20040817Petition for Reconsideration of Nextel.pdf

ORIGINAL
McDEVITT & MILLER, LLP
Dean J. Miller (ISB No. 1968)
420 West Bannock Street
O. Box 2564-83701
Boise, Idaho 83702
Phone [phone]
Facsimile [phone]
joe~mcdevitt-miller.com
Idaho Public Utilities Commission
Office of the SecretaryRECEIVED
AUG 1 3 200~
Boise, Idaho
BRIGGS AND MORGAN, P.
Philip R. Schenkenberg (MN #260551)
2200 First National Bank Building
332 Minnesota Street
Saint Paul, Minnesota 55101
Phone [phone]
Facsimile [phone]
pschenkenberg~ bri ggs. com
Attorneysfor NPCR, Inc. d/b/a Nextel Partners
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
In the Matter of the Petition of IA T
Communications, Inc. d/b/a NTCH-Idaho, Inc., or
Clear Talk, for Designation as an Eligible
Telecommunications Carrier
In the Matter of the Application of NPCR, INC.
d/b/a NEXTEL PARTNERS Seeking
Designation as an Eligible Telecommunications
Carrier that may receive Federal Universal ServiceSupport
Case No. GNR- T -03-
Case No. GNR-03-
NPCR. INC. d/b/a NEXTEL PARTNERS
PETITION FOR RECONSIDERATION
COMES NOW NPCR, Inc. d/b/a Nextel Partners ("Nextel Partners" or the "Company
in accordance with RP 331 et seq.hereby requests that the Commission reconsider Order No.
29541 (the "Order ) issued in this case on July 23 , 2004 denying Nextel Partners' Application for
PETITION FOR RECONSIDERA TION-
eligible telecommunications carrier ("ETC") designation in certain areas within the State of
Idaho.
In the Order, the Commission acknowledges that Nextel Partners can provide the Federal
Communications Commission s ("FCC") supported services and the Commission fails to identify
any consumer haml that would be caused by allowing Nextel Partners to compete for universal
service customers and obtain access to federal funds that are available to carriers providing
service in high-cost areas. Nonetheless, the Commission determined the Application failed to
satisfy the "public interest" requirement in 47 U.C. ~ 214(e)(2), and denied the Application.
This finding is based on the following three considerations:
Nextel Partners did not produce a build-out plan for reVIew by the
Commission;
The Commission questioned whether N extel Partners would be usIng
federal funds to serve consumers in truly rural areas; and
Nextel Partners' regulatory status as a commercial mobile radio service
CMRS") provider regulated by the FCC. (Order, pp. 20-24.
As discussed below, these considerations do not justify the denial of this Application.
addition, if reconsideration is granted, N extel Partners will identify three new cell sites in these
areas that are hoped to be online by the end of2004. Nextel Partners will further identify six cell
sites that today are not cost-justified, and would not be built any time in the next several years in
the absence of ETC funding. If Nextel Partners obtains ETC designation, however, it will spend
all universal service funds received in 2005 and onward towards constructing these sites. Nextel
Partners will also clarify that its commitment to comply with the CTIA Consumer Code for
Wireless Services is a commitment that the Commission will have the authority to monitor and
enforce. If Nextel Partners fails to live up to this commitment the Commission would have the
authority to take action to revoke N extel Partners' ETC designation.
PETITION FOR RECONSIDERA TION-
NEXTEL PARTNERS' BUILD-OUT PLANS AND USE OF FEDERAL FUNDS
As Nextel Partners indicated that the hearing, the Company is licensed throughout the
rural service areas identified in its Petition, and the Company is committed to providing service
to consumers in this area as expeditiously as possible. Tr. pp. 72-74. No party disputed
however, the significant economic challenges associated with building out a network in these
areas. It is also undisputed that even as an ETC, Nextel Partners (unlike the ILECs, who have a
high degree of assurance of cost recovery) will not be guaranteed to recover of its costs of
building these areas. Nextel Partners will have to raise the capital resources to build new sites
and pay for those sites through. consumer revenues, as supplemented by per-line support
available from the federal universal service fund.Even IT AlCitizens Witness Trampush
acknowledged that a publicly-traded company like Nextel Partners could not make a
commitment to build in areas that lacked business justification.Tr. 560-562.The
Commission s Order fails to acknowledge these economic realities, and would seem to require
Nextel Partners to make decisions without regard to the financial impacts on the company or
investor capital.
Part of this concern by the Commission regarding network build-out is an apparent belief
that Nextel Partners' receipt of universal service funds will not lead to the provision of
telecommunications services to consumers in new areas in the State of Idaho. (Order, p. 21.)
This is essentially an attack on the FCC's funding mechanisms that provide a competitive ETC a
per-line support amount based on the incumbent's receipt of funds. The FCC has determined that
In fact, there are significant disclosure requirements under federal law that are primarily
designed to ensure that investors in a publicly-traded company can be confident that
management is making good economic decisions with those investor dollars.
