20110223Decision Memo.pdf

DECISION MEMORADUM
TO:COMMISSIONER KEMPTON
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
COMMISSION STAF
LEGAL
b'N~--t-- ti-crl
FROM: WELDON STUTZMA
DEPUTY ATTORNEY GENERA
DATE: FEBRUARY 18,2011
SUBJECT: INVESTIGATION OF AN APPROPRITE CERTIFICATION PROCESS
FOR COMPETITIVE LOCAL EXCHAGE CARERS
On August 27, 2010, the Commission issued Order No. 32059 in Case No. TIM-T-
08-01. The Order denied a request by Time Warner Cable Information Services (Idaho), LLC
for a Certificate of Public Convenience and Necessity (CPCN) authorizing it to provide
telecommunications service in Idaho. The Commission denied Time Warner's request for a
CPCN because the Company was not planing to offer "basic local exchange service" as defined
in Title 61, Idaho Code. The Commission stated in the Order that it no longer issues CPCNs to
telephone corporations under Idaho Code § 61-625, and instead it "registers" new competitive
local exchange cariers (CLECs) by issuing a "Certificate" under Commission Rule 114, IDAPA
31.01.01.1 14. Order No. 32059, p. 7. The Commission stated it used the certification process to
register and review applicants to provide telecommunications services pursuant to Rule 114. Id.
Evidence in the Time Warner case indicated the Commission previously issued
CPCNs under Title 62, Idaho Code, to at least two other wholesale telecommunications
providers. The Commission stated in its Order that, inasmuch as it may have previously issued
Title 62 CPCNs to wholesale providers who do not offer basic local exchange services, "the
Commission is committed to appropriately addressing the matter through an investigatory
process to verify that recipients of CPCNs are actually providing basic local exchange service to
customers in Idaho." Order No. 32059, p. 11. The Commission further stated that it "is taking
appropriate steps to verify that Title 62 Certificates are issued to carriers providing basic local
DECISION MEMORANDUM 1
exchange service," and that the Commission "intends to investigate all holders of Title 62
CPCNs to ensure they are providing basic local service." Order No. 32059, p. 12.
In response to the Commission's directive in Order No. 32059, the Commission Staff
began requesting information of all Idaho CLECs. The Staffs first request, dated July 20,2010,
requested information regarding the current count of access lines provided by each company to
residential customers in Idaho and to small business customers. Staff also requested information
regarding the current number of all other access lines used by the company to provide service to
other than residential or small business customers. Staff sent a similar second request on
October 1, 2010. Armed with the information obtained through the first two requests, Staff sent
a third letter to Idaho CLECs on November 9,2010. Referencing the Commission's instructions
in Order No. 32059, Staff notified CLECs that currently hold a CPCN but do not provide basic
local exchange service that the Commission might consider rescinding the company's CPCN.
Staff asked that, "if it is correct that (company L is not currently providing basic local exchange
service in Idaho, please indicate in a letter to the Commission Secretary whether (company L
voluntarily relinquishes its CPCN or whether the company has any objections to the
Commission's rescission of (company)'s Certificate." A copy of the Staffs November 9,2010,
letter is attached to this Memorandum.
In response to Staffs correspondence, eight CLECs agreed to the rescission of their
Certificates. However, more than twice that number strongly objected to possible relinquishment
of their CPCN. Several CLECs provided specific information regarding their need for a CPCN
from the Commission. For example, 360networks (USA), Inc. stated:
In order to enter into its Interconnection Agreements with Qwest, Verizon
and CenturyTel, 360networks was required by the incumbents to provide a
Certificate of authority from the Idaho Commission enabling 360networks to
do business as a competitive local exchange carrier (CLEC) in the state. An
Idaho specific CLEC certificate was also required for 360networks to obtain
company codes that allow it to exchange information with other
telecommunications providers for the proper routing and rating of
telecommunications traffc transmitted between 360networks and the rest of
the industry. Furthermore, 360networks would not have been able to obtain
numbering resources in Idaho if it had not obtained written authorization from
the Idaho Commission to provide local services here. The certification must
remain in effect for 360networks to continue to enjoy these CLEC privileges.
DECISION MEMORANDUM 2
Objection and explanation was also provided by Qwest Communications Company LLC (QCC).
QCC stated that its
Primary concern about maintaining its CPCN is based on the realities of the
marketplace. Revoking QCC's CPCN could harm QCC as a competitor and
could harm competition in, and outside, Idaho. If the QCC CPCN is revoked
QCC could be deemed no longer in compliance with the Networx contract
requirements, which could trigger action by the government services
administration to find QCC in default and terminate the contract. If that were
to occur, it would affect QCC's abilty to compete for federal government
business not only in Idaho but nationwide. Furthermore, if QCC's Networx
contract were terminated, the total number of telecommunications providers
under Networx would be reduced from three to two for all services, not just
basic local exchange service.
