Rules were updated October 2009 in response to statutory changes effective July 1, 2009.
197
The rules were changed on October 2nd to reflect 90 percent restored in 24 hours and the reports were changed to
be filed quarterly. The new reporting became effective beginning January 1, 2010.
198
FPSC Order No. PSC-09-0659-FOF-TP and Order No. PSC-09-0660-FOF-TP, Docket No. 080641-TP, In re:
Initiation of rulemaking to amend and repeal rules in Chapter 25-4 and 25-9, F.A.C., pertaining to
telecommunications.
199
The reports are posted on the Commission’s Web site and can be found at the following link:
http://www.psc.state.fl.us/utilities/telecom/servicequality/index2.aspx.
195
77
requirements.200 AT&T, CenturyLink, and Windstream had Commission approved SGPs in
effect during 2009.
1. 2009 Service Quality Evaluation Reports
The Windstream service quality evaluation indicated that Windstream was not providing
all of the automatic rebates. Windstream’s SGP states “Sundays or holidays are not covered by
the SGP and will be calculated and credited to customers consistent with Rule 25-4.110(6),
F.A.C.” Windstream provided a total of $1,372 in out-of-service rebates for the period of July
2006 through December 2007.201 Windstream started its SGP in July 2006 and the review period
of the evaluation concluded in December 2007.
The ITS service quality evaluation also indicated that ITS was not providing all of the
automatic rebates. In a response to the service quality evaluation report, ITS stated that a new
billing system was implemented in April 2006 and found a problem with the new billing system
while training a new clerk in September 2008. As a result, ITS provided a total of $328 in
additional rebates to its customers. ITS made changes in its procedures to assure that the system
properly provides automatic rebates.
The AT&T service quality evaluation identified minor discrepancies which have been
remedied. The categories contributing to the majority of discrepancies were out-of-service
trouble reports that were not cleared within 24 hours, out-of-service rebates, and out-of-service
SGP rebates. In its response to the draft report, AT&T stated that “it statuses a customer’s
service as out-of-service based on the customer’s report, line test results, and what a technician
determines to be the cause of the trouble in the field.” Staff considers a trouble report as out-ofservice according to the rule, as “[t]he inability, as reported by the customer, to complete either
incoming or outgoing calls over the subscriber’s line.”202 Most of the discrepancies in these
categories were due to situations where AT&T and Commission staff differed on whether or not
the customer was out-of-service. However, AT&T credited the customers based on staff’s
interpretation.
The TDS service quality evaluation indicated that TDS was not providing all of the
required automatic rebates. In a response to the service quality evaluation report, TDS stated
that “the lack of rebates can be attributed to human error and system process.” The amount of
the rebates TDS will provide is pending final resolution,203 TDS made changes in its procedures
to assure that the system properly provides automatic rebates.
Verizon’s service quality evaluation also indicated that Verizon was not providing all of
the required automatic rebates. Verizon stated, “[t]he majority of the missed rebates were related
200
Rule 25-4.085, F.A.C., Service Guarantee Program.
FPSC Order No. PSC-09-0359-PAA-TL, Docket No. 090057-TL, In re: Investigation and determination of
appropriate method for issuing time-out-of-service credits to all affected customers of Windstream Florida, Inc.
202
Rule 25-4.003, F.A.C., Definitions.
203
FPSC Docket No. 100027-TL, In re: Investigation and determination of appropriate method for refunding
apparent rebates not provided by Quincy Telephone Company d/b/a TDS Telecom/Quincy Telephone as required by
rule and/or tariff.
201
78
to customers who had their account on vacation service (seasonal service). The customer
requested service to be restored from vacation services and a trouble report was received prior to
the first bill being generated.” Without a bill, Verizon did not have a way to issue a credit for the
trouble report and the accounts were placed on a 30-day follow up. The 30-day follow up was
not accruing and the company provided rebates to its customers that were affected. Verizon
issued a “refresher-training course for its associates.”
The CenturyLink service quality evaluation report contained only minor discrepancies.
The categories contributing to the majority of the discrepancies were out-of-service trouble
reports that were not cleared within 24 hours and service-affecting reports that were not cleared
within 72 hours. CenturyLink’s response to the draft report stated that “the results are in
accordance with its stated goals in its Service Guarantee Program approved by the Commission.”
CenturyLink operates under an SGP and, therefore, the rules are waived for compliance
purposes, but require credits to the customers when the rules are not met.
2. Service Guarantee Programs
ILECs are allowed to petition the Commission for approval of a Service Guarantee
Program (SGP) in lieu of certain service standard rule requirements. In exchange for relief from
the rules, however, an SGP contains financial incentives for compliance with certain SGP service
quality standards. The financial incentives may take the form of a credit to an individual
customer for service outages exceeding a certain level, or may require the ILEC to make
payments to a fund, which is for the purpose of promoting Lifeline service, in the event the
company fails to achieve a certain compliance percentage on a particular service standard
established by the SGP. In 2009, three ILECs (AT&T, CenturyLink, and Windstream) operated
under Commission-approved SGPs.
AT&T’s SGP provides automatic credits to residential customers for service outages
exceeding 24 hours and automatic credits for missing service installation commitment dates by
more than 3 days.204 For calendar year 2009:
•
AT&T credited its customers $1,400,627 for not repairing out-of-service trouble
reports within 24 hours and $181,800 for missed installation commitments.
CenturyLink’s SGP provides automatic credits to residential customers for service
outages exceeding 24 hours and automatic credits for missed installation commitment dates of
greater than 3 days.205 In 2009:
•
CenturyLink credited its customers $187,229 for not restoring residential service
outages within 24 hours and $146,150 for missing the service installation
commitments.
204
FPSC Order No. PSC-10-0077-PAA-TL, Docket No. 090461-TL, Petition for modification of Service Guarantee
Program by BellSouth Telecommunications, Inc. d/b/a AT&T Florida., issued February 10, 2010.
205
FPSC Order No. PSC-05-0918-PAA-TL, Docket No. 050490-TL, Petition for approval of Service Guarantee
Program with relief from requirements of Rules 25-4.070(3)(a), 25-4.073(1)(a), and 25-4.110(b), F.A.C., by SprintFlorida, Incorporated, issued September 19, 2005.
79
•
CenturyLink placed $44,000 to its community fund for missing its monthly average
answer time standard.
Windstream’s SGP has service standards similar to those of AT&T and CenturyLink
concerning service installation, repair intervals, and answer times.206 In 2009:
•
Windstream provided $625 in credits to customers for failing to install service on the
agreed upon date.
•
Windstream credited $2,184 to those customers experiencing out-of-service
conditions.
•
Windstream placed $41,000 in its Community Service Fund to promote Lifeline
service.
B. Competitive Market Oversight
1. AT&T Request for Waiver of Rule 25-4.040(2), F.A.C.
In 2009, the Commission granted AT&T a temporary two-year waiver of a Commission
rule that requires that each subscriber listed in a directory be furnished one copy of that directory
(both residential and business pages) for each access line.207, 208 Under the waiver, AT&T
continues to supply business white page listings and yellow pages to all subscribers, but
residential white pages are delivered only upon customer request. AT&T notified customers of
this change by including a message in the “News You Can Use” section of its customer bills for
two months. In addition, the options by which customers may acquire and access residential
listings are prominently placed in three locations in the business white page listings, including
the toll-free number to request a free copy of the residential white pages listings. To further
consumer awareness, the Commission is conducting public outreach to inform consumers of the
trial program and collecting customer feedback. Upon completion of the two-year trial period,
the Commission will assess consumer feedback and determine if the rule waiver should be
continued or revoked.
206
Docket No. 050938-TP Joint application for approval of transfer of control of Alltel Florida, Inc., holder of ILEC
Certificate No. 10 and PATS Certificate No. 5942, from Alltel Corporation to Valor Communications Group, and
for waiver of carrier selection requirements of Rule 25-4.118, F.A.C., due to transfer of long distance customers of
Alltel Communications, Inc. to Alltel Corporate Holding Services, Inc.
207
Rule 25-4.040(2), F.A.C.
208
Docket No. 090082-TL, In re: Petition by BellSouth Telecommunications, Inc. d/b/a/ AT&T Florida d/b/a/
AT&T Southeast for waiver of Rule 25-4.050(2), Florida Administrative Code.
80
2. Comcast / TDS Telecom Arbitration
In 2008, Comcast Phone of Florida, LLC d/b/a Comcast Digital Phone (Comcast Phone)
filed a Petition for Arbitration with TDS Telecom pursuant to state and federal law.209 While the
Commission has dealt with many arbitration petitions in the past, this case was unique in that it
presented only one issue: Is TDS Telecom required to offer interconnection to Comcast Phone
under Section 251 of the 1996 Act and/or Sections 364.16, 364.161, and 364.162, F.S.? After an
administrative hearing, the Commission concluded that Section 251(a) of the Act imposes a
general obligation on all telecommunications carriers to “interconnect directly or indirectly with
the facilities and equipment of other telecommunications carriers.” The Commission found that
Comcast Phone is a telecommunications carrier, as defined by 47 U.S.C. §153 (44), and an
obligation to interconnect should rightfully be imposed on TDS.210 On January 6, 2010, the
parties filed a fully executed interconnection agreement.
3. Rulemaking to Implement Changes to Section 364.04, F.S.
During the 2009 legislative session, Section 364.04, F.S., was amended to allow
telecommunications companies, at their option, to continue filing price schedules (formerly
known as tariffs) with the Commission or to publish their schedules through other reasonably
publicly accessible means, such as a web site. A telecommunications company that does not file
its schedules with the Commission is required to inform its customers where they may view the
company’s schedules. The Commission held a rulemaking workshop on March 30, 2010, to
discuss possible amendments to the current rules. Post-workshop comments were filed on May
7, 2010. The Commission is in the process of reviewing the comments.
