27826.pdf

Office of the Secretary
Service Date
December 21, 1998
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
CITIZENS TELECOMMUNICATIONS
COMPANY OF IDAHO TO REDUCE ACCESS
RATES AND REBALANCE OTHER RATES FOR)
TELECOMMUNICATIONS SERVICES.
CASE NO. CTC-98-
CLARIFICATION OF
ORDER NO. 27789
ORDER NO. 27826
On May 15, 1998, Citizens Telecommunications ofldaho filed a plan to lower access
rates by removing inherent subsidies in those rates, to rebalance its rates for telecommunications
services in Idaho and to address the numerous petitions and requests for extended area service (EAS)
from customers in communities throughout the Citizens serving area. On November 6, 1998, the
Commission issued Order No. 27789 approving Citizens' proposal to rebalance its rates and
approving Citizens' proposed EAS changes and its local and regional calling plans , as modified by
the Order. The Commission further found that the pending petitions for EAS in GNR- T -96-
(Horseshoe Bend/Garden Valley/Sweet), GNR-96-8 (RigginslWhite Bird/New Meadows),
GNR-97-21 (Springfield), USW-97-l/CTC-97-1 (Marsing) and GNR-97-10 (Blaine
County) were resolved by the Order.
On November 13 , 1998, Citizens filed a Petition for Clarification requesting the
Commission to clarify Order No. 27789 to reflect its proposed implementation schedule included
in its Comments filed on July 31 , 1998. No party objected to Citizens' Petition. On November 24
1998, R. 1. Tallent filed comments requesting the Commission to reconsider Order No. 27789.
Based on its review of the record, the public hearings, public comments, company
comments, the law, the stipulations filed by Citizens, U S WEST Communications, Inc., Idaho
Telephone Association, and Staff, and the request for reconsideration, the Commission grants
Citizens' Petition and denies Mr. Tallent's request for reconsideration. Furthermore , pursuant to
Rule 325, the Commission further clarifies Order No. 27789 on its own motion to prevent confusion
between the approved Marsing, Springfield and Sweet EAS plans and the optional regional calling
plans to be offered those customers. The Commission further clarifies its Order to make plain that
ORDER NO. 27826
Order No. 27789 did not eliminate the EAS calling areas previously approved by the Commission
in Order Nos. 27063 24929 20365 or 17412.
BACKGROUND
In response to state and federal legislative changes requiring local exchange carriers to
reduce or eliminate existing implicit rate subsidies, Citizens proposed to reduce its current effective
access charges by more than fifty percent (50%), from an effective rate of about twelve cents ($0.12)
per minute to a proposed effective rate of about six cents ($0.06) per minute. To offset the lower
revenues caused by the reduction in access charges, Citizens proposed a local rate increase from
$9.85 to $17.50 per month for residential lines and from $19.75 to $35.10 per month for business
lines. Under its proposal, current EAS increments, which average $2.08 for residential lines and
$5.50 for business lines, are eliminated. Expanded local calling areas within Citizens' serving area
are included in the basic local rates and optional local calling plans will be available for $1.20 for
residential lines and $1.80 for business lines. In addition, optional regional local calling plans to
areas outside Citizens' serving area will be offered for $8.10 for residential customers and $12.
for business customers. Citizens' proposed local rates are lower than 125% of the statewide average.
Citizens did not request an adjustment to its revenue requirement and claimed that the proposed rate
design is revenue neutral providing Citizens with the opportunity to earn its already established
revenue requirement.
After reviewing the Application, written comments and public testimony, the
Commission found that Citizens' Application should be approved as modified in the Order. Order
No. 27789. The Commission further found that the Order resolved pending petitions for toll-free
1 The Commission granted mandatory EAS in September 1997 for U S WEST Caldwell and
Nampa exchanges into Citizens' Parma , Wilder and Homedale exchanges at no cost to U S WEST
customers. Order No. 27063. Likewise, the Commission granted EAS to U S WEST Blackfoot
customers to the Springfield exchange in June 1993. Order No. 24929. In addition, the Commission
granted EAS from the Emmett exchange (then owned by Mountain Bell Telephone Company) to the
Sweet exchange (then owned by Continental Telephone Company of the West) in April 1986. Order
No. 20365. Finally, the Commission granted EAS from the Caldwell exchange (then owned by
Mountain Bell Telephone Company) to the Marsing exchange (then owned by Continental
Telephone Company of the West) in June 1982. Order No. 17412.
