20020827Petition.pdf

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August 27,2002
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Boise
ldaho Falls
Pocatello
US Bank Plaza Building
101 S Capitol Blvd lOth Fl
PO Box 829
Boise ldaho 83701 0829
208 34s 2000
800 4222889
208 385 5384 Fax
www.moffatt.com
Eugene C. Thomc
John 17. Batrett
R. B. Rock
Richard C. Fields
Robert E. Bakes
John C. r$C'md
D. James Manning
Gary T. Dance
Iary C. Hunter
Morgan W'. Richrds
Matk A. Ellison
Randall A. Peterman
Mark S. Prusynski
Stephen R. Thomas
MOFFHTT THOMAS BARRETT ROCK el nmtDs, CHTD.
Glenna M. Christensen Jmes L. Mttin
Gerald T. Husch C. Clayton Gill
Scott L. Campbell Stephanie A. Balzarini
Michael G. McPeek David P. Grdner
Kirk R. Helvie Julian E. Gabiola
Robert B. Burns Angela D. Schaer
James C. Dale Casey C. Robertson
Michrel E. Thomu RayJ. Chrcko
Patricia M. Olsson BradleyJ. Dixon
James C. deGlee Keasa L. Hollister
BradleyJ \Tilliams Mark C. Peterson
Lee Radfordilil;j6.-R". wittisc.Mffitt,
David S.Jensen r9o7-r98o
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Ms. Jean Jewell
Idaho Public Utilities Commission
472West Washington
Post Office Box 83720
Boise, Idaho 837 20-007 4
Re: Case No. GNR-T-02-16
MTBR&F File No. 14-926.7
Dear Ms. Jewell:
Enclosed for filing are an original and seven copies of Petition For Declaratory Order Regarding
the Use of Virtual NPAAIXX Calling Patterns regarding the above-referenced matter. Also,
pursuant to the Commission's request, we have forwarded this document in PDF format to you
on August 26,2002, via e-mail. Thank you for your assistance.
Very truly yours,
Cilrilyt,-W
Jennifer Taylor
Administrative Assistant to
Morgan W. Richards, Jr.
ljrt
Enclosures
cc: Counsel of Record (w/encl.)
BOI MT1 :409965.1
Morgan W. Richards,ISB No. 1913
Morrltt, THolrl,e,s, BARnrrr, Rocr &
FIeLos, CrnRrBRrp
101 S. Capitol Boulevard, l0th Floor
Post Office Box 829
Boise,Idaho 83701
Telephone: [phone]
Facsimile: [phone]
[e-mail]
1 5-881. 1 8, I 3-090 ar:d 14-926
Conley E. Ward, Jr.
GIvBNS Punslsy LLP
277 N.6th Street, Suite 200
Post Office Box2720
Boise, Idaho 837 0l-2720
Telephone: [phone]
Facsimile: [phone]
cew@givenspursley. com
Attorneys for Petitioners
IN THE MATTER OF THE PETITION OF
POTLATCH TELEPHONE COMPANY;
CENTURYTEL OF IDAHO; CENTURYTEL
OF THE GEM STATE; AND THE IDAHO
TELEPHONE ASSOCIATION,
?l;':Tf,,i:C27 Fii L: l*L
Case No. GNR-T-02-16
PETITION FOR DECLARATORY ORDER
REGARDING THE USE OF VIRTUAL
NPA/NXX CALLING PATTERNS
G]rj
.- -r\rttrrni.i-.,r:itLU
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
PETITION F'OR DECLARATORY ORDER - I BOI MTl :403718.'l
I.
NATURE OF ACTION
l. The petitioners file this action pursuant to IDAPA 31.01.01.101 and 102,
IDAPA 31.42.01.101, and IDAPA 31.01.01.33.
2. The petitioners seek an order from the Idaho Public Utilities Commission
declaring that the use of Virtual VNXX or VNXX-like services are not in the public interest and
prohibiting their use in Idaho. In the alternative, petitioners seek an order from the Commission
declaring that the use of VNXX or VNXX-like services are MTS or the equivalent of MTS and
are subject to the assessment and payment of access charges.
