20230801Decision Memo.pdf

MICHAEL DUVAL
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE,IDAHO 83720-0074
[phone]
IDAHO BAR NO.11714
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 ELECTRIC )LIGHTWAVE,LLC'S AND ZAYO GROUP,)CASE NOS.ELI-T-23-01
LLC'S JOINT APPLICATION FOR )ZAY-T-23-01
APPROVAL TO ASSIGN THE CERTIFICATE )
OF PUBLIC CONVENIENCE AND )
NECESSITY HELD BY ELECTRIC )COMMENTS OF THE
LIGHTWAVE,LLC TO ZAYO GROUP,LLC )COMMISSION STAFF
COMMISSION STAFF ("STAFF")OF the Idaho Public Utilities Commission,by and
through its Attorneyof record,Michael Duval,Deputy AttorneyGeneral,in response to the
Notice of Application and Notice of Modified Procedure in Order No.35846 issued on July 10,
2023,submits the followingcomments.
BACKGROUND
On March 23,2023,Electric Lightwave,LLC d/b/a Allstream ("Electric Lightwave")and
Zayo Group,LLC ("Zayo")(referred to collectivelyas "the Applicants")jointly applied to the
Idaho Public Utilities Commission ("Commission")seeking approval to transfer Electric
Lightwave's Certificate of Public Convenience and Necessity ("CPCN")No.344 to Zayo with
Zayo being the remaining entity after assuming CPCN No.344.The Applicants refer to this
STAFF COMMENTS 1 JULY 31,2023
process as the "Pro Forma Consolidationi."Application at 1.While retaining their original
request,the Applicants filed an amended application ("Application")on April 3,2023,for
compliance purposes.The Commission issued a Notice of Application and sets deadlines for
interested persons to comment on the Application,and for the Applicants to reply.2
APPLICATION
The Applicants are both Delaware limited liability companieS3 and they are both
authorized to engage in telecom business activities in IdahO4.Electric Lightwave is a wholly
owned subsidiary of Zayo with a principal office located at 18110 SE 34th Street;Building One,
Suite 100,Vancouver,Washington 98683.Zayo is whollyowned by Zayo Group Holdings,
Inc,6 with a principal office located at 1821 30th Street,Unit A,Boulder,Colorado 80301.
The Applicants assert that the Pro Forma Consolidation is part of the Company's efforts
to simplify its corporate structure,reduce the reporting and accounting burdens,provide
operational efficiencies,and save costs by reducing the duplication of roles within the
Applicants'corporate structures.Id.
The Applicants state that Zayo is a provider of bandwidth infrastructure and
interconnection services over regional and metropolitan fiber networks.These
telecommunications service offerings include high-capacity bandwidth services such as private
lines,Ethernet,and wavelength services.Its customers consist primarily of wireless service
providers,national and regional communications service providers,media/Internet/content
companies,governments,banks,and other bandwidth-intensive enterprises.In Idaho,Zayo
Group is authorized to provide wholesale telecommunications service pursuant to Order No.
32765 issued in Case No.ZAY-T-12-01 and is registered as an Other Telecommunications
Provider.Id.at 2.
I See Exhibit A Corporate Structure of Applicants before and after the Pro Forma Consolidation.
2 See Order No.35846.
3 See Exhibit B Certificate of Formation.
4 See Exhibit C Certificate of Authority to Transact Business in Idaho.
5 See Exhibit A.
STAFF COMMENTS 2 JULY 31,2023
The Applicants state that Electric Lightwave provides a broad range of communication
and networking services to businesses,wholesale carriers,web content providers,government
organizations,and educational institutions.These services include but are not limited to,
facilities-based local,resold long-distance,Internet,broadbandtransport,and data services.
Currently,in Idaho,Electric Lightwave is authorized to provide local exchange
telecommunication services pursuant to First Amended Certificate No.344 issued by
Commission Order No.29528 in Case No.ELI-T-04-2.Both Zayo and Electric Lightwave have
been authorized to provide domestic and international services by the Federal Communications
Commission.Id.at 3.
The Applicants explain that as a result of certain Pro Forma intra-company transactions
undertakenby Zayo,Electric Lightwave was consolidated into Zayo.This means that the Pro
Forma Consolidation is expected to result in the merger of Electric Lightwave with and into
Zayo Group,whereby the separate existence of Electric Lightwave will cease,and Zayo will be
the survivingentity.Once the Pro Forma Consolidation is completed,the Applicants plan for
Zayo to form a division that will be known as Allstream.This division will provide the services
that Electric Lightwave once provided-includingcertain services not currentlyprovided by
Zayo.The Applicants state that customer rates and terms of service would not change if Electric
Lightwave'scustomers are served directly by Zayo.Zayo plans to use Electric Lightwave's
existing facilities (and other facilities)to provide local exchange services.Id.at 4.
The Applicants state their request is in the public interest and ask that it be granted on an
expedited basis.Additionally,subject to receipt of applicable regulatory approvals,the
Applicants proposed to complete the Pro Forma Consolidation as soon as possible within the
calendar year of 2023.Id.at 4.
STAFF COMMENTS 3 JULY 31,2023
STAFF ANALYSIS
Staff conducted a review of this Joint Application and concluded that the CPCN
Certificate No.344 that was granted to Electric Lightwave should be canceled and Zayo be
issued a new CPCN certificate of its own.
The joint Application submitted by the Applicants proposes a Pro Forma Consolidation
which is expected to result in the merger of Electric Lightwave with and into Zayo,whereby the
separate existence of Electric Lightwave will cease,and Zayo will be the survivingentity.Thus,
as a direct result of this transaction,the CPCN Certificate No 344 that Electric Lightwave holds,
should be cancelled-since Electric Lightwave will no longer exist as a separate entity.
