19970613Order N.docx

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSIONIN THE MATTER OF THE APPLICATION OF CITIZENS TELECOMMUNICATIONS COMPANY OF IDAHO FOR APPROVAL OF AN INTRALATA TOLL DIALING PARITY IMPLEMENTATION PLAN.))))))CASE NO. CTCT972NOTICE OF MODIFIED PROCEDUREORDER NO. 26998On March 24, 1997, Citizens Telecommunications Company of Idaho (CTC-Idaho; Company) filed an Application requesting that the Commission approve an intraLATA long-distance dialing parity plan. The Company requests permission to implement dialing parity no later than August 8, 1997. CTC-Idaho serves approximately 18,000 local access lines in 30 communities scattered throughout Idaho. CTC-Idaho is a sister company of Citizens Telecommunications which is a provider of intrastate long-distance services and is also authorized to resell local telephone service in certain areas of Idaho. On May 5, 1997, the Commission issued Order No. 26913 scheduling a Status Conference in this case. At the Status Conference, the parties in this case advised the Commission that they were attempting to negotiate a settlement agreement to resolve their concerns about the dialing plan. On June 6, 1996, the parties filed a Settlement Agreement in this case. In this Order, the Commission solicits comments on CTC-Idahos dialing parity plan and the Settlement Agreement.CTC-IDAHOS APPLICATIONSection 251(b)(3) of the federal Telecommunications Act of 1996, requires that local exchange companies (LECs), such as CTC-Idaho, provide dialing parity to all long-distance carriers. Dialing parity means that a customer has access to a long-distance carrier of the customers choice on an equal dialing or 1+ basis. CTC-Idaho asserts that the Federal Communications Commissions (FCC) rules implementing the dialing parity requirement of the Act compel the Company to provide equal access to all interLATA and intraLATA long-distance companies. Application at 3. The Company currently provides all of its customers with interLATA equal access capability, i.e., all CTC-Idaho customers have the ability to choose an interLATA 1+ toll carrier of their choice. Because CTC-Idahos sister company (Citizens Telecommunications) is authorized to provide interLATA toll services, the FCC requires that CTC-Idaho implement both intraLATA and interLATA dialing parity in all its exchanges. If Citizens Telecommunications begins providing interLATA toll services before August 8, 1997, then FCC Rule 51.213(b) requires that CTC-Idaho offer its customers intraLATA and interLATA dialing parity by that same date. See47 C.F.R.  51.213(b) (1996). CTC-Idaho proposes to provide intraLATA equal access featuring two-PIC capability. Application at 6. This will allow each CTC-Idaho customer to presubscribe to one long-distance company for all interLATA toll calls and to presubscribe to the same or another long-distance company for all intraLATA toll calls. To meet the August 8, 1997 deadline, CTC-Idaho proposes the following schedule for implementing intraLATA equal access dialing.DateActionMay 12, 1997Notify interexchange carriers of date of effectiveness of intraLATA equal access conversion in each end office May 12, 1997Business offices commence procedures for training associated with intraLATA equal access conversionsJune 10, 1997All intraLATA equal access circuits (trunks and translations) in place and testing to beginJune 10, 1997File equal access recovery charge tariffJuly 10, 1997Deadline for receipt of Access Service Requests from interexchange carriersJuly 10, 1997Preconversion notification (one time) to customers, by billing inserts, of intraLATA equal access conversionsAugust 8, 1997IntraLATA equal access conversion dateThe Company proposes to recover the incremental costs of its dialing parity plan from all providers of 1+ intraLATA toll services offering such services in CTC-Idaho exchanges. Application at 5. The Companys incremental costs include dialing parity-specific switch software, any necessary hardware and signaling system upgrades, and consumer education costs that are strictly necessary to implement dialing parity.Id. at n.6. CTC-Idahos Application did not include a cost estimate. The Company proposes to recover its cost of conversion over a two-year period. The Company recommends that the costs be allocated among long-distance carriers, including