3. The petitioners also seek an order from the Commission declaring that the
use of VNXX or VNXX-like services are an inappropriate use of numbering services and a
violation of number portability standards; and are in violation of funding requirements for the
USF, TRS and high cost fund requirements.
II.
PETITIONERS
4. Petitioner Potlatch Telephone Company ("Potlatch") is a corporation
organized under the laws of the state of Idaho, with its primary place of business located in
Kendrick, Idaho. Potlatch is an ILEC authorized to provide local exchange and other
telecommunications services within the state of Idaho pursuant to a certificate of public
convenience and necessity issued by this Commission pursuant to Title 61, Idaho Code. All
pleadings, correspondence and other communications conceming this petition should be directed
to the ITA's representatives as follows:
BOI_MT1 :403718.1PETITION TOR DECLARATORY ORDER - 2
Morgan W. Richards
MorrATt, THoMAS, BARRETT, Rocr & FIeLos, CneRrpReo
l0l S. Capitol Boulevard, 10th Floor
Post Office Box 829
Boise,Idaho 83701
Telephone: [phone]
Facsimile: [phone]
[e-mail]
Gail Long
Manager, External Relations
Post Office Box 1566
Oregon City, Oregon 97 045-1566
Telephone: [phone]
Facsimile: [phone]
gail.long@tdstelec om. c om
5. Petitioner Centurytel of Idaho is a corporation under the laws of the state
of Delaware, with its primary place of business located in Salmon, Idaho. Petitioner Centurytel
of the Gem State is a corporation organized under the laws of the state of Idaho, with its primary
place of business located in Grandview, Idaho. Both companies are ILECs authorized to provide
local exchange and other telecommunications services within the state of Idaho pursuant to their
certificates of public convenience and necessity issued by the Commission pursuant to Title 61,
Idaho Code. (Hereinafter, the two companies will be referred to collectively as "Centu4y''). All
pleadings, correspondence and other communications concerning this petition should be directed
to the ITA's representatives as follows:
Morgan W. Richards
MonrLtt, THoues, BlRnrrr, Rocr & FIeLns, CueRrBRBo
l0l S. Capitol Boulevard, l0th Floor
Post Office Box 829
Boise,Idaho 83701
Telephone: [phone]
Facsimile: [phone]
[e-mail]
PETITION FOR DECLARATORY ORDER - 3 BOI MTl :40371 8. 1
Ted Hankins
Director, State Government Relations
Post Office Box 4065
Monroe, Louisiana 7 12ll-4065
Telephone: [phone]
Facsimile: [phone]
Ted.Hankins @centurytel. com
6. Petitioner Idaho Telephone Association ("ITA") is a nonprofit association.
ITA represents 14 small ILECs that provide local exchange and related telecommunication
services in predominantly rural areas of Idaho. Some of the ITA member companies also operate
as CLECs, either directly or through affiliates or subsidiaries. The ITA is authorized to represent
its member companies in proceedings before the Commission and other official bodies. The 14
carriers include: Albion Telephone Company, Cambridge Telephone Company, Midvale
Telephone Exchange, Direct Communications Rockland, Silver Star Telephone Company, Rural
Telephone Company, and Inland Telephone Company. All of these companies receive support
from the Idaho Universal Service Fund. All pleadings, correspondence and other
communications concerning this petition should be directed to the ITA's representatives as
follows:
Conley Ward
GrveNs Punslpv LLP
277 N.6th Street
Post Office Box2720
Boise,Idaho 83701
Telephone: [phone]
Facsimile: [phone]
cew@givenspursley. com
PETITION FOR DECLARATORY ORDER - 4 BOI MTl:403718.1
Clay Sturgis
Senior Manager
Moss Aoeus LLP
601 Riverside, Suite 1800
Spokane, Washingto n 9920 I -0663
Telephone: [phone]
Facsimile: [phone]
[e-mail]
III.