As part of its response, 360networks suggested that "rather than revoking a
company's certificate, the Commission consider offering a separate certification for those
carriers that do not provide 'retail basic local exchange' under state law but provide or offer to
provider other local exchange and exchange access service in Idaho under the federal act."
360networks explained that
A gap exists today between the application of Idaho law and the implementing
rules relating to rights of CLECs under Sections 251 and 252 of the
Telecommunications Act of 1996. As the Commission acknowledges, the
definition of a 'local exchange carrier' entitled to Section 251 and 252 rights
is broader than Idaho state law's definition of the providers of 'basic local
exchange service.' Under the Act, even those providers seeking to provide
only wholesale telecommunications services are entitled to interconnection
and other rights of local exchange carriers. In Idaho, however, only 'basic
local exchange carriers' obtain a 'Certificate' from the Commission.
Processes relating to the federal Act such as those noted above
(interconnection, numbers, company codes) require some sort of
'certification' from the Idaho Commission authorizing the CLECs to provide
local telecommunications services here. Without it, a CLEC is prevented
from entering the Idaho local exchange market. 360networks recommends
that the Commission close that gap and provide a written certification that
evidences a CLEC's ability to provide local telecommunications services in
Idaho under the federal Act. (footnote omitted.)
360networks suggested the Commission provide a sort of "written certification" or "order in lieu
of certificate," rather than a CPCN, to solve the problem of CLECs that need Commission
approval but do not provide basic local exchange service.
DECISION MEMORANDUM 3
In light of the responses received from Staffs inquiry into access line use by CLECs,
Staff recommends the Commission take no further action to revoke CPCNs and instead open a
docket to investigate whether some sort of certification process is appropriate for Title 62
telecommunications providers in Idaho, as recommended by 360networks. Notice of the
investigation should set forth questions for interested parties to address in wrtten comments as
follows:
1. Is a certification by the Commission necessary for companies providing
telecommunications services but not basic local exchange service?
2. If some sort of Commission certification is needed, what form or
designation might it take?
3. What legal authority does the Commission have to issue certification that
is not a Certificate of Public Convenience and Necessity?
4. What can the Commission do to ensure numbers are used efficiently by
CLECs and other telecommunications providers?
COMMISSION DECISION
Should the Commission open a docket to investigate whether some sort of
certification process is appropriate for Title 62 telecommunications providers in Idaho that do
not provide basic local exchange service?
Weldon B. Stutzman
Deputy Attorney General
bls/M:CLEC Certification _ ws
DECISION MEMORANDUM 4
.'
November 9,2010
Dear (telecommuncations company):
Previously (company name) requested and obtained a Certificate of Public Convenience and
Necessity (CPCN or Certificate) from the Idaho Public Utilties Commission. The Commission
issues CPCNs to competitive local exchange cariers (CLECs) seeking to provide local exchange
services in Idaho pursuant to Title 62, Idaho Code. A Title 62 CPCN obtained by a CLEC does
not confer a right to a specific service territory, and instead is the process used by the
Commission "to register and review applications to provide local telecommunication services."
IDAPA 31.01.01.114.
It came to the Commission's attention in a recent case that it may have issued Certificates to
companies that are not providing local telecommunications services. Specifically, the
Commission noted that at least two Certificates may have been issued "to wholesale
telecommunications providers that may not curently offer basic local exchange services in
Idaho." The Commission stated its commitment to "appropriately addressing the matter through
an investigatory process to verify that recipients of CPCNs àre actually providing basic local
exchange service to customers in Idaho." Order No. 32059, Case No. TIM-T-08-01, issued
August 27, 2010, p. 11. The Commission reiterated its intention "to investigate all holders of
Title 62 CPCNs to ensure they are providing basic local service." ¡d, p. 12.
Pursuant to the Commission's directive in Order No. 32059, Commission Staff obtaned
information from CLECs that curently have a CPCN issued by the Commission. Based on the
information it received, Staff believes (company name) curently holds a Certificate issued by
the Commission, and does not curently provide basic local exchange service in Idaho. If you
believe this information is incorrect, please immediately provide information to verify that
(company) is providing basic local exchange service in Idaho.
If it is correct that (company) is not curently providing basic local exchange service in Idaho,
please indicate in a letter to the Commission Secretary whether (company) voluntarily
relinquishes its CPCN, or whether the company has any objections to the Commission's
rescission of (company)'s Certificate. Where appropriate, Commission Staff wil ask the
Commission to initiate a formal process to rescind CPCNs issued to companies not curently
providing basic local exchange service in Idaho. Because a Certificate relates to local basic
.c
telecommunications service, revocation does not affect a company's abilty to perform its non-
retail business activities.
Please respond to this letter by November 29, 2010. Thank you for your prompt attention to
this request.
Sincerely,
Carolee Hall
Telecom Analyst
L:CPCN_chall