20230821Supplemental Comments of the Commission Staff.pdf

CLAIRE SHARP
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION 37
PO BOX 83720
BOISE,IDAHO 83720-0074
[phone]
IDAHO BAR NO.8026
Street Address for Express Mail:
11331 W CHINDEN BLVD,BLDG 8,SUITE 201-A
BOISE,ID 83714
Attorneyfor the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF MILLENNIUM )NETWORKS,LLC'S NOTICE OF THE )CASE NO.MNL-T-23-01ACQUISITIONOFCERTAINASSETSOF)CTL-T-23-03
CTC TELECOM,INC.)
)SUPPLEMENTAL COMMENTS
)OF THE COMMISSION STAFF
COMMISSION STAFF ("STAFF")OF the Idaho Public Utilities Commission,by and
throughits Attorneyof record,Claire Sharp,Deputy AttorneyGeneral,submits the following
supplemental comments.
BACKGROUND
On May 26,2023,Millennium Networks,LLC,d/b/a Silver Star Communications
("Millennium"or "Company")filed a notice to the Idaho Public Utilities Commission
("Commission")of its acquisition of most of CTC Telecom,Inc's.("CTC")1 assets in Ada
County,Idaho.Notice at 1.
Millenium represented that it entered into an Agreement on April 19,2023,to acquire
almost all the assets of CTC within Ada County.Petition at 1.CTC is a telecommunications
'CTC is the acronym used for CTC Telecom,Inc.in the Petition.The Commission uses CTL to identify CTC
Telecom,Inc.for purposes of its case management software.For purposes of this Order,we will use CTC.
STAFF COMMENTS l AUGUST 21,2023
company providingbasic local exchange telecommunication services in Idaho under CPCN No.
348.Id;see also Order No.28059.Millenium is a telecommunications company operating
under CPCN No.494.Id.;see also Order No.31027.
Millenium represented it acquired "telecommunications equipment and facilities,
certain customer and vendor contracts and certain other rights and agreements between CTC and
third parties or government agencies"under the Agreement.Petition at 1.Millenium stated it
plans to offer local exchange services in and around Ada County and represented its existing
CPCN allows for the provision of these services in the planned area.Id.at 2.
On July 12,2023,Commission Order 35852 opened a new case for CTC (to be processed
concurrentlywith Millennium's Petition),provided Notice of the Petition,established a July 27,
2023,public comment deadline and an August 4,2023,Company reply deadline.
Since Order No.35852,Millennium and CTC (collectivelythe "Companies")
independently reached out to the Commission Staff's Counsel and asked for additional time to
respond to the discovery propounded by the Commission Staff ("Staff").In addition,CTC
expressed concerns about the relevance of the information requested and wished to discuss those
concerns with Staff.
On July 27,2023,Staff filed its comments which were intended as interim comments due
to incomplete discovery.
On July 31,2023,Counsel for Staff,Staff,Millennium,and CTC discussed Staff's
discovery request and the Companies'concerns.Staff's Counsel conferred with the Companies
and proposed establishing new,supplemental comment and reply deadlines,to allow Staff to
consider the additional information which will be filed in this case.Doing this would require
establishing a supplemental deadline for public comments and a new deadline for the
Companies'reply.Staff expected additional information from Millennium and CTC by August
3,2023.
On August 1,2023,Staff presented a Decision Memorandum to the Commission
explaining the need to modify comment and reply deadlines in this case.The Commission
granted Staff's request to establish supplemental public comment and new Company reply
deadlines.
On August 2,2023,the Companies filed their responses to Staff interim comments.In
their responses,they objected to Staff discovery requests on the ground that no Idaho code
STAFF COMMENTS 2 AUGUST 21,2023
provides the Commission with the authority to review the asset sale.Additionally,the
Companies contended that the Idaho Code $61-328 is whollyinapplicable to
telecommunications companies.
On August 9,2023,the Commission issued a Notice of Supplemental Comments
Deadlines establishing supplementalpublic comment deadline of August 21,2023,and a new
Companies'reply deadline of August 28,2023.see Order No.35879.
STAFF ANALYSIS
Staff has reviewed the Companies'objections to responding to production requests.Staff
has also examined the Companies statutory obligations and Commission Orders associated with
the processing of assets transfer cases.Staff believes that it is in the public interest that the
Companies be compelled to respond to Staff production requests.The assets being transferred
are used by the Companies to provide services to the customers.The full agreement that was
entered into by the Companies on April 19,2023,is crucial for Staff to determine whether or not
the transaction is in the public interest.
Investment of Authority
Pursuant to Idaho Code §61-501,the Commission has been vested with the power and
jurisdiction to supervise and regulate every public utility in the State of Idaho.The Companies
are public utility Companies providing utility services as defined in Idaho Code §61-121.Thus,
as such,Staff have concluded that the Commission has jurisdiction over the business conduct of
the Companies.
