20110216Comments.pdf

NEIL PRICE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
BARNO. 6864
F;1,. i~C: t:c
16l 1 fEB \6 Pri 3: l 2
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
ALLIED WIRELESS COMMUNICATIONS )
CORPORATION, D/B/A ALLTEL WIRELESS, )
FOR DESIGNATION AS AN ELIGIBLE )
TELECOMMUNICATIONS CARRER. )
)
)
CASE NO. ALL-T-IO-Ol
COMMENTS OF THE
COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilties Commission, by and through its
attorney of record, Neil Price, Deputy Attorney General, and in response to the Notice of
Application and Notice of Modified Procedure issued in Order No. 32167 on January 26,2011, in
Case No. ALL-T-10-01, submits the following comments.
BACKGROUND
On December 16, 2010, Alled Wireless Communcations Corp. dba Alltel Wireless
(Alled Wireless or Company) fied an Application seeking designation as an eligible
telecommunications carrier (ETC) pursuant to the federal Telecommunications Act and this
Commission's Order No. 29841. 47 U.S.C. § 214(e)(l-2); 47 C.F.R. § 54.201. Alled Wireless is
a commercial mobile radio services (CMRS) carrier licensed to provide mobile services as
defined in 47 U.S.C. § 153(27) "throughout portions ofIdaho." Application at 2. Designation as
an ETC would allow Alled Wireless to receive monetary support from the federal Universal
STAFF COMMENTS 1 FEBRUARY 16,2011
Service Fund (USF) and participate in the federal Lifeline program as well as the Idaho
Telephone Service Assistance Program (ITSAP). i
Allied Wireless is a full-service wireless carier that offers universal services throughout
its licensed service area and wil provide the supported services using the existing network
infrastrcture of Allied Wireless. This infrastructure consists of (1) switching, truing, cell sites,
and network equipment together with any expansion and enhancements to the network; and (2) as
necessary, through the resale of another carrier's service or through roaming arrangements. ¡d. at
16.
Alled Wireless seeks ETC designation in the non-rural wire centers served by Qwest
Corporation and in the rural wire centers served by Cambridge Telephone Company, CenturyTel
of Idaho, Inc., Custer Telephone Cooperative, Inc., Farmers Mutual Telephone Co., and Midvale
Telephone Exchange, Inc. ¡d. at Exhibit 4.
Alled Wireless is a wholly-owned subsidiary of Atlantic Tele-Network, Inc. (A TNI), a
publicly-traded corporation headquarered in Beverly, Massachusetts. ATNI, and ultimately
Alled Wireless, recently acquired certain wireless assets, licenses and accompanying
authorizations in six states, including Idaho, from subsidiaries ofVerizon Wireless. ¡d. at 2-3.
Alled Wireless states it is authorized to use the Alltel Wireless (Alltel) brand name in the
acquired areas and intends to continue using the Alltel name going forward. ¡d. at 3. Most
existing Alltel Customers that were acquired by Alled Wireless wil see no substative changes
to their existing wireless service, and new customers wil have access to wireless plans, features,
handsets and service that are similar to what has historically been provided by AllteL. ¡d.
STAFF ANALYSIS
Staff has reviewed the Allied Wireless Application and has conducted an analysis of the
Company's fulfillment of the federal Telecommunications Act of 1996 ("the Act") and of
i The Federal Communications Commission's Lifeline program is intended to promote universal service by using
USF revenues to make telecommunications service more affordable. Idaho participates in the residential ITSAP
program pursuant to Idaho Code § 56-901and Order No. 21713.
STAFF COMMENTS 2 FEBRUARY 16,2011
Commission Order No. 2984 I. In addition, Staff has analyzed the merits of awarding ETC
designation for rural wire center service areas.2
In the Application, Alled Wireless states it will offer the federally designated universal
services which are supported by the federal USF program. These universal services include: (I)
voice grade access to the public switched telephone network; (2) a certain amount of local usage;
(3) dual tone multi-frequency signaling; (4) single-pary service; (5) access to emergency
services; (6) operator services; (7) long-distace services; (8) directory assistance: and (9) long-
distance limitation (i.e., toll blocking) for qualifying low-income customers. ¡d. at 5-8.
