STATE OF NEW YORK PUBLIC SERVICE COMMISSION

At a session of the Public Service Commission held in the City of New York on July 14, 2016

COMMISIONERS PRESENT:

Audrey Zibelman, Chair Patricia L. Acampora Gregg C. Sayre Diane X. Burman

CASE 16-C-0186 – Petition of Verizon New York Inc. for Additional Waiver of New York Code of Rules and Regulations, Title 16, Section 602.10(b) Pertaining to the Distribution of Telephone Directories.

CASE 16-C-0190 - Petition of Dex Media, Inc., for Additional Waiver of New York Code of Rules Pertaining to the Distribution of Telephone Directories.

ORDER GRANTING WAIVER SUBJECT TO CONDITIONS

(Issued and Effective July 15, 2016)

BY THE COMMISSION:

INTRODUCTION By petition filed March 23, 2016, Verizon New York Inc. (Verizon or the Company) requests an additional waiver of 16 NYCRR §602.10(b), to permit the Company’s directory publisher, Dex Media, Inc. (Dex Media), to discontinue the automatic distribution of all paper directories to its customers. By petition filed March 29, 2016, and amended on April 12, 2016, Dex Media supports Verizon’s additional waiver request and further requests that the Commission also allow a full transition from paper to an environmentally-sound digital directory option. CASES 16-C-0186 and 16-C-0190

The Commission finds that the justifications provided by Verizon and Dex Media to discontinue distribution of all paper directories, including business and government listings, subject to a customer ability to opt-into paper delivery, are reasonable and are, therefore, granted subject to the conditions discussed below.

BACKGROUND In 2010, the Commission granted Verizon’s request for a limited waiver of 16 NYCRR §602.10(b).1 The waiver request pertained only to the distribution of white page directories in Verizon’s local exchange areas.2 The waiver specifically allowed Verizon to stop blanket distribution of residential white page directories on behalf of itself and the affected wireline Competitive Local Exchange Companies (CLECs) and to provide copies of such directories to customers only upon request. Distribution of the business and government listing directories, however, remained unaffected. The Commission’s rules, at 16 NYCRR §602.10(b), require all service providers (including Verizon) to distribute

1 See, Case 10-C-0215, Petition of Verizon New York Inc. for Waiver of New York Code of Rules and Regulations, Title 16, §602.10(b) Pertaining to the Distribution of Telephone Directories, Order Granting Waiver with Conditions (issued October 15, 2010) (2010 Waiver Order). 2 Verizon had previously provided directories containing residential white pages to all of its customers statewide. In addition, Verizon also provided copies to most, and perhaps all, wireline competitive local exchange carrier (CLEC) customers operating in Verizon’s local exchange areas pursuant to its various interconnection agreements (ICAs) or commercial agreements.

-2- CASES 16-C-0186 and 16-C-0190

a directory3 that contains both residential and business listings: Each service provider shall distribute at no charge to its customers within a local exchange area, a copy of the local exchange directory for that area, and one additional copy shall be provided for each working telephone number upon request. A copy shall be filed with the Commission.4

In our 2010 Order, the Commission found that: Customers today have many options in terms of locating telephone numbers. Statistics suggest that telephone directories are not nearly as valuable as they were even a decade ago. In addition, telephone books, by nature, are large and cumbersome and utilize a significant amount of natural resources to produce and distribute. Verizon’s proposal to discontinue distribution of the residential white page listings is a reasonable one that will have a positive impact on the environment.

VERIZON’S PETITION Verizon’s request would extend the 2010 Waiver Order pertaining to the distribution of residential white page directories to include yellow business page and government white page directories distributed in New York State. Verizon proposes to adopt a more customer-focused and environmentally conscious approach to the distribution of telephone directories. If the requested waiver is granted, Verizon proposes to distribute directories “on-demand” to customers who request one. Pursuant to the petition, customers can request a printed directory from Dex Media by calling a toll-free number, 1-800-

3 Pursuant to 16 NYCRR §602.10(a)(1): A directory shall be in such form and list such information, as will permit the numbers of local exchange customers in the area covered by the directory to be obtained, except for public telephones and numbers unlisted at a customer's request. 4 2010 Waiver Order, p. 10. -3- CASES 16-C-0186 and 16-C-0190

888-8448, and printed directories are generally distributed within two weeks of the request. In accordance with the current rule and the previous waiver of the rule, Verizon provides all customers with printed business white page directories that include an alphabetical listing of all business customers with published numbers. These directories also include government white pages, yellow pages and consumer guide pages. Directories are published and delivered to all customers annually by Dex Media. Verizon states that the revolutionary changes to the telecommunications industry have rendered print directories essentially obsolete. The books distributed today by Verizon’s publisher are reduced in size as they do not include individuals and businesses who have “cut the cord” in favor of a wireless device, or the many cable and Voice over Internet Protocol (VoIP) subscribers whose providers no longer submit their customers’ telephone numbers to Verizon for inclusion in the listings database. Also, according to the Company, customers are now using ubiquitous electronic search tools that provide instantaneous results rather than printed directories. Based on the number of requests for residential directories for a recent one-year period, Verizon estimates that less than one percent of New York households desired a printed directory. Verizon expects that low usage of printed directories will continue to decline. Furthermore, the petition notes that granting the requested waiver will materially and positively affect the environment and customers that have no need for printed directories. According to the Company, since the Commission’s printed residential directory publishing waiver in 2010, approximately 13,600 tons of paper per year have been eliminated from the waste stream in the Verizon East states.