ORDER NO. 27826
calling in GNR-96-2 (Horseshoe Bend/Garden Valley/Sweet), GNR-96-8 (RigginslWhite
Bird/NewMeadows), GNR-97-10 (Blaine County), and USW-97-l/CTC-97-1 (Marsing) and
closed those cases.
CITIZENS' PETITION FOR CLARIFICATION
On July 31 , 1998 , Citizens filed comments that revised its proposed implementation
schedule. Citizens stated that during the planning process it became apparent that implementation
of all the rate changes and calling plans at one time would be more efficient, cost effective and less
confusing for its customers. Therefore, in its July 31 comments, Citizens proposed a single cut over
date in all exchanges of not later than 180 days from the date of the final order to implement the new
rates. It further proposed that it stagger implementation of the optional calling plans in each
exchange just prior to the cut over date. No party objected to Citizens' revised implementation
schedule. On November 6, 1998, the Commission ordered Citizens to implement the proposed rates
within thirty (30) days of the final order. Order No. 27789. On November 12, 1998, Citizens
requested the Commission clarify its Order to reflect its revised schedule as set forth in its
Comments.
TALLENT'S REQUEST FOR RECONSIDERATION
On November 24, 1998, Mr. R. 1. Tallent, a Citizens' customer from Riggins , requested
the Commission reconsider Order No. 27789. In particular, Mr. Tallent requested the Commission
reconsider granting Citizens' request for rate rebalancing.He argued that rebalancing was
unnecessary because he believes that it was based on a twenty-three million dollar ($23 000 000)
investment in fiber optic cable which he claims was not necessary for local service and primarily
benefitted long distance service. Therefore, he asserted that access charges for long distance carriers
should not be reduced.
Mr. Tallent also objected to expanding the current EAS calling area for the Riggins
exchange to include New Meadows and McCall because he does not call these areas and objects to
subsidizing" those customers who do.
Finally, Mr. Tallent requested the Commission reconsider again denying Riggins
customers EAS to Grangeville. Mr. Tallent suggested that the cost study prepared in conjunction
ORDER NO. 27826
with the Commission s consideration ofEAS to Grangeville in Case No. GNR-92-5 was not
current. In addition, he also asserted that while this Commission found that the combination of
LATA boundaries and difficult terrain made EAS to Grangeville very costly to Riggins and White
Bird customers, the Commission erroneously assumed two things: that EAS to Grangeville would
require new facilities be constructed and that the Commission did not have jurisdiction over LATA
(Local Access and Transport Area) waivers.
COMMISSION FINDINGS
Motion/or Reconsideration. In Order No. 27789, the Commission found that Citizens
rate rebalancing request was revenue neutral and, thus, Mr. Tallent's concern regarding Citizens
twenty-three million dollar ($23 000 000) investment is unjustified because that investment is not
the basis for the rate increases. The Commission finds that the underlying rate increases are directly
related to Citizens' reduction in access charges for long distance carriers , as required by state and
federal law.They are not directly related to the twenty-three million dollar ($23 000 000)
investment.
Mr. Tallent also objects to rate rebalancing on principle. In Order No. 27789, the
Commission found that Idaho Code 9 62-623 requires incumbent telephone corporations, such as
Citizens, to remove implicit subsidies from their rates and further found that the Legislature
specifically identified the carrier common line component of access charges as an implicit subsidy
that must be reduced and/or made explicit. Because access rates have, in essence, subsidized local
service rates and because Citizens is a fully rate-regulated company, Citizens is entitled to have the
opportunity to meet its revenue requirement. The Commission, therefore, concluded that rebalancing
Citizens' local service rates was necessary in order to allow Citizens to have the opportunity to earn
its rate of return. The Commission further found that the proposed local service rates are fair and
just and are revenue neutral. Mr. Tallent presented no evidence that would support reconsideration
of that finding and reconsideration is denied.
Mr. Tallent also objected to extending EAS for Riggins customers to White Bird, New
Meadows, McCall, Donnelly and Cascade. The reason for reconsideration urged by Mr. Tallent
appears to be no more than a disagreement with the Commission regarding the decision reached.
