Report on the Status of

Competition in the
Telecommunications
Industry

AS OF DECEMBER 3 1, 2018

Florida Public Service Commission

Table of Contents
List of Tables .................................................................................................................................. ii
List of Figures ................................................................................................................................ iii
List of Acronyms ........................................................................................................................... iv
Executive Summary ........................................................................................................................ 1
Chapter I. Introduction and Background ........................................................................................ 3
Chapter II. Wireline Market Overview ........................................................................................... 5
A. Incumbent Carriers ................................................................................................................. 5
B. Mergers/Acquisitions ............................................................................................................. 6
Chapter III. Status of Wireline Competition in Florida .................................................................. 9
A. Wireline Trends in Florida ..................................................................................................... 9
B. Wireline Market Mix, Market Share, and Access Lines ...................................................... 10
C. Competitive Market Trends ................................................................................................. 13
Chapter IV. Wireless, VoIP, and Broadband ................................................................................ 15
A. Wireless................................................................................................................................ 15
B. Voice over Internet Protocol (VoIP) .................................................................................... 19
C. Broadband ............................................................................................................................ 23
Chapter V. Competitive Market Analysis & Statutory Issues ...................................................... 27
A. Statutory Issue – Competitive Providers ............................................................................. 27
B. Statutory Issue – Consumers ................................................................................................ 29
C. Statutory Issue – Affordability & Service Quality ............................................................... 31
D. Statutory Issue – Carrier Disputes ....................................................................................... 32
Chapter VI. State Activities .......................................................................................................... 33
A. Intercarrier Matters .............................................................................................................. 33
B. Lifeline ................................................................................................................................. 34
C. Telephone Relay Service ...................................................................................................... 35
Chapter VII. Federal Activities ..................................................................................................... 37
A. USTelecom Forbearance Petition ........................................................................................ 37
B. FCC Hurricane Response ..................................................................................................... 37
C. Broadband Deployment........................................................................................................ 39
D. Open Internet/Net Neutrality ............................................................................................... 39
E. Universal Service.................................................................................................................. 40
F. Major Calling Enforcement Actions ..................................................................................... 46
G. Public Safety Network ......................................................................................................... 47
H. Robocalls .............................................................................................................................. 48
Appendix A. List of Certificated CLECs as of December 31, 2018............................................. 49
Glossary ........................................................................................................................................ 53

i
List of Tables
Table 3-1
Florida Wireline Access Line Comparison ............................................................................. 12
Table 4-1
U.S. Interconnected VoIP Subscribership by Customer Type ................................................ 20
Table 6-1
Florida Lifeline Eligibility and Participation Rate.................................................................. 34
Table 7-1
Federal Universal Service Programs in Florida ...................................................................... 41
Table 7-2
Lifeline Support Phase Down Schedule ................................................................................. 45

ii
List of Figures
Figure 3-1
Florida Wireline Access Line Trends ....................................................................................10
Figure 3-2
Florida Residential & Business CLEC Market Share ............................................................11
Figure 3-3
Florida Residential Wireline Trends by ILECs and CLECs ..................................................13
Figure 3-4
Florida Business Wireline Trends by ILECs and CLECs ......................................................14
Figure 4-1
U.S. Wireless Substitution Rates ...........................................................................................16
Figure 4-2
U.S. Wireless Market Share as of 3rd Quarter 2018..............................................................17
Figure 4-3
U.S. Retail Voice Telephone Subscriptions ...........................................................................19
Figure 4-4
Florida Residential Interconnection VoIP Subscribers ..........................................................22
Figure 4-5
Florida Business Interconnected VoIP Subscribers ...............................................................23
Figure 4-6
Percentage of Broadband U.S. Households ...........................................................................24
Figure 4-7
Percentage of U.S. Non-Internet Users ..................................................................................25
Figure 5-1
2017 National Voice Market ..................................................................................................28
Figure 5-2
Florida CLEC Market Share ..................................................................................................30
Figure 5-3
Telephone Service Subscription Florida vs. Nation ..............................................................32
Figure 7-1
USF Quarterly Assessment Factor .........................................................................................42
Figure 7-2
2018 Authorized Federal High-Cost Support ........................................................................43
Figure 7-3
E-Rate Program Support and Funding Cap ...........................................................................44

iii
List of Acronyms
CDC Centers for Disease Control and Prevention

CLEC Competitive Local Exchange Company

FCC Federal Communications Commission

FPSC Florida Public Service Commission, the Commission

FTRI Florida Telecommunications Relay, Inc.

F.S. Florida Statutes

ILEC Incumbent Local Exchange Company

IP Internet Protocol

kbps kilobits per second

Mbps Megabits per second

TASA Telecommunications Access System Act of 1991

TDM Time Division Multiplexing

USF Universal Service Fund

USAC Universal Service Administrative Company

VoIP Voice over Internet Protocol

iv
Executive Summary
Section 364.386, Florida Statutes, requires the Florida Public Service Commission (FPSC or
Commission) to report on the status of competition in the telecommunications industry to the
Legislature by August 1 of each year. As of December 31, 2018, there were 10 incumbent local
exchange companies and 255 competitive local exchange companies certificated by the
Commission to operate in Florida.

In 2018, the Florida wireline market continued to follow the national trend with AT&T,
CenturyLink and Frontier all experiencing access line losses. The local and national markets
continued to consolidate with several mergers and acquisitions. Several intrastate issues were
resolved or initiated in 2018. The Lifeline subscription rate in Florida increased from 41.3
percent of eligible households in 2017 to 42.7 percent in 2018.

Consumers in Florida continue to migrate from traditional wireline service to wireless and
cable/Voice over Internet Protocol (VoIP) services. The data indicates that residential migration
may be increasing slightly, while business customers continue to migrate away from traditional
wireline to VoIP technology in large numbers. Carriers reported approximately 1.9 million total
wireline access lines in Florida for 2018, about 23 percent fewer than the previous year.

For the eighth year in a row, total wireline residential access lines were exceeded by total
business access lines. Wireline residential and business access lines again experienced significant
drops in 2018. Total residential access lines declined 23.6 percent, while total business access
lines declined 23 percent. Much of this decline continues to be attributed to the transition to
VoIP and wireless-only services. CenturyLink continues to be Florida’s largest wireline
residential access line provider, despite experiencing a 30.2 percent decline in residential lines
during 2018. AT&T declined 19.8 percent, while Frontier declined 24.1 percent in residential
access lines during the same period. Competitors continued to largely ignore the wireline
residential market, as their market share dropped to less than one percent. The wireline
competitors’ business market share decreased to 33.5 percent in 2018. More than 62 percent of
AT&T’s and Frontier’s wirelines were business lines, while fewer than 40 percent of
CenturyLink’s wirelines were business lines. More than 99 percent of competitors’ access lines
were business lines.

As reported for the past several years, intermodal competition from wireless, VoIP, and
broadband continued to drive the telecommunications markets in 2018. According to the most
recent FCC data, there are an estimated 20.8 million wireless subscriptions in Florida, and
greater than 4.5 million VoIP connections.

Analysis of the telecommunications data obtained by the Commission produced the following
conclusions:

• Many competitive local exchange companies reported offering a variety of services and
packages comparable to those offered by incumbents. Subscribers to cable and business
VoIP services continued to increase, while the number of wireless subscriptions in
Florida declined slightly. These factors contribute to the conclusion that competitive

1
 providers are able to offer functionally equivalent services to both business and
residential customers.
• The continued decrease in both business and residential incumbent local exchange
company wireline access lines demonstrates that customers are finding reasonable pricing
packages and functionality with competitive local exchange companies, cable providers,
and wireless providers, as well as VoIP services from the incumbent local exchange
companies.
• Based on the continued growth of interconnected VoIP services and wireless-only
households, the network reliability of non-incumbent providers is sufficient to satisfy
customers. The Federal Communications Commission-reported telephone penetration
rate of 92.7 percent for Florida suggests that the vast majority of Florida residents are
able to afford telephone service. The number and variety of competitive choices among
all types of service providers suggest that competition is continuing to have a positive
impact on the telecommunications market in Florida.

2
Chapter I. Introduction and Background
Chapter 364, F.S., requires the Commission to prepare and deliver a report on the status of
competition in the telecommunications industry to the President of the Senate, the Speaker of the
House of Representatives, and the majority and minority leaders of the Senate and the House of
Representatives on August 1 of each year. Section 364.386, F.S., requires that the report address
the following four elements:

1. The ability of competitive providers to make functionally equivalent local

exchange services available to both residential and business customers at
competitive rates, terms, and conditions.
2. The ability of customers to obtain functionally equivalent services at comparable
rates, terms, and conditions.
3. The overall impact of competition on the maintenance of reasonably affordable
and reliable high-quality telecommunications services.
4. A list and short description of any carrier disputes filed under Section 364.16, F.S.

The Commission is required to make requests to local exchange telecommunications providers

each year for the data required to complete the report. The data request was mailed on February
22, 2019, to 10 incumbent local exchange companies (ILECs) and 255 competitive local
exchange companies (CLECs). Responses were due April 15, 2019. The data presented and the
analyses that follow accurately reflect the information provided by the ILECs and the reporting
CLECs.

The report is divided into chapters that summarize key events and data that may have a short-
term or long-term effect on the Florida telecommunications market. Chapter II summarizes the
current state of the ILECs nationally, primarily as reported in their respective annual reports filed
with the Securities and Exchange Commission. Chapter II also summarizes merger activity in
2018 affecting Florida-certificated carriers. Chapter III presents data regarding wireline access
lines in Florida, including access line trends, residential/business access line mix, and market
share. Chapter IV discusses the continued development of the wireline market’s principle forms
of intermodal competition: wireless, Voice Internet Protocol (VoIP) and broadband. Chapter V
primarily uses data outlined in the other chapters to answer the four statutory questions
delineated above. Chapter VI provides a summary of state activities affecting local
telecommunications competition in 2018 including intercarrier matters, Lifeline, and
Telecommunications Relay Service. Chapter VII details some of the major federal activities that
may affect the Florida market.

3
Chapter II. Wireline Market Overview
One tool to gauge whether the Florida market is isolated or a part of a national trend is to look at
companies’ annual federal filings. National trends are often reflected in the companies’
respective annual reports filed with the Securities and Exchange Commission. There are 10
ILECs providing wireline services in Florida, the largest of which are AT&T, CenturyLink, and
Frontier.1 These companies’ annual reports showed that, like in Florida, they continue to face
access line losses nationally as customers disconnect traditional landline services and migrate to
wireless and VoIP services.

Telecommunications carriers seeking to transfer assets or corporate control in mergers and

acquisitions must first receive approval from the FCC, which examines the public interest impact
of proposed mergers or acquisitions. In 2018, there were 70 telecommunications mergers and
acquisitions nationally. Recent transactions of interest to Florida are described below.

A. Incumbent Carriers
AT&T reported losses of approximately 807,000 switched access lines nationwide (16.7 percent)
in 2018. In Florida, AT&T’s total switched access lines declined by nearly 131,000 (15.6
percent), with residential access lines decreasing by over 65,000 lines (19.8 percent) and
business lines by over 65,000 lines (12.8 percent). In 2018, AT&T reported a decrease in
operating revenues in their communications segment of approximately $5.8 billion nationwide, a
decline of 3.8 percent. After the acquisition of Time Warner, overall revenues increased 6.4
percent, from $160.5 billion in 2017, to $170.8 billion in 2018. AT&T reported over $21.2
billion in capital expenditures in 2018.2

CenturyLink “no longer report[s] or discuss[es] access lines as a key operating metric” and
omitted this information from the company’s Annual Report.3 In Florida, CenturyLink’s total
switched access lines declined by over 163,000 (26.0 percent), with residential access lines
decreasing over 121,000 (30.2 percent), and business access lines decreasing over 42,000 (18.7
percent). In 2018, CenturyLink reported an increase in operating revenues of approximately
$5.78 billion nationwide, a gain of 24 percent.4 CenturyLink’s capital expenditures for 2018
approached $3.2 billion, and the company estimates capital expenditures for 2019 will be
between $3.5 billion to $3.8 billion.5

Frontier experienced an eight percent loss in access lines nationwide compared to 2017, ending
2018 with approximately 4.1 million subscribers.6 In Florida, Frontier’s total switched access

1
Responses to Local Competition Data Request 2019.
2
AT&T Inc., Form 10-K, December 31, 2018, , [Link]
[Link]?Type=page&FilingId=13241251-431955-1012380&CIK=0000732717&Index=90000, Exhibit 13, p. 1,
accessed May 3, 2019; Responses to Local Competition Data Request 2019.
3
CenturyLink Form 10-K, December 31, 2018,
[Link] p. 53, accessed May 6, 2019.
4
Ibid, p. 51.
5
Ibid. p. 74, 88.
6
Frontier Communications, Form 10-K, December 31, 2018,
[Link]
[Link]#Managements_Discussion_And_Analysis, p. 31, accessed May 6, 2019.

