20050518Comments.pdf

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DONOVAN E. WALKER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 5921
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Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE INVESTIGATION
OF INTRASTATE PRESUBSCRIBED
INTEREXCHANGE CARRIER (LPIC) CHANGE)CHARGES CASE NO. GNR- T -05-
COMMENTS OF THE
COMMISSION STAFF
The Staff of the Idaho Public Utilities Commission, by and through its attorney of record
Donovan E. Walker, Deputy Attorney General, in response to the Notice of Investigation and
Notice of Modified Procedure issued on March 28, 2005, respectfully submits the following
comments.
INTRODUCTION
The Federal Communications Commission (FCC) ordered a new interstate presubscribed
interexchange carrier (PIC) change charge to be tariffed on or before April 14, 2005 for interstate
long distance carrier charges. The Idaho Commission opened this docket to investigate
intraLATA PIC change charges (LPIC) that are tariffed at the state level. On April 8 , 2005, the
FCC issued Order No. DA-05-1045 , which extended the deadline for the filing of revised
interstate PIC change charge tariffs from April 14 to October 17, 2005. Staff recommends that
the Commission adopt as a safe harbor the same pricing structure for intralata LPIC change
ST AFF COMMENTS MAY 18 2005
charges as adopted by the FCC for interstate PIC change charges, and require that all incumbent
local exchange carriers file changes to LPIC change charges in the appropriate Idaho tariffs at
the same time as they file changes to interstate PIC change charges with the FCC.
BACKGROUND
On March 15 2005, the FCC issued a Report and Order (47 C.R. Chapter I, CC Docket
No. 02-, FCC 05-32) revising its PIC charge policies. PIC change charges are federally
tariffed charges imposed by incumbent local exchange carriers (ILECs) on end-user subscribers
when these subscribers change their long distance carriers. The Report and Order requires
ILECs to create separate PIC change charges based on the method used to process the request.
Based on cost information submitted in the record of the proceeding, the Report and Order
adopts safe harbors below which PIC change charges will be considered reasonable. These safe
harbors are $1.25 for electronically processed PIC changes and $5.50 for manually processed
PIC changes. Additionally, ILECs must also revise their federal tariffs to reflect a rate that is
equal to 50 percent of the full PIC change charge rate when a customer requests a PIC change in
conjunction with an intraLA T A primary interexchange carrier (LPIC) change. Pursuant to this
initial order, these federal tariff revisions were to be filed on or before April 14, 2005. The FCC
subsequently extended this deadline to October 17, 2005.
The FCC's previous safe harbor was set at $5.00. Under the safe harbor, companies
could tariff a charge of up to $5.00 without providing cost studies. If a carrier desired to tariff a
higher charge, they had to provide cost support to justify the higher amount. The FCC's new
safe harbor applies only to PIC changes for interstate long distance. IntraLA T A PIC (LPIC)
change charges are tariffed at the state level. Although the Idaho Commission has not formally
established a safe harbor rate for LPIC change charges, it has established a precedent of
approving a rate that is within the FCC's safe harbor of $5.00 without requiring the company to
submit detailed cost support. When the new rates for interstate PIC change charges become
effective there will be a lack of consistency between the charges for changing PICs and LPICs.
The consumer impact of any changes are difficult to identify without information on the extent to
which Idaho s ILECs can process such change orders electronically.
The Commission opened this docket to investigate whether the LPIC change charges
established by the Commission should coincide with the PIC change charges established by the
STAFF COMMENTS MAY 18, 2005
FCC. Additionally, the Commission requested information from Idaho ILECs on their
capabilities and actual usage levels of electronic processing for PIC/LPIC changes.
STAFF ANALYSIS
The FCC extended the April 14 deadline to October 17, 2005, in response to petitions
from many local carriers regarding the extent of the changes required to implement the two
tiered rate structure and the difficulties associated with complYing by the April 14 deadline. This
delay may also give the Idaho Commission more time to review the comments that may be filed
in this proceeding and to address other concerns that may come up regarding this change.
