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HomeMy WebLinkAbout20031118Curry Rebuttal for IAT.pdfMolly O'Leary, Esq. (ISB # 4996) RICHARDSON & O'LEARY, PLLC 99 E. State Street, Suite 200 Eagle, Idaho 83616 (208) 938-7900 (Voice) (208) 938.7904 (Facsimile) mo 11 y~ri chardsonando 1 eary. com BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION In the Matter of the Petition of IA T Communications, Inc., d.a. NTCH-Idaho, Inc. ) or Clear Talk, for Designation as an Eligible Telecommunications Carrier. CASE NO. Docket No. GNR-O3- In the Matter of the Application ofNPCR, INC. d/b/a NEXTEL PARTNERS Seeking Designation as an Eligible Telecommunications Carrier that may receive Federal Universal Service Support. CASE NO. Docket No. GNR-O3- REBUTTAL TESTIMONY LARRY CURRY ON BEHALF OF IAT COMMUNICATIONS , INC., D.A. NTCH-IDAHO, INC. Please state your name and business address. My name is Larry Curry. I am a director of IA T Communications Inc., a Delaware corporation, and the president and general manager ofNTCH-Idaho, Inc. an Idaho corporation, collectively doing business as Clear Talk ("Clear Talk"). Clear Talk's offices are located at 233 N. Main Street, Pocatello, Idaho, 83204. I live and work in Pocatello, Idaho. Have you read the testimony submitted by Lance A. Tade on behalf of Citizens Telecommunications Company of Idaho ("CT -Idaho Yes. Have you read the testimony submitted by Daniel L. Trampush on behalf of the Idaho Telephone Association ("ITA") and CT -Idaho? Yes. What is the purpose of the testimony you are riling today? The purpose of my testimony today is to rebut the misinformation and mischaracterizations contained in the testimony of Mr. Tade and Mr. Trampush. Let's start with Mr. Tade s testimony. Generally speaking, what misinformation and/or mischaracterizations do you believe require rebuttal? Well, there are three general areas of Mr. Tade s testimony that I would like to address: (1) that disaggregation of the Aberdeen exchange would result in Clear Talk's unfair arbitrage of the federal Universal Support Fund system; (2) that Clear Talk's local usage service is not equivalent to CT-Idaho s; and (3) that this Commission is charged with resolving national telecommunications policy matters in the context of its Section 214(e)(2) public interest inquiry. CASE NO. Docket No. GNR-O3- In the Matter of the Petition ofIAT Communications Inc., d.a. NTCH-Idaho, Inc. or Clear Talk, for Designation as an Eligible Telecommunications Carrier LARRY CURRY, REBUTIAL TESTIMONY What specific concerns do you have regarding Mr. Tade testimony that disaggregation of the Aberdeen exchange would result in Clear Talk' unfair arbitrage of the federal Universal Support Fund system? First of all, the whole concept of wire centers is based on 20th century wireline technology and has no applicability to today s wireless technology. So CT-Idaho s insistence that the Commission adhere to that archaic perspective in considering Clear Talk's application for ETC designation is purely self-serving, does not reflect today s reality, and is not reasonably related to any public benefit. Secondly, Clear Talk's application is based on its Federal Communications Commission ("FCC" spectrum licenses, not on some arbitrary decision to concentrate its buildout in low-cost high-profit areas. For all we know, Clear Talk's license in the Aberdeen exchange area may only be for the highest cost portion rather than the lowest cost portion. That is a risk we are willing to take. Clear Talk has aggressively met demand within its licensed areas and seeks ETC designation in order to allow it to continue to meet demand in the higher- cost portions of its licensed areas. This is precisely what the Universal Service Fund was designed for - deployment of universal service and state of the art technology to all consumers, regardless of where they live. Other than the fact that accepting CT -Idaho s argument that wireless ETCs should be required to serve an incumbent rural LEC's entire Study Area would arbitrarily prevent Clear Talk from being designated an ETC, are there broader public interest concerns regarding such an approach? Yes. If the Commission were to accept CT - Idaho s argument that ETCs should be designated on a Study Area basis only, then the Commission would, by default, create a situation whereby only large, wireless carriers with wall-to-wall license coverage would qualify for ETC designation in Idaho. Often times, the smaller wireless CASE NO. Docket No. GNR-O3- In the Matter of the Petition of IA T Communications Inc., d.a. NTCH-Idaho, Inc. or Clear Talk, for Designation as an Eligible Telecommunications Carrier LARRY CURRY, REBUTIAL TESTIMONY carriers can serve customers more cost-effectively than their larger counterparts. Smaller companies can be more efficient in terms of the cost of capital and cost of operations and this translates into savings for consumers. For instance, Clear Talk already offers unlimited wireless calling at anytime of the