5
lines declined by around 87,000 (28.3 percent), with residential access lines decreasing nearly
25,000 (24.1 percent) and business lines by nearly 62,000 (30.5 percent). In 2018, Frontier
reported a decrease in revenue of over $500 million nationwide, a loss of six percent.7 In 2018,
Frontier’s capital expenditures approached $1.2 billion.8

The seven rural Florida ILECs experienced a more modest contraction in the number of switched
access lines in their respective wireline service areas. In 2018, rural carriers in Florida saw their
total access lines decline by approximately 5,000 (4.4 percent), while residential lines decreased
by 1,200 (1.6 percent) and business lines decreased by nearly 3,800 (10.4 percent).9

Windstream is the largest of the rural ILECs and operates in northeast Florida. Nationally,
Windstream has approximately 1.4 million residential and small business customers,
representing a decline of nearly 31,000 (2.3 percent) from the previous year.10 In Florida,
Windstream experienced a slight increase in switched access lines of 477 (0.8 percent),
consisting of a 2,278 increase (4.7 percent) in residential lines and a loss of 1,801 (13.2 percent)
business lines.11 According to Windstream’s annual report, the company incurred $820.2 million
in capital expenditures in 2018.12

B. Mergers/Acquisitions
1. Windstream Services, LLC/MassComm, Inc., d/b/a Mass
Communications
In December 2017, Windstream Services, LLC (Windstream) announced a merger with
MassComm, Inc., d/b/a Mass Communications (MassComm). This transaction would be for cash
totaling $37.5 million. Windstream is an ILEC, while MassComm is a CLEC; both companies
operate in the state of Florida.

MassComm concentrated its marketing to small and medium-sized organizations ranging from
education to finance. The acquisition closed on March 27, 2018.13

7
Ibid, p.46.
8
Ibid.
9
Responses to Local Competition Data Request for 2019.
10
Windstream, 10-K, December 31, 2018, [Link]
[Link], Table. F-17, accessed May 6, 2019.
11
Responses to Local Competition Data Request 2019.
12
Windstream, 2018 10-K, p. 30.
13
“Windstream acquires MASS Communications,” GlobeNewswire, released March 27, 2018,
[Link]
[Link], accessed April 15, 2019.

6
 2. Broadsmart Florida, Inc./Nexxis Inc.
The shareholders of Broadsmart Florida Inc. (Broadsmart) and Nexxis Inc. (Nexxis) came to an
agreement on October 19, 2017, for the acquisition of controlling ownership in Broadsmart. 14
On March 20, 2018, Broadsmart announced that its acquisition by Nexxis had been completed.
Broadsmart operates as a CLEC in the state of Florida. Nexxis provides U.S. based VoIP
services.15

3. AT&T/Time Warner
On October 22, 2016, AT&T Inc. announced that it intended to acquire Time Warner Inc. The
new company would have a total equity value of $85.4 billion and a total transaction value of
$108.7 billion. On November 20, 2017, the Department of Justice sued to block the merger on
the grounds that AT&T could use control of Time Warner content to stifle innovation and drive
up prices without market competition. AT&T argued that this form of merger was a vertical
merger, thus it did not impair market competition. District Judge Richard Leon of the District
Court for the District of Columbia approved the merger on June 12, 2018.16, 17, 18 The U.S. Court
of Appeals for the D.C. Circuit upheld the decision on February 25, 2019. The Department of
Justice did not appeal the decision further.

14
“Broadsmart Florida, Inc. (TX587) and Nexxis Inc. Notice of Transaction That Will Result in a Change to the
Ownership of an Authorized Telecommunications Provider,” Florida Public Service Commission library, released
April 18, 2018. [Link] accessed April 15,
2019.
15
“Domestic Section 214 Application Filed for the Transfer of Control of Broadsmart Florida, Inc. to Nexxis Inc.”
Federal Communications Commission Public Notice, released March 20, 2018,
[Link] accessed April 15, 2019.
16
AT&T Press Release, “AT&T to Acquire Time Warner,” released October 22, 2016,
[Link] accessed May 1, 2018.
17
The Hill, “Closing arguments made in AT&T-Time Warner merger trial,” published April 30, 2018,
[Link] accessed
May 1, 2018.
18
Telecompetitior, “AT&T Time Warner Approval is Without Conditions,” published June 12, 2018,
[Link] accessed June 20, 2018.

7
Chapter III. Status of Wireline Competition in Florida
For the past decade, the technologies used to deliver voice telephony have continued to evolve.
Analog circuits using traditional Time Division Multiplexing (TDM) and copper wires are being
replaced by wireless cell-based transmission and VoIP, which is provided via a digital broadband
connection, either wireless or wired.

Wireless, VoIP, and broadband are all exempt from FPSC jurisdiction. The FPSC is therefore
limited in what data it can collect regarding these technologies. Trends in these technologies are
summarized in Chapter IV.

TDM-based wireline service is still used throughout the country and Florida, and is the primary
subject of this report. Also, the telecommunications network as a whole utilizes many of the
traditional wireline facilities for interoffice and long distance transport.

This chapter discusses the number, market mix, and market share of residential and business
wirelines. Knowledge of the number of wirelines and the trends for market participants is
essential to understanding the state of the market, as well as in helping to inform policy
decisions.

A. Wireline Trends in Florida

Total combined traditional wirelines for ILECs and CLECs declined 23.2 percent, from
approximately 2.5 million in December 2017 to 1.9 million as of December 2018. From 2014
through 2018, the total number of traditional wirelines declined by around 1.9 million, dropping
by half.

Residential access lines, which totaled approximately 703,000 as of December 2018, fell by 23.6
percent from the previous year. Florida CLECs, which represent relatively few residential access
lines, reported a decrease of greater than 4,600 lines, or 55.7 percent in 2018. A majority of this
decline was due to the largest remaining residential CLEC provider exiting the market.

The number of wireline business connections declined as well. The total business access lines
reported for ILECs and CLECs were approximately 1.2 million, a decrease of around 23 percent
from 2017 to 2018. The decline consisted of approximately 173,000 ILEC business access lines
and nearly 186,000 CLEC business access lines. Of the incumbent carriers, AT&T experienced
the largest decline in business access lines with losses of nearly 66,000, while CenturyLink and
Frontier lost around 42,000 and 62,000 business lines, respectively. Rural ILECs had a smaller
loss at around 3,700 lines. These losses equate to an 11.5 percent decline in the combined line
total of the three largest Florida ILECs, versus a 10.4 percent decline in the combined line total
of the rural ILECs.

9
Figure 3-1 illustrates the overall trend in Florida for both residential and business lines (not
including VoIP connections). Based on current data, declines in residential lines continued at
nearly the same rate in 2018, while the decline in business lines accelerated significantly.

Figure 3-1
Florida Wireline Access Line Trends

Source: Responses to FPSC data requests (2015-2019)

B. Wireline Market Mix, Market Share, and Access Lines

1. Market Mix
The composition of customers served by ILECs and CLECs has shifted over time. In general,
both ILECs and CLECs have seen an increased concentration of traditional wireline business
customers as residential customers migrate to other options. The business-to-residential customer
mix for ILECs was about 30 percent business and 70 percent residential in 2004. By 2017, the
mix for ILECs had shifted so much that the percentage of traditional business wirelines exceeded
the percentage of traditional residential wirelines. The trend continued in 2018, with ILECs
having nearly 54 percent business lines and 47 percent residential lines.

The shift in mix has been even more pronounced in the CLEC market. In 2004, the business to
residential customer mix for CLECs was about 63 percent business and 37 percent residential.
By 2018, the CLEC business-to-residential customer mix had shifted to over 99 percent business
lines and less than one percent residential.

10
 2. Market Share
CLECs have traditionally focused on business customers. Figure 3-2 illustrates FPSC data on
CLEC market share by business and residential customer classes. The inverse of this percentage
would be market share for the ILECs in Florida. According to FPSC data, the CLEC residential
market share decreased from 0.9 percent in 2017 to 0.5 percent in 2018, while the CLEC
business market share decreased from 37.7 percent in 2017 to 33.7 percent in 2018.

Figure 3-2
Florida Residential & Business CLEC Market Share

Source: Responses to FPSC data requests (2014-2019)

The results from FPSC data in Figure 3-2 are similar to data provided by the FCC that reported
less than one percent CLEC residential market share and slightly over 33 percent business
market share in June 2017.19

19
FCC, “Voice Telephone Services Report as of June 30, 2017,” released November 2018,
[Link] State-Level Subscriptions (Excel), accessed May 17, 2019.

11
 3. Access Lines
Local exchange companies were serving approximately 1.9 million lines in Florida as of
December 31, 2018, a decline of 23.2 percent from 2017, as illustrated in Table 3-1. In 2018,
ILEC residential access lines decreased by 23.3 percent, while ILEC business lines decreased by
17.8 percent. Among the ILECs, CenturyLink had the largest decline in residential access lines at
30.2 percent, while Frontier experienced the largest loss of business access lines at 30.5 percent.
The CLECs experienced a relatively small decline in residential access lines. Given their small
market presence, this yielded the largest percentage loss at 55.7 percent. CLEC business access
lines decreased by 30.8 percent.

Table 3-1
Florida Wireline Access Line Comparison
ILECs CLECs Both
2015 Residential 1,381,124 27,813 1,408,937
Business 1,205,777 652,214 1,857,991
Total 2,586,901 680,027 3,266,928
2016 Residential 1,187,615 14,415 1,202,030
Business 1,104,197 681,398 1,785,595
Total 2,291,812 695,813 2,987,625
2017 Residential 911,814 8,341 920,155
Business 976,768 591,089 1,567,857
Total 1,888,582 599,430 2,488,012
2018 Residential 698,975 3,695 702,670
Business 803,240 409,122 1,212,362
Total 1,502,215 412,817 1,915,032
Change Residential -23.3% -55.7% -23.6%
2017- Business -17.8% -30.8% -22.7%
2018
Total -20.5% -31.1% -23.0%
Source: Responses to FPSC data requests (2016-2019)

12
C. Competitive Market Trends
1. Residential Wireline Access Line Trends
Figure 3-3 displays the wireline residential access line trends separately for AT&T, Frontier,
CenturyLink, aggregate rural ILECs, and aggregate CLECs. Over the past five years, AT&T and
Frontier have both averaged losses of around 22 percent per year, while CenturyLink has
experienced an average of about 14 percent decline per year in residential access lines. During
that period, CLEC residential lines declined by an annual average of 32 percent, while rural
ILEC access lines declined by an average of four percent.

Figure 3-3
Florida Residential Wireline Trends by ILECs and CLECs

Source: Responses to FPSC data requests (2015-2019)

In 2018, Frontier’s rate of residential line losses stayed nearly the same as the previous year.
CenturyLink experienced a loss of 25.4 percent in 2017 and a loss of 30.2 percent in 2018. The
CLECs had line losses of 42.9 percent in 2017 and 55.7 percent in 2018. AT&T experienced line
losses of 22.4 percent in 2017 and 19.8 percent in 2018, while the rural ILECs reported access
line losses of 10.6 percent in 2017 and 1.6 percent in 2018. AT&T and the rural ILECs
experienced a slowing rate of residential line losses, while Frontier’s rate of line loss remained
unchanged. CenturyLink and the CLECs rate of line losses accelerated.

13
 2. Business Wireline Access Line Trends
Figure 3-4 displays the wireline business access line levels separately for AT&T, Frontier,
CenturyLink, aggregate rural ILECs, and aggregate CLECs. Over the past five years, AT&T has
experienced an average decline of about 13 percent per year, while Frontier and CenturyLink
have experienced average annual declines of around 10 percent, respectively. The average annual
decline in CLEC business access lines over the past five years is 17 percent, while rural ILEC
business access lines declined by four percent annually over the same period.

Figure 3-4
Florida Business Wireline Trends by ILECs and CLECs

Source: Responses to FPSC data requests (2015-2019)

AT&T experienced business wireline losses of 13.7 percent in 2017 and 12.8 percent in 2018.
Frontier lost 10.6 percent of its business wirelines in 2017 and 30.5 percent in 2018. CenturyLink
lost 9.2 percent of its business lines in 2017 and 18.7 percent in 2018. The rural ILECs reported
line losses of 2.7 percent in 2017 and 10.4 percent in 2018 while the CLECs reported business
wireline declines of 13.2 percent in 2017 and 30.8 percent in 2018. AT&T’s rate of business line
losses slowed, while all others accelerated.

14
Chapter IV. Wireless, VoIP, and Broadband
Wireless, VoIP, and broadband are the principle communication technologies consumers are
choosing today. As previously discussed, they are replacing traditional wireline service. This
chapter summarizes current trends in these technologies.

