cent991_cc.doc

CHERI C. COPSEY
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
Idaho Bar No. 5142

Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983

Attorney for the Commission Staff

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF CENTURYTEL OF IDAHO, INC. FOR APPROVAL OF ITS PLAN TO IMPLEMENT INTRASTATE, INTRALATA DIALING PARITY. )
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CASE NO. CEN-T-99-1

COMMISSION STAFF COMMENTS
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COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its Attorney of record, Cheri C. Copsey, Deputy Attorney General, and submits the following comments for the Commission’s consideration in Case No. CEN-T-99-1 of CenturyTel of Idaho, Inc.’s (CenturyTel) dialing parity plan.
BACKGROUND
Following the implementation of the Telecommunications Act of 1996, many states challenged the jurisdictional authority of the Federal Communications Commission (“FCC”) to implement the Act. In 1997, the Eighth Circuit Court of Appeals held that the FCC had exceeded its authority when it promulgated rules to implement various sections of the Act. Among other things, the Eighth Circuit held that the FCC lacked jurisdiction to promulgate its dialing parity rules 47 CFR §51.205-51.217. The FCC appealed to the United States Supreme Court. On January 25, 1999, the United States Supreme Court reversed, in part, the Eighth Circuit and held, inter alia, that the FCC has jurisdiction to implement the Act’s local competition provisions, including those rules addressing dialing parity. AT&T v. Iowa Utilities Board, 119 S.Ct. 721 (1999).
In response, the FCC issued Order 99-54 revising the schedule for implementation of dialing parity. Order 99-54 established new deadlines for all local exchange carriers (“LECs”) to implement intraLATA dialing parity. Specifically, all local exchange carriers are required to submit dialing parity plans to the respective state commissions by April 22, 1999. State commissions were given until June 22, 1999, to review and approve those plans. Approved intraLATA toll dialing parity plans were directed to be implemented within thirty days of approval.
Toll dialing parity, also referred to as “1 plus equal access” or carrier presubscription, allows a customer to pre-select a carrier for intrastate, intraLATA toll calls and then access his chosen carrier simply by dialing 1 plus the telephone number. Without dialing parity, a customer wishing to use a specific toll carrier may be required to dial a series of numbers before dialing the telephone number. Currently, intrastate, intraLATA toll traffic for the customers of each of these companies is carried by U S WEST Communications, unless a customer dials around to reach a different toll carrier.
On April 22, 1999, CenturyTel filed an Application with the Commission for an Order approving its intraLATA toll dialing parity implementation plan. CenturyTel offers local telephone exchange service in the Idaho exchanges of North Fork, Salmon and Leadore. See Case No. CGS-T-99-2.
CENTURYTEL’S PROPOSAL AND THE STAFF RECOMMENDATION
CenturyTel submitted an intraLATA toll dialing parity plan indicating that each of the exchanges it operates associates with the southern Idaho LATA (see 47 CFR §51.213). Upon implementation of toll dialing parity, customers will be able to presubscribe to a carrier for both their interLATA and intraLATA toll calls. This means that originating customers will be able to dial toll calls without having to use any extra digits or access codes (other than the prefatory “1” or “0”). In addition, originating customers will continue to be able to use “dial-around” 101-XXXX to route their specific calls to a carrier other than their presubscribed carrier if they so choose.
A. Implementation schedule
FCC Order 99-54 requires that intraLATA toll dialing parity plans be submitted to state commissions by April 22, 1999, and approved by those state commissions by June 22, 1999. Those plans are required to be “implement(ed) no later than 30 days after the date on which the plan is approved. CenturyTel proposed the following sequence of events to outline their implementation schedule.
Notification to IXCs April 16, 1999
Paperwork due from IXCs May 5, 1999
Informational letter sent to customers June 1, 1999
Second letter sent by separate mailer June 10, 1999
IntraLATA Conversion date July 13, 1999
Free PIC change grace period ends until November 13, 1999

