20040123Post Hearing Brief IAT.pdf

Molly O'Leary, Esq. (ISB # 4996)
Richardson & O'Leary, PLLC
99 E. State Street, Suite 200
Eagle, Idaho 83616
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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-
POST -HEARING BRIEF OF IA T
COMMUNICATIONS, INC., d/b/a!
CLEAR TALK
STATEMENT OF THE CASE
On February 3 2003 , IAT Communications, Inc., d/b/a Clear Talk ("Clear Talk") filed a
an Application with the Idaho Public Utilities Commission ("Commission ) requesting
designation as an Eligible Telecommunications Carrier ("ETC") pursuant to Section 214(e) of
the Telecommunications Act of 1996 ("the Act"). In that petition, Clear Talk initially sought
designation in the service areas of Citizens Telecommunications Company of Idaho ("Citizens
Albion Telephone Company ("ATC"), Qwest Corporation ("Qwest"), Filer Mutual Telephone
Company ("Filer ), Fremont Telecom Company ("Fremont"), and Project Mutual Telephone
CLEAR TALK'S POST-HEARING BRIEF-
Cooperative Association, Inc. ("Project Mutual") - all of which are classified as incumbent local
exchange carriers ("ILEC") and, with the exception of Qwest, are classified as rural ILECs.
More than two months later, on April 28, 2003 , NPCR, Inc. d/b/a Nextel Partners
Nextel") also requested Commission designation as an ETC for a portion of its Idaho wireless
service territory, including some Citizens exchanges, and A TC, Filer, Project Mutual, Mud Lake
Telephone Cooperative Association, Inc. ("Mud Lake ), and Farmers Mutual Telephone
Company ("Farmers
On May 5, 2003 , Clear Talk filed an Amended Application to, among other things
clarify that it was not seeking ETC designation for the purpose of the Idaho Universal Service
Fund. Clear Talk also requested interim ETC designation for any service area for which its
petition was not contested.
On June 11 2003 , the Commission issued Order No. 29261 , designating Clear Talk as an
ETC in the Qwest exchanges that are coterminous with Clear Talk's PCS Basic Trading Areas
Nos. 202, 353 and 451 , which include the American Falls, Blackfoot, Bliss, Buhl, Burley,
Gooding, Idaho Falls, Rexburg, Rigby, Shelley, Pocatello, Lava Hot Springs, McCammon, Twin
Falls, Jerome, Kimberly, and Wendell exchanges. In so ordering, the Commission found that
based on the record before it, Clear Talk met the threshold requirements of Section 214( e)( 1 )(A)
and (B) for the foregoing Qwest exchanges. Order 29261 at 5 - 6.
On June 13, 2003 , at the request of Commission Staff, Clear Talk filed a Second
Amended Application to clarify the rural wire centers within its current Idaho service area for
which it was seeking ETC designation. Pursuant to Exhibit B of Clear Talk's Second Amended
Petition, Clear Talk limited its application for ETC designation to the following rural ILEC wire
centers:
CLEAR TALK'S POST-HEARING BRIEF - 2
1. Fremont Telecom - Ashton Exchange (ASTIDMARSO); St. Anthony Exchange
(STATIDMADSO)
2. Project Mutual- Qwest/Burley Exchange (HYBNIDOIRSO); Paul Exchange
(P AULIDXCRSO); Rupert Exchange (RPRTIDXCDSO)
3. Citizens Telecom ofIdaho - Aberdeen Exchange (ABRDIDXCDSO)
On May 27 2003 , the Commission combined the two applications and requested
comments from other potentially interested parties under the Commission s Modified Procedure
Rules. Order No. 29240. Petitions to Intervene were filed by the Idaho Telephone Association
ITA"), Citizens, and Project Mutual. On July 21 2003, the Commission granted ITA's request
for an evidentiary hearing. Order No. 29292 at 9. Direct and Rebuttal Testimonies were pre-
filed by the parties and an evidentiary hearing was held on December 9th and 10th 2003, pursuant
to the Commission s Notice of Hearing. Order No. 29312.