JURISDICTION
7. \,rNXX services provide two-way communication to the public for
compensation. Therefore, these services are "telecommunication service" as defined in Titles 61
and 62 of Idaho Code. ,See Idaho Code $$ 62-603(9) and 6l-621(2). Entities providing
telecommunication service are "telephone corporations" and are subject to regulation by the
Commission. Idaho Code $$ 6l-121(l) and 62-603(10).
8. In addition, the Idaho Public Utilities Commission has jurisdiction over
this matter pursuant to at least the following statutory provisions: Idaho Code Sections 62-603,
62-604, 62-609, 62-614, 62-622(4)(c), 6l-302, and 6l -3 I 5.
Iv.
GENERAL ALLEGATIONS
9. Petitioners and/or their members are aware of situations in other states
where competitive local exchange carriers ("CLECs") are requesting to enter into relationships
under which a virtual NPAA{XX ("\AIXX") would be established within individual local
exchange areas or extended area service ("EAS") of the petitioners or their members (i.e., one
NPAA{XX per rate center). An alternative method for establishing a \,/NXX maybe to use one
NPAAIXX over multiple rate centers.
PETITION FORDECLARATORY ORDER- 5 BOI MTl :403718.1
10. \INXX calling occurs when telephone numbers containing exchange, or
66NXX" codes associated with a particular exchange are assigned to customers with no physical
presence in that exchange. The result of such assignments is that calls dialed between locations
that are not within the same local callingarea are rated as local rather than toll. Consequently,
the end users do not pay toll charges (either the originating party for normal toll-dialed calls or
the receiving party for 800type calls).
11. Petitioners believe at least one or more CLECs that provide VNXX or
VNXX-like services in other states are now certificated in Idaho.
12. The apparent purpose of establishing VNXX or VNXX-like arrangements
would be to allow customers of the petitioners and/or their members to call a customer of a
\fNXX provider on a local dialing pattem basis. However, the physical location of the customer
would not be within the local exchange area (nor an EAS calling area), but in some remote local
exchange area. Thus, the use of the \trNXX would result in the unlawful transporting of
telephone calls between local exchanges. A call under these circumstances would be classified
as a local call even though it would otherwise be a long-distance call. Under this system, calls
would occur without the payment of the required access charges to the originating and
terminating local exchange provider, or the payment of toll charges.
13. For example, under a VNXX arrangement, a CLEC could obtain an
NPA/NI)(X for the Fruitland local exchange area. It may have a customer located in Burley to
whom it would assign a number out of the Fruitland local exchange areaNPAA{XX assigned to
that CLEC. In theory, this would then allow a customer to reach the CLEC's customer which has
been assigned a number out of the \/NXX on a local dial basis. Through transport arrangements
PETITION FOR DECLARATORY ORDER - 6 BOI_MT1 :40371 8.1
such as a direct T-1, that call would be hauled back to the CLEC's switch and then be terminated
to the CLEC's end use customer in Burley. Using \INXX, therefore, the call is treated as a local
call.
14. Under an "end-to-end" analysis of the calling pattem, this would not be a
local call. lnstead, this would be an interexchange call for which a toll charge would apply, and
access charges would be assessed on the originating and terminating ends of the call.
15. The "end-to-end analysis" has its origin in Federal Communications
Commission ("FCC") orders discussing the nature of calling patterns. This analysis looks at
where the call actually originates and terminates. For example, see In the Matter of
Implementation of the Local Competition Provisions in the Telecommunications Act of 1996,
Intercarrier Compensationfor ISP-Bound Traffic, CC Docket No. 96-88, No. 99-68,
F.C.C. 0l -l 3 1 (released Apil 27, 2001).'
16. In Idaho, it appears that this end-to-end analysis of the nature of the traffic,
looking at the location of the calling party and the location of the called party, is particularly
appropriate. Under Idaho Code Section62-603 there is a specific definition of the term "basic
local exchange service." It is defined as "the provision of access lines to residential and small
business customers with the associated transmission of two-way interactive switched voice
communication within a local exchange calling area." I.C. $ 62-603(l). A "local exchange
calling area" is defined as "a geographic area encompassing one (l) or more local communities
as described in maps, tariffs, rate schedules, price lists, or other descriptive material filed with
the commission by a telephone corporation, within which area basic local exchange rates rather
rPlease note: This case was recently remanded to the FCC by the Court of Appeals.