day for a flat rate of$39.95 or less. Based on a monthly average of 1460 minutes of use per customer in Idaho, Clear Talk provides at least twice the average minutes of use as any national wireless carrier for a service charge that is at least 20% less on the average. This statement is based on public reports filed by our competitors for the third quarter of 2002, as detailed on Exhibit 2, attached to this testimony. Anything else? Yes. Let me point out some of the benefits that a local wireless carrier like Clear Talk can provide to the areas where we seek ETC designation that can not be provided by large national carriers. A small wireless carrier like Clear Talk typically has greater network security from catastrophic events or terrorism than larger wireless carriers. We provide local switching with a separate switch in Idaho Falls, Pocatello and Twin Falls, so if one part of our system were knocked out by an act of God or terrorism, the impact would be limited to the immediate local calling area, not our entire southern Idaho operation. This should be contrasted with national wireless carriers and their affiliates which may switch multiple states from a single switch and accordingly expose entire states to a loss of service if the operation of that switch or the lines feeding are compromised. Furthermore, because we provide local switching, we are providing high- technology jobs in Idaho, unlike some of our larger competitors whose switches are located outside the state. In fact, we are the only wireless carrier that we are aware of that has even a single switch, let alone the three switches that we have in our Idaho FCC CASE NO. Docket No. GNR-O3- In the Matter of the Petition of IA T Communications Inc., d.a. NTCH-Idaho, Inc. or Clear Talk, for Designation as an Eligible Telecommunications Carrier LARRY CURRY, REBUTIAL TESTIMONY licensed areas. Not only are our switch operators located in Idaho, but our customer care centers are local as well. So, again, that has a positive impact on Idaho employment but more imprtantly for our customers, it ensures that our customers will be able to talk to a customer care represenative that has firsthand knowledge of the area and of our network facilities in the area and who works side-by-side daily with the operations people who can actually do something to improve our customers experience. This contrasts favorably with other large wireless and wireline carriers who have started to export customer care functions to foreign counties to take advantage of cheap labor rates in those foreign countries. Unlike our larger competitors, Clear Talk provides four-digit dialing which allows our customers to dial any other Clear Talk customer in their area by just dialing the last 4 digits. In rural areas we encourage customers and businesses to use the last four digits of their wireline phone as the four-digit number for their wireless phone. This technology helps simplify our customers ' transition between wireline and wireless service in these areas. Finally, since we view ourselves as a "local player , we are far more receptive to working cooperatively with other local telecommunications providers than larger, national carriers are. In fact, we have consistently sought out cooperative opportunities with the small rural carriers in all of the areas we serve. This includes some of the same carriers that are opposing us in this action. So, how would you sum up your concerns regarding the potential cost to Idaho of a decision based solely on a rural LEC's Study Area? It would reduce cost-effective competition in the wireless sector reduce network security, deny Idaho consumers the benefit of innovations unique to small CASE NO. Docket No. GNR-O3- In the Matter of the Petition of IA T Communications Inc., d.a. NTCH-Idaho, Inc. or Clear Talk, for Designation as an Eligible Telecommunications Carrier LARRY CURRY, REBUTTAL TESTIMONY wireless service providers like four-digit dialing, and reduce contributions to the local economy through the loss of high-technology jobs. What about Mr. Tade s concerns regarding "asymmetric regulation Mr. Tade s testimony regarding asymmetric regulation is curious. In what sense? Mr. Tade testided that , " Asymmetric regulation may be defined as the practice of imposing market constraints on the incumbent firm not likewise borne by its competitors." (P. 7, LL. 10-, L. Tade Direct Testimony). Yet, Mr. Trampush, who testified as an expert witnes on behalf ofCT-Idaho, stated that the wireless carriers are not direct competitors of incumbent LECs. (p. 27, LL. 5 - 16, D. L. Trampush, Direct Testimony. IF Clear Talk receives ETC designation for a portion of the Aberdeen exchange, will it "pick and choose" the geographic extent of its ETC obligations within the designated ETC service area? No. Clear Talk is committed to providing service throughout its ETC-designated service areas, based on customer demand to the extent it is federally licensed to provide service in that area. What