A. Wireless
Wireless service is delivered to consumers via the now-ubiquitous cell telephone and/or
smartphone. Dr. Anna-Maria Kovacs, Visiting Senior Policy Scholar at the Georgetown Center
for Business and Public Policy, notes that despite a penetration rate of over 120 percent, the
nation still has an insatiable appetite for wireless devices and usage.20

According to the FCC’s most recent data, the four largest facilities-based wireless service
providers in the United States – AT&T, Sprint, T-Mobile, and Verizon Wireless – accounted for
over 400 million connections by year-end 2017.21 Fierce Wireless reports that wireless
subscriber connections have grown from 417.5 million in 2017 to an estimated 441.1 million by
the end of the third quarter 2018, representing a 5.6 percent increase over third quarter 2017.22,23

1. Wireless Substitution
As wireless devices saturate the market, consumers are choosing to replace their traditional wired
service with only cell service. This is called “wireless substitution,” and it has a direct effect on
the provisioning of traditional wireline service. Though nearly 36 percent of U.S. households
subscribe to both wireline and wireless service, this segment continues to decline. Wireless-only
households in the United States rose from 52.5 percent in June 2017 to 54.9 percent one year
later. Substitution continued to increase while the number of households with both wireline and
wireless service decreased 1.5 percent.24 The number of wireline-only households decreased 0.5
percentage points to 5.4 percent.25 Figure 4-1 shows national trends in the percentage of
households with wireless only, wireline only, and dual household usage.

20
Anna-Maria Kovacs, Ph.D., CFA, “Competition in the U.S. Wireless Services Market”, August 2018,
[Link]
services-market, accessed May 31, 2019.
21
FCC, 2018 Communications Marketplace Report, released December 26, 2018,
[Link] accessed May 7, 2019.
22
Fierce Wireless, "How Verizon, AT&T, T-Mobile, Sprint and more stacked up in Q3 2018: The top 7 carriers,"
November 6, 2018, [Link]
q3-2018-top-7-carriers, accessed April 30, 2019.
23
Fierce Wireless, “How Verizon, AT&T, T-Mobile, Sprint and more stacked up in Q3 2017: The top 7 carriers”,
November 10, 2017, [Link]
up-q3-2017-top-7-carriers, accessed May 21, 2019.
24
Blumberg SJ, Luke JV. Wireless substitution: Early release of estimates from the National Health Interview
Survey, January – June 2018. National Center for Health Statistics, released December 2018,
[Link] accessed April 29, 2019.
25
Ibid.

15
 Figure 4-1
U.S. Wireless Substitution Rates

Source: CDC/NCHS, National Health Interview Survey

2. Florida Trends
According to the most recent data available from the FCC, Florida’s wireless subscriptions were
estimated to be 20,754,000 as of June 2017. This is a modest decrease of 0.4 percent from the
previous year.26

Florida’s rate of wireless substitution continues to closely track national trends.27 Florida’s
wireless-only households increased to 57.5 percent in 2017. This percentage is slightly higher
than the national average of 52.5 percent for the same period.28 While state-level 2018 data for
Florida will not be available from the FCC until 2020, Florida’s wireless substitution rate is
expected to maintain a level similar to the national average.

26
FCC, Voice Telephone Services Report, State-Level Subscriptions, released November 2018,
[Link] accessed May 31, 2019.
27
National Center for Health Statistics, Centers for Disease Control and Prevention, “Wireless Substitution State-
Level Estimates from the National Health Interview Survey,” released March 2019, [Link]
nchs/nhis/new_nhis.htm, accessed May 8, 2019.
28
Blumberg SJ, Luke JV. Wireless substitution: Early release of estimates from the National Health Interview
Survey, January – June 2018. National Center for Health Statistics, released December 2018,
[Link] accessed April 29, 2019.

16
 3. Networks and Usage
Among wireless providers, Verizon continues to lead the market with 34.9 percent of the
wireless market. AT&T, T-Mobile, and Sprint follow with 34.1 percent, 17.5 percent, and 12.1
percent, respectively.29 Current wireless market share is shown in Figure 4-2.

Figure 4-2
U.S. Wireless Market Share as of 3rd Quarter 2018

Source: Fierce Wireless

4. New Technology – 5G
Wireless technology continues to outpace innovations for wireline services. As discussed in
previous reports, this is not an indication the switched access network is no longer necessary.
Wireline facilities are the backbone of the new generation of wireless tools available to
consumers. The switched access network is instrumentally critical to wireless technology. End
users use their devices wirelessly, but once their signal reaches a cell tower/receiver, the voice
and data signals are transported primarily through landline facilities to the termination point.

29
Fierce Wireless, "How Verizon, AT&T, T-Mobile, Sprint and more stacked up in Q3 2018: The top 7 carriers,"
November 6, 2018, [Link]
q3-2018-top-7-carriers, Accessed April 30, 2019.

17
Thus, the wireline network will be vital in the advancement of the fifth generation wireless (5G)
services.

The FCC’s strategy to promote mobile broadband 5G technology includes three key components:
(1) pushing more spectrum into the marketplace; (2) updating infrastructure policy; and (3)
modernizing regulations. The FCC has held several spectrum auctions, and it has acted to
simplify permitting and siting rules to ease infrastructure deployment.30

Verizon expects to launch mobile 5G services in 2019 as compatible devices become available.31
In addition to announcing it is launching 5G services in parts of at least 30 cities this year,
Verizon has announced it will offer the new Samsung Galaxy S10 5G to new and existing
customers.32

Sprint is continuing the deployment of its Next-Gen Network plan and indicates its total 5G
footprint covers more than 1,000 square miles.33 According to Sprint, its spectrum holdings will
allow it to introduce 5G in parallel with 4G service over the same 2.5 GHz spectrum band
without disrupting the capacity needed to support 4G users.34

AT&T believes increased speeds and network efficiency foreseen with 5G technology will
enable the deployment of internet-connected devices and faster delivery of data services. AT&T
continues to invest in its wireless network as it looks to provide future service offerings and
participate in technologies such as 5G and millimeter-wave bands.35

If its merger with Sprint is approved, T-Mobile expects to quickly launch a nationwide 5G
network, accelerate innovation, and increase competition in the U.S. wireless, video and
broadband industries.36 The company is continuing its network expansion to increase current
capabilities as it prepares for the nationwide rollout of 5G services.37

30
FCC, “The FCC's 5G FAST Plan,” updated April 12, 2019, [Link] accessed April 19, 2019.
31
Verizon Communications Inc., Form 10-K for the Period Ending 12/31/2018, [Link]
[Link]/EFX_dll/[Link]?FetchFilingHTML1?SessionID=vcRyUScz6oRsn-J&ID=13233286, accessed
May 8, 2019.
32
Verizon expands 5G to 20 more cities; pre-order open for Samsung S10 5G phones, FierceWireless, Kendra
Chamberlain, April 25, 2019, available at [Link]
pre-order-open-for-samsung-s10-5g-phones, last accessed May 9, 2019.
33
Sprint News Release, “Sprint Reports Fiscal Year 2018 Fourth Quarter And Full Year Results” released May 7,
2019, [Link] P. 2,
last accessed May 22, 2019.
34
Sprint Corporation, Form 10-Q for the quarterly period ended December 31, 2018, released January 31, 2019,
[Link] accessed May
8, 2019.
35
AT&T, Inc. Form 10-K, filed February 20, 2019, available at
[Link]
[Link]?FilingId=13241251&Cik=0000732717&PaperOnly=0&HasOriginal=1, accessed May 8, 2019.
36
T-Mobile US, Inc. Form 10-K, Filed February 7, 2019, available at [Link]
0001283699/[Link], accessed May 8, 2019.
37
Ibid, p.6.

18
B. Voice over Internet Protocol
VoIP service is voice telephony utilizing digital computer protocols used by the Internet. VoIP
requires a broadband Internet connection. It can be provided via separate interconnected digital
channels and privately managed, or “over the top” of the existing Internet traffic.

Interconnected VoIP providers include cable companies, ILECs, and CLECs. Customers usually
subscribe to broadband service and lease/purchase telephone equipment from the VoIP provider.
Calls are sent through the Internet connection, but the transmission information “packets” are
privately managed and prioritized to increase call reliability and quality.

Over-the-top companies include Magic Jack, Vonage and Skype. These types of providers
require the customer to acquire a broadband Internet connection from any provider. Some
providers use small converters that plug in-line between the consumer’s existing phone and a
standard telephone jack (e.g. Magic Jack), while others may require a computer to complete the
call (e.g. Skype). Calls are then made over the existing Internet connection.

The FCC’s latest data surveyed from 2013 through 2017, shown in figure 4-3, shows a continued
growth rate for interconnected VoIP of eight percent per year, while subscribership to traditional
wireline services decreased by 11 percent.38

Figure 4-3
U.S. Retail Voice Telephone Subscriptions
(in Millions)

Source: FCC Voice Telephone Services Report June 2017

38
FCC, Voice Telephone Services: Status as of June 30, 2017, released November 2018, [Link]
telephone-services-report, accessed April 19, 2019.

19
As of June 30, 2017, the FCC reported that there were approximately 64.4 million interconnected
VoIP subscribers in the U.S. This total includes 7.75 million over-the-top VoIP subscribers.
Residential VoIP subscribers accounted for over 40.1 million of the total subscribers nationwide
while business subscribers accounted for approximately 24.3 million.39 Table 4-1 shows U.S.
interconnected VoIP subscribership by customer type as of June 2017.40 Data collected by the
FPSC also shows nearly 2.9 million interconnected VoIP residential subscribers in Florida as of
December 2017.41

Table 4-1
U.S. Interconnected VoIP Subscribership by Customer Type
(In Thousands)
Total Over-the-Top All Other VoIP Total
ILEC 138 13,246 13,385
Non-ILEC 7,614 43,475 51,088
Total 7,753 56,721 64,473
Residential
ILEC 45 9,961 10,006
Non-ILEC 2,193 27,925 30,119
Total 2,238 37,886 40,125
Business
ILEC 93 3,285 3,378
Non-ILEC 5,422 15,550 20,969
Total 5,515 18,836 24,347
Source: FCC Voice Telephone Services Report June 201742

1. National Market Analysis

The FCC reported that in June 2017, there were “455 million retail voice telephone service
connections” across the United States.43 Of these retail connections, 119 million are provided
over end-user switched access lines and interconnected VoIP subscriptions. Over half receive
access via interconnected VoIP services.44

a. Facilities-Based VoIP Providers

In the facilities-based residential interconnected VoIP market, non-ILEC companies accounted
for nearly 30.1 million VoIP subscribers as of June 2017, compared to 10 million ILEC VoIP
subscribers.45 Comcast, the country’s largest cable provider, had an estimated 10.2 million VoIP

39
FCC, Voice Telephone Services: Status as of June 30, 2017, released November 2018, [Link]
telephone-services-report, Ibid, Figure 3, accessed April 19, 2019.
40
Ibid, Figure 3.
41
Responses to the FPSC Local Competition Data Request 2018.
42
FCC, Voice Telephone Services: Status as of June 30, 2017, released November 2018, [Link]
telephone-services-report, Figure 3, accessed April 19, 2019. Note: totals in the table may not sum due to rounding.
43
Ibid, Page 2.
44
Ibid, Table 1.
45
Ibid.

20
subscribers at year-end 2018.46 This represents a decrease of approximately 12 percent from
year-end 2017. The second largest cable provider, Charter Communications, reported
approximately 11.2 million VoIP subscribers at year-end 2018, a decrease of less than one
percent from 2017.47

AT&T reported approximately 4.6 million U-verse Consumer VoIP subscribers at year-end
2018.48 This represents a 12.3 percent decrease from the previous year.

b. Over-the-Top VoIP Providers

Routing calls over a customer’s existing Internet connection allows over-the-top providers to
have a much lower cost of service than wireline and wireless competition. According to the
FCC’s latest report, there were 7.8 million over-the-top interconnected VoIP subscribers in the
U.S. as of June 2017. This total included nearly 2.2 million residential subscribers and
approximately 5.5 million business subscribers nationwide. The FCC’s figures show a reduction
of approximately 19 percent in residential subscribers, and nearly a 14.6 percent increase in
business subscribers in 2017 over the same period in 2016.59

2. Florida Market
The FPSC does not have jurisdiction over VoIP services. As a result, the ability to determine an
accurate estimate of the total number of VoIP subscribers in Florida is limited. However, several
ILECs and CLECs in Florida voluntarily responded to the Commission’s data request and
provided information on the number of residential VoIP subscribers. The Florida Internet and
Television Association reported approximately two million residential VoIP subscribers for its
five largest member providers, but it has not historically provided business line data. The FCC
reported non-ILECs in Florida served approximately 1.3 million business subscribers by June
2016, and almost 1.5 million by June 2017.49

As of December 2018, there are an estimated 2.7 million residential interconnected VoIP
subscribers in Florida.50 Figure 4-4 shows the number of residential interconnected VoIP
subscribers in Florida by provider type. Data for 2018 indicates a modest decrease in the
residential VoIP market.

