20150203Comments.pdf

DAPHNE HUANG ' '[i]ri 't'
DEPUTY ATTORNEY GENERAL - tnrq rFF _i pt{ t: I IIDAHO PUBLIC UTILITIES COMMISSION I.'"iI I I LI, 9
PO BOX 83720 ,i . -r ;- :...,^.
BOISE, IDAHO 83720-0074 i r-iii- j ,': : ' 1 ;': i-'r'|""
[phone]
IDAHO BAR NO. 8370
Street Address for Express Mail:
472 W , WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF FIRST STEP INTERNET, )
LLC'S APPLICATION FOR CONDTTTONAL ) CASE NO. FSI-T-14-01
DESIGNATION AS AN ELIGIBLE )
TELECOMMUNICATIONS CARRIER FOR ) COMMENTS OF THE
PURPOSES OF PARTICIPATING IN THE ) COMMISSION STAFF
FEDERAL COMMUNICATIONS )
COMMISSION'S RURAL BROADBAND )EXPERIMENTS. )
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
Attorney of record, Daphne Huang, Deputy Attorney General, and in response to the Notice of
Application and Notice of Modified Procedure issued in Order No. 3321 I , submits the following
comments.
BACKGROUND
On December 22,2014, First Step Internet, LLC ("First Step" or "Company") applied to
the Commission for a conditional Order designating it as an eligible telecommunications carrier
(ETC) in the State of Idaho so it can participate in the Federal Communications Commission's
(FCC) Rural Broadband Experiments (RBE).
Overview of the Rural Broadband Experiments
In the USF/ICC Transformation Order, the FCC comprehensively reformed and
modernized the high-cost program within the universal fund and the intercarrier compensation
STAFF COMMENTS 1 FEBRUARY 3,2015
system to focus support on networks capable of providing voice and broadband services.' Th"
FCC created the Connect America Fund (CAM) and established a budget for the high-cost
program.2 The FCC provided for up to $1.8 billion of the Connect America budget to be spent
annually to make the broadband-capable infrastructure available to as many unserved locations
as possible within the areas served by price cap carriers, while sustaining voice and broadband-
capable infrastructure in high-cost areas that would not be served without this support.3
In subsequent Orders, the FCC adopted revisions to the CAM. CAM Phase II revised the
minimum speed requirement for broadband speeds and made changes to the term of support,
deployment milestones, and served location requirements among other revisions.a
ln the January 2014 Tech Transition Order, the FCC adopted a framework for
experiments to be conducted in price cap territories with the expectation that funding would not
exceed the amount of model-calculated support associated with the relevant geographic a.ea.5
In July 2014, the FCC took further steps to implement the Connect America Fund by
adopting a $100 million budget for rural broadband experiments in price cap areas, and the FCC
opened a formal application process for companies to seek this federal support.6 The RBE is
intended to bring "robust, scalable broadband networks" to rural communities unserved by "an
unsubsidized competitor that offers voice and Internet access delivering at least 3 Mbps
downstream/76 8 kbps upstream."T
On December 5, 2014, the FCC announced the provisionally-selected bidders to
participate in the RBE and these bidders are now required to submit additional information
demonstrating their financial and technical qualifications. Among the provisionally-selected
bidders are "l2 entities seeking support to build networks capable of delivering l0 Mbps
I USf/rcC Transformation Order and FNPRM,26FCC Rcd 17663, FCC I l-161, released on November 18, 201l.
2 Id. at l77lO,para.123.
'Id. at l7725,para. 158.
a See Connect America Fund et al.;WC Docket Nos. 10-90 et al., Report and Order and Further Notice of Proposed
Rulemaking, 26FCC Rcd 17663 (201 l) (USF/ICC Transformation Order and FNPRM) aff'd sub nom., In re: FCC
I l- 161 ,753 F.3d l0l5 ( l0th Cir.2014). Earlier this year, we adopted rules that built on the framework established
by the Commission in the USF/ICC Transformation Order, and proposed targeted adjustments necessary to ensure
that the Commission best utilize the funds that consumers and businesses pay into the universal service system.
Connect America Fund et al., WC Docket No. l0-90 et al., Report and Order et al,29 FCC rcd 7051 (2014) (April
Connect America Order and FNPRlr4).s TechTransition Order,FCC l4-5, released January 31,2014.
6 See Connect America Fund; ETC Annual Reports and Certification,WC Docket Nos. l0-90, 14-58, R-FNPR, 29
FCC rcd 8768 (2014) (Rural Broadband Experiments Order).
