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Home My WebLink About971006.docx October 6, 1997 Eileen Benner Government Affairs Asst. Vice President Idaho 6120 Castle Dr. Boise, ID 83703 Dear Eileen: I thought I would provide an update of the status of the discussions in the Commission’s review of the emergency petition filed by MCI and AT&T regarding payphone subsidies (Case No. GNR-T-97-5). There has been a considerable amount of data exchanged and a number of conversations between myself and each of the parties, but as most of this has been informal, I thought it best to summarize my understanding of the current status of the discussions. In response to the data requests of Staff, MCI, AT&T, U S WEST, GTE and most other utilities provided those parties that had signed the necessary agreements with proprietary information. My analysis of that information indicated the payphone operations of all Idaho LECs were either self supporting, or any deficit that was present was so small that changes to access charges were not appropriate at this time. I informally told MCI and AT&T of my findings and they asked me to look at a model developed by MCI, which they claimed provided a more thorough analysis than I had conducted. I was provided a copy of the model in August, and based upon the analysis for U S WEST included with the model, again concluded no subsidy existed. In early September, I provided U S WEST, MCI and AT&T a copy of a draft report which included my conclusion that no changes to access charges were appropriate at this time. MCI promptly responded with a revised version of the model, which included significantly greater detail. This model did identify a subsidy for U S WEST. The basic calculations included in the model did not vary considerably from that of my own analysis, but this model used data from ARMIS reports as inputs, rather than the data provided directly by U S WEST. The ARMIS data differed significantly from the U S WEST data in a number of key elements, which is the primary reason for the different conclusion. Eileen Benner October 6, 1997 Page 2 With MCI’s permission I provided U S WEST with a copy of the analysis, including the ARMIS input data, and requested a response as to why the data was different between the two sources and whether the conclusion was accurate. One of the more significant discrepancies was the number of company-owned payphones. U S WEST informally indicated a possible explanation may be the ARMIS data included semi-public pay phones, while the data provided by U S WEST did not. U S WEST requested an opportunity to look into it more thoroughly and indicated they would get back to me. A few days later, U S WEST indicated discussions/negotiations were being conducted between AT&T/MCI and U S WEST on a corporate-wide level (14 states), and that U S WEST was in the process of preparing forward-looking cost studies for those discussions. They preferred to wait until those numbers were available before responding to my request so that the numbers provided to Idaho could be consistent with those provided to the 14-state discussions. These numbers were expected to be available by mid-October. U S WEST indicated these discussions might result in a corporate-wide settlement of this issue. In light of these discussions, I indicated a willingness to wait for the corporate-wide numbers. I also indicated that if the parties were trying to resolve this dispute among themselves, I wanted to give those discussions an opportunity to succeed. I suggested it may be appropriate to put the Idaho proceedings on the back burner until the corporate-wide discussions are concluded, one way or the other. As the Commission’s orders approving the April 15 payphone deregulation tariffs left open the possibility of a refund of any overpayments since April 15, should the Commission ultimately find that further rate adjustments were appropriate, I believe the risk of jeopardizing the corporate-wide negotiations exceeds the risk of a delay in this matter. Therefore, unless I am presented with reasons for proceeding otherwise, I intend to defer any further action on this matter for 45 to 60 days, or until I hear the negotiations have concluded. I hope this update is useful. Please let me know if my understanding of any of the actions in this case needs to be revised. Sincerely, Wayne Hart Telecommunications Analyst WH:gdk:i:wpfiles/utelcomm/payslow.ltr October 6, 1997 Greg Harwood Davis, Wright, Tremaine 999 Main St. Suite 911 Boise, ID 83702 Dear Greg: I thought I would provide an update of the status of the discussions in the Commission’s review of the emergency petition filed by MCI and AT&T regarding payphone subsidies (Case No. GNR-T-97-5). There has been a considerable amount of data exchanged and a number of conversations between myself and each of the parties, but as most of this has been informal, I thought it best to summarize my understanding of the current status of the discussions. In response to the data requests of Staff, MCI, AT&T, U S WEST, GTE and most other utilities provided those parties that had signed the necessary agreements with proprietary information. My analysis of that information indicated the payphone operations of all Idaho LECs were either self supporting, or any deficit that was present was so small that changes to access charges were not appropriate at this time. I informally told MCI and AT&T of my findings and they asked me to look at a model developed by MCI, which they claimed provided a more thorough analysis than I had conducted. I was provided a copy of the model in August, and based upon the analysis for U S WEST included with the model, again concluded no subsidy existed. In early September, I provided U S WEST, MCI and AT&T a copy of a draft report which included my conclusion that no changes to access charges were