20181004Idaho Telecom Alliance Response.pdf

Cvxrnn A. Meuu-o PLLC
8385 Vl Emenalo Srneer . Borse, Ionno 83704
(2OB) 57 7 -57 47 . cam@ camlawidaho.com
October 4,2018
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Via Hand Delivery
Ms. Diane Hanian, Commission Secretary
ldaho Public Utilities Commission
472 W. Washington Street
Boise, lD 83720-0074
RE:
IPUC File No
Dear Ms. Hanian:
2017 Review of the ldaho Universal Service Fund
Response to Staff's Second Summary and Report
GNR-T-17-05
Enclosed for filing are the original and seven copies of the ldaho Telecom Alliance's
Response to Staff's Second Summary and Report in the above-referenced matter.
Thank you for your assistance in this matter. lf you have any questions regarding this
filing, please feelfree to contact me.
Sincerely,
Cynthia A. Meli
Enclosures
Cynthia A. Melillo (lSB # 5819)
Cynthia A. Melillo PLLC
8385 W. Emerald Street
Boise, lD 83704
Telephone: [phone]
Email: [e-mail]
RECEIVED
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Attorneys for ldaho Telecom Alliance
BEFORE THE
IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE 2017 REVIEW OF
THE IDAHO UNIVERSAL SERVICE FUND
CASE NO. GNR-T-17-05
RESPONSE OF THE IDAHO TELECOM
ALLIANCE TO STAFF'S SECOND
SUMMARY AND REPORT
The ldaho Telecom Alliance ("lTA"), by and through its attorney of record, Cynthia A.
Melillo PLLC, hereby files this Response to Staff's Second Summary and Report in Case No.
GNR-T-17-05, dated September 7,2018 ("Staff's Second Report"). ITA is a state telephone
association, and its members include both commercial companies and cooperatives. The thirteen
(13) members of ITA provide advanced telecommunications and broadband services in rural
ldaho. Allthe members (or affiliates of the members) are designated Eligible Telecommunications
Carriers ('ETC") in ldaho. Eight of the members receive funding from the ldaho Universal Service
Fund and claim a direct and substantial interest in this proceeding.
On January 17 ,2018, the ldaho Public Utilities Commission (the "Commission") convened
a workshop for interested parties and stakeholders in the ldaho Universal Service Fund ("lUSF")
to discuss how the IUSF relates to the current legal and regulatory framework, the evolving
telecommunications landscape, and universal telecommunications services in ldaho generally.
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1RESPONSE OF IDAHO TELECOM ALLIANCE _ GNR.T-17-05
Option 2: Seek statutory revisions. Specifically, approach the legislature about
updating and revising the statute. These changes would most likely include adding
assessments on, and expanding disbursements to include, allqualifying providers,
so long as they are serving unserved and underserved areas according to the
amended statute.
Staff, in Staff's Second Report, has asked interested parties to provide proposed
legislative changes for consideration at an informal settlement meeting to be held on October 17,
2018.
!TA's Response
Although the ITA did not file response comments to Staff's First Report, ITA is in
agreement with the other stakeholders that Option 2, as set forth above, is the proper course of
action, and ITA desires to be a part of and participate in any workshops or settlement meetings
scheduled for the purpose of coming to consensus on proposed legislative changes. However,
ITA does not believe that the stakeholders have enough information at this time to provide specific
legislative changes. As Staff is aware, policy directives are dependent on costs of implementing
such policy changes. For instance, the costs of legislative changes that would fund the ldaho
Universal Service Fund ("IUSF") through the State's general fund, as in Washington, are vastly
2RESPONSE OF IDAHO TELECOM ALLIANCE _ GNR-T-17-05
Following the workshop, interested parties submitted position papers. ln lieu of holding a second
workshop, Staff issued its Staff Summary and Report dated April4, 2018 ("First Staff Report"). ln
the First Staff Report, Staff provided three potential outcomes based upon the position papers.
Several stakeholder parties provided response comments to the First Staff Report, and Staff
concluded that most responses were in line with Staff's Option 2 as set forth in the First Staff
Report:
different than the costs of legislative changes that expand the contribution base to the IUSF, as
in Utah. Assuming the ldaho legislature would be more inclined to approve legislation that was
more like Utah's legislation, there are still many questions and details regarding cost issues and
financial analysis. Drafting legislative changes without all the information would not be productive.
ITA respectfully requests staff assistance in providing input on estimated costs of implementing
the various models used by ldaho's neighboring states.
Moreover, while there is consensus among the stakeholders that Staff's Option 2 is the
best option, the stakeholders have had no opportunity to work together to come to consensus
around any of the major issues or details of the proposed legislative changes. ITA believes that
the next workshops/settlement meetings should be used as a means for the stakeholders to reach
consensus around the principles for the proposed legislative changes, and then the stakeholders
and Staff can work together on specific language around such principles.
