20110328Comments.pdf

WELDON B. STUTZMAN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 3283
riEc,.\\/i;tì
r'\ c.., "", c,.
Len ~~R 28 AM \\ t 20
Street Address for Express Mail:
472 W WASHINGTON
BOISE ID 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF AN INVESTIGATION )
OF AN APPROPRIATE CERTIFICATION ) CASE NO. GNR-T-ll-Ol
PROCESS FOR TELECOMMUNICATIONS )
COMPANIES THAT DO NOT PROVIDE BASIC )
LOCAL EXCHANGE SERVICE. ) COMMENTS OF THE
) COMMISSION STAFF
)
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through
its Attorney of record, Weldon B. Stutzman, Deputy Attorney General, and in response to the
Notice of Investigation and Notice of Modified Procedure issued in Order No. 32194 on
February 25,2011, submits the following comments.
BACKGROUND
On August 27, 2010, the Commission issued Order No. 32059 in Case No. TIM-T -08-01.
The Order denied a request by Time Warer Cable Information Services (Idaho), LLC for a
Certificate of Public Convenience and Necessity (CPCN) authorizing it to provide
telecommunications service in Idaho 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
STAFF COMMENTS 1 MARCH 28, 2011
Commission Rule 114, IDAPA 31.01.01.114. 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 Case No. TIM-T-08-01 indicated the Commission may have issued
CPCNs under Title 62, Idaho Code, to other wholesale telecommunications providers. The
Commission stated in its Order that, inasmuch as it may have previously issued CPCNs to
companies that 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 cariers providing basic local 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
requested information of all Idaho CLECs regarding the current count of access lines provided
by each company to residential customers in Idaho and to small business customers. Based on
the information provided, and referencing the Commission's instructions in Order No. 32059,
Staff notified CLECs that curently hold a CPCN but do not provide basic local exchange service
that the Commission might consider rescinding the company's CPCN. Company responses were
sent to Staff and the Commission Secreta.
A number of responses in favor of retaining a company's Certificate of Public
Convenience and Necessity were received from cariers. Some of the companies argued that a
certificate is a requirement ofNeuStar and NANPA for a carrier to obtain telephone numbers.
Another common concern was the companies' understanding that a certificate is necessar in
order to interconnect with Qwest (or other ILECs) under Sections 251 and 252 of the Federal
Telecommunications Act of 1996 ("Act"). One company pointed out that data services have
been declared to be telecommunications services at the federal leveL. Finally, a few other
arguments for the retention of a Certificate were: requirement for rights-of-ways, necessary for
governent telecommunications contracts and if a certificate were to be cancelled, missed
opportunities to compete should a company be required to reapply.
In light of the responses received from Staff s inquiry into access line use by CLECs, the
Commission determined to open a docket to investigate whether some sort of certifcation
STAFF COMMENTS 2 MARCH 28, 2011
process is appropriate for Title 62 telecommunications providers that do not provide basic local
exchange service. The Commission asked for written comments addressing the need or purpose
of a certification for telecommunication companies that provide services other than basic local
exchange service. Commenters were asked to address the following questions:
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 effciently by
CLECs and other telecommunications providers?
STAFF REVIEW
Staff s initial investigation began with a letter to all Idaho competitive local exchange
cariers (CLECs). Ninety-eight letters were sent out July 20, 2010, with a follow-up to those
companies that had not replied on October 1,2010. The letters requested that the Companies
provide access line counts for both residential and small businesses as well as the provision of
OCNs (Operating Company Number) codes. i Staff reviewed the Company information and also
looked at Secretary of State Company standings as well as Commission Annual Reporting,
regulatory assessments and Idaho Universal Service Fund reporting.
The responses fell into three distinct groups of competitive cariers in Idaho. The first
group was the usual competitive carrier providing basic local exchange services to residential
and small business customers. Members of this group are in compliance with the Commission's
rules, are curent with their regulatory fee assessments and in good standing with the Secretary of
State.
1 DCNs also known as company codes are assigned by NECA, The DCN is a four digit number used to identify
local telecommunications providers, It is used on Access Service Requests as well as in the NPA-NXX ordering
process. A telecommunications provider can have more than one DCN, if they offer different types of service or
operate in several different states. The main DCN number assigned to the provider is referred to as the Parent DCN.
