29067.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF BASICPHONE, INC. FOR A CERTIFICATE OF PUBLIC CONVENIENCE AND NECESSITY TO PROVIDE LOCAL EXCHANGE SERVICES IN IDAHO.
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ORDER NO. 29067
On May 2, 2002, BasicPhone, Inc. filed an Application for a Certificate of Public Convenience and Necessity to provide local residential and business dial tone on a prepaid basis in the state of Idaho. On May 16, 2002, the Commission issued a Notice of Application and Notice of Modified Procedure. Order No. 29028. In response to this Order the Commission Staff submitted written comments and was the only party to do so.
Based on Staff’s comments, the law and the record, the Commission grants the Application. The Commission further finds that the Certificate shall be issued subject to the posting of a bond.
BACKGROUND
As stated above, in compliance with Commission Rules of Procedure, BasicPhone filed an Application for a Certificate of Public Convenience and Necessity to provide local residential and business dial tone on a prepaid basis throughout Idaho. The Company also intends to offer prepaid long distance service. If the Commission approves its Application, BasicPhone requests that it waive the requirement to establish an escrow account because it is a prepaid provider. BasicPhone states that it will operate as a non-facilities based reseller of services of incumbent telecommunications carriers. BasicPhone represents that it has no plans to build facilities in the future. BasicPhone is incorporated in the State of Texas and represents that it is in good standing under the laws of that State. BasicPhone represents that it is currently authorized to do business as a foreign corporation in the State of Idaho.
STAFF ANALYSIS AND RECOMMENDATION
Staff reviewed the Application and financials submitted by the Company. Staff found that the Company’s Application was in compliance with the Commission’s Rules of Procedure and Commission Order No. 26665. Accordingly, Staff recommended approval of BasicPhone’s Application and tariff along with a waiver of the escrow account or bond requirement.
COMMISSION FINDINGS
Based on the comments, the law and the record, the Commission grants the Application. However, we disagree with the Company and Staff that a bond or some sort of financial security is not necessary in this case. After review of the record we find that because BasicPhone has no history in the State and requires customers to pre-pay for services, it is necessary that it post a bond in order to protect consumers in the event that the Company does not provide the services that its customers have paid for. The Commission finds that consistent with past decisions the Company shall be required to post and maintain a bond initially established at $5,000 that will be maintained at a level that exceeds $50 per residential and small business basic local exchange service customer for a period of not less than two years of operation within Idaho. After this time period the Company may petition the Commission to eliminate the financial security requirement.

O R D E R
IT IS HEREBY ORDERED that the Application of BasicPhone, Inc., for a Certificate of Public Convenience and Necessity is granted subject to the requirement that the Company provide evidence to the Commission of establishment of a $5,000 bond.
THIS IS A FINAL ORDER. Any person interested in this Order or in interlocutory Orders previously issued in this Case No. GNR-T-02-08 may petition for reconsideration within twenty-one (21) days of the service date of this Order with regard to any matter decided in this Order or in interlocutory Orders previously issued in this Case No. GNR-T-02-08. Within seven (7) days after any person has petitioned for reconsideration, any other person may cross-petition for reconsideration. See Idaho Code § 61626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of July 2002.

PAUL KJELLANDER, PRESIDENT

See Attached Dissenting Opinion
MARSHA H. SMITH, COMMISSIONER

DENNIS S. HANSEN, COMMISSIONER

ATTEST:

Jean D. Jewell
Commission Secretary

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DISSENT OF
COMMISSIONER MARSHA H. SMITH
Case No. GNR-T-02-08
I hereby respectfully dissent from the majority decision in this case to require BasicPhone, Inc. to post a bond as a condition of the Commission granting the Company a Certificate of Public Convenience and Necessity. In its review of the Company’s Application and accompanying materials Staff found that the posting of a bond was unnecessary in this case as BasicPhone’s financial position was sound and it did not require advance deposits from its customers. I agree with Staff’s recommendation and believe that it is consistent with the Telecommunications Act of 1996 in that it encourages competition and seeks to eliminate impediments to it. Requiring the posting of a bond here creates the very barrier to competition that should be avoided in cases with these facts. Accordingly, I disagree with the majority’s decision.

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MARSHA H. SMITH, COMMISSIONER

ORDER NO. 29067 1

Office of the Secretary
Service Date
July 3, 2002