20140325Comments.pdf

KARL T. KLEIN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
(208) 334-03t2
IDAHO BARNO.5156
Street Address for Express Mail:
472W, WASHINGTON
BOISE, IDAHO 83702-5918
Attomey for the Commission Staff
IN THE MATTER OF THE APPLICATION OF
CUSTER TELEPHONE BROADBAND
SERVICES LLC FOR DESIGNATION AS AN
ELIGIBLE TELECOMMUNICATIONS
CARRIER FOR LOW.INCOME SUPPORT.
l-,:.:,,1t,.,...'i.l
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
)) CASE NO. CTB-T-14-01
)
)
COMMENTS OF THE
COMMISSION STAFF
The Staff of the Idaho Public Utilities Commission comments as follows on Custer
Telephone Broadband Services LLC's Application for designation as an eligible
telecommunications carrier ("ETC").
BACKGROUND
On January 6,2014, Custer Telephone Broadband Services LLC ("CTBS" or
"Company") filed an Application seeking ETC designation under 47 U.S.C. $ 21a(e) (l)-(2),47
C.F.R. $ 54.201 of the Rules of the Federal Communications Commission ('.FCC"), and the rules
and regulations of the ldaho Public Utilities Commission (the "Commission") as outlined in
Order No. 29841. CTBS seeks ETC designation so it can receive federal Universal Service Fund
low-income support in the Salmon, Idaho exchange ("Designated Service Area"). Application at
1.
STAFF COMMENTS MARCH 25,2074
The Application
CTBS is a wholly owned subsidiary of Custer Telephone Cooperative, Inc. with its
principal place of business in Challis, Idaho. The Company received a Certificate of Public
Convenience and Necessity ("CPCN") issued on October 14,2011 under Order No. 32383
authorizing it to provide local exchange and interexchange services in Idaho. Id. at2. The
Company is a full-service wireline carrier that provides facilities-based, local exchange services
in the Designated Service Area. CTBS says the Designated Service Area is part of CenturyTel
of Idaho, Inc. dba Centurylink's service area, and does not include any areas served by rural
telephone companies . Id at l-2, 4, and 7 .
The Company says it meets all statutory and regulatory requirements to be designated as
an ETC, including those outlined in the federal Lifeline and Link Up Reform and Modernization,
Order ("Lifeline Reform Order"), released on February 6,2012 (FCC l2-ll) and the
Commission's eligibility requirements as specified in Commission Order No. 29841 . Id. at 7, 3-
4. Id. at3-7.
CTBS says that granting its Application will serve the public interest and the market by
promoting additional choices for Lifeline service to qualifying consumers in the Designated
Service Area. Id. at8.
STAFF ANALYSIS
Staff has reviewed CTBS's Application and has conducted an analysis of the Company's
fulfillment of the federal Telecommunications Act of 1996, the Lifeline Reform Order and of
Commission Order No. 29841. Specific state and federal requirements for ETC designation are
discussed in more detail as follows.
Public Interest Considerations
Staff typically applies a two-prong test when analyzing whether a company's ETC
application is in the public interest. First, Staff determines whether the Company contributes to
Idaho Funds. Second, Staff analyzes whether the Company's application raises "cream
skimming" concerns. Here, Staff believes the hrst prong is satisfied because CTBS's CPCN
subjects the Company to the following conditions: (1) Compliance with the Number Pool
Administrator and Order No. 30425 mandating number resource utilization forecast reporting;
(2) Contribution to the Idaho Universal Service Fund, Idaho Telecommunications Relay System,
STAFF COMMENTS MARCH 25,2014
Idaho Telephone Assistance Program and any future reporting requirements deemed appropriate
for competitive telecommunications providers. See Order No. 32383 at 3.
Staff also believes the second, "cream skimming" prong is satisfied. The Commission
explained its "cream skimming" concerns in Order No. 29541. In summary, a request for ETC
designation for an area less than the entire study area of a rural telephone company generally
raises concerns that an Applicant intends to "cream skim" in the rural study area.t Order No.
29541at 16. Rural cream skimming occurs when competitors seek to serve only the low-cost,
high revenue customers in a rural telephone company's study area. This is a concern because
universal service support is calculated based on a study area-wide average of a rural telephone
company that serves customers in both high cost and low cost areas throughout its study area.
Id. As the FCC's Federal-State Joint Board on Universal Service noted in 1996:
Potential "cream skimming" is minimized because competitors, as a
condition of eligibility, must provide services throughout the rural
telephone company's study area. Competitors would thus not be
eligible for universal service support if they sought to serve only the
lowest cost portions of a rural telephone company's study area.
Id. at 16-17, quoting 12 F.C.C.R. 87, 108 at I 172 (emphasis added).
Here, the Company requests ETC designation for an entire exchange currently served by
a non-rural incumbent local exchange carrier. Thus, no cream skimming concerns arise.
For these reasons, Staff believes CTBS satisfies the public interest considerations.
