20070507Decision memo.pdf

DECISION MEMORANDUM
TO:CO MMISSI 0 NER KJELLAND ER
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
COMMISSION STAFF
FROM:DON HOWELL
DATE:MAY 4, 2007
SUBJECT:EDGE WIRELESS, LLC'S APPLICATION FOR DESIGNATION AS AN
ELIGIBLE TELECOMMUNICATIONS CARRIER (ETC), CASE NO.
EDG- T -07 -
In February 2007 , the Commission issued a Notice of Application and Notice of
Modified Procedure regarding Edge Wireless s Application for designation as an eligible
telecommunications carrier (ETC) for several Idaho service areas. In particular, Edge seeks ETC
designation in certain rural and non-rural wire centers. The Commission has the authority to
designate telecommunication carriers as ETCs under the federal Telecommunications Act of
1996. 47 U.C. g 214(e)(1-2); 47 C.R. g 54.101; Idaho Code g 62-615(1). In response to the
Commission s Notice of Modified Procedure, the Idaho Telephone Association (ITA) filed a
protest to Edge s ETC Application.
In Order No. 30286 issued March 28 , 2007, the Commission address ITA's Protest
and directed IT A and Edge to exchange information via discovery. The Commission also
directed Edge to allow ITA to review Edge s two-year network improvement plan after
executing a confidentiality agreement. The Order directed Edge and IT A to inform the
Commission no later than April 25 whether a hearing is necessary or if the matter may continue
to be considered by Modified Procedure. Order No. 30286 at 2.
Edge filed timely Comments that the Commission should designate Edge as an ETC
and ITA timely filed a "Motion for a Staff Investigation." IT A asserted in its Motion that Edge
neither has facilities in all the areas it proposes to serve as an ETC carrier, nor does Edge s build-
out plan indicate that it will install such facilities within 2 years. IT A Motion at 4 (confidential).
DECISION MEMORANDUM
On May 1 2007, Edge filed an errata correction to its Application. On May 3,2007 , Staff filed
an objection to ITA's Motion and Edge filed a Reply to ITA's Motion.
EDGE WIRELESS COMMENTS
Edge noted in its comments that it has provided confidential documents and other
information to ITA. The parties also engaged in a conference call in order "to permit ITA to ask
clarifying questions regarding the material" that Edge provided. Having provided IT A with the
requested information, Edge urged the Commission to continue processing this matter under
Modified Procedure and issue an Order granting ETC designation to Edge. Edge Comments at
IT A MOTION FOR A STAFF INVESTIGATION
In response to Order No. 30286, ITA filed a "Motion for a Staff Investigation.
Although IT did not request an evidentiary hearing in its Motion, it did request "the
Commission direct its Staff to conduct further investigations and issue a report to the
Commission and Parties. . .." ITA Motion at 2. IT A insists there are two discrepancies with
Edge s ETC Application. First, IT A alleges that Edge does not or will not serve all the wire
centers in those telephone service areas in which it is seeking ETC designation. Id. at 3. ITA
asserts that Edge does not have facilities in certain wire centers nor does Edge s two-year build-
out plan reveal that these wire centers are scheduled for facilities in the next two years. Id. at 4
(confidential).
Second, IT A requests that the Commission direct its Staff to conduct an independent
investigation to ensure that Edge s ETC Application does not result in "cream skimming.! IT
requested that the Staff determine:
(1) If Edge in fact lacks facilities and the ability to provide service in the
requested wire centers
(2) Whether Edge is serving only the most profitable and least cost areas of
those wire centers where it is serving only a portion of the area, and
(3) Whether Edge s claimed network coverage is accurate.
J 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." Order No. 29541 at 16 (emphasis original).
DECISION MEMORANDUM
IT A Motion at 6. IT A requested that the Staff issue a written report examining the three issues
set out above.
EDGE ERRATA
On May 1 , 2007 , Edge filed an errata correction to its Application to remove the
Stanley wire center from its proposed ETC area." Edge Errata at 1. Edge acknowledges that it
inadvertently included the Stanley wire center in its proposed ETC area allegedly served by rural
incumbent Custer Telephone. Because the Stanley wire center is in fact in Midvale Telephone
study area, including the Stanley wire center in Edge s ETC area "would require the Commission
to redefine the Midvale study area to the wire center level." This was not Edge s intent. Errata
at 2. Consequently, Edge withdrew the Stanley wire center from its proposed ETC service area.