46
Comcast Corporation, Comcast 2018 Annual Report on Form 10-K, released January 01, 2019,
[Link]
edgar?action=getcompany&CIK=0001166691&owner=exclude&count=40&hidefilings=0, accessed April 22, 2019.
47
“Charter Announces Fourth Quarter and Full Year 2017 Results,” Charter Communications, Inc. News Release,
released February 2, 2018, [Link]
year-2017-results/, accessed May 1, 2018.
48
AT&T Inc. 2018 Annual Report 10-K, [Link]
[Link]?comingfrom=secshow, accessed April 22, 2019.
FCC, Voice Telephone Services: Status as of December 31, 2016, released February 2018,
[Link] accessed May 2, 2019.
49
FCC Voice Telephone Services Report, State-Level Subscriptions, Supplemental Table 1, Florida, released
February 2018, [Link] accessed May 1, 2019.
50
Responses to FPSC data request 2019.

21
 Figure 4-4
Florida Residential Interconnected VoIP Subscribers

Source: Responses to FPSC data requests (2015-2019)

While the Commission receives business VoIP data from telecommunications carriers,
corresponding data was not made available from most cable companies as requested. Data is
available from the FCC that provides VoIP business lines through June 2017.51 Figure 4-5
identifies the number of interconnected VoIP business subscribers by ILEC and non-ILEC
carriers. Non-ILEC carriers include cable companies. From June 2016 to June 2017, non-ILECs
experienced a nearly 14.5 percent increase in interconnected business VoIP subscribers. By
comparison, ILECs experienced an increase of more than 22.4 percent in interconnected business
VoIP subscribers for the same time period. Based on the general trend of such interconnected
business VoIP lines and the reduction in traditional switched access lines, it is likely that there
will be further growth in this market segment.

51
Ibid.

22
 Figure 4-5
Florida Business Interconnected VoIP Subscribers

Source: FCC, Voice Telephone Services Report (*through June 30, previous years through December 31)

C. Broadband
The latest report published by the FCC (2017) indicated that 82 percent of households
nationwide had fixed broadband connections with download speeds of at least 200 kilobits per
second (kbps), 68 percent had a speed of at least 10 megabits per second (Mbps), 54 percent had
at least 25 Mbps, and 18 percent had at least 100 Mbps.52 These levels were slightly higher than
the previous year.

Florida Broadband Trends

The FCC reported that 93 percent of Florida households had fixed broadband connections of at
least 200 kbps and 20 percent had connection speeds of at least 100 Mbps by June 2017. Cable
modem services accounted for roughly two-thirds of non-mobile broadband connections in
Florida with download speeds greater than 200 kbps. Mobile broadband connections accounted
for almost 72 percent of all broadband connections in Florida with download speeds greater than
200 kbps. 53

According to the Pew Research Center, between 2015 and 2016 the number of Americans who
had a high-speed Internet connection in their homes increased from 66 percent to 73 percent.54
However, by the end of December 2017, the number of Americans reporting broadband in the

52
FCC, Internet Access Services: Status as of June 30, 2017, released November 2018,
[Link] Figure 32, accessed April 16, 2019.
53
Ibid, Figure 32.
54
Pew Research Center, Internet/Broadband Fact Sheet, February 5, 2018, [Link]
sheet/internet-broadband/, accessed May 3, 2019.

23
home dropped to 65 percent.55 This represents an eight percent reduction from 2016. This shift
may be the result of increased smartphone and tablet use at home.56 Figure 4-6 shows the
percentage of U.S. households with in-home broadband connections between 2000 and 2017.

Figure 4-6
Percentage of Broadband U.S. Households

Source: Pew Research Center

55
“One-in-five Americans own a smartphone, but do not have traditional broadband service,” Pew Research Center
Internet & Technology, April 27, 2018, [Link]
say-the-internet-has-been-good-for-society/pi_2018-04-30_internet-good-bad_0-02/, accessed June 11, 2019.
56
Demographics of Mobile Device Ownership and Adoption in the United States, Pew Research Center, February 5,
2018, [Link] accessed April 3, 2019.

24
The Pew survey showed that nine out of ten people younger than 50 years old go online through
a smart phone that they own.57 However, Pew concluded that, while the number continues to
decline, there are still those who do not use the Internet at all. Figure 4-7 reflects Pew’s survey
results regarding use of the Internet from 2000-2017.

Figure 4-7
Percentage of U.S. Non-Internet Users

Source: Pew Research Center

57
Pew Research Center, “Internet, social media use and device ownership in U.S. have plateaued after years of
growth,” September 28, 2018, [Link]
device-ownership-in-u-s-have-plateaued-after-years-of-growth/, accessed June 6, 2019.

25
Chapter V. Competitive Market Analysis & Statutory Issues
This chapter discusses the four issues required by Section 364.386, F.S. It relies primarily on
information reported in the previous chapters of this report.

A. Statutory Issue - Competitive Providers

The ability of competitive providers to make functionally equivalent local exchange
services available to both residential and business customers at competitive rates, terms,
and conditions.

In 2018, the wireline residential and business markets in Florida declined for both ILECs and
CLECs. The total percentage decline was 23.2 percent. CLEC lines decreased 31.9 percent
between December 2017 and December 2018, while ILEC lines decreased by 20.5 percent
during the same period. The higher rate of line loss resulted in a decrease in the total CLEC
wireline market share in Florida from 24.1 percent in 2017 to 21.4 percent in 2018.

Residential VoIP subscribership accounted for 2.7 million connections by December 2018,
representing a five percent decrease in lines.58 Comparable 2018 end of year data was not
available for wireless and business VoIP segments of the market. However, recently released
data for 2017 from the FCC indicated that the number of business VoIP lines grew 15.3 percent
from June 2016 through June 2017.59

Updated wireless subscriber data for Florida in 2018 will not become available until early in
2020. However, data from previous years shows Florida continues to follow national trends and
continues to increase.60

Figure 5-1 uses the FCC’s data regarding the number of voice subscribers by technology for
2017 to illustrate the competitive nature of the industry nationwide. While the data does not
reflect the market for the reporting period of this report, it does provide insight regarding how
carriers are meeting the market demand for service.

58
Responses to FPSC data requests 2019.
59
FCC, “Voice Telephone Services as of June 30, 2017,” State-Level Subscriptions spreadsheets, released
November 2018, [Link] accessed May 1, 2019.
60
National Center for Health Statistics, Centers for Disease Control and Prevention, “Wireless Substitution State-
Level Estimates from then National Health Interview Survey,” released March 2019, [Link]
nchs/nhis/new_nhis.htm, accessed May 8, 2019.

27
This data suggests that CLECs, VoIP, and wireless carriers are able to provide functionally
equivalent services to residential and business customers at rates, terms and conditions
acceptable to consumers. The number of CLECs offering a variety of services also indicates the
availability of functionally equivalent services at comparable terms. Other services offered by
CLECs that reported providing local service include:

• Bundled services (41 CLECs)

• VoIP (69 CLECs)
• Broadband Internet access (55 CLECs)
• Video service (10 CLECs)

Figure 5-1
2017 National Voice Market

Source: FCC, Voice Telephone Services Report, Nationwide and State-Level Data as of June 2017

28
In response to FPSC data request questions, the majority of CLECs reported no barriers to
competition or elected not to respond. The companies that did report competitive concerns
mentioned issues with ILEC pricing practices, responsiveness to trouble reports, and the lack of a
formal plan for IP transition.61 We note that the CLECs have not filed any petitions with the
Commission to address any of these issues. Some of these issues may be addressed by the FCC.

Conclusion: Subscriptions to traditional wireline, VoIP, and wireless services decreased in 2018.
Traditional wireline and VoIP services decreased faster than wireless services reflecting the
national trend of consumers opting to forgo maintaining wirelines of any kind in favor of
maintaining only wireless devices, as well as growing saturation in the wireless market and
number portability possibly causing inaccuracies in subscription number counts.62 Given that
telephone service is a necessity, the substantial difference in rates of decreases in reported
subscriptions between traditional wireline and VoIP services and wireless services, reflects the
opportunities and choices of consumers to seek out services from providers other than traditional
ILECs. Many CLECs reported offering a variety of services and packages comparable to those
offered by ILECs. All of these factors contribute to the conclusion that competitive providers are
able to offer functionally equivalent services to both business and residential customers.

B. Statutory Issue – Consumers

The ability of consumers to obtain functionally equivalent services at comparable rates,
terms, and conditions.

Functionally equivalent services are available to consumers via wireline telephony, wireless
telephony, or VoIP. The primary focus of this report is the provision of wireline
telecommunications by ILECs and CLECs, which submit responses to the FPSC’s annual data
request.

As of December 31, 2018, 111 CLECs provided data indicating that they provide local voice
service in Florida. This is an increase from the 2017 response, when 104 CLECs responded.

Competitive carriers can offer service through resale of ILEC or CLEC wholesale services, by
using their own facilities, by leasing portions of their networks from an ILEC, or a combination
of any of these methods. Figure 5-2 provides a historical view of CLEC market share in Florida
for the traditional wireline access line market. As of December 2018, 21.6 percent of total
traditional wireline access lines in Florida are provided by companies other than ILECs.

61
Responses to FPSC data requests 2019.
62
National Center for Health Statistics, Centers for Disease Control and Prevention, “Wireless Substitution State-
Level Estimates from then National Health Interview Survey,” released March 2019, [Link]
nchs/nhis/new_nhis.htm, accessed May 8, 2019.

29
 Figure 5-2
Florida CLEC Market Share

Source: Responses to FPSC data requests (2015-2019)

Traditional ILEC business lines decreased 18 percent in 2018, while business lines from
competitive carriers fell 30.8 percent. Business lines provided through VoIP are not reported to
the FPSC by providers, making accurate estimates of statewide business VoIP lines impossible.
ILEC and non-ILEC provided VoIP business lines are reported through FCC-issued monitoring
reports. However, the data reported through the FCC is usually one to two years old, limiting its
usefulness.

According to FCC data, ILEC VoIP business lines increased by 10.9 percent, while non-ILEC
VoIP business lines grew nearly 6.3 percent from June 2016 to June 2017.63 This suggests that
business customers have the ability to find reasonable pricing packages with CLECs and are
taking advantage of these options. These options include CLEC cable companies and, in some
cases, wireless providers.

ILEC residential lines decreased 23.3 percent in Florida in 2018. CLEC residential lines
decreased 55.7 percent, but as those lines only comprise less than one percent of the residential
market, the impact was insignificant. Nationally, wireless-only households continued to grow,
reaching 54.9 percent in the first half of 2018.64

As stated in Chapter IV of this report, there are nearly 2.7 million interconnected residential
VoIP subscribers in Florida.65 These and other factors demonstrate that customers are able to
find comparable services at reasonable prices through wireless, CLEC, and VoIP providers.

63
FCC, Voice Telephone Services: Status as of December 31, 2016, released February 2018,
[Link] accessed May 2, 2018.
64
Blumberg SJ, Luke JV. Wireless substitution: Early release of estimates from the National Health Interview
Survey, January – June 2018. National Center for Health Statistics, released December 2018,
[Link] accessed April 29, 2019.
65
Responses to FPSC data requests 2019.

30
Conclusion: Wireline access lines for both residential and business customers have maintained a
steady decline over the past several years (see Figure 3-1). This contrasts with the continued
growth in wireless-only households. Business wireline declines have been partially offset by
significant growth in business VoIP lines. Carriers are managing the shifts in market conditions
by bundling services and providing a variety of pricing plans in an attempt to meet consumer
demand and expectations. These factors indicate that consumers are able to acquire functionally
equivalent services at comparable rates, terms, and conditions.

C. Statutory Issue – Affordability & Service Quality

The overall impact of competition on the maintenance of reasonably affordable and
reliable high-quality telecommunications services.

According to the FCC, the average telephone service subscription rate in Florida was 92.7
percent in 2018. This is slightly lower than the national telephone service subscription rate of
96.1 percent.66 The rate in Florida has consistently been slightly less than the national rate. A
previous Commission report on this issue identified six possible factors related to telephone
penetration rate: immigration, age, income/poverty, Lifeline and Link-up, race/ethnicity, and
education.67

Telephone service subscribership rates tend to be higher for older consumers, higher income
consumers, higher Lifeline subscription rate areas, and more educated populations. Rates tend to
be lower for immigrants, areas with higher poverty rates, and more diverse populations. When
compared to the U.S., Florida has a greater percentage of immigrants and seniors and a more
diverse population. Florida also has lower average income and education levels. Florida usually
averages less Lifeline support per capita than the U.S. average.

