ETC Fact Sheet

17. WHAT IS AN ETC?
1. ETC is an acronym for eligible telecommunications carrier. An eligible telecommunications carrier is a common carrier that has been designated by the Commission to receive universal service support.
17. HOW DO I BECOME AN ETC?
1. In order to be designated an ETC in Kansas, you need to file an application with the Commission and meet all Federal and state ETC criteria.
17. WHAT ARE THE FEDERAL ETC REQUIREMENTS?
1. Eligibility for Federal universal support is covered by Section 214(e) of the Federal Act. Section 214(e) of the Federal Act states that,

   (1) ELIGIBLE TELECOMMUNICATIONS CARRIERS.—A common carrier designated as an eligible telecommunications carrier under paragraph (2) or (3) shall be eligible to receive universal service support in accordance with section 254 and shall, throughout the service area for which the designation is received—

   (A) offer the services that are supported by Federal universal service support mechanisms under section 254(c), either using its own facilities or a combination of its own facilities and resale of another carrier’s services (including the services offered by another eligible telecommunications carrier); and

   (B) advertise the availability of such services and the charges therefor using media of general distribution.

   (2) DESIGNATION OF ELIGIBLE TELECOMMUNICATIONS CARRIERS.—A State commission shall upon its own motion or upon request designate a common carrier that meets the requirements of paragraph (1) as an eligible telecommunications carrier for a service area designated by the State commission. Upon request and consistent with the public interest, convenience, and necessity, the State commission, so long as each additional requesting carrier meets the requirements of paragraph (1). Before designating an additional eligible telecommunications carrier for an area served by a rural telephone company, the State commission shall find that the designation is in the public interest.

   (3) DESIGNATION OF ELIGIBLE TELECOMMUNICATIONS CARRIERS FOR UNSERVED AREAS.—If no common carrier will provide the services that are supported by Federal universal service support mechanisms under section 254(c) to an unserved community or any portion thereof that requests such service, the [Federal Communications] Commission, with respect to interstate services, or a State commission, with respect to intrastate services, shall determine which common carrier or carriers are best able to provide such service to the requesting unserved community or portion thereof and shall order such carrier or carriers to provide such service for the unserved community or portion thereof. Any carrier or carriers ordered to provide such service under this paragraph shall meet the requirements of paragraph (1) and shall be designated as an eligible telecommunications carrier for that community or portion thereof.

   (4) RELINQUISHMENT OF UNIVERSAL SERVICE.—A State commission shall permit an eligible telecommunications carrier to relinquish its designation as such a carrier in any area served by more than one eligible telecommunications carrier. An eligible telecommunications carrier that seeks to relinquish its eligible telecommunications carrier designation for an area served by more than one eligible telecommunications carrier shall give advance notice to the State commission of such relinquishment. Prior to permitting a telecommunications carrier designated as an eligible telecommunications carrier to cease providing universal service in an area served by more than one eligible telecommunications carrier, the State commission shall require the remaining eligible telecommunications carrier or carriers to ensure that all customers served by the relinquishing carrier will continue to be served, and shall require sufficient notice to permit the purchase or construction of adequate facilities by any remaining eligible telecommunications carrier. The State commission shall establish a time, not to exceed one year after the State commission approves such relinquishment under this paragraph, within which such purchase or construction shall be completed.

   (5) SERVICE AREA DEFINED.—The term “service area” means a geographic area established by a State commission for the purpose of determining universal service obligations and support mechanisms. In the case of an area served by a rural telephone company, “service area” means such company’s “study area” unless and until the [Federal Communications] Commission and the States, after taking into account recommendations of a Federal-State Joint Board instituted under section 410(c), establish a different definition of service area for such company.