about Mr. Tade s testimony regarding the issue of local usage? Mr. Tade s testimony is off the mark with respect to Clear Talk. Our subscribers in southeast Idaho get unlimited local usage for a flat monthly fee of $39.95 no matter what day of the week or time of the day a call is placed. There are no maximum number of minutes and, therefore, no hidden charges. CASE NO. Docket No. GNR-O3- In the Matter of the Petition ofIAT Communications Inc., d.a. NTCH-Idaho, Inc. or Clear Talk, for Designation as an Eligible Telecommunications Carrier LARRY CURRY, REBUTTAL TESTIMONY In what ways is Clear Talk's local usage service superior to CT- Idaho Well, we would argue that our service is superior to CT-Idaho s on several levels, but a clear advantage that we offer to our southeastern Idaho customers in terms oflocal usage is the breadth ofthe local calling area, which far exceeds that offered by CT-Idaho. Please explain. For a flat fee of$39.95 per month, our customers in southeast Idaho can call virtually anywhere in the area comprised of the Idaho Falls, Twin Falls and Pocatello Basic Trading Areas ("BT A") without a toll call. In our market research, we have found that there are many areas within even a single southern Idaho BT A where the incumbent wireline carrier, supported by USF funds, charges a toll call where Clear Talk does not. For example, according to our research, a toll would be charged for wireline calls from Burley to Twin Falls, whereas Clear Talk customers can make unlimited calls between Burley and Twin Falls as part of our flat fee service in that area. Let's turn our attention now to Mr. Tade s testimony regarding CT -Idaho s Public Interest concerns. OK. How would you characterize Mr. Tade s testimony regarding the Commission s public interest inquiry in this docket? The focus of Mr. Tade s testimony is on national telecommunications policy rather than on the local public interest. How so? Well, the chief points Mr. Tade makes regarding the Commission public interest inquiry are: 1) designation of multiple ETCs will lead to unbridled growth CASE NO. Docket No. GNR-O3- In the Matter of the Petition of IA T Communications Inc., d.a. NTCH-Idaho, Inc. or Clear Talk, for Designation as an Eligible Telecommunications Carrier LARRY CURRY, REBUTTAL TESTIMONY of the Universal Service fund and a decline in the rural LECs ' draws against the funds; 2) lack of inter-carrier compensation for use of networks; and 3) lack of infrastructure build- out accountability. Let's start with the rust point. How is that a matter of federal telecommunications policy? It simply does not make sense that, in passing Section 214(e)(2) of the Telecommunications Act of 1996, Congress intended to charge this Commission with balancing the benefits of designating rural ETCs in Idaho against national public policy concerns, if any. The Telecommunications Act of 1996 clearly envisions that multiple ETCs will be designated throughout the United States so, Congress was either not worried about unbridled growth of the Universal Service fund or, more likely, felt that the benefits of bringing wireless and state of the art telecommunications to areas currently subsidized by Universal Service funds outweighed any detriments associated with a growth in the fund. I would also like to point out that the current growth of the fund is almost entirely attributable to the incumbent wireline carriers. It is public record that more than 96% of all Universal Service funds currently go to wireline, not wireless, carriers. Growth ofthe fund is a reflection of the healthy growth in Americans' use of telecommunications technology in their homes, such as adding additional lines for fax and internet connections. Are there any other problems with Mr. Tade s testimony regarding growth of the Universal Service fund? Yes. Mr. Tade s testimony is based on the assumption that consumers will substitute wireless telephones for wireline telephones. Yet, as I previously noted, CT-Idaho s own expert, Mr. Trampush, has testified that, despite the presence of CASE NO. Docket No. GNR-O3- In the Matter of the Petition of IA T Communications Inc., d.a. NTCH-Idaho, Inc. or Clear Talk, for Designation as an Eligible Telecommunications Carrier LARRY CURRY, REBUTTAL TESTIMONY multiple wireless carriers in CT-Idaho s Study Area, CT-Idaho has not lost a significant number of access lines over the last three years and, to the extent it has lost any, that loss may be attributed to the local economy. (P. 27, LL. 6 - 10, D.L. Trampush Direct Testimony.) In addition, each new phone that is added to the telecommunications mix- whether wireles or wireline - adds an additional contribution to the fund, so you do not have a situation of fewer and fewer subscribers paying for a bigger and bigger fund. The FCC has consistently adjusted the method in which the Universal Service fund contribution is assessed. There is no indication that they will not continue to do this and accordingly, any testimony about the