Some of these factors have opposing effects, causing the magnitude of the difference between
the national and Florida telephone service subscription rates to fluctuate. Taken together, the net
result of these factors is that Florida telephone service subscription rates are consistently near but
slightly below the national average.

66
FCC, Staff Interview, April 15, 2019.
67
FPSC, “Telephone Subscribership Rates in Florida,” released 2014,
[Link]
accessed June 4, 2019.

31
 Figure 5-3
Telephone Service Subscription: Florida vs. Nation

Source: FCC Staff Interview

Conclusion: Based on the continued growth of interconnected VoIP and wireless-only

households and the ongoing decline of traditional wireline access lines, the network reliability of
non-ILEC providers appears to be sufficient. The telephone service subscription rate of 92.7
percent supports the conclusion that the vast majority of Florida residents are able to afford
telephone service. The number and variety of competitive choices among all types of service
providers suggest that competition is having a positive impact on the telecommunications market
in Florida.

D. Statutory Issue – Carrier Disputes

A listing and short description of any carrier disputes filed under Section 364.16, F.S.

Conclusion: There were no carrier disputes filed with the FPSC under Section 364.16, F.S., in
2018.

32
Chapter VI. State Activities
This chapter provides a summary of state activities affecting local telecommunications
competition in 2018. The state activities discussed in this chapter are important in helping to
gauge how well the market is functioning for Florida businesses and consumers.

A. Intercarrier Matters
1. Wholesale Performance Measurement Plans
Wholesale performance measurement plans provide a standard against which the Commission
can monitor performance over time to detect and correct any degradation in the quality of service
ILECs provide to CLECs. The Commission adopted performance measurements for AT&T in
August 2001 (revised in 2010), for CenturyLink in January 2003 (revised in 2013 and 2016), and
for Verizon in June 2003 (revised in 2007). Trending analysis is applied to monthly performance
measurement data provided by each ILEC. 68

AT&T is the only ILEC that is required to make payments to CLECs when certain performance
measures do not comply with established standards and benchmarks. AT&T’s approved
Performance Assessment Plan consists of 47 measurements; financial remedies are applied to 24
of these measures. In 2018, AT&T paid $555,029 in remedies to CLECs, which is an increase of
17.4 percent from 2017. The greatest cause of this increase was an incident with a trunk line in
February 2018, that led to a number of blocked and redialed calls resulting in a remedy of
$458,286.

On October 15, 2015, CenturyLink filed proposed revisions to its Performance Measurement
Plan as a result of a negotiated settlement with the Nevada Public Utilities Commission. The
revisions included revising reporting requirements from monthly to quarterly, eliminating several
performance measures from the plan, and amending two measures. The proposal was approved
for Florida by the Commission on February 15, 2016.69 CenturyLink reported no non-
compliances in 2018, equaling 2017’s results.

Frontier Communications completed its purchase of Verizon Florida’s wireline operations in

Florida in April 2016. In its role as a major ILEC, Frontier is responsible for a Performance
Measurement Plan, which includes 29 measures. In 2018, Frontier maintained an average
monthly compliance rate of 78.6 percent, ranging from 73.5 percent to 81.8 percent. This result
improved upon 2017’s average monthly compliance rate of 76.5 percent.

2. Other Matters
The Commission processed a number of other telecommunications-related items in 2018. The
Commission processed 46 service schedule and tariff filings, 60 interconnection agreements and

68
FPSC Dockets: No. 20000121A-TP (AT&T), No. 20000121B-TP (CenturyLink), and No. 20000121C-TP
(Frontier FL).
69
Docket No. 000121B-TP, Investigation into the establishment of operations support systems permanent
performance measures for incumbent local exchange telecommunications companies. (CenturyLink Florida Track),
Order No. PSC-16-0072-PAA-TP issued February 15, 2016, [Link]
2016/[Link], accessed May 9, 2019.

33
amendments, 11 carrier certifications, five certificate cancellations, and over 150 general
inquiries/informal complaints.

B. Lifeline
The FPSC allows consumers participating in the Supplemental Nutrition Assistance Program
(SNAP) or Medicaid to apply to the Lifeline program online. When an application is completed,
a Commission computer automatically makes a query to a Florida Department of Children and
Families (DCF) web services interface to confirm current participation in SNAP or Medicaid.
The real-time response verifies participation in at least one of the programs, but does not identify
the program. A positive response will generate an automatic email to the appropriate Lifeline
provider advising that an approved Lifeline application is available for retrieval on the FPSC
web site. A negative response will cause a letter to be sent to the applicant stating his/her
participation in SNAP or Medicaid could not be confirmed and offering the applicant assistance
with any questions. Based upon June 2018 SNAP participants, Lifeline eligible households
decreased by 2 percent while the participation rate increased by 1.4 percent from the prior year.70
Table 6-1 shows the Lifeline eligibility and participation rates in Florida for the last four years.71

Table 6-1
Florida Lifeline Eligibility and Participation Rate
Year Lifeline Enrollment Eligible Households Participation Rate
Jun-15 833,426 2,011,166 41.4 %
Jun-16 852,255 1,712,005 49.8%
Jun-17 685,864 1,662,374 41.3%
Jun-18 694,647 1,628,111 42. 7%
Source: U.S. Department of Agriculture

If a program other than Medicaid or SNAP is used for certification, the customer must provide
documentation of participation from the administering agency, which could be the Social
Security Administration (Supplemental Security Income), Federal Public Housing Assistance
(FPHA), Veterans Pension benefit, or the Bureau of Indian Affairs. If a Lifeline applicant
chooses to apply for Lifeline directly with an eligible telecommunications carrier (ETC), the
carrier can access the DCF web services to confirm program participation for Medicaid and
SNAP. In Florida, certification and verification can be accomplished using this process if the
applicant or existing Lifeline customer participates in the Medicaid or SNAP programs
administered by the DCF.

70
USDA, Supplemental Nutrition Assistance Program: Households Participating, Florida SNAP households for
June 2018: 1,628,111, [Link] accessed
September 20, 2018.
71
FPSC, “2018 Florida Lifeline Report,” released December 2018,
[Link] Figure 3, accessed May 16, 2019.

34
On April 27, 2016, the FCC released its Lifeline Modernization Order.72 In this Order, the FCC
established a National Lifeline Eligibility Verifier (National Verifier) to transition various carrier
and state verification systems to a single system. The FCC envisions that the National Verifier
will include electronic and manual methods to determine eligibility and will include a Lifeline
Eligibility Database. In addition to determining eligibility for Lifeline, the National Verifier will
allow access by authorized users, provide support payments to providers and conduct
recertification of subscribers.

In 2018, the Universal Service Administrative Company (USAC) launched the National Verifier
in eight states. As of May 2019, two more launches have been conducted and there are now 22
states and four U.S. territories using the National Verifier.73 USAC is currently planning to have
the remaining 28 states operating under the National Verifier by the end of 2019, by
encompassing the remaining states into quarterly launches throughout the year.

Once the National Verifier has completed its implementation within a state or territory, the
responsibility to verify eligibility will transition from ETCs or state administrators to the
National Verifier. USAC continues to inform stakeholders and regulators of its deployment
schedule for the states next in line for National Verifier deployment.

C. Telephone Relay Service

It is estimated that approximately three million persons living in Florida have been diagnosed as
having hearing loss.74 Relay service in Florida provides telecommunication services for deaf,
hard of hearing, deaf-blind, or speech impaired persons, functionally equivalent to the service
provided to hearing persons.

Chapter 427, F.S., established the Telecommunications Access System Act of 1991 (TASA).
TASA provides funding for the distribution of specialized telecommunications devices and
intrastate relay service through the imposition of a surcharge of up to $0.25 per wireline access
line per month, for up to 25 access lines per account. The surcharge billed per month per wireline
access line is $0.10 for the 2018/2019 budget year.

Pursuant to TASA, the FPSC is responsible for establishing, implementing, promoting, and
overseeing the administration of a statewide telecommunications relay service. In accordance
with TASA, the FPSC directed the local exchange companies to form a not-for-profit
corporation, known as Florida Telecommunications Relay, Inc. (FTRI) to directly administer
basic relay service in Florida.

72
FCC 16-38, WC Docket No. 11-42, Lifeline and Link Up Reform and Modernization, Third Report and Order,
Further Report and Order, and Order on Reconsideration, released April 27, 2016, [Link]
attachmatch/[Link], accessed May 16, 2019.
73
USAC, “Lifeline National Verifier: National Verifier Launches,” [Link]
verifier/launches/[Link], accessed May 17, 2019.
74
2019 Florida Coordinating Council for the Deaf and Hard of Hearing Biennial Report to Governor Rick Scott, the
Florida Legislature & the Supreme Court and “Demographics and Statistics,” Florida Telecommunications Relay,
Inc., [Link]
[Link], accessed May 21, 2019.

35
Minutes of use for traditional relay service have declined in recent years as evolving technology
has caused many users to migrate to more advanced services. The current provider projects that
traditional minutes will continue to decline.

Basic relay service is provisioned in Florida under contract by a single service provider. Through
a competitive bid evaluation process, the FPSC awarded the current relay provider contract to
Sprint, effective March 1, 2018, for a period of three years. The contract contains options to
extend the contract for four additional one-year periods, and requires mutual consent by both
parties to extend the contract.

On June 11, 2019, the Commission approved FTRI’s 2019/2020 budget. The TASA surcharge
will remain at $0.10, beginning September 1, 2019.

36
Chapter VII. Federal Activities
This chapter details some of the major federal activities pertaining to telecommunications. Each
of these issues has the potential to have significant influence on the telecommunications industry.

A. USTelecom Forbearance Petition

On May 4, 2018, the United States Telecom Association (USTelecom) filed a petition with the
FCC seeking forbearance from several of the ILEC regulatory obligations under Sections 251,
252, 271, and 272 of the Telecommunications Act, such as requirements to provide wholesale
access to unbundled network elements (UNEs) and resale. USTelecom also requested that states
not be allowed to issue similar unbundling and resale rules if forbearance is granted.75, 76, 77

The FCC stated in an order released on February 14, 2019, that pursuant to forbearance rules of
the Telecommunications Act, barring any contravening ruling, the USTelecom Forbearance
petition shall be deemed granted on August 2, 2019.78 If this petition is granted, some CLECs
would no longer be able to compete because they would no longer be guaranteed rights to resale
or interconnection. The CLECs that could continue to compete would be those affiliated with
ILECs and the larger CLECs, which have invested in their own networks. In Florida, the impact
on residents would be minimal given that CLECs comprise less than one percent of the market.
The business market would also be somewhat insulated given that it is mostly serviced by large
CLECs, ILEC-affiliated CLECs, and ILECs.

B. FCC Hurricane Response

On October 10, 2018, Hurricane Michael, a Category 5 hurricane, made landfall in the Florida
panhandle. Along with other infrastructure, the telecommunications network sustained major
damage. According to the FCC, at the peak level of damage in the affected Florida counties,
nearly 29 percent of cell sites were rendered nonfunctional, while more than 250,000 cable and
wireline subscribers experienced service outages.79

In preparation and response, the FCC took several steps to promote public safety and
connectivity. These steps included updating status and restoration efforts with status reports,
granting a waiver of its E-Rate program invoicing rules to assist affected schools and libraries,
and granting a petition filed by the FPSC requesting a temporary four-month waiver of the
Lifeline program's non-usage and recertification rules for subscribers in 12 affected Florida
counties.80,81 Additionally, on November 1, 2018, the FCC announced the formation of the

75
USTelecom, “Petition of USTelecom for Forbearance Pursuant to 47 U.S.C. § 160(c) to Accelerate Investment in
Broadband and Next-Generation Networks,” filed May 4, 2018, [Link]
accessed May 9, 2019.
76
FCC, Communications Act of 1934, [Link] accessed May 15, 2018.
77
USTelecom, Petition for Forbearance. Section B, pp. 30-31.
78
FCC, “Order Extending Deadline of USTelecom Forbearance Petition,” released February 14, 2019,
[Link] accessed February 14,
2019.
79
FCC, “Communications Status Report for October 11, 2018” and “Communications Status Report for October 12,
2018”, released October 11-12, 2018, [Link] accessed April 9, 2019.
80
FCC, “WCB Grants a Waiver to Schools Affected by Hurricane Michael”, released October 26, 2018,
[Link] accessed April 9, 2019.

37
Disaster Response Working Group of the Broadband Deployment Advisory Committee (BDAC),
which will develop best practices for responding before, during and after a disaster.82 Also, on
November 16, 2018, the FCC solicited comments on service provider preparation and response,
prospective improvements to FCC response, and on communications service user experience.83
In addition to service restoration efforts, providers responded by offering a variety of credits,
including unlimited talk/text, late fee waivers, free service, etc. for up to three months after the
hurricane. Verizon also announced that it was adding Panama City to cities included in its initial
rollout of 5G advanced services, starting in 2019.84

On May 9, 2019, the FCC issued a report on its investigation into communications providers’
preparation for and response to Hurricane Michael.85 The report found that three key factors
were the predominant causes of the slow restoration of wireless service following the 2018
storm: insufficient backhaul resiliency, inadequate reciprocal roaming arrangements, and lack of
coordination between wireless service providers, power crews, and municipalities.

