Application Package Instructions

Filing Package Requirements

Submit Original plus 3 copies of Complete Package AND Check (see 4a or 4b below)

1. A telecommunication services supplier must file a Statement of Business Operations ("SBO"), including the following information in a question – answer format.

a. Corporate name, complete address, telephone/fax numbers, e-mail address
b. Local Company name, complete address, telephone/fax numbers, e-mail address
c. Business locations.
d. Service agent, complete address, telephone/fax numbers, e-mail address
e. Attorney of record, complete address, telephone/fax numbers, e-mail address
f. Corporate officers and major stockholders or partners holding a ten percent or greater equity interest.
g. General description of operations.
h. Description, in detail, of the customer service organization to be employed in serving carriers and end users.
i. Customer service contact, complete address, telephone/fax numbers, e-mail address
j. Regulatory contact person, complete address, telephone/fax numbers, e-mail address
k. Company web site URL, if available.

2. Provide evidence, in exhibit form, of authorization from the Rhode Island Secretary of State, 148 West River St., Providence, RI 02904 (401-222-3040), to do business in Rhode Island. Any filing not including this requirement will be put on hold until the documentation is received or the filing package will be return for deficiencies.And supply the “d/b/a name form” from the Secretary of State if using a fictitious name within the state. (see requirements below for this procedure) 

3. All telecommunication service supplier applicants must file latest company's stated financial position.

4.a. Only the CLEC (Class I and Class VI) may file tariffs at a later date; 30 days before commencing operations in the state.  Filing must include a check in the amount of $300.00, made payable to "State of Rhode Island". 

4.b. All non CLEC (Class II, III, IV,V ) telecommunication service suppliers filing must include tariffs leaving the effective date BLANK.  Filing must also include a check in the amount of $250.00, made payable to "State of Rhode Island”.

Package Review

The Division of Public Utilities and Carriers will review the Statement of Business Organization ("SBO") and make a recommendation to the Public Utilities Commission as to whether the telecommunication service supplier should be authorized to provide service in Rhode Island. NO service may be rendered unless and until the Commission has approved the company's tariffs, usually processed within 30 days from docketing date.

A telecommunication service supplier authorized to provide intrastate service shall file tariffs pursuant to Rhode Island General Laws, Section 39-3-11. However, the Commission will exercise its authority pursuant to Section 39-3-12 to modify certain of the tariff filing requirements. The Commission's rules of practice and procedure requires the filing of minimal supporting documentation and permits tariffs to go into effect thirty days after notice in the absence of a suspension order.

Annual Requirements

The telecommunication service supplier with intrastate operating authority shall make annual filings with the Division of Public Utilities as follows:

a. If there are any changes to the SBO, the SBO should be amended annually as of June 30 of each year or before if changes are made, but in no event not later than June 30th of each year.

b. Thirty days following the close of a Competitive Access Provider only, CAP's (Class I) fiscal year, a filing shall be made disclosing the number of lines in service and the revenues derived therefrom.

c. Once audited figures are available on the information filed pursuant to (b), the CAP shall supplemented their prior report, (if figures and amounts are different from original filing in b above.)

d. BEFORE July 1st, and every year thereafter, a check for the annual fee in the highest class of services offered ie. Class 1, 2 ,3…., should be issued to the "State of Rhode Island " along with the Annual Reporting requirements listed above. (See REGULATIONS AND FEE SCHEDULES FOR TELECOMMUNICATIONS PROVIDERS - 4. ANNUAL FEES)

(special notation – An invoice will be sent May/June time period for the annual filing fee, with a printout of selected information about the telecommunication service supplier, this form should be updated and returned as soon as possible. The payment can be processed separately and forwarded to the Commission.)

Mail to, Rhode Island Public Utilities Commission, Attn: Accounting Section, 89 Jefferson Blvd., Warwick, RI 02888.

Failure to remit the annual fee by August 1st, will result in suspension of operating authority. After September, any provider whose operating authority has been revoked may reapply by filing an original application with appropriate fees.

