28503.phg.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE INVESTIGATION TO DETERMINE AN APPROPRIATE COST MODEL USING FORWARD-LOOKING ECONOMIC COSTS FOR CALCULATING THE COSTS OF BASIC TELECOMMUNICATION SERVICES IN IDAHO
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CASE NOS. GNR-T-97-22
GNR-T-00-2

NOTICE OF PREHEARING CONFERENCE FOR SEPTEMBER 18, 2000

ORDER NO. 28503
IN THE MATTER OF THE INVESTIGATION TO ESTABLISH THE IDAHO HIGH COST FUND AS REQUIRED BY IDAHO CODE § 62-610A THROUGH F.
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The Commission in December 1997 commenced a process to establish a new Universal Service Fund, or high cost fund (HCF), within the state of Idaho pursuant to new legislation enacted by the legislature. See Idaho Code § 62-610A through F. The purpose of the high cost fund is “to enable eligible telecommunications carriers to make universal service widely available to all persons within the state of Idaho at reasonable rates.” Idaho Code § 62-610F. Revenue for the fund will come from a surcharge imposed on “end users of all retail telecommunication services” within the state; disbursements from the fund must be used to defray costs of providing universal service to customers within a geographic area. Id. In addition, administration of the fund is to be “specific, predictable and sufficient in conjunction with federal universal service support mechanisms to preserve and advance universal service within the state of Idaho.” Idaho Code § 62-610F(2).
In an effort to satisfy the statutory requirement to adopt a methodology that is “specific, predictable and sufficient in conjunction with the federal universal service support mechanisms,” the Commission previously requested the parties to analyze whether the cost model approved by the FCC might be the most efficient means to satisfy the Idaho statutes. The Commission issued Order No. 28223 directing the parties to provide comments and evidence on adoption of the FCC model for calculating high cost support for non-rural local exchange carriers in Idaho. The Commission also subsequently issued an Order consolidating two separate cases and identifying eight specific goals to be accomplished in this docket. See Order No. 28261 issued January 18, 2000. That Order also established a hearing date in August to receive evidence on the identified issues. However, prior to the dates scheduled for hearing, litigation surrounding the FCC’s cost model created significant practical if not legal problems in the use of that model. In fact, as a result of the pending litigation, GTE Northwest Incorporated (GTE/Verizon) filed a Motion to Suspend Docket on August 2, 2000. The basis for GTE’s Motion was the appeal of the Fifth Circuit Court of Appeals decision in GTE Service Corp. v. FCC, 183 F.3d 393 (5th Cir. 1999) to the United States Supreme Court and the recent Eighth Circuit Court of Appeals decision on remand in Iowa Utilities Board, et al v. Federal Communications Commission, No. 96-3321, 2000 WL 979117, (8th Cir., July 18, 2000). The Commission granted GTE’s Motion in part, vacating the scheduled hearing dates and inviting responses from the parties, and convening a prehearing conference on August 22, 2000.
During the prehearing conference on August 22, 2000, the parties presented arguments regarding the legal and practical effects of the current litigation surrounding the FCC’s cost model. Although the parties largely agree the pending litigation may not affect the legal ability of the Commission to adopt the cost model, using the FCC cost model undoubtedly creates significant practical problems for the Commission and the parties attempting to use it. Accordingly, the Commission has determined that it may be appropriate to consider alternatives to adopting any of the forward looking cost models advocated by the parties or adopted by the FCC.
The Commission is determined, however, that consideration of an alternative should not delay the proceedings. In fact, the Commission is interested in looking at alternatives as a way to simplify this process and achieve the legislature’s directive sooner rather than later. Accordingly, the Commission is interested in approaches that are simple, accessible and affordable, and satisfy the statutory requirements for a methodology that is specific, predictable and sufficient in conjunction with the federal universal service support, and provides for calculating universal service costs using a forward looking cost methodology. The phrase “forward looking cost methodology” is not defined in the statute, and the Commission believes the phrase excludes only the use solely of embedded costs to determine universal service support costs.
After reviewing the record in this case, including the arguments of the parties during the prehearing conference, the Commission issues this Order establishing a prehearing conference for September 18, 2000. The purpose of the prehearing conference is to establish a schedule for proceeding to a hearing in this case, and to discuss alternatives to adoption of the FCC cost model, or any of the currently advocated cost models, as a means of complying with the legislature’s directive to establish a high cost universal service fund.
NOTICE OF PREHEARING CONFERENCE
YOU ARE HEREBY NOTIFIED that the Commission will convene a prehearing conference in this case on MONDAY, SEPTEMBER 18, 2000 AT 10:00 A.M. IN THE COMMISSION HEARING, 472 W. WASHINGTON, BOISE, IDAHO and continuing until completed. Parties wishing to participate by telephone should so notify the Commission Secretary at least three days in advance of the prehearing conference.
YOU ARE FURTHER NOTIFIED that all hearings will be conducted pursuant to the Rules of Procedure adopted by the Idaho Public Utilities Commission. IDAPA 31.01.01.000 et seq.
YOU ARE FURTHER NOTIFIED that all hearings and pre-hearing conferences in this matter will be held in facilities meeting the accessibility requirements of the Americans with Disabilities Act. Persons needing the help of a sign language interpreter or other assistance of the kind that the Commission is obligated to provide under the Americans with Disabilities Act in order to participate in or to understand the testimony and argument at a public hearing may ask the Commission to provide a sign language interpreter or other assistance at the hearing. The request for assistance must be received at least five (5) working days before the hearing by contacting the Commission Secretary at:
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone] (TELEPHONE)
[phone] (TEXT TELEPHONE)
[phone] (FAX)

O R D E R
IT IS HEREBY ORDERED that a prehearing conference is scheduled to begin at 10:00 a.m. Monday, September 18, 2000.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho, this
day of September 2000.

DENNIS S. HANSEN, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

PAUL KJELLANDER, COMMISSIONER

ATTEST:

Myrna J. Walters
Commission Secretary

bls/O:gnrt9722_gnrt002_ws

NOTICE OF
PREHEARING CONFERENCE
ORDER NO. 28503 1

Office of the Secretary
Service Date
September 6, 2000