PUBLIC UTILITY COMMISSION
Harrisburg, PA. 17105-3265
Public Meeting held July 13, 2000
Commissioners Present:
John M. Quain, Chairman
Robert K. Bloom, Vice Chairman
Nora Mead Brownell
Aaron Wilson, Jr.
Terrance J. Fitzpatrick
Affiliated Interest Agreements between
Bell Atlantic Directory Services Inc. and
Bell Atlantic Network Services, Inc. on behalf of Bell Atlantic-Pennsylvania, Inc. / Docket Number:
G-00000765
G-00000766
G-00000767
ORDER
BY THE COMMISSION:
On May 24, 2000, Bell Atlantic-Pennsylvania, Inc. (“BA-PA” or “Company”) filed, pursuant to 66 Pa. C.S. §2101, et seq., Applications seeking the Commission’s approval of three affiliated interest agreements (“Agreements”) between Bell Atlantic Directory Services Inc. (“DSI”) and Bell Atlantic Network Services, Inc. on behalf of BA-PA. The statutory consideration period for these filings was extended until July 21, 2000. These Agreements were filed in conjunction with two amendments (Amendments to Agreement for the Provision of Advertising), docketed at G-00000770 and G-00000771, which will be addressed by separate orders.
In order to comply with recent Federal Communication Commission (“FCC”) regulations regarding the obligation of local exchange companies to license subscriber listings[1], BA-PA has filed the three proposed Agreements and made revisions to its Tariff No. 1.[2] Together with the tariff revisions and the two related amendments docketed at G-00000770 and G-00000771, the proposed Agreements replace BA-PA’s current agreement with DSI entitled Publishing and Listings License Agreement[3] (“License Agreement”), under which DSI produces telephone directories for BA-PA, has the right to resell listings to third parties, and serves as a conduit for providing listings to independent publishers.
As a result of the FCC requirement that listings be provided by the local exchange company to affiliates and non-affiliates on the same terms and conditions, DSI is now purchasing listings under BA-PA’s revised directory listing tariff. This major change requires that BA-PA’s current License Agreement with DSI be replaced by new agreements addressing BA-PA’s ongoing arrangements with DSI that are not covered by the addition of terms and conditions and rates for the sale of directory listings to its Tariff No. 1.[4]
The three proposed agreements include:
(1) Information Provisioning and Related Services Agreement, pursuant to which DSI will be compensated for providing various listings database services. (Docket No. G-00000765).
(2) Directory Publishing Agreement, the purpose of which is to ensure that DSI continues to be obligated to satisfy all of BA-PA’s regulatory obligations with respect to directory publishing. (Docket No. G-00000766).
(3) Marketing Uses Listings License Agreement, pursuant to which DSI will pay BA-PA for the right to continue to engage in approved listings-related marketing activities. (Docket No. G00000767).
Information Provisioning and Related Services Agreement
Under the current License Agreement, DSI acts as the service provider for listing requests from third-party directory publishers. Therefore, the capability for providing database listings resides within DSI rather than BA-PA. Since BA-PA does not currently possess the capability to fulfill third-party requests on an efficient basis, it wishes to utilized the computer services of DSI to make sure that the needs of independent publishers are met.
BA-PA, under the terms of the Information Provisioning and Related Services Agreement, may request DSI to provide it with certain information provisioning services, including processing and fulfillment of orders for its subscriber listing information and listing information of subscribers to services of Other Telecommunications Providers that BA-PA has agreed to provide, and other related services. BA-PA will compensate DSI for its services at the same rate DSI charges other businesses for the same services, or if such a rate does not exist, the lower of DSI’s fully distributed costs and estimated fair market value, consistent with the FCC’s affiliate transaction rules.
This Agreement will become effective upon Commission approval, pursuant to Section 2101, et seq., of the Public Utility Code. The initial term of the agreements is for a period of one (1) year with automatic renewals for additional periods of one (1) year unless terminated in writing by either party at least ninety (90) days prior to the expiration of the then current term.
Directory Publishing Agreement
Under the proposed Directory Publishing Agreement, DSI, as “Publisher,” agrees to fulfill BA-PA’s regulatory obligations with respect to the publication and distribution of telephone directories, which include: publication of subscriber listings, publication of light-faced listings in the Yellow Pages for business subscribers, delivery of directories to subscribers, and publication of certain other information. BA-PA will provide the Publisher with listing information of its subscribers and subscribers of other providers or resellers of intraLATA local exchange services or wireless services (“Other Telecommunications Providers” or “OTPs”) for whom BA-PA has agreed or is required to provide directory services.