7 Application at | (quoting Connect America Fund ETC Annual Reports and Certifications, Report and Order and
Further Notice of Proposed Rulemaking,29 F.C.C.R. 8,769 atfl 7 (2014).
STAFF COMMENTS 2 FEBRUARY 3,2015
downstream and I Mbps upstream to all locations in project census blocks in Colorado, Idaho,
Iowa, Kansas, Kentucky, Michigan, North Carolina, Ohio, Tennessee, Texas, Virginia, and
Washington."s The post-selection review process for these 12 bidders now begins. In the review
process, the FCC is required to determine whether each selected applicant has demonstrated that
it has the technical and financial qualifications to successfully complete the regulatory
requirements for the universal support, which includes obtaining ETC designation from state
Commissions by March 5,2015 for the Service Area.e
The Application
First Step is a facilities-based regional Internet Service Provider, offering fixed
broadband Intemet access services, and "a variety of fixed terrestrial broadband services,
including dial up, DSL, fiber, cable Internet and fixed wireless broadband services." Application
at2. The Company also offers voice services using Voice over Intemet Protocol (VoIP)
technology. Id. The service area for which the Company requests designation is set forth in
Exhibit 1 of the Company's Application, but includes part of eastern Washington, and remote
parts of Clearwater, Idaho, Latah, Lewis and Nez Perce Counties. 1d.
First Step states that the RBE uses Connect America funding to advance broadband
networks in rural communities in price cap areas. Id. at3. The FCC provisionally selected First
Step to receive RBE funding, but requires the Company to obtain and confirm ETC status,
among other technical and financial qualifications. Id. at l-2. First Step asks the Commission to
grant the Company ETC status that is "conditional and effective upon it being awarded" FCC
funding for participation in the RBE. Id. at2.
The Company states it qualifies for ETC designation under the federal
Telecommunications Act(47 U.S.C. $ 2la(e)(1)), the Federal Communications Commission's
eligibility rules (47 C.F.R. $ 5a.101(a)), and other requirements set forth by this Commission,
outlined in the Appendix to Commission Order No. 29841 . Id. at 4-9.
The Company asserts it satisfies the requirements for designation as an ETC in that it:
(1) has common carrier status; (2) commits and is able to provide services supported by federal
universal support mechanisms; (3) will advertise the availability of supported services; (4) will,
8 Lltireline Competition Bureau Announces Entities provisionally Selected Bidders for Rural Broadband
Experiments; Sets Deadlinesfor Submission of Additional Information,WC Docket No. l0-90, Public Notice, DA
14-1772 (rel. Dec. 5,2014). See Exhibit 2.t Id. Attachment B at 4.
STAFF COMMENTS FEBRUARY 3,2015
through its ETC designation, advance the public interest, convenience and necessity; (5) is not
seeking ETC designation for any part of Tribal Lands; (6) commits and is able to provide
supported services as required by this Commission for ETC status; (7) is capable of managing
traffic and maintaining functionality without an external power source; (8) complies with
applicable consumer protection and service quality standards; and (9) will comply with annual
reporting requirements established by this Commission. /d.
With the Application, First Step included an Exhibit 3 outlining the Company's two-year
project improvement plan for "deployment of a 4GLTE-Td fixed Radio Access Network (RAN)
to provide 10 Mbps/lMbps broadband Internet access along with voice-over-IP telephony
service, to serve the [109] census blocks identified in Exhibit 1." Id. at 19. The projected start
date is May l, 2015 and the Company states that it expects 25o/o of the project build-out will be
completed by April 30,2016. Coverage to 100% of the planned service area will be completed
within two (2) years and "the estimated population that will be served as a result of these
improvements is 542 currently unserved locations." Id. at23.
STAFF ANALYSIS
Staff has reviewed First Step's Application and has conducted an analysis of the
Company's fulfillment of the federal Telecommunications Act of 1996, the Connect America
Fund requirements, and Commission Order No. 29841. In addition, Staff has analyzed the public
interest benefits of awarding the Company a conditional ETC designation. Specific state and
federal requirements for ETC designation are discussed in more detail below.
Public Interest Analysis
When applying the public interest test in an Application for ETC designation, Staff
believes there are two primary considerations that merit discussion. First, Staff verifies that the
Company will contribute to the appropriate Idaho Funds. Second, Staff analyzes whether the
Company's application raises o'cream skimming" concems.
