2012 PSC Annual Report - Missouri Public Service Commission

REGULATORY ACTIVITYcompanies are considered small or very small based uponthose definitions as provided by the National RegulatoryResearch Institute (NRRI). One of the major challenges isproviding the utility with reasonable rates to make neededrepairs and Missouri Department of Natural Resources(DNR) mandated upgrades while at the same time keepingthose rates reasonable for consumers.In fulfilling its duties, the Unit also works very closelywith DNR whose responsibilities include ensuring that theutilities are complying with the applicable federal and stateenvironmental and water quality laws and regulations.The Commission and DNR share information aboutthe companies they regulate under a Memorandum ofUnderstanding. This agreement includes provisionsregarding the agencies’ cooperation and coordination onoverlapping matters such as DNR’s issuance of constructionand operating permits and the Commission’s utility servicearea certification process.The Unit is also active in federal activities that impactwater and sewer industries in Missouri. Many of the issuesthat are impacting these industries in Missouri are obstaclesin other states as well; therefore, the Unit participates inworking groups with NRRI and the National Association ofRegulatory Utility Commissioners (NARUC).TELECOMMUNICATIONSPublic Service Commission Oversightof Telecommunications ServiceThe Missouri Public Service Commission (Commission)continues to provide oversight of many telecommunicationsactivities in Missouri. Although the Commission no longerprovides detailed examinations of telephone companyprices and earnings, it nevertheless provides certificationand regulatory oversight in many areas including universalservice, telephone numbering, intercarrier compensation,Interconnected Voice over Internet Protocol and videoservice registration.The Commission also maintains authority to investigatematters pertaining to telephone service quality. TheCommission and its staff also provide mediation andarbitration services between and among telecommunicationcompanies as well as end-user customers.The Commission does not regulate wireless servicesor broadband data services provided over the Internet.However, the continued development of intermodalcompetition often results in non-regulated entitiesappearing in matters before the Commission.Reform of Intercarrier CompensationIntercarrier compensation refers to the charges that onetelephone company pays to another telephone company tooriginate, transport, and/or terminate telecommunicationstraffic. Intercarrier compensation payments are governedby a complex system of federal and state laws and rules.There are two major forms of intercarrier compensation –access charges and reciprocal compensation. Although thesame or similar facilities are used to originate, terminateand transport all types of telephone traffic, the rates forintercarrier compensation vary based on several factorsincluding: (1) where the call begins and ends; (2) what typesof companies are involved (landline, wireless, etc.); and (3)what type of traffic is involved (voice, data, wireless, etc.).In November 2011, the Federal CommunicationsCommission (FCC) instituted national reforms forintercarrier compensation. This action began what isexpected to be a nine year transition period in which localtelephone companies implement various aspects of the newfederal guidelines.In Missouri, over 91 incumbent and competitive localtelephone companies have made the necessary tariff filingsto implement the first phase of the new federal mandate.As of July 2012, Missouri’s local telephone companies haveimplemented two significant changes. The first change wasto begin charging the same for terminating intrastate Voiceover Internet Protocol Telephone (VoIP) calls as is permittedfor interstate VoIP calls. The second change implementedrequired each local telephone company to reduce itsterminating access rates. Further activity is planned in2013 whereby Missouri’s intrastate terminating switchedaccess rates will be reduced to corresponding interstaterate levels.Telephone NumberingThe Commission serves as an impartial telephonenumbering administrator in Missouri, working closely withthe National Number Pool Administration to implementindustry guidelines to include telephone numberreclamation procedures, and the issuance of new telephonenumbers in quantities sufficient to serve new telephonenumbering needs.The Commission also monitors national activities thatimpact telephone number administration in Missouri.These activities serve to meet expectations that telephonenumbers are utilized efficiently as the Public SwitchedTelephone Network continues its evolutionary migration toan Internet Protocol-based successor network.The Commission also serves in a capacity to review, andpotentially reverse, decisions by federal authorities which2 PSC Annual Report