4. Bright House / Verizon Arbitration
On November 3, 2009, Bright House Networks Information Services (Florida), LLC, a
certificated CLEC, filed a petition for arbitration with Verizon Florida, LLC pursuant to state and
federal law.211 Initially, over 40 issues were in dispute, including a number of issues that were
cases of first impression for the Commission. However, through continued negotiations, the
parties resolved all but eight issues prior to hearing, and this matter was heard in May 2010.
Parties filed briefs and reply briefs in July 2010 and a staff recommendation will follow.
209
Docket No. 080731-TP, In re: Petition by Comcast Phone of Florida, LLC d/b/a Comcast Digital Phone for
arbitration of an interconnection agreement with Quincy Telephone Company d/b/a TDS Telecom, pursuant to
Section 252 of the Federal Communications Act of 1934, as amended, and Sections 120.57(1), 120.80(13), 364.012,
364.15, 364.16, 364.161, and 364.162, F.S., and Rule 28-106.201, F.A.C.
210
Order No. PSC-09-0839-FPF-TP, issued December 21, 2009, in Docket No. 080731-TP, In re: Petition by
Comcast Phone of Florida, LLC d/b/a Comcast Digital Phone for arbitration of an interconnection agreement with
Quincy Telephone Company d/b/a TDS Telecom, pursuant to Section 252 of the Federal Communications Act of
1934, as amended, and Sections 120.57(1), 120.80(13), 364.012, 364.15, 364.16, 364.161, and 364.162, F.S., and
Rule 28-106.201, F.A.C.
211
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.
81
5. DeltaCom / Hypercube Access Charge Dispute
DeltaCom, Inc., (DeltaCom) filed a petition on June 5, 2009, seeking an order from the
Commission that the company is not liable for intrastate access charges billed by Hypercube
Telecom, LLC (Hypercube).212 DeltaCom alleges that Hypercube needlessly inserts itself into the
call flow for certain wireless calls. Some wireless carriers pass traffic to Hypercube instead of
directly to the ILEC to which it is already directly connected. Hypercube then delivers the traffic to
the ILEC. Hypercube does not charge wireless providers for this transiting service, but instead seeks
to charge wireline carriers such as DeltaCom. Hypercube, a CLEC, argues that it has lawfully
charged DeltaCom for telecommunications services performed by Hypercube in connection with
DeltaCom’s provision of toll-free calls that originate and terminate within Florida. This matter is
scheduled to be heard by the Commission on September 8-9, 2010.
6. AT&T Florida / Sprint Nextel Interconnection Agreement Dispute
On January 8, 2010, AT&T filed a complaint against Sprint Nextel asking the
Commission to find that Sprint Nextel had violated their interconnection agreements by failing to
pay the appropriate charges for interMTA traffic213 and to require Sprint Nextel to pay all past
due amounts for AT&T's termination of such traffic.214 Sprint Nextel believes this dispute
concerns AT&T’s efforts to unilaterally change a longstanding, previously agreed upon and
implemented contract provision that specifically addresses the treatment of interMTA traffic.
The parties requested that the Commission defer ruling on this matter until after July 2010. The
outcome had not been announced as of the publishing date of this report.
7. 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
provider.215 On May 4, 2010, the Sprint Nextel companies filed Motions to Consolidate in each
docket requesting consolidation since both dockets involve substantially overlapping subject
matter and substantially overlapping disputed issues. AT&T responded to the Motions on May 11,
2010, asking the Commission to defer ruling until the parties complete their negotiations. On May
21, 2010, an informal meeting was held to discuss procedural matters and the status of the
parties’ negotiations. At that meeting the parties agreed that the Commission should continue to
defer ruling on the pending Motions while the parties continue to negotiate issues in dispute and
procedural matters. A second informal meeting was held on June 21, 2010. At that meeting the
parties advised Commission staff that the issue of consolidating dockets had been resolved and
212
Docket No. 090327-TP, In re: Petition of DeltaCom, Inc. for order determining DeltaCom, Inc. not liable for
access charges of KMC Data LLC, and Hypercube Telecom, LLC.
213
An MTA is a geographic service area defined by the FCC for wireless carriers.
214
Docket No. 100019-TP, In re: Complaint to enforce interconnection agreements between BellSouth
Telecommunications, Inc. d/b/a AT&T Florida and Sprint Spectrum, L.P., Wireless Co, L.P. and SprintCom, Inc.
(jointly d/b/a Sprint PCS) and Nextel South Corp.
215
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.
82
that approximately 50-60 issues remain in dispute. A meeting to finalize issues is scheduled for
sometime in July and the matter is currently scheduled to be heard by the Commission in
December 2010.
8. Qwest’s Discrimination Complaint
On December 11, 2009, Qwest filed a complaint alleging that multiple CLECs (the
CLECs), including Verizon Access Transmission Services; XO Communications Services, Inc.;
tw telecom of florida, l.p.; Granite Telecommunications, LLC; Cox Florida Telcom, L.P.;
Broadwing Communications, LLC; and CLECs whose true names are currently unknown, have
subjected Qwest to unjust and unreasonable rate discrimination in connection with the provision
of intrastate switched access services in violation of state law.216 Specifically, Qwest believes
that the CLECs entered into undisclosed contract service agreements (or individual case basis
arrangements) with select IXCs outside of tariffs or price lists and failed to make those same
rates, terms, and conditions available to Qwest.
Five of the six named CLECs, XO, Time Warner Cable, Granite, Cox, and Broadwing,
filed a Joint Motion to Dismiss with prejudice Qwest’s requests for “reparations” and injunctive
relief on the grounds that the Commission lacks jurisdiction to grant such relief. In addition,
Verizon Access filed a Motion to Dismiss Reparations Claim and Motion for Final Summary
Order Dismissing All Other Claims Against Verizon Access, asserting that Verizon Access has
no individual case basis contracts for intrastate switched access service in Florida.
The Commission addressed the Motions at its May 4, 2010 Agenda Conference and
decided that upon review of the parties’ arguments and consistent with previous decisions, the
Joint CLECs’ Partial Motion to Dismiss and Verizon Access’ Motion to Dismiss Reparations
Claim be granted to the extent Qwest seeks monetary damages or injunctive relief. However, the
Commission noted that it does have the authority to order refunds, if applicable.217 In addition, a
conclusive showing that there is no genuine issue of material fact in dispute was not made by
Verizon Access. Therefore, Verizon Access’ Motion for Summary Final Order was denied
without prejudice. This matter will likely be scheduled for an administrative hearing in the near
future.
216
Docket No. 090538-TP, In re: 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; Cox Florida Telcom, L.P.; Broadwing Communications,
LLC; and John Does 1 through 50 (CLEC's whose true names are currently unknown) for rate discrimination in
connection with the provision of intrastate switched access services in alleged violation of Sections 364.08 and
364.10, F.S.
217
Order No. PSC-10-0296-FOF-TP, issued May 7, 2010 in Docket No. 090537-TP, In re: 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; Cox Florida Telcom, L.P.; Broadwing Communications, LLC; and John Does 1
through 50 (CLECs whose true names are currently unknown) for rate discrimination in connection with the
provision of intrastate switched access services in alleged violation of Sections 364.08 and 364.10, F.S.
83
9. dPi Teleconnect Promotional Credits Complaint
dPi Teleconnect, LLC (dPi) filed a complaint against AT&T on May 1, 2009, seeking to
recover cash-back promotional credits.218 dPi argues that AT&T has, over the past months and
years, sold AT&T retail services at a discount to AT&T end users under various promotions that
have lasted for more than 90 days. dPi further contends it is entitled to purchase and resell those
same services at the promotional rate, less the wholesale discount. dPi argues that although it met the
same qualifications as AT&T Florida's retail end users and applied for the promotional credits, dPi
has not received the credits requested for the periods ending June 8, 2007. An administrative
hearing was scheduled for April 14, 2010; however, dPi filed a Notice of Voluntary Dismissal of
Complaint with Prejudice on April 5, 2010.
10. AT&T Promotional Credits Complaints
AT&T filed complaints against Image Access, Inc. d/b/a New Phone (New Phone), and
LifeConnex Telecom, LLC (LifeConnex) on January 8, 2010, asserting that both companies have
unpaid balances for telecommunications services provided by AT&T for resale under the terms
and conditions of their applicable interconnection agreements.219 According to AT&T, as of
November 2009, NewPhone has a past due and unpaid balance of more than $245,000 in Florida,
and LifeConnex has a past due and unpaid balance exceeding $1 million in Florida. Both New
Phone and LifeConnex deny the allegations in AT&T’s complaints and have filed Motions to
Dismiss and/or Stay.220 The parties filed a Joint Motion on Procedure on June 15, 2010,
requesting that the Commission hold the proceedings in abeyance until similar proceedings in
several other states are completed. The Commission issued an order granting the petition on
June 18, 2010.221
11. 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 (formerly BellSouth) in August 2001, for CenturyLink (formerly
Embarq) in January 2003, and for Verizon in June 2003. Trending analysis is applied to monthly
performance measurement data provided by each ILEC.
218
Docket No. 090258-TP, In re: Complaint by dPi Teleconnect, L.L.C. against BellSouth Telecommunications,
Inc. d/b/a AT&T Florida for dispute arising under interconnection agreement.
219
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 and Docket No. 100022-TP, In re: Complaint and
petition for relief against Image Access, Inc. d/b/a New Phone by BellSouth Telecommunications, Inc. d/b/a AT&T
Florida.
220
AT&T filed to consolidate these dockets for the limited purposes of expeditiously resolving the two common
issues; New Phone and LifeConnex oppose consolidation.