The Commission has multiple options with regard to the tariffing of intraLA T A or LPIC
change charges. It could allow each company to file its proposed charges without guidance from
the Commission, requiring each company to individually justify its proposals. This would
require each company to prepare cost studies to support their proposals, and require evaluation of
those cost studies by Staff. This would be time consuming and expensive for all. The
Commission could allow companies to keep LPIC charges as currently filed, and not make
changes to LPIC charges when they make changes to the interstate PIC change charges. This
would likely lead to considerable confusion at the consumer level. In addition, the FCC
requirement that the interstate PIC change charges are to be cut in half if both an LPIC and PIC
change is made at the same time is inconsistent with the manner in which this situation is
currently addressed. Current Commission policy precludes charges for changing the LPIC when
ordered at the same time as changes to the PIC. These provisions were the result of Commission
guidance issued in the orders requiring local exchange companies to implement equal access (for
example, see Order No. 28072). This discrepancy would result in the companies failing to
recover their costs when both changes are made at the same time. Alternatively, the Commission
could establish a safe harbor for LPIC change charges at the same level as that set for interstate
PIC change charges, and require that all Idaho incumbent local exchange companies (ILECs)
implement these changes at the same time that changes are made to the interstate PIC change
charge.
The FCC relied upon cost data submitted in its proceeding when establishing the
interstate PIC change charge safe harbor. Its analysis indicated essentially no difference in costs
when an ILEC makes a change in either the PIC or LPIC. As the costs are the same, Staff sees
STAFF COMMENTS MAY 18, 2005
no reason to consider any safe harbor levels other than those selected by the FCC for PIC change
charges for an LPIC change charge.
There are a number of implementation issues that deserve some discussion. Under a two
tiered rate structure, a consumer can only get the lower rate if a change order is submitted
electronically. An electronic submission takes place when the long distance company
computer sends electronic information to the computer of the local exchange company that
serves the customer. This electronic information is then automatically entered into the local
exchange company s work order system. Only long distance carriers may submit electronic
requests.
If a customer calls the desired new long distance carrier and has that carrier initiate the
PIC change, the order will most often be placed electronically, and the customer will only be
charged $1.25. If the customer simply calls their local exchange company and asks to be
switched to a different carrier, then that order will be placed manually, and the customer billed at
the higher $5.50 rate.If a customer wants to change to a "no-PIC"where no carrier is
designated as the default long distance carrier, the customer s only option is to place the order
with the local exchange company, which would result in a manual order charge of $5.50.
Customers that request to change both the LPIC and PIC at the same time would incur the
same charges as a customer that requests a change to only the PIC or LPIC. However, if a
customer were to change the PIC at one time, and then later request a change to the LPIC, they
would incur double charges. While this is appropriate, as the Company would incur the costs of
making changes twice, it is in both the company and the customers interest that both changes be
requested at the same time.
Clearly, the manner in which the customer requests the change of carrier will impact the
charges that the customer will incur. For this reason, the Commission may wish to consider
whether disclosure or customer education requirements would be appropriate.
Staff has very little information on the extent to which electronic filing is used by Idaho
local exchange companies, especially the smaller ones. Some companies may not be able to
accept electronic submissions. The FCC concluded that the two tiered rate structure would
encourage long distance carriers, who often pay the change charge as an enticement to get
consumers to switch, to upgrade to electronic filing. While Staff agrees that this may be the case
for long distance carriers, it does not apply to local exchange carriers. Questions remain, such
as: Are all Idaho local exchange companies able to process electronic LPIC change requests?
ST AFF COMMENTS MAY 18 2005
Would the public interest be served if any non-electronic capable companies were to upgrade?
, how should this be encouraged?
While Staff is hopeful that some of the answers to these questions may be provided by
the comments submitted in this proceeding, additional research into these issues may be
appropriate.
RECO MMEND A TI 0 N
Staff recommends that the Commission adopt as a safe harbor the same pricing structure
for intralata LPIC change charges as adopted by the FCC for interstate PIC change charges, and
require that all incumbent local exchange carriers file changes to LPIC change charges in the
appropriate Idaho tariffs to become effective at the same time as changes to interstate PIC
change charges that are filed with the FCC.
Respectfully submitted this it( ~day of May 2005.
Donovan E. Walker
Deputy Attorney General
Technical Staff: Wayne Hart
Beverly Barker
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STAFF COMMENTS MAY 18, 2005
CERTIFICATE OF SERVICE
HEREBY CERTIFY THAT I HAVE THIS 18TH DAY OF MAY 2005
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. GNR-05-, BY MAILING A COpy THEREOF POSTAGE PREPAID
TO THE FOLLOWING:
MARY S HOBSON
STOEL RIVES LLP
101 S CAPITOL BLVD STE 1900
BOISE ID 83702-5958
DOUG COOLEY
CENTUR YTEL
707 13TH STREET SE STE 280
SALEM OR 97301-4036
INGO HENNINGSEN
FRONTIER
4 TRIAD CENTER STE 200
SALT LAKE CITY UT 84180
SECRET Y
CERTIFICATE OF SERVICE