PETITION FOR DECLARATORY ORDER - 7 BOI_MT1 :403718.1
than message telecommunication service rates apply." I.C. S 62-603(7). Since the call in the
example in paragraph 13 originates within the Fruitland exchange, as defined on that exchange
map, and terminates in the Burley exchange, as defined by that exchange map, the call is an
interexchange call. Obviously, there is not an extended area service route in place between
Fruitland and Burley.
17. The possibility of different classifications for the same physical call raises
concerns that the petitioners or their members could be held in violation of Idaho law (e.g. I.C.
$ 6l-315) for an unjust discrimination in rates as between the CLEC using a VNXX and an IXC
which does not; for providing reduced rates; and for providing undue preference or advantage to
the carrier in scenario one over carrier in scenario two. Thus, petitioners are in a position where
they must seek a declaratory order from the Commission clariffing their responsibilities in these
circumstances.
18. Section 62-622(4)(c) expresses a clear legislative intent to make sure that
switched/special access charges are not avoided by scams. A declaratory order from the
Commission can clariff whether virtual NPAA{XX calling patterns are in violation of this
statute.
19. Depending on the method of deployment of the \rNXX, it can raise
significant issues relating to either number resources or number portability. If a new
NPAATNXX is obtained for each rate center within the state, then this is a significant waste of
numbering resources. This Commission has undertaken significant efforts to conserve number
resources in order to delay NPA overlays, and to the extent possible, preserve seven-digit dialing.
On the other hand, if a single NPAAIXX is desired to be spread across multiple rate centers, then
PETITION FOR DECLAR,A.TORY ORDER - 8 BOI_MT1 :40371 8.1
this raises a concern about the mechanics of number portability and may be in violation of the
industry standards established and approved by this Commission.
20. tn any event \fNXX and VNXX-like services raise serious concerns about
the public's interest; integrity of local calling areas; conservation of numbering resources; and
the avoidance of customer confusion. The use of such a system erodes the entire distinction
between local and toll calls in Idaho and bypasses the Commission's carefully designed
regulatory process. This tlpe of activity will result in rate increases for local customers. The
increases will be felt particularly in those areas serviced by small telephone companies with rural
customer bases, such as petitioners and their members. This result will not occur due to
technological or service innovations, but instead will be merely the result of responses to
arbitrage. The public interest will not be advanced.
21. The use of VNXX and VNXX-like services also exacerbates the problem
ofpreserving the 208 areacode for the entire state of Idaho. If VNXX calling is allowed, the
location of the customers is separated from the exchange to which an NXX is assigned. The
result is a substantial incentive to exploit arbitrage opportunities.
22. The Idaho Public Utilities Commission has rejected similar proposals
relating to EAS "bridging" or "arbitrage" as unlawful and not in the public's interest. See, e.g.,
Idaho Local Exch. Cos. v. Upper Valley Communications, Inc.,PUC Case No. GNR-T-94-1.
23. Numerous other states have already considered these issues. In some cases
these issues have arisen in arbitration disputes questioning whether the assessment of reciprocal
compensation is appropriate. In other words, the question has been whether the use of a VNXX
PETITION FOR DECLARATORY ORDER - 9 BOI MT1 :403718.1
results in a "local" call for purposes of applying reciprocal compensation. The following cases
held that UNXX calls are interexchange traffic and subject to access charges:
a. The New York Public Service Commission ruled against a similar
scheme calling it a "transparent long distance telephone service, virtually identical to traditional
circuit-switched carriers. . . we also conclude that DataNet imposes the same burdens on the local
exchange as do other interexchange carriers and should pay all applicable and appropriate
charges paid by other long distance carriers, including access charges." Complaint of Frontier
Telephone of Rochester Against US DataNet Corporation Concerning Alleged Refusal to Pay
Intrastate Carrier Access Charges, Cuse No. 0l-C-1 I 19, issued May 3l,, 2002.
