FUS-0435*; P-00981628.O; Citizens Tel. Co. of New York s5

PENNSYLVANIA PUBLIC UTILITY COMMISSION Harrisburg, PA 17105-3265

Public Meeting held October 23, 2014 Commissioners Present:

Robert F. Powelson, Chairman, Statement John F. Coleman, Jr., Vice Chairman James H. Cawley Pamela A. Witmer Gladys M. Brown

Pennsylvania Public Utility Commission Docket No. R-2010-2176403 v. Docket No. R-2010-2179527 Cavalier Telephone Mid-Atlantic, L.L.C.

Investigation of Practice of Paper Invoice Charges Docket No. I-2010-2181481

BY THE COMMISSION: Before the Commission for consideration is the final resolution of proposed tariff revisions filed by Cavalier Telephone Mid-Atlantic, L.L.C. (Cavalier or the Company). The proposed tariff revisions filed by Cavalier are: (1) tariff Supplement No. 35, issued May 14, 2010, to become effective July 1, 2010, to the Company’s Competitive Local Exchange Carrier (CLEC) Tariff Telephone Pa. PUC No. 1,1 which increases the charge for a New Install to $40.00 and establishes a Paper Bill Invoice Fee (PBIF) of $3.95 per month for business customers who elect to receive paper bills rather than electronic invoices; and (2) tariff Supplement No. 3, issued May 26, 2010, to become effective July 1, 2010, to the Company’s long distance interexchange carrier (IXC) Reseller Tariff Telephone Pa. PUC No. 2,2 which also proposes to establish a PBIF of $3.95 per month

1 See Docket No. R-2010-2176403. 2 See Docket No. R-2010-2179527. for business long-distance customers who elect to receive paper bills rather than electronic invoices.

Staff from the Commission’s Bureau of Fixed Utility Services3 informed Cavalier that they believed that the proposed PBIF was in violation of the law and regulations and requested that the proposal be withdrawn. On June 11, 2010, Cavalier filed a Petition for Review and Answer to Material Question (Petition). The question presented was: should Cavalier’s proposed Tariff Supplements introducing a Paper Bill Invoice Fee for business customers be permitted to become effective on July 1, 2010? Cavalier submitted a brief in support of its Petition on June 21, 2010. No briefs in opposition were received.

In an Order entered July 29, 2010, the Commission, inter alia, permitted Cavalier’s proposed tariff supplements to go into effect, subject to the results of a final Commission Order in Investigation of Practice of Paper Invoice Charges (Investigation) at Docket No. I-2010-2181481. The Commission also ordered that the Investigation include additional issues referenced in the body of the Order. Finally, Cavalier’s Petition for Review was granted in part, and denied in part, consistent with this Order, without prejudice to the right of Cavalier to raise the PBIF issues in the Investigation at Docket No. I-2010-2181481.

The Commission followed this with a Notice of Investigation Secretarial Letter, published August 14, 2010, in the Pennsylvania Bulletin (40 Pa.B 4728). The Notice identified the PBIF issues and sought comment from interested parties. On September 8, 2010, as part of this Investigation, the Commission issued a secretarial letter that enclosed a questionnaire seeking information on paper billing practices of all telecommunication carriers.

3 Currently identified as Technical Utility Services.

2 The Notice of Investigation Secretarial Letter sought comments about billing practices in general. Comments were sought from interested parties on the issues of “tariff parity,” the legality of application of paper billing fees for customers receiving bundled services, whether the paper billing fee is a price deregulated rate, and the effect of the ETA (Electronic Transaction Act) on the interpretation of Section 1509.

The Commission concluded, in the March 20, 2014 Order, that imposing a separate line item charge to recover the costs for the provision of monthly paper bills is not consistent with the Public Utility Code, Commission regulations, long standing precedent, and well-established practices of Pennsylvania public utilities. The Commission also concluded that recovering costs regarding monthly bills allows for an excessive recovery of these costs and failing to provide customers with an itemized monthly bill free of charge constitutes unreasonable and inadequate service, actionable under Section 1501. 66 Pa. C.S. § 1501.

On April 4, 2014, Verizon filed a Petition for Reconsideration of the Commission’s March 20, 2014 Order. See 52 Pa. Code § 5.572. Verizon argued in its Petition that the Order contravenes the plain language of the Public Utility Code and exceeds the Commission’s legal authority. On April 14, 2014, OCA filed an Answer in Opposition to Verizon’s Petition for Reconsideration. On July 24, 2014, the Commission denied Verizon’s Petition for Reconsideration. On August 21, 2014, Cavalier filed a Petition for Review of the Commission’s March 20, 2014 and July 24, 2014 Orders. Cavalier has not requested stay or supercedeas of the Commission Orders.

As indicated previously, the Commission’s March 20, 2014 Order concluded that imposing a separate line item charge to recover costs regarding paper invoice charges for the provision of monthly bills is unjust and unreasonable and is not consistent with the Public Utility Code, Commission regulations, the Commission’s long standing precedent, and well-established practices of all public utilities operating in Pennsylvania. The

3 Commission’s Order stated that proposed tariff provisions authorizing telecommunications carriers to charge residential or business customers a fee to receive a paper bill will be denied and directed the Law Bureau to prepare an order disposing of Cavalier’s outstanding tariff filings consistent with the March 20, 2014 and July 24, 2014 Orders.

Based on our decision in March 20, 2014 and July 24, 2014 Orders, which are still in effect, we shall take Cavalier’s Supplement No. 35, to the Company’s tariff Pa. PUC No. 1, and Supplement No. 3, to the Company’s Tariff Telephone Pa. PUC No. 2 out of operation effective with the date of the issuance of this Order and we shall direct Cavalier to file tariff supplements removing the tariff provisions that allowed the Company to charge a PBIF to its local and long distance customers.

THEREFORE,

IT IS ORDERED:

1. That Cavalier Telephone Mid-Atlantic, LLC 's Supplement No. 35, to the Company’s Tariff Pa. PUC No. 1, and Supplement No. 3, to the Company’s Tariff Telephone Pa. PUC No. 2 are hereby declared to be unlawful, void and, therefore, unenforceable, effective with the date of entry of this order.

2. That Cavalier Telephone Mid-Atlantic, LLC, within 10 days of the issuance of this order, file tariff supplements removing the tariff provisions that allowed the Company to charge a PBIF to its local and long distance customers. In addition, this would allow the company to add back any language that will be withdrawn when the above supplements are taken out of effect.

3. That the Secretary’s Bureau shall mark Docket No. I-2010-2181481 closed.

4 BY THE COMMISSION

Rosemary Chiavetta Secretary

(SEAL)

ORDER ADOPTED: October 23, 2014

ORDER ENTERED: October 23, 2014