STATEMENT OF FACTS
The Commission has already found, based on the evidence in the record, that Clear Talk
has met the threshold requirements of Section 214(e)(1):
Based on the Company s filings, the Commission finds that Clear Talk is a
wireless common carrier that has licenses granted by the FCC to provide service in
southeastern Idaho. The Commission further finds that Clear Talk has met the
requirements for ETC designation in Qwest exchanges in southeastern Idaho as it will
offer the supported services to all customers in its designation areas through its own
facilities or those of other carriers and will advertise these services.
Order No. 29261 at.5. In support ofthis finding, the Commission cited In the Mattero!
Federal-State Joint Board on Universal Service 15 F.R. 15168, 15178 at ~ 24 (2000), and the
Declaration of Larry Curry , attached as Exhibit 1 to Clear Talk's Application. /d. at FNA.
The Commission concluded that:
CLEAR TALK'S POST-HEARING BRIEF - 3
" . . . Clear Talk's Petition and supporting materials demonstrate that the
Company has the ability and commitment to provide all the services required for ETC
designation throughout the Qwest exchanges in southeastern Idaho.
Order No. 29261 at 6.
In addition to the Qwest exchanges, Clear Talk's above-referenced Application and
supporting materials requested ETC designation in the Ashton and St. Anthony exchanges of
Fremont Telecom, the Aberdeen exchange of Citizens, and the Qwest/Burley, Paul, and Rupert
exchanges of Project Mutual.
As with its request for ETC designation for the Qwest exchanges, Clear Talk's request
for ETC designation for the above-referenced rural ILEC exchanges is limited only by the reach
of its FCC licenses for southern Idaho. These licenses were acquired based on availability and
price, not some grand scheme to game the Universal Service Fund system. Tr. 386, LL. 4 - 9;
Tr. 462, LL. 9 - 13. Clear Talk is committed to maximizing its investment in these licenses by
deploying services in previously unserved areas. Tr. 471 , L. 17 - Tr. 472, L.l.
Clear Talk's ability to increase deployment of wireless communication services to
consumers in the requested rural ILEC exchanges will, at a minimum, double with the assistance
of Universal Service Fund support. Tr. 380, LL. 17 - 20; Tr. 472, LL. 2 - 8. In addition
Universal Service Fund support will allow Clear Talk to enhance its existing services, as
required by Section 254(e) of the Act. Clear Talk's provision of wireless services in the
requested rural areas will increase customers' telecommunication choices and mobility, as well
as improve public safety by bringing telecommunication services into previously unserved areas
and decreasing response times for emergency services.
CLEAR TALK'S POST-HEARING BRIEF - 4
In addition to traditional mobile wireless service, Clear Talk also intends to offer wireless
local loop service in the requested rural ILEC exchanges. Tr. 355, LL. 21 - 24; Tr. 356, L.
Tr. 358, L. 8. This service will compete directly with incumbent landline services.
Since its entry into Idaho, Clear Talk has demonstrated a consistent growth trend based
on customer demand. Clear Talk Exhibit 3. Clear Talk stands ready, willing and able to bring
wireless service deeper into Idaho if it is able to offset some of the higher costs associated with
rural areas with Universal Service Fund support. Tr. 440, LL. 10 - 15.
Clear Talk has agreed to have its ETC designation conditioned on several conditions
proposed by Citizens. TR. 443, L. 1 - Tr. 444, L. 13.
IT A has conceded that competition from wireless service will cause rural ILECs to
operate more efficiently. ITA Post-Hearing Brief at 14.
The survey referenced by ITA in its testimony (e.
g.,
Tr. 494, LL. 6 - 9) and Post-Hearing
Brief(at 14) is not in evidence.
There is no evidence in the record that consumers will be harmed by the designation of
Clear Talk as an ETC in the rural exchanges that are the subject of Clear Talk's Application.
There is no evidence in the record that the rural exchanges that are the subject of Clear
Talk's Application cannot support more than one ETC.
