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PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Telecommunications Division

RESOLUTION T-16763

Public Programs Branch

May 27, 2004

R E S O L U T I O N

Resolution T-16763. All Competitive and Incumbent Local Exchange Carriers. Revision of the Time Allowed to File California Teleconnect Fund Claims, Changes in Claim Filing Requirements, Clarification of Program Rules, Incorporation of Program Rules into a Comprehensive Guide, Rules Related to the Application of Federal E-Rate Discounts to Carrier Claims and Elimination of Amended Claims.

_________________________________________________________________

Summary

This resolution adopts the following modifications for the California Teleconnect Fund (CTF):

Background

The CTF was established by Decision (D.) 96-10-066 on October 25, 1996. In this decision, the Commission reaffirmed its' commitment to universal service, and in accordance with state and federal directives, created the CTF to provide discounted rates for a family of telecommunications services for schools and libraries, government-owned health care providers and qualifying community based organizations.

Claim Filing Deadlines

On July 12, 2001 in Resolution (Res.) T-16542 the Commission adopted time limits on filing CTF claims. Those time limits were two years from the filing due date. This limitation allowed carriers two years and forty-five days from the end of the month for which the claim is made to file claims for reimbursement from the CTF fund.

The lengthy period between the end of the period and the deadline for filing a claim for that period means that up until a few months ago the most recent claim from the two major carriers in California was two years old. This situation has now been remedied with the cooperation of the carriers involved. Lack of current claims data has hampered TD's efforts to provide accurate estimates for budgeting purposes. A few carriers are still two years behind in filing claims. This may be a problem for the carriers involved because the CTF appropriation authority requires that claims for periods in FY 01-02 and before to be paid prior to June 30, 2004.

CTF Applications and Claim Filing

Res. T-16319 (September 2, 1999) adopted specific requirements for both the claim and for the accompanying data worksheet. A specific form for claim submission was adopted and a required supporting worksheet with specific data elements and formatting was adopted.

Res. T-16330 (October 7, 1999) adopted claim reporting requirements for periods in 1997.

Res. T-16381 (October 25, 2001) adopted interim rules for claim submissions and modified rules effective as of July 1999 claims. Additional data elements to account for stacking of E-rate and CTF discounts were added to the supporting worksheet. Carriers were required to account for customers' E-rate discounts on their claims for periods after July 1, 1999. Carriers were further required to include documentation for the E-rate portion of the supporting worksheets.

In Res. T-16742 (May 8, 2003), the Commission broadened the eligibility for CTF services and streamlined the application process. Provisions adopted included eliminating the carrier input to the customer application process and application maximums.

This resolution modifies and clarifies claim filing rules consistent with Res. T-16742 and efforts of TD to simplify the claim filing process.

Requirement of Carriers to Discount

The CTF fund is predicated on customers receiving the CTF discount and then carriers turning around and claiming for reimbursement from the Commission. Claims have always been termed as "reimbursement" implying that the expense must be incurred prior to submitting claims on the fund. To allow carriers to withhold CTF discounts pending CTF payments would subject CTF customers to carrier delay or inability to file claims - circumstances beyond the control of CTF customers.

Carrier's CTF Guide

For the duration of the program the rules for carriers submitting reimbursement claims have been contained in the various resolutions and decisions establishing rules for CTF claims. The result is much confusion regarding what the rules are and which rules were effective. This resolution would create a Guide for Carriers Submitting CTF Reimbursement Claims - attached to this document - that will be continuously updated as circumstances change and the need arises.

Proposed Rules Regarding Application of E-rate to CTF Claims

Delays in carrier notification of the application of E-rate discounts have resulted in long periods where E-rate is applicable but does not appear on carrier claims. The result of this is the problem of accounting for E-rate discounts occurring beyond the funding year. Notification of discounts late in the funding year results in anomalies in claim filing such as a claim of ($400,000) from a carrier who normally submits claims for more than $700,000. This resolution adopts rules which allow carriers to suspend CTF discounts to schools and/or libraries that do not provide timely notification to the carriers regarding which services are subject to E-rate discounts. This resolution also provides an opportunity for an E-rate eligible entity which has had their CTF discount suspended to appeal that suspension to TD .

Claim Interest

Carriers wishing to claim interest have been required to include an interest amount on their claim form. Providing this information has been difficult because the calculation factors have been either unavailable or vague. This resolution adopts specific instructions for including interest and further specifies that interest will be applicable for a compliant claim if payment for the claim is not approved within 60 days of timely filing.

Elimination of Amended Claims Except in Specified Circumstances

Prior claim resolutions have allowed carriers to file amended claims for previously unclaimed services up to three years past the date a claim is paid. This provision was made prior to SB 669 (1999) and the incorporation of the CTF into the state budget process. Under this rule an amended claim could be filed long past the appropriation authority for that period. Similarly, TD's ability to reevaluate a claim for three years past the date a claim is paid is contrary to the limitations on the CTF's appropriation authority.

Discussion

Appropriation Authority and Claim Filing Deadline Inconsistencies

On July 12, 2001 in Res. T. 16542 the Commission adopted time limits for filing CTF claims. Those time limits were two years from the filing due date. The filing due date is forty-five days from the ending day of the period for which the claim is filed. For instance, a July 2003 claim is due forty-five days from July 31, 2003 or September 15, 2003.

The primary source of information for development of the CTF budget and the implementation and size of a CTF surcharge are CTF claims. Late filed claims, especially among the largest claimants to the fund, has left Commission staff in the position of having to use data that was only meant to provide maximum allowed claims. With no current information on the actual amount of filed claims, Commission staff was in the position in Fiscal Years (FYs) 01- 02 and 02-03 of overestimating the demands on the fund to ensure that the fund was adequate to meet the needs of the schools, libraries, health care institutions and community organizations who were being served by the fund.

The forecasts on incomplete information resulted in a CTF fund balance of $214 million on July 1, 2003, in spite of having a zero surcharge since January 1, 2003. The large fund balance has attracted an undue amount of attention to the fund. This attention has negatively impacted the fund. The FY 2003-04 State of California Budget Act transferred $150 million as a loan to the General Fund because of this surplus balance.