future state of the fund, the level of future contributons and/or consumers' future response to as yet unknown future scenarios is speculative at best. What about Mr. Tade s testimony regarding inter-carrier compensation? Mr. Tade does not appear to be arguing that Clear Talk' application presents an inter-carrier compensation issue unique to its Study Area or unique to Idaho. The issue of inter-carrier compensation on a national basis is addressed by the 1996 Telecommunications Act. To the extent CT-Idaho believes that the Act does not adequately address the issue of inter-carrier compensation in the present context, then that is a matter for Congress to address in setting future federal telecommunications policy. I believe you identified "accountability" as the rmal concern that Mr. Tade raised in his direct testimony regarding the Commission s local public interest inquiry. Please explain your disagreement with Mr. Tade s testimony. Perhaps the best way to answer is by asking a rhetorical question: Was CT-Idaho required to provide this Commission with a build-out plan for its network prior to receiving ETC designation and prior to knowing where customer growth would CASE NO. Docket No. GNR-O3- In the Matter of the Petition ofIAT Communications Inc., d.a. NTCH-Idaho, Inc. or Clear Talk, for Designation as an Eligible Telecommunications Carrier LARRY CURRY, REBUTTAL TESTIMONY occur in its targeted area? And, if not, why should Clear Talk be held to a different standard? I sincerely doubt that CT-Idaho or any of its affiliates would agree to have its network build-out plans a matter of public record and inquiry if they were in a competitive industry such as wireless telecommunications, as opposed to the publicly subsidized monopoly that they seek to retain. Clear Talk has taken the crucial initial first step: it has begun extending its service into the edges of rural southeastern and south central Idaho. We have begun our master build out and we stand ready, willing and able to bring wireless service deeper into rural Idaho if we are able to offset some of the higher costs associated with serving these less densely populated areas through receipt of Universal Service fund support. Since our entrance into the market will give customers choices they did not previously have customer demand and acceptance will drive our build-out within the ETC designated area. Apart from the issue of Universal Service support, Clear Talk has built out in a customer- driven manner and will remain so. As the Commission can see from Exhibit 3, Clear Talk has a proven track record of aggressively deploying advanced wireless telecommunications in its FCC license areas. Mr. Tade concluded his testimony by identifying four conditions that CT -Idaho believes the Commission should impose on Clear Talk as part of its designation as an ETC. What is Clear Talk's reaction to those condtions? I will address each condition separately. The first condition CT- Idaho recommends is that Clear Talk be required to publish and adhere to a Commission- approved tariff. We don t believe that is necessary for a number of reasons. First, unlike CT-Idaho which is a regulated monopoly, Clear Talk cannot expect to stay in business unless it remains competitive. As Mr. Trampush testified, there are several wireless service providers cun-ently offering service in CT-Idaho s Study Area. P. 26, LL. 14 - 20 CASE NO. Docket No. GNR-O3- In the Matter of the Petition of IA T Communications Inc., d.a. NTCH-Idaho, Inc. or Clear Talk, for Designation as an Eligible Telecommunications Carrier LARRY CURRY, REBUTTAL TESTIMONY L. Trampush Direct Testimony.) Clear Talk cannot remain competitive unless it offers the best product at the lowest cost. An artificial market control such as a Commission- approved tariff isn t necessary where competition exists. Furthermore, Clear Talk is willing to stipulate that it will not charge more for its rural wireless service than it does for its urban wireless service - the very communications parity that the Universal Service fund seeks to encourage through monetary support. The second condition that CT-Idaho suggests is that Clear Talk be required to publish service area maps identifying areas for which it has received ETC designation. Clear Talk already publishes service area maps, and updates those maps quarterly. These maps are available on Clear Talk's website (www.cleartalk.net), and an exemplary map was submitted to this Commission as Exhibit A, to Clear Talk's Second Amended Petition. A current map is attached as Exhibit 4 to this testimony. In addition, Clear Talk has committed to advertise the availability of its service throughout the areas for which it receives ETC designation. (Clear Talk Petition for ETC Designation, p. 8. Consequently, Clear Talk doesn t believe there is any reason to require it to do what it already does. The third condition suggested by CT -Idaho is that Clear Talk be required to provide service quality data within thirty days