Special Notice - Resellers can Resell “Local Exchange Services”

At an open meeting held July 29, 1997, the Commission reviewed a Request for Clarification from the Division of Public Utilities. The Division asked whether registered carriers that are Competitive Switchless Resellers ("CSR") may resell local exchange and related optional services without being a Competitive Local Exchange Carrier ("CLEC").

The Commission answered in the affirmative, as quoted below:

"The Commission believes that there may never be a bright line between CSR's and CLECs (other than the existence of Rhode Island facilities), but that in any case the evolution of the competitive marketplace will assist both the Division and the Commission in determining whether and when further distinctions are necessary."

Rhode Island Summary of Assessment – Surcharges – Taxes and Rules 

There are a number of specific Rhode Island taxes/surcharges that every telecommunication company should be aware of and an “assessment charge” for the Rhode Island Public Utilities Commission budget. 

I. Administrative expenses – Assessment against utilities.

Pursuant to the Rhode Island General Law Chapter 1 of title 39, the General Assembly mandated an assessment on gross revenues of utilities operating within the state of Rhode Island.

“The administrator (of the Division of Public Utilities and Carriers) shall thereupon apportion and assess one hundred percent (100%) of such expenses among the several public utility companies and common carriers located in this state in the proportion that the gross intrastate utility operating revenues of each public utility company and common carrier shall bear to the total gross intrastate utility operating revenues for the last preceding fiscal year of all public utility companies and common carriers; provided, however, that any public utility or common carrier, whose gross intrastate revenues in any fiscal year as reported to the administrator do not exceed one hundred thousand dollars ($100,000), shall not be subject to the assessment.”

Pursuant to the Rhode Island General Law 39-1-22 False Returns. – A company subject to the supervision of the commission or division which furnishes it with a sworn or affirmed report, return, or statement, which the company knows or should know contains false figures or information regarding any material matter lawfully required of it, and any company which fails within a reasonable time to obey a final order of the commission or division, shall be fined not more than twenty thousand dollars ($20,000).

It is required that all telecommunication carriers, with intrastate revenues in excess of $100,000. be required to file annual intrastate revenues (Calendar basis - January through December) with the Rhode Island Division of Public Utilities and Carriers, in care of Accounting Section at 89 Jefferson Blvd., Warwick, Rhode Island 02888. Phone (401) 941-4500 and FAX (401) 941-9248.  An invoice for the telecommunication carriers assessment will be forwarded at the appropriate time by the Division. Files of the annual Rhode Island revenues and access lines will be kept confidential.

II. Dual party telephone relay service for deaf, hearing impaired and speech impaired persons. Generally known as the “TTY/TDD Relay Surcharge”.

Pursuant to the Rhode Island General Law 39-1-42, the Public Utilities Commission was mandated to (a) establish, administer, and promote a statewide dual party telephone relay service and to (b) establish, by rule or regulation, an appropriate funding mechanism to recover the costs of providing this service to the general body of rate payers.

On May 1, 1998 in R.I.P.U.C. Docket No. 2046, the Commission ordered the assessment of a monthly relay surcharge to be 9 cents ($0.09) [1] for each telephone access line in the state of Rhode Island. The costs associated with the relay service are to be recovered by each telecommunication carrier providing local telephone service. The monthly surcharge should be established as a separate line item on the monthly statement of telephone customers.

Both Text Telephone (“TT”) and Voice users may place calls through the relay service by calling the toll-free access number 800-RI-55555 (800-745-5555).

With the advent of competition in the telecommunication market in Rhode Island, it is required that all carriers providing telephone service be required to bill its customers the relay surcharge and remit the TDD Relay surcharge amount (payable) to the Rhode Island Division of Public Utilities and Carriers, in care of Accounting Section at 89 Jefferson Blvd., Warwick, R.I. 02888 or FAX (401) 941-9248.