TD requires all information available to accurately predict future demands on the fund. Current claim data coupled with the required carrier claim forecasts is essential to developing budgets that reasonably predict future demands on the fund.

Furthermore, it is the objective of the Commission to ensure that all obligations are paid as they occur. Long delays in filing claims by carriers result in long delays in paying claims. With this extensive claim-filing period, the carriers have the option of filing one claim or twenty-five claims. TD does not have the resources to process a claims deluge of this nature. This further complicates the task of paying current CTF obligations on a timely basis.

TD therefore proposes that the time allowable to file claims for review and payment be shortened by one year to one year and forty-five days after the end of the period for which the claim is made. Most carriers are up to date in the filing of their CTF claims. To allow time for the few carriers who are not currently up to date, TD proposes to make this provision effective as of June 1, 2004.

TD recommends that the Commission adopt the proposal of TD changing the carrier claim filing interval to one year and forty-five days after the end of the period for which the claim is made and making this rule effective on June 1, 2004.

Claim Format Revisions

Changes to the Claim Form

The claim form is revised from it's current indicator of only the month and year for which the claim is being submitted to include indications of whether the claim is 1) A claim for a specific month and year, or 2) A resubmittal of amounts disallowed from a payment for the initial claim filed for that month and year, or 3) A revision necessitated by a claim for a multi-month credit or debit extending into previous fiscal year(s).

It is further revised to allow the claiming carrier to claim interest by merely checking a box below the total amount claimed.

Other minor changes are made to reflect changes in payment procedure.

Changes to Supporting Workpapers

Elimination of Application Maximums

Res. T-16319 adopted specific requirements for both CTF claims and the accompanying data worksheet. These rules were subsequently modified by Res. T-16381 which established rules that have been effective for claims for all periods subsequent to July 1, 1999.

In Res. T-16742, the Commission broadened the eligibility for CTF services and streamlined the application process. The elimination of maximums and the service-specific application process necessitates changes in the worksheet format adopted in Res. T-16319 and modified by Res. T- 16381.

Claims for periods prior to July 1, 2003 have been limited to specific services as approved by the TD in its application process. One of the requirements of this process is that the claiming entity, i.e. the carrier, not claim more reimbursement than was authorized by TD. To ensure that this requirement was met, the worksheet that accompanied claims had mandatory columns for the application maximums. Also included in the worksheets was a column indicating whether or not the claim passed the application test, i.e. did not exceed the maximum set by the application approval and a column called CTF Basis, which provided a calculation of how much was being claimed of the maximum allowed. Since there are now no application maximums, it is no longer necessary to include columns containing information about application maximums in claims for periods subsequent to June 30, 2003. These three columns are therefore eliminated for claims for periods subsequent to June 30, 2003. Specific information regarding the revised worksheet format is contained in Guide for Carriers Submitting CTF Reimbursement Claims, Section A attached to this resolution.

Elimination of the Application Approval Date

Also included in the worksheet was a column indicating the approval date for each customer application. This column is eliminated for claims for periods subsequent to June 30, 2003.

Addition of Worksheets for Carriers use in Submitting Multi-month or Partial-month Claims

Claims are to be made on a monthly basis. An exception to this rule is when a carrier has extended a lump sum credit to a customer, when a carrier is crediting the CTF for late application of E-rate discounts and when a service is installed or disconnected on a date other than the beginning of the month. Under these limited circumstances, a carrier may submit a multi-month or partial-month credit or debit in the month that the credit or debit was applied. This multi-month or partial-month credit or debit should be on a separate worksheet but should be included in the claim total for the applicable month.

Multi-month credits or debits, which extend over more than one fiscal year, shall be broken down by the fiscal year. A revised claim shall be filed for each fiscal year that the multi-month claim applies. For example, if in August, a carrier applied a credit to a customer for a period beginning in April of the same year, the carrier shall submit a separate claim for that credit that occurred in the prior fiscal year, i.e. April, May & June as a revision for June. The credit applicable to July and/or August may be included in the claim total submitted for August.

The new worksheet as described in the Guide Section A and shown in Section C-2 includes three additional columns for use by carriers submitting permissible multi-month or partial-month claims. These columns are the date the credit or debit starts, the date the credit or debit ends, and the total of the multi or partial-month credit or debit. The columns to the left of these final three columns should be populated identically to a monthly claim. Two of the final three columns designate the period to which the credit or debit is applicable and the last column is the result of the monthly amount multiplied by the days that the credit or debit was applied. If the claim is a credit claim, such as those provided to account for retroactive E-rate credit or a service disconnection - the negative value should be inserted in the final column and not in the first seventeen columns.

Other Changes to the Worksheet Supporting the Claim

TD proposes to eliminate columns in the claim supporting work papers for CTF Basis, Application Maximum and Application Approval Dates; to make columns for Surcharge/Surcredit applicable to only to carriers subject to Surcharge/Surcredits; to make 911, Federal Excise and Local Tax columns optional to those carriers claiming reimbursement for these fees and to include a worksheet allowing for accounting of multi or partial month credit or debits to the CTF for claims filed after June 30, 2004 and for claims for periods after June 30, 2003.

TD is permitted to request information regarding the service address of CTF customers when it is necessary to determine the accuracy of a CTF claim or the eligibility of a customer for CTF discounts.

TD recommends adoption of the revisions to the claim format and supporting work paper modifications as proposed by TD.

Carriers Required to Extend CTF Discounts Upon Providing Service to CTF-Eligible Customers

Since the CTF program was initiated in 1996 there has been a presumption that carriers would provide authorized discounts to CTF customers and claim reimbursement from the CTF as provided by Commission rules. One service provider has been denying discounts to its' only CTF customer, a financially strapped school district, for several years, because it has not received funding from the Commission. In the case of this provider, the Commission has been unable to provide funding for the period in question because the carrier has not submitted a valid claim for these funds in a timely manner.