-4- CASES 16-C-0186 and 16-C-0190

Expansion of this “on-demand” program to business and government listings will continue this trend. If the additional waiver is granted, the Company states it will make residential, business, and government white page directory listings, including the Consumer Guide, available to customers online or in printed form, upon request, at no charge. To publicize this change, Verizon will issue a customer bill message, a webpage notice, and an industry notice to CLECs. Online, Dex Media’s website will indicate that a directory can be ordered by calling (877) 2 Get Dex; also an online search for “Verizon white pages” will return a link informing users that a new white pages directory can be ordered by calling 1.800.888.8448 or by visiting the Verizon White Pages Online Directory Search.

DEX MEDIA’S PETITION Dex Media5 requests that the Commission go beyond Verizon’s request so as to permit a full transition from paper to digital directories.6 Section 602.10(b) requires Verizon to distribute a copy of each directory published to each subscriber. However, Section 602.10 in its entirety, comprising Sections 602.10 (a) and (b), also contains certain content requirements in addition to requiring basic number listings. Dex Media requests that the Commission clarify that digital directory distribution be deemed to satisfy the “front of book”

5 On April 30, 2013, Dex One Corporation and SuperMedia Inc. announced the completion of their merger, creating Dex Media, Inc., one of the largest national providers of social, local and mobile marketing solutions through direct relationships with local businesses. 6 Dex Media filed an amended petition on April 12, 2016. The amended petition eliminated a request that paper directories would no longer have to be provided after a 36-month transition period under certain conditions. -5- CASES 16-C-0186 and 16-C-0190

content requirements of these and any other statutes and regulations that touch on or refer to directories. Dex Media seeks to clarify that digital publication of other information (front of book information) required by statutes and regulations is expressly permitted. Dex Media further seeks to discontinue saturation delivery of business white and yellow pages, with such saturation delivery to be implemented only on a market-by-market basis as Dex Media determines the needs in a particular market. There would be no “flash cut” throughout the Verizon territories in the State. Over time, for a given market, Dex Media states it would make a market-specific determination to curtail the extent of distribution of paper directories. Dex Media proposes to continue to make paper directories available at no charge to Verizon customers on an “upon request” basis. Thus, all subscribers will have access to the digital directory and those who request a print directory will receive one at no charge. Dex Media publishes its print directories in a digital format at www.DexPages.com, using the traditional layout of its printed white and yellow pages. According to the petition, all the content and information required by the Commission’s Rules are also contained in the digital directory for each and every community Dex Media serves in New York. Dex Media states that it will continue to publish the front of book information and content required by the Commission’s Rules in the digital versions of the directories; it will also continue to include that information in the paper versions of the directories provided to customers requesting them. Dex Media further states that households without Internet access also have alternative, competitive options to print directories, using their telephones. They can call

-6- CASES 16-C-0186 and 16-C-0190

traditional directory assistance for a “small charge per listing” and they can also call toll-free information services. The current market leader, which reportedly handles millions of calls every month, is 1-800-FREE-411.

STATE ADMINISTRATIVE PROCEDURES ACT Verizon’s request for a waiver of the Commission’s rule was published in the State Register on April 13, 2016 with comments due by May 28, 2016. Dex Media’s request for a waiver of the Commission’s rule was published in the State Register on April 20, 2016 with comments due by June 4, 2016. No comments were received.

DISCUSSION As the Commission indicated in the 2010 Waiver Order, customers today have many options in terms of locating telephone numbers. Statistics suggest that telephone directories are not nearly as valuable as they were even a decade ago. In addition, telephone books, by nature, are large and cumbersome and utilize a significant amount of natural resources to produce and distribute. The Petitioners’ proposal to discontinue blanket distribution of the business and government listings is a logical extension of the 2010 Waiver Order and one that will have a positive impact on the environment. The Commission is authorized to waive or clarify its rules for good cause. To the extent that the restrictions imposed by 16 NYCRR §602.10(b) are based on Part 609 of the Commission’s rules, waiver authority is explicitly set forth in 16 NYCRR §609.17, which provides that “[u]nless otherwise precluded by the Public Service Law or other applicable law, the Commission may, for good cause shown or upon its own motion, waive any requirement of this Part [i.e., Part 609].” Moreover, to the extent the Commission has authority to impose these -7- CASES 16-C-0186 and 16-C-0190

