20040803Press Release.pdf

IDAHO PUBLIC UTILITIES COMMISSION
July 29, 2004
Case No. GNR-03-, GNR-03-
Order No. 29541
Contact: Gene Fadness [phone]
Website: www.puc.state.id.
Commission denies funding for telecom high-cost support
Two wireless telecommunication providers will not qualify for subsidized support to offer
services in areas of rural Idaho already served by other telephone companies.
By a 2-1 vote, the Idaho Public Utilities Commission denied petitions by N extel Partners and
Clear Talk, each of which sought designation as an "eligible telecommunications carrier" (ETC).
The designation would have qualified the companies for assistance from the Universal Service
Fund.
The Universal Service Fund (USF) was created by Congress in the 1930s to ensure that citizens
schools, libraries and health care facilities located in largely rural areas receive the same quality
of service and comparable rates to those who live in urban areas. It costs telephone companies
more money to serve in rural areas where there are fewer customers to pay fortelephone lines
wires and switches. All telephone companies providing interstate service must contribute to the
USF and nearly all choose to pass on their contribution to customers in the form of a line item
that appears on customer bills. In Idaho, customers contribute about 8 cents per residential line
per month, 13 cents per business line per month and $.0025 for every minute of long-distance
calls within the state.
Both Nextel and Clear Talk already provide wireless service in the areas in which they seek ETC
designation but maintain they could expand services in their areas and also promote competition
with USF support. The Telecommunications Act of 1996 promotes two primary goals for the
federal Universal Service Fund: to provide for universal service in rural, high-cost areas and to
encourage competition.
However, the majority on the commission said both companies were engaging in "cream
skimming" by seeking ETC designation only in the lower cost areas of the study areas pertinent
to their applications. For example, Clear Talk sought ETC designation for St. Anthony, but
excluded the Island Park area. Nextel applied for service in Rupert, but excluded Oakley,
Minidoka and Norland.
Commissioners were also concerned that qualifying more areas for universal service support in
areas where there are already telecommunication providers that qualify for USF would drain the
fund and increase consumers ' costs to support the fund.
Commissioner Marsha Smith dissented from the majority opinion. "Although I share the
majority s concern that granting these applications may adversely impact the federal USF, this
concern is an insufficient basis to deny the application " Smith said. "While this commission
may not approve of a support system that awards USF to multiple ETCs, that is the system that is
in place today." Smith said the FCC is examining the issue ofUSF support in competitive areas
but has not yet modified the standards in place for granting ETC designation.
Further, Smith said Nextel Partners ' application should have been granted because the company
indicated it would make the same commitments to provide service outside its existing service
areas. "Nextel Partners ' dilemma is that it needs ETC status to obtain federal USF support to
expand in high-cost rural areas, but cannot get ETC status without expanding into such areas
she said.
Nextel sought ETC status in areas served by Albion Telephone Company, Filer Mutual
Telephone Company, Farmers Mutual Telephone Company, Mud Lake Telephone Cooperative
Project Mutual Telephone Cooperative, Rural Telephone and Citizens Telecommunications of
Idaho. Clear Talk sought ETC designation in areas served by Fremont Telecom, Project Mutual
and Citizens. The majority of those companies were represented in the case by the Idaho
Telephone Association, which opposed the Nextel and Clear Talk petitions. Also intervening in
opposition to the applications were Project Mutual Telephone Cooperative and Citizens
Telecommunications Company.
A full text of the commission s order, along with other documents related to this case, are
available on the commission s Web site at www.puc.state.id.. Click on "File Room" and then
on "Telecommunications Cases" and scroll down to Case No. GNR- T -03-8 for Clear Talk and
GNR-03-16 for Nextel Partners.
Interested parties may petition the commission for reconsideration by no later than Aug. 16.
Petitions for reconsideration must set forth specifically why the petitioner contends that the order
is unreasonable, unlawful or erroneous. Petitions should include a statement of the nature and
quantity of evidence the petitioner will offer if reconsideration is granted.
Petitions can be delivered to the commission at 472 W. Washington St. in Boise, mailed to P.
Box 83720, Boise, ill, 83720-0074, or faxed to 208-334-3762.