of a request by the Commission. Clear Talk would be willing to stipulate to this condition, provided there are adequate safeguards in place regarding the circumstances pursuant to which such a Commission request would arise and provided any such information that is produced would be adequately protected from public disclosure. Finally, the last condition suggested by CT-Idaho relates to consumer relations and actually has three parts: (1) that Clear Talk be required to respond to Consumer Assistance Section inquiries regarding consumer complaints concerning ETC service CASE NO. Docket No. GNR-O3- In the Matter of the Petition of IA T Communications Inc., d.a. NTCH-Idaho, Inc. or Clear Talk, for Designation as an Eligible Telecommunications Carrier LARRY CURRY, REBUTTAL TESTIMONY offerings; (2) that Clear Talk provide a regulatory contact; and (3) that Clear Talk comply with the Commission s Customer Relations Rules. As for the first part, Clear Talk is willing to stipulate to responding to Consumer Assistance Section inquiries regarding consumer complaints concerning its ETC service offerings in the areas for which it has received ETC designation. As for the second requirement, Clear Talk is willing to provide a regulatory contact for Consumer Assistance Section inquiries. And, finally, Clear Talk is willing to stipulate to compliance with the Commission s Customer Relations Rules for universal services offered in the areas for which it receives ETC designation. Mr. Curry, did you have an opportunity to review the Utah Public Service Commission s decision cited by Mr. Tade as support for this Commission s denial of Clear Talk's application? proceeding? Yes. And the Utah Supreme Court decision cited by Mr. Tade? Yes. What is your reaction to the relevancy of those decisions to this These decisions are irrelevant to Clear Talk's application. First, it should be noted that at least one of the ILECs who existed in the areas that Western Wireless applied for, South Central Utah, provided its own wireless voice offering in a large portion of the area applied for by Western Wireless, using its own switch and wireless infrastructure. This is not the case in the three Idaho BTA's where Clear Talk has applied for ETC designation. Second, the Utah commission s decision was based in large part on its finding that granting Western Wireless ETC status would create a financial burden on the State of Utah Universal Service fund. This is not the case with Clear Talk's application. CASE NO. Docket No. GNR-O3- In the Matter of the Petition ofIAT Communications Inc., d.a. NTCH-Idaho, Inc. or Clear Talk, for Designation as an Eligible Telecommunications Carrier LARRY CURRY, REBUTTAL TESTIMONY And, to the extent that there is any impact on the federal Universal Service fund, it will be extremely minor given that the federal fund contains more than 7 billion dollars and distributions to wireless carriers amount to less than 4% of that total. Clear Talk would only represent an extremely small percent of the extremely small percentage of the fund being allocated to wireless carriers. Could designating Clear Talk as an ETC actually benefit Idaho? Yes. Designating Clear Talk will allow more federal Universal Service funds to flow toward Idaho in the form of subsidies for wireless service in rural areas. On the other hand, if wireless carriers are not designated in Idaho, the state Universal Service fund could in fact be burdened because more demands on the federal fund could be made by other states such as Mississippi, which already facilitates more than 75 million dollars of payments from the federal fund to local wireless carriers. The end result being that a decision to not designate a wireless carrier will, on a percentage basis, decrease Idaho s allocation from this fund and leave the financial burden of paying for wireless services in rural areas completely on Idaho s rural consumers, unlike other states that have facilitated this cost being shared with the federal Universal Service fund. Any other distinctions between Clear Talk's application and the Western Wireless proceeding in Utah? Yes. In the Western Wireless proceeding, the Utah commission only considered two potential public benefits - lower cost service from allowing wireless competition and the potential of wireless to cover areas previously unserved by the wireline LECs. The commission found no significant public benefit in Western Wireless application because Western Wireless refused to say in advance what its pricing would be CASE NO. Docket No. GNR-O3- In the Matter of the Petition of IA T Communications Inc., d.a. NTCH-Idaho, Inc. or Clear Talk, for Designation as an Eligible Telecommunications Carrier LARRY CURRY, REBUTTAL TESTIMONY - only that it would be competitive - and Western Wireless refused to file maps of its coverage with the Utah commission. Clear Talk's position in this proceeding is substantially different in three main ways. First of all, Clear Talk has indicated what it's