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S T a T E O F M I C H I G S T A T E O F M I C H I G A N BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION * * * * * In the matter, on the Commission’s own motion, ) to implement 2009 PA 182, MCL 484.2310. ) Case No. U-16183 ) At the April 13, 2010 meeting of the Michigan Public Service Commission in Lansing, Michigan. PRESENT: Hon. Orjiakor N. Isiogu, Chairman Hon. Monica Martinez, Commissioner Hon. Greg R. White, Commissioner OPINION AND ORDER On December 17, 2009, Governor Jennifer M. Granholm signed 2009 PA 182 (Act 182) into law. Act 182 amends MCL 484.2310 of the Michigan Telecommunications Act, 1991 PA 179, MCL 484.2101 et seq. Act 182 was passed in an effort to reform toll access service rates in Michigan. On January 11, 2010, the Commission issued an order (January 11 order) in this docket to begin the process of implementing toll access service rate reform. In that order, the Commission noted that Act 182 requires that the Commission administer a fund known as the intrastate switched toll access rate restructuring mechanism1 (restructuring mechanism). MCL 484.2310(9). The restructuring mechanism is to be funded via “a mandatory monthly contribution by all providers of retail intrastate telecommunications services and all providers of commercial mobile 1See, MCL 484.2310(23)(e). service.” MCL 484.2310(12). This restructuring mechanism must “be established and shall begin operation within 270 days after the effective date” of Act 182. The primary purpose of today’s order is to establish the total size of the restructuring mechanism and to notify eligible providers of the disbursements for which they are eligible. Pursuant to MCL 484.2310(11)(a), the January 11 order directed each eligible provider to submit to the Commission information and all the supporting documentation that establishes the amount of the reduction in annual intrastate switched toll access revenues that will result from the reduction in rates required by MCL 484.2310(2). All of the providers listed in Exhibit A of the January 11 order filed data in this proceeding as eligible providers. One additional party, Allband Communications Cooperative (Allband), filed information as an eligible provider. The Commission is aware that the Federal Communications Commission (FCC) has granted Allband certain waivers that permit Allband to be treated as an incumbent local exchange carrier for the purposes of receiving universal service support and participating in National Exchange Carriers Association (NECA) tariffs and pools. Therefore, the Commission finds that Allband should be considered an eligible provider as defined in Section 23(c) of Act 182.2 The Commission also observes that in Exhibit A attached to the January 11 order, Upper Peninsula Telephone Company was listed as a singular company. However, pursuant to Upper Peninsula’s corporate reorganization, Upper Peninsula has spun off certain of its exchanges into a separate company, Michigan Central Broadband Company. The two companies filed data for each company individually, as well as the information for the previous joint company. The Commission has chosen to list Upper Peninsula Telephone Company and Michigan Central Broadband Company separately. The Commission notes that doing so will not affect 2See, the FCC’s August 11, 2005 order in WC Docket No. 05-174. Page 2 U-16183 disbursements because the sum of the disbursements to each company will be equal to the disbursement that otherwise would have been given to the historical singular Upper Peninsula Telephone Company. Based on the information submitted by the eligible providers, the Commission Staff (Staff) has calculated the total amount of annual disbursements to be made from the restructuring mechanism to be $16,261,878.33, as shown on Attachment 1 to this order. Additionally, the Commission estimates that annual administrative costs for the fund will be $440,000. The Commission finds that an amount equal to one month of distributions from the fund should be retained in the fund as a cash reserve. This amount equals $1,355,156.53. The Commission finds the total restructuring mechanism amount to be $18,057,034.86. Having carried out the primary purpose of this order, the Commission turns to a secondary concern. In the January 11 order, the Commission required all providers to submit certain data necessary for the implementation of Act 182 of 2009 by February 16, 2010. While many of the providers complied with the February 16 filing deadline, other providers either filed tardy responses or have yet to submit the required data. Although the Staff has been diligent in working informally with providers to ensure that all data is filed, the Commission wishes to stress that it does not condone the late filings by providers and will not tolerate the blatant