PETITION FOR RECONSIDERA TION-
this mechanism is fair and is competitively neutral as applied to competitive ETCs, and this
Commission cannot second-guess those FCC decisions:
We agree with the Joint Board that competitive neutrality is a fundamental
principle of universal service reform, and that portability of support is necessary
to ensure that universal service support is distributed in a competitively neutral
manner.
In the Matter of Federal-State Joint Board on Universal Service Seventh Report & Order, FCC
99-119, ~ 74 (reI. l\1ay 28, 1999). In addition, the FCC is currently considering changes to these
funding mechanisnls to identify and address problems with this funding mechanism. It is that
process, not this ETC designation, that is the appropriate forum for such concerns to be raised.
To address the Commission s concern to the best of its ability, however, Nextel Partners
can identify three cell sites that will be constructed in these areas, and which the Company hopes
will be activated before the end of the year. Attachment A hereto is a diagram that shows
existing cell site locations in black, and the three "in-progress" sites in red. This shows further
build-out from what was known in December when the case was presented to the Commission
and extends the signal cloud accordingly.
Nextel Partners has also identified six cell sites within the designated areas that would
provide service to areas without access to Nextel Partners' network today. Those cites are in the
following locations, and are represented in gray on Attachment A:
Site Name Lat LoD
Rupert Quality 42.6686 113.669
Aberdeen 42.9391 112.831
T erreton 43.112.459
Menan 43.8268 111.992
Packer John 44.2078 116.069
South McCal 44.9099 116.095
PETITION FOR RECONSIDERA TION-4
The cost to construct those cell sites would be approximately $1.2 million, and there would be
ongoing operational costs necessary to maintain those cites. Nextel Partners will not be able to
justify building any of these sites within the next three years based on current economic
considerations without ETC funding.
If designated as an ETC, Nextel Partners will dedicate all universal servIce funds
received in the State of Idaho to constructing and operating those cell sites. Based on current
levels of support and projections, this will take at least several years to accomplish. The sooner
such funds are available, however, the sooner these sites will be built. Nextel Partners will also
continue to consider other build-out in these areas, and to comply with the Virginia Cellular
standard for addressing requests for service. See Nextel Partners ' Feb. 24 Supplemental Filing,
pp. 3-
Nextel Partners respectfully request that the Commission find this additional commitment
satisfies the Commission s concerns regarding the Company s use of federal universal service
funds. These specific and concrete commitments go beyond the "tentative general business plan
envisioned by the Commission. (Order, p. 21.) The Commission should also recognize that this
provides a clear opportunity for this Commission to use federal universal service funds to bring
better telecommunications services to its constituents.
If Reconsideration is granted, Nextel Partners is prepared to promptly file testimony
affirming the above commitments, if desired by the Commission.
THE COMMISSION'S CONCERNS OVER SERVICE QUALITY SHOULD BE
RECONSIDERED
The Commission s Order expresses a concern that Nextel Partners would be operating as
an ETC without being subject to the regulatory authority of the Commission. Order, pp. 23-24.
The FCC has been clear that principles of competitive neutrality require that a common carrier
PETITION FOR RECONSIDERA TION-
regulated by the FCC be treated no less favorably than a common carrier regulated by a state
commission: "We re-emphasis that the limitation on a state s ability to regulate rates and entry
by wireless service carriers under section 332(c)(3) does not allow the states to deny wireless
carriers ETC status.Seventh Report and Order supra, ~ 72.The Commission should
reconsider its decision to deny Nextel Partners federal ETC designation simply because it is a
federally regulated carrier.
Moreover, the Commission should look on Nextel Partners' status as a participant in the
competitive wireless industry favorably - regulators generally attempt to facilitate competitive
markets so monopoly regulation is not necessary. In a competitive market, a carrier that does not
meet consumers' needs and provide high-quality customer service will not maintain its customer
base.If Nextel Partners does not maintain its customer base or draw new customers, its
eligibility to obtain universal service funds will decrease correspondingly. These economic
incentives are sufficient to address concerns regarding Nextel Partners' provision of service as an
ETC. The record in this case reflects that Nextel Partners is an industry leader in providing high-
quality customer service. Nextel Partners respectfully requests that this evidence, rather than the
Commission s own jurisdictional limitations, should be the proper focus on of the public interest
test.
In addition, Nextel Partners has committed to comply with the CTIA Consumer Code of
Conduct. This has been accepted and endorsed by the FCC as an appropriate commitment to
service quality by a participant in the competitive wireless market. In the Matter of Federal-
State Joint Board on Universal Service, Virginia Cellular, LLC Petition for Designation as
Eligible Telecommunications Carrier in the Commonwealth of Virginia CC Docket No. 96-
Memorandum Opinion and Order FCC 03-338, ~ 30 (reI. Jan. 22, 2004). The Commission
PETITION FOR RECONSIDERA TION-
should defer to the FCC's determination on this matter. Moreover, this Commission will have
ongoing authority to hold Nextel Partners to its commitment to comply with the CTIA Code. If
for example, Nextel Partners is not complying with that Code, the Commission would have
authority to investigate and revoke Nextel Partners' ETC designation. This authority is a heavy
stick that would be available to the Commission, and is a better way to address this issue than
denying designation.