III. Gross earnings of certain corporations and public service companies. Generally known as “Gross Earnings Tax”

Pursuant to the Rhode Island General Law Chapter 13 of title 44, Public Service Corporation Tax, the General Assembly mandated a Gross Earnings tax on telecommunication services within the state of Rhode Island.

(4) “In the case of every telecommunications corporation providing telecommunications service, five percent (5%) effective July 1, 1997.”

(6) “Due date of annual return – Every corporation shall file a return with the (tax) administrator on or before March 1 of each year.”

(10) “In the case of every corporation carrying on business both within and without this state, its entire gross earnings from its operation for the preceding calendar year, or for the portion of the year that the corporation has carried on business within this state shall be apportioned to this state.”

Remit the Gross Earnings Tax amount (payable) to the “State of Rhode Island”, and mail to: RI Division of Taxation, One Capitol Hill, Providence, RI 02908.Tel. No. (401) 574-8970. Call for forms and for a copy of current regulations or go to tax.state.ri.us.

IV. Sales and Use Taxes 

Pursuant to the Rhode Island General Law Chapter 18 of title 44, the General Assembly mandated a Sales and Use tax on telecommunication services within the state of Rhode Island at the rate of seven percent (7%).

44-18-7(9) “The furnishing for consideration of telecommunications service which includes local exchange service, intrastate toll service, interstate and international toll service…. Including the furnishing, rental, or leasing of all equipment or services pertaining or incidental thereto; provided, that the service is: rendered in its entirety within this state, originated in this state and terminated in another state or a foreign country and with respect to which the service is charged to a telephone number, customer, or account located in this state or to the account of any transmission instrument in this state, originated in another state or a foreign country and terminated in this state and is charged to a telephone number, customer, or account located in this state at which the service is terminated, or to the account of any transmission instrument in this state at which the service is terminated.”

Remit the Sales and Use tax amount (payable) to the “State of Rhode Island”, and mail to: RI Division of Taxation, One Capitol Hill, Providence, RI 02908.Tel. No. (401) 574-8970. Call for forms and for a copy of the current regulations or go to tax.state.ri.us.

Tariff Changes

Rhode Island General Laws requires thirty (30) days notice of change in rates. The time period for the 30 day notice commences from the date the filing is received and docketed by the Commission Clerk, as long as the filing confirms to the tariff filing package requirements. Tariff filing package for CSRs should contain an original and 7 copies of the cover letter stating docket number and original company name as certified, an outline of changes and tariffs, and a check in the amount of $50.00 payable to “State of Rhode Island”.For CLECs, the package should include an original and 7 copies. All filings must be addressed to Ms. Stephanie De La Rosa, Commission Clerk, Rhode Island Public Utilities Commission, 89 Jefferson Blvd., Warwick, RI 02888.Phone 401-780-2107.

Mergers and Asset Purchase / Lease Agreements

Mergers and asset purchase / lease agreements between telecommunications companies doing business in Rhode Island must be approved by the Division of Public Utilities and Carriers in cases where two or more of the companies involved in the transaction are  (certificated by the Public Utilities Commission) to do business in Rhode Island. Division approval is not required in cases where only ONE certificated Rhode Island telecommunications provider is involved in the transaction (see R.I.G.L. 39-3-24, et seq). In cases where approval is not required, telecommunications companies are required to notify both the Commission and Division of all merger and asset purchase / lease agreements. Any questions on this section can be directed to Ms. Margaret L. Hogan Esq. at 401-780-2120. Companies seeking approval pursuant to RIGL 39-3-24 must file with Ms. Stephanie De La Rosa, Commission Clerk, Rhode Island Division of Public Utilities, 89 Jefferson Blvd., Warwick, RI 02888. 401-780-2107.

Stocks, Bonds and Notes Issuance’s

Only telecommunications companies that are incorporated in the state of Rhode Island are required to seek and receive Division approval to issue stocks, bonds, notes and other evidences of indebtedness (see R.I.G.L. 39-3-15 et seq.)  Although approval is not required for foreign utilities doing business in Rhode Island, these companies are required to notify both the Commission and Division of all security issues involving their companies.  Any questions on this section can be directed to Ms. Margaret L. Hogan, Esq. At 401-780-2120.