ITA's Principle Positions
Even though ITA is not proposing specific legislative language at this time, ITA has a
framework around which it would like to construct legislative change. ln general, ITA believes
that any device or service that connects to the Public Switched Telephone Network ('PSTN')
should be assessed a charge, and any company with carrier of last resort obligations providing a
device or service that connects to the PSTN in a high cost area should be supported, whether
with recurring distributions from the fund or a onetime distribution for costs incurred to serve a
high cost area. ln addition, ITA believes that companies othenrvise eligible to receive support
should be supported for providing broadband internet service to high cost areas.
3RESPONSE OF IDAHO TELECOM ALLIANCE - GNR-T-17-05
I ncreasing the Contribution Base.'
The IUSF was established to maintain "the universal availability of local exchange
service at reasonable rates and to promote the availability of message telecommunications
service (MTS) at reasonably comparable prices throughout the state of ldaho." ldaho Code
S 62-610. The IUSF is funded by a statewide per line end user surcharge on local exchange
service and a cents-per-minute surcharge on MTS and WATS type services. ldaho Code S 62-
610. The concept behind the surcharge was to support high cost rural areas with low cost
urban revenues by implementation of a uniform charge. Given the changing
telecommunications landscape, a charge imposed solely on telephone lines is no longer
uniform. There are now ways to connect to the PSTN other than by an "access line to
residential and small business customers with the associated transmission of two-way interactive
switched voice communication within a local exchange calling area." ln order for the surcharge,
and thus the burden to support rural connectivity, to be uniform and competitively neutral, it
must be applied to access line connectivity and the functional equivalent of two-way
interactive switched voice communication from an end user to the PSTN. This would increase
the contributors to the IUSF by including wireless and VolP connections, and in turn should result
in a decrease in the amount of the surcharge while still meeting the funding needs of the
IUSF.
Distributions from the IUSF:
Eliqible Recipients
ITA continues to support the regular distribution of funds from the IUSF to eligible
telecommunications carriers. ln addition, ITA acknowledges that because of the changing
landscape of telecommunications services, telecommunications carriers with carrier of last resort
4RESPONSE OF IDAHO TELECOM ALLIANCE - GNR-T-17-05
obligations in rural high cost areas cannot always subsidize the costs of providing services in the
rural areas from the profits made in providing services to urban areas. Therefore, ITA supports
the one-time distribution of funds to telecommunications carriers with carriers of last resort
obligations not currently receiving support for providing services in rural high cost areas within the
areas in which they have carrier of last resort obligations. lf such distributions are allowed in the
new legislation, in order to be eligible to receive such support, the telecommunications carriers
must meet criteria similar to that met by those telecommunications carriers currently eligible for
support - namely, the Commission must evaluate the income/revenue requirement for such carrier
against the cost of providing the high cost service.
Services Elioible for Support:
Currently funds are available to eligible telecommunications carriers providing Basic Local
Exchange Service (access lines). ITA believes that funds should be available for eligible
telecommunications carriers to deploy and manage networks capable of providing (i) access
lines; (ii) the functional equivalent of access lines; and (iii) broadband internet access service.
ln summary, ITA will support legislative changes that will broaden the contribution base to
the IUSF by imposing surcharges on access lines andthe functional equivalent of access lines -
including wireless and VolP. ITA acknowledges that details will have to be worked out regarding
how surcharges are to be assessed against certain such services (like prepaid wireless services).
ITA also acknowledges that these details, while difficult, are capable of resolution and should not
be an impediment to implementing these reforms.
Summary
5RESPONSE OF IDAHO TELECOM ALLIANCE _ GNR-T-17-05
ITA will further support legislative changes that allow for one-time distributions to
telecommunications carriers not currently receiving support if such telecommunications carriers
meet the eligibility requirements and can demonstrate the financial need for such support.
Finally, ITA will support legislative changes allowing for funds to be available for eligible
telecommunications carriers to deploy and manage networks capable of providing (i) access
lines; (ii) the functional equivalent of access lines; and (iii) broadband internet access service.
ITA is prepared to participate in workshops/settlement meetings to work through the
details of such legislative changes.
6RESPONSE OF IDAHO TELECOM ALLIANCE - GNR-T-17-05
ITA respectfully submits this Response on this 4th day of October 2018.
A. Mel
CYNTHIA A.O PLLC
Attorney for ldaho Telecom Alliance
7RESPONSE OF IDAHO TELECOM ALLIANCE - GNR-T-17-05
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 4th DAY OF OCTOBER,2018, SERVED THE
FOREGOING RESPONSE OF THE IDAHO TELECOM ALLIANCE TO CALL FOR LEGISLATIVE
CHANGES, IN CASE NO. GNR-T-17-05, BY EMAILING A COPY THEREOF TO THE
FOLLOWING:
E-mailList: Alvson [e-mail]
James.farr@centurvlink. com
John mtecom.com
[e-mail]
krm@q ivenspu rslev. com
[e-mail]
[e-mail]
mestess@apu bl icpol icv. com
[e-mail]
mam lverstar.net
bpatterson@citvofammon. us
[e-mail]
iohn. sisemore@att. com
ron@williamsbradburv. com
i harrison@idahocities. oro
sqrigs@idcou nties. oro
i on. barrett@ i rp. idaho. oov
ia A. tVlelillo
8RESPONSE OF IDAHO TELECOM ALLIANCE _ GNR-T-17-05