The requirement that the discount be provided to customers upon the approval of their application is implicit - by the use of the word "reimbursement" -- in the rules adopted by the Commission for participation in the CTF. This paragraph seeks to make those rules explicit by requiring that customers receive the appropriate CTF discounts upon approval of their application and prior to filing claims for those same discounts with TD. Program rules further provide that the discount be retroactive to the date that the successful application is received by the Commission. This rule further requires retroactive credits be granted to CTF-eligible customers as provided by program rules. This rule, which has been part of the CTF program since its inception, applies to all claims for all periods since the program began in 1997.

The Commission will consider opening an Order to Institute an Investigation (OII) or Order to Show Cause (OSC) to deal with any carrier refusing to comply with this rule or other program rules.

Clarification of effective date of CTF Discount

The rules prior to Res. T-16742 clearly indicated that CTF discounts were effective as of the application date. Since each application was accompanied by a specific list of services it was clear what effective date was applicable to each service. Post Res. T-16742 procedures allow an existing or already eligible CTF customer to add services to their CTF discount by simply calling the carrier and ordering the services. Clarification is necessary to identify the effective date of a CTF discount for an already-existing service. Existing or already-eligible CTF customers must notify the carrier that they are CTF customers and are seeking additional CTF discounts concurrently with placing an order for additional CTF services. New CTF customers, starting from June 1, 2004, will receive notification letters that will advise them they have thirty days to advise the carrier from the date of their eligibility notification letter which of their existing services are eligible for CTF discount. When the carrier is timely notified of the eligible services, the carrier will back credit these services to the new CTF customer's application date.

The notification date will be available to the carriers on the CPUC website. A letter of this requirement will advise customers approved under the streamlined application process - estimated to be about 200 - who have not been advised of this limitation. Customers approved under the pre-July 1, 2003 process were limited to the services specifically enumerated in their applications. If a carrier failed to apply the discount to a service listed in an application, customers are subject to the billing dispute provisions of the carrier's tariff.

TD proposes to make the CTF program rule that carriers discount prior to claiming explicit rather than implicit and further requires that customers' services be discounted as soon as they are eligible for a discount.

TD recommends adoption of the rule requiring carriers to provide discounts to CTF customers upon eligibility as determined by TD and to provide CTF discounts prior to submitting claims for reimbursement from the fund.

Guide for Carriers Submitting CTF Reimbursement Claims

Rules for carriers submitting reimbursement claims are contained in D. 96-10-066, Res. T-16052, Res. T-16319, Res. T-16330, Res. T-16381, Res. T-16542, D. 02-10-60, Res. T-16742 and in two administrative letters issued by TD in 2003. To ensure that all rules are available to all carriers wishing to serve and serving CTF customers, and to ease entry of new carriers to serve CTF customers, TD proposes the creation of a Guide for Carriers Submitting CTF Reimbursement Claims (Guide) attached to this resolution in lieu of an appendix. TD proposes to continually update this document for ministerial changes, via the issuance of administrative letters, which will then be incorporated into the Guide. A current version of the Guide will be available and maintained on the CPUC website. Both claiming carriers and TD will use the Guide in preparing, reviewing and paying claims.

TD has made every attempt at this time to include all rules relevant to filing carriers. Some rules, adopted in prior CTF resolutions, may not be included in this guide. These rules are still effective. As omissions are pointed out to TD, additional rules previously adopted by the Commission will be included in addition to ministerial changes, using the vehicle of the administrative letter as described in the paragraph above.

TD recommends incorporating all program rules for carriers making reimbursement claims to the CTF into a Guide for Carriers Submitting CTF Reimbursement Claims.

Carriers Authorized to Impose Certain Requirements Upon E-rate Customers

Requirement of Timely Carrier Notification

The California Teleconnect Fund is designed to enhance the discounts available to schools and libraries that are beneficiaries of E-rate funding. E-rate is a federal program administered by the Schools and Libraries Division (SLD) of the Universal Service Administrative Company (USAC) at the direction of the Federal Communications Commission. E-rate provides funding for connectivity, whether via telecommunications or the Internet. E-rate funding provides discounts ranging from 20% to 90% of the costs of eligible services. The level of funding for a specific school or library depends on the percentage of subsidized or free school lunches and the urban/rural status of the population served.

While CTF predates E-rate, CTF was redesigned to accommodate E-rate funding for telecommunications and provide additional discounts to E-rate eligible CTF customers. In Res. T-16052, the Commission authorized carriers to apply CTF as a discount to the remainder of the recurring service expense that the school or library is liable for after E-rate, thus providing a 50% discount on that remaining service. For some schools and libraries the two discounts combined may equal a 95% discount off the monthly rates for the services provided that are eligible for discounts.

Even though CTF has been designed to work with E-rate there is no direct relationship between the services funded by E-rate to the services funded by CTF. For carriers to file claims that include the E-rate discount, schools and libraries must indicate to the carrier to which services to apply the E-rate discount. Carriers have had great difficulty obtaining this required information in a timely way from some schools and libraries. The difficulty is so great that the E-rate discount virtually disappears from claims for the first six months of the E-rate funding year and in some cases is not properly applied at all during the funding year. These delays in notification along with E-rate funding commitments received late or past the end of the funding year, cause carriers to file CTF claims that must later be reversed. The ancillary problem caused is that there is temporarily a much greater demand on the CTF fund than is appropriate given customers' actual funding needs.

TD proposes authorizing carriers to impose requirements on their CTF customers that facilitate the preparation of accurate claims. To provide this incentive, essential to minimize superfluous bookkeeping both on the part of the Commission and on the part of carriers, and to avoid payments from the fund that are later reversed, TD proposes the following provisions:

TD recommends adoption of the rule regarding the provision of information about the application of E-rate discounts as proposed.

E-rate Funding Mechanism

E-rate customers have the option of being funded directly from the SLD via reimbursement for services that have already been paid (Billed Entity Applicant Reimbursement - BEAR) or having their service provider invoice the SLD for discounts provided to the E-rate customer. To ensure that carriers have accurate information regarding the application of E-rate discount for purposes of applying the CTF discount, and to eliminate customer opportunities to collect a greater discount than the program has provided for, the carrier reimbursement funding mechanism has been approved for use by CTF customers. However, certain carriers continue to use the BEAR funding mechanism for their CTF customers. In order to make the rule requiring a specific E-rate funding mechanism of CTF customers explicit, TD recommends adoption of the following CTF rule: Carriers who are currently using the BEAR funding process for the E-rate customers will be allowed to do so until July 1, 2006. On or before July 1, 2006, TD will assess the feasibility of allowing the BEAR funding process to continue beyond the July 1, 2006 date.