CTC-Idaho, on the basis of each carriers share of total intrastate (both intraLATA and interLATA) long-distance minutes of use. Id. at 9. CTC-Idaho will first forecast the total intrastate minutes of use for the first year. The Company will then develop an equal access recovery charge by dividing one-half of the total implementation costs by the total forecast minutes of use over the two-year period. This surcharge will then be applied to all intrastate originated and terminating local switching minutes in CTC-Idaho exchanges for a twelve-month period. At the end of the first year, the surcharge will be adjusted to reflect any over- or under-recovery. The adjusted surcharge will then apply to the remaining twelve-month period. At the end of the recovery period, any deficiency or surplus will be charged or returned to the interexchange carriers in proportion to the implementation costs they have paid. Id. The Application did not contain the forecasted minutes of use.CTC-Idaho asserts that recovering its dialing parity costs from all intrastate minutes of use of the 1+ intraLATA toll service providers is appropriate. The Company asserts that this recovery mechanism will fairly distribute the costs to a participating LEC that presently has no interLATA minutes of use and to interexchange carriers that presently have no intraLATA minutes of use.Id. at 9-10. Citizens Telecommunications fits into this latter category. The Company believes that this cost recovery proposal is competitively neutral and fully consistent with the FCCs dialing parity rules.CTC-Idaho proposes a one-time notification to its customers in July 1997. The Company will notify its customers by use of a postcard and the issuances of news releases to local news media outlets. The Company recommends that the issuance and return of a customer ballot not be used because it would be unduly disruptive and expensive for all participants in the equal access conversion process. Id. at 7. The Company maintains that customers who do not make an affirmative selection of an intraLATA carrier will remain with their existing 1+ intraLATA carrier. The Company insists that FCC rules prohibit it from automatically assigning to itself new customers who do not affirmatively choose a toll provider. The Company proposes that new customers who do not make an affirmative selection of an intraLATA carrier, will not be provided 1+ intraLATA dialing capability until an affirmative selection is made. Id. at 7-8.PROCEDURAL HISTORYOrder No. 26913 authorized CTC-Idaho to begin the first three steps in its dialing parity plan and schedule a status conference for May 27, 1997. The Order also established a deadline for intervention in this matter no later than May 14, 1997. Pursuant to the filing of timely petitions to intervene, the Commission granted intervention to U S WEST Communications, AT&T Communications of the Mountain States, and the Idaho Telephone Association. On June 4, 1997, MCI Telecommunications Corporation filed a late Petition to Intervene and CTC-Idaho subsequently opposed MCIs late intervention. On June 9, 1997, MCI withdrew its Petition to Intervene pursuant to Rule 67, IDAPA 31.01.01.067.THE SETTLEMENT AGREEMENTOn June 6, 1997, CTC-Idaho filed a Settlement Agreement entered into among the parties. Pursuant to the terms of the Settlement Agreement, CTC-Idaho shall implement 2-PIC intraLATA equal access thereby allowing its customers to presubscribe to one long-distance carrier for all interLATA calls and to the same or another carrier for all intraLATA toll calls. Agreement at  2. The Company has agreed to provide individual notice to each customer by means of a one-time postcard mailing. The parties (as well as the Staff) have agreed to the language of the customer notice. Existing CTC-Idaho customers who do not select a new intraLATA carrier will remain with their current carrier. Id. at  4. New CTC-Idaho customers who do not select an intraLATA carrier will not be able to make 1+ intraLATA toll calls but will be able to reach intraLATA long-distance carriers by other means (10XXX, 800+, etc.). Id. at  6. Customers will be allowed one intraLATA PIC change free of charge during the first six months of the conversion (beginning August 8, 1997). Id. at  10.Paragraph 11 of the Settlement Agreement sets out the