The Idaho Code §62-622 provides that Competitive Local Exchange Carriers ("CLEC")
services are not price regulated by the Commission.However,the Commission has the authority
to determine the non-economic requirements for all telephone corporations providing basic local
services,includingbut not limited to service qualitystandards,provision of access to carriers
providing MTS,filing of price lists,customer notice,and customer relations rules.Additionally,
the Commission has the authorityto resolve disputes between or among telephone corporation(s)
and provider(s)of services exempted from regulation under Idaho Code §62-603(13)(Idaho
Code §62-609)and to investigate and resolve complaints made by subscribers to
STAFF COMMENTS 3 AUGUST 21,2023
telecommunications services which are subject to the provisions of Title 62 (Idaho Code §62-
616).
It is based on this invested authoritythat the Commission issued the Companies with the
Certificate of Public Convenience And Necessity (CPCN)certificates and also the Eligible
Telecommunications Carrier ("ETC")designation in the State of Idaho.CTC holds CPCN
Certificate No.348 which was granted by Commission Order No.28059 in Case No.CTL-T-99-
01.CTC was designated an ETC by Commission Order No.30867 in Case No.CTL-T-09-01.
Millennium,on the other hand,holds CPCN Certificate No.494 which was granted by
Commission Order No.31027 in Case No.MNL-T-09-01.
CPCN -ETC
Pursuant to Idaho Code §61-528 and Commission Orders No.26665 and No.35126,one
of the sine qua non conditions for the issuance of a CPCN certificate and the granting of the ETC
status is that a company must submit financial data sufficient to establish it possesses adequate
financial resources to provide the proposed services.These are assurances and descriptions of
their financial qualifications to be able to provide services to their customers.
The Companies provided those assurances and descriptions in their initial applications for
CPCN certificates and ETC designation.This is why they are holders of both the CPCN
certificates and CTC is a holder of the ETC status.Therefore,based on this,the Commission has
authorityover the conduct of the companies.
The sale of assets by CTC to Millenium,the movingout of the Ada County area by CTC,
and the moving into the Ada County area by Millenium all constitute material changes that are
different from what was initially declared in the Companies'applications for the CPCN
certificates and ETC status.These material changes do require a Staff review so that records can
be updated,verifications to compliance with CPCN and ETC requirements can be conducted and
confirmed,and most importantlypublic interest issues can be addressed.The Companies'
refusal to respond to Staff production requests does not assist Staff in this endeavor.
STAFF COMMENTS 4 AUGUST 21,2023
Idaho Code §61-328
The examination of assets transfer transactions by Staff is usuallyconducted using Idaho
Code §61-328 as a guide.Staff would usuallylook at:1)whether the transaction would follow
the public interest,2)whether the cost of and rates for supplying service would be increased
because of the transaction,and 3)whether the transferee has the bona fide intent and financial
ability to operate and maintain the system in the public service.
In their filing responses,the Companies stated that Idaho Code §61-328 is wholly
inapplicable to telecommunications companies,as this applies only to Electric Utilities.
However,this argument does not align with the Commission's use of this code for
evaluating the transfer of assets between public utilities.This is particularlythe case in water
utilities.In Order No.34416 of Case No.BCS-W-19-01/DIA-W-19-01,the Commission stated
that "The Commission has an established practice of evaluating the transfer of water systems
under the criteria found in Idaho Code §61-328.Diamond Bar and Bar Circle are privatelyheld
water companies and public utilities as defined in these laws."Order 34416 pg.4.
Conclusion
In sum,based on the material provided,the Idaho Statuses,and the Commission Orders,
the Companies refusal to adequatelyrespond to Staff production requests hinders Staffs ability
to express an opinion on the Asset Purchase Agreement,dated effective April 19,2023,that the
Companies entered into and also to address the public interest issue.
STAFF COMMENTS 5 AUGUST 21,2023
STAFF RECOMMENDATION
Staff believes that it is in the public interest that the Companies be compelled to respond
to Staff production requests.In particular,the full agreement that was entered into and the
accounting treatment of the transaction are both crucial information for Staff to determine
whether or not the transaction is in the public interest.
Respectfullysubmitted this 21st day of August 2023
C .Claire Sh
Deputy AttorneyGeneral
Technical Staff:Johan Kalala-Kasanda
i:umisc/connnents/mnlt23.l_ctlt23.3 supp comments
STAFF COMMENTS 6 AUGUST 21,2023
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 21th DAY OF AUGUST 2023,
SERVED THE FOREGOING SUPPLEMENTAL COMMENTS OF THE
COMMISSION STAFF TO MILLENNIUM NETWORKS,LLC AND CTC
TELECOM INC.,IN CASE NO.MNL-T-23-01/CTL-T-23-03,BY E-MAILING A
COPY THEREOF,TO THE FOLLOWING:
MICHELLE MOTZKUS RICHARD WIGGINS
LEGAL &REG ADMIN CTC TELECOM,INC.
MILLENNIUM NETWORKS LLC P.O.BOX 88
P.O.BOX 226 130 SUPERIOR STREET
FREEDOM,WY 83120 CAMBRIDGE,ID 83610
E-MAIL:[e-mail] E-MAIL:[e-mail]
SECRETARY
CERTIFICATE OF SERVICE