17. WHAT SERVICES ARE SUPPORTED BY FEDERAL UNIVERSAL SERVICE SUPPORT?
1. The services or functionalities that are to be supported by Federal universal service support mechanisms, as identified in 47 C.F.R. § 54.101(a), are (1) voice-grade access to the public switched telephone network; (2) local usage; (3) dual tone multi-frequency signaling or its functional equivalent; (4) single-party service or its functional equivalent; (5) access to emergency services; (6) access to operator services; (7) access to long distance services; (8) access to directory assistance; and (9) toll limitation for qualifying low-income consumers.
17. MUST A CARRIER PROVIDE ALL OF THE SERVICES THAT ARE SUPPORTED BY THE FEDERAL UNIVERSAL SERVICE FUND IN ORDER TO RECEIVE FEDERAL UNIVERSAL SERVICE SUPPORT?
1. Yes. Per 47 C.F.R. § 54.101(b), an eligible telecommunications carrier must offer each of the services set forth in 47 C.F.R. § 54.101(a) in order to receive federal universal service support. However, per 47 C.F.R. § 54.101(c) a state commission may grant a petition of a telecommunications carrier, that is otherwise eligible to receive universal service support, additional time to complete the network upgrades needed to provide single-party service, access to enhanced 911 service, or toll limitation.
17. SECTION 214(E)(1) OF THE FEDERAL ACT ALLOWS ETCS TO RECEIVE UNIVERSAL SERVICE SUPPORT IF IT OFFERS THE SERVICES SUPPORTED BY THE FEDERAL UNIVERSAL SERVICE FUND AND ADVERTISES FOR THOSE SERVICES THROUGHOUT THE "SERVICE AREA" FOR WHICH THE DESIGNATION IS RECEIVED. WHAT IS A "SERVICE AREA?"
1. Section 214(e)(5) of the Federal Act allows State commissions discretion over establishing “service areas.” “Service areas” or “operating areas” are defined by the state act in K.S.A. 66-1,187(k)(2). K.S.A. 66-1,187(k)(2) provides that,

   (1) In the case of a rural telephone company, operating area or service area means such company’s study area or areas as approved by the federal communications commission;

   (2) in the case of a local exchange carrier, other than a rural telephone company, operating area or service area means such carrier’s local exchange service area or areas as approved by the commission.

   Thus, a carrier must offer its services throughout a rural company’s entire study area in order to be eligible for universal service support, unless the Commission grants a carrier’s request for redefinition below the study area level and the FCC concurs.

   In its September 30, 1999 order in Docket No. 99-GIMT-326-GIT, the Commission designated Kansas wire centers as the service area for universal service support for non-rural telephone company’s services areas. Thus, in order to receive universal service support in non-rural telephone companies’ service areas an ETC must offer service throughout the wire center for which it seeks support.

17. DOES KANSAS HAVE A STATE UNIVERSAL SERVICE FUND?
1. Yes. K.S.A. 66-2008 required the Commission to establish the Kansas Universal Service Fund (KUSF) on or before January 1, 1997.
17. WHAT IS THE STATE CRITERIA FOR RECEIVING STATE UNIVERSAL SERVICE SUPPORT?
1. Kansas law adopts the federal standards, contained in 214(e)(1), for designating a provider as an ETC for KUSF purposes. K.S.A. 66-2008(c) states:

   Pursuant to the federal act, distributions from the KUSF shall be made in a competitively neutral manner to qualified telecommunications public utilities, telecommunications carriers and wireless telecommunications providers, that are deemed eligible both under subsection (e)(1) of section 214 of the federal act and by the commission.

   The Commission, at this time, has not established additional state-specific criteria for ETC designation.

17. CAN A CARRIER QUALIFY TO BE AN ETC IN ALL AREAS OF THE STATE OF KANSAS?
1. Yes; however, it must be declared by the Commission that it is in the public interest for a carrier to be an ETC in rural areas of the state and the Commission may determine whether it is in the public interest for a carrier to be an ETC in non-rural areas of the state.
17. WHAT AREAS OF KANSAS ARE CONSIDERED RURAL?
1. For state purposes, all exchanges except those served by Southwestern Bell Telephone Company or Sprint/United Telephone Company are considered rural. For federal purposes, all exchanges except those served by Southwestern Bell Telephone Company are considered rural.
17. HAS THE COMMISSION ADDRESSED WHETHER IT IS IN THE PUBLIC INTEREST TO DESIGNATE ADDITIONAL ETCS IN RURAL AREAS?
1. Yes. The Commission established a rebuttable presumption that it is in the public interest to designate additional ETCs in the areas served by rural telephone companies in Order No. 10 in Docket No. 99-GCCZ-156-ETC. The Order states in pertinent part,

   The Commission finds, as a general principle, that allowing additional ETCs to be designated in rural telephone company service areas is in the public interest. This general public interest finding is a presumption which may be rebutted by individual rural telephone companies. The Commission has the discretion to find that in a particular discrete rural area, competition is not in the public interest. The obligation to establish that additional ETCs are not in the public interest is on the rural telephone company serving that area. Such a determination must be based on the facts shown to exist in a specific study area.

