A local, long distance or prepaid provider seeking to offer intrastate services must obtain authorization or “certification” (as it is commonly called) from the Public Utility Commission (PUC) or equivalent telecom regulatory agency in the state in which it intends to provide service. An overview of the state authorization or certification process is provided below.
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Most states require providers to seek authorization or certification to operate as a telecommunications provider by submitting an application with the state PUC or similar regulatory agency. In many instances, the application requests that the PUC issue a Certificate of Public Convenience and Necessity (CPCN) or similar authorization, which is formal approval of the provider’s proposed operations and may be thought of as essentially a license to operate as a telecommunications provider in a given state.
Applications for certification can take many forms and vary in length and complexity. Some states require only the submission of short registration forms, while others require full petitions, with notarized affidavits, and the submission of tariffs. Tariffs are documents outlining a provider’s rates, terms and conditions for the services it offers and are typically 30 pages to 40 pages in length.
The costs associated with gaining authorization or certification include legal fees for preparation of the applications and tariffs, fees assessed by most PUCs for filing applications and other costs. As each application requires varying degrees of interaction with officials at the PUC, which can result in the accumulation of billed attorney time, we offer flat-fee arrangements whereby the costs associated with each application are controlled and set upfront.
PUC filing fees for each state typically range from $35 to $350, with the rare exception of a higher fee of up to $1,000. A state-by-state breakdown of our flat-fee schedule and PUC/PSC filing fees is available upon request.
Applications for CPCNs can take anywhere from one month to one year to process by a state PSC/PUC, with an average processing time from the date of filing of around six weeks. Processing times vary depending on how elaborate a state’s requirements and procedures are, the efficiency of the state PUC’s staff (staff availability and workload), how well an application is prepared (mistakes slow processing times) and other factors, such as hearing requirements (discussed below).
For instance, states with minimal regulatory requirements, such as Colorado and Montana (which require the submission of one- to two-page registration forms), authorize providers to begin operations immediately upon filing the forms, with no processing times. Other states take approximately two to three months to process applications. And other states such as Arizona have been known to take over six months, and sometimes close to a year, to process applications, depending on the factors discussed above.
As mentioned above, several states currently require hearings as part of the certification process, which can add significant delays in processing time. Hearings before state PUCs require a representative from the applicant’s company to testify (either in person or, depending on the state, telephonically) about the company’s managerial, technical and financial fitness to provide telecommunications services, as well as other related matters.
Hearings typically last about an hour or two but require preparation on the part of counsel and the witness to facilitate a favorable outcome. Hearing preparation, as well as the requirement in states such as South Carolina that in-state, local counsel represent the applicant in the hearing, can increase the costs of obtaining certification in such states.
It is also important to note that some states, while not requiring hearings, require that in-state, local counsel be used to file the applications and represent the applicant on a limited basis to obtain certification. Currently, local telecom counsel is required in Missouri, Mississippi and South Carolina. We have established relationships with attorneys in these states and typically enlist their services on behalf of our clients.