Alled Wireless wil comply with all applicable Idaho service quality standards and
consumer protection rules, and wil abide by the Consumer Protection Standards established by
the Cellular Telephone Industry Association (CTIA) consumer code. ¡d. at 15.
Alled Wireless states that grant of ETC designation is in the public interest. More
specifically, Alled Wireless asserts that use of high cost support wil provide consumers with
"improved coverage, service quality, and reliability" and "will lead to significant health and
safety benefits." ¡d. at 22-23. Allied Wireless also maintains that there is no possibility for
cream-skimming, and it "is only seeking ETC designation in areas that cover the entirety of the
incumbent LEC service area." ¡d. at 28.
Alled Wireless believes that its designation as an ETC wil "impose no burden on the
federal Universal Service Fund and only a negligible burden if the CETC cap is lifted." ¡d. at 24.
Rural Wire Centers
The Allied Wireless Application includes 20 rural wire centers in Idaho curently served
by five incumbent local exchange cariers (ILEC). These rural wire centers are: Cambridge,
Council, Cuprum, Lowman, and Indian Valley served by Cambridge Telephone Company;
Leadore, North Fork, and Salmon served by CenturTel of Idaho, Inc.; Challis, Clayton, Elk
Bend, and May served by Custer Telephone Cooperative, Inc.; Fruitland and Nu Acres served by
Farers Mutual Telephone Co.; and Lakeview, Midvale, Staley, War Lake, Waren, and
Yellow Pine served by Midvale Telephone Exchange, Inc. ¡d., Exhibit 4.
2 The term "service area" denotes a geographic area established by a State Commission for the purpose of
determining universal service obligations and support mechanisms. In the case of a rural telephone company, service
area is defined as a company's study area unless and until the FCC and the State Commission, after taing into
account recommendations ofa Federal-State Joint Board instituted under section 410(c), establish a different
definition of service area for such company. 47 U.S.c. § 214(e)(5)STAFF COMMENTS 3 FEBRUARY 16,2011
The Act treats rual and non-rual service areas differently for the puroses of ETC
designation. When a carer meets the statutory ETC requirements and requests designation in a
rual area served by an ILEC, the Act gives the State Commission more discretion than in the
non-rural areas. The Act states that the State Commission may grant ETC designation to the
additional carrier provided that ETC designation of the additional carrier is in the public interest.
47 U.S.C.§ 214(e)(2).
Under the Act and Order No. 29841, greater emphasis is placed on scrutinizing the public
interest issues for ETC Applications in rual service areas. Rural wire centers often have widely
disparate population densities, and therefore, highly disparate cost characteristics. As such, Staff
believes the public interest analysis plays a more important role when reviewing an ETC
designation in rural service areas.
Public Interest Analysis
Under Section 214 of the Act, the State Commission must determine that an ETC
designation is consistent with the public interest, convenience and necessity. 47 U.S.C.
§ 214(e)(2). In accordance with the Act, and the ETC requirements of the FCC rules, the
Commission has stated:
In adopting the FCC's proposed public interest analysis, this
Commission adopts an analytical framework for making a public
interest determination. This framework necessarily involves the
consideration of certain enumerated factors, such as the benefits to
consumer choice, the unique advantages and disadvantages of the
applicant's service offering, and, where applicable, consideration of
creamskimming. However, the Commission may consider other
relevant public interest determinations in its public interest
determination. Order No. 29841 at 15-16.
This Commission has consistently applied the public interest analysis in previous decisions. The
Commission denied the ETC Applications of wireless carriers, IA T Communications, Inc.
dba NTCH-Idaho, Inc., and NPCR, Inc dba Nextel Partners (Case No. GNR-T-03-08). In
addition, the Commission parially denied, Inland Cellular Telephone Company (Case No.
INC-T-06-02) and CTC Telecom, Inc. (Case No. CTL-T-09-01), because the applicants failed to
carr out their burden of demonstrating that their Applications for rural areas were in the public
interest. See Order Nos. 29541, 30212 and 30867. These Applications failed the public interest
test by partial service area coverage or by placing too much emphasis on competition and relying
on approved state and federal applications in very different service areas rather than explainingSTAFF COMMENTS 4 FEBRUARY 16,2011
how the paricular applicant's ETC designation would benefit all customers in its ETC service
area.