221
FPSC Order No. PSC-10-0402-PCO-TP, issued June 18, 2010 in 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 and Docket No. 100022-TP, In re: Complaint and petition for relief against Image Access, Inc.
d/b/a New Phone by BellSouth Telecommunications, Inc. d/b/a AT&T Florida.
84
For AT&T, the Commission adopted a Performance Assessment Plan to measure
AT&T’s wholesale performance. AT&T’s current Performance Assessment Plan consists of 49
performance measurements. Remedy payments may be applied to 35 of the measurements if
AT&T fails to meet the performance standards approved by the Commission. For the calendar
year 2009, AT&T paid approximately $943,456 in remedies to CLECs and $290,614 in remedies
to the State of Florida General Revenue fund. In June 2009, the Commission initiated a review
and assessment of the Performance Assessment Plan and anticipates resolution of any changes in
2010. AT&T, CLECs, Florida Cable Telecommunications Association, and Commission staff
are participating in the review. AT&T is seeking to eliminate the remedies and penalties paid to
the State of Florida for failed performance.
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 calendar year
2009, CenturyLink’s monthly compliance with established standards has ranged from 91.6
percent to 96.9 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 2009, Verizon’s monthly compliance with approved
standards ranged from 82.2 percent to 88.3 percent.
C. Broadband Grants Activity
The DMS was awarded grant money made available through the ARRA to map Florida
broadband service. As provided by the ARRA, NTIA is in charge of determining recipients of
the funding through the State Broadband Data and Development grant program (SBDD) and
facilitating the reporting process for each project. The total cost of the Florida DMS SBDD
project is estimated at $7.1 million with a proposed $4.9 million being funded with grants. The
initial funding awarded by NTIA was $2.5 million and covers the first 2 years of the project.
NTIA will disburse funding for the remaining three years at a later time. DMS opted to
outsource the project to a third-party vendor and the contract was awarded to Connected Nation.
Connect Florida is the official broadband mapping entity and will maintain the map and all of the
associated data sets. Connected Nation uses a software system called Broadband Stat that will
allow users to search for providers and broadband information using a variety of criteria.
Broadband Stat is a flexible tool that will permit the map owner/administrator to input multiple
data sets in order to map a variety of characteristics such as connection speed, technology type,
and Florida-specific demographic characteristics. Connected Nation will be providing training
on the Broadband Stat tool as part of the project.
The initial mapping data upload was completed in May 2009. Anchor institution data
was loaded in June 2009. DMS projects that approximately 30,000 anchor institutions will be
included in the final maps. Out of the 322 broadband providers in Florida, only 67 were
designated as qualified providers as defined by the NTIA. Site validation through field work will
be completed by December 2010.
85
As part of the overall mapping grant, DMS was awarded $500,000 to be used specifically
for planning purposes over a 5-year period. The focus of the SBDD planning grant is to research
and analyze how government and anchor institutions in Florida are using, procuring, and
providing broadband services to determine if there are options to optimize broadband
investments through leveraging demand aggregation. The funding will be used in partnership
with the Public Utility Research Center.
Upon being named the official agency to manage the state broadband efforts in 2009,
DMS created a broadband workgroup consisting of representatives from a variety of state
agencies and Enterprise Florida. The FPSC representatives were chosen as core members of the
workgroup and have participated since the onset of the group’s formation. The workgroup acts
as the steering committee for both pieces of the project.
D. State Legislation
1. SB 814 Lifeline
SB 814 permits CMRS or wireless carriers that have been designated as Eligible
Telecommunications Carriers (ETCs) to provide Lifeline services to customers meeting the 150
percent of federal poverty guideline income eligibility test. A wireless ETC must notify the
FPSC that it has elected to use the federal poverty guidelines as an eligibility criterion prior to
enrolling subscribers under the income eligibility test. The bill also changes the date by which
procedures to promote Lifeline participation must be developed from December 31, 2007, to
December 31, 2010, and requires designated ETCs to participate in this process. Further, the bill
directs the FPSC, the Department of Children and Family Services (DCF), the Department of
Education, and the Office of Public Counsel (OPC) to share with ETCs information such as a
person's name, date of birth, service address, and telephone number, so that the carriers can
identify and enroll an eligible person in the Lifeline and Link-Up programs. This information
must remain confidential and may only be used to determine eligibility and enrollment in the
Lifeline and Link-Up programs.
Finally, the bill directs the FPSC, DCF, OPC, and ETCs offering Lifeline and Link-Up
benefits to convene a workshop by December 31, 2010, to determine how customer information
necessary to determine eligibility and enrollment will be shared, the obligations of each party
relating to the use of the information, and the procedures necessary to increase enrollment and
verify customer eligibility for the Lifeline and Link-Up benefits. The bill was signed by the
Governor on June 3, 2010, and became effective July 1, 2010.
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2. HB 1377 Telecommunications Regulation
HB 1377 repealed sections of Chapter 364 F.S. related to rate-of-return regulation. The
section repealed, the title of the section, and the justification of the repeal appear on Table 6-1.
Table 6-1. Section-by-Section Analysis of HB 1377
Section,
F.S.
Title
Comment
364.03
Rates to be reasonable; performance of
service; maintenance of telecommunications
facilities
364.035
Rate fixing; criteria service complaints
364.037
Telephone directory advertising
364.05
Changing rates, tolls, rentals, contracts or
charges.
364.055
Interim rates; procedure
364.14
Readjustment of rates, charges, tolls, or
rentals; order or rule compelling facilities to
be installed, etc.
364.17
Forms of reports, accounts, records, and
memoranda.
364.18
Inspection of accounts and records of
companies.
Obsolete; covered
elsewhere
Obsolete; rate-ofreturn
Obsolete; rate-ofreturn
Obsolete; rate-ofreturn
Obsolete; rate of
return
Obsolete; rate-ofreturn
Obsolete; rate-ofreturn; covered
elsewhere
Obsolete; rate-ofreturn; covered
elsewhere
Source: Florida Statutes
The bill also amends Section 364.051, F.S., Price Regulation, to repeal the ILEC option to
elect price cap regulation. Since all ILECs have elected price cap regulation, these sections are
obsolete. Portions of Section 364.052, F.S., Regulatory methods for small local exchange
telecommunications companies, relating to rate-of-return regulation, are also deleted. The bill was
signed by the Governor on May 7, 2010, and became effective July 1, 2010.
3. HB 163 E911 Fees for Prepaid Wireless Service
HB 163 provides that the E911 fee shall not be assessed on or collected from providers of
wireless prepaid calling arrangements prior to July 1, 2013. The bill further provides that the
E911 Board shall collect the fee from the sale of prepaid wireless service, beginning July 1,
2013, if it determines that a fee should be collected from the sale of such service. The bill was
signed by the Governor on May 11, 2010, and became effective on July 1, 2010.
87
4. SB 742 Public Safety Telecommunicators / E911
SB 742 requires any person employed as a 911 public safety telecommunicator at a
public safety answering point to be certified by the Department of Health (DOH) by October 1,
2012. The bill renames “911 emergency dispatchers” as “911 public safety telecommunicators”
and expands the functions they perform related to 911 calls. The bill adds dispatching to the list
of E911 services and revises the authorized expenditures of the E911 fee to include the fees
collected by the DOH for certification and recertification of 911 public safety
telecommunicators. Certification requirements for public safety telecommunicators are outlined
in the bill, including fees and requirements for applicants to sit for a certification examination
developed by the DOH. The bill was signed by the Governor on June 3, 2010, and became
effective July 1, 2010.
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Chapter VII. Federal Activities
A. Broadband
1. National Broadband Plan
The ARRA was signed into law February 17, 2009. The ARRA required the FCC to
develop a NBP within one year of passage of the legislation, and the final Plan was released on
March 16, 2010. In general, the Plan seeks to ensure all people of the United States have access
to broadband capability and establishes benchmarks for meeting that goal. The FCC coordinated
with the NTIA to develop achievable specific goals. The goals of the plan are to:
•
Broaden the deployment of broadband technologies.
•
Define broadband to include any platform capable of transmitting high-bandwidth
services.
•
Ensure harmonized regulatory treatment of competing broadband services.
•
Encourage and facilitate an environment that stimulates investment and innovation in
broadband technologies and services.
The FCC released a 2010 timeline to begin implementation of the recommendations in
the Plan. The recommendations include a complete overhaul of the current universal service
fund (USF) and ICC programs; increasing spectrum availability, expansion of Lifeline, Link-Up,
and E-rate eligibility; and encouraging smart grid energy networks. Coordination between
federal, state, and local governments; industry professionals; and community involvement will
be necessary to accomplish the tasks proposed by the FCC.
Of particular interest to the state of Florida is the recommendation to reform the current
USF program. Florida is the largest net contributor to the fund. The Plan lays out a three-stage
strategy to change the USF and ICC programs to remove barriers and to transition support to
broadband services to make them more widely available to people in the U.S. at an affordable
price.
The first stage calls for improved accountability and performance of the current ICC and
USF programs by the end of 2011. The Connect America Fund (CAF) will be created to
eventually take the place of the high-cost programs. The FCC plans to transfer $15.5 billion over
the next decade from the high-cost programs to support broadband services through the CAF.
The FCC also suggests that Congress provide an additional few billion dollars a year in funding
to accelerate broadband deployment. The FCC will also initiate actions to establish a transition
plan to eliminate per-minute charges in the ICC program.
The second stage will begin in 2012 and last through 2016. The FCC anticipates that the
disbursements from the CAF will begin in this stage. The FCC also plans to broaden the USF
contribution base and begin to implement the ICC transition plan. In the third stage the FCC will
89
continue to manage the overall size of the fund, complete the transition from the high-cost
support programs to the CAF, and decrease ICC rates.