pricing would be and has not refused to file maps with this Commission. But there are additional benefits flowing from Clear Talk's application that were not considered in the Utah proceeding, namely: (1) network security, (2) local customer care service, (3) four-digit dialing, (4) low-cost reliable service, and (4) high technology jobs. Not to mention the public benefits not necessarily exclusive to Clear Talk, such as including emergency service access in remote areas environmental benefits due to the less intrusive wireless technology, and productivity gains for rural consumers resulting from the convenience of on-demand wireless communications. What about the issue of pricing? As I previously stated, Clear Talk delivers unlimited calling throughout southeast Idaho for $39.95 and is willing to provide the same pricing to rural areas as it does in the whole of its Idaho service area. Clear Talk has been in business for more than two years and its pricing today is the same as when it launched service. Clear Talk has no plans to either increase or decrease its pricing. Clear Talk also offers up to 1500 minutes oflong distance calling for an additional $15.00 per month, or a combined plan with unlimited local calling and 1500 minutes oflong distance for $48.95. That is lower than the MCI "neighborhood" plan that is available only on wireline networks. In addition, Clear Talk will provide a fixed wireless product to those that qualify for Lifeline support at the same price that Lifeline service is provided by the ILEC. CASE NO. Docket No. GNR-O3- In the Matter of the Petition ofIAT Communications Inc., d.a. NTCH-Idaho, Inc. or Clear Talk, for Designation as an Eligible Telecommunications Carrier LARRY CURRY, REBUTTAL TESTIMONY What about service coverage maps? Clear Talk has already provided its current coverage maps in this proceeding. Furthermore, Clear Talk will provide coverage maps in strict confidence to the Commission for its service in some of the more remote high-cost areas that it has applied for ETC designation in, only after attempting to use assets in place such as communication sites and backhaul networks of the ILECs and after considering the economics of serving those areas with the assistance ofUSF support. For example, we currently feel that any area that will bring us 250 customers warrants a cell site. If there was significant USF support in an area, we may be willing to outlay the capital with an expectation of only half that amount of customers. Or, we might be willing to put in two cell sites to get that same number of expected customers with one site being a highway site that would tie in a remote community to our network. Is Clear Talk willing to condition its ETC designation on the riling of service maps for remote areas? Yes. Clear Talk is willing to allow our ETC designation to be conditioned on filing maps that serve the remote areas for which we intend to seek USF support and certification of a date that the additional sites will be deployed, provided the same is demanded of all carriers. Thereafter, depending on the demand for our offerings we will file maps to increase the coverage area in the same manner. In the interest of reducing the environmental impact in these areas, we urge the Commission to make subsequent carriers (Clear Talk was the first carrier to file for ETC designation in the three Southeastern Idaho BT As) hold off on their deployment plans so they can make use of the same communication sites. Please summarize the differences that you believe distinguish Clear Talk's Idaho application from that submitted by Western Wireless in Utah. CASE NO. Docket No. GNR-O3- In the Matter of the Petition of IA T Communications Inc., d.a. NTCH-Idaho, Inc. or Clear Talk, for Designation as an Eligible Telecommunications Carrier LARRY CURRY, REBUTTAL TESTIMONY As previously stated, a larger company such as Western Wireless is unlikely to provide the same amount of public benefits that Clear Talk has described that it can provide including local switching, local customer care, local employment, a more secure network in a crisis, four digit dialing, and the quick response to network issues that results from having the complete technical staffliving locally in the area we serve in Idaho. These public benefits are unique to Clear Talk and need to be considered in Clear Talk's application. Can you summarize the additional public benefits that will result from widespread deployment of wireless services in Idaho that the Utah commission did not consider in the Western Wireless case? Another public benefit of universal deployment of wireless service in rural Idaho that the Commission should consider is emergency service access. From our viewpoint, if even one rural customer is able to make a life saving call from a wireless phone in what would have been an unserved area then the greater public benefit is clear. Given the remote nature and outdoor activities in the areas under consideration it is very likely that