Applicants have the burden of proof to demonstrate that the public interest is served by
designating them as an ETC in these rual areas. Order No. 29541 at 6 (citing Virginia Cellular,
LLC Petition/or Designation as an ETC, 19 F.C.C.R. 1563 (2004)). The Alled Wireless
Application makes five primary public interest arguments.
1. Improved Coverage, Service Quality and Reliability. Alled Wireless states that with
USF high-cost support, it will operate, maintain, and expand its communications infrastrcture in
Idaho to "improve signal coverage, enhance wireless call quality, and provide more advanced
services to Idaho consumers." Application at 22. The Company also intends to bring third
generation (3G) wireless services to the area. ¡d. Citing the Virginia Cellular Order, 19 FC Rcd
at 1576 (para.29), Allied Wireless states the expansion of its network "wil assist consumers in
rural areas who often must drive significant distances to places of employment, stores, schools,
and other critical community locations." ¡d.
Staff believes that the implicit benefits of the Company's two-year network improvement
plan wil provide consumers with additional services not curently available.
2. High-cost Support Wil Lead to Significant Health and Safety Benefits. The Company
states that ETC designation wil provide "additional consumer choice and a potential solution to
health and safety risks associated with the rural nature of these areas." ¡d. at 23. Allied Wireless
maintains that the mobility of wireless service when compared to wireline service wil offer
"important health and safety benefits so that people in need are not required to travel long
distances to find a telephone in an emergency or other important health and safety situation( s)."
¡d. at 24.
Staff does not advocate one technology over another, but instead recognizes that each has
unique advantages and disadvantages depending upon the geography, demographics, and
technological needs ofthe community. Staff, however, agrees that mobility of wireless service
wil provide health and safety benefits for consumers.
3. Impact on the Federal USF. Alled Wireless believes that grant of this Application
wil impose no burden on the federal USF and only a negligible burden if the CETC cap is lifted.
¡d. at 24. Citing the Universal Service Administrative Company's (USAC) most recent quarerly
fiing projections to the FCC, the Company states that even if it were to capture every incumbent
LEC subscriber, it would not cause undue strain on the USF high-cost fund. ¡d at 26. Alled
Wireless argues that "the Commission should follow the FCC's guidance and find that theSTAFF COMMENTS 5 FEBRUARY 16,2011
analysis of any individual ETC designation's effect on the federal USF is inconclusive and,
therefore, need not be undertaken." ¡d.
This topic is examined in greater detail in the High-Cost Federal Funding discussion.
4. Benefits of Competition. Alled Wireless asserts that designation as an ETC "wil
promote competition and faciltate the provision of high-quality communications service to those
living and working within the proposed service area." ¡d. at 27. The Company states,
"(r)esidents in may rual areas have long trailed urban areas in receiving competitive local
exchange service ( s) and advanced telecommunications services, and in some rual areas no
meaningful choice of local exchange carier exists." Alled Wireless furher notes, "it is also
evident that deployment of high-quality wireless telecommunications infrastructure is essential to
economic development in rual areas." ¡d.
Staff notes that there are other wireless providers in the service area that Alled Wireless
proposes to serve and, therefore, Staff does not believe the benefits of competition to be a
compellng argument to satisfy the public interest requirement.
5. Likelihood of Cream Skimming. Alled Wireless states that there is no possibilty for
cream-skimming, because it is not targeting paricular areas based on the possibilty of receiving
"uneconomic levels of support." Rather, the Company states it is only seeking ETC designation
"in areas that cover the entirety of the incumbent LEC service area." ¡d. at 28.
Staff notes that Allied Wireless is not seeking ETC designation in parial wire centers and
is proposing to serve some of the more sparsely populated and more costly study areas in Idaho.
This is supported by a wire center population density chart. ¡d. Confidential Exhibit 3. Staff
agrees that an Application for ETC designation that includes an entire service area avoids the
appearance of cream skimming.
Other Public Interest Considerations
When applying the public interest test in an Application for ETC designation, Staff
believes there are other considerations that have not been mentioned, but merit discussion.