2. Broadband Data Collection
The National Association of Regulatory Utility Commissioners (NARUC) filed a petition
on September 25, 2009, requesting that the FCC “clarify that no FCC-issued order or regulation
limits state authority to collect any data from any broadband infrastructure or service
provider.”222 NARUC filed its petition during national efforts to increase the deployment and
adoption of broadband services. A critical element of this effort is improving the quality and
usefulness of data regarding broadband infrastructure and services. Congress recognized this
point and enacted the Broadband Data Improvement Act (BDIA) in October 2008. The goal of
BDIA was to improve federal data on broadband deployment and adoption that “will assist in the
development of broadband technology across all regions of the country.”
In enacting the BDIA, Congress recognized that a number of states were attempting to
collect broadband-related data. Those efforts, however, typically rely on voluntary submissions
from broadband providers. The reliance on voluntary submissions has made it difficult, if not
impossible, for any given state to obtain comprehensive and reliable information on broadband
deployment and adoption within its borders. NARUC asserted that states accepted a voluntary
submission regime in part because of uncertainty as to whether the FCC had preempted state
broadband data collection efforts. NARUC filed its petition in order to eliminate this
uncertainty.
On April 26, 2010, the FCC issued an Order concluding that it has not preempted or
otherwise precluded the states from mandating that broadband providers file data or other
information regarding broadband infrastructure or services. In issuing this declaratory ruling, the
FCC expressed no opinion regarding whether the laws of any particular state authorize the state’s
public utilities commission or similar agency to require the filing of such data or information.
3. Network Neutrality and Internet Network Management
The United States Court of Appeals for the District of Columbia (Court) ruled, on April
6, 2010, that the FCC exceeded its authority when it issued a 2008 order barring Comcast from
interfering with its customers’ use of peer-to-peer applications over its broadband service. Peerto-peer programs allow users to share large files directly with one another without going though
a central server. Peer-to-peer traffic can consume significant amounts of bandwidth and could
affect Internet performance of other consumers. Providers, such as Comcast, contend that they
should be able to manage their network traffic, especially certain applications which use peer-topeer interconnection, to maintain network performance. At issue is the ability of consumers to
access applications and content without an intentional degradation of service by a broadband
provider. This principle is more commonly referred to as network neutrality.
222
National Association of Regulatory Utility Commissioners, Petition for Clarification or Declaratory Ruling that
No FCC Order or Rule Limits State Authority to Collect Broadband Data (filed September 25, 2009).
90
Beginning in 2002, the FCC adopted a series of orders classifying broadband Internet
access services as information services subject to the FCC’s general jurisdiction under Title I of
the 1996 Act. Prior to Title II classification, broadband transmissions were treated as common
carrier services subject to more specific statutory requirements set forth in Title II of the 1996
Act. Although the Act does not establish specific rules for providers of information services, the
Supreme Court has held that the 1996 Act gives the FCC “ancillary authority” under Title I to
regulate matters that fall within its federal jurisdiction but are not directly addressed by the
substantive provisions of the Act.
The Court’s Order only addressed whether the FCC’s authority under ancillary
jurisdiction extends to regulation of an Internet service provider’s network management
practices. The Court concluded that the FCC’s ancillary authority must be tied to an expressly
delegated authority. Because the FCC did not demonstrate such a link in defending its Order, the
Court vacated the FCC’s Order.
FCC Chairman Genachowski has issued a statement outlining a framework to reclassify
Chairman
broadband services as a “telecommunications services” under Title II.223
Genachowski recognizes that simply reclassifying broadband services under Title II would
expose broadband service providers to the extensive regulations that he believes are ill suited to
broadband. His proposed alternative would still reclassify broadband transmission services
under Title II, but would forbear from applying most of Title II’s regulatory requirements in a
manner similar to wireless communications.
Currently the FCC has not issued a Notice of Proposed Rulemaking (NPRM) or Notice of
Inquiry (NOI) seeking comment on the Chairman’s proposal.
However, other FCC
commissioners have issued general comments regarding the proposal. Commissioners Copps
and Clyburn have expressed general support to the proposal, while Commissioners McDowell
and Baker expressed concern.224, 225, 226
B. Universal Service
Consumers in Florida pay significantly more into the federal USF than what is returned to
eligible service providers in Florida.227 For this reason, the FPSC continues to actively monitor
223
FCC, Statement by Chairman Genachowski, "The Third Way: A Narrowly Tailored Broadband Framework,"
released May 6, 2010, <http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-297944A1.pdf>, accessed on May
19, 2010.
224
“Statement of Commissioner Michael J. Copps on Chairman Genachowski’s Announcement to Reclassify
Broadband,” FCC News Release, May 6, 2010, <http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC297946A1.pdf>, accessed on May 19, 2010.
225
“Statement of Commissioner Mignon Clyburn on Chairman Genachowski’s Announcement to Reclassify
Broadband,” FCC News Release, May 6, 2010, <http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC297959A1.pdf>, accessed on May 19, 2010.
226
“Joint Statement of Commissioners McDowell and Baker on Chairman Genachowski's Announcement to
Reclassify Broadband,” FCC News Release, May 6, 2010,
<http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-297948A1.pdf>, accessed on May 19, 2010.
227
FCC, “Universal Service Monitoring Report,” CC Docket No. 98-202, released December 31, 2009, Table 1.12,
< http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-295442A1.pdf>, accessed on June 4, 2010.
91
and participate in ongoing proceedings at the FCC and with the Federal-State Joint Board on
Universal Service (Joint Board). Table 7.1 shows Florida’s estimated contribution and receipts
for 2008.
Table 7-1. 2008 Federal Universal Service Programs in Florida
(Annual Payments and Contributions in Thousands)
Estimated
Contributions
from
Consumers
Estimated
Net
Prior Year
Estimated Net
$77,293
$296,859
($219,566)
($209,950)
Low Income
$24,283
$54,316
($30,033)
($35,182)
Schools &
Libraries
$76,306
$116,671
($40,365)
($43,307)
$270
$3,279
($3,009)
($2,342)
$178,152
$482,420
($304,268)
($297,876)
Program
Payments to
Service
Providers
High-Cost
Rural Health
Care
Total228
Source: FCC Universal Service Monitoring Report, Table 1.1 (2008-2009)
1. FCC’s Response to Court’s Remand of High-Cost Rules
In 2005, the Tenth Circuit Court of Appeals remanded the FCC’s rules regarding highcost universal service support to nonrural carriers for the second time.229 The high-cost funds
related to the affected rules represent approximately 8 percent of the high-cost fund in 2009 and
about 5 percent of the total federal universal service program.230 The Tenth Circuit directed the
FCC to address the following three issues:
1. Articulate a definition of “sufficient” that appropriately considers the range of
principles that Congress established in Section 254(b) of the 1996 Act.
2. Define the term “reasonably comparable” in a manner that comports with the
concurrent duties to preserve and advance universal service.
228
The total contribution in this table includes approximately $7 million in administrative expenses for the Universal
Service Administrative Company.
229
Qwest Communications Int’l, Inc. v. FCC, 398 F.3d 1222 (10th Cir. 2005).
230
Universal Service Administrative Company, 2009 Annual Report, pp. 39-40.
92
3. Craft a support mechanism taking into account all the factors that Congress identified
in drafting the Act and its statutory obligation to preserve and advance universal
service.
The FCC made little progress addressing the court’s remand until 2009. In January 2009,
Qwest Corporation, the Maine Public Utilities Commission, the Vermont Public Service Board,
and the Wyoming Public Service Commission (the petitioners) filed a petition for a writ of
mandamus with the Tenth Circuit, asserting that the FCC had unreasonably delayed responding
to the Court’s remand. Shortly after that petition was filed, the FCC and the petitioners
negotiated an agreement under which the FCC would release a final order that responds to the
court’s remand no later than April 16, 2010.
As promised, the FCC’s Order on Remand was released on April 16, 2010.231 In the
Order, the FCC defined “sufficient” as an affordable and sustainable amount of support that is
adequate, but no greater than necessary, to achieve the goals of the universal service program.
The FCC asserts that the current nonrural high-cost support mechanism provides sufficient
support to achieve the universal service principles set forth in Section 254(b) of the 1996 Act. In
contrast to prior orders, the FCC argues that any determination regarding sufficiency must look
at the cumulative effect of all four support programs, not just the high-cost program. The FCC
further buttresses this argument by noting that subscribership penetration rates have increased
since Congress enacted Section 254, thus demonstrating that rates are not too high.
In the order, the FCC argues that rural rates are “reasonably comparable” to urban rates if
rural rates fall within a reasonable range of national average urban rates. Only one state,
Wyoming, argued that rural rates in Qwest’s service territory were not reasonably comparable to
the nationwide average urban rate. In its 2005 order, the FCC had created a “supplemental
support mechanism” that would target support to those areas that had taken all responsible steps
to achieve reasonable comparability through state action and existing federal support. Prior to
this order, no carrier had received support from this mechanism. The Order concludes that the
current nonrural support mechanism produces rates that preserve and advance universal service.
2. Reform of Universal Service and Intercarrier Compensation
The FCC requested comments from interested parties on how to begin implementing
elements of the NBP to fundamentally reform both intercarrier compensation and the federal
USF.232 The notice requesting comments was issued in April 2010. The notice seeks comment
on whether the FCC should use a model to help determine universal service support levels in
areas where no private sector business case exists to provide broadband and voice services. The
notice also seeks comment on the best way to target funding toward new deployment of
broadband networks in unserved areas while the FCC is considering final rules to implement a
new CAF funding mechanism. The purpose of the CAF is to ensure universal access to both
broadband and voice services.