Interest calculation and applicability

Carriers, wishing to claim interest, are required to indicate so on their claim. This will be accomplished by checking the "Interest Claimed" box on the claim. Interest shall be calculated using the three-month commercial paper rate issued by financial institutions (available at the Federal Reserve Board website, www.federalreserve.gov/releases/cp/). Carriers will be eligible for interest if a compliant claim is filed within forty-five days of the end of the month being claimed and if the claim is not approved for payment within sixty days of filing. This period is designated as such to allow TD adequate time to review claims given claim filing deadlines and the Commission's payment cycles. The carrier payment process requires submission to the Information Management and Services Division by the nineteenth of each month. Presuming that most carriers file immediately prior to or on the fifteenth of each month, a thirty-day review period means that TD has only one or two days to review incoming claims to meet the next carrier payment cycle on the nineteenth. TD recommends adoption of extending the CTF claim review period to 60 days to allow TD a reasonable time to review claims and submit requests for payment.

Clarification is made for circumstances where a claim is incompletely or incorrectly filed. When TD is unable to review a claim due to carrier omissions in filing, TD will request additional information. The period where interest applies will then be tolled until the carrier responds accurately to TD's request.

Elimination of Provisions for Filing Amended Carrier Claims

Res. T-16319, T-16330 and T-16381 recognized that inaccuracies may occur in computing CTF claims by either the Carrier or TD and therefore adopted a three-year window for amended CTF claims or CTF reviews after the date the claim is paid. Consistent with the limitation on appropriation authority and limitations on TD's ability to review and pay claims, TD is proposing elimination of the provision for Amended Claims. Allowing carriers to submit additional claims on the funds for three years after the date a claim is actually paid means that a carrier could claim for a specific month and year six years after the claim period has ended and at least three years after TD's appropriation authority to pay claims for the month and year has expired. In addition, TD would be required to continually over budget - and over collect in surcharges - to ensure that there were funds available to pay these long-past obligations. TD proposes that the carriers take whatever time is necessary in the one year and forty-five days they are given to file claims and ensure that the claims filed are accurate.

In the seven years history of the CTF, amended claims have been filed because carriers were unfamiliar with the correct method of pricing services prior to discount, and with the process of calculating CTF discounts correctly. Carriers were also unable to gather all records of customers who had been provided discounts. These problems were within the control of the carriers and should be resolved at this point in the program's development. Requiring carriers to file only once puts the burden of carrier problems on the carriers and not on Commission staff which has been required to wade through duplicate and more submissions over many months to adequately compensate a few carriers who have had difficulties filing adequate and accurate claims. It further lifts the burden of long waits for payments from carriers who file claims correctly.

The Commission wants all CTF customer discounts to be reimbursed by the CTF. Accordingly, TD is authorized to consider the filing of amended claims on an individual case basis where carriers experience unusual and rare circumstances which lead to the filing of inaccurate or inadequate claims. TD is also authorized to consider amended claims where circumstances occur that are beyond the control of the carrier, such as legal, legislative and regulatory changes. Also exempted from the one-time filing only rule are compensation changes required by Commission-ordered financial audits.

TD further proposes to limit TD's ability to amend claim payments consistent with the requirements of the appropriation limits for the claim period in question. This limitation would not apply to special circumstances such as audits or litigation. To ensure that all carriers contemplating filing amended claims have an opportunity to do so, TD proposes eliminating amended claims effective on June 1, 2004. This effective date is made in consideration of the upcoming limitation on Appropriation authority on reimbursements for periods prior to June 30, 2002.

TD recommends elimination of provisions in the CTF rules for Amended Claims effective June 1, 2004.

Comments

In compliance with PU Code 311 (g), in the past, the Commission has served a hard copy of prior resolutions regarding CTF to all telecommunications carriers and the parties of record in R. 95-10-020/I95-01-021. To be consistent with the Commission's commitment to utilize the Internet for distributing Commission orders and information, the TD has informed telecommunications carriers serving CTF customers, members of the California Teleconnect Fund Advisory Committee, CTF school and library applicants and the parties of record in R. 95-01-020/I95-01-021 on the availability of the draft resolution, as well as the conformed resolution, when adopted by the Commission on the Commission web-site, www.cpuc.ca.gov. This notice of availability was mailed on February 11, 2004.

TD hosted a working session with representatives of eleven carriers on February 19, 2004. Changes have been made to the claim form, the supporting workpapers and to the Guide as a result of this session.

TD also recorded a webcast for school and library customers on March 5, 2004, highlighting the proposed changes in the rules that affect school and library customers.

Five parties filed comments and a number of other parties communicated their concerns to TD verbally. Written comments are summarized below by party and by issue in Appendix A attached to this document.

Schools and libraries were given an extension of time to file and this resolution was held from March 13 to April 22, 2004 to ensure that these parties had ample opportunity to comment. Informal comments were submitted directly to TD which called for the following changes in the resolution

This resolution reflects the comments by the parties with regard to the following areas

Proposals of commenting parties not responded to in this resolution are denied.

Findings

THEREFORE, IT IS ORDERED that:

This resolution is effective today.

I hereby certify that this Resolution was adopted by the Public Utilities Commission at its regular meeting on May 27, 2004. The following Commissioners approved it:

Appendix A - Synopsis of Comments to Res. T-16763

Issue

SBC

Verizon

Frontier

17 small Lecs

AT&T

 

Worksheet Revision/Service Address

Billing Address not service address

 

Should be able to use either address. Opposes mandated service address.

 

 

 

Effective Date of CTF Discounts

What is the date?

 

 

 

 

 

Guide

Wants clarification on updating procedure.