b. The Public Utilities Commission of Ohio very recently issued a
decision in which it concluded that such calling was interexchange traffic subject to access
charges. In the Matter of the Petition of Global NAPs, Inc. for Arbilration, Case
No. 01-281I-TP-ARB and Case No. 0I-3096-TP-ARB, Arbitration Award (May 9,2002) at
8-1 l.
c. In South Carolina, that state's Commission recently ruled that the
use of a \INXX was an interexchange call under an "end-to-end" analysis and that access charges
would apply. In re Petition of Adelphia Business Solutions of South Carolina, Inc. for
Arbitration of an Interconnection Agreement with Bellsouth Telecommunications, Inc.,Docket
No. 2000-516-C, Order No. 2001-045 (Jan. 16, 2001). The South Carolina Commission relied
on FCC analysis that telecommunications traffic is local only if it originates and terminates
within the same local callin g arca. See South Carolina Order at 7 . The South Carolina
Commission went on to hold that under this analysis reciprocal compensation is not due on calls
BOI_MT1 :40371 8.1PETITION FOR DECLARATORY ORDf,R - 10
placed to VNXX numbers as the calls do not terminate within the same local calling area in
which the call originated. The South Carolina Commission held that access charges should apply
to such calls. ^See South Carolina Order at 13.
d. The Maine Commission analogized \/NXX service to that of an
800 service and held that access charges should apply. See In re Investigation into Use of
Central Office Codes (NW by New England Fiber Communications, LLC d/b/a Brooks Fiber,
Docket No. 98-758, Order (June 30, 2000) at 12.
e. In Georgia, a similar decision was reached where the Georgia
Commission held that while a CLEC could create a VNXX, traffic had to be separated between
local and toll traffic for proper routing and billing of calls. See In re Petition of BellSouth
Telecommunications, Inc. for Arbitration of an Interconnection Agreement with Intermedia
Communications, Inc., Docket No. 11644-U (July 5, 2000) at 13.
f. Similar results were reached in Tennessee and Missouri. See In re
Petitionfor Arbitration of the Interconnection Agreement Between BellSouth
Telecommunications, Inc. and Intermedia Communications, Inc.,Docket No. 99-00948, lnterim
Order of Arbitration Award (Jan.25,2001) at 44. See also In the Matter of the Application of
AT&T Communications of the Southwest, Inc., TCG St. Louis, Inc., and TCG Kansas City, Inc.,
for Compulsory Arbitration of Unresolved Issues With Southwestern Bell Telephone Co.,Case
No. T0-2001-455, Arbitration Order (June 7,2001) at 31.
PETITION FOR DECLARATORY ORDER - 11 B0l MTl :403718.1
v.
RELIEF REQUESTED
24. \/NXX and VNXX-like services are "message telecommunication
services" or "MTS" as defined by Idaho Code and administrative rules, or the functional
equivalent thereof. Idaho Code $ 62-603(8). See also Idaho Code $ 6l-121.
25. Idaho Code Section62-609(l) requires providers of message
telecommunications service to "impute to themselves, in the aggregate on a service by service
basis, their individual cost of special or switched access or its equivalent in their prices."
Providers of VNXX services should be required to impute the cost of switched access in their
price in compliance with Idaho Code Section 62-609(l).
26. Idaho Code Secti on 62-609 provides for the payment of access charges by
telephone corporations and providers of services to LEC's for providing access to local exchange
networks. \rNXX, and VNXX-like services unreasonably and unfairly utilize LEC's plant and
facilities without justly compensating the LEC for such use under Idaho Code Section62-609(2).
27. \/NXX and VNXX-like services result in a preference and unfair
advantage in violation of Idaho Code Section62-609. To the extent that there is a difference in
treatment for the same physical call (it originates in one rate center and terminates in a different
rate center), whereby one carrier is given preferential treatment and charged less than a carier
transmitting an identical call, petitioners and their members are adversely affected by being
placed at risk of violation of the state statutes herein cited.
PETITION FOR DECLARATORY ORDER - 12 BOI MT1 :403718.1
28. \/NXX calling creates an incentive on the part of CLECs to obtain, and
waste, vast numbers of telephone numbers, and may result in the violation of number portability
standards demonstrating that \-rNXX and VNXX-like services are not in the public interest.