various conversion costs that the Company will recover. The Company shall recover its equal access conversion costs over a two-year period. The surcharge shall be applied to Citizens originating intrastate (intraLATA and interLATA) switched toll and other carriers originating intrastate (intraLATA and interLATA) switched access minutes in CTC-Idahos local exchanges. Based upon a forecast of originating minutes of use for the first year, the parties calculate that the surcharge will be $.00137 per minute which does not include the PIC change cost. Once calculated, the PIC change cost will be included with the surcharge when CTC-Idaho files its surcharge tariff. Id. at  11.Although U S WEST and AT&T were parties to the Settlement Agreement, they conditioned their approval. See Footnote 1 on page 5. U S WEST suggested that the conversion surcharge should be applied to both originating and terminating access minutes. AT&T suggested that the surcharge be placed only on originating intraLATA access minutes of use. Despite these concerns, US WEST and AT&T consented to the Settlement Agreement only for this particular case. The parties to the Settlement Agreement recommend that the Commission issue a Notice of Modified Procedure requesting comments on the toll dialing parity plan. The parties requested that the Commission request comments in 14 days so that Citizens might still meet the FCC implementation date of August 8, 1997.NOTICE OF MODIFIED PROCEDUREYOU ARE HEREBY NOTIFIED that the Commission has determined that the public interest may not require a formal hearing in this matter and will proceed under Modified Procedure pursuant to Rules 201 through 204 of the Idaho Public Utilities Commission's Rules of Procedure, IDAPA 31.01.01.201 through -.204.YOU ARE FURTHER NOTIFIED that any person desiring to state a position on this Application may file a written comment in support or opposition with the Commission within fourteen (14) days from the date of this Notice. Based upon the need to implement to toll dialing parity plan no later than August 8, 1997, the Commission finds there is good cause to request comments in fourteen (14) days. The comment must contain a statement of reasons supporting the comment. Persons desiring a hearing must specifically request a hearing in their written comments. Written comments concerning this application shall be mailed to the Commission and the Applicant at the addresses reflected below:COMMISSION SECRETARYBARBARA L. SNIDERIDAHO PUBLIC UTILITIES COMMISSIONASSOCIATE GENERA COUNSELPO BOX 83720JACQUELINE R. KINNEYBOISE, IDAHO 83720-0074STAFF ATTORNEYCITIZENS TELECOMMUNICATIONSStreet Address for Express Mail:COMPANY OF IDAHO8920 EMERALD PARK DRIVE, SUITE G472 W. WASHINGTON STELK GROVE, CA 95624BOISE, IDAHO 83702-5983These comments should contain the case caption and case number shown on the first page of this document.YOU ARE FURTHER NOTIFIED that if no written comments are received within the time limit set, the Commission will consider this matter on its merits and enter its Order without a formal hearing. If written comments are received within the time limit set, the Commission will consider them and, in its discretion, may set the same for formal hearing.YOU ARE FURTHER NOTIFIED that the Application together with the supporting Settlement Agreement have been filed with the Commission and are available for public inspection during regular business hours at the Commission offices.YOU ARE FURTHER NOTIFIED that all proceedings in this case will be held pursuant to the Commission's jurisdiction under Title 61 of the Idaho Code and that the Commission may enter any final Order consistent with its authority under Title 61.YOU ARE FURTHER NOTIFIED that all proceedings in this matter will be conducted pursuant to the Commission's Rules of Procedure, IDAPA 31.01.01.000 et seq.O R D E RIT IS HEREBY ORDERED that this matter be processed under Modified Procedure. Interested persons have fourteen (14) days to submit written comments on CTC-Idahos intraLATA toll dialing parity plan and the accompanying Settlement Agreement of the parties.DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this day of June 1997.DENNIS S. HANSEN, PRESIDENTRALPH NELSON, COMMISSIONERMARSHA H. SMITH, COMMISSIONERATTEST:Myrna J. WaltersCommission Secretarybls/O-ctct972.dh2