Inconsistencies. Cites 30 day rule. Wants letters to be added to top of columns on worksheet.

No changes to guide without public comment

 

 

 

Time Limits for CTF/erate customers

Should not be at carriers discretion

Should not implement.

 

Should clarify 486 form.

 

 

E-rate funding mechanism

 

 

Customers should have option of using BEAR.

Carriers should have discretion.

 

 

Interest on claims

Wants more specificity. Wants interest on disallowed items. 75 day window is too long.

Wants on-time filing to be extended to 75 days.

 

 

Wants interest to be applicable upon filing or wants 60 days to timely file.

 

Amended Claims

Limit to one year and no more than six per year except when TD changes claim requirements

Keep amended claims, at least for periods where amended claims were permissible

 

Carriers should be able to submit retroactive or revised claims for any reason. Carriers should be able to file for e-rate trueups more than 1 year and 45 days after the period.

Opposes elimination of amendments. Carriers should be able to amend up to two years after claim is due.

 

Issue

SBC

Verizon

Frontier

17 small Lecs

AT&T

 

Resolution Implementation Dates

Wants all dates to be the same

 

 

 

 

 

Separate Claims for separate fiscal years

Opposes

 

 

 

 

 

Daily Rate calculation

Wants 10% variance specified

 

 

 

 

 

Self effectuating date for claim approval

 

Verizon Proposal

 

 

Wants 60 days.

 

Workshop

 

 

 

 

Wants Workshop

 

Discounting Flexibility

 

 

 

 

Cannot bill. Wants to send check.

 

 

SBC Reply

Verizon Reply

Frontier Reply

17 Small LECs Reply

AT&T Reply

Cox Reply

Worksheet Revision/Service Address

 

Supports use of billing address.

 

 

 

 

Effective Date of CTF Discounts

 

Supports 30 day rule. Agrees with SBC on questions.

 

 

 

 

Guide

 

Wants notice and comment.

 

 

Wants workshops before updating.

 

Time Limits for CTF/erate customers

 

 

 

Cxrs should not be required to discontinue CTF service.

 

 

 

SBC Reply

Verizon Reply

Frontier Reply

17 Small LECs Reply

AT&T Reply

Cox Reply

E-rate funding mechanism

Supports Resolution. Carrier Invoicing Method should be required. One year transition period for carriers to comply.

 

One year transition.

 

 

Wants flexibility if acquires a customer using BEAR method.

Interest on claims

 

 

 

 

Should be clarified. Wants interest on resubmitted claims.

 

Amended Claims

 

Repeats original comment.

Should be allowed in period allowed to file claims. Should be allowed for erate modifications. Should be allowed when caused by legislative or regulatory changes.

 

 

Opposes elimination. Cites reasons that are addressed in the new claim filing format.

Resolution Implementation Dates

 

 

 

 

Uniform date on July 1, 2004

 

Separate Claims for separate fiscal years

 

Separate FY requirement would increase paperwork.

Supports SBC

 

 

 

Self effectuating date for claim approval

Supports AT&T proposal.

 

 

 

Wants approval in 60 days.

Supports because does not believe TD can review pending 01-02 claims.

Workshop

 

Wants Workshop

 

 

Calls for workshop to work out competing concerns.

Wants Workshop

Late notification of e-rate

 

 

 

 

 

Wants rules on customers paying back CTF.

Guide for Carriers Submitting CTF Reimbursement Claims

Section A

California Teleconnect Fund Program (CTF)

Claim Form and Supporting Worksheet Instructions for all Claims filed after June 30, 2004

(8 Pages)

STATE OF CALIFORNIA

PUBLIC UTILITIES COMMISSION

CALIFORNIA TELECONNECT FUND (CTF) PROGRAM

Claim Form Instructions for CTF Claims Filed after June 30, 2004 and for Claims for Periods after June 30, 2003.

(Page 1 of 9)

The attached form is to be used by participating telecommunications carriers when requesting reimbursement for discounts already provided to qualified entities under the CTF program. Qualified entities are entities that have been qualified by the Telecommunications Division (TD) to receive CTF discounts consistent with the criteria established in Decision 96-10-066 and Res. T-16742.

Disclaimer. Every attempt has been made to ensure that this guide is a complete compendium of relevant CTF rules. Where a rule has been adopted by the Commission in the past or in the future and has not been included in this Guide, TD will update the Guide accordingly. Omission from this guide does not make any validly adopted program rule inapplicable to claiming carriers.

Provision of Discount. Carriers are required to provide the appropriate discounts on CTF customer's bills upon notification of approval or upon commencement of service for an existing CTF customer. Approved CTF customers are listed on the CPUC's website. Carriers are limited to submitting claims for reimbursement for discounts already provided to CTF customers. The submission of claims when no discounts have been is a violation of California Public Utilities Commission rules and may be subject to sanctions and/or fines.

Carrier Eligibility. Any carrier, who is licensed to provide local telephone service in the State of California and has filed a CTF tariff, is eligible to provide discounted service to CTF customers.

Customer Eligibility. Approved CTF customers are listed on the CPUC website: http://www.cpuc.ca.gov/static/industry/telco/public+programs/index.htm. Included in the listing is the application number and date of eligibility notification. Customers retain their eligibility once approved by TD unless they are found to be no longer qualified for CTF or are found to be in violation of CTF program rules.

One Time Monthly Filing Only. The attached CTF claim form should be timely filed, accompanied by a supporting worksheet in the designated format and other required documents, for each month claimed, with the Public Programs Branch of the Telecommunications Division. The Public Programs Branch will review and approve the CTF claim and supporting data file.

STATE OF CALIFORNIA

PUBLIC UTILITIES COMMISSION

CALIFORNIA TELECONNECT FUND (CTF) PROGRAM

Claim Form Instructions for CTF Claims Filed after June 30, 2004 and for Claims for Periods after June 30, 2003.

(Page 2 of 9)

Subtotals. Carriers are required to group records associated with a single customer together. Customer applications have been consolidated into a single number for each customer which should be inserted in the supporting workpapers in the first column. The consolidated CTF application number is located on the CPUC website at http://www.cpuc.ca.gov/static/industry/telco/public+programs/index.htm. The amount claimed for each customer should be subtotaled on the supporting workpaper for the monthly claim.