This CPCN Certificate No.344 was issued to Electric Lightwave,Inc.to authorize
Electric Lightwave to provide telecommunications services to Idaho residences and businesses,
includingbasic exchange services,within parts of the state of Idaho.The Commission approved
Electric Lightwave's Certificate by Order No.27627 issued July 15,1998.Order No.27627
limited the areas in which Electric Lightwave is authorized to provide local telecommunications
service to only within the counties of Ada,Canyon,Boise,and Elmore.Subsequently,pursuant
to Commission Order No.29528 issued June 22,2004,Certificate No.344 was amended to
reflect the change in name from Electric Lightwave,Inc.to Electric Lightwave,LLC.The
Company is registered with the Secretary of State as a foreign limited liabilitycompany with the
foreign name Electric Lightwave,LLC.
The Joint Application proposes that the CPCN Certificate No.344 be transferred to Zayo
once the Pro Forma Consolidation is completed.However,Staff believes that this certificate
should be canceled and Zayo should be issued its own CPCN certificate since it will be the only
remaining standing entity.As shown in the Application,Zayo does fulfill all the requirements
for the issuance of a CPCN certificate.
Zayo asserts that,as far as customers are concerned,the Pro Forma Consolidation will be
seamless and will not result in any change in their services.Zayo will use the familiar
"Allstream"brand with respect to the affected customers that receive services,primarily
traditional voice services,not currentlyprovided by Zayo.The remaining affected customers
will be served under the "Zayo"brand.The rates,terms,and conditions of the customers'
services will not change.Additionally,there will be no change in the managerial qualifications
of the telecommunications provider serving the customers affected by the Pro Forma
STAFF COMMENTS 4 JULY 31,2023
Consolidation.The managerial and operations personnel that currentlyoperate Electric
Lightwave will continue to operate a portion of the Allstream business as a separate division
within Zayo and the remaining operations will be overseen by Zayo's existing experienced
management and operations personnel.
In Idaho,Zayo is already authorized to provide wholesale telecommunications service
pursuant to Order No.32765 issued in Case No.ZAY-T-12-01 and is registered as an Other
Telecommunications Provider.The new CPCN certificate will also be statewide in scope and
will encompass the authorityto provide telecommunications service offerings of both Zayo and
Electric Lightwave.
STAFF RECOMMENDATION
1.Electric Lightwave,LLC.and CPCN Certificate No.344
Staff has reviewed Electric Lightwave'sApplication and recommends that CPCN
Certificate No.344 be canceled to reflect the Pro Forma Consolidation of Electric
Lightwave into Zayo.
2.Zayo Group,LLC
Staff has reviewed Zayo's Application and believes the Company understands the
Commission's rules and requirements related to the provision of telecommunication
services in Idaho.Based on this review,Zayo's filing fulfills the requirements of
procedural Rule 114 and Order No.26665.Staff also believes the Company possesses
the requisite financial,managerial,and technical qualifications necessary to operate as a
provider of telecommunications services in the entire state of Idaho.
Therefore,Staff recommends that Zayo be issued a Certificate of Public Convenience and
Necessity subject to the followingconditions:
1.Zayo complies with the number pooling and reporting requirements of the North
American Numbering Plan Administrator,as set forth in Commission Order No.
30425;
2.Zayo provides necessary reports and contributions appropriateto the Idaho Universal
Service Fund,Idaho Telecommunications Relay Services,and Idaho
Telecommunications Service Assistance Program,and complies with all future
STAFF COMMENTS 5 JULY 31,2023
reporting requirements deemed appropriateby the Commission for competitive
telecommunications providers;
3.Prior to issuance of the CPCN,Zayo files a final price list outlining all its rates,
terms,and conditions with the Commission;
4.Zayo provides three reports to the Commission indicating the number of basic local
exchange customers it has and the services being offered.These reports will be due
as follows:
a.November 27,2023;
b.March 25,2024;
c.July29,2024;and
If Zayo fails to provide the three reports,Zayo shall relinquish its CPCN and all
telephone numbers it has been assigned or the Commission will by its own order
revoke the Company's CPCN.
5.If Zayo is not providing basic local exchange service by the time the third report is
due,the Commission by its own order will revoke the Company's CPCN.
Respectfully submitted this 31st day of July 2023.
Michael Duval
Deputy AttorneyGeneral
Technical Staff:Johan Kalala-Kasanda
i:umisc/comments/eli_zayt23.lmdjkcomments
STAFF COMMENTS 6 JULY 31,2023
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 31sT DAY OF JULY 2023,SERVED
THE FOREGOING COMMENTS OF THE COMMISSION STAFF,IN CASE NOS.
ELI-T-23-01 /ZAY-T-23-01,BY MAILING A COPY THEREOF,POSTAGE PREPAID,
TO THE FOLLOWING:
LAUREN LANTERO CATHERINE WANG
VP GENERAL COUNSEL BRETT P FERENCHAK
CORPORATE ZAYO GROUP LLC MORGAN LEWIS &BOCKIUS
1821 30TH ST UNIT A 1111 PENNSYLVANIA AVE NW
BOULDER CO 80301 WASHNGTON DC 20004-2541
E-MAIL:[e-mail] E-MAIL:[e-mail]
brett.ferenchakŠmorganlewis.com
DOUGLAS DENNEY
VP LEGAL &REGULATORY
ALLSTREAM
18110 SW 34TH ST STE 100
VANCOUVER WA 86383
E-MAIL:doug.denney allstream.com
SECRETARY
CERTIFICATE OF SERVICE