these situations will occur. From an environmental standpoint, we only ask the Commission to consider the impact of a whole string oftelephone poles in some ofthese incredibly scenic rural areas as opposed to one antenna on a remote rooftop about the size of a pizza dish. From a productivity standpoint, it's the difference between shutting off the tractor to come inside and take a phone call or just idling down the tractor, having your conversation and being ablte to immediately go back to work. Mr. Curry, let's turn our attention now to Mr. Trampush' testimony. OK. CASE NO. Docket No. GNR-O3- In the Matter of the Petition of IA T Communications Inc., d.a. NTCH-Idaho, Inc. or Clear Talk, for Designation as an Eligible Telecommunications Carrier LARRY CURRY, REBUTTAL TESTIMONY In his direct testimony, Mr. Trampush identifies four criteria to aid the commission in determining whether Clear Talk has the "commitment and capability" to provide universal service throughout the areas for which it receives ETC designation. Would you please discuss whether Clear Talk is able to meet those criteria? I would be happy to. The first criteria suggested by Mr. Trampush is whether Clear Talk has a "clear business plan" and "timetable" for build-out of its network. Obviously, Clear Talk has a clear business plan for extending its service into the more rural portions of its FCC license areas or it would not have gone to the trouble and expense of applying for ETC designation. In addition, as I previously testified, Clear Talk's network build-out has been and will continue to be customer-driven, especially in the more remote portions of its FCC license areas. The second criteria suggested by Mr. Trampush is that Clear Talk demonstrate its financial capability to provide ETC services. Clear Talk has provided financial data in this proceeding pursuant to a Protective Agreement which amply demonstrates its financial capabilities. Didn t Mr. Trampush raise a question about the bankruptcy of Leap Wireless? Yes. Mr. Trampush is correct that Leap Wireless, which owns a thirty percent (30%) minority interest in Clear Talk, filed a petition for bankruptcy reorganization. But, as can be seen from the financial data produced by Clear Talk in response to the Intervenors' data request, Clear Talk is in solid financial condition. Furthermore, neither NTCH-Idaho nor its parent company nor any its or its parent' affiliates - comprising operating wireless networks in seven states - have ever filed a bankruptcy petition. The downturn in the telecommunications industry affected many CASE NO. Docket No. GNR-O3- In the Matter of the Petition of IA T Communications Inc., d.a. NTCH-Idaho, Inc. or Clear Talk, for Designation as an Eligible Telecommunications Carrier LARRY CURRY, REBUTTAL TESTIMONY companies that were not as well managed as the Clear Talk group and many, including GST Telecommunications, Inc., of which Mr. Trampush was the Chief Financial Officer were forced to file bankruptcy. The good news is, that Leap Wireless s plan for emerging from bankruptcy has been approved by the federal bankruptcy court and, having restructured, Leap Wireless now has a solid financial base. What is the third criteria Mr. Trampush suggested for aiding the Commission in assessing Clear Talk's "capability and commitment" to provide universal service throughout the area for which it receives ETC designation? Spectrum adequacy. Does Clear Talk have adequate spectrum? Yes. Clear Talk's ETC application is for designation in areas that are coterminous with its FCC spectrum licenses, all of which comprise 15 MHZ of licensed spectrum. By comparison, larger companies serve large cities like Phoenix and Cleveland with only 10 MHZ oflicensed spectrum. And the fourth and fmal criteria suggested by Mr. Trampush? ETC compliance history in other jurisdictions. Is that criteria applicable to Clear Talk? Not really. Why not? Because Clear Talk has not yet received ETC designation in any jurisdiction other than Idaho, where it has received ETC designation in Qwest Communications' southern Idaho service area. Did Mr. Trampush raise public interest concerns regarding Clear Talk's application for ETC designation? Yes. CASE NO. Docket No. GNR-O3- In the Matter of the Petition of IA T Communications Inc., d.a. NTCH-Idaho, Inc. or Clear Talk, for Designation as an Eligible Telecommunications Carrier LARRY CURRY, REBUTTAL TESTIMONY Did he raise any different issues than those raised by CT-Idaho and previously discussed in this rebuttal testimony? Yes. Would you please identify those issues and explain Clear Talk' response to Mr. Trampush's testimony on those issues? The first public interest issue raised by Mr. Trampush that differs from those raised by CT-Idaho in Mr. Tade s testimony is whether it is fair to subsidize wireless competition with inter-exchange carriers. Clear Talk's response to that argument is: (1) the Intervenors in this proceeding are not inter-exchange carriers and, thus, they do not have