Application of CTF Discounts. CTF discounts are applicable as of the date the customer's application has been received by TD. This may involve credits to the customer's account because of the period between the application date and the date the customer is notified of CTF eligibility. New CTF customers will be notified that there is a thirty-day period from the date of the notification letter to advise their telecommunications provider(s) of CTF eligibility and identify services to which the CTF discount should be applied for applicability of CTF credits back to the application date. The date of CTF eligibility notification will appear on the CPUC website in the record of CTF eligible customers. Services which would ordinarily be subject to discount and have not been discounted because of a failure to notify the carrier within the thirty day notification window may be discounted at the discretion of the carrier.

In the case of new service for existing CTF customers, CTF discounts are applicable on the date the carrier takes the order for new service from an existing CTF customer who notifies the carrier of the applicability of CTF when the order is placed. If no such notification occurs when the order is placed, the discount is applicable on the date notification is made.

Application of E-rate Discount. Carriers are required to apply any E-rate discount the customer is entitled to prior to applying the CTF discount to reach the proper claimed amount.

The CTF discount is half of either 1) the monthly rate for the service being claimed for reimbursement or 2) the monthly rate less the e-rate discount, whichever is less.

Carriers are authorized to require customers to provide information about the application of their E-rate discounts as follows:

STATE OF CALIFORNIA

PUBLIC UTILITIES COMMISSION

CALIFORNIA TELECONNECT FUND (CTF) PROGRAM

Claim Form Instructions for CTF Claims Filed after June 30, 2004 and for Claims for Periods after June 30, 2003.

(Page 3 of 9)

E-Rate Credits to the CTF. Carriers are required to discount a service according to the e-rate that a customer has been approved for and then apply the 50% CTF discount to the remainder. E-rate funding applies July 1 through June 30. Customers and carriers frequently do not receive notification of E-rate funding until well after July 1. In the months when no E-rate is applicable because no funding notification has been received, customers should receive a 50% discount off the regular monthly rate for eligible services. When notification is received, the customer would normally be credited for the difference between the discount that was applied (CTF only) and the discount that is applicable with the approval of E-rate (E-rate and CTF). This customer credit should appear on that month's claim as a credit to the fund. There is no metric to express this

amount in the context of the CTF supporting workpapers. Carriers should identify the service identically to the way the service is identified as called for on the multi-partial worksheet. In the final column the credit to the fund should appear along with the date that the E-rate grant appeared on the customer's monthly bill. TD will look at what was claimed for the period in question and compare it to what should have been claimed with the E-rate and determine if the credit is correct.

Semi-Annual Filing. When a carrier's total CTF claims for a six month period are less than $2500, the carrier may file semi-annually. If the amount of the discounts is identical for all six months of the semi-annual period, the carrier may file one claim sheet for the entire period with one supporting worksheet indicating in the file name that the worksheet is for each month of January through June or July through December. If the amount of discount reimbursement varies from month to month, the carrier must file claim sheets and supporting worksheets for each month claimed. Semi-annual reporting must be on a January-June, July-December basis. Semi-annual claims are due forty-five days after the end of the period for which the claim is made.

Interest on Semi-Annual Claims is discussed below.

Revisions. With one exception, revisions are not necessary nor are permitted. Retroactive claims ("debits") for the purpose of recouping lump sum credits when an existing customer is newly approved for CTF shall appear in the multi-month spreadsheet, which is provided in Section C. Credits to the fund for the purpose of accounting for late notification of E-Rate eligibility shall also appear on the multi-month credit worksheet. Both the credit and debit amounts from the multi-month worksheet shall be included in the total for the month claimed.

Lump Sum Credit Revision Exception. A limited revision is permitted when a carrier is claiming a lump sum credit for months that are in a different fiscal year than the month claimed, such as when a multi month credit is claimed in July 2003. This would require a separate claim dated June 2003 for any credits or debits that are applicable to June 2003 and any months prior to that up to June 2002. In this limited circumstance a revised claim may be filed to be credited or debited on the last month of the fiscal year previous (i.e. June) to the month being claimed. The revision must be filed for only the additional funds due the carrier or the credit to the CTF that the claim represents.

STATE OF CALIFORNIA

PUBLIC UTILITIES COMMISSION

CALIFORNIA TELECONNECT FUND (CTF) PROGRAM

Claim Form Instructions for CTF Claims Filed after June 30, 2004 and for Claims for Periods after June 30, 2003.

(Page 4 of 9)

Interest Payment. Interest payments for compliant CTF claims will be calculated using the three-month commercial paper rate issued by financial institutions (available at the Federal Reserve Board website, www.federalreserve.gov/releases/cp/). Calculation of interest starts 60 days after the date the claim is timely filed. Calculation of interest ends fifteen days after the reimbursement payment is approved by TD, provided the carrier files its monthly claim in a complete form with supporting documents on a timely basis.

Carriers must file compliant claims on time to be eligible for interest. Claims are timely filed when received by the Commission within forty-five days of the end of the period being claimed. To claim interest, the carrier should check the box on the claim form indicating that interest is claimed. If the claim is eligible for interest the Public Programs Branch will compute applicable interest payments fifteen days past the day the payment approval letters are sent to the carrier and include them with the payment. The additional fifteen days is to account for the period necessary for CPUC IMSD and State Controller's processing of checks. No claim that is approved for payment by TD within sixty days of filing will be eligible for interest.

Tolling of Claim Review Period. When TD is unable to review a claim due to carrier omissions in filing, TD will request additional information. The period where interest applies will then be tolled until the carrier responds accurately to TD's request.

Interest on Semi-Annual Claims. Months contained in a semi-annual compliant filing are considered timely filed if filed by August 15 for claims for the first half of the calendar year and by February 15 for the second half of the calendar year. Interest will apply to timely filed compliant claims if not paid within sixty days from the date of filing as provided above. Computation of interest for semi-annual claims will be made on the same basis as monthly claims.