STAFF COMMENTS 3 MARCH 28, 2011
Another group consisted of 29 companies that did not respond, had their notices retured
by the post offce as "addressee unown" or were not in good stading or cancelled with the
Secretary of State. Moreover, these companies have not paid regulatory fees and have become
an on-going concern for the Fiscal Staff of the Commission. Because these companies canot be
located and are not in compliance with Commission regulatory requirements, Staff believes a
separate docket wil need to be opened to revoke this group's certifications and price lists.
The final group of cariers became the focus of this case. On November 9, 2010, a final
letter was sent out to these 40 cariers. The letter explained that the Commission was conducting
a review of carrers that were not providing local exchange services as defined by Idaho Code.
The letter further stated that the Commission was prepared to take appropriate steps to verify that
Certificates were issued to carriers providing basic local exchange services. Staff received
immediate responses to its final letter. Some of these responses were fied with the
Commission's Secretary and some were sent directly to Staff. Of the 40 letters that were sent, 17
written responses strongly objected, six companies agreed to rescind and two had already
relinquished. Fifteen companies have not replied.
In response to Staffs letter, some companies objected to possible relinquishment of their
CPCN. Some of the recurring responses pointed out that a gap exists in the application of Idaho
law and implementing the rules relating to rights ofCLECs under Sections 251 and 252 of the
Act. As the Commission ac~owledged in its findings, the definition of a 'local exchange
carier' 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 oflocal exchange carriers. In Idaho, however, only 'basic local exchange cariers' obtain
a 'Certificate' from the Commission. Many carriers argued that processes relating to the Act
such as interconnection, obtaining telephone number resources and/or company codes (OCNs)
require some sort of 'certification' from the Idaho Commission authorizing cariers to provide
telecommunications services. Without it, the cariers argued, they are prevented from entering
the Idaho local exchange market.
As par of its response, one company 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 provide 'other' local
exchange and exchange access service as defined under the federal act." According to the FCC,
STAFF COMMENTS 4 MARCH 28, 2011
the definition of "telecommunications services" includes both retail and wholesale services.2
Another Company proposed a resolution for the Commission to bridge the gap between state and
federal law by adopting an alternative that is in place in Iowa. During Staffs investigation it
found that Colorado also had implemented a unique arangement that provided an alternative to
certification for those "other" companies.
Staff believes there is a disparty between what state commissions have traditionally done
with CPCNs and what the FCC defines or requires for services, creating a significant challenge
and conflct in the progression of telecommunications services. This conflct is not unique to
Idaho and has required states to alter, or adapt, their statutes, rules and guidelines so that
competition is not impeded in their states. The FCC could certinly assist the states by
reviewing its numbering and other rules that are more than a decade old. In the interim, the
ability of states to mesh the two jurisdictional issues has created some unique solutions to fuher
the goal of the Act.
IOWA PLAN
In Iowa, the Utilties Board established a separate "certification" process to be used by
local exchange cariers that do not meet the state CPCN requirement but satisfy the requirements
of the Act. The certificate is referred to as an "order in lieu of certificate." The Iowa Board
found that by establishing this separate certification process it was able to "exercise regulatory
flexibilty in a changing telecommunications environment.,,3 Staff believes that this would
comport with the Idaho Legislature's stated intent to encourage the development of competition
in the local exchange markets in Idaho and would provide "other" service providers the abilty to
obtain numbering resources, continue to interconnect with the incumbent local exchange carriers
and also obtain OCNs.
COLORADO PLAN
When petitioned by a VoIP services provider for a CPCN, the Colorado Commission
issued a Letter of Registration (LOR) to provide emerging competitive telecommunications
2 See Memorandum Opinion and Order, Time Warner Cable Requestfor Declaratory Ruling that Competitive
Local Exchange Carriers May Obtain Interconnection Under Section 251 of the Communications Act of 1934, as
Amended, to Provide Wholesale Telecommunications Services to VoIP Providers. FCC, DA 07-709, ii 123 State of Iowa Deparent of Commerce Utilties Board, Docket No. TCU-08- 7, page 2.
STAFF COMMENTS 5 MARCH 28, 2011
services along with a CPCN. The CPCN was for the provision of basic local exchange services
and the LOR addressed the "other" services the Company was going to provide. The Colorado
Commission found that "until such time as the Federal Communications Commission (FCC)
makes a determination on the classifcation of Voice over Internet Protocol (VoIP) services as
either a telecommunications service or an information service. . . this Commission wil grant a
temporary waiver on its own motion of the requirements. . ." The Colorado company indicated
that it was going to provide wholesale switching and interconnection VoIP services to cable
providers and similarly situated wholesale customers.