II.CONCLUSION
Nextel Partners made Application in Spring of 2003 for ETC designation. The Company
is a rural provider that has invested substantial resources in the State of Idaho and hopes to
continue to do so. Its ability to continue to provide these first-class telecommunications services
to people in more rural areas will be dependent on the economics of build-out. These economics
depend on the availability of federal high-cost funds. Nextel Partners respectfully requests that
the Commission grant this request for reconsideration, hold N extel Partners to these
commitments, and designate Nextel Partners as an ETC in its requested service areas. Nextel
Partners further requests that the Commission certify Nextel Partners' use of federal funds prior
to the FCC and the Universal Service Administrator prior to the October 1 , 2004 deadline. This
will allow Nextel Partners to begin planning to receive and use federal universal service support
in 2005 to provide 1110re and better telecommunications services to Idaho consumers.
WHEREFORE, Nextel Partners respectfully requests that this Petition be granted, and if
desired by the Commission, Nextel Partners will promptly submit testimony of a company
witness supporting these commitments.
PETITION FOR RECONSIDERA TION-
Dated: August 13 2004 NPCR, INC. d/b/a NEXTEL PARTNERS
McDEVI &
Dean J. Miller
420 West Bannock Street
O. Box 2564-83701
Boise, Idaho 83702
Phone [phone]
Facsimile [phone]
BRIGGS AND MORGAN, P.
Philip R. Schenkenberg (MN #260551)
Matthew Slaven (MN #288226)
2200 First National Bank Building
332 Minnesota Street
Saint Paul, Minnesota 55101
Phone [phone]
Facsimile [phone]
COUNSEL FOR APPLICANT
NPCR, INC. d/b/a NEXTEL PARTNERS
PETITION FOR RECONSIDERA TION-
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CERTIFICATE OF SERVICE
I hereby certify that on I caused to be served true and correct copies of the foregoing document Nextd
Partners' Petition for Reconsideration by the methode s) indicated, upon:
Hand Delivered Mary S. Hobson Hand Delivered
Glenn Ishihara, President Federal Express STOEL RIVES LLP Federal Express
IA T COMMUNICATIONS, INc.S. Mail 101 So, Capitol Blvd., Suite 1900 S. Mail
703 Pier Avenue, Suite B; PMB 813 T elecopy Boise, Idaho 83702 T elecopy
Hermosa Beach, California 90254 mshobson~stoel.com Email
Attorneys for ~west Corporation
Molly O'Leary Hand Delivered Robert M. Nielsen Hand Delivered
RICHARDSON &:: O'LEARY Federal Express ATTORNEY AT LAw Federal Express
99 East State Street, Suite 200 S, Mail O. Box 706 S. Mail
O. Box 1849 T elecopy Rupert, Idaho 83350 T elecopy
Eagle, Idaho 83616 Email Attorney for Project Mutual Telephone Email
molly~richardsonandoleary, conl Cooperative Association, Inc.
Attorney for LA Communications, Inc.loo slaw~mt.
Conley E. Ward, Jr. Hand Delivered Charles H. Creason, Jr.Hand Delivered
GIVENS PURSLEY, LLP Federal Express President
&::
General Manager Federal Express
227 North 6th Street, Suite 200 S. Mail PROJECT MUTUAL TELEPHONE COOP.S. Mail
O. Box 2720 T elecopy 507 G Street T elecopy
Boise, Idaho 83701-2720 Email O, Box 366 Email
cew~givenspursley.com Rupert, Idaho 83350
Attorney for Idaho elephont: Association ccreason~mt.coo
Clay Sturgis, Senior Manager Hand Delivered Weldon Stutzman, Deputy AG Hand Delivered
Moss ADAMS LLP Federal Express ID PUBLIC UTILITIES COMMISSION Federal Express
601 Riverside, Suite 1800 S. Mail 472 West Washington Street S. Mail
Spokane, Washington 99201-0063 T elecopy O. Box 83720 T elecopy
clays~mossadams.com Email Boise, Idaho 83720-0074 Email
Attorney for Idaho elephont: Association jhammon ~puc. state.id. us
Commission Staff
Morgan W. Richards Hand Delivered Eric Steinmann, Corporate Counsel Hand Delivered
MOFFAT THOMAS BARRETI ROCK &: FIELDS Federal Express IA T COMMUNICATIONS, INC.Federal Express
101 So. Capitol Blvd., loth Floor S, Mail O. Box 1976 S. Mail
O. Box 829 T elecopy Wrightwood, California 92397 T elecopy
Boise, Idaho 83701 Email
111wf€)moffatt.com
Attorneys for Citizens Telecommunications of Idaho
Lance A. T ade, Manager Hand Delivered
State Government Affairs Federal Express
CITIZENS TELECOMMUNICATIONS OF IDAHO S. Mail
4 Triad Center, Suite 200 T elecopy
Salt Lake City, Utah 84180 Email
ltade~czn. com
Attorney for Citizens Telecommunications of Idaho