In its decision in In the Matter of the Application of Qwest for Deregulation of Basic
Local Exchange Rates in Its Boise, Nampa, Caldwell, Meridian, Twin Falls, /daho Falls, and
Pocatello Exchanges (hereafter Qwest Deregulation ), the Commission did not find that
CLEAR TALK'S POST-HEARING BRIEF - 5
wireless service does not and cannot compete with landline service. Order No. 29360. Rather
the Commission found that Qwest failed to meet its evidentiary burden in the case before it. /d.
at 19.
ARGUMENT
I. Clear Talk has met the threshold requirements for ETC designation in the
subject rural areas.
In granting Clear Talk's request for ETC designation in Qwest's exchanges, the
Commission has correctly found, based on the evidence in the record, that Clear Talk meets the
threshold requirements under Section 214(e)(1) for ETC designation. Order No. 29261. This
finding expressly includes a determination that Clear Talk "has the ability and commitment to
provide all the services required for ETC designation throughout the Qwest exchanges./do at 6.
Pursuant to principles of res judicata the record likewise supports a finding that Clear Talk has
the ability and commitment to provide all of the services required for ETC designation in the
requested rural exchanges.
II.Granting Clear Talk's Application is in the Public Interest.
In addition to finding that the threshold requirements of Section 214(e)(1) have been met
Section 214( e )(2) of the Act requires that, in the case of a request for a competitive ETC
designation in a rural ILEC's service area, the Commission find that the requested designation is
in the public interest. 47 U.C. ~ 214(e)(2).
Rather than accepting the self-serving spin provided by ITA's and Citizens ' expert
Daniel Trampush, this Commission need look no further than the Federal Communication
CLEAR TALK'S POST-HEARING BRIEF - 6
Commission ("FCC") for guidance on how to apply the public interest standard of Section
214(e)(2) to the facts ofthis matter.
As stated by the FCC, designation of a wireless carrier in rural areas serves the public
interest by promoting competition and the provision of new technologies to consumers in high-
cost and rural areas. In the Matter of Federal-State Joint Board on Universal Service: Western
Wireless Corporation Petition for Designation as an Eligible Telecommunications Carrier in the
State of Wyoming, CC. Docket 96-45 (Dec. 26, 2000) (hereafter Wyoming
),
at ~~ 9, 18.
Designation of competitive ETCs promotes competition and benefits consumers in rural and
high-cost areas by increasing customer choice, innovative services, and new technologies. /do
~ 19. Competition will also provide an incentive to rural telephone companies to improve their
existing networks to remain competitive, resulting in improved service to consumers. /d.
Consumers will likewise benefit from expanded local calling areas. Id. at ~ 23.
While the Intervenors attempt to make much of the fact that some wireless service is
already available in portions of their service areas without the benefit of Universal Service Fund
support, the FCC's decision in the Wyoming case was not premised on whether there were other
wireless carriers present in the subject exchanges. Therefore, any attempt by the Intervenors to
argue that this Commission s decision must be premised on the existence or non-existence of
other wireless carriers, is a red herring.
I IT A has conceded that competition from wireless service will cause rural ILECs to
operate more efficiently. ITA Post-Hearing Brief at 14.
CLEAR TALK'S POST-HEARING BRIEF - 7
Like Western Wireless in Wyoming, Clear Talk is seeking ETC designation in the subject
rural exchanges precisely so that it canfurther its deployment of wireless service to rural Idaho.
Designation of Clear Talk as an ETC will, at a minimum, double its ability to deploy wireless
universal service to portions of rural Idaho that presently lack wireless service. And, like
Western Wireless in Wyoming, Clear Talk intends to offer wireless local loop service in the
subject rural ILEC exchanges. Tr. 355 , LL. 21 - 24; Tr. 356, L. 2 - Tr. 358, L. 8. This service
will compete directly with incumbent landline services.
In addition, like Western Wireless in Wyoming, and countless other wireless ETCs, the
incentive for Clear Talk to make good on its commitment to offer these services throughout the
exchanges within its FCC license areas is twofold: (1) expand coverage to maximize the baseline
return on its investment in the FCC licenses; and (2) because support is tied to the acquisition of
customers, Clear Talk cannot realize the potential for Universal Service Fund support without
reaching out to as many consumers as possible. As the FCC noted in Wyoming, unlike rural
ILECs, a competitive carrier must continuously demonstrate its commitment to offer and deploy
the supported services. Wyoming at ~ 15. So the risk of non-compliance is squarely on the
shoulders of Clear Talk - not Idaho consumers.
