20050308Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM:DONOVAN E. WALKER
DATE:MARCH 7, 2005
SUBJECT:APPLICATION OF COMMPARTNERS, LLC FOR A CERTIFICATE
PUBLIC CONVENIENCE AND NECESSITY CASE NO. CMP-04-
On November 16, 2004, CommPartners, LLC filed an Application for a Certificate of
Public Convenience and Necessity to provide basic resold and facilities-based local exchange
and interexchange services in eligible areas statewide. In the Notice of Application and
Modified Procedure issued January 24, 2005, the Commission sought comments regarding
CommPartners' Application. Order No. 29691. No comments were received other than those
submitted by Commission Staff.
THE APPLICATION
According to the Application, CommPartners is in the process of building an Internet
Protocol (IP) based communications network throughout all 50 states and the District
Columbia. The network is designed to connect public and private IP networks with the Public
Switched Telephone Network (PSTN). The Company will provide the network needed for
V oice-Over- Internet Protocol (VoIP) providers to originate and terminate IP-based
communications, as well as allow for the termination of traditional circuit-switched telephone
calls. The traffic to be carried over this network will be comprised of primarily information
services traffic such as V oIP, as well as interstate, intrastate interLA T A, intraLA T A, and local
traffic.
CommPartners' network is a "hub-centric topology" consisting of switching centers
in Las Vegas, Chicago, Atlanta, and New York. These switching centers are collocation points
situated in highly sophisticated environments where large numbers of network providers meet for
DECISION MEMORANDUM
interconnection among their networks. At these locations, CommPartners has placed softswitch
equipment, routers and border control devices.
CommPartners is organized as a Nevada Limited Liability Company. The
Application states that it has an Operating Agreement and Certificate of Status issued by the
Idaho Secretary of State stating that it is qualified to transact business in the State of Idaho. The
Company s principal place of business is in Las Vegas, Nevada. The Company states that it will
primarily be providing network transit and associated operations support systems for VoIP traffic
to wholesale customers. CommPartners' proposed service area would be all areas served by
incumbent local exchange carriers, Qwest and Verizon that are required by the
Telecommunications Act of 1996 to interconnect their networks with competitive local exchange
camers.
STAFF COMMENTS AND RECOMMENDATIONS
Staff has reviewed the information provided by CommPartners in its Application and
believes it satisfies the requirements of the Commission s Rule of Procedure 111 IDAP A
31.01.01.111 , and Procedural Order No. 26665, issued November 7, 1996, which sets out the
necessary information to be included with an Application for a Certificate.
CommPartners is a relatively new telecommunications company that provides VoIP
services nationwide, with switching centers in Las Vegas, New York, Chicago, and Atlanta. The
Application included resumes of key individuals that indicated extensive experience in the
telecommunications field. The Application included financial information that indicated the
Company had adequate financial resources for a company at this stage of operations. Staff
satisfied that the Company has the technical, managerial and financial strength to provide the
services identified in the Application.
The Application indicated CommPartners intends to provide basic local exchange
services to both residential and business customers using the Company s VoIP network. The
Company s primary market is wholesale service to other carriers and Internet service providers
but it will also occasionally provide service directly to end use customers. All CommPartners
local exchange customers would need to obtain broadband service in order to utilize the
Company s VoIP local exchange service. Service to Idaho customers would be provided through
the Company s VoIP switch in Las Vegas, Nevada.
DECISION MEMORANDUM
The Application indicated the Company would initially provide service in the area
currently served by Qwest and Verizon. All of CommPartners' customer originated calls would
be originated as data services and carried by IP to the Company s switch in Las Vegas. If the
called party were also a VoIP customer, the call would remain on IP and terminated as a data
service to that customer. If the called party uses traditional voice service, the call is converted to
voice protocol and routed to that party through "the nearest RBOC/ILC/CLEC or wireless
carrier s local telephone switch that serves the called party.
CommPartners specifically indicated in its Application that it will comply with all
Commission rules. Additionally, it has provided an illustrative tariff with its Application that
demonstrates an understanding of tariff requirements and processes.
There are many regulatory issues associated with VoIP services that have yet to be
determined. It is possible that it may eventually be determined that the services provided by
CommPartners are outside the jurisdiction of a state commission and may be provided without a
Certificate. However, CommPartners is well aware of the uncertainty of the outcome of various
proceedings in this regard and voluntarily sought a Certificate, and agreed to comply with the
Commission s local exchange rules. Staff recommends that a Certificate of Public Convenience
and Necessity to provide competitive local exchange service in Idaho be provided to
CommPartners, LLC.
COMMISSION DECISION
Does the Commission with to approve CommPartners' Application for a Certificate
of Public Convenience and Necessity?
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Donovan E. Walker
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DECISION MEMORANDUM