Network Improvement Plan
In the Idaho ETC Designation Order, the two-year network improvement and progress
report is required of all ETCs receiving high-cost support. See Commission Order No. 29841 at
18. With Cricket Communications, Inc.'s ETC Application, the Commission determined that a
two-year network improvement plan was not applicable for Lifeline-only (low-income support)
ETCs and granted Cricket's ETC designation. See CRI-T-11-01, OrderNo.3250l.
I Re"o**ended Decision, In the Mqtter of Federal-State Joint Board on (Jniversal Service CC Docket No. 96-45,
12 F.C.C.R. 87, 180 atl172 (1996) (stating that potential cream skimming is minimized when competitors, as a
condition of eligibility for universal service support, must provide services throughout a rural telephone company
study area). See also Virginia Cellular, LLC Petitionfor Designation as an Eligible Telecommunications Caruier in
the Commonwealth of Virginia, CC Docket No. 96-45, l9 F.C.C.R. 1563, 1578 (2004).
STAFF COMMENTS MARCH 25,2014
In the USF/ICC Transformation Order, the FCC amended section 54.202 to clarify that a
common carrier seeking designation as a Lifeline-only ETC is not required to submit a five-year
network improvement plan as part of its application for designation as an ETC. Because
Lifeline-only ETCs are not receiving funds to improve or extend its networks, the FCC stated
that it "saw little purpose in requiring such plans as part of the ETC designation process."2 In the
Application, CTBS's states that, "because CTBS is requesting only low-income [USF] support,
the requirement to submit the fCommission's 2-year or the FCC's 5-year] service improvement
plan is not applicable." Application at 4. Staff agrees that a network improvement plan is not a
requirement for CTBS's ETC Application.
Ability to Remain Functional in Emergencies
CTBS confirms that it has the ability to remain functional in emergency situations in
accordance with the Idaho ETC Order and Section 54.202(a)(2) of the FCC's Rules, 47 C.F.R. $
5a.202(a)(2). CTBS asserts that because it is using its own redundant facilities, the Company
will provide functionality in emergency situations to its customers, including access to a
reasonable amount of back-up power during external power outages, it will reroute traffic around
damaged facilities and manage traffic spikes during emergency situations. Id. at 5. Staff
believes the Company satisfies this requirement.
Other ETC Designation Requirements
Additional requirements for ETC designation are detailed in Appendix 1 of Order No.
29841and are discussed in more detail below.
l. Common Carrier Status. CTBS is a common carrier as defined in U.S.C. Title 47. Id.
at 4.
2. Provide the Universal Services. CTBS will provide each of the supported services
identified in Section 54.101 and Section 5a.202(a) of the FCC's Rules (47 C.F.R. $ 54.101(a)
and 47 C.F.R. $ 54.202(a). Id. at 4-6.
3. Advertising. CTBS will advertise the availability and rates for its services described
in the Application through media of general distribution . Id. at 7 .
2 See Lifeline and Link up Reform and Modernization et al, WC Dkt no. ll-42 et a/. Report and Order and Further
Notice of Proposed Rulemaking, FCC l2-11 at para 386.
STAFF COMMENTS MARCH 25,2014
4. The Commitment and Ability to Provide Supported Services. CTBS will provide the
supported services. Id. at 3.
5. A commitment to Consumer Protection and Service. CTBS commits to satisfring all
such applicable state and federal requirements related to consumer protection and service quality
standards. Id. at7.
6. Description of the Local Usage Plan. CTBS's rate plans will provided local usage
consistent with Section 54.101(a)(2). Id. at 4-5.
7. Tribal Notification. The Company will provide Tribal notifications. Id. at7.
Staff believes CTBS meets the aforementioned requirements where applicable for ETC
designation as a provider of low income support.
STAFF RECOMMENDATION
Based on its review of the Company's Application, Staff believes that the Company has
the requisite technical, financial and managerial expertise as well as the commitment to fulfi1lthe
obligations of an ETC in Idaho. The Company will provide all universal services supported by
the federal USF throughout its Designated Service Area; it has addressed all public interest
questions that accompany an ETC Application; and CTBS will provide service plans in
accordance with its CPCN. Thus, Staff believes CTBS's Application for designation as an ETC
is in the public interest and should be approved for the Designated Service Area.
Respectfully submitted this Z StA day of Mar ch2ol4.
Karl T. Klein
Deputy Attorney General
Technical Staff: Grace Seaman
i:umisc/comments/ctbt 14. I kkgs comments
STAFF COMMENTS MARCH 25,2014
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 25TH DAY OF MARCH 2014,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. CTB-T-14.01, BY MAILING A COPY THEREOF, POSTAGE PREPAID,
TO THE FOLLOWING:
CYNTHIA A MELILLO
CYNTHIA A MELILLO PLLC
8385 W EMERALD ST
BOISE ID 83704
E-MAIL : [e-mail]
CERTIFICATE OF SERVICE