1. Contributions to Idaho Programs. As in the more recent Applications for Certificate of
Public Convenience and Necessity (CPCN), the Commission grants a CPCN subject to certin
conditions. One of these conditions is contribution to the Idaho Universal Service Fund (USF),
Idaho Telephone Relay Service (TRS), and Idaho Telephone Service Assistance Program
(ITSAP), and any future reporting deemed appropriate for competitive communications providers.
Staff believes that if this requirement is appropriate for a CPCN then it must also be appropriateSTAFF COMMENTS 6 FEBRUARY 16,2011
for an ETC designation that is subject to greater scrutiny than a CPCN. Staff believes that these
conditions, pursuant to Idaho Code, also apply to an ETC designated company.
2. FCC Requirement of Access to Emergency Service. Access to emergency service is
one of the federal requirements for designation as an ETC. 47 U.S.C. § 54.10(a). The FCC
requirement also applies to enhanced 911 access, which includes the capability of providing
automatic number identification (ANI) and automatic location information (ALI). Alled
Wireless avers that its customers wil be able to reach an emergency dispatch, or public safety
answering point (PSAP), by dialing 9-1-1. Application at 6-7. Staff believes a public interest test
must include the Company's commitment to adhere to all requirements of the E911 Idaho
Emergency Communications Commission as outlined in Idaho Code § § 31-4801 through -4819.
Public Interest Summary
In evaluating the public interest portion of an ETC Application, the Commission weighs
whether the potential benefits of ETC designation outweigh the potential harms. One
consideration is whether the Applicant is committed to providing universal service throughout the
rural areas or, if not, whether the potential for cream skimming exists. Staff believes the
Company avoids the appearance of cream skimming where the Application includes all wire
centers in a designated service area. Staff notes that the Alled Wireless Application includes a
2011 and 2012 network improvement plan (Application, Confidential Exhibit D), with wire
center specific details.
In addition to the information contained in the Alled Wireless Application, Staff believes
the Company is required to meet the public interest tests discussed in Other Public Interest
Considerations even when they are not explicitly stated in the Application.
In sum, the Staff believes the Alled Wireless Application presents an acceptable
argument to support the Company's public interest position.
Network improvement Plan
The two-year network improvement plan must describe with specificity proposed
improvements or upgrades to the applicant's network on a wire center-by-wire center basis
throughout its proposed designated service area. Order No. 29841 at 18.
As mentioned earlier, Alled Wireless presents detailed information outlining its network
improvement plan for years 2011 and 2012. The plan includes details such as affected wire
STAFF COMMENTS 7 FEBRUARY 16,2011
centers, expenditures, dates, and a narrative description of the planed improvements.
Application, at Confidential Exhibit 3.
Staff believes Alled Wireless provides a reasonable improvement plan. Additionally, with
grant of ETC designation, companies must anually submit a Two-Year Network Improvement
Plan and Progress Report to maintain the ETC designation. This anual requirement wil hold the
Company accountable for making a reasonable effort to implement the network improvement
plan. See Appendix Reporting Requirement, Order No. 29841.
Abilty to Remain Functional in Emergencies
The Commission explains in Order No. 29841 that it "understands different cariers in
different industries and geographic areas wil have different technological challenges and
opportunities to meet these fuctional requirements, especially in an emergency." Order No.
29841 at 10. To demonstrate the ability to remain functional during emergencies, the ETC
applicant must show that it has a "reasonable amount of back-up power to ensure functionality
without an external power source, is able to re-route traffic around damaged facilities, and is
capable of managing different traffic spikes resulting from emergency situations."
In the Application, Allied Wireless describes the components that make up its fault-
tolerant network. Application at 12-14. These components are, generator backups that include
backup batteries that provide at least four hours of back-up power; portable generators that can be
moved to individual cell sites, as needed; remote monitoring by the company's 24/7 Network
Operations Center; connectivity to the public switched voice network using a microwave backup
for areas where landline facilties are unavailable; and redundant ring topology. Id.
Staff believes the fault-tolerant network, as described in this Application, provides
adequate support to demonstrate the Company's ability to remain functional in an emergency.
Other ETC Designation Requirements
Additional requirements for ETC designation, not previously discussed, are detailed in the
Appendix 1 of Order No. 29841 and discussed more fully below.
1. Common Carier Status. Allied Wireless Telecom is a Commercial Mobile Radio
Services (CMRS) carrier providing "mobile service" as defined in 47 U.S.C. § 153(27).
