19990812.doc

DECISION MEMORANDUM

TO: COMMISSIONER HANSEN
COMMISSIONER SMITH
COMMISSIONER KJELLANDER
MYRNA WALTERS
RON LAW
TONYA CLARK
LYNN ANDERSON
DON HOWELL
STEPHANIE MILLER
JOE CUSICK
DOUG COOLEY
BEV BARKER
WORKING FILE

FROM: CHERI C. COPSEY

DATE: AUGUST 12, 1999

RE: CENTURYTEL OF THE GEM STATE, INC. TARIFF ADVICE NO. 99-3 –intraLATA DIALING PARITY TARIFF; CASE NO. CGS-T-99-3.

On June 23, 1999, CenturyTel of the Gem State, Inc. filed Tariff Advice No. 99-3 adding the terms, conditions and rates for providing intraLATA toll dialing parity in Idaho pursuant to the Commission’s Order No. 28067. On July 19, 1999, the Commission issued a Notice of Application and Notice of Modified Procedure. Order No. 28089
On August 9, 1999, the Commission Staff filed Comments recommending the Tariff Advice be approved. No other person filed Comments.

BACKGROUND
CenturyTel of the Gem State, Inc. offers local telephone exchange service in the Idaho exchanges of Grand View, Bruneau, and Richfield. On April 22, 1999, Gem State filed an Application with the Commission for an Order approving its intrastate, intraLATA toll dialing parity implementation

plan. On June 7, 1999, in Case No. CGS-T-99-1, the Commission approved Gem State’s Application as modified. See Order 28067. On April 22,1999, Gem State also filed a Petition requesting the Commission suspend certain dialing parity obligations imposed by 47 U.S.C. § 251(b)(3) and by FCC Order 99-54 for eighty-eight (88) of its access lines. See CGS-T-99-2. The Commission granted the Petition on June 2, 1999. Order No. 28056.
In conformance with its approved implementation plan, Gem State mailed separate customer notifications regarding intraLATA equal access and executed the intraLATA conversion on July 13, 1999. On June 23, 1999, Gem State, Inc. filed Tariff Advice No. 99-3 adding the terms, conditions and rates for providing intraLATA toll dialing parity in Idaho pursuant to the Commission’s Order No. 28067. In its Tariff Advice, Gem State proposed that incremental expenses relating to intraLATA toll dialing implementation (Equal Access Recovery Charges) be recovered through a surcharge of $0.007485 per originating intraLATA access minute to be imposed on the participating intraLATA interexchange (IXC) companies over a 24-month period beginning July 13, 1999. In response, the Commission suspended the Tariff Advice for a period of thirty (30) days, or until such time as the Commission may issue an Order accepting or rejecting or modifying the Tariff Advice. Order No. 28089.
Staff filed comments on August 9, 1999. 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.

STAFF COMMENTS
Gem State projects an annual demand of approximately 2.7 million intraLATA toll minutes and proposes to recover $20,332 annually for two years. Staff reviewed Gem State’s submitted incremental costs including the supporting work papers and cost model. Staff contacted the Wyoming Public Utilities Commission where this cost model has been used before and concludes that the cost model is appropriate for this particular application in Idaho dialing parity.
Staff finds that Gem State’s method for cost recovery from all intraLATA toll providers is competitively neutral and consistent with FCC 96-333 and DA 98-2534. The Staff further finds that these incremental costs would not have been incurred “but for the implementation of dialing parity” and are, therefore, appropriately charged to the intraLATA toll providers. Because dialing parity creates equal access to intraLATA toll, Staff finds that cost recovery based on intraLATA toll usage is reasonable. Staff also finds that the 24 month recovery period is appropriate

STAFF RECOMMENDATION
Staff recommended the Commission approve Gem State’s Advice No. 99-03 which modifies its local exchange tariff to include an equal access recovery charge (EARC) for twenty-four (24) months. However, Staff also recommended the Commission order Gem State’s also include an adjustment period at or near the end of the first year of recovery. Staff further recommended that any order approving Gem State’s Tariff Advice be made effective August 13, 1999.

Commission Decision
Should this Tariff Advice be approved?

Cheri C. Copsey

M:cgst993_cc2.doc

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.

DECISION MEMORANDUM 3