20091023Comments.pdf

WELDON B. STUTZMAN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 3283
E'I'-""IREC I," \:\)
2009 OCT 23 PM 2= 31
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE ANNUAL REVISION)
OF THE UNIVERSAL SERVICE FUND )
SURCHARGES TO BECOME EFFECTIVE )OCTOBER 1, 2009. )
)
)
)
CASE NO. GNR-T-09-05
COMMENTS OF THE
COMMISSION STAFF
The Staff of the Idaho Public Utilties Commission, by and through its Attorney of
Record, Weldon B. Stutzman, Deputy Attorney General, submits the following comments in
response to Order No. 30894 issued on September 2, 2009.
BACKGROUND
On July 16,2009, the Administrator of the Idaho Universal Service Fund (USF) fied her
Annual Report to the Commission for the period July 1, 2008 through June 30, 2009. Funds
from the USF are distributed to eight rual telecommunications companies to assist the
companies in meeting their residual revenue requirement as determined by the Commission in
past rate cases. For a company to continue to receive USF funding its average one-pary, single-
line service rate must be revised if the difference in the company's average rate and the statewide
average threshold rate (125% of the statewide average) is greater than three percent. IDAPA
STAFF COMMENTS 1 OCTOBER 23, 2009
31.46.01.106. In addition, a company's rate for switched access service must be revised if it is
more than three percent below the weighted statewide average rate, and the difference in the
company's anual revenue for switched access service and the statewide average is greater than
$6,000. IDAPA 31.46.01.106.02.
The Administrator reported that the 2009 statewide weighted average is $20.61 for
residential service and $32.43 for business service, bringing the threshold rates for companies to
maintain USF eligibilty to $25.76 for residential service, and $40.54 for business service. The
USF Administrator noted that none of the eight companies receiving USF fuding curently meet
the eligibility requirements established by Idaho Code § 62-610 and Commission USF Rule 106.
The residential service rates for each company are more than 3% below the threshold rates for
USF eligibilty.
ST AFF ANALYSIS
The Commission agreed with the Administrator's annual report recommendation that the
residential local exchange line rate of the eight telephone companies receiving Idaho USF
disbursements did not meet the USF eligibilty requirements and that the USF funding was at
issue for these companies. See Order No. 30894 at 4.
Comments submitted by the Idaho Telecom Allance (IT A) on October 20, 2009 requests
that the Commission rescind its proposal to require the USF recipients to increase residential
local exchange rates and reduce the USF draws. The primary position taken by IT A is that the
Administrator overstated the actual weighted statewide average residential rate by using posted
tariff and price list rates without consideration of actual rates which reflect promotional
discounts, bundled service rates and other discount mechanisms promoted by Qwest and Verizon
who comprise almost 84% of the total residential lines in Idaho. ITA Comments at 2.
Each year, the USF Administrator mails a multi-page Anual Report form to all
telephone companies requesting residential and business line information. See page one (1) and
two (2) of the Idaho Universal Service Fund form. The Administrator reviews the reports for
reasonableness and investigates anomalies and incomplete information. From this data, the
Administrator determines the average statewide residential and business one-pary, single line
service rates and calculates the statewide weighted average rates used to determine USF
eligibilty. It is assumed that companies are accurately reporting both the bundled and stad
alone line quantities and rates. The Administrator may confirm accuracy or overstatement of
STAFF COMMENTS 2 OCTOBER 23, 2009
data in the reports by comparing the rates to the company's posted tariff or price list rates. The
Administrator used the rates stated on the reports submitted by Qwest and Verizon. Based on the
results of the Administrator's calculations, all USF recipients' residential rates were below the
threshold leveL.
In its comments, the IT A argues that a statutory provision allows the USF recipients to
maintain the current line rates as well as the curent USF support distribution. Idaho Code § 62-
605(e) states:
F or the purpose of calculating the weighted statewide average rates for residence
and business basic local exchange service rates to enable the commission to
determine eligibilty for distribution to eligible telecommunications cariers from
the unversal service fud established pursuant to chapter 6, title 62, Idaho Code,
the residence and business basic local exchange rates in effect on July 1, 2005,
shall constitute the basis for such calculation, unless the commission determines
that changes in basic local exchange rates subsequently to July 1, 2005, should be
used for such calculation for the purpose of determining the eligibility of
telecommunications cariers for distribution from the universal service fud.
Implicit in Order No. 30894, the Commission determined that it is appropriate to use the
curent statewide weighted average rates for determining USF eligibility. This decision is
appropriate and consistent with the purose and goals of the state USF. The USF was never
intended to permanently subsidize low rates for small company customers, while all other
customer rates increase. The Commission should explicitly state its determnation to use curent
statewide average rates in determining USF eligibilty and distributions.
The Commission should reaffirm its decision to use the most current rates for determining
USF eligibilty requirements.
Respectfully submitted this2~ ~ day of October 2009.
lJ- ~
Weldon B. Stutzman
Deputy Attorney General
Technical Staff: Grace Seaman
i:umisc/commentsgnrt9.05wsgs comments
STAFF COMMENTS 3 OCTOBER 23, 2009
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 23RD DAY OF OCTOBER 2009,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. GNR-T-09-05, BY MAILING A COPY THEREOF, POSTAGE PREPAID,
TO THE FOLLOWING:
AL YSON ANDERSON
ID UNIVERSAL SER FUND
1964 N 300 E
CENTERVILLE UT 84014
INLAND TELEPHONE CO
ATTN: JAMES BROOKES
PO BOX 171
ROSLYN W A 98941
LEONARD MAY
DIRECT COMMUNICATIONS
PO BOX 269
ROCKLAND ID 83271-0269
ALLEN HOOPES VP
SILVER STAR TELECOM
PO BOX 226
FREEDOM WY 83120
ODEEN REDMAN
ALBION TELEPHONE CO
dbaATC
PO BOX 98
ALBION ID 83311-0098
STEVE CHILD
MIDV ALE TELEPHONE CO
POBOX7
MIDVALE ID 83645-0007
MARK MARTELL
OFFICE MANAGER
RURAL TELEPHONE CO
892 W MADISON AVE
GLENNS FERRY ID 83623
RICHARD WIGGINS
CAMBRIDGE TELEPHONE CO
PO BOX 88
CAMBRIDGE ID 83610-0088
CERTIFICATE OF SERVICE