June 18, Enclosed for filing in the above-referenced matter, please find the Michigan Cable Telecommunications Associations Reply Comments.

Transcription

1 124 West Allegan Street, Suite 1000 Lansing, Michigan T (517) F (517) Michael S. Ashton mashton@fraserlawfirm.com (517) June 18, 2018 Ms. Kavita Kale, Executive Secretary Michigan Public Service Commission 7109 W. Saginaw Hwy. Lansing, MI RE: MPSC Docket No. U Dear Ms. Kale: Enclosed for filing in the above-referenced matter, please find the Michigan Cable Telecommunications Associations Reply Comments. me. If you have any questions or concerns with the enclosed, please do not hesitate to contact Very truly yours, Fraser Trebilcock Davis & Dunlap, P.C. Michael S. Ashton MSA/ab Enclosure FRASER TREBILCOCK DAVIS & DUNLAP PC LANSING DETROIT GRAND RAPIDS

2 STATE OF MICHIGAN BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION In the matter, on the Commission s own ) motion, to implement the provisions of ) Section 408(5) of 2018 PA 51. ) Case No. U ) MICHIGAN CABLE TELECOMMUNICATIONS ASSOCIATION S REPLY COMMENTS I. INTRODUCTION The Michigan Cable Telecommunications Association ( MCTA ) is a Michigan nonprofit corporation whose membership consists of many of the operators of cable systems in Michigan. MCTA s members provide cable television, Internet, and interconnected Voice over Internet Protocol ( VoIP ) services to Michigan businesses and consumers. MCTA represents the common interests of its members and has been recognized by the Michigan Public Service Commission ( Commission ) as being well suited to intervene in proceedings on behalf of the cable television industry in Michigan. (January 29, 1985 Opinion and Order in MPSC Case No. U-7620, p. 3). As interconnected VoIP service providers who are required to collect the state emergency surcharge from their customers, MCTA s members have a direct and vital interest in this proceeding to ensure that the state emergency fund is properly allocated in a manner that complies with Michigan law and ensures that the funds are spent on their intended purpose -- public safety. 1

3 As required by the passage of 2018 PA 51, 1 the Commission initiated this proceeding to determine the reimbursable categories of recurring and nonrecurring costs from the state emergency fund that would be available to Internet Protocol-based (IP-based) service providers. In its April 18, 2018 Order, the Commission proposed various cost categories for recovery and invited interested parties to file initial comments on or before May 18, The Commission then set June 18, 2018 as the time to file any reply comments. MCTA had no concerns with respect to the cost categories initially proposed by the Commission s April 18, 2018 Order, and therefore did not file initial comments. After reviewing the initial comments filed by various other providers, MCTA files these reply comments because certain providers proposed cost recovery for items outside those permitted by the law. With respect to cost recovery, the Michigan Legislature specifically limited the recovery to IP-based service providers for their costs related to the transport, routing, or delivery to PSAPs of IP-based emergency service. MCL (4)(b). II. LEGAL STANDARD FOR COST RECOVERY With the passage of 2018 PA 51, the Michigan Legislature allowed for the reimbursement from the state emergency fund of the costs related to the transport, routing, or delivery to PSAPs of IP-based emergency service. MCL (b)(4). The Michigan Legislature also assigned to the Commission the responsibility of determining the appropriate cost categories for this recovery and of reviewing the invoices submitted by the IP-based service providers seeking reimbursement. MCL (b)(5). In relevant part, Section 408(4) and (5) state: (4) All money collected and deposited in the emergency fund created in section 407 must be distributed as provided in this section. Annual money in the fund not exceeding $37,000, must be distributed as follows: PA 51 amended the Emergency Service Enabling Act, 1986 PA 32, being MCL et. seq. 2