Trade Name(s) and d/b/a Name(s)

Telecommunications companies must register the trade name or d/b/a name with the Secretary of State, Corporations Division, 100 North Main St., Providence, RI 02903 (request a form 401-222-2357). The company must file this trade name and d/b/a release form with the original application if they are requesting the trade name or d/b/a. In addition if the company wants to add or change a trade name or d/b/a after receiving certification at the PUC, they must submit the complete Secretary of State form. Companies seeking to implement name change must do so through the submission of a tariff filing see procedures below.

Filing Information on Trade Name(s) and d/b/a Name(s)  Needed at the PUC

If the company wants to add or change a trade name or d/b/a after receiving certification follow instructions listed below.

  1. Submit trade or d/b/a name authorization form that you received back from the Secretary of State along with 2 and 3 below.  (The authorization form is required for processing)
  2. Change each tariff page with the addition of the trade name or d/b/a.
  3. A check in the amount of $50.00 made out to "State of Rhode Island", unless fee has been waivered because of revenue assessment
  4. Send to attention the Commission Clerk, RIPUC, 89 Jefferson Blvd., Warwick, RI 02888
  5. The filling will be acted upon by the Commission and should be effective 30 days upon docketing by the Commission Clerk, please allow 2 days processing time for docketing.  You should put in the issue and effective dates on each page.

Upgrading from a lower class, ie Reseller to CLEC

Any telecommunication carrier classified as a CSR (Class II) that wants to upgrade to a CLEC (Class I) must file a complete new filing package. Upon acceptance of the CLEC status by the Commission, the CSR Class II certificate must be requested by the company to be recalled and cancelled, otherwise, the company will be responsible for the annual fee for both classes. Direct the request to the Commission Clerk at the RIPUC.

STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS

DIVISION OF PUBLIC UTILITIES AND CARRIERS

REGULATIONS AND FEE SCHEDULES FOR TELECOMMUNICATIONS PROVIDERS

Date of Public Notice: September 21, 1995
Date of Public Hearing: October 5, 1995
Effective Date: December 26, 1995

1. INTRODUCTION

These regulations, enacted pursuant to 1995 P.L. Chapter 316, govern the fees payable by telecommunications providers who are not otherwise subject to the provisions of R.I.G.L. 1956 (1988 Reenactment), 39-1-26(a) or (b). These fees represent the reasonable costs incurred by the Division of Public Utilities and Carriers and the Public Utilities Commission in docketing, investigation, and decision-making.

2. DEFINITIONS

As used in these rules, except as otherwise required by the context:

a. "Applicant" means, in proceedings involving filings for permission or authorization which the Commission may give under statutory or other authority delegated to it, the party on whose behalf the filings are made.

b. "Clerk" means the Commission clerk, appointed by the Commission pursuant to R.I.G.L. 39-1-9.

c. "Commission" means the Public Utilities Commission.

d. "Division" means the Division of Public Utilities and Carriers described in R.I.G.L. 39-1-2(4) and 39-1-3.

e. "Telecommunications provider" means any person, firm or corporation providing, inter alia, intrastate telecommunications services, which is not otherwise liable for payments to the Public Utilities Reserve Fund (currently .00025% of gross annual operating revenues attributable to intrastate operations in Rhode Island) or for rate case expense reimbursements. For the purpose of these regulations, telecommunications providers are subdivided into six classes:

(1) Class I: Competitive Access Providers ("CAP"). Entry is controlled by Docket No. 2129. These carriers are facilities-based, providing customers with some of the same services available through the local exchange carrier. (the Commission added the Competitive Local Exchange Carrier "CLEC" classification to this Class I in open meeting)

(2) Class II: Resellers doing business as Certified Switchless Resellers ("CSR"). Entry is controlled by Docket No. 2262, incorporating many of the requirements of Docket No. 2129. CSRs are non-facilities-based carriers which purchase access at a discount from facilities-based carriers and/or the local exchange carrier, and market or resell their services.