231
FCC 10-56, Order on Remand and Memorandum Opinion and Order, WC Docket No. 05-337 and CC Docket
No. 96-45, adopted and released on April 16, 2010.
232
FCC 10-58, Notice of Inquiry and Notice of Proposed Rulemaking, WC Docket No. 10-90, GN Docket No. 0951, and WC Docket No. 05-337, adopted and released on April 21, 2010.
93
Within the notice, the FCC also seeks comments on changes to current rules that would
cut legacy universal service spending on voice services in high-cost areas and to shift support to
broadband communications. These proposals include 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, and phasing out support for multiple
competitors in areas where the market cannot support even one provider.
The proposal to cap the overall size of the high-cost program was recommended by the
Joint Board in November 2007. The FPSC supported such a cap in comments filed with the
FCC. Because the FCC has already implemented a cap affecting competitive ETCs, the size of
the high-cost fund has not increased significantly since 2007.
3. Separate High-Cost Support for Nonrural Insular Carriers
In 2005, the FCC considered creating a separate high-cost universal service support
mechanism for nonrural insular areas. The Puerto Rico Telephone Company (PRTC) had
asserted that a separate nonrural insular high-cost fund was needed. In 2005, telephone
subscribership in Puerto Rico (a nonrural insular area) was 73.8 percent, far below the national
average of 94.8 percent.
The FPSC filed reply comments on May 16, 2006, in this proceeding in opposition to
further growth in the high-cost fund. Specifically, the FPSC did not believe the interim high-cost
support mechanism sought by PRTC was warranted. PRTC failed to show how decreases in
high-cost support had negatively affected subscribership. Moreover, if the FCC wished to
provide additional high-cost support, another mechanism already exists to do so.233 The creation
of a new insular high-cost mechanism for one carrier appears to be inconsistent with how the
FCC has addressed similar subscribership issues on federally recognized tribal lands, where the
FCC expanded Lifeline and Link-Up support, not high-cost support. The FPSC urged the FCC
not to address affordability issues through the high-cost mechanism.
On April 16, 2010, the FCC released an Order concluding that dramatic increases in
telephone subscribership in Puerto Rico over the last several years make it unnecessary to adopt
a new high-cost support mechanism for nonrural insular carriers. Subscribership in Puerto Rico
had jumped to 91.9 percent by 2008. Total high-cost support for Puerto Rico rose from less than
$140 million in 1998 to more than $215 million in 2008, an increase of nearly 54 percent, and
low-income support jumped from $1.16 million in 2001 to $23.4 million in 2008.
4. Effects of Merger Conditions on Competitive ETCs
On November 4, 2008, the FCC approved two telecommunications mergers upon the
companies’ agreement to several key conditions. The first merger was between Verizon
Wireless and Alltel Corporation, and the second was the combination of the WiMAX network
holdings of Sprint Nextel and Clearwire Corporation. Of particular interest is the impact the
233
The FCC has already made supplemental support available to nonrural carriers that demonstrate that their rates in
rural, high-cost areas are not reasonably comparable to urban rates nationwide and that the state has taken steps to
achieve reasonable comparability.
94
mergers will have on the federal USF, and specifically on high-cost support. Both companies
have agreed to a five-year phase down of the high-cost support they currently receive. The total
federal high-cost support would be reduced by 20 percent for the first year, and by an additional
20 percent per year for the subsequent 4 years. Competitive ETCs, like Alltel and Sprint Nextel,
can request high-cost support if such funding is justified by a cost analysis. Prior to these orders,
the support these carriers received was based on the equal support rule under which support is
currently capped.
For 2008, the total high-cost fund was $4.4 billion.234 Competitive ETCs received
approximately $1.3 billion of this amount.235 Alltel received $414 million in 2008 and Sprint
Nextel received $63 million in 2008.236 The reduction agreed to in the mergers represents an 11
percent decrease in the total size of the high-cost fund and a 36 percent decrease in the high-cost
support that competitive ETCs receive.
If the final reform adopted by the FCC results in more significant reductions in high-cost
support, then these carriers could potentially receive more support under the five-year phase
down. Alternatively, if any final reform results in more support being available to carriers (such
as from a fund specifically for wireless carriers), then the merged companies could discontinue
further phase downs and apply for support under the new rules.
5. Referral of Lifeline / Link-Up Issues to the Federal-State Joint Board
On May 4, 2010, the FCC asked the Joint Board to review the rules relating to the federal
Lifeline and Link-Up programs.237 Specifically, the FCC asked the Joint Board to recommend
any changes to these programs that might be necessary based on consideration of:
1. The combination of federal and state rules that govern which customers are eligible to
receive discounts.
2. Best practices among states for effective and efficient verification of customer
eligibility.
3. Appropriateness of various outreach and enrollment programs.
4. The potential expansion of the low-income program to broadband, as recommended
in the NBP.
The FCC requested that the Joint Board prepare a recommended decision regarding these
issues and submit its decision to the FCC within six months.
234
FCC, “Universal Service Monitoring Report,” CC Docket No. 98-202, released December 31, 2008, Table 3.2,
<http://hraunfoss.fcc.gov/edocs_public/attachmatch/DOC-287688A5.pdf >, accessed on April 2, 2008.
235
Ibid.
236
Universal Service Administrative Company, High Cost Data Disbursement Search Tool, Spin Codes: 143008900,
143006742, 143000910, and 143010148, <http://www.usac.org/hc/tools/disbursements/default.aspx>, accessed on
April 22, 2009.
237
FCC 10-72, Order, CC Docket No 96-45 and WC Docket No. 03-109, released May 4, 2010,
<http://hraunfoss.fcc.gov/edocs_public/attachmatch/FCC-10-72A1.pdf>, accessed on May 5, 2010.
95
6. Afterhours Use of Internet Connections at Schools Receiving E-Rate
Funding
The FCC released an order on February 19, 2010, that enables schools that receive
funding from the schools and libraries program (or E-rate program) to allow members of the
public to use the schools’ Internet access during non-operating hours.238 This action will
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,” defined as activities that are integral, immediate, and
proximate to the education of students. As a result, services and facilities purchased by schools
using E-rate funding remain largely unused during evenings, weekends, school holidays, and
summer breaks. The waiver of the FCC’s rules is effective through funding year 2010 (which
ends June 30, 2011). The waiver is subject to the following conditions:
•
Schools participating in the E-rate program are not permitted to request more services
than are necessary for “educational purposes.”
•
Any community use of E-rate funded services at a school facility is limited to nonoperating hours, such as after school hours or during times when the students are out
of school.
•
Consistent with the 1996 Act, schools may not resell discounted services or network
capacity.
In addition, the FCC adopted a NPRM which seeks comment on revising its rules to
make these changes permanent. The FCC also seeks comment on conditions that should be
established to guard against waste, fraud, and abuse.
C. Local Number Portability
Local Number Portability (LNP) allows end-users the option to switch their
telecommunications service provider without having to change their telephone numbers, as long
as the location remains the same. In May 2009, the FCC reduced the porting interval timeframe
for simple wireline and simple intermodal port requests from four business days to one business
day.239, 240 The four-business-day porting interval for simple wireline port requests was adopted
more than ten years ago. Since that time, the telecommunications market has changed
dramatically, and technological advances have enabled number porting to be accomplished in a
238
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 May 5, 2010.
239
FCC 09-41, CC Docket No. 95-116, Telephone Number Portability, and WC Docket No. 07-244, Local Number
Portability Interval and Validation Requirements, Report and Order and Further Notice of Proposed Rulemaking,
released May 13, 2009).
240
The FCC defined “intermodal ports” as “(1) wireline to wireless ports; (2) wireless to wireline ports, and (3) ports
involving interconnected Voice Over Internet Protocol (VoIP) service.”
96
much shorter period, as evidenced by the voluntary two and one-half hour wireless provider
interval standard.
The North American Numbering Council (Council), a Federal Advisory Committee
established by the FCC, addressed the implementation issues for the new porting interval 90 days
after the effective date of the FCC order. The FCC order stated that all providers subject to FCC
LNP rules must comply with the one-business-day porting interval within nine months from the
date that the Council submitted its report to the FCC, which was October 31, 2009. As of July
31, 2010, all providers subject to the FCC’s LNP rules must comply with the 1-business-day
porting interval, except small providers whom were given 15 months from the date that the
Council submitted its report to the FCC to comply, January 31, 2011.
97
98
Appendix A. List of Certificated CLECs as of 12/31/09
**Indicates that the company did not respond to the Commission’s data request.
^^Indicates that the company is in the process of canceling its certificate or has a pending
bankruptcy.
^^1 800 RECONEX, Inc. d/b/a USTEL
A.R.C. Networks, Inc. d/b/a InfoHighway
AboveNet Communications, Inc.
Access Communications, LLC.
Access One, Inc.
Access Point, Inc.
AccuTel of Texas, Inc.
ACN Communication Services, Inc.
Advanced Telecom of South Florida, Inc.
**Advantage Group of Florida
Communications, L.L.C.
Aero Communications, LLC
Affordable Phone Services, Inc. d/b/a High
Tech Communications
Airespring, Inc.
ALEC, Inc.
Alternative Phone, Inc.
American Fiber Network, Inc.
American Fiber Systems, Inc.
American Telephone Company LLC
Americatel Corporation
ANEW Broadband, Inc. d/b/a INSTANTEL
PHONE SERVICE
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.
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.
**Ciera Network Systems, 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
Cleartel Telecommunications, Inc. d/b/a
Now Communications, also d/b/a
VeraNet Solutions
Clective Telecom Florida, LLC.