requirements, it has similar authority to clarify, rescind or waive them.7 The general powers that the Legislature has granted to the Commission are broad enough to encompass the power to waive its own rules. For the following reasons we believe a further waiver should be granted here. We agree with the Petitioners that today, consumers have access to competitive listing providers and free means to look up telephone numbers and other information provided in traditional regulated print directories, which by and large obviates the need for a printed directory, provided that the electronic and telephonic directories are of equal or sufficiently similar quality to the traditional regulated print directories. Moreover, because only traditional wireline (incumbent LECs and CLECs) listings are typically available for inclusion in these directories, the directories are necessarily less useful as time goes on, due to the massive shift of consumers from traditional wireline to VoIP and to wireless services. Our approval of Verizon’s waiver requests to discontinue the blanket distribution of directories to all customers is conditioned, however, on adequate and thorough customer notification. Thus, we will require Verizon to implement its commitment to make residential, business, and government white page directory listings, including the Consumer Guide, available to customers online or in printed form, upon request, at no charge. Additionally, we will require Verizon and Dex Media to implement their proposed means of communicating

7 The Commission’s power to waive substantive rules in appropriate cases is recognized by 16 NYCRR § 3.3(c). See, e.g., Case 95-C-0152, Order Issuing Certificate of Public Convenience and Necessity (issued July 19, 1995) (waiving Parts 600, 601, 602, 603, 604, 631, 632, 640, 642 and Section 644.3 of 16 NYCRR). -8- CASES 16-C-0186 and 16-C-0190

this change and the various options available to consumers, as outlined in their respective petitions. Finally, the Petitioners’ concerns about the negative environmental impact of unwanted and unneeded directories are well taken. Under the Petitioners’ proposal, Dex Media will continue to deliver printed directories to customers that value and use them. So as to avoid undue waste, we agree that Dex Media should be granted the regulatory flexibility to switch to digital products, as it requested. We thus grant Dex Media’s request and clarify that digital publication of other information as required by statutes and regulations (front of book information) is expressly permitted. One issue that warrants further discussion is how to implement Verizon’s ongoing commitment to produce and deliver directories to CLEC customers residing in Verizon’s local exchange areas. Section 602.10(b) requires each service provider to distribute white page directories to its customers in those applicable local exchanges. In addition, Verizon also provides copies to most, and perhaps all, wireline CLEC customers operating in Verizon’s local exchange areas pursuant to its various ICAs and other agreements. Because we have decided here to apply Verizon’s and Dex Media’s waiver requests broadly, our approval is conditioned upon Verizon providing notification that reaches all customers (Verizon’s and CLEC customers relying on Verizon for distribution) in affected local exchange areas. Additional public notice of the change in the modified distribution process is also in the public interest. Our intent is to ensure that all customers, both Verizon’s and CLECs’ customers in its territory, receive the required

-9- CASES 16-C-0186 and 16-C-0190

notification of their right to opt-in to continued delivery of the white page directories.8 To monitor customer satisfaction of this limited waiver request, we will require Verizon to provide quarterly status reports on the number of customer complaints the Company or Dex Media receives, as well as the number of customer requests it receives for the business and government directories. The first report should be provided to the Office of Consumer Services (OCS) three months after the issuance of this Order. The status reports will continue for two years after which Verizon should consult OCS Staff regarding termination.

CONCLUSION In reaching this decision, we rely on Verizon and Dex Media’s statements that it will issue communications as described in this Order and accept that commitment as a condition of our approval. In addition, although not required by the Commission, we encourage all the CLECs who rely on Verizon for distribution services to consider individual bill notices, as well. Under this proposal, all customers (CLECs included) in Verizon’s local exchange areas will receive notification on how to obtain residential white pages directories in a format that is convenient to their individual needs going forward.

The Commission orders: 1. Verizon of New York Inc.’s and Dex Media, Inc.’s requests for waiver of 16 NYCRR Section 602.10(b) of the

8 Carriers that publish and distribute their own directories and do not rely on Verizon pursuant to ICAs would need to request a specific waiver of our rule in order to discontinue distribution of their own residential white pages.

-10- CASES 16-C-0186 and 16-C-0190

requirements relating to the distribution of telephone directories is approved, conditioned upon Verizon New York Inc. and Dex Media, Inc. providing notification that reaches all customers in affected local exchange areas consistent with their respective petitions and the discussion above. Additional public notice of the change in the modified distribution process is also in the public interest, as discussed in the body of this Order. 2. Verizon New York Inc. shall provide quarterly status reports consistent with the discussion in the body of this Order. 3. The Secretary in her sole discretion may extend the deadlines set forth in this Order, provided the request for such extension is in writing, including a justification for the extension, and filed on a timely basis, which should be on at least one day's notice prior to any affected deadline. 4. This proceeding is closed pending compliance with ordering clauses 1 and 2.

By the Commission,

(SIGNED) KATHLEEN H. BURGESS Secretary

-11-