The Commission as a fact finding body has a responsibility to consider the evidence presented and
ORDER NO. 27826
base its findings on substantial, competent evidence. Boise Water Corp. v. IPUC 97 Idaho 832, 555
2d 163 (1976); See also Rosebud Enterprises v. IPUC 128 Idaho 609, 618, 917 P.2d 766, 775
(1996) (the Supreme Court will not displace the Commission s choice between two fairly conflicting
views). Accordingly, it is not grounds for reconsideration that Mr. Tallent disagrees with the
Commission s decision.
Moreover, the Commission finds that nearly seven hundred (700) people, most from
Riggins, filed petitions requesting these particular toll-free calling areas. GNR- T -96-8. In addition
nearly 160 White Bird residents requested EAS to Riggins. The Commission further finds that the
evidence supported its decision to extend EAS to Riggins, White Bird, New Meadows, McCall
Donnelly and Cascade customers and Mr. Tallent presented no evidence challenging the
Commission s decision. Accordingly, reconsideration on this issue is denied.
Finally, the Commission finds that the primary barriers to extending EAS for Riggins and
White Bird customers to Grangeville -- LATA boundaries, interference caused by White Bird
Mountain and lack offacilities to connect White Bird to Grangeville -- still exist. While Mr. Tallent
identifies the "public network" as available to Citizens and U S WEST for EAS from Riggins to
Grangeville, the Commission finds this network is owned by long distance carriers and is nQ1
available to carry Citizens' Riggins and White Bird calls to Grangeville. Therefore, the Commission
finds that new facilities must be built to accommodate EAS to Grangeville. Moreover, the
Commission fmds that while it would like the authority to grant a waiver of LATA boundaries to
intrastate regional Bell operating companies, like US WEST, the Commission does not have that
legal authority. The Federal Communications Commission has that authority under federal law.
Therefore, the Commission finds that it simply cannot grant the waiver and that this is another major
road block to extending EAS to Grangeville. Therefore, the Commission finds that Mr. R. 1. Tallent
has not presented any new information that changes the Commission findings made in Order No.
27789 regarding granting EAS to Grangeville and reconsideration on this issue is denied.
Citizens' Petition for aarification. The Commission finds that it is in the public interest
to grant Citizens' Petition for Clarification and that no party objected to Citizens' revised
implementation schedule. The Commission further finds that it is more efficient, cost effective and
less confusing for Citizens ' customers to use a single cut over date in all exchanges of not later than
180 days from the date of the final order to implement the new rates. The Commission also finds
ORDER NO. 27826
that Citizens' proposal to stagger implementation of the optional calling plans in each exchange
implementing each calling plan just prior to the cut over date is reasonable.
Commission aarification. The Commission also finds that Order No. 27789 should be
clarified to clearly indicate that the Order did not eliminate previously approved existing mandatory
EAS calling areas for U S WEST customers in the Caldwell, Nampa, Emmett, or Blackfoot
exchanges. In Order No. 27789, the Commission found that there was no evidence to support
imposing mandatory EAS on all U S WEST customers in the U S WEST Boise Region, the
U S WEST Eastern Idaho Region or the U S WEST Magic Valley Region into certain Citizens
exchanges. However, the Commission finds that in refusing to impose mandatory EAS on all
U S WEST customers in these regions, it was not eliminating existing mandatory U S WEST EAS
calling areas. The following existing EAS calling areas were not changed by Order No. 27789.
The Commission finds that in September 1997, the Commission granted mandatory EAS
for U S WEST Caldwell and Nampa exchanges into Citizens' Parma , Wilder and Homedale
exchanges in Case No. CTC-97-3/ GNR-93-7/GNR-93-11. Likewise, the Commission finds
that in June 1993, the Commission granted mandatory EAS to U S WEST Blackfoot customers into
the Springfield exchange in Case No. GNR-92-09.Order No. 24929.In addition, the
Commission finds that in April 1986, the Commission ordered mandatory EAS from the Emmett
exchange (then owned by Mountain Bell Telephone Company) to the Sweet exchange (then owned
by Continental Telephone Company of the West) in Case No. U-I037-52. Order No. 20365.
Finally, the Commission finds that in June 1982, the Commission ordered mandatory EAS from the
Caldwell exchange (then owned by Mountain Bell Telephone Company) to the Marsing exchange
(then owned by Continental Telephone Company of the West) in Case No. U-1O37-43. Order No.