To improve recovery efforts for future storms, the report recommends that wireless providers
enter into roaming agreements as part of their pre-storm preparation processes and that
communications providers and power companies enter into coordination agreements regarding
mutual preparation and restoration efforts that can be activated when a storm strikes. The report
also recommends that wireless providers use diverse backhaul options, such as microwave and
satellite links, participate in training activities to improve coordination of restoration efforts, and
ensure familiarity with applicable best practices, especially relating to cooperation and
coordination with local utilities.

81
FCC, “WCB Waives Rules for Lifeline Consumers Affected by Hurricane Michael”, released November 16,
2018, [Link] accessed
April 9, 2019.
82
FCC, “Chairman Pai Announces Members of BDAC Disaster Response Working Group”, released November 1,
2018, [Link]
accessed April 9, 2019.
83
FCC, “Public Safety And Homeland Security Bureau Seeks Comment On Hurricane Michael Preparation And
Response,” released November 16, 2018, [Link] accessed
January 15, 2019.
84
“Verizon's new network, including 5G technology, will help drive the Florida Panhandle’s future, includes $25
Million investment,” NASDAQ, Verizon Press Release, released October 24, 2018, [Link]
release/verizons-new-network-including-5g-technology-will-help-drive-the-florida-panhandles-future-include-
20181024-01436, accessed October 29, 2018.
85
FCC, “FCC Releases Report on Communication Impacts of Hurricane Michael,” released May 9, 2019,
[Link] accessed May 10,
2019.

38
C. Broadband Deployment
FCC Chairman Ajit Pai has stated that his number one priority is expanding broadband access.86
The FCC and the federal government have been using several strategies to pursue this goal. One
method that the FCC is using to facilitate the process of broadband deployment is the creation of
the Broadband Deployment Advisory Committee (BDAC), a federal advisory committee that is
intended to provide an effective means for stakeholders to exchange ideas and develop
recommendations and advice on how to accelerate the deployment of high-speed Internet
access.87

Another method that the FCC uses to gauge its progress is the regular issuance of broadband
deployment reports. On February 19, 2019, the FCC released the highlights of a draft of its 2019
Broadband Deployment Report, which show significant progress in broadband deployment,
especially in rural America. These findings helped lead the draft report to conclude that the FCC
is now encouraging broadband deployment on a reasonable and timely basis.88 On April 12,
2019, FCC Chairman Pai announced the creation of the Rural Digital Opportunity Fund, which
will offer $20.4 billion in support of rural broadband networks over ten years.89

The FCC is not the only agency that has been working to improve broadband deployment. The
American Broadband Initiative Milestones Report, released on February 13, 2019, details
strategies from over 20 Federal agencies for increasing broadband access and encouraging
private-sector broadband investment.90

D. Open Internet/Net Neutrality

In 2018, the FCC reversed its policy outlined in previous reports and implemented a de-
regulatory framework for net neutrality. As a result of this reversal, 34 states and the District of
Columbia proposed net neutrality legislation, and five passed net neutrality laws or resolutions.91

86
FCC, “Bridging The Digital Divide For All Americans,” [Link]
digital-divide-all-americans, accessed April 27, 2018.
87
FCC, “Broadband Deployment Advisory Committee,” [Link]
committee, accessed April 10, 2019.
88
FCC, “Draft FCC Broadband Report: Digital Divide Is Narrowing Substantially,” released February 19, 2019,
[Link] accessed April 10,
2019.
89
Telecompetitor, “Pai Proposes FCC Rural Digital Opportunity Fund: $20.4 Billion Over 10 Years for Price Cap
Territories,” published April 12, 2019, [Link]
fund-20-4-billion-over-10-years-for-price-cap-territories/, accessed April 19, 2019.
90
Congress, bill search for “broadband,”
[Link]
22%2C%22search%22%3A%22broadband%22%2C%22congress%22%3A%22116%22%2C%22type%22%3A%2
2bills%22%7D, accessed April 11, 2019.
91
NCSL, “Net Neutrality Legislation in States,” published January 23, 2019,
[Link]
[Link], accessed April 10, 2019.

39
Six state governors issued executive orders that effectively bar state agencies from doing
business with ISPs that violate net neutrality principles.92

Multiple parties, including attorneys-general from 22 states, have also filed legal challenges to
the new policy. On September 30, 2018, California passed a strict net neutrality law, but it has
reached an agreement with the U.S. Department of Justice to hold enforcement of this law in
abeyance until the legal challenges to the new policy are resolved. 93, 94, 95

E. Universal Service
Universal service is the policy that all Americans should have equal access to communications
services. While Florida consumers benefit from being able to make and receive calls from all
parts of the nation, there is a cost associated with this policy. The Universal Service Fund (USF)
is the federal fund that supports the budgets of universal service programs; it is paid for by
contributions from providers of telecommunications based on an assessment of interstate and
international end-user revenues.

In general, Florida consumers pay more into the USF than what is returned to eligible service
providers in Florida.96 For 2017, New York, California, and New Jersey consumers were larger
net contributors than Florida. The FPSC monitors and participates in ongoing proceedings at the
FCC and with the Federal-State Joint Board on Universal Service. Table 7-1 shows Florida’s
estimated contribution and receipts for 2017 and provides a comparison of net contributions for
2015 and 2016.

92
NRRI, “Net Neutrality State Actions Tracker,” published April 17, 2018, [Link]
accessed April 25, 2018.
93
Ibid.
94
California Legislature, Consumer Remedies Act as amended, passed September 30, 2019,
[Link] , accessed April 10, 2019.
95
NECA, District Court Stays Challenge of California Net Neutrality Bill, issued October 26, 2019,
[Link] accessed April 10, 2019.
96
FCC, “Universal Service Monitoring Report-2018,” released May 31, 2019,
[Link] accessed May 31, 2019.

40
 Table 7-1
2017 Federal Universal Service Programs in Florida
(Annual Payments and Contributions in Thousands of Dollars)
2015 2016 2017
Service Estimated
Estimated Estimated Estimated
Providers Consumer
Net Net Net
Payments Contributions
High-Cost ($219,785) ($211,994) $57,775 $283,322 ($225,547)
Low Income (6,787) 4,004 78,777 77,849 (928)
Schools & Libraries (60,265) (48,257) 132,689 160,305 (27,616)
Rural Health Care (16,315) (13,639) 3,633 15,821 (12,188)
Total ($308,505) ($280,312) $272,874 $549,555 ($276,681)
Source: FCC Universal Service Monitoring Report, various years, Table 1.9.97

1. Contribution System Reform

Telecommunications service providers fund the USF based on a quarterly FCC assessment factor
applied to interstate and international telecommunications revenues. Mobile wireless carriers and
interconnected VoIP providers are also required to contribute.98 As detailed in Figure 7-1, the
assessment factor exceeded 20 percent for the first time in 2018, and it is expected to exceed 24
percent in the third quarter of 2019.99 Since 2015, the assessment factor ranged from a high of
24.9 percent in the third quarter of 2019 to a low of 16.7 percent in the fourth quarter of 2015.100
Figure 7-1 illustrates assessment factor rates and projected rates since 2015.

To ensure that funding is sufficient for USF programs, the FCC issued a Notice of Proposed
Rulemaking on May 31, 2019, seeking comment on ways to evaluate financial aspects of the
four Universal Service programs, including the possibility of a budget cap.101

97
Note: Figures may not add up due to rounding.
98
Wireless carriers and interconnected VoIP providers may use the interim safe harbor percentages to estimate the
interstate portion of their revenues.
99
Billy Jack Gregg Universal Consulting, USAC Data Email, received June 3, 2019.
100
FCC, “Contribution Factor & Quarterly Filings - Universal Service Fund (USF) - Management Support,”
[Link]
support, accessed May 31, 2019.
101
FCC, “FCC Initiates Evaluation of Funding for USF,” released May 31, 2019,
[Link] accessed June 5, 2019.

41
 Figure 7-1
USF Quarterly Assessment Factor

Source: FCC Public Notices on Proposed Contribution Factors, various quarters

2. High Cost
In 2011, the FCC reformed and modernized its existing high-cost fund to maintain voice services
and extend broadband capable infrastructure.102 As part of this reform, the FCC began to phase
out the existing high-cost support programs and began funding through the Connect America
Fund (CAF). The CAF focuses on supporting and expanding fixed broadband availability and
voice service. Figure 7-2 identifies the authorized national support by high-cost program for
2018, an increase of 3.9 percent from 2017.

The High Cost Program implemented three new funds in 2017, with the intended goal to bring
broadband to rural America. First, the Alternative Connect America Cost Model, with $619.1
million disbursed in 2018, offered interstate rate-of-return carriers the option to elect to receive
model-based support for a 10-year term in exchange for extending broadband service to a pre-
determined number of eligible locations. Second, the Connect America Broadband Loop
Support, with $825.2 million disbursed in 2018, was made available to interstate rate-of-return
carriers that elected not to participate in the Alternative Connect America Cost Model. This
program is a rebranded form of interstate common line support, but expanded to support
broadband-only lines. Finally, the Alaska Plan, with $526.2 million disbursed in 2018,
established a separate fund for wireline and wireless carriers that serve Alaska. Like the
Alternative Connect America Cost Model, carriers can elect to receive model-based support for a
10-year term in exchange for extending broadband service. It differs from that program in so far
as it incorporates the unique climate and geography of Alaska.

102
FCC 11-161, WC Docket No. 10-90, Connect America Fund, Report and Order and Further Notice of Proposed
Rulemaking, released November 18, 2011, [Link]
accessed June 5, 2019.

42
 Figure 7-2
2018 Authorized Federal High-Cost Support
(Funding in Millions of Dollars)

Source: USAC 2018 Annual Report103

3. Schools and Libraries

The schools and libraries support program, commonly known as the E-rate Program, provides
financial assistance for eligible schools and libraries. The program provides support to reduce the
cost associated with telecommunications services, Internet access, and eligible equipment, along
with repair and upkeep of eligible equipment. The discounts range from 20 percent to 90 percent
of the costs of eligible services, depending on the level of poverty and whether the school or
library is located in an urban or rural area.

Figure 7-3 reflects the new cap relative to the amount of support distributed in prior years.104 On
an annual basis, Florida consumers can expect to pay about $28 million more per year into the
federal program than the amount of support Florida schools and libraries will receive based on
2017 estimated contribution data. Because the cap is almost twice the amount as what was
distributed, there is the potential for increased net contributions into the program in the future.

103
Universal Service Administrative Company 2018 Annual Report,
[Link] annual-reports/[Link], page 10, accessed
May 31, 2019.
104
FCC Public Notice, DA 18-163, Wireline Competition Bureau Announces E-Rate Inflation-Based Cap for
Funding Year 2018, released February 20, 2018, [Link]
accessed June 1, 2019.

43
 Figure 7-3
E-Rate Program Support and Funding Cap
$4.5

Schools & Libraries Program Support

$4.0
$3.5
$3.0
(billions)

$2.5
$2.0
$1.5
$1.0
$0.5
$0.0
2014 2015 2016 2017 2018

Distributed Support Funding Cap

Source: USAC 2018 Annual Report105 and Universal Service Monitoring Report

4. Low Income
The Lifeline program provides a $9.25 discount on phone service for qualifying low-income
consumers to ensure that all Americans have the opportunities and security that phone service
brings. The FCC has determined that broadband has become essential to participation in modern
society, offering access to jobs, education, health care, government services and opportunity. On
April 27, 2016, the FCC released an Order to further modernize the federal Lifeline program.

The FCC’s Order takes a variety of actions to encourage more Lifeline providers to deliver
newly supported broadband services as the FCC transitions from primarily supporting voice
services to targeting support at providing broadband services. The Order also limits the
qualifying criteria consumers can use to sign up for Lifeline services, removing the ability of
states to specify additional qualifying programs or criteria. In addition, the FCC has established a
budget for the expanded Lifeline program of $2.25 billion, indexed to inflation. By way of
comparison, the authorized support for the Lifeline program in 2018 was $1.14 billion.106

The FCC states that to be sustainable and achieve its goals of providing low-income consumers
with robust, affordable, and modern service offerings, a forward-looking Lifeline program must
focus on broadband services. Therefore, the FCC concluded that it is necessary that going
forward the Lifeline discount will no longer apply to voice-only offerings, following an extended
transition period, except in census blocks with only one Lifeline provider. Prior to the complete

105
Universal Service Administrative Company 2018 Annual Report,
[Link] annual-reports/[Link], page 10, accessed
May 31, 2019.
106
Universal Service Administrative Company 2018 Annual Report,
[Link] page 6, accessed May
17, 2019.