29. \,/NXX and VNXX-like services also adversely affect the universal service
fund ("USF") and the telecommunications relay system fund ("TRS"); and the high cost
universal service fund. Idaho Code $$ 62-610,61-1304 and62-610F. This is because if MTS
traffic is diverted to the VNXX service, the total amount of MTS minutes is reduced. The USF
and TRS are funded by a surcharge on MTS minutes, and any reduction in MTS minutes directly
reduces the level of funding. See IDAPA 31.46.01 and IDAPA 31.46.02. When the high cost
universal service fund is implemented, a similar adverse effect is expected to occur.
30. \.rNXX and VNXX-like services are inappropriate and not in the public
interest. If not flatly prohibited under Idaho law, VNXX and VNXX-like service providers
should be required to pay originating and terminating access charges to the serving local
exchange companies; should be required to impute to themselves their costs in pricing; and
should be required to comply with all applicable provisions of Idaho law. See Idaho Code $ 62-
609.
vI.
PRAYER FOR RELIEF
WHEREFORE, the petitioners pray for an order from the Commission granting
the following relief:
1. For an order declaring that the use of VNXX or VNXX-like services are
not in the public interest, prohibiting their use in Idaho, and authorizing immediate termination
BOI MT1 :40371 8.1PETITION FOR DECLARATORY ORDER - 13
and disconnection of such services by any Idaho LEC;
2. For an order, in the altemative, declaring that the use of VNXX or VNXX-
like services are MTS and are subject to a) toll charges; b) the assessment and payment of access
charges; c) imputing of costs in pricing; and d) all applicable state laws and regulations;
3. For an order declaring that such service arrangements are an inappropriate
use of numbering resources where that service uses a new NPAA.{XX for each rate center, and
prohibit such practice; and declaring that where a single NPAA{XX is desired to be spread over
several rate centers, such practice would violate standards needed to implement number
portability, and is prohibited.
4. For an order declaring that the use of VNXX and VNXX-like services
violate state law by improperly and unlawfullyresulting in a decrease in the level of funding for
the USF, TRS and high cost funds.
Respecttully submitted this U*^rof August, 2002.
Morr.l,tr, THoMAS, Be,Rnntt, Rocr &
FIELDS, CHaRrsREo
B' llno--u- P'J/> L-.
Attorneys for Petitioners Potlatch and Century
GrvpNs PunsI-By LLP
Jr. - Of the Firm
for Idaho Telephone Association
PETITION F'OR DECLARATORY ORDER - 14 BOI MT1 :403718.1
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on ,n"*Oay of Augu st,2002,I caused a true and
correct copy of the foregoing PETITION FOR DECLARATORY ORDER to be served by the method
indicated below, and addressed to the following:
(f) U.S.Mail, Postage Prepaid
( ) Hand Delivered
( ) Overnight Mail
( ) Facsimile
tvf u.S. Mail, Postage Prepaid
( ) Hand Delivered
( ) Ovemight Mail( ) Facsimile
<rf u.S.Mail, Postage Prepaid
( ) Hand Delivered
( ) Overnight Mail
( ) Facsimile
t Yf U.S. Mail, Postage Prepaid
( ) Hand Delivered
( ) Ovemight Mail
( ) Facsimile
Conley E. Ward, Jr.
GIVENS PunsI-By LLP
277 N.6th Street, Suite 200
Post Office Box2720
Boise, Idatro 837 0l -27 20
Fax: [phone]
Ted Hankins
Director
State Government Relations
Post Office Box 4065
Monroe, Louisiana 7 l2ll -4065
Fax: [phone]
Gail Iong
Manager
External Relations
Post Office Box 1566
Oregon City, Oregon 97 045 -l 566
Fax: [phone]
Clay Sturgis
Senior Manager
Moss Aoeus LLP
601 Riverside, Suite 1800
Spokane, Washingto n 99201 -0663
Fax: [phone]
PETITION FOR DECLARATORY ORDER - 15 BOI MTl:403718.1