(3) Class III: Resellers doing business through the use of debit cards ("DCS"). DCS is a pre-paid calling-card service provided by a wholesale company that allows an in-state outbound call to be charged to a debit card, typically through the use of a "1+800" number and a personal identification number.

(4) Class IV: Operator Service Providers ("OSP") or Alternate Operator Services ("AOS"). These providers offer an alternative to operator services provided by the local exchange carriers and facilities-based interexchange carriers. OSPs furnish services to carriers who do not have their own operators, and to businesses such as hotels, hospitals, airports, and educational institutions. The services may include calling card, collect, and third-party calls.

(5) Class V: Private coin telephones. This class includes Customer-Owned, Coin-Operated Telephones ("COCOT") and Inmate Services. COCOTs generally secure alternative operator services for calling card, collect, and third-party calls, since the financial commissions are greater. Inmate Services provides outbound-only coin telephones for residents of the state and federal prisons.

(6) Class VI: Other service providers who are not covered by Classes I-V. (wholesaler of data services)

3. ORIGINAL APPLICATIONS

a. Class I. In addition to the materials required to be submitted to the Clerk pursuant to Docket No. 2129, CAP (or CLEC) applicants shall tender $300.00, in a check payable to the State of Rhode Island. No application shall be accepted for docketing in the absence of full payment and all required paperwork.

b. Class II. In addition to the materials required to be submitted to the Clerk pursuant to Docket No. 2262, CSR applicants shall tender $250.00, in a check payable to the State of Rhode Island. No application shall be accepted for docketing in the absence of full payment and all required paperwork. Certain CSRs were granted interim authority by the Commission, pending action by the General Assembly. Holders of interim authority need not refile their materials, but will obtain permanent authority by submitting a letter requesting the same, accompanied by $250.00, in a check payable to the State of Rhode Island.

c Class III. In addition to a Statement of Business Operations and initial tariffs, DCS applicants shall tender $250.00, in a check payable to the State of Rhode Island. No application shall be accepted for docketing in the absence of full payment and all required paperwork.

d. Class IV. Class IV applicants are required to file certain information with the Division, pursuant to the Rules and Regulations for Telephone Operator Service Providers in Rhode Island, issued April 8, 1991. In addition, OSPs shall tender $250.00, in a check payable to the State of Rhode Island. No application shall be accepted for docketing in the absence of full payment and all required paperwork.

e. Class V. COCOTs with fifteen units or more who wish to offer service as Class V telecommunications providers, must submit a registration form, listing information required by Docket Nos. 1786, 1796, and 1899, and initial tariffs. Inmate Services providers must submit a copy of the contract with the State of Rhode Island or the United States of America. In addition to this paperwork, Class V telecommunications providers shall tender $150.00, in a check payable to the State of Rhode Island.

f. Class VI. The Division will dictate entry requirements for these providers on a service-by-service basis. Class VI telecommunications providers shall tender a check payable to the State of Rhode Island, in an amount to be determined by the Division, not to exceed $300.00.(now includes wholesaler data services)

4. ANNUAL FEES

a. Class I. In addition to the materials required to be submitted to the Clerk annually pursuant to Docket No. 2129, CAPs (or CLECs) shall tender $250.00, in a check payable to the State of Rhode Island, not later than July 1 following the date on which authority was granted. Failure to remit the annual fee by August 1 shall result in suspension of authority. Such suspension shall automatically become revocation if the annual fee remains unpaid by September 1; Class I telecommunications providers whose authority has been revoked may reapply for authority by filing an original application with the appropriate fees, as described in Rule 3a.