4 (b) 25.56% must be available to reimburse local exchange providers for the costs related to wireless emergency service and to reimburse IP-based service providers for the costs related to the transport, routing, or delivery to PSAPs of IP-based emergency service. Any cost reimbursement allowed under this subdivision must not include a cost that is not related to wireless emergency service or to IP-based emergency service. A local exchange provider or an IP-based service provider may, on a quarterly basis, submit an invoice to the commission for reimbursement from the emergency fund for allowed costs. Except as otherwise provided in subsection (5), within 45 days after the date an invoice is submitted to the commission, the commission shall approve, either in whole or in part, or deny the invoice. (5) Within 60 days of the effective date of the 2018 amendatory act that added this subsection, the commission shall commence a proceeding to determine the recurring and nonrecurring cost categories for all IP-based service providers. The commission shall allow any interested person to intervene in a proceeding under this subsection. Within 180 days after a proceeding is commenced under this subsection, the commission shall issue a final order adopting the recurring and nonrecurring cost categories for all IP-based service providers considered just and reasonable by the commission. For cost studies first submitted by an IP-based service provider after the commission completes the proceeding under this subsection, the commission shall, within 45 days of receiving an invoice, only approve those costs in the invoice that are both of the following: (a) Consistent with the recurring and nonrecurring cost categories for IP-based service providers approved by the commission under this subsection. (b) For contracts entered into after the effective date of the 2018 amendatory act that amended this section, the result of a competitively bid process as confirmed by supporting documentation. Thus, to be reimbursable, the cost must be: (1) borne by an IP-based service provider, and (2) related to the transport, routing, or delivery to PSAPs of IP-based emergency service. 3

5 III. REPLY COMMENTS A. Reply to Frontier Communications In its comments, Frontier Communications ( Frontier ) stated that it was concerned with the conversion costs of service providers that are not the service provider in a given county. (Frontier at p. 3; emphasis added.) Frontier went on to assert that these costs could be substantial and then claimed that, [o]nce a county awards a contract to the IP-based service provider, the conversion and ongoing IP-based costs for all providers in that county are reimbursable by the Commission. (Id., emphasis added.) Frontier s broad request for cost reimbursement from the state emergency fund for all providers -- and not just the IP-based service provider -- directly conflicts with the plain language of the statute. Section 408(4)(b) plainly limits reimbursement to IP-based service providers. MCL (4)(b). Similarly, Section 408(5) limits reimbursement to IP-based service providers. MCL (5). When construing a statute, the main objective is to discern the Legislature s intent through the language plainly expressed. Grange Ins. Co. of Michigan v. Lawrence, 494 Mich. 475, 493 (2013). The clear and unambiguous language of a statute is to be enforced as written. In re Bradley Estate, 494 Mich. 367, 377 (2013). Here, the statute does not allow for reimbursement of all providers as requested by Frontier, but only to IPbased service providers. B. Reply to Peninsula Fiber Network, LLC In the comments filed by Peninsula Fiber Network, LLC ( PFN ), PFN seeks reimbursement from the state emergency fund for categories of expense not related to the transport, routing, or delivery to PSAPs of IP-based emergency service as required by MCL (4)(b). PFN s proposals should be rejected out of hand because the numerous 4

6 categories for which it seeks reimbursement conflict with the legislative requirements and would result in the inappropriate expenditures of funds collected for the sole purpose of providing emergency service. As set forth above, the Michigan Legislature plainly stated that reimbursement from the state emergency fund for IP-based providers was to be limited to costs related to the transport, routing, or delivery to PSAPs of IP-based emergency service. Yet, PFN appears to seek recovery for other costs, which it asserts are just and reasonable and fall within 31 other categories. (PFN at pp ) Adopting such broad categories would lead to potential abuse because the categories, in and of themselves, are overbroad and include, among other things, legal expenses (Id., at p. 10, 13), late payment fees (Id., at p. 11, 18), the cost of ongoing relationships with PSAPs and Governing Authority (Id., p. 12, 24), the cost of defending the cost study (Id., at p. 12, 25), and the cost of responding to legislative requests and reporting (Id., p. 12, 28-29). These overly broad categories should be rejected by the Commission because they exceed the reimbursable costs allowed by MCL (4)(b), which require reimbursable costs to relate to the transport, routing, or delivery to PSAPs of IP-based emergency service. These categories simply do not relate to transportation or delivery of actual emergency services to a PSAP. These categories are also neither a just nor a reasonable use of funds collected for the specific purpose of providing emergency services to Michigan citizens. Adopting these broad categories would constitute poor stewardship of much needed funds to provide emergency services to Michigan citizens and lead to abuses of the fund. 5

7 Respectfully Submitted, Dated: June 18, 2018 Fraser Trebilcock Davis & Dunlap, P.C. Counsel for Michigan Cable Telecommunications Association By: Michael S. Ashton (P40474) 124 West Allegan Street, Suite 1000 Lansing, Michigan Telephone: (517)