XII. Grandfathering and Withdrawal of Services
Our existing policy regime largely treats the grandfathering and withdrawal of service as a standard tariff change that must be filed thirty days in advance of effectiveness and include a twenty-day protest period. The utility also must give affected customers notice twenty-five days in advance of the effective date of the change.742 This section reviews proposals for modifying our current treatment of grandfathering and withdrawal of services.
A. Position of Parties
AT&T urges the Commission to remove all restrictions on grandfathering743 and withdrawal of residential and business services, so long as the services at issue are not basic residential or business access line services.744 Under AT&T's proposal, the withdrawal or grandfathering of service would go into effect via a one-day tariff filing, but that the tariff must include a twenty-five-day notice period, with notice completed "25 days in advance of `the requested effective date of the advice letter proposing the change, or the date when the utility submits the advice letter, whichever date is earlier.'"745
AT&T maintains that new services are being rapidly developed and deployed in the competitive voice communications marketplace, and as new and innovative services stream into the market, all competitors should be free to discontinue offering outdated services without unnecessary regulatory delay.746 In particular, it argues that it "makes little sense to interfere with the dynamic interplay of technology and customer product selection by arbitrarily requiring certain competitors to follow burdensome and time consuming procedures to grandfather or withdraw services while others need not."747
Frontier and SureWest assert that there should be no restriction on ILEC withdrawal or grandfathering of services other than basic local services.748 The mid-sized ILECs claim that there is no rationale for restricting withdrawal or grandfathering of other services.749
TURN and DRA oppose the ILECs' proposals to permit services, other than residential and business access lines, to be grandfathered or withdrawn on one-day advice letters.750 TURN and DRA contend that this proposal would not provide sufficient time for parties to protest or for Commission staff to determine the effects of a decision to grandfather or withdraw service.751
TURN reminds the Commission that it has previously affirmed that adequate notice to consumers, specifically with regards to withdrawal of service and rate increases, is a crucial consumer protection. TURN cites the following portion of the Commission's decision in D.02-01-038:
We are convinced that prior notice to customers is necessary and appropriate in the circumstances covered by the requirements we adopt today. Our experience in many complaint proceedings and investigations conducted since we last took a broad look at customer notice requirements in the telecommunications industry shows that inadequate information, misinformation, and customer confusion in this industry are far too prevalent. Prior notice to customers will not hamper legitimate competition; in fact, our new notice requirements will help ensure that customers get what they want and like what they get.752
TURN argues that the same requirements applying to proposed price increases should similarly apply to advice letters dealing with grandfathering or withdrawal of service.753 According to TURN, Commission staff should be able to verify, for example, the number of customers subscribing to a service and determine whether these customers have alternatives that are comparable in terms of function, price, and quality.754
DRA declares that any decision to grandfather and/or withdraw the existing price-capped services should occur only after all affected parties have had adequate notice and opportunity to be heard.755 Specifically, DRA urges us to maintain the current twenty-five-day notification requirements for advice letters seeking withdrawal, and to permit them to become effective after thirty days only if there is no protest, as set forth by D.02-01-038. DRA raises the concern that the well-being of vulnerable customers otherwise could be endangered due to inadequate notice requirements for service withdrawal.756 DRA notes that DisabRA cautions that there are services other than basic residential and business access line services that may be essential to some customer groups, such as disabled customers, even when they are not essential for the broader population.757
DRA also advocates that the Commission not permit the ILECs to grandfather and withdraw any service for which price caps are retained.758 It reasons that such services are, by definition, essential services for which competitive alternatives cannot protect consumers from price-gouging.759
B. Discussion: Tariffs Become Effective on a One-Day Filing, but Require Thirty-Day Advance Notice to Affected Customers
Statutory policies and the level of market competition advise against the continuation of monopoly era regulations that limit the ability of carriers to withdraw or grandfather services that are no longer attractive to customers. In particular, these regulatory policies are incompatible with statutory instructions to encourage development of new technologies by using technologically and competitively neutral measures.
With the wide availability of communications alternatives from voice competitors, we see no reason to impose regulatory requirements on ILECs that we do not impose on other carriers. Yet we do not believe that the twenty-five day notice to customers provides sufficient warning of proposed changes. We note that we already require a thirty-day notice to customers who are being transferred to a new carrier. Since in a competitive market the strongest action a customer may take is to switch vendors, we believe it is reasonable to extend the thirty-day notice rule to all changes that either increase rates, withdraw services, or impose more restrictive conditions. We, therefore, make a tariff to withdraw and/or grandfather services effective on a one-day filing, but the carrier must provide a thirty-day or more advance notice to the customer before withdrawing or grandfathering the service and extend this requirement to all carriers.
We find that this proposed procedure and its thirty-day notice requirement is stricter than the customer notice envisioned in the January 2002 Commission decision cited by TURN. We hold that the thirty-day advance notice will give the disabled community with time it need to find alternative service (if necessary), but we see no need to impose the DRA's proposal for a thirty-day filing and protest period before the tariff becomes effective.
Thus - with the exception of basic residential (1MR and 1FR) and basic business (1MB) services, where the withdrawal of service would raise public safety issues - we see no reason for imposing limitations beyond requiring a one-day filing period before which the advice letter becomes effective and thirty-day notice in advance of the withdrawal or grandfathering of any service. The thirty-day notice requirement, for parity, applies to both CLECs and ILECs.
742 See D.02-01-031, Appendix, page A-1.
743 A means of administering a tariff for an obsolete service, so as to halt the growth of service; ultimately, discontinue the service altogether, or change existing tariff regulations without discontinuing certain rights, privileges, or conditions of service to existing customers.
744 Pacific Bell Opening Brief at 60.
745 Id. at 83.
746 Id. at 61.
747 Pacific Bell Opening Brief at 60-61.
748 Citizens Opening Brief at 27; SureWest Opening Brief at 30-31.
749 Citizens Opening Brief at 27; SureWest Opening Brief at 30-31.
750 Comparison of URF Proposals; TURN Opening Brief at 39.
751 TURN Opening Brief at 39.
752 TURN Reply Brief at 45 (citing Second Interim Opinion Adopting Certain Requirements for Notifying Telecommunications Customers of Proposed Transfer, Withdrawal of Service, or Higher Rates or Charges, D.02-01-038, 2002 Cal. PUC LEXIS 34 (2002)).
753 TURN Opening Brief at 39.
754 Id.
755 DRA Reply Brief at 29.
756 Id. at 28.
757 Id.; DRA Opening Brief at 22-23.
758 DRA Reply Brief at 28.
759 Id.