99
Appendix A: List of Certificated CLECs as 12/31/09
CloseCall America, Inc
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
CommPartners, LLC
ComNet (USA) LLC
Comtech21, LLC
Comtel Telcom Assets LP d/b/a Excel
Telecommunications
Comtel Telcom Assets LP d/b/a VarTec
Solutions
Comtel Telcom Assets LP d/b/a VarTec
Telecom
Conextel, 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
Custom Network Solutions, Inc.
Cypress Communications Operating
Company, LLC
Dedicated Fiber Systems, Inc.
DeltaCom, Inc.
DG TEC, LLC
Dialtone Telecom, LLC
DIECA Communications, Inc. d/b/a Covad
Communications Company
Digital Express, Inc.
DPI Teleconnect, L.L.C.
DRS C3 Systems, Inc.
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
Ernest Communications, Inc.
EveryCall Communications, Inc.
eVox Communications, LLC
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 Multi Media Services, Inc. d/b/a
Florida Multi Media
Florida Phone Systems, Inc.
Florida Public Telecommunications
Association, Inc.
Florida Telephone Services, LLC
Fonix Telecom, Inc.
Fort Pierce Utilities Authority d/b/a
GigaBand Communications
FPL FiberNet, LLC
France Telecom Corporate Solutions L.L.C.
Frontier Communications of America, Inc.
Ganoco, Inc. d/b/a American Dial Tone
General Computer Services, Inc. d/b/a
BeCruising Telecom
Georgia Public Web, Inc.
Global Capacity Group, Inc.
Global Connection Inc. of America (of
Georgia)
Global Crossing Local Services, Inc.
Global Crossing Telemanagement, Inc.
Global NAPS, Inc.
Global Response Corporation
Globalcom Inc. d/b/a GCI Globalcom Inc.
Grande Communications Networks, Inc.
Granite Telecommunications, LLC
Great America Networks, Inc.
GTC Communications, Inc.
Harbor Communications, LLC
100
Appendix A: List of Certificated CLECs as 12/31/09
Hayes E Government Resources, Inc.
Home Town Telephone, LLC
Hotwire Communications, Ltd.
Hypercube Telecom, LLC
IDS Telcom Corp. d/b/a Cleartel
Communications
IDT America, Corp. d/b/a IDT
Image Access, Inc. d/b/a NewPhone, Inc.
Image Access, Inc. d/b/a NewPhone, Inc.
inContact, Inc. d/b/a UCN
iNetworks Group, Inc.
Infotelecom, LLC
Intellicall Operator Services, Inc. d/b/a ILD
Intellifiber Networks, Inc.
Interactive Services Network, Inc. d/b/a ISN
Telcom
InterGlobe Communications, Inc.
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.
^^LecStar Telecom, Inc.
Level 3 Communications, LLC
LifeConnex Telecom, LLC
Lightyear Network Solutions, LLC
Litestream Holdings, LLC
^^Looking Glass Networks, Inc.
Madison River Communications, LLC d/b/a
CenturyLink
Marco Island Cable, Inc.
Maryland TeleCommunication Systems, Inc.
Matrix Telecom, Inc. d/b/a Matrix Business
Technologies also d/b/a Trinsic
Communications
MCC Telephony of Florida, LLC
McGraw Communications, Inc.
MCImetro Access Transmission Services
LLC d/b/a Verizon Access Transmission
Services
McLeodUSA Telecommunications Services,
Inc.
^^MET Communications, Inc.
Metropolitan Telecommunications of
Florida, Inc. d/b/a MetTel
Micro Comm, Inc.
Midwestern Telecommunications,
Incorporated
Mitel NetSolutions, Inc.
Momentum Telecom, Inc.
MULTIPHONE LATIN AMERICA, INC.
**National Telecom & Broadband Services,
LLC
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.
nii Communications, Ltd.
Norlight Telecommunications, Inc.
Norlight, Inc. d/b/a Cinergy
Communications
Norstar Telecommunications, 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
101
Appendix A: List of Certificated CLECs as 12/31/09
Novus Communications, Inc.
NuVox Communications, Inc. d/b/a NuVox
**OneStar Long Distance, Inc.
ONE SOURCE NETWORKS CLEC LLC
One Voice Communications, Inc.
OneTone Telecom, Inc.
Optical Telecommunications, Inc. d/b/a
HControl Corporation d/b/a SH Services
LLC
Orlando Telephone Company, Inc.
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
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 Spectrum, LLC
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.
SIP Interchange Corporation
SKYNET360, LLC
SkyWay Telecom, Inc.
Smart City Networks, Limited
Partnership
Smart City Solutions, LLC d/b/a Smart City
Communications
Smart Network Solutions
Communications Corp
SNC Communications, LLC
Solarity Communications LLC
Southeastern Services, Inc.
Southern Light, LLC
Southern Telecom, Inc. d/b/a Southern
Telecom of America, Inc.
^^Southern Telcom Network, Inc.
Spectrotel, Inc.
Sprint Communications Company Limited
Partnership
StarVox Communications, Inc.
Sterling Telecom Inc.
STS Telecom, LLC
Sun Tel USA, Inc.
Sunesys, LLC
Supra Telecommunications and Information
Systems, Inc.
Syniverse Technologies, Inc.
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
Tallahassee Community College
TCG South Florida
TelCove Operations, Inc.
Tele Circuit Network Corporation
Telecom Management, Inc. d/b/a Pioneer
Telephone
TeleDias Communications, Inc.
Telepak Networks, Inc.
Telovations Inc.
102
Appendix A: List of Certificated CLECs as 12/31/09
Telrite Corporation
Telscape Communications, Inc.
Tennessee Telephone Service, LLC d/b/a
Freedom Communications USA, LLC
^^Terra Telecommunications Corp.
The Boeing Company
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.
^^Universal Telecom, Inc.
Utility Board of the City of Key West d/b/a
Keys Energy Services
**VBNet, Incorporated
Verizon Avenue Corp.
Verizon Florida LLC
Verizon Select Services Inc.
Vixxi Solutions Inc.
VoDa Networks, Inc.
Wholesale Carrier Services, Inc.
WTI Communications, Inc.
XO Communications Services, Inc.
YMax Communications Corp.
Zone Telecom, Inc.
103
104
Appendix B. CLECs Providing Service
Name
Access Communications, LLC.
Access One, Inc.
Access Point, Inc.
ACN Communication Services, Inc.
Affordable Phone Services, Inc. d/b/a High Tech Communications
Alternative Phone, Inc.
American Fiber Network, Inc.
ANEW Broadband, Inc. d/b/a INSTANTEL PHONE SERVICE
Astro Tel, Inc.
AT&T Communications of the Southern States, LLC d/b/a AT&T
BCN Telecom, Inc.
Bellerud Communications, LLC
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
BLC Management LLC d/b/a/ Angles Communication Solutions
Broadband Dynamics, L.L.C.
Broadstar, LLC d/b/a PrimeCast
Broadview Networks, Inc.
Broadwing Communications, LLC
Budget PrePay, Inc. d/b/a Budget Phone
BudgeTel Systems, Inc.
BullsEye Telecom, Inc.
Business Telecom, Inc. d/b/a BTI
Callis Communications, Inc.
Campus Communications Group, Inc.
Cbeyond Communications, LLC
City of Daytona Beach
City of Quincy d/b/a netquincy d/b/a netquincy.com d/b/a
www.netquincy.com
CloseCall America, Inc
Comtech21, LLC
Comtel Telcom Assets LP d/b/a Excel Telecommunications
Covista, Inc.
Cox Florida Telcom, L.P. d/b/a Cox Communications d/b/a Cox
Business d/b/a Cox
Custom Network Solutions, Inc.
DeltaCom, Inc.
Dialtone Telecom, LLC
DIECA Communications, Inc. d/b/a Covad Communications Company
105
Resale
X
X
X
X
X
X
X
X
X
X
Local
Platform
X
SwitchBased
VoIP
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Appendix B. CLECs Providing Service
Name
DPI Teleconnect, L.L.C.
DSL Internet Corporation d/b/a DSLi
Easy Telephone Services Company
Embarq Communications, Inc. d/b/a CenturyLink Communications
ENA Services, LLC
Ernest Communications, Inc.
EveryCall Communications, Inc.
Express Phone Service, Inc.
First Communications, LLC
FLATEL, Inc.
Florida Multi Media Services, Inc. d/b/a Florida Multi Media
Florida Phone Systems, Inc.
Florida Telephone Services, LLC
France Telecom Corporate Solutions L.L.C.
General Computer Services, Inc. d/b/a BeCruising Telecom
Global Connection Inc. of America (of Georgia)
Global Crossing Local Services, Inc.
Global Crossing Telemanagement, Inc.
Global Response Corporation
Granite Telecommunications, LLC
Harbor Communications, LLC
Hotwire Communications, Ltd.
Image Access, Inc. d/b/a NewPhone, Inc.
Interactive Services Network, Inc. d/b/a ISN Telcom
InterGlobe Communications, Inc.
Knology of Florida, Inc.
Level 3 Communications, LLC
LifeConnex Telecom, LLC
Lightyear Network Solutions, LLC
Litestream Holdings, LLC
Matrix Telecom, Inc. d/b/a Matrix Business Technologies also d/b/a
Trinsic Communications
MCC Telephony of Florida, LLC
MCImetro Access Transmission Services LLC d/b/a Verizon Access
Transmission Services
Metropolitan Telecommunications of Florida, Inc. d/b/a MetTel
Midwestern Telecommunications, Incorporated
Mitel NetSolutions, Inc.
Momentum Telecom, Inc.
Navigator Telecommunications, LLC
Network Telephone Corporation d/b/a Cavalier Telephone d/b/a
Cavalier Business Communications
New Horizons Communications Corp.
