14. Selection of a Default Carrier
When there is no arranged carrier and customers have not selected a new carrier in a reasonable period of time, the Commission may require that a default carrier provide service.17 CLECs and ILECs willing to serve as the default carrier must file a response within 15 days of the filing of the application and exit plan. Prospective default carriers must also note if they have any limitations on service, either by geographic area or type of service. The selected default carrier must be in compliance with Commission rules and regulations, and be able to serve the entire geographic service area of the exiting CLEC (with preference given to carriers that provide the type of service provided by the exiting carrier).
If no carrier volunteers, the default carrier will either be the underlying network service provider, the carrier of last resort18 in the area being served, or a carrier that offers the same type of service as the exiting carrier, if the replacement carrier has the facilities to serve some or all of the exiting carriers' remaining customers.
On July 30, 2007, AT&T California filed a response to A.07-07-010, requesting designation as the default carrier for Applicant's customers in those areas in which it provides local exchange service.19 Specifically, AT&T California seeks to be designated as the default local exchange carrier for "local dial-tone only." No other carrier within the areas where both TWCIS and AT&T California provide service has volunteered to serve Applicant's customers, and no party has opposed the request. The CD recommends that AT&T California be designated the default carrier for Applicant's customers in those areas in which it provides local exchange service. AT&T California is a COLR in a number of areas where Applicant's affected customers are located, offers similar services to those of Applicant, and has facilities to serve Applicant's remaining customers in those geographic areas in which it provides service.
On August 2, 2007, Verizon responded to the default carrier issue in A.07-07-010, asserting that it was willing to accept any customers who choose to initiate service with Verizon, but it was unwilling to be designated the default carrier in those TWCIS service territories in which it provides local exchange service. Verizon listed three objections to default carrier designation. First, migrating customers from a facilities-based carrier to Verizon would entail significant and extraordinary costs.20 Second, Verizon does not have facilities in some areas that TWCIS currently serves. Third, there is a significant risk of "double migrations" which would occur when involuntarily migrated customers subsequently choose to leave Verizon.
Verizon has urged the Commission to delay approving TWCIS's application until Applicant has transferred 95% of the approximately 40,000 customers to an alternative carrier. Verizon argued that the Guidelines were not created to facilitate a withdrawal from service to facilitate a carrier's change in marketing strategy. TWCIS maintains that it is compelled to discontinue service as a result of the expiration of its network facilities contract with AT&T Communications, Inc.21 Verizon also asserted that the role of default carrier would be difficult and costly to perform in this context because each individual customer transfer must be preceded by a carrier visit to the customer's property or premises. Consequently, involuntary or forced customer migrations will be infeasible. Each carrier acknowledges that the customer transfer must follow a request or invitation to enter onto a customer's property or into a customer's premises.
In a November 20, 2007 Consolidated Summary of Exit Plan Information, TWCIS emphasized that it should not have to reimburse AT&T California and Verizon for any costs or charges associated with the transition of non-responding customers to these carriers in their ILEC service areas. Instead, TWCIS asked the Commission to designate TWC Digital Phone to serve as default carrier for "any remaining customers who do not choose a new service provider."22 In its December 5, 2007 Motion for Party Status, TWC Digital Phone requested default carrier designation in all of Verizon's territory.
The CD recommends that Verizon be designated the default carrier for Applicant's customers in those areas in which it provides local exchange service and has the necessary facilities. Verizon is the COLR in several areas where Applicant's affected customers reside, offers similar services to those of Applicant, and has facilities to serve Applicant's remaining customers.
Verizon does not have facilities to provide service to customers in Playa Vista. TWCIS proposed in its September 11, 2007 Consolidated Amended Reply that the Commission consider new CLEC applicant, Race, as a possible default carrier for Playa Vista's Lifeline customers.23 At that time, Race had not directly sought formal designation as an arranged or default carrier, nor had it intervened in this proceeding. However, in September 2007, it filed for the necessary certification to operate as an authorized provider of limited facilities-based and local exchange service. TWCIS reiterated its proposal to become the default carrier for Lifeline customers in the Playa Vista neighborhood, and represented that it would offer its Digital Voice service to the existing 23 customers at the current Lifeline rate.24 On December 5, 2007, Race moved to intervene herein25 and offered to serve as a default carrier in Playa Vista for TWCIS's remaining Lifeline customers.
In this case, designating more than one default carrier is necessary because some of Applicant's customers have not yet selected a new carrier and those remaining nonresponding customers are located in the service territories of two COLRs and in an area where neither COLR has facilities. In its December 5, 2007 pleading, Race requested designation as the default carrier for Lifeline customers in Playa Vista,26 once it received certification. On December 19, 2007, Race filed supplemental information in support of TWCIS's application, and stated that its affiliate, Race Technologies, was then providing Lifeline services to customers in Playa Vista. It further maintained that Playa Vista customers had complained to the Commission about the fees Race Technologies charged them for migrating from TWCIS to Race Technologies; however, after discussions with Commission staff, it refunded the offending fees and settled the complaints.27 We note that now that Race has received a CPCN, it offers the Playa Vista community an alternative carrier with service similar to that which TWCIS discontinues with this application and it claims to have the facilities with which to serve TWCIS's customers. Its entry into the local exchange carrier market as well as into the Playa Vista community increases choice and should benefit the public interest.