appropriate at this time. MCI promptly responded with a revised version of the model, which included significantly greater detail. This model did identify a subsidy for U S WEST. The basic calculations included in the model did not vary considerably from that of my own analysis, but this model used data from ARMIS reports as inputs, rather than the data provided directly by U S WEST. The ARMIS data differed significantly from the U S WEST data in a number of key elements, which is the primary reason for the different conclusion. Greg Harwood October 6, 1997 Page 2 With MCI’s permission I provided U S WEST with a copy of the analysis, including the ARMIS input data, and requested a response as to why the data was different between the two sources and whether the conclusion was accurate. One of the more significant discrepancies was the number of company-owned payphones. U S WEST informally indicated a possible explanation may be the ARMIS data included semi-public pay phones, while the data provided by U S WEST did not. U S WEST requested an opportunity to look into it more thoroughly and indicated they would get back to me. A few days later, U S WEST indicated discussions/negotiations were being conducted between AT&T/MCI and U S WEST on a corporate-wide level (14 states), and that U S WEST was in the process of preparing forward-looking cost studies for those discussions. They preferred to wait until those numbers were available before responding to my request so that the numbers provided to Idaho could be consistent with those provided to the 14-state discussions. These numbers were expected to be available by mid-October. U S WEST indicated these discussions might result in a corporate-wide settlement of this issue. In light of these discussions, I indicated a willingness to wait for the corporate-wide numbers. I also indicated that if the parties were trying to resolve this dispute among themselves, I wanted to give those discussions an opportunity to succeed. I suggested it may be appropriate to put the Idaho proceedings on the back burner until the corporate-wide discussions are concluded, one way or the other. As the Commission’s orders approving the April 15 payphone deregulation tariffs left open the possibility of a refund of any overpayments since April 15, should the Commission ultimately find that further rate adjustments were appropriate, I believe the risk of jeopardizing the corporate-wide negotiations exceeds the risk of a delay in this matter. Therefore, unless I am presented with reasons for proceeding otherwise, I intend to defer any further action on this matter for 45 to 60 days, or until I hear the negotiations have concluded. I hope this update is useful. Please let me know if my understanding of any of the actions in this case needs to be revised. Sincerely, Wayne Hart Telecommunications Analyst WH:gdk:i:wpfiles/utelcomm/payslow.ltr October 6, 1997 Dean J. Miller, P.A. Attorney at Law P.O. Box 2564 Boise, ID 83701-2564 Dear Joe: I thought I would provide an update of the status of the discussions in the Commission’s review of the emergency petition filed by MCI and AT&T regarding payphone subsidies (Case No. GNR-T-97-5). There has been a considerable amount of data exchanged and a number of conversations between myself and each of the parties, but as most of this has been informal, I thought it best to summarize my understanding of the current status of the discussions. In response to the data requests of Staff, MCI, AT&T, U S WEST, GTE and most other utilities provided those parties that had signed the necessary agreements with proprietary information. My analysis of that information indicated the payphone operations of all Idaho LECs were either self supporting, or any deficit that was present was so small that changes to access charges were not appropriate at this time. I informally told MCI and AT&T of my findings and they asked me to look at a model developed by MCI, which they claimed provided a more thorough analysis than I had conducted. I was provided a copy of the model in August, and based upon the analysis for U S WEST included with the model, again concluded no subsidy existed. In early September, I provided U S WEST, MCI and AT&T a copy of a draft report which included my conclusion that no changes to access charges were appropriate at this time. MCI promptly responded with a revised version of the model, which included significantly greater detail. This model did identify a subsidy for U S WEST. The basic calculations included in the model did not vary considerably from that of my own analysis, but this model used data from ARMIS reports as inputs, rather than the data provided directly by U S WEST. The ARMIS data differed significantly from the U S WEST data in a number of key elements, which is the primary reason for the different conclusion. Dean J. Miller October 6, 1997 Page 2 With MCI’s permission I provided U S WEST with a copy of the analysis, including the ARMIS input data, and requested a response as to why the data was different between the two sources and whether the conclusion was accurate. One of the more significant discrepancies was the number of company-owned payphones. U S WEST informally indicated a possible explanation may be the ARMIS data included semi-public pay phones, while the data provided by U S WEST did not. U S WEST requested an opportunity to look into it more thoroughly and indicated they would get back to me. A few days later, U S WEST indicated discussions/negotiations were being conducted between AT&T/MCI and U S WEST on a corporate-wide level (14 states), and that U S WEST was in the process of preparing forward-looking cost studies for those discussions. They preferred to wait until those numbers were available before responding to my request so that the numbers provided to Idaho could be consistent with those