2012 PSC Annual Report - Missouri Public Service Commission

REGULATORY ACTIVITYhave denied additional telephone numbers to telephonecompanies when specific utilization guidelines are not met.Often referred to as “safety valve” requests, such authoritypermits the Commission to examine and verify telephonenumbering needs involving individualized companyspecificsituations. In the 2012 fiscal year, the Commissionwas asked to examine and make determinations in fivesuch company-specific situations. In all five cases, theCommission granted the telephone company requests anddid so in an expedited manner.The Commission continues to be aggressive in its effortsto conserve telephone numbers. Those efforts have enabledMissouri to delay the implementation of new area codes inthe state.Missouri’s area codes are projected to exhaust allavailable telephone numbers at the following time periods:AREACODEPROJECTED DATE OF TELEPHONENUMBER EXHAUSTION*314 1st quarter of 2022417 3rd quarter of 2028573 4th quarter of 2022636 4th quarter of 2034660 3rd quarter of 2028816 1st quarter of 2026*Forecast as approved by the FCC in April 2012. The exhaust datesare reviewed twice a year by numbering authorities.Programs Administeredby the Missouri CommissionMissouri Universal Service Fund: The Missouri UniversalService Board (Board), consisting of the Commission andOffice of the Public Counsel, oversees the Missouri UniversalService Fund (USF) pursuant to Section 392.248 RSMo.The Missouri USF solely provides funding for discountedtelecommunications services for qualifying low income anddisabled customers. The Missouri USF only provides fundingto landline carriers and does not provide any funding forwireless carriers. There are 51,499 landline subscribers inMissouri receiving support (47,919 low income and 3,580disabled) which represents a 19% decrease over the past year.Federal Universal Service Fund Program: The federalUSF program provides a variety of funding opportunitiesfor providing telecommunications services. Most notablewithin the federal USF program are the high-cost supportprogram and the Lifeline program. Both programs weresignificantly reformed this past year by the FCC.The FCC released reforms for the federal USF high-costsupport program in November 2011. The FCC’s reformscapped federal USF high-cost support funding at $4.5billion. The FCC also created the Connect America Fund toultimately replace all existing high-cost support mechanismsand use such funding for expanding broadband serviceavailability. In addition, the FCC created the Mobility Fundto help expand mobile broadband networks. Althoughcertain federal USF high-cost support will be phased out overa period of years, competitive bidding will be introduced toaward funding.The FCC’s reforms will have different impacts on carriers;however, reform provisions include ways for incumbentlocal telephone companies to maintain funding levels ifcertain conditions are met. For example, the local ratesfor an incumbent rate of return regulated company mustmeet or exceed certain rate levels in order to retain mosthigh-cost support funding. Ultimately, the FCC projects itsreform measures will enable 90% of rate-of-return carriersto see high-cost support reductions of less than 20%. TheFCC’s reforms are also designed to increase accountabilityand oversight.The FCC released reforms for the Lifeline program inFebruary 2012. The FCC’s reforms generally tightenrequirements within all states for participation in thePSC Annual Report 2