Furthermore, Clear Talk has committed to use the Universal Service Fund support it
receives to upgrade its facilities and enhance its present service, which is a specific goal of the
fund. 47. U.C. ~ 254(e).
Finally, there is no evidence in the record that consumers will be harmedbytne
designation of Clear Talk as an ETC in the rural exchanges that are the subject of Clear Talk'
CLEAR TALK'S POST-HEARING BRIEF - 8
Application; and there is no evidence in the record that the rural exchanges that are the subject of
Clear Talk's Application cannot support more than one ETC.
Consequently, like the facts in Wyoming, the evidence before this Commission meets the
public interest test enunciated by the FCC.
CONCLUSION
For the foregoing reasons, and based on the record before it, the Commission should
grant Clear Talk's Application for ETC designation.
As this Commission stated in Qwest Deregulation: The public interest is served when
effective competitive forces exist to protect customers from monopoly pricing. Order No 29360
at 20. Designation of Clear Talk as an ETC in the requested rural exchanges will help ensure
that effective competitive forces will spread to, take root in, and propagate throughout rural
Idaho.
RESPECTFULLY SUBMITTED, this 23rd day of January, 2003.
me; dba Clear 1'alk)
CLEAR TALK'S POST-HEARING BRIEF - 9
CERTIFICATE OF SERVICE
I HEREBY CERTIFY that on this 23rd day of January, 2004, I caused a true and
correct copy of the foregoing POST-HEARING BRIEF OF CLEAR TALK to be served by
the method indicated below, and addressed to the following:
Jean Jewell
Idaho Public Utilities Commission
472 West Washington Street
Post Office Box 83720
Boise, Idaho 83720-0074
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Dean J. Miller, Esq.
420 West Bannock
Post Office Box 2564-83701
Boise, Idaho 83702
[phone] (Fax)
i oe~mcdevitt -miller .com
Conley Ward
Givens Pursley LLP
277 North 6th Street, Suite 200
Post Office Box 2720
Boise, Idaho 83701
[phone] (Fax)
mailto: cewcmgivenspursley. com
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Philip R. Schenkenberg, Esq.
2200 First National Bank Building
332 Minnesota Street
St. Paul, Minnesota 55101
pschenkenbergcmbriggs. com
Lance A. Tade, Manager
State Government Affairs
Citizens Telecommunications Company of
Idaho
4 Triad Center, Suite 200
Salt Lake City, UT 84180
ltadecmczn. com
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CLEAR TALK
CERTIFICATE OF SERVICE - 1
Charles H. Creason, Jr.
President and General Manager
Project Mutual Telephone Cooperative
Association, Inc.
507 G Street
Post Office Box 366
Rupert, Idaho 83350
John Hammond, Deputy AG
Idaho Public Utilities Commission
472 West Washington Street
Boise, Idaho 83720-0074
[phone] (Fax)
ihammoncmpuc. state.id. us
Clay Sturgis, Senior Manager
MOSS ADAMS LLP
601 Riverside, Suite 1800
Spokane, WA 99201-0063
clavscmmossadams.com
Morgan W. Richards, Esq.
Moffatt, Thomas, Barrett, Rock & Fields
101 S. Capitol Blvd, 10th Floor
P. O. Box 829
Boise, Idaho 83701-0829
[phone] (Fax)
mwrcmmoffatt.com
Mary S. Hobson
Stoel Rives LLP
101 S. Capitol Blvd, Suite 1900
Boise, Idaho 83702-5958
[phone] (Fax)
mshobsoncmstoel.com
CLEAR TALK
CERTIFICATE OF SERVICE - 2
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Robert M. Nielsen
548 E Street
Post Office Box 706
Rupert, Idaho 83350
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Signed:
CLEAR TALK
CERTIFICATE OF SERVICE - 3