Nexus Communications, Inc. d/b/a Nexus Communications TSI, Inc.
106
Resale
X
X
X
X
X
X
X
X
Local
Platform
X
X
SwitchBased
VoIP
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Appendix B. CLECs Providing Service
Name
Norlight, Inc. d/b/a Cinergy Communications
North American Telecommunications 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
NuVox Communications, Inc. d/b/a NuVox
One Voice Communications, Inc.
OneTone Telecom, Inc.
Optical Telecommunications, Inc. d/b/a HControl Corporation d/b/a
SH Services LLC
Orlando Telephone Company, Inc.
PaeTec Communications, Inc.
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.
QuantumShift Communications, Inc.
QuikVoip, LLC
Qwest Communications Company, LLC
ReTel Communications, Inc.
Rightlink USA, Inc.
Ring Connection, Inc.
RNK Inc. d/b/a RNK Communications Inc.
Sandhills Telecommunications Group, Inc. d/b/a SanTel
Communications
Saturn Telecommunication Services Inc. d/b/a STS Telecom
Servi Express Caracol d/b/a Telefonica Express
Smart City Solutions, LLC d/b/a Smart City Communications
SNC Communications, LLC
Southeastern Services, Inc.
Spectrotel, Inc.
Sprint Communications Company Limited Partnership
Sun Tel USA, Inc.
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
Tele Circuit Network Corporation
TeleDias Communications, Inc.
Telovations Inc.
Tennessee Telephone Service, LLC d/b/a Freedom Communications
USA, LLC
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
107
Resale
Local
Platform
X
SwitchBased
X
X
X
X
X
VoIP
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Appendix B. CLECs Providing Service
Name
Think 12 Corporation d/b/a Hello Depot
TQC Communications, Corp.
Trans National Communications International, Inc.
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
WTI Communications, Inc.
XO Communications Services, Inc.
Zone Telecom, Inc.
Total # of Companies = 128
Resale
X
X
X
X
Local
Platform
SwitchBased
VoIP
X
X
X
X
X
X
87
108
X
X
X
42
25
X
X
X
X
47
Appendix C. Number of CLEC Providers In Each Exchange
Exchange
Alachua
Alford
Alligator Point
Altha
Apalachicola
Apopka
Arcadia
Archer
Astor
Avon Park
Baker
Baldwin
Bartow
Belle Glade
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
Chipley
CLEC Residential
Providers
(Dec-08)
(Dec-09)
4
1
4
3
0
1
0
0
0
0
11
7
9
4
12
11
1
0
9
4
3
3
5
7
7
4
22
21
11
4
5
1
2
0
30
28
1
2
8
6
9
5
2
2
29
23
11
9
3
0
0
0
20
15
1
0
21
17
16
12
9
5
3
0
16
15
6
4
3
0
0
0
4
4
1
2
10
11
2
1
4
1
18
15
18
12
109
CLEC Business
Providers
(Dec-08)
(Dec-09)
2
1
7
5
0
0
0
1
1
1
20
20
12
14
7
6
6
3
13
13
4
5
8
9
14
18
19
20
16
14
9
11
0
1
43
39
3
5
7
7
21
22
7
5
32
29
25
23
2
1
0
0
6
7
0
1
20
20
14
14
9
14
3
4
12
13
18
17
9
8
0
0
6
6
8
7
4
5
0
1
3
3
12
10
12
10
Appendix C. Number of CLEC Providers In Each Exchange
Exchange
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
Ft. Lauderdale
Ft. Myers Beach
CLEC Residential
Providers
(Dec-08)
(Dec-09)
1
1
13
9
9
6
8
6
30
21
17
13
30
22
7
4
5
3
3
1
7
4
8
12
6
2
8
4
33
26
17
17
27
22
25
19
10
10
31
23
7
3
8
5
1
0
21
13
0
0
11
11
24
18
4
1
11
6
0
0
25
19
12
6
2
0
1
0
4
2
6
4
16
14
3
1
30
22
2
3
6
4
47
38
4
4
110
CLEC Business
Providers
(Dec-08)
(Dec-09)
1
1
31
34
18
16
9
10
28
25
20
19
34
26
4
6
10
13
1
1
13
13
8
7
16
14
13
14
37
32
18
15
35
30
23
21
7
7
35
30
14
17
10
11
0
0
12
10
0
0
15
13
26
26
20
17
11
13
2
3
17
16
11
11
1
1
1
0
8
8
10
8
25
26
1
1
26
23
5
5
10
10
47
49
12
13
Appendix C. Number of CLEC Providers In Each Exchange
Exchange
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
Keaton Beach
Kenansville
Keys
CLEC Residential
Providers
(Dec-08)
(Dec-09)
10
7
35
30
5
4
2
2
17
12
6
4
20
12
1
1
6
4
4
3
1
0
7
3
13
13
10
7
4
1
18
18
16
16
2
0
2
0
16
11
15
14
39
31
36
28
6
1
0
0
1
1
6
2
6
3
0
0
1
2
1
1
6
2
23
19
42
38
1
0
12
11
1
0
16
10
1
16
26
0
0
0
0
22
25
14
111
CLEC Business
Providers
(Dec-08)
(Dec-09)
18
19
29
27
8
8
0
1
11
9
4
4
15
15
0
0
4
4
3
2
0
0
11
11
17
12
21
22
3
1
8
6
6
4
2
2
1
1
16
14
11
9
42
39
29
26
10
13
0
0
3
1
18
19
13
13
3
4
2
3
2
2
11
13
22
21
42
43
2
2
7
4
1
1
21
22
1
27
32
0
0
3
3
31
36
9
Appendix C. Number of CLEC Providers In Each Exchange
Exchange
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
Myakka
Naples
North Cape Coral
Newberry
CLEC Residential
Providers
(Dec-08)
(Dec-09)
15
0
0
9
12
4
8
5
8
21
26
6
11
1
2
5
13
6
7
1
5
2
5
5
16
7
9
5
3
0
1
2
1
0
18
12
2
1
10
3
4
3
3
3
11
4
9
9
2
0
3
1
33
29
1
0
49
44
4
5
21
18
24
17
0
0
9
7
2
0
5
4
10
8
6
2
6
8
3
0
12
8
4
5
14
16
112
CLEC Business
Providers
(Dec-08)
(Dec-09)
11
0
0
23
25
10
13
15
15
16
18
18
17
2
2
23
24
13
12
0
3
3
6
5
15
17
18
16
3
2
6
6
0
0
11
9
3
2
12
11
1
2
13
14
12
12
6
6
1
1
2
1
27
25
1
1
50
51
5
5
19
17
14
12
0
1
9
10
3
3
7
5
15
16
13
14
1
2
5
6
23
24
15
16
6
8
Appendix C. Number of CLEC Providers In Each Exchange
Exchange
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
Port Charlotte
Port St. Lucie
Punta Gorda
Quincy
Raiford
CLEC Residential
Providers
(Dec-08)
(Dec-09)
6
5
6
4
37
32
3
2
7
5
20
17
6
4
15
8
4
2
12
5
10
12
1
0
6
4
35
29
47
37
18
17
19
13
17
15
19
17
19
13
7
5
2
1
29
21
1
0
39
31
25
24
1
0
14
6
2
0
10
6
19
13
12
8
0
0
2
1
11
12
33
31
5
4
2
1
9
2
32
27
2
0
2
1
0
0
113
CLEC Business
Providers
(Dec-08)
(Dec-09)
16
20
16
15
35
33
13
14
22
23
20
19
6
6
20
20
4
5
12
16
7
6
0
0
18
16
23
24
51
47
27
25
12
12
14
10
16
16
21
19
18
21
2
3
25
20
0
1
30
26
31
27
1
1
12
11
7
10
20
19
21
18
18
17
1
1
12
10
4
3
40
35
4
5
1
1
18
17
33
28
17
18
0
0
0
0
Appendix C. Number of CLEC Providers In Each Exchange
Exchange
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
Vero Beach
Waldo
Walnut Hill
Wauchula
Weekiwachee Springs
Weirsdale
CLEC Residential
Providers
(Dec-08)
(Dec-09)
2
3
6
5
2
1
2
1
0
1
34
28
2
1
15
6
4
4
25
17
11
6
4
3
8
5
0
1
5
3
3
1
3
2
10
6
36
27
3
1
10
7
15
9
24
15
11
9
23
14
22
18
5
3
4
2
0
0
25
21
18
13
5
5
0
1
8
5
4
3
6
4
11
9
31
24
1
0
0
1
8
5
18
12
5
4
114
CLEC Business
Providers
(Dec-08)
(Dec-09)
15
18
0
0
4
5
8
8
0
1
33
31
10
8
29
27
6
6
22
16
18
15
12
9
9
11
10
11
5
5
2
2
7
9
16
19
29
26
1
2
13
12
30
29
33
25
4
4
23
23
34
36
21
23
12
14
0
0
22
19
10
8
7
7
0
0
5
8
13
13
21
22
6
5
30
25
1
1
0
0
10
11
21
22
5
4
Appendix C. Number of CLEC Providers In Each Exchange
Exchange
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-08)
(Dec-09)
12
11
2
0
4
2
0
0
1
0
8
4
11
7
5
4
13
8
16
11
17
10
4
3
47
42
7
6
11
10
14
14
7
3
6
3
115
CLEC Business
Providers
(Dec-08)
(Dec-09)
6
5
0
0
4
4
0
0
1
1
13
13
11
10
13
12
22
21
23
22
26
27
18
19
44
45
7
7
7
5
9
10
18
17
3
4
116
Appendix D. Summary of Complaints Filed By CLECS
Complaint or
Docket
Number
0815954T
CLEC
AstroTel
ILEC
Verizon
Date
Opened
01/05/09
AstroTel
Verizon
03/24/09
0845686T
Complaint against
Verizon for not
fulfilling orders in a
timely manner
04/16/10
BudgeTel
BellSouth
AT&T
04/23/09
0851360T
05/28/09
dPi Teleconnect
BellSouth
AT&T
05/01/09
090258-TP
AstroTel
Verizon
05/07/09
0853693T
Complaint against
AT&T for not
fulfilling orders in a
timely manner
Complaint stating
that BellSouth owes
credits to dPi dating
between 2003-2007
for promotions
Complaint against
Verizon for not
fulfilling orders in a
timely manner
AstroTel
Verizon
06/08/09
0859308T
Complaint that
Verizon failed to
correct a service
error in a timely
manner
06/08/10
AstroTel
Verizon
06/09/09
0860106T
Complaint against
Verizon for not
fulfilling orders in a
timely manner
06/26/09
AstroTel
Verizon
06/16/09
0861502T
Complaint against
Verizon for not
fulfilling orders in a
timely manner
07/02/09
117
Description
Complaint against
Verizon for not
fulfilling orders in a
timely manner
Date
Closed
01/07/09
04/05/10
06/03/09
Resolution
The order in
question was
completed and a
Service
Activation
Report was sent
to AstroTel
Verizon
received
confirmation
that the
problematic
circuits were
functional
AT&T
confirmed new
circuits were
operational
dPi filed a
Voluntary
Dismissal of
Complaint with
Prejudice
Verizon
admitted
technical error
and completed
installation
Verizon
corrected the
issue and
confirmed that
customer was
satisfied
Errors on the
part of both
companies
resulted in the
delay; service
was restored
Errors on the
part of both
companies
resulted in the
delay; service
was restored
Appendix D. Summary of Complaints Filed By CLECS
Date
Opened
07/14/09
Complaint or
Docket
Number
0869785T
ILEC
BellSouth
AT&T
AstroTel
Verizon
07/17/09
0870635T
Complaint against
Verizon for not
fulfilling orders in a
timely manner
08/06/09
AstroTel
Verizon
08/04/09
0875998T
08/05/09
AstroTel
Verizon
10/13/09
0895543T
Complaint against
Verizon for failing
to reinstate service
in a timely manner
Complaint against
Verizon for not
fulfilling orders in a
timely manner
AstroTel
Verizon
11/10/09
0903551T
Complaint against
Verizon for not
fulfilling orders in a
timely manner
12/15/09