44
phase out of support for voice-only services, the FCC will reevaluate its conclusion as part of a
2021 report on the state of the Lifeline marketplace. After this transition, the federal Lifeline
program will continue to support voice service when bundled with a broadband service that
meets the FCC’s minimum service standards.107 Table 7-2 outlines the FCC's phase down
schedule.

Table 7-2
Lifeline Support Phase Down Schedule
Fixed Mobile Fixed Mobile
Effective Dates
Voice Voice Broadband Broadband
Through 11/30/2019 $9.25 $9.25 $9.25 $9.25
From 12/1/19 to 11/30/20 $7.25 $7.25 $9.25 $9.25
From 12/1/20 to 11/30/21 $5.25 $5.25 $9.25 $9.25
After 11/30/21 0 0 $9.25 $9.25
Source: FCC 2016 Lifeline Modernization Order (FCC 16-38)

On May 14, 2019, the FPSC approved the relinquishment of both Cox Florida Telcom, L.P.
(Cox) and Global Connection Inc. of America’s (Global) wireline ETC designations. In the
relinquishment petition filed by Cox, the company cites the FCC Lifeline changes described
above, as well as the impact of the shift in demand towards wireless Lifeline service as the
reasons it is exiting the market as an ETC.108 In 2017 the Commission approved a partial ETC
relinquishment for AT&T in all areas of the company’s service territory in which they did not
receive high cost support. Much like Cox’s petition, AT&T echoed the statements that the shift
in market demand towards wireless Lifeline subscription and the changes the FCC were making
to the program hindered wireline market share and profitability. Global relinquished its wireline
ETC designation, but has also cancelled its Certificate of Authority to provide
telecommunications service in Florida. In the company’s petition it states that though it has made
the decision to relinquish their ETC designation and cease offering wireline service, the
company’s organizational strategy will allow them to operate as a non-ETC wireless service
provider in Florida. It is unclear if this represents a potential trend of wireline ETC
relinquishments that could impact the Florida Lifeline market.

The FPSC filed comments in the FCC’s 2017 Fourth Report and Order and Notice of Proposed
Rulemaking to further reform the Lifeline program.109 In those comments, the FPSC took the
position that customers should have the option to continue to receive Lifeline support for voice-

107
The fixed broadband speed standard is based on what a substantial majority of consumers receive (currently 18
Mbps downloads/2 Mbps uploads). The FCC also sets minimum monthly fixed broadband usage allowances,
starting at 150 GB on December 2. 2016, and as of December 1, 2018 has been increased to 1000 GB. Mobile
broadband services standards have been phased in starting at 500 MB per month of 3G data on December 1, 2016,
two GB of 3G data as of December 1, 2018, and will be analyzed by the FCC for further increases in speeds and
usage allowance using an update mechanism by December 1, 2019.
108
Petition of Cox Florida Telcom, L.P. for Relinquishment of Eligible Telecommunications Carrier Status, pp. 2-4,
\\fp3\filings\psc\library\filings\2019\02247-2019\[Link], accessed May 17, 2019.
109
Comments of the Florida Public Service Commission in WC Docket No. 17-287, Bridging the Digital Divide for
Low-Income Consumers, WC Docket No. 11-42, Lifeline and Link Up Reform Modernization, and WC Docket No.
09-197, Telecommunication Carriers Eligible for Universal Service Support,
[Link] accessed May 17, 2019.

45
only service and that the FCC should eliminate its planned phase down of support for voice-only
services. We noted our concern that if the only option for customers to obtain Lifeline voice
service is to combine the service with broadband, the combined services may become cost
prohibitive for some consumers without increasing financial support from the Lifeline program.

F. Major Calling Enforcement Actions

Federal and state agencies routinely initiated enforcement actions to deter noncompliance with
government regulations. During 2018, the Florida Attorney General, FCC, FTC, and Department
of Justice issued major violations for issues such as buildout failure, calling violations, call
completion, fraud, slamming and cramming, and Universal Service Fund violations. Florida-
based companies and residents were involved in several major violations including the
following.

1. Calling Violations
The Truth in Caller ID Act prohibits callers from deliberately falsifying caller ID information, a
practice called “spoofing”, disguising their identity with the intent to harm, defraud consumers,
or wrongfully obtain anything of value. Changes in technology have made it easier and cheaper
for scammers to make robocalls and to manipulate caller ID information. To address this
consumer problem, the FCC and FTC have focused both on enforcement actions and on pursuing
policies to help consumers and their service providers block malicious robocalls. Some recent
examples of calling violation enforcement actions are listed below.

• On May 10, 2018, the FCC fined Mr. Adrian Abramovich of Miami, $120 million for
making approximately 96 million spoofed robocalls.110

• On December 14, 2018, the Office of the Florida Attorney General and the FTC announced a
federal district court judgment of $23 million against Kevin Guice, owner of an Orlando-
based scam robocall operation, for tricking consumers into paying upfront fees of $500 to
$1500 for false credit card interest-rate-reduction and debt-elimination services.

• On March 26, 2019, the FTC issued a press release detailing its recent settlements with two
companies and associated individuals in Florida. Higher Goals Marketing, based in Orlando,
was fined $3.15 million for robocalls and Pointbreak Media and affiliates, based in Boca
Raton, Deerfield Beach, and Lake Worth, received fines ranging from $1.72 million to $3.62
million for falsely claiming to represent Google and threatening businesses with removal
from Google search results.

2. Call Completion Issues

On April 16, 2018, the FCC reached a settlement with T-Mobile over rural call completion
violations. The settlement is the result of an FCC investigation into allegations that T-Mobile had
been inserting false ring tones in rural calls that it failed to complete. To settle this matter, T-
Mobile admitted that it violated the FCC’s prohibition against the insertion of false ring tones

110
FCC, News Release, “FCC Fines Massive Neighbor Spoofing Robocall Operation $120 Million,” released May
10, 2018, [Link]
accessed April 12, 2019.

46
and that it did not correct problems with delivery of calls to certain rural areas. T-Mobile agreed
to implement a compliance plan and to pay a $40 million civil penalty.111

3. Slamming and Cramming

“Slamming” is the illegal practice of switching a consumer’s traditional wireline telephone
company for local, local toll, or long distance service without permission. The slamming rules
also prohibit unreasonable delays in the execution of an authorized switch by the local telephone
company. “Cramming” is the illegal act of placing unauthorized charges on your wireline,
wireless, or bundled services telephone bill. Crammers often rely on confusing telephone bills to
trick consumers into paying for services they did not authorize or receive, or that cost more than
the consumer was led to believe. Below is a list of some slamming and cramming enforcement
actions taken recently by the FCC.

• On April 27, 2018, the FCC proposed a $5.32 million fine against Tele Circuit Network
Corporation for slamming, cramming, and failure to respond to an FCC inquiry, This
company is a CLEC regulated by the FPSC.112

• On March 21, 2019, the FCC issued a $2.32 million fine against Long Distance Consolidated
Billing Company for deceptive marketing practices, slamming, and cramming. This company
was regulated by the FPSC as an interexchange company (IXC) until IXCs were deregulated
on July 1, 2011.113

4. Universal Service Fund Violations

On February 5, 2019, the FCC approved the creation of a new fraud unit in its Enforcement
Bureau in order to help combat misuse of taxpayer funds supporting universal service
programs.114 The following is an enforcement action against a locally active company for
Universal Service Fund violations.

• On January 30, 2018, the FCC proposed an $18.7 million fine against DataConnex for
apparent violations involving the Universal Service Fund Rural Health Care Program. As a
VoIP provider, the Brandon company is not regulated by the FPSC.115

G. Public Safety Network

On December 28, 2017, the state of Florida opted to join the First Responder Network Authority
(FirstNet). FirstNet is a nationwide public safety broadband network, as well as the name of the

111
FCC, “Settlement with T-Mobile for Rural Call Completion Violations,” released April 11, 2018,
[Link] accessed April 23, 2019.
112
FCC, “FCC Proposes $5.3 Million Fine for Cramming & Slamming Violations,” released April 27, 2018,
[Link] accessed May 3,
2019.
113
FCC, “FCC Fines Carrier $2.32 Million for Slamming and Cramming,: released on March 21, 2019,
[Link] accessed May 3, 2019.
114
FCC, “FCC Votes To Create New Fraud Division Within The Enforcement Bureau,” published February 4, 2019,
[Link] accessed April 24,
2019.
115
FCC, News Release, “FCC Proposes $18.7 Million Fine Against DataConnex,” released January 30, 2017,
[Link] accessed January 31, 2017.

47
federal agency that was created in 2012 to deploy and operate the network. Congress established
FirstNet in Section 6204 of the Middle Class Tax Relief and Job Creation Act of 2012, which
also directed the FCC to reserve spectrum frequencies for public safety use in a nationwide
broadband network and allocated up to $7 billion for construction of the network. FirstNet falls
under the responsibility of the National Telecommunications and Information Agency (NTIA),
which is itself under the purview of the United States Department of Commerce. FirstNet is
envisioned as a way to improve efficiency and coordination of emergency services amongst
thousands of federal, state, and local first responders. All states and territories have joined
FirstNet.116,117,118

On May 2, 2018, NTIA announced the award of 46 grants under the State and Local
Implementation Grant Program 2.0 to help states and territories prepare for FirstNet’s buildout of
the nationwide public safety broadband network. The Florida Department of Management
Services received a grant of $425,000.119

H. Robocalls
The FCC took several actions in 2018 to halt the proliferation of robocalls. On November 5,
2018, FCC Chairman Pai sent letters to voice providers asking those telecommunications
companies which have not yet established concrete plans to adopt the new industry call
authentication protocol to do so without delay.120 This will reduce spoofing and help to identify
robocalls. Chairman Pai also sent letters to telecommunications companies on November 6,
2018, to encourage assistance in industry efforts to trace scam robocalls that originate on or pass
through company networks.121

116
Tampa Bay Times, “Florida finally joins FirstNet’s future first-responder network,” published January 1, 2018,
[Link]
network_164012151, accessed April 24, 2018.
117
First Responder Network Authority, [Link] accessed April 24, 2018.
118
Government Publishing Office, “Middle Class Tax Relief And Job Creation Act Of 2012,” released February 22,
2012, [Link] accessed January 24, 2018.
119
NTIA, “NTIA Gives 46 Grant Awards to States and Territories to Plan for FirstNet Deployment,” released May
2, 2018, [Link]
deployment, accessed April 23, 2019.
120
FCC, “Chairman Pai Demands Industry Adopt Protocols To End Illegal Spoofing, “ released November 5, 2018,
[Link] accessed
April 24, 2019.
121
FCC, “FCC Urges More in Phone Industry to Join in Tracing Scam Robocalls,” released November 6, 2018,
[Link] accessed April 24,
2019.

48
Appendix A. List of Certificated CLECs as of December 31, 2018
** Indicates the company did not respond to the Commission's data request

365 Wireless, LLC BT Communications Sales LLC

382 Networks, Inc. BullsEye Telecom, Inc.
[Link] Net, Inc. Business Telecom, LLC d/b/a EarthLink
Access One, Inc. Business
Access Point, Inc. Call One Inc. of Illinois
ACN Communication Services, LLC Callis Communications, Inc.
Airespring, Inc. Campus Communications Group, Inc.
Airus Inc. Cbeyond Communications, LLC
Alternative Phone, Inc. ** CBTS Technology Solutions LLC
American Telephone Company LLC CenturyLink Communications, LLC d/b/a
ANEW Broadband, Inc. Embarq Communications
ANPI Business, Inc. Citadel Design & Construction, LLC
AT&T Corp. City of Bartow
ATC Outdoor DAS, LLC City of Gainesville, a municipal corporation
Atlantic Broadband Enterprise, LLC d/b/a GRUCom
Atlantis Communications LLC City of Lakeland
ATN, Inc. City of Leesburg
Backbone Communications Inc. ** City of Ocala d/b/a Ocala Electric Utility
Baldwin County Internet/DSSI Service, Clear Rate Communications, Inc.
L.L.C. ** Cloud Computing Concepts, d/b/a C3
[Link] CLEC, LLC Cogent Communications of Florida LHC,
Barr Tell USA, Inc. Inc.
Batchlink, Inc. Comcast Business Communications, LLC
BCM One, Inc. Comcast Phone of Florida, LLC d/b/a
BCN Telecom, Inc. Comcast Digital Phone
BeCruising Telecom LLC d/b/a BeCru Comity Communications, LLC
BellSouth Telecommunications, LLC d/b/a Communications Authority, Inc
AT&T Florida d/b/a AT&T Southeast ComNet (USA) LLC
Benchmark Communications, LLC d/b/a COMTECH 21, LLC
TotalComUSA Conterra Ultra Broadband, LLC
BetterWorld Telecom LLC d/b/a BetterWorld Convergia, Inc.
Telecom CoreTel Florida, Inc.
Birch Communications, LLC Cox Florida Telcom, L.P. d/b/a Cox
Bright House Networks Information Services Communications d/b/a Cox Business
(Florida), LLC d/b/a Cox
Broadband Dynamics, L.L.C. Crexendo Business Solutions, Inc.
BroadRiver Communication Corporation Crosstel Tandem, Inc.
Broadsmart Florida, Inc. ** Crown Castle Fiber LLC
Broadview Networks, Inc. Crown Castle NG East LLC
Broadvox-CLEC, LLC Custom Network Solutions, Inc.
Broadwing Communications, LLC Custom Tel, LLC