standing to raise an argument on behalf of inter-exchange service providers; and (2) the issue raised by Mr. Trampush is one of federal telecommunications policy - not an issue regarding the local public interest. Any other public interest issues raised by Mr. Trampush that you have not already addressed in your response to Mr. Tade s testimony? Yes. Mr. Trampush testified that because wireless carriers are unregulated, do not have Carrier of Last Resort responsibility, do not provide equal access to inter-exchange carriers, and Universal Service fund support would be based on the incumbent LEC's costs rather than the wireless carrier s costs, Universal Service fund support would be a windfall to a wireless carrier. And your response to that assertion? First of all, Clear Talk is agreeing to be bound by the Commission s Customer Relations Rules for the services it provides in areas for which it receives ETC designation, so it is agreeing to appropriate regulation. As for the Carrier of Last Resort argument, if Clear Talk receives ETC designation in the requested areas, it will be able to provide wireless service in areas where it may be cost-prohibitive for a CASE NO. Docket No. GNR-O3- In the Matter of the Petition of IA T Communications Inc., d.a. NTCH-Idaho, Inc. or Clear Talk, for Designation as an Eligible Telecommunications Carrier LARRY CURRY, REBUTTAL TESTIMONY wireline LEC to provide service, thus alleviating the regulatory burden of which Mr. Trampush complains. And, I might add, Clear Talk can provide that service with far less impact to the environment than traditional wireline service providers. Anything else? Yes. Although Clear Talk is not required to provide equal acccess to inter-exchange service providers, Clear Talk provides low-cost long distance service at rates far below what individual consumers can negotiate on their own from inter-exchange carriers. In addition, consumers can use "dial around" access codes to connect to discount long distance service providers of their choice. What about the issue of Universal Service fund support being based on an incumbent LEC's costs rather than on the wireless service provider costs? Again, that is a matter of fedeal telecommunications policy, not a matter concerning the local public interest that the Commission is charged with considering. Furthermore, the incumbent LECs may petition the FCC to disaggregate their wire centers, thus eliminating the possibility that a wireless ETC will receive Universal Service support based on an incument LEC's entire Study Area that is out of line with the costs of the LEC's wire center or centers that are coterminuous with a wireless service provider s FCC spectrum licenses. Mr. Curry, does that conclude your Rebuttal Testimony in this proceeding? Yes, it does. CASE NO. Docket No. GNR-O3- In the Matter of the Petition ofIAT Communications Inc., d.a. NTCH-Idaho, Inc. or Clear Talk, for Designation as an Eligible Telecommunications Carrier LARRY CURRY, REBU1TAL TESTIMONY Co v e r e d PO P & mi l S 11 . 11 . 5 ~. . $. . 0 . 1. d 19 8 . 25 . 29 4 J I 36 . Su n of N e ! 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"" , " j o c a r r l J o / h o r o m p ' d " J f r o ' " "" " , r l e t ! do l O . p~ re f e r 'a 11 1 0 IV i r e l E . . / " , h u l r v ~r d re p o r T f o l ' I 1 d d i J i O t l U I i l f j i J n n r B i o f l . All , . . ( . O f 1 n l m, d " t u n l o p ~ Q r 0" - 1iJ . b a c l rJ j th a Wi r e / = S C Q ~ " n i Q " , d ; R~ C; " i d o . C. i I : p t ! l : Ef f Pe r Ra t e Ne t A d d M O U P e r M i $3 7 1 71 & $ 0 . S4 6 5 43 6 S O . $7 , 65 1 1: 1 . 7 $ 0 . 21 . NA 32 S S O . .$ 6 , 02 0 48 4 SO J 3 NA 27 5 $ 0 . NA 24 1 SO . ~ 7 NA 43 8 $0 . 1 2 $1 , 2 2 4 2 1 5 1 0 . 1) 4 ( ) 1 16 C S O . SS 3 5 65 0 SO . 1 I $6 8 7 61 4 S O . 93 6 42 6 S O . NA 32 5 5& . 1 4 NA 34 7 S U 2 NA 66 0 S t I . $1 , 2 6 2 5 3 5 $ 0 . S3 7 2 63 0 $ 0 . $2 , 1 1 3 3 2 7 $ 1 0 . $1 5 , 93 8 60 7 $ 0 . $1 , 1 4 1 3- 6 7 S a . $5 2 5 62 5 S O . 74 2 37 9 .$ ( U 2 34 5 47 9 $ 0 . 12 1 f'o. . fT l IS ! I- ' Ex h i b i t 2 CLEAR TALK IDAHO FACT SUMMARY 35 Employees w/3! Being Local or From Idaho 6 Retail Centers 30 Reseller Locations 3 Lucent Switches-Pocatello, Idaho Falls, Twin Falls 70 Antenna Facilities Built wi 4 More Under Construction Proj ected 97 Facilities to Cover Licensed Area 47 Active Sites 38 Collocators Covered Population to Date 375 000 Exhibit 3 /" " Ma p l n f o Pr o f e s s i o n a l - ( I D T W I N h , ID M I N l h , . . . , IF p r o p S 30 M a p ) Cl e a r t a l k Bl u e A r e a nt y Pr o j e c t M u t u a l Mi n i d o k a C N T Y Fr e e m o n t T e l e c o m Fr e e m o n t C N T Y Qw e s t Ar e a i n r e d p a t t e r n Ba n n o c k C N T Y Bi n g h a m C N T Y Bo n n e v i l l e C N T Y Ca s s i a C N T Y Go o d i n g C N T Y Je r o m e C N T Y Ma d i s o n C N T Y Po w e r C N T Y Tw i n F a l l s C N T Y Zo o m : 3 4 5 . 9 m i IE d i t i n g : (: o s m e t i c L a y e r Se l e c t i n g : l O C O ir - - Ex h i b i t 4