BudgeTel
BellSouth
AT&T
11/12/09
0903673T
Complaint against
BellSouth for not
fulfilling orders in a
timely manner
12/10/09
AstroTel
BellSouth
AT&T
12/03/09
0908572T
Complaint against
BellSouth for not
fulfilling orders in a
timely manner
12/05/09
118
Description
Complaint against
BellSouth for not
fulfilling orders in a
timely manner
Date
Closed
07/30/09
CLEC
AstroTel
11/03/09
Resolution
BellSouth and
AstroTel
worked together
to properly
reissue service
order
Verizon could
not locate
customer’s
apartment
initially to
fulfill order;
service has been
reinstated
Verizon was
able to correct
the issue and
reinstate service
A Verizon
system error
created the
delay and has
since been
rectified
The Verizon
tech was unable
to initially
access the
customer for
installation
Installation
completed on
11/16/09; no
explanation
provided
Wrong number
provided for
BellSouth’s
administration
Center; staff
provided
instructions to
AstroTel for
requesting the
order
Appendix E. 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 Guidelines241, 242
241
Legislation was passed during the 2008 session that increased Lifeline eligibility in Florida from 135 percent of
the Federal Poverty Guidelines to 150 percent, effective July 1, 2009.
242
Effective July 1, 2010, Legislation passed during the 2009 session permits wireless ETCs to offer Lifeline service
to customers that qualify under the 150 percent of Federal Poverty Guideline criterion.
119
120
Glossary
3G
4G
911 / E911
Access Line
ARRA
Broadband
Circuit
CLEC
Coaxial Cable
Commercial Agreement
CMRS
DOCSIS
Third-generation technology. Used in the context of mobile
telephone standards. 3G networks are wide area cellular telephone
networks that evolved to accommodate 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.
The American Recovery and Reinvestment Act of 2009.
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.
A high-capacity cable widely used in voice, video, and data
applications. Coaxial cable includes one physical channel that
carries the signal surrounded (after a layer of insulation) by
another concentric physical channel, both running along the same
axis. The outer channel serves as a ground and a shield against
external interference.
A contractual arrangement between an ILEC and CLEC to obtain
access to network components or other services not required
pursuant to state or federal law.
Commercial Mobile Radio Service. Technical term for a wireless
communications provider.
Data Over Cable Service Interface Specification. DOCSIS
defines the communications and operation support interface
requirements for a data over cable system.
121
Glossary
DSL
ETC
Exchange
FiOS
FTTH
FTTN
ILEC
Intermodal
interMTA
Internet Protocol (IP)
IXC
Digital Subscriber Line. A family of technologies (including
variations such as asynchronous DSL, high bit-rate DSL, very
high bit-rate DSL, etc.) that provide 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.
FiOS is Verizon’s suite of voice, video, and broadband services
provisioned over fiber 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-home. The fiber deployment architecture in which
optical fiber is carried all the way to the customer premises.
Fiber-to-the-node. A hybrid network architecture involving
optical fiber from the carrier network, terminating in a
neighborhood cabinet which converts the signal from optical to
electrical. The connection from the cabinet to the user premises is
over twisted copper pair or coaxial cable.
Incumbent Local Exchange Company. Any company certificated
by the FPSC to provide local exchange telecommunications
service in Florida on or before June 30, 1995, as their successor
companies.
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.
Refers to traffic outside of the Metropolitan Trading Area (MTA).
A MTA is an area defined by the FCC for the purpose of issuing
wireless licenses. The U.S. is broken down into 51 MTAs.
The term refers to all the standards that keep the Internet
functioning. IP describes software that tracks the Internet address
of nodes, routes outgoing messages, and recognizes incoming
messages.
Intrastate Interexchange Company. Any entity that provides
intrastate interexchange telecommunications services.
122
Glossary
Local Loop
See Access Line.
Local Platform
The commercial replacement for UNE-P. The local platform
provides an end-to-end circuit. See UNE-P.
Long Term Evolution. LTE is a technology standard for the future
provision of 4G wireless services.
National Broadband Plan.
LTE
NBP
OSS
Peer-to-peer
Public Switched
Telephone Network
Resale
Switch
Switched Access
Operations Support System. Methods and procedures
(mechanized or not) that directly support the daily operation of the
telecommunications infrastructure. The average local exchange
company has hundreds of OSSs, including automated systems
supporting order submission, order processing, line assignment,
line testing, and line billing.
Any distributed network architecture that is composed of
participants that make a portion of their resources (such as
processing power, disk storage or network bandwidth) directly
available to other network participants, without the need for
central coordination instances (such as servers or stable hosts).
Peers are both suppliers and consumers of resources, in contrast to
the traditional client–server model where only servers supply, and
clients consume.
The network that provides switching and transmission facilities to
the general public.
The 1996 Act requires ILECs to offer to 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.
A mechanical, electrical, or electronic device that opens or closes
circuits, completes or breaks an electrical path, or selects paths or
circuits.
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.
123
Glossary
Tariff
Telecommunications Act
of 1996 (the 1996 Act)
TRRO
TRS
UNE
U-verse
Universal Service
VoIP
Wi-Fi
Historically, 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 are subject to
review by regulatory agencies and must be followed by the
common carrier to ensure nondiscrimination between customers.
In Florida, statutory change enacted in 2009 no longer require
tariffs to be filed and approved by the FPSC. Instead, ILECs and
CLECs are permitted to publish rates, terms and conditions of
service electronically.
The federal Telecommunications Act of 1996 established a
national framework to enable CLECs to enter the local
telecommunications marketplace.
Triennial Review Remand Order. The FCC released the TRRO in
February 2005. In this Order, the FCC eliminated unbundled local
switching as a UNE, effective March 11, 2005, with a transition
period extending until March 11, 2006. This decision effectively
eliminated the combination of local elements known as Unbundled
Network Element Platform. In its place, the ILECs continue to
provide the same service but at higher market-based rates, a
service referred to as local platform.
Telecommunications Relay System. TRS enables a person who is
deaf or hard of hearing to access the nation’s telephone system to
communicate with voice telephone users through a relay provider
and a communications assistant.
Unbundled Network Element. The Telecommunications Act of
1996 requires that the ILECs unbundle certain network elements
and make them available to CLECs. UNEs are defined as physical
and functional elements of the network, for example, Network
Interface Devices, local loops and subloops, OSSs, etc.
U-verse is the brand name of AT&T for a group of services
provided via Internet Protocol, 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.
This term describes the financial support mechanisms that
constitute the federal 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
in rural, insular, and high-cost areas, and to public institutions.
Voice over Internet Protocol. The technology used to transmit
voice conversations over a data network using Internet Protocol.
Wi-Fi is a standard originally licensed by the Wi-Fi Alliance to
describe the underlying technology of wireless local area networks
(WLAN) based on the specific methods and techniques of wireless
local area network operation.
124
Glossary
WiMAX
Wireline
Worldwide Interoperability for Microwave Access. Defined by the
WiMAX Forum, formed in April 2001, to promote conformance
and interoperability. The Forum describes WiMAX as a
standards-based technology enabling the delivery of last mile
wireless broadband access as an alternative to cable and DSL.
A term used to describe the technology used by a company to
provide telecommunications services. Wireline is synonymous
with “landline” or land-based technology.
125
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