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Telecommunications Industry in Florida Annual Report to the Florida

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Telecommunications Industry in Florida Annual Report to the Florida Annual Report to the Florida Legislature ON THE STATUS OF COMPETITION IN THE Telecommunications Industry in Florida A S O F M A Y 3 1 , 2 0 0 4 FLORIDA PUBLIC SERVICE COMMISSION This report was prepared by the Florida Public Service Commission’s Office of Market Monitoring and Strategic Analysis TABLE OF CONTENTS LIST OF FIGURES AND TABLES............................................................................................ v LIST OF ACRONYMS ............................................................................................................... vi EXECUTIVE SUMMARY .......................................................................................................... 1 CHAPTER I: INTRODUCTION AND BACKGROUND........................................................ 4 A. PROVISIONS AND GOALS OF CHAPTER 364, FLORIDA STATUTES, AND THE TELECOMMUNICATIONS ACT OF 1996 .............................................................................. 6 1. Chapter 364, Florida Statutes .............................................................................. 6 2. Federal Telecommunications Act of 1996 (the 1996 Act).................................. 6 B. METHODOLOGY.................................................................................................................. 8 CHAPTER II: AN INTRODUCTION TO THE CHANGING COMPETITIVE LANDSCAPE .................................................................................................................... 9 A. INNOVATION IN A RAPIDLY CONVERGING MARKET......................................................... 9 1. Wireless ................................................................................................................ 10 a. Florida’s Market-Based Approach to Wireless ...................................... 11 b. Wireless Investment & Innovation.......................................................... 11 c. Wireless Voluntary Efforts ...................................................................... 12 i. Voluntary Consumer Code .............................................................. 12 ii. Voluntary Anti-SPAM Efforts........................................................ 13 iii. Voluntary Consumer Complaint Assistance................................ 13 2. Voice over Internet Protocol (VoIP).................................................................. 14 3. Broadband over Power Line .............................................................................. 16 B. DECLINE OF TRADITIONAL TELECOM SECTOR .............................................................. 17 CHAPTER III : STATUS OF LOCAL COMPETITION IN FLORIDA ............................ 20 A. WIRELINE MARKET SHARE ANALYSIS............................................................................ 20 1. CLEC Market Share Growth ............................................................................ 20 2. Access Line Comparisons................................................................................... 21 3. CLEC Market Penetration by ILEC Service Area.......................................... 22 4. Competitive Presence by Exchange................................................................... 23 i B. STATUS OF COMPETITIVE MARKETS............................................................................... 25 1. Changing Market Trends................................................................................... 25 a. Overall Access Line Trends ..................................................................... 25 b. ILEC versus CLEC Line Trends ............................................................. 27 2. Impact of Regulatory Changes .......................................................................... 31 a. TRO and Its Appeal.................................................................................. 31 b. FCC’s Interim and Final Rules .............................................................. 33 3. Market Shifts ....................................................................................................... 36 CHAPTER IV: Advanced Communications Landscape ........................................................ 38 A. INTERMODAL COMPETITION ........................................................................................... 38 1. Voice over Internet Protocol .............................................................................. 39 2. Wireless ................................................................................................................ 44 3. Cable..................................................................................................................... 49 B. BROADBAND...................................................................................................................... 56 1. Nationwide Trends in the Broadband Market ................................................. 56 2. The Florida Broadband Market ........................................................................ 60 3. Overview of Existing and Emerging Broadband Technologies ...................... 62 a. Wireless Broadband ................................................................................. 62 i. 3G Wireless........................................................................................ 62 ii. Wi-Fi ................................................................................................. 63 iii. Fixed Wireless................................................................................. 65 iv. Satellite............................................................................................. 66 b. Fiber-to-the-Home ................................................................................... 67 c. Broadband over Power Line (BPL)......................................................... 69 CHAPTER V: DISCUSSION OF ITEMS REQUIRED BY CHAPTER 364, F.S. ............. 72 A. INTRODUCTION................................................................................................................. 72 B. DISCUSSION OF SIX STATUTORY ISSUES.......................................................................... 73 1. The Overall Impact of Local Exchange Telecommunications Competition on the Continued Availability of Universal Service.............................................. 73 ii 2. The Ability of Competitive Providers to Make Functionally Equivalent Local Exchange Service Available to Both Residential and Business Customers at Competitive Rates, Terms, and Conditions...................................................... 74 3. The Ability of Customers to Obtain Functionally Equivalent Services at Comparable Rates, Terms, and Conditions. ................................................... 75 4. The Overall Impact of Price Regulation on the Maintenance of Reasonably Affordable and Reliable High-Quality Telecommunications Services. ......... 77 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...................................................................... 79 6. Any Other Information and Recommendations Which May be in the Public Interest. ................................................................................................................ 79 CHAPTER VI: STATE ACTIVITIES ..................................................................................... 80 A. TELE-COMPETITION INNOVATION & INFRASTRUCTURE ENHANCEMENT ACT OF 2003 80 1. Long Distance Market ........................................................................................ 80 2. Expansion of Lifeline .......................................................................................... 80 3. Promotion of VoIP as a Competitive Alternative............................................. 81 4. Basic Local Exchange Market............................................................................ 81 B. COLLOCATION DOCKETS NOS. 981834-TP/990321-TP ................................................. 81 C. IMPLEMENTING THE REQUIREMENTS OF THE FCC’S TRO IN COMMISSION DOCKET NOS. 030850/030851/030852-TP..................................................................................... 82 D. WHOLESALE PERFORMANCE MEASUREMENT PLANS .................................................... 84 E. SERVICE QUALITY DOCKETS AND INCUMBENT LOCAL EXCHANGE COMPANIES ......... 84 1. Sprint.................................................................................................................... 85 2. BellSouth .............................................................................................................. 85 F. FLORIDA TELECOMMUNICATIONS COMPETITIVE INTERESTS FORUM .......................... 85 G. LIFELINE AND LINK-UP PROGRAMS................................................................................ 86 CHAPTER VII: FEDERAL ACTIVITIES............................................................................. 88 A. THE FCC’S TRIENNIAL REVIEW ORDER ON UNE RULES ............................................. 88 B. REGULATORY FRAMEWORK FOR BROADBAND WIRELINE ACCESS TO THE INTERNET 89 iii C. IP-ENABLED SERVICES (VOICE OVER INTERNET PROTOCOL)....................................... 89 D. DEVELOPMENT OF A UNIFIED INTERCARRIER COMPENSATION REGIME ...................... 91 E. UNIVERSAL SERVICE ........................................................................................................ 92 1. Review of the Definitions of Universal Service................................................
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