Application at 2-3.
2. Provide the Universal Services. Allied Wireless offers the federally designated
services listed at 47 U.S.C. § 54.lO(a). Id. at 5-8.STAFF COMMENTS 8 FEBRUARY 16,2011
3. Advertising. Alled Wireless plans to advertise the availability of each of the
supported services as detailed in the Application, throughout its licensed service area, by media of
general distribution. Id. at 17.
4. The Commitment and Ability to Provide Supported Services. Alled Wireless is
committed to answering all reasonable requests for service within its proposed ETC service area.
Id. at 10.
5. A Commitment to Consumer Protection and Service. Alled Wireless wil comply
with all applicable Idaho service quality standards and consumer protection rules, and will also
abide by the Consumer Protection Standards established by the Cellular Telephone Industry
Association (CTIA) consumer code. Id. at 15.
6. Description of the local Usage Plan. Alled Wireless submits its rate plan brochures in
Exhibit 2.
7. Tribal Notification. Alled Wireless provided a copy of a notification letter to the Nez
Perce Tribe advising the tribe of the Company's intent to seek designation as an ETC. Id.
Exhibit 5.
Staff believes Alled Wireless meets the aforementioned ETC designation requirements.
HIGH-COST FEDERAL FUNDING
The original goal of the federal Universal Service Fund, under the Telecommunications
Act of 1934, was to provide at least one access line for basic telephone service to every household
in the U.S., and at a reasonable, subsidized cost.
Staff is aware of the high-cost federal fuding issues for rural areas. Staff recognizes and
is concerned about the growth of high-cost funds, paricularly as it relates to Competitive ETCs
(CETC). The escalating high-cost fund is an ongoing concern that is being addressed at the
federal leveL. On April 29, 2008, the FCC adopted the Federal-State Joint Board on Universal
Service's recommendation to impose an interim emergency cap on the amount of high-cost
support that CETCs may receive. See FCC 08-122. Specifically, effective May 1,2008, total
anual CETC support for each state wil be capped at the level of support that CETCs in that state
were eligible to receive during March 2008 on an annualized basis. All newly designated and
existing CETCs in Idaho wil share the high-cost USF support in the amount that was distributed
to Idaho CETCs in March 2008. The only exception to this interim cap is if a CETC: (1) Files
cost data demonstrating that its costs meet the support threshold in the same maner as the ILEC;
STAFF COMMENTS 9 FEBRUARY 16,2011
or (2) Serves tribal lands or Alaska Native regions. The interim cap wil remain in place until the
FCC adopts comprehensive reform measures. Id.
The Commission is not in a position to alter public policy regarding the federal USF draw.
The Commission must follow the rules and regulation even if troubled by the outcome. In the
meantime, Staff does not believe it should recommend denial of an ETC Application that
reasonably meets all of the statutory requirements for an ETC designation. Denial of an ETC
Application also denies the rual consumers the benefit of Idaho Telephone Service Assistance
Program (ITSAP), federal Lifeline and Linkup support, as well as other potential technological
and safety benefits that may be offered by the CETC. Staff wishes to note, however, that to the
extent the areas are already served, these benefits are available to the consumers through the
ILECs or other wireless cariers.
STAFF RECOMMENDATION
Staff is satisfied that the Application meets the minimal requirements for ETC designation
in Idaho and recommends that the Commission approve the Application of Alled Wireless
Communications, LLC for designation as an eligible telecommunications Carrier.
Respectfully submitted this f~j: day of February 2011.
1J.~"'"W'"
. ~.~, ,
~eil Price
Deputy Attorney General
Technical Staff: Grace Seaman
i :umisc: commentsalltI O. i npgs comments
STAFF COMMENTS 10 FEBRUARY 16,2011
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 16TH DAY OF FEBRUARY 2011,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. ALL-T-10-01, BY MAILING A COPY THEREOF, POSTAGE PREPAID,
TO THE FOLLOWING:
MOLLY O'LEARY
RICHARDSON & O'LEARY
PO BOX 7218
BOISE ID 83707
E-MAIL: mollyGYrichardsonandolear.com
JJ~
SECRETARY'
CERTIFICATE OF SERVICE