disregard of its orders. Therefore, the Commission instructs the Staff to continue its investigation of non-filers and to report to the Commission by April 23, 2010, the identities of those providers who are not then in full compliance with the January 11 order. The Staff is also directed to make recommendations Page 3 U-16183 for the possible imposition of sanctions by the Commission to ensure full compliance with the January 11 order.3 Finally, the Commission notes that a group of competitive local exchange carriers (CLECs) have filed pleadings with the FCC in an attempt to persuade the FCC to preempt the implementation of toll access service rate reform in Michigan.4 The FCC has solicited comments and replies regarding this proposal. The Commission filed comments in the FCC proceeding opposing FCC preemption. Unless and until the FCC takes action to preempt Act 182, the Commission is duty bound to carry out the mandates of this legislation. THEREFORE, IT IS ORDERED that: 3On April 8, 2010, Verizon North Inc., Contel of the South, Inc. d/b/a Verizon North Systems, Verizon Long Distance LLC; Verizon Enterprise Solutions LLC; Verizon Select Services Inc.; MCI Communications Services, Inc. d/b/a Verizon Business Services; MCIMetro Access Transmission Services LLC d/b/a Verizon Access Transmission Services; Teleconnect Long Distance Services & Systems Company; TTI National, Inc., Muskegon Cellular Partnership; Verizon Wireless Personal Communications Limited Partnership; Alltel Communications of Michigan RSAs, Inc.; Alltel Communications of Michigan RSA #4, Inc.; Alltel Communications of Michigan RSA #1 and RSA #5, Inc.; Alltel Communications of Southern Michigan Cellular Limited Partnership; Cellular Mobile Systems of Michigan RSA #7 Limited Partnership; Michigan RSA #9 Limited Partnership; Alltel Communications of Michigan RSA #6 Cellular Limited Partnership; Alltel Communications of Saginaw MSA Limited Partnership; and New Par (collectively, Verizon), filed comments to the effect that the lack of compliance by telecommunications providers will be harmful to end-user customers by requiring them to pay a higher surcharge than they would if the Commission compelled full compliance with the new law. The Commission is aware of the issues with delinquent providers on the contribution side and will address this with other outstanding issues in the next order in this docket. 4The link to the FCC case is: http://fjallfoss.fcc.gov/ecfs/comment_search/execute?proceeding=10- 45&applicant=&lawfirm=&author=&disseminated.minDate=&disseminated.maxDate=&recieved. minDate=&recieved.maxDate=&address.city=&address.state.stateCd=&address.zip=&daNumber =&fileNumber=&submissionTypeId=&__checkbox_exParte=true. Page 4 U-16183 A. The eligible provider disbursements and total fund size of the intrastate switched toll access rate restructuring mechanism shown on Attachment 1 to this order are approved. B. The Commission Staff shall report to the Commission by April 23, 2010 regarding the identities of those providers who are not then in full compliance with the January 11, 2010 order, along with its recommendations for the possible imposition of punitive action by the Commission to ensure full compliance with the January 11, 2010 order. The Commission reserves jurisdiction and may issue further orders as necessary. Any party desiring to appeal this order must do so by the filing of a claim of appeal in the Michigan Court of Appeals within 30 days of the issuance of this order, under MCL 484.2203(12). MICHIGAN PUBLIC SERVICE COMMISSION ________________________________________ Orjiakor N. Isiogu, Chairman ________________________________________ Monica Martinez, Commissioner ________________________________________ Greg R. White, Commissioner By its action of April 13, 2010. ________________________________ Mary Jo Kunkle, Executive Secretary Page 5 U-16183 Attachment 1 Intrastate Switched Toll Access Rate Restructuring Mechanism Eligible Provider Disbursements & Total Fund Size April 13, 2010 Eligible Provider Annual Disbursement Monthly Disbursement Ace Telephone Company $418,134.08 $34,844.51 Allband Communications Cooperative $6,061.27 $505.11 Allendale Telephone Company $465,345.88 $38,778.82 Baraga Telephone Company $188,856.72 $15,738.06 Barry County Telephone Company $479,832.98 $39,986.08 Blanchard Telephone Company $49,658.85 $4,138.24 Bloomingdale Telephone Company $644,407.35 $53,700.61 Carr Telephone Company $101,258.64 $8,438.22 CenturyTel Midwest-MI, Inc. $2,264,069.14 $188,672.43 CenturyTel of Michigan $4,879,597.76 $406,633.15 CenturyTel of Northern Michigan $206,222.02 $17,185.17 CenturyTel of Upper Michigan $1,116,972.46 $93,081.04 Chapin Telephone Company $41,052.03 $3,421.00 Chatham Telephone Company (TDS Telecom) $282,647.89 $23,553.99
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