17412. The Commission finds that it did not intend to eliminate the EAS calling areas established
by those orders.
Likewise, in reviewing Citizens ' Application it came to the Commission s attention that
Citizens' description of its proposed EAS and its optional calling plans for Springfield, Marsing and
Sweet exchanges is confusing. For example, the Commission finds that according to its Application
Springfield customers will have EAS to Aberdeen, Springfield and Blackfoot. However, according
to the same Application, Springfield customers will also be offered an optional regional calling plan
that includes "Blackfoot." Likewise, Marsing customers will have EAS that includes Caldwell.
ORDER NO. 27826
According to its Application, Marsing customers will be offered an optional regional calling plan
that includes Caldwell.Sweet customers will have EAS to Emmett and, according to its
Application, also be offered an optional regional calling plan that includes Emmett.The
Commission finds that these apparent inconsistencies may cause customer confusion and, therefore
finds that further clarification is necessary. Therefore, on its own motion, the Commission will
clarify its Order to avoid confusion for Citizens' customers.
CLARIFICATION OF EAS, LOCAL AND REGIONAL CALLING PLANS
Based on the Commission findings set forth in Order No. 27789 and the above clarification
below is a revised chart reflecting the local calling areas (EAS), optional local calling plans, and
optional regional calling plans ordered by the Commission, as clarified in this Order. The Citizens
regions are modified as follows to reflect this clarification:
Region 1 American Falls, Bancroft, Blackfoot, Downey, Grace, Idaho Falls
Lava Hot Springs, McCammon, Montpelier, Pocatello, Preston
Rexburg, Rigby, Ririe, Roberts, Shelley, and Soda Springs exchanges
Region lA American Falls, Bancroft, Downey, Grace, Idaho Falls, Lava Hot
Springs, McCammon, Montpelier, Pocatello, Preston, Rexburg,
Rigby, Ririe, Roberts, Shelley, and Soda Springs exchanges
Region 2 Bliss, Buhl, Castleford, Dietrich, Eden-Hazelton Gooding,
Hagerman, Jerome, Kimberly, Murtaugh, Shoshone, Twin Falls, and
Wendell exchanges
Region 3 Boise, Caldwell, Emmett, Idaho City, Kuna, Melba, Meridian
Middleton, N amp a, and Star exchanges
Region 3A Boise, Caldwell, Idaho City, Kuna, Melba, Meridian, Middleton
Nampa, and Star exchanges
Region 4 Hailey and Ketchum exchanges
Region 5
Region 5A
Boise, Caldwell, Emmett, Idaho City, Kuna, Melba, Meridian
Middleton, Nampa, Star New Plymouth, Weiser and Payette
exchanges
Boise, Emmett, Idaho City, Kuna, Melba, Meridian, Middleton
Nampa, Star, New Plymouth, Weiser and Payette exchanges
ORDER NO. 27826
ORDER NO. 27826
ORDER
IT IS HEREBY ORDERED that Citizens' Petition for Clarification is granted.
IT IS FURTHER ORDERED that Citizens implement the proposed rates included in its
Application no later than one-hundred eighty (180) days from the service date of Order No. 27789.
IT IS FURTHER ORDERED that Order No. 27789 is hereby clarified as set forth more
specifically above.
IT IS FURTHER ORDERED that the Petition for Reconsideration filed by R. 1. Tallent is
denied.
THIS IS A FINAL ORDER ON RECONSIDERATION. Any party aggrieved by this Order
or other final or interlocutory Orders previously issued in Case Nos. CTC-98-, GNR-96-
(Horseshoe Bend/Garden Valley/Sweet), GNR-96-8 (RigginslWhite Bird/New Meadows), and
GNR-97-10 (Blaine County) and USW-97-l/CTC-97-1 (Marsing) may appeal to the Supreme
Court of Idaho pursuant to the Public Utilities Law and the Idaho Appellate Rules. See Idaho
Code 9 61-627.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this ,/8' LX day
of December 1998.
~~~
RALPH NE , COMMISSIONER
MARSHA H. SMITH, COMMISSIONER
ATTEST:
Myrna 1. Walters
Commission Secretary
O:ctct983.cc2
ORDER NO. 27826