NUMBERING RESOURCES
Staff contacted the Pooling Administrator (PAS) at NeuStar to determine whether there
were exceptions to the requirement of a CPCN for number resource distribution. Staff also
contacted the North American Numbering Plan Administrator (NANP A) to obtain information
regarding Numbering Resource Utilzation/orecast Report (NRUF)4 reporting requirements for
a non-certificated company. According to the PAS, a CPCN is needed in order for a company to
receive numbers. When Staff inquired as to how the Iowa Order in Lieu of a Certificate is
handled, Staff was told that it depends upon each State's final order as to whether or not NeuStar
can accommodate the number resource request and FCC guidelines. In the case of Iowa, the
Order in Lieu of Certificate has worked thus far.
Ultimately, the FCC mandates that a company hold a CPCN or other authorization before
any telephone numbers are granted. In its First Report and Order the FCC ordered that, "cariers
must provide, as par of their applications for initial numbering resources, evidence (e.g. state
commission order or state certificate to operate as a carier) demonstrating that they are licensed
and/or certified to provide service in the area in which they seek numbering resource."s The
Order goes on to require contracts for unbundled network elements, network information
showing that equipment has been purchased and is operational or wil be in place to provide
4 NRUF is a semiannual report compiled by the North American Numbering Plan Administration, based on
information provided by the telecom industr in accordance with the FCC.
5 FCC 00-104, Para 97, Numbering Resource Optimization, Report and Order and Further Notice of Proposed
Rule Making
STAFF COMMENTS 6 MARCH 28, 2011
service within 60 days of the numbering resources activation date. The burden is on the carier
to demonstrate that it is both authorized and prepared to provide service before receiving initial
numbering resources. These requirements apply to all carers requesting numbering resources.
DELEGATED AUTHORITY
In March 2007, the Idaho Commission was granted Delegated Authority by the FCC to
implement number conservation. The Act allows the FCC to delegate to state commissions or
other entities jurisdiction over numbering. In the Numbering Resource Optimization Notice,6 the
FCC concluded that thousands-block number pooling is an important resource optimization
strategy, essential to extending the life of the North American Numbering Plan (NANP). Idaho
has a single area code (208) and by implementing mandatory pooling the Commission has
significantly extended the exhaust date. Staff is confident that because of the IPUC's Delegated
Authority, allowing "other" cariers the abilty to obtain numbers should not significantly
compromise the 208 area code given that all companies are required to provide
forecast/utilzation reports and pool numbers. When Idaho was granted Delegated Authority, the
exhaust date for the 208 Area Code was projected to be second quarter 2010. Since
implementing mandatory pooling, the exhaust date has been extended to the third quarer 2015
and has been consistently pushed out every quarter.
STAFF RECOMMENDATION
Staff believes that this Commission has the authority to establish an alternative to a
CPCN for "other" Telecommunications providers. Idaho Code § 62-615 explicitly grants the
Commission full power and authority to implement the Act. Moreover, the statute provides for
the Commission to promulgate rules and/or procedures necessary to carr out the duties
authorized or required by the Act. In addition, the Commission would be better able to monitor
and enforce number pooling requirements if all companies fie for certification with the
Commission. Therefore, Staff recommends the Commission:
6 See Numbering Resource Optimization Notice, 14 F.C.C. Rcd 10322, 10383-84(June 2, 1999).
STAFF COMMENTS 7 MARCH 28, 2011
1. Implement a procedure that grants an Order in Lieu of a Certificate similar to the
process in Iowa. Cariers that provide "other" telecommunications services and
receive an Order in Lieu of a Certificate must provide an OCN and maintain all
number reporting requirements.
2. For Companies that already have CPCNs, leave them in place and implement the new
Order in Lieu of a Certificate prospectively, if the Commission deems this an
appropriate solution.
3. Mandate that all cariers comply with the Commission's rules, pay all requisite
regulatory fees, maintain current company information and remain in good standing
with the Secretary of State.
4. Require wholesale companies that receive numbering resources to be responsible for
all NRUF reporting requirements using its own OCN. Should the numbers be given
to an end user of the wholesale company, the wholesale provider should stil be
responsible for all number resource management reporting requirements.
5. Open a docket, issue orders to show cause, and revoke the certificates and price lists
of the 29 CLECs that were unesponsive to Staff s investigation and are no longer
certified with the Secretar of State.
Respectfully submitted this .~t/ ll day of March 2011.
o~Weldon . Stutzman
Deputy Attorney General
Technical Staff: Carolee Hall
i:umisc:commentsgnrtl I.wsch comments
STAFF COMMENTS 8 MARCH 28, 2011