Staff Recommendation. This schedule meets the FCC deadlines. Staff recommends the Commission approve CenturyTel’s proposed timetable and the proposed July 13, 1999, cut-over date.
B. Notification to IXCs
Under the plan submitted on behalf of CenturyTel, all carriers that currently offer interLATA toll service to the customers in the CenturyTel exchanges were requested to confirm whether they intend to offer intraLATA service. This notification to IXCs was mailed out April 16, 1999, and responses are due by May 5, 1999. Any other carrier that requests to offer intraLATA service by June 1, 1999, will be added to the list of available intraLATA carriers.
Staff Recommendation. Staff believes this process and time frame for interexchange carrier notification is adequate and commends CenturyTel for getting an early start on IXC notification. Therefore, Staff recommends the Commission approve the plans IXC notification process and timetable.
C. Notification to Customers
CenturyTel proposes that on June 1, 1999, a notice will be sent to customers in a bill insert to inform them of the coming opportunity they will have to choose an intraLATA carrier. A proposed notice was included in the Application. The notice will list the available carrier choices and address what will happen for those customers who do not respond by making a carrier selection. A second, separate mailer will be sent out during the second week of June.
Those customers who respond to the customer notifications before July 13, 1999, will have their intraLATA presubscription choice programmed into the switch on that cut-over date.
CenturyTel’s implementation plan also proposes a 120-day “grace period” after the cut-over date wherein customers may change their intraLATA carrier choice two additional times free of charge. The grace period would end November 13, 1999. Thereafter, each intraLATA PIC change will result in a $5 PIC change fee.
Staff Recommendation. Staff reviewed the draft customer notice and finds it to be clear and competitively neutral. Staff recommends the Commission approve CenturyTel’s customer notification process.
Although CenturyTel’s proposal does not address it, Staff recommends that existing interLATA PIC “freezes” do not automatically transfer to the intraLATA PICs and are only extended to the intraLATA selection upon affirmative request from the customer.
D. Existing Customers Who Do Not Actively Choose.
CenturyTel had originally intended to leave customers who do not affirmative choose an intraLATA carrier with their existing carrier -- U S WEST. However, CenturyTel was recently notified by U S WEST that it does not wish to be the default company or to carry CenturyTel toll. In light of this, CenturyTel suggested to Staff that it would be willing to assign the interLATA carrier as the intraLATA carrier for those customers who do not make an affirmative selection. CenturyTel’s customer notification will inform its customers of this procedure if an affirmative selection is not made.
Staff Recommendation. Staff recommends that the Commission require customers who do not actively choose an intraLATA carrier by July 13, 1999, be defaulted to their interLATA carrier.
The FCC has not clearly defined the requirements regarding existing customers who do not affirmatively choose a carrier. (See FCC Order No. 99-54, footnote 22). Consequently, Staff believes that defaulting existing CenturyTel customers who do not choose an intraLATA carrier to that customer’s interLATA carrier is reasonable and fair because it represents a choice which that customer has made within an openly competitive environment. In addition, Staff believes this strategy will be less confusing to customers when compared to “pooling” allocation methods or requiring “dial around” methods.
E. New Customers
CenturyTel proposes that new customers who do not designate an intraLATA toll carrier will have to “dial around” using 101-XXXX carrier access codes until they choose their presubscribed carrier(s).
Staff Recommendation. Staff recommends the Commission approve CenturyTel’s proposal for new customers who do not designate an intraLATA toll carrier.
F. Business Office Practices
CenturyTel’s plan proposes to the process intraLATA PIC requests “without undue delay” and “in a competitively neutral manner.”
Staff Recommendation. Staff recommends the Commission approve CenturyTel’s plan. In addition, Staff recommends that CenturyTel be required to process PIC change requests within five (5) business days.
G. Cost Recovery
CenturyTel proposes that incremental expenses relating to intraLATA toll dialing parity implementation be recovered via a surcharge on intraLATA access minutes over a 48-month period.
Staff Recommendation. Staff generally supports recovering costs related to dialing parity implementation by imposing a surcharge on intrastate access rates sufficient to recover conversion costs over a 48-month period. However, because dialing parity creates equal access to intraLATA toll, Staff recommends that cost recovery should be usage based. Therefore, Staff recommends the surcharge be imposed on all intraLATA toll originating access minutes in each of the respective exchanges. Staff generally supports a 48-month recovery period but would recommend that this period be shortened to 24 months in light of the minimal anticipated costs. Staff further recommends that this method be reviewed at the end of the first year to determine its effectiveness and, if necessary, adjust the recovery rate.
Because the costs for implementing are not yet determined, Staff cannot establish what the amounts will be until those costs are submitted by CenturyTel. Once the data are submitted, Staff will review CenturyTel’s cost recovery data to determine its appropriateness. Staff does not believe the intraLATA dialing parity costs will be very significant. According to the FCC order, companies may only recover those incremental costs directly related to the provision of 1+ intraLATA toll dialing parity. Staff recommends the Commission make it clear in any final order that by approving the dialing parity plan, it is not approving those costs. Further, the Commission should expressly reserve the right to review the cost information and disallow costs it determines are not directly related to implementing the plans.
H. Staff Recommendation for Recovery of Waived PIC Charges
Although CenturyTel’s proposal does not address it, Staff recommends that CenturyTel be allowed to recover the waived PIC change charges during the free PIC period. Staff recommends that CenturyTel be allowed to issue a one time bulk bill to each participating IXC, assessing the $5.00 PIC change charge for the total number of lines changed to those carrier’s PIC. It is fair to assess these charges to competing IXCs because they will experience a growth in their respective customer base thereby allowing those one-time charges to be recovered over time. Staff recommends that the IXCs not be allowed to pass those fees on to the end user.
Respectfully submitted this day of May 1999.

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Cheri Copsey
Deputy Attorney General

Technical Staff: Doug Cooley
Consumer Staff: Carol Cooper

STAFF COMMENTS 1 MAY 18, 1999