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Dais Communications, LLC Granite Telecommunications, LLC
Dedicated Fiber Systems, Inc. Great America Networks, Inc. **
DeltaCom, LLC d/b/a EarthLink Business GRU Communication Services/GRUCom
Dialtone Telecom, LLC GTC Communications, Inc.
DIGITALIPVOICE, INC. ** GTC, Inc. d/b/a Consolidated
Discount CLEC Services Corporation Communications/GTC
dishNET Wireline L.L.C. Harbor Communications, LLC
DSCI, LLC Hayes E-Government Resources, Inc.
DSL Internet Corporation d/b/a DSLi d/b/a HD Carrier, LLC
VOX3COM ** Home Town Telephone, LLC
EarthLink Business, LLC Hotwire Communications, Ltd. **
Easy Telephone Services Company IDT America, Corp. d/b/a IDT
Electronet Broadband Communications, Inc. inContact, Inc.
Embarq Florida, Inc. d/b/a CenturyLink INDIGITAL, INC d/b/a INdigital
ENA Services, LLC iNetworks Group, Inc. **
eNetworks, LLC d/b/a eNetworks NC, LLC INNOVATIVE TECH PROS, CORP D/B/A
Enhanced Communications Network, Inc. INNOVATIVE TECH PROS
d/b/a Asian American Association Integrated Path Communications, LLC
Entelegent Solutions, Inc. InteleTel, LLC
ExteNet Systems, Inc. Intelletrace, Inc.
[Link], Inc. Intellifiber Networks, LLC
FiberLight, LLC Interactive Services Network, Inc. d/b/a ISN
Fibernet Direct Florida LLC Telcom d/b/a IPFone
First Choice Technology, Inc. InterGlobe Communications, Inc.
First Communications, LLC InterMetro Fiber, LLC
FL Network Transport, LLC IPC Network Services, Inc.
Florida Hearing and Telephone Corporation ITS Fiber, LLC d/b/a ITS Fiber
Florida Phone Systems, Inc. ITS Telecommunications Systems, Inc. d/b/a
Fort Pierce Utilities Authority d/b/a FPUAnet ITS Fiber
Communications J C Telecommunication Co., LLC **
France Telecom Corporate Solutions L.L.C. Joytel Wireless Communications, Inc.
Frontier Communications of America, Inc. Keys Energy Services
Frontier Communications of the South, LLC Knology of Florida, Inc. d/b/a WOW! Internet,
Frontier Florida LLC Cable and Phone
GC Pivotal, LLC d/b/a Global Capacity Latin American Nautilus USA, Inc.
Georgia Public Web, Inc. Level 3 Communications, LLC
GetGo Communications LLC Level 3 Telecom of Florida, LP
GigaMonster, LLC Lightspeed CLEC, Inc. **
Global Connection Inc. of America (of Lingo Telecom of the South, LLC
Georgia) Litestream Holdings, LLC
Global Crossing Local Services, Inc. Local Access LLC
Goff Network Technologies - Florida, Inc. Local Telecommunications Services - FL,
d/b/a USA FIBER LLC
Magna5 LLC
Maryland TeleCommunication Systems, Inc.

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MassComm, Inc. d/b/a Mass Communications Optical Telecommunications, Inc. d/b/a
Matrix Telecom, LLC d/b/a Impact Telecom HControl Corporation d/b/a SH Services
d/b/a Startec d/b/a Americatel d/b/a LLC **
Matrix Business Technologies d/b/a Orlando Telephone Company, Inc. d/b/a
Trinsic Communications d/b/a Vartec Summit Broadband
Telecom d/b/a Excel PacOptic Networks, LLC
Telecommunications d/b/a Clear Choice PaeTec Communications, LLC
Communication Paradigm Telecom II, LLC
MCC Telephony of Florida, LLC Paradigm Telecom, Inc.
MCImetro Access Transmission Services Peak Tower, LLC **
Corp. d/b/a Verizon Access Peerless Network of Florida, LLC
Transmission Services Phone Club Corporation
McLeodUSA Telecommunications Services, PNG Telecommunications, Inc. d/b/a
L.L.C. PowerNet Global Communications
Metropolitan Telecommunications of Preferred Long Distance, Inc.
Florida Inc. d/b/a MetTel Pro-Net, Inc.
Miami-Dade Broadband Coalition I LLC Protection Plus of the Florida Keys, Inc. d/b/a
Micro-Comm, Inc. ENGAGE COMMUNICATIONS
Mitel Cloud Services, Inc. Pure Telephone Corp **
MIX Networks, Inc. QuantumShift Communications, Inc.
Mobilitie Management, LLC Quincy Telephone Company d/b/a TDS
MOSAIC NETWORX LLC Telecom
MULTIPHONE LATIN AMERICA, INC. RCLEC, Inc.
Nebula Telecommunications of Florida LLC Real Fast Networks LLC **
Network Billing Systems, L.L.C. d/b/a Rosebud Telephone, LLC
Fusion d/b/a Solex Sage Telecom Communications, LLC
Network Innovations, Inc. Sandhills Telecommunications Group, Inc.
Network Telephone, LLC d/b/a SanTel Communications
Neutral Tandem-Florida, LLC SBA DAS & Small Cells, LLC
New Horizons Communications Corp. Seminole Telecom of Florida, LLC
Norstar Telecommunications, LLC SKYNET360, LLC **
North County Communications Corporation ** Smart City Networks, Limited Partnership
Northeast Florida Telephone Company d/b/a Smart City Solutions II, LLC
NEFCOM Smart City Solutions, LLC d/b/a Smart City
NOS Communications, Inc. d/b/a Communications
International Plus d/b/a O11 Smart City Telecommunications LLC d/b/a
Communications d/b/a The Internet Smart City Telecom
Business Association d/b/a I Vantage Southeastern Services, Inc.
Network Solutions d/b/a Blueridge Southern Light, LLC
Telecom Systems Southern Telecom, Inc. d/b/a Southern
Offramp, LLC ** Telecom of America, Inc.
One Voice Communications, Inc. Spectrotel, Inc. d/b/a OneTouch
OneStar Long Distance, Inc. ** Communications d/b/a Touch Base
Onvoy, LLC Communications
Opextel LLC d/b/a Alodiga Sprint Communications Company Limited
Partnership

51
SQF, LLC US LEC of Florida, LLC d/b/a PAETEC
Stratus Networks, Inc. Business Services
Strome Networks, LLC ** US Signal Company, L.L.C.
Sunesys, LLC Vanco US, LLC
Synergem Technologies, Inc. Velocity The Greatest Phone Company Ever,
T3 Communications, Inc. Inc.
Talk America Services, LLC Verizon Select Services Inc.
Talk America, LLC d/b/a Windstream Talk Vero Fiber Networks, LLC d/b/a Vero
America, LLC Networks
TALKIE COMMUNICATIONS, INC. Vesta Solutions, Inc.
TampaBay DSL Inc d/b/a PBX-Change VoDa Networks, Inc.
Telapex Long Distance, Inc. Vodafone US Inc.
TelCentris Communications, LLC ** Voxbeam Telecommunications Inc.
Telco Experts, LLC WAHL TV INC.
TelCove Operations, LLC WANRack, LLC
Tele Circuit Network Corporation Webpass Florida LLC
Telecom Management, Inc. d/b/a Pioneer West Safety Communications Inc.
Telephone West Telecom Services, LLC
Teleport Communications America, LLC Wholesale Carrier Services, Inc.
Teliax, Inc. Wide Voice, LLC
Telrite Corporation WiMacTel, Inc.
Telscape Communications, Inc. Windstream Florida, LLC
Terra Nova Telecom, Inc. Windstream KDL, LLC
TerraNovaNet, Inc. Windstream Norlight, LLC
The Other Phone Company, LLC Windstream NTI
TIME CLOCK SOLUTIONS, LLC Windstream NuVox, LLC
Time Warner Cable Business LLC WonderLink Communications, LLC
Total Marketing Concepts, LLC ** WTI Communications, Inc.
Touchtone Communications Inc. XO Communications Services, LLC
Tristar Communications Corp. YMax Communications Corp.
Triton Networks, LLC Zayo Group, LLC
United Commercial Telecom, LLC
Uniti Fiber LLC

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Glossary
4G The short name for fourth-generation wireless, the stage of
broadband mobile communications that will supercede the third
generation (3G). A 4G network requires a mobile device to be able
to exchange data at 100 Mbps
5G 5G is the coming fifth-generation wireless broadband technology.
5G will provide better speeds and coverage than the current 4G.
5G is set to offer speeds of up to 1 Gb/s for tens of connections or
tens of Mbps for tens of thousands of connections. 5G is not
scheduled for nationwide launch until 2020.
Access Line The circuit or channel between the demarcation point at the
customer’s premises and the serving end or class 5 central office.
Backhaul In wireless networks, the connection from an individual base
station (tower) to the central network (backbone). Typical
backhaul connections are wired high-speed data connections (T1
line, etc.), but they can be wireless as well (using point-to-point
microwave or WiMax, etc.).
Broadband A term describing evolving digital technologies offering
consumers integrated access to voice, high-speed data services,
video on demand services, and interactive information delivery
services.
Circuit A fully operational two-way communications path.
CLEC Competitive Local Exchange Company. Any company certificated
by the Florida Public Service Commission to provide local
exchange telecommunications service in Florida on or after July 1,
1995.
Communications Act or The federal Communications Act of 1934, as amended by the
The Act Telecommunications Act of 1996, established a national
framework to enable CLECs to enter the local telecommunications
marketplace.
DSL Digital Subscriber Line, a technology that connects the user to
broadband connections across a telephone network. It uses the
same copper loops as wireline telephone service.
Facilities-based VoIP This term refers to VoIP service provided by the same company
service that provides the customer’s broadband connection. Facilities-
based VoIP services are generally provided over private managed
networks and are capable of being provided according to most
telephone standards. While this service uses Internet Protocol for
its transmission, it is not generally provided over the public
Internet.
ILEC Incumbent Local Exchange Company. Any company certificated
by the FPSC to provide local exchange telecommunications
service in Florida on or before June 30, 1995.

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Interconnected VoIP According to the FCC, it is a VoIP service that (1) enables real-
service time, two-way voice communications; (2) requires a broadband
connection from the user's location; (3) requires Internet protocol-
compatible customer premises equipment; and (4) permits users
generally to receive calls that originate and terminate on the public
switched telephone network.
Intermodal The use of more than one type of technology or carrier to transport
telecommunications services from origination to termination.
When referring to local competition, intermodal refers to non-
wireline voice communications such as wireless or VoIP.
Internet Protocol (IP) The term refers to all the standards that keep the Internet
functioning. It describes software that tracks the Internet address
of nodes, routes outgoing messages, and recognizes incoming
messages.
Over-the-Top VoIP This term refers to VoIP service that is provided independently
service from a particular broadband connection and is transmitted via the
public Internet.
Switched Access Local exchange telecommunications company-provided exchange
access services that offer switched interconnections between local
telephone subscribers and long distance or other companies.
TDM Time Division Multiplexing is a method of transmitting and
receiving independent signals over a common signal path by
means of synchronized switches at each end of the transmission
line so that each signal appears on the line only a fraction of the
time in an alternating pattern. TDM circuit switched lines
represent the traditional wireline access line data within this report
and do not include VoIP connections.
U-verse U-verse is the brand name of AT&T for a group of services
provided via Internet Protocol (IP), including television service,
Internet access, and voice telephone service.
Universal Service This term describes the financial support mechanisms that
constitute the national universal service fund. This fund provides
compensation to communications entities for providing access to
telecommunications services at reasonable and affordable rates
throughout the country, including rural, insular, high-cost areas,
and public institutions.
Universal Service USAC is an independent American nonprofit corporation
Administrative Company designated as the administrator of the federal Universal Service
(USAC) Fund by the Federal Communications Commission. USAC is a
subsidiary of the National Exchange Carrier Association.
VoIP Voice over Internet Protocol. The technology used to transmit
voice conversations over a data network using Internet Protocol.
Wireline A term used to describe the technology used by a company to
provide telecommunications services. Wireline is synonymous
with “landline” or land-based technology.

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