b. Class II. In addition to the materials required to be submitted to the Clerk annually pursuant to Docket No. 2262, CSRs shall tender $175.00, in a check payable to the State of Rhode Island, not later than July 1 following the date on which authority was granted. Failure to remit the annual fee by August 1 shall result in suspension of authority. Such suspension shall automatically become revocation if the annual fee remains unpaid by September 1; Class II telecommunications providers whose authority has been revoked may reapply for authority by filing an original application with the appropriate fees, as described in Rule 3b.

c. Class III. DCS providers shall tender $175.00, in a check payable to the State of Rhode Island, not later than July 1 following the date on which authority was granted. Failure to remit the annual fee by August 1 shall result in suspension of authority. Such suspension shall automatically become revocation if the annual fee remains unpaid by September 1; Class III telecommunications providers whose authority has been revoked may reapply for authority by filing an original application with the appropriate fees, as described in Rule 3c.

d. Class IV. AOS or OSP providers shall tender $175.00, in a check payable to the State of Rhode Island, not later than July 1 following the date on which authority was granted. Failure to remit the annual fee by August 1 shall be cause for notice of a Show Cause hearing, publication of the notice on the National Association of Regulatory Utility Commissioners' Electronic Bulletin Board, and potential revocation if the annual fee remains unpaid by September 1; Class IV telecommunications providers whose authority has been revoked may reapply for authority by filing an original application with the appropriate fees, as described in Rule 3d.

e. Class V. COCOTs and Inmate Services providers with fifteen or more units shall tender $25.00 or $0.10 per telephone, whichever is greater, in a check payable to the State of Rhode Island, not later than July 1 following the date on which operations began. Failure to remit the annual fee by August 1 shall be cause for notice of a Show Cause hearing, and publication of the notice on the National Association of Regulatory Utility Commissioners' Electronic Bulletin Board. Class V telecommunications providers whose annual fees have not been paid by September 1 must reapply for authority by filing an original registration application with the appropriate fees, as described in Rule 3e.

f. Class VI. Class VI telecommunications providers shall tender a check payable to the State of Rhode Island, in an amount to be determined by the Division, not to exceed $250.00.(now includes wholesale data services)

5. ADDITIONAL FILING FEES

a. Class I. CAPs (or CLEC) shall tender $50.00, in a check payable to the State of Rhode Island, with each tariff revision or non-tariff filing, other than the annual filings required by Rule 4a. No filing shall be accepted for docketing unless the account is in full satisfactory status, and full payment is made.

b. Class II. CSRs shall tender $50.00, in a check payable to the State of Rhode Island, with each tariff revision or non-tariff filing, other than the annual filings required by Rule 4b. No filing shall be accepted for docketing unless the account is in full satisfactory status, and full payment is made.

c. Class III. DCS providers shall tender $50.00, in a check payable to the State of Rhode Island, with each tariff revision or non-tariff filing, other than the annual filings required by Rule 4c. No filing shall be accepted for docketing unless the account is in full satisfactory status, and full payment is made.

d. Class IV. AOS or OSP providers shall tender $50.00, in a check payable to the State of Rhode Island, with each tariff revision or non-tariff filing, other than the annual filings required by Rule 4d. No filing shall be accepted for docketing unless the account is in full satisfactory status, and full payment is made.

e. Class V. COCOTs and Inmate Service providers shall tender $25.00, in a check payable to the State of Rhode Island, with each tariff revision, other than the annual filing required by Rule 4e. No payment shall be required with non-tariff filings. No filing shall be accepted for docketing unless the account is in full satisfactory status, and full payment is made.

f. Class VI. Class VI telecommunications providers shall tender $50.00, in a check payable to the State of Rhode Island, with each tariff revision or non-tariff filing, other than the annual filings which may be required by Rule 4f. No filing shall be accepted for docketing unless the account is in full satisfactory status, and full payment is made.(now includes wholesale data services)

6. MISCELLANEOUS PROVISIONS

a. Multi-class Providers. A telecommunications provider who has authority under more than one class must submit the paperwork for each class, and the fees associated with the highest class.