Notwithstanding TWCIS's repeated requests that the Commission designate TWC Digital Phone as default carrier for all of its remaining nonresponding customers, we find such action to be infeasible at this time. The Guidelines require a candidate for default carrier designation to be an "ILEC or CLEC ... in compliance with Commission rules and regulations." TWC Digital Phone does not meet this requirement, because its regulatory status in California is unclear at present. Further, the designation of TWC Digital Phone as the sole default carrier would jeopardize the Guidelines' goal to "(m)aintain [the Commission's] ability to monitor events and assist parties."28 The Commission is best able to monitor and assist the actions and customers of a certificated ILEC or CLEC.
In addition, TWCIS has indicated that it does not want to reimburse the designated default carriers for any of the associated migration costs. Thus, it appears that seeking to avoid the reimbursement of default carriers' migration costs is a central reason for the request to have TWC Digital Phone designated as default carrier for TWCIS's entire service area. The Guidelines provide for the reimbursement of default carriers' migration costs by an exiting carrier. TWCIS's insistence that it should not have to reimburse costs is contrary to the Guidelines. Moreover, the designation of AT&T California and Verizon, in their respective service areas, is consistent with the Guidelines preference for the selection of default carriers "that provide the type of service provided by the exiting carrier."
Here, the technical specifics of customer transfer to the default carrier(s) in this situation differs from the technical specifics of transfer to the typical default carrier. The Guidelines seek to facilitate "the seamless transfer of end users when their carrier exits the market."29 In most instances, the customer transfer can occur regardless of the customer's failure to advise the exiting carrier of its wishes. In this circumstance, the technical requirements of discontinuing TWCIS's circuit-switched service and continuing with AT&T California, Verizon, Race, or TWC Digital Phone service necessitates a "break" in the transfer. To minimize the impact of this break, after February 21, 2008, TWCIS shall begin to downgrade the service of its remaining customers to "soft dial tone."30 Nevertheless, TWCIS's customers should be fully informed about the interruption of their essential voice service, the need for them to make an affirmative choice, and the commitment by all concerned to ensure that the interruption of service is as brief as possible.
The downgrade to "soft dial tone" shall be done on a rolling basis. TWCIS shall send out a notice, no less than five business days prior, specifying the exact date the service downgrade will occur so that customers will have time to obtain service with a new carrier and avoid the service downgrade. Soft dial tone will ensure public safety by permitting customers to reach emergency services and by providing a final warning to the customer that he or she needs to make arrangements with an alternative carrier for unrestricted telephone service. TWCIS may discontinue service to the customer placed on soft dial tone after 21 days with notice to the CD.
While the technical imperatives of this case distinguish it from the usual voluntary discontinuance of service, the need for default carriers remain. Even with the unavoidable interruption in telephone service, Lifeline and non-Lifeline customers need to know that there is a carrier designated and prepared to provide service to them. To that end, on November 28, 2007, the assigned ALJ issued a ruling designating AT&T California, Verizon, and TWC Digital Phone as the default carriers for Applicant's remaining customers in the respective ILEC service areas and Playa Vista. We affirm the ALJ's ruling with respect to AT&T California and Verizon. However, now that Race is certificated and "able to formally accept the migration of any Lifeline customers or other circuit-switched customers, currently served by TWCIS," we shall grant Race's request to be designated as default carrier in Playa Vista. With this appointment of a qualified certificated carrier that offers service similar to that being discontinued and prepared to serve the Playa Vista community, we remove the default carrier designation and obligation from TWC Digital Phone. Non-responding Playa Vista customers will now be offered the opportunity to transfer their service to Race, or make arrangements to transfer to TWC Digital Phone.
The third-party verification requirements of Pub. Util. Code § 2889.5 do not apply to Applicant's customer base transferred to AT&T California, Verizon, Race, and TWC Digital Phone in this mass migration.
17 The Commission may require compensation for the default carrier under some circumstances.
18 A carrier of last resort (COLR) is a public utility that is obligated to serve all the customers in a service area who request service. D.96-10-066 designated all ILECs as COLRs and established a process for designating CLECs to become COLRs.
19 AT&T California noted that it does not currently provide local exchange service in all the geographic areas that TWCIS serves.
20 A technician would have to be dispatched to each customer's residence to disconnect the customers inside wiring from TWCIS's facilities and connect them to a Verizon network interface device. This could require multiple visits. (Verizon Response at 2.)
21 Following questioning at the November 30, 2007 status teleconference, TWCIS clarified that it was subleasing the network facilities from Comcast.
22 November 20, 2007 Consolidated Summary at p. 2.
23 As well as non-responding customers who have not selected an alternate carrier.
24 November 9, Letter to ALJ Reed and November 16, 2007 Progress report. Figure is updated as of December 5, 2007.
25 Pursuant to the November 28, 2007 ALJ Ruling Designating Default Carriers.
26 Race stated that until certificated, Race Technologies would be providing Lifeline service.
27 Race Technologies, Inc.'s Supplemental Information Provided in Support of Time Warner Cable Information Services (California), LLC's Application for Authority to Discontinue at p.1 (December 5, 2007).
28 Opinion Adopting Mass Migration Guidelines, D.06-10-021, mimeo. at p.10.
29 D.06-10-021, mimeo. at p. 19.
30 Here, "soft dial tone" will provide customers with the ability to make only 911 calls and 611 calls to TWCIS customer service.