File CTF Claims with the Public Programs Branch. Each appropriate completed CTF monthly claim should be mailed to or filed with the Public Programs Branch, accompanied by (a) an electronic data file (CD or disk) in the format prescribed by this Resolution (see page 7 of claim form instructions), and (b) the supporting documents relating to E-Rate discount for the appropriate E-Rate funding year. Carriers must attach the data required from the FCDL (Form 486 Data Sheet) once in each E-Rate funding year for each CTF application number. Carriers may elect to file the data mentioned above on a monthly basis.

STATE OF CALIFORNIA

PUBLIC UTILITIES COMMISSION

CALIFORNIA TELECONNECT FUND (CTF) PROGRAM

Claim Form Instructions for CTF Claims Filed after June 30, 2004 and for Claims for Periods after June 30, 2003.

(Page 5 of 9)

Deadlines for Filing CTF Claims. The completed CTF monthly claim form with supporting worksheet are to be received by 4 PM on the forty-fifth day following the end of the period being claimed to be considered timely filed. Claims will be accepted for review up to 4 PM one year

and forty-five days past the end of the period being claimed. Claims received more than one year and forty-five days from the ending date of the period being claimed will not be accepted for review and will not be paid. This provision is effective as of July 1, 2004.

Filing Address. The address for filing of claims is as follows:

Filing consists of 1) Completed CTF Claim Form; 2) Electronic Data File and 3) E-Rate documentation, if appropriate. When a telecommunications carrier submits: (1) an appropriate completed CTF claim form with the Public Programs Branch on a timely basis (as described above) but without the accompanying electronic data files (CD or disk) in the format

prescribed by the Telecommunications Division or (2) an electronic data file (CD or disk) in the format prescribed by the Telecommunications Division on a timely basis and, if applicable, the supporting documents relating to E-Rate discount, but without an appropriate completed CTF claim form, the CTF filing is not considered filed with the Public Programs Branch.

Claim Payment. After the claim is approved by the Public Programs Branch, a copy of the carrier's CTF claim form, (with the section for CPUC use completed), will be mailed to the attention of the signatory of the State of California form 204, payee data record, on file with the Commission. Payment will be made by the California State Controller by check mailed to the address on the Payee Data Record. When the Public Programs Branch rejects a monthly CTF claim: (1) a copy of the claim form marked as "Rejected" will be mailed to the signatory of the CTF claim form at the address indicated on the form, and (2) a letter signed by the Branch Manager will accompany the CTF claim form explaining the reason(s) for the rejection.

Disallowances. When the Public Programs Branch has reviewed the claim and finds errors or unsupported claims on some of the records, a check will be made out to the claiming carrier for the amount of the claim less the value of the records in error. An explanation of the payment will accompany the payment accompanied by detail regarding the reasons and the records that were rejected.

STATE OF CALIFORNIA

PUBLIC UTILITIES COMMISSION

CALIFORNIA TELECONNECT FUND (CTF) PROGRAM

Claim Form Instructions for CTF Claims Filed after June 30, 2004 and for Claims for Periods after June 30, 2003.

(Page 6 of 9)

Disallowance Resubmittals. To obtain payments on the rejected, non compliant or unsupported claim amounts, carriers have thirty days from the date of the payment letter to resubmit corrected records for review. These records, considered disallowance resubmittals of an already paid claim, are to be submitted accompanied by a claim form, marked "Disallowance Resubmittal",

the Public Programs letter rejecting the records and a digital data file supporting the claim in the same format as specified in Section C. A cover letter and other supporting information may be included with an explanation regarding the validity of the records being resubmitted.

Public Records. A telecommunications carrier's completed CTF claim form will be considered a public document; the supporting data files submitted by a carrier will not be considered public documents.

Definitions:

A. Schools and Libraries (S&Ls): In Decision 96-10-066, the Commission established that qualifying schools are "public or nonprofit schools providing elementary or secondary education, i.e., grades K-12, and which do not have endowments of more than $50 million." Qualifying libraries are "only those libraries which are eligible for participation in state-based plans for funds under Title III of the Library Services and Construction Act (20 USC Sections 335c et seq.). "The discount rates for schools and libraries are set at 50% for measured business service, switched 56, Integrated Services Digital Network (ISDN), T-1 service, DS-3 and up to OC 192 or their functional equivalents.

STATE OF CALIFORNIA

PUBLIC UTILITIES COMMISSION

CALIFORNIA TELECONNECT FUND (CTF) PROGRAM

Claim Form Instructions for CTF Claims Filed after June 30, 2004 and for Claims for Periods after June 30, 2003.

(Page 7 of 9)

B. Government Owned and Operated Hospitals and Health Clinics (GHCs): In Decision 96-10-066, the Commission established that qualifying GHCs are "municipal and county government owned and operated hospitals and health clinics. The discounts for qualifying hospitals and health clinics effective June 8, 2003 shall be entitled to 50% for measured business service, switched 56, Integrated Services Digital Network (ISDN), T-1 service, DS-3 and up to OC 192 or their functional equivalents.

C. Community-Based Organizations (CBOs): In Decision 96-10-066, the Commission established the requirements to qualify as a CBO: "a CBO must provide proof at the time of application that it is a tax exempt organization", as described in Section 501 ( c ) (3) or 501 (d) of the Internal Revenue Code, Title 26 of the United States Code; "This CBO must also certify that it offers health care, job training, job placement, or educational instruction. . ."

C. CBO's (continued)

Total Discounts refer to the sum of the discounts for all CTF subsidized services provided to qualified community-based organizations.

Payment Process. The telecommunications carrier should complete all the necessary information necessary for the receipt of a check. Wire transfers of funds are not available. The telecommunications carrier's signatory should be a management employee responsible for completing the entries in the CTF claim form and for the preparation of the submitted supporting data file.

STATE OF CALIFORNIA

PUBLIC UTILITIES COMMISSION

CALIFORNIA TELECONNECT FUND (CTF) PROGRAM

Claim Form Instructions for CTF Claims Filed after June 30, 2004 and for Claims for Periods after June 30, 2003.