   However, since the Commission’s rebuttable presumption finding, the FCC found in the Virginia Cellular proceeding that considering only the value of competition is not sufficient in making a public interest finding. The FCC adopted several criteria to be used in public interest findings for rural company service areas in its Virginia Cellular Order. The FCC states that in determining whether it is in the public interest to designate an additional ETC in areas served by rural companies it will consider the following:

   • the benefits of increased competition;
   • the impact of multiple designations on the universal service fund (USF);
   • the unique advantages and disadvantages of the applicant’s service offering;
   • any commitments made regarding quality of service; and
   • the applicant’s ability to provide the supported services throughout the designated service area within a reasonable amount of time.

   Although the FCC’s Virginia Cellular Order is not binding on this Commission, the Commission found in Docket No. 04-ALKT-283-ETC that examining additional factors enumerated in the FCC’s order is reasonable.

17. HAS THE COMMISSION IMPOSED ADDITIONAL REQUIREMENTS ON ETCS?
1. The Commission determined in its May 5, 2000 order in Docket No. 00-GIMT-584-GIT that both state and federal law allow it to impose conditions for distributions from the KUSF in order to ensure competitive neutrality, and also to impose conditions for ETC designation, but declined to do so at that time. In its September 24, 2004 Order in Docket No. 04-ALKT-283-ETC, the Commission declared it will open a generic proceeding to discuss the following issues related to ETC designations: minimum local usage; content, frequency and types of media for advertising; per-minute blocking for wireless carriers; billing standards; carrier-of-last resort responsibilities; build-out plans; and application of termination fees.

   In addition, the Commission required the following of RCC Minnesota, Inc. and ALLTEL Kansas Limited Partnership in their respective ETC designation orders: a) file a map indicating the extent of its existing infrastructure for which service coverage is available from such facilities and update the map on a yearly basis; b) work with Staff in developing language used in all advertising for areas in which the carrier is designated as an ETC; comply with CTIA's Code for Wireless Service and report the number of complaints per 1000 handsets for the proceeding year on January 31 of each year; provide a projection of the amount of support it expects to receive from the FUSF in 2005; provide a capital expenditure budget for Kansas for 2005; and to follow the process each carrier outlined for evaluating requests for service. The Commission required H&B Cable Service, Inc. to also work with Staff in developing language to be used in all advertising for areas in which the carrier is designated an ETC.

17. ARE ETCS REQUIRED TO MEET MINIMUM QUALITY OF SERVICE STANDARDS?
1. Currently, unless an ETC is a facilities based local exchange carrier, ETCs are not required to meet minimum quality of service standards. In its May 5, 2000 Order in Docket No. 00-GIMT-584-GIT, the Commission chose not to impose minimum quality of service standards on ETCs; except to the extent an ETC is a facilities based local exchange carrier, the ETC is required to meet the Commission’s Quality of Service standards, as required by the Commission in Docket No. 191,206-U. However, on September 13, 2004, the Commission opened Docket No. 05-GIMT-187-GIT to examine the retail quality of service standards adopted in Docket No. 191,206-U. One of the issues to be examined is whether to impose minimum quality of service standards on all ETCs.

   Additionally, in Docket Nos. 04-RCCT-338-ETC and 04-ALKT-283-ETC, the Commission required RCC Minnesota, Inc. and ALLTEL Kansas Limited Partnership, respectively, to comply with CTIA’s Code for Wireless Service and report the number of complaints per 1000 handsets for the proceeding year on January 31 of each year.

17. ARE ALL LINES SUPPORTED BY THE KUSF?
1. All lines provided by ETCs to residential and single line business customers in high cost areas are supported by the KUSF. A business customer with three (3) or fewer lines or units/phones is considered to be a single line business customer.