Staff believes the first consideration is satisfied because First Step's wholesale service
provider registration subjects the Company to the following conditions: (l) Compliance with
Number Pool Administrator and Order No. 30425 mandating number resource utilization
forecast reporting; (2) as appropriate, contribution to the Idaho Universal Service Fund, Idaho
Telecommunications Relay System, Idaho Telephone Assistance Program, and any future
STAFF COMMENTS FEBRUARY 3,2015
reporting requirements deemed appropriate for competitive telecommunications providers. See
Order No. 32383 at 3. On January 22,2013, the Commission approved First Step as a registered
wholesale provider of local telecommunications services within the State of ldaho. See Order
No.32721.
The Commission explained its "cream skimming" concerns in Order No. 29541. To
summarize, a request for ETC designation for an area less than the entire study area of a rural
telephone company generally raises concerns that an Applicant intends to "cream skim" in the
rural study -.a.'o In this case, the FCC's RBE funds are applied to census blocks rather than
study areas. Thus, Staff believes the cream skimming consideration is irrelevant for this
Application.
First Step asserts that designation as an ETC is consistent with the Public Interest,
Convenience and Necessity. Through the RBE, the public interest will be served with the
accelerated deployment of voice and broadband-capable networks in unserved rural, high-cost
areas, including extremely high-cost areas. Application at 6,9-10. Additionally, "ETC
designation will allow rural areas that the FCC has deemed unserved to become served with
broadband and voice services that meet FCC-defined metrics." Id. at 7. For these reasons, Staff
believes First Step satisfies the public interest considerations.
Ability to Remain Functional in Emergencies
First Step asserts it has the ability to remain functional in emergencies and satisfies the
requirements of the FCC and the Idaho ETC Order. Specifically, the Company states it has
adequate amounts of back-up power to ensure functionality without an external power source,
and maintains a redundant middle-mile backbone network with redundant paths and network
rings. Power outage protection is available at all sites through battery backup or gas-powered
generators. Id. at8. Staff believes the Company satisfies this requirement.
Other ETC Designation Requirements
Additional requirements for ETC designation are detailed in the Appendix I of Order No.
29841and discussed more fully below.
'o Recommended Decision, In the Matter of Federal-State Joint Board on Llniversal Service CC Docket No. 96-45,
l2 F.C.C.R. 87, 180 atl 172 (1996) (stating that potential cream skimming is minimized when competitors, as a
condition of eligibility for universal service support, must provide services thoughout a rural telephone company
study area).
STAFF COMMENTS FEBRUARY 3,2015
l. Common Carrier Status. First Step is a common carrier as defined in 47 U.S.C. $ 2la(e).
Id. at 4-5.
2. Provide the Universal Services. First Step will provide the supported services identified
in Section 47 C.F.R. $ 54.101(a). Id.
3. Advertising. First Step will advertise the availability and pricing of its universal
offering. Id. at 6.
4. The Commitment and Ability to Provide Supported Service. First Step will provide
supported services. Id. at 5-7.
5. Commitment to Consumer Protection and Service.First Step will comply with
applicable consumer protection and service quality standards specified by the FCC and
the CTIA Consumer Code. Id. at8-9.
Description of the Local Usage Plan. First Step's service offerings are comparable to the
offerings of the incumbent local exchange carrier (ILEC). Id. at9.
Tribal Notification. First Step is not seeking ETC designation in Tribal Lands and does
not propose to install equipment within Tribal borders. Id. at7.
STAFF RECOMMENDATION
Based on its review of the Company's Application, Staff believes that First Step has the
requisite technical, financial, and managerial expertise as well as the commitment to fulfill the
obligations of an ETC in Idaho. First Step will provide all universal services supported by the
federal USF throughout its designated service area; it has addressed all public interest questions
that accompany an ETC Application; and the Company will expand broadband services into
unserved areas. Staff believes First Step's Application for a conditional ETC designation to
participate in the FCC's Rural Broadband Experiments is in the public interest and should be
approved for the census blocks as outlined in Exhibit 1 of the Application.
6.
7.
STAFF COMMENTS FEBRUARY 3,2015
vr4Respectfully submitted this
Technical Staff: Grace Seaman
i:umisc/comments/&itl4. I djhgs commcnts
day of February 2015.
STAFF COMMENTS FEBRUARY 3,2A15
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 3RD DAY OF FEBRUARY 2015,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. FSI-T-I4.01, BY MAILING A COPY THEREOF, POSTAGE PREPAID, TO
THE FOLLOWING:
KEVIN OWEN
PRESIDENT
FIRST STEP INTERNET LLC
1420 S BLAINE ST
MOSCOW rD 83843
E-MAIL: [e-mail]
CERTIFICATE OF SERVICE