b. Publication of Arrearages. An AOS, OSP, COCOT, or Inmate Services provider which fails to submit the annual fee in a timely manner will be summoned for a Show Cause hearing. Notice of this hearing will be published on the National Association of Regulatory Utility Commissioners' Electronic Bulletin Board so that regulators in other states can be alerted to the provider's failure to comply with regulations. The provider shall be classified "unsatisfactory" for all inquiries.

c. Limitation on Authority within a Class. The Clerk will not accept any original application for filing, if the telecommunications provider seeking authority currently holds authority in the same class (e.g. no CAP (or CLEC) can file an application to provide service as a CAP (or CLEC), although it may seek authority as a CSR).

The foregoing rules and regulations, after due notice and an opportunity for hearing, are hereby adopted and filed with the Secretary of State this 4th day of December, 1995, to become effective twenty (20) days after filing, in accordance with the provisions of R.I.G.L. 1956 (1988 Reenactment) nbsp42-35-2(a)(2), nbsp42-35-3, and R.I.G.L. 1956 (1984 Reenactment) nbsp39-1-26(c).

Fee Schedule for Telecommunications Providers

ALL FEES MUST ACCOMPANY PAPERWORK.

Class I
Original Application $ 300
Annual Fee due by July 1 of each year $250
Each Tariff Filing Change $50

Class II
Original Application $250
Annual Fee due by July 1 of each year $175
Each Tariff Filing Change $50

Class III
Original Application $ 250
Annual Fee due by July 1 of each year $175
Each Tariff Filing Change $50

Class IV
Original Application $250
Annual Fee due by July 1 of each year $175
Each Tariff filing Change $50

Class V
Original Application $150
Annual Fee $25 or 10 cents per phone whichever is greater, due by July 1 each year.
Each Tariff filing Change $25

Class VI
Original Application not to exceed $300
Annual Fee not to exceed $250 due by July 1 of each year
Each Tariff filing Change $50

STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS

PUBLIC UTILITIES COMMISSION

IN RE: ENTRY REQUIREMENTS FOR

COMPETITIVE LOCAL EXCHANGE CARRIERS DOCKET NO. 2411

REPORT AND ORDER

On April 5, 1996, a letter from Brooks Fiber Communications of Rhode Island, Inc. ("Brooks") was received by the Public Utilities Commission ("Commission"). The letter formally notified the Commission of Brooks' intention to provide switched local service in Rhode Island, and requested whatever permission might still be necessary to do so. After open meeting discussion as to the proper forum Footnote1 for considering entry requirements for competitive local exchange carriers ("CLECs"), the Commission created this generic docket on April 23, 1996 and invited prospective CLECs to submit comments on the scope of regulation.

By May 21, 1996, comments had been filed by Brooks, Teleport Communications Group, AT&T, Cox Communications, Inc., the Division of Public Utilities and Carriers, and NYNEX, the incumbent local exchange carrier.

Several parties noted that all the services offered by CLECs are competitive. Thus, their service offerings, service quality and prices are all responsive to the marketplace. It was suggested that the difference in market power between the CLECs and the incumbent, NYNEX, requires different regulatory treatment for the CLECs.

The distinction in the scope of regulation was explicitly recognized by Congress in the Telecommunications Act of 1996 ("the Act"). CLECs, for example, are saddled with fewer obligations than those imposed on incumbents and former Bell Operating Companies. Footnote2

The Commission is mindful that the Act prohibits states from erecting barriers to competitive entry. Footnote3 However, Congress did not thereby intend to preempt our jurisdiction over all aspects of local service delivery. Indeed, the Act authorizes the Commission to impose requirements "necessary to preserve and advance universal service, protect the public safety and welfare, ensure the continued quality of telecommunications services, and safeguard the rights of consumers." Footnote4

Many of those requirements will be developed in the context of Docket No. 2252, and this docket does not purport to address them. Rather, our goal is to establish minimal provisions necessary to protect residential and small business customers, whose sophistication and ability to protect themselves may not be equal to those of the large users who have typically been customers of the Competitive Access Providers authorized by Docket No. 2129.