Id. at 1-
ST AFF OBJECTION
On May 3, 2007, Staff filed an objection to the ITA Motion. Staff suggests that ITA
has misconstrued the standard for granting ETC status. An ETC applicant is not required to
demonstrate a pre-existing ability to serve an entire service area nor even an entire wire center
before being granted an ETC designation. Rather, Staff reports that an ETC Applicant must
demonstrate a commitment to fulfill all reasonable requests for service within the proposed
service area. Staff maintains that Edge satisfies this requirement when the Company stated its
commitment to serve requesting customers.Staff Objection at 2-citing Application at 14.
Staff states that Edge can avoid cream skimming by virtue of its commitment to serve entire wire
centers. Objection at 3; Staff initial Comments at 7.
Staff also objects to the Motion because it is not a reasonable use of Staffs time to
conduct an investigation into Edge s "Network Coverage.Staff-explains that ETCs must file
annual reports to include: (1) a two-year Network Improvement Plan and Progress Report; and
(2) Unfulfilled Service Requests. These reports are used to determine how well an ETC is
performing based upon stated commitments in its ETC application and whether it will be
approved for recertification by the Commission. Objection at 3. For these reasons, Staff argues
that IT A's request for a Staff investigation is unwarranted.
DECISION MEMORANDUM
EDGE REPLY
On May 3 , 2007, Edge also filed a reply to ITA's Motion.Edge urges the
Commission to deny ITA's Motion because it is based upon a misreading of the law and is
intended to delay the designation of Edge as an ETc. Edge Reply at 1. Edge acknowledges that
it does not currently have its own facilities in all the proposed ETC area. However, Edge
maintains that federal law and this Commission s Rules do not require an ETC to serve a
proposed area exclusively through its own facilities.Id. at 2 (emphasis original). Edge asserts
that it may offer service by using its own facilities, the facilities of other carriers, or build new
facilities. Id.
Edge states that the standards for granting ETC status were established in Order No.
29841. In the Appendix to the Order, the Commission requires an ETC applicant to demonstrate
that it will: (a) provide service on a timely basis to requesting customers within
the applicant's service area where the applicant's network already passes the
potential customer s premises; and (b) provide service within a reasonable period
of time, if the potential customer is within the applicant's licensed service area
but outside its existing network coverage, if service can be provided at
reasonable cost by (i) modifying or replacing the requesting customer s
equipment; (ii) deploying roof-mounted antenna or other equipment; (iii)
adjusting the nearest cell tower; (iv) adjusting network or customer facilities; (v)
reselling services from another carrier s facilities to provide service; or (vi)
employing, leasing or constructing an additional cell site, cell extender, repeater
or other similar equipment.
The ETC applicant must also submit a two-year network improvement plan that
describes with specificity proposed improvement or upgrades to the applicant'
network on a wire center-by-wire center basis throughout its proposed designated
service area. Each applicant must also demonstrate how signal quality, coverage
or capacity will improve due to the receipt of high-cost support; the projected
start date and completion date for each improvement and the estimated amount of
investment for each project that is funded by high-cost support; the specific
geographic areas where the improvements will be made; and the estimated
population that will be served as a result of the improvements. If an applicant
believes that service improvements in a particular wire center are not needed, it
must explain its basis for this determination and demonstrate how funding will
otherwise be used to further the provision of supported services in that area.
Edge Reply at 3 citing Order No. 29841 , Appx at 2. Thus, Edge argues that the extent of current
wireless coverage is irrelevant; it is the carrier s commitment to providing service under the
standards set out above that is the test for ETC designation. Edge Reply at 3.
DECISION MEMORANDUM
Edge maintains that it has sufficient radio spectrum to serve its proposed area. Id. at 4.
The Company states that it has a switch in Pocatello and a customer service center in Idaho Falls.
Edge says it is committed to building out the "rural wire centers and has the proven ability to do
so.Id. Edge s two-year plan is merely a plan for the deployment of facilities and a new two-
year plan is due every year. Edge reiterates that it is not seeking ETC status below the study area
level for any rural ILEC in Idaho nor is it seeking to serve any partial wire centers. Id. at 4-
Edge urges the Commission to deny IT A's Motion and continue processing the ETC
application under Modified Procedure. Edge insists that ITA has every reason to delay this
application "because ETC designation will make Edge a more formidable competitor, both for
the IT A members in their capacity as rural ILECs and in their capacity as members of the
Syringa Wireless consortium.Id. at 6.
COMMISSION DECISION
1. What is the Commission s determination regarding ITA's Motion for a Staff
Investigation?
2. Does the Commission wish to continue processing this case under Modified
Procedure or schedule a hearing?
3. Anything else?
Don Howell
M:EDG-O7-01 dh
DECISION MEMORANDUM