(Page 8 of 9)

Prescribed Data File Format for Supporting Workpapers. The data file shall be stored on a 3-1/2 inch high-density diskette or CD using Microsoft Excel worksheets. Each spreadsheet shall contain a maximum of 25,000 rows. If a company submits several worksheets in a workbook, each worksheet shall include a subtotal for the 25,000 rows of records.

Claim Form Supporting Workpaper Instructions for CTF Claims Filed after July 1, 2004 and for claim months after June 30, 2003. The file name should contain the carrier's name, its CPUC identification number, and the month applicable to the data file. This information may also be included on the worksheet tab and the worksheet page header. It shall not be inserted on the data sheet. The first row - and the first row only -- of the data file shall be used for column headings. The second row and each row thereafter shall be a record. Carriers with more than one worksheet shall include the range of application numbers in the worksheet file name or and indication that the file is for multi-partial months. A file name example, using Pinnacles Telephone Company as an example, is "1013'01-04, 0001-0050" and "1013'01-04'Multi-Partial'0001-0050". It is not necessary to include the application number range for claims containing one worksheet for a single month or for a multi-partial month.

Each record shall represent a telephone service containing the following information:

· CTF application number (Numeric)

· the name of the qualified entity as it appears on the CTF application (Alpha)

· billing address of the customer who received CTF discount (Alpha, Numeric)

· the billing or account number (Alpha, Numeric)

· working telephone number of the service being claimed

· billing code or service description (Alpha, Numeric)

· quantity for each type of discounted service (Alpha, Numeric)

· unit price (currency, 2 decimal places)

· Applicable E-Rate Discount (percentage, 2 decimal places) (attach data sheet attached to USAC, SLD Letter re notification of receipt of Form 486).

· CTF discount after E-rate (currency, 2 decimal places)2

· Applicable surcharge/surcredits (currency, 2 decimal places)3 or bill and keep surcharges

· CTF Discount Including surcharge/surcredits (currency, 2 decimal places)2

· CPUC user fee (currency, 2 decimal places)

· 911 Tax on the total CTF discounts (currency, 2 decimal places)4

· Federal Excise Tax on the total CTF discounts (currency, 2 decimal places)3

STATE OF CALIFORNIA

PUBLIC UTILITIES COMMISSION

CALIFORNIA TELECONNECT FUND (CTF) PROGRAM

Claim Form Instructions for CTF Claims Filed after June 30, 2004 and for Claims for Periods after June 30, 2003.

(Page 9 of 9)

Record Information Requirements (cont.)

· local and city taxes on the total CTF discounts (currency, 2 decimal places) 3

· total CTF claim (currency, 2 decimal places)

· Multi or Partial-Month Credit or Debit (or installation) From Date (date format: mm/dd/yyyy) 4

· Multi or Partial-Month Credit or Debit (or disconnect) to Date (date format: mm/dd/yyyy)4

· Total Multi-Month Credit or Debit (currency, 2 decimal places) 4

Data Limited to Guide Specifications. Claiming carriers shall provide only the data that is specified above.

Monthly Partial Calculations. To allow for differences in the number of days in the various months, the daily rate will be calculated using the following formula: monthly rate x twelve divided by 365 + 1. Because multiple month credits or debits may include months of varying lengths to which varying rates may apply; TD personnel will not require these figures to be exactly as they would calculate out under this formula.

Guide for Carriers Submitting CTF Reimbursement Claims

Section B

California Teleconnect Fund Program (CTF)

CTF Claim Form

Claim Form Instructions for CTF Claim Periods Beginning July 2003

(1 Page)

CALIFORNIA TELECONNECT FUND (CTF) CLAIM FORM

(To be completed by the filing carrier)

(Use one form for each U#)

For the Month(s) of ________________ _______ (Year)

□ Initial Claim for this period

□ Resubmittal of amounts disallowed on ____________ (date of payment letter)

□ Revised claim to account for multi-month credit included in ________ claim

Company Name ____________________________CPUC U-____________

The following amounts are submitted for reimbursement. These amounts are supported by an accompanying data file (CD or disk) in the format prescribed by the Telecommunications Division.

A. Schools and Libraries (S&Ls)

1. Total Discounts _____________________._______

2. Taxes/User fee _____________________._______

3. Claim for S&Ls (Ln 1 + Ln 2) _____________________._______

B. Government Owned & Operated Hospitals & Health Clinics (GHCs)

4. Total Discounts _____________________._______

5. Taxes/User Fee _____________________._______

6. Claim for GHCs (Ln 4 + Ln 5) _____________________._______

C. Community-Based Organizations (CBOs)

7. Total Discounts _____________________._______

8. Taxes/User Fee _____________________._______

9. Claim for CBOs (Ln 7 + Ln 8) _____________________._______

D. Total Claims for the Month (Ln 3 + Ln 6 + Ln 9) _____________________._______

E. Interest Claimed □

I hereby certify that this form and the accompanying data file have been examined by me and to the best of my knowledge and belief they are true and complete. Carrier's signatory should be able to answer questions on claim calculations.

Signature_________________________________________ Date________________________

Printed Name_____________________________________ Title_________________________

E-Mail Address____________________________________ Telephone No. (___)____________

Mailing Address________________________________________________________________

For CPUC use only:

Telecom Staff Reviewer__________________________ ____ Approval Date ____________

Amount Approved if Different from Claimed Amount _______ __________ Amount Disallowed _________

Guide for Carriers Submitting CTF Reimbursement Claims

Section C

CTF Supporting Worksheet Sample

1 The E-rate - or, more precisely, the Schools and Libraries Universal Service Support Mechanism - provides discounts to assist most schools and libraries in the United States to obtain affordable telecommunications and Internet access.

2 For partial month services, the CTF discount should be based on the partial month billing amount

3 Required columns for carriers subject to surcharges/surcredits. Carriers not subject to surcharges/surcredits should omit these columns.

2

4 Columns for 911 Tax, Federal Excise Tax and local and city taxes may be omitted if no claim is made.

3

4 For use only in instances where CTF discounts or credits for more or less than a single month are being claimed. These columns should never designate periods in more than one fiscal year.

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