Consistent with the current License Agreement, telephone directories will be distributed by the Publisher to each of BA-PA’s subscribers and to subscribers of Other Telecommunications Providers at no cost to BA-PA or the OTPs. In return, the Publisher may sell advertising in any section of the telephone directories, and BA-PA will have no rights or interest in any revenues received by the Publisher in connection with the sale or other marketing of Directory Advertising.
This Agreement will become effective upon Commission approval, pursuant to Section 2101, et seq., of the Public Utility Code. The initial term is two (2) years, after which this Agreement will automatically renew on the same terms and conditions for successive one-year terms. Following the expiration of the initial term, either party may terminate this Agreement upon not less than twelve (12) months prior written notice.
Marketing Uses Listings License Agreement
The proposed Marketing Uses Listings License Agreement permits DSI, as “Licensee,” to use, resell, or relicense to third parties certain portions of BA-PA’s directory listing information for direct mail or telemarketing applications. This information may not be used for directory assistance services, and BA-PA has the right to prevent its use for any other products or services which BA-PA may find objectionable. BA-PA may also designate any subscriber’s listing information as being unavailable for marketing purposes.[5]
DSI agrees to pay BA-PA a fee that is consistent with the pricing of the current License Agreement, and BA-PA may change the fee at any time on ninety (90) days advanced notice to DSI. On an annual basis, the Agreement will result in an increase in BA-PA’s operating revenue.
This Agreement will become effective upon Commission approval, pursuant to Section 2101, et seq., of the Public Utility Code.
In further support of the three Agreements, BA-PA indicates, among other things, that:
--Competitive bidding is not applicable because these Agreements replace the previously approved Publishing and Listings License Agreement.
-- The previously approved Publishing and Listings License Agreement is being restructured through these Agreements to comply with new FCC requirements.
--BA-PA’s revenues and expenses associated with these Agreements will be accounted for as regulated transactions in accordance with Commission and FCC rules and BA-PA’s internal guidelines.
--BA-PA is charging its affiliate in accordance with FCC Parts 32 and 64 Rules and Regulations which ensure that affiliate services are not subsidized by the regulated ratepayer.
--The purposed of the three Agreements is to reflect the changing regulatory environment for directory listings while enabling BA-PA to continue to satisfy its obligations involving the publication and distribution of telephone directories, including the provision of subscriber listing information to independent publishers.
-- For these reasons, BA-PA contends the proposed Agreements are in the best interest of it and its customers.
Conclusion
Upon our review of the Company’s filings, it does not appear that these Agreements are unreasonable or contrary to the public interest. Therefore, we shall hereby approve the Company’s filings. However, approval of these filings does not constitute a determination that such filings are consistent with the public interest and the associated costs or expenses are reasonable or prudent for the purposes of determining just and reasonable rates. Furthermore, our approval is contingent upon the possibility that subsequent audits and reviews may be conducted pursuant to Section 2102, et seq., of the Public Utility Code, 66 Pa. C.S. §2102, et seq.; THEREFORE,
IT IS ORDERED:
1. That Bell Atlantic-Pennsylvania, Inc.’s Applications for approval of three affiliated interest agreements entitled Information Provisioning and Related Services Agreement, Directory Publishing Agreement, and Marketing Uses Listings License Agreement, entered into between Bell Atlantic Directory Services, Inc. and Bell Atlantic Network Services, Inc., on behalf of Bell Atlantic-Pennsylvania, Inc., are approved subject to possible inquiry and subsequent audit and review, in any Commission proceeding.
2. That this approval will apply only to the agreement(s), services(s), parties, and any other matters specifically and clearly defined within this instant filing.
BY THE COMMISSION,
James J. McNulty
Secretary
(SEAL)
ORDER ADOPTED: July 13, 2000
ORDER ENTERED: July 13, 2000
1
[1] FCC regulations adopted on August 23, 1999, at Docket No. 96-115, 96-98, and 99-273.
[2] On March 3, 2000, BA-PA issued revisions to Tariff Telephone Pa. P.U.C. No. 1, to become effective March 13, 2000, setting forth new terms and conditions and rates under which listings will be made available directly by BA-PA rather than by DSI to all publishers, including DSI. These revisions were approved by Secretarial Letter issued March 27, 2000, at Docket No. R-00005115.
[3]Affiliated Interest Agreement between Bell Atlantic-Pennsylvania, Inc. and Bell Atlantic Directory Services, Inc., Docket No. G-00960515 (Pa. Public Utility Commission, December 19, 1996).
[4] See Footnote No. 2.
[5] Non-Published, Non-Listed, and Opt-Out listings, which are those listings that a telephone subscriber has requested not be used for marketing purposes, will not be made available.