The Commission is of the opinion that the following entry requirements for CLECs, similar to those proposed by Brooks, will adequately protect Rhode Island consumers without erecting barriers to competitive entry:

1. The Commission shall grant authority to a CLEC upon its finding all of the following:

  1. That the applicant has satisfactorily provided a Statement of Business Operations in accordance with the Report and Order in Docket No. 2129, and a map of the geographical area or areas in which service will be offered; and (outlined the required information earlier in this requirement file listing)
  2. That the applicant meets the standard for financial resources, managerial qualifications, and technical competence established below; and
  3. That the CLEC has specified whether it intends to offer its service to all business and residence customers that request local exchange service; and
  4. That the CLEC has paid the appropriate application fees, pursuant to the Regulations and Fee Schedules for Telecommunications Providers. Until further notice, a CLEC shall be treated as a Class I telecommunications provider.

2. The Commission shall use the following standard for determining an applicant has sufficient financial resources:

  1. Upon request, applicants to become facilities-based service providers shall demonstrate they possess a minimum of $100,000 cash or other financial instrument as described in 2(c), available for the first year expenses of Rhode Island operations;
  2. Upon request, applicants to become non-facilities based service providers shall demonstrate they possess a minimum of $20,000 cash or other financial instrument as described in 2(c), available for the first year expenses of Rhode Island operations
  3. To satisfy the requirements of 2(a) and (b), if imposed, applicants may use appropriate financial instruments, subject to verification and review by the Commission, including but not limited to:
  • cash or cash equivalent, including cashier's check or sight draft
  • certificate of deposit or other liquid deposit with a reputable bank or other institution
  • irrevocable letter of credit
  • line of credit
  • loan
  • guarantee.

The requirements of 2(a), (b), and (c) are not intended to prescribe the credit terms which apply between carriers.

3. The Commission shall determine an applicant possesses sufficient managerial qualifications on the basis of reviewing brief biographies of the applicant's key officers and/or managers:

  1. For facilities-based applicants, the Commission shall review brief biographies of the applicant's key technical management personnel, if different from its key officers and/or managers, commensurate with the scope of the applicant's operations.
  2. For non-facilities based applicants, the Commission shall consider the technical competence of the underlying carrier(s) used in providing the applicant's service.

4. Before commencing operations, an applicant shall, if deemed necessary by the Commission, post and maintain a surety bond to cover refunds of all residential customer deposits, including advanced billing.

5. A CLEC must receive approval of its filed intrastate tariff prior to commencing operations. Such approval will be automatic if the Commission does not act within sixty days of the tariff filing.

The Commission is committed to competition in telecommunications. We believe that removing barriers and encouraging new entrants will result in lower costs to customers. These minimal entry requirements for CLECs will allow competitive local exchange service to commence. How it is to be managed raises issues, including the applicability of quality of service standards and universal service requirements, which we will address in Docket No. 2252. Any CLEC authorized to provide service in Rhode Island is bound by the decision in that docket.

Accordingly, it is

(15040) ORDERED:

The Commission adopts, for Brooks Fiber Communications of Rhode Island, Inc., and all other potential Competitive Local Exchange Carriers, the requirements detailed in this Report and Order.

EFFECTIVE AT PROVIDENCE, RHODE ISLAND ON JULY 9, 1996 PURSUANT TO AN OPEN MEETING DECISION. WRITTEN ORDER ISSUED JULY 12, 1996.

PUBLIC UTILITIES COMMISSION

Footnote1

The Commission is currently considering a wide range of issues arising from competition in the telecommunications marketplace in Docket No. 2252.

Footnote2

Contrast Section 251(b), which defines obligations for all local exchange carriers, with Section 251(c), imposing additional obligations on incumbent local exchange carriers.

Footnote3

See Section 253(a).

Footnote4

See Section 253(b).