HomeMy WebLinkAbout19971231Order No 27292.docBEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF ATLAS COMMUNICATIONS, LTD. FOR A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY TO PROVIDE RESOLD LOCAL EXCHANGE CARRIER SERVICES.
)
)
)
)
)
) CASE NO. ACM T 97 2
ORDER NO. 27292
BACKGROUND
On November 14, 1997, the Commission issued a Notice of Modified Procedure soliciting comments in response to the Application of Atlas Communications, Ltd. (Atlas) for a Certificate of Public Convenience and Necessity to provide resold local exchange carrier services within the state of Idaho. Comments were filed by U S WEST, the Idaho Telephone Association and the Commission Staff.
U S WEST
U S WEST notes that, at this time, Atlas does not have an interconnection or resale agreement with U S WEST for the state of Idaho. The purpose of U S WESTs comments is simply to object to Atlas request in its Application that it be granted an exemption from the requirements of Idaho Code 62-610, and the rules of the Commission related thereto, pertaining to the Idaho Universal Service Fund (USF).
U S WEST notes that in paragraph 11 of Atlas Application, Atlas requests an exemption from the provisions of Idaho Code 62-610 relating to the USF. The Application states:
Applicant as a resale carrier, submits that granting an exemption from the Commissions Universal Service Fund (USF) requirements is warranted because the facilities-based carriers from which Applicant will purchase underlying transmission services for its Idaho operations will make payments into the USF which will cover Applicants contribution. Applicants contribution to the USF will be met through payments made by local exchange carriers (e.g., U S WEST and GTE) from which Applicant will lease transmission capacity; therefore, Applicant should be granted an exemption from direct payment into the USF.
U S WEST argues that the Idaho USF and its requirements are a product of statute, not Commission mandate. Idaho Code 62-610(2) provides that the USF shall be funded by imposing a statewide end user surcharge on local exchange service and MTS and WATS type services. Sub paragraph (a) to that section further provides that providers of local exchange service shall remit the local exchange surcharge revenues to the fund administrator. . . . U S WEST argues that Atlas request for exemption seeks to avoid the explicit statutory requirements that end users (i.e., Atlas retail customers) be surcharged and that their local exchange provider (i.e., Atlas) collect the surcharge from its customers and remit it to the fund administrator.
U S WEST argues that contribution to the Idaho USF is a statutory requirement and questions whether the Commission even has the jurisdiction to grant the requested relief should it be inclined to do so. U S WEST further asserts that the requested exemption is contrary to the public interest.
U S WESTs second point of contention is that, contrary to Atlas assertion, U S WEST will not pay the end user surcharge associated with the resale of local exchange services. U S WEST contends that it is not obligated to do so under the statutory language cited above and that, in any event, such a suggestion is illogical. In the context of the typical resale arrangement, U S WEST is not a provider of local exchange services; it is a wholesaler with no retail customer to surcharge. Consequently, U S WEST will not collect any funds to remit to the USF administrator. U S WEST argues that expecting it to pay the surcharge is, in effect, asking that it make a contribution to the fund out of its reduced revenues associated with the sale of local service at a discount to a competitor. Such an expectation, U S WEST contends, is not consistent with rationale business practices.
In conclusion, U S WEST argues that in drafting the USF statutory language, the Idaho Legislature intended that local exchange customers and not facilities-based providers share the responsibility of funding the Idaho USF. U S WEST argues that reducing the number of customers in the pool providing USF funding will increase the surcharge for remaining customers and undermine the USF itself. It could also provide Atlas with a competitive advantage, U S WEST asserts.
Idaho Telephone Association (ITA)
The ITA also takes exception to Atlas request for exemption from USF requirements. The ITA notes that if Atlas is to resell local exchange service as proposed in its Application, then it is a provider of local exchange subject to Idaho Code 62-610 and cannot be exempted from the statutes requirements. Absent firm assurances that Atlas has specifically provided that either U S WEST or GTE will collect and remit the USF surcharge, then Atlas request for exemption should be denied, the ITA asserts.
Commission Staff
Staffs review of the financial data submitted by Atlas with its Application reveals that the Company incurred losses in 1995 and 1996. Moreover, Atlas has not provided the Commission with any indication as to its source of financing. Staff notes that procedural Order No. 26665 contains the requirement that LEC Applicants provide a signed copy of an escrow account with a bonded agent if the Company requires advanced deposit by its customers. In its interim tariff, Atlas indicated its intent to additionally require advanced payments in some instances. Atlas did not address the escrow requirement in its Application but has recently advised Staff that it will revise its tariffs to reflect that it will not require advanced deposits for the services contemplated thereby negating the escrow requirements. Staff recommends, nonetheless, that in view of the financial deficiencies of Atlas, that the escrow account be expanded to cover all special advanced payments, as opposed to deposits, (such as special configurations or construction), including one months revenue in addition to any deposits the Company requires. If the Company identifies its source of financing to show that its customers would not be hurt if Atlas ceased its operations in Idaho, then this requirement could be waived, Staff suggests.
In addition, Staff noted 34 areas in the interim tariff filed by Atlas that require clarification, correction or modification. Until these items are satisfied, Staff contends that Atlas interim tariff does not comply with the Commissions rules. Regarding Atlas request for exemption from USF requirements, Staff notes that Atlas assumes that the facilities-based carriers for which Atlas resells will pay the USF requirements. Staff believes that this is not necessarily a valid assumption and that Atlas should be required to pursue exemption from USF requirements in a separate proceeding following the procedure outlined in IDAPA 31.46.01 for toll providers who request exemptions from these funding obligations. Essentially, this procedure allows the USF administrator and/or Staff to grant exception if the provider supplies letters from the underlying carriers verifying that the carriers remit the required funds.
FINDINGS
We find that, based upon the uncontested information presented to us at this juncture, the Application of Atlas does not comply with the requirements of the Commissions Procedural Order No. 26665. Consequently, the Application is dismissed. Atlas is free to refile its application at a future time should it desire. In that event, we urge the Company to consult with the Commission Staff to ensure that all of the Commissions technical requirements are satisfied.
Because Atlas Application does not comply with the Commissions Procedural Order, it is unnecessary to resolve the issue raised regarding Atlas request for an exemption from the requirement to collect the USF surcharge from its customers. We point out, however, that it appears that Atlas has failed to obtain the consent of the underlying carriers from whom it intends to purchase transmission facility services. We urge Atlas to more fully address this issue in the event that it chooses to refile its application.
O R D E R
IT IS HEREBY ORDERED that the Application of Atlas Communications, Ltd. is dismissed without prejudice.
THIS IS A FINAL ORDER. Any person interested in this Order (or in issues finally decided by this Order) or in interlocutory Orders previously issued in this Case No. ACM-T-97-2 may petition for reconsideration within twenty-one (21) days of the service date of this Order with regard to any matter decided in this Order or in interlocutory Orders previously issued in this Case No. ACM T 97-2. Within seven (7) days after any person has petitioned for reconsideration, any other person may cross-petition for reconsideration. See Idaho Code 61 626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this day of December 1997.
DENNIS S. HANSEN, PRESIDENT
RALPH NELSON, COMMISSIONER
MARSHA H. SMITH, COMMISSIONER
ATTEST:
Myrna J. Walters
Commission Secretary
bls/O:ACMT971.bp3
ORDER NO. 27292 -5-
Office of the Secretary
Service Date
December 31, 1997