provided to the 14-state discussions. These numbers were expected to be available by mid-October. U S WEST indicated these discussions might result in a corporate-wide settlement of this issue. In light of these discussions, I indicated a willingness to wait for the corporate-wide numbers. I also indicated that if the parties were trying to resolve this dispute among themselves, I wanted to give those discussions an opportunity to succeed. I suggested it may be appropriate to put the Idaho proceedings on the back burner until the corporate-wide discussions are concluded, one way or the other. As the Commission’s orders approving the April 15 payphone deregulation tariffs left open the possibility of a refund of any overpayments since April 15, should the Commission ultimately find that further rate adjustments were appropriate, I believe the risk of jeopardizing the corporate-wide negotiations exceeds the risk of a delay in this matter. Therefore, unless I am presented with reasons for proceeding otherwise, I intend to defer any further action on this matter for 45 to 60 days, or until I hear the negotiations have concluded. I hope this update is useful. Please let me know if my understanding of any of the actions in this case needs to be revised. Sincerely, Wayne Hart Telecommunications Analyst WH:gdk:i:wpfiles/utelcomm/payslow.ltr October 6, 1997 Tim Gates MCI Western Public Policy 707 17th Street Suite 3600 Denver, CO 80202 Dear Mr. Gates: I thought I would provide an update of the status of the discussions in the Commission’s review of the emergency petition filed by MCI and AT&T regarding payphone subsidies (Case No. GNR-T-97-5). There has been a considerable amount of data exchanged and a number of conversations between myself and each of the parties, but as most of this has been informal, I thought it best to summarize my understanding of the current status of the discussions. In response to the data requests of Staff, MCI, AT&T, U S WEST, GTE and most other utilities provided those parties that had signed the necessary agreements with proprietary information. My analysis of that information indicated the payphone operations of all Idaho LECs were either self supporting, or any deficit that was present was so small that changes to access charges were not appropriate at this time. I informally told MCI and AT&T of my findings and they asked me to look at a model developed by MCI, which they claimed provided a more thorough analysis than I had conducted. I was provided a copy of the model in August, and based upon the analysis for U S WEST included with the model, again concluded no subsidy existed. In early September, I provided U S WEST, MCI and AT&T a copy of a draft report which included my conclusion that no changes to access charges were appropriate at this time. MCI promptly responded with a revised version of the model, which included significantly greater detail. This model did identify a subsidy for U S WEST. The basic calculations included in the model did not vary considerably from that of my own analysis, but this model used data from ARMIS reports as inputs, rather than the data provided directly by U S WEST. The ARMIS data differed significantly from the U S WEST data in a number of key elements, which is the primary reason for the different conclusion. Tim Gates October 6, 1997 Page 2 With MCI’s permission I provided U S WEST with a copy of the analysis, including the ARMIS input data, and requested a response as to why the data was different between the two sources and whether the conclusion was accurate. One of the more significant discrepancies was the number of company-owned payphones. U S WEST informally indicated a possible explanation may be the ARMIS data included semi-public pay phones, while the data provided by U S WEST did not. U S WEST requested an opportunity to look into it more thoroughly and indicated they would get back to me. A few days later, U S WEST indicated discussions/negotiations were being conducted between AT&T/MCI and U S WEST on a corporate-wide level (14 states), and that U S WEST was in the process of preparing forward-looking cost studies for those discussions. They preferred to wait until those numbers were available before responding to my request so that the numbers provided to Idaho could be consistent with those provided to the 14-state discussions. These numbers were expected to be available by mid-October. U S WEST indicated these discussions might result in a corporate-wide settlement of this issue. In light of these discussions, I indicated a willingness to wait for the corporate-wide numbers. I also indicated that if the parties were trying to resolve this dispute among themselves, I wanted to give those discussions an opportunity to succeed. I suggested it may be appropriate to put the Idaho proceedings on the back burner until the corporate-wide discussions are concluded, one way or the other. As the Commission’s orders approving the April 15 payphone deregulation tariffs left open the possibility of a refund of any overpayments since April 15, should the Commission ultimately find that further rate adjustments were appropriate, I believe the risk of jeopardizing the corporate-wide negotiations exceeds the risk of a delay in this matter. Therefore, unless I am presented with reasons for proceeding otherwise, I intend to defer any further action on this matter for 45 to 60 days, or until I hear the negotiations have concluded. I hope this update is useful. Please let me know if my understanding of any of the actions in this case needs to be revised. Sincerely, Wayne Hart Telecommunications Analyst WH:gdk:i:wpfiles/utelcomm/payslow.ltr October 6, 1997 John Souba U S WEST Communications, Inc. P.O. Box 7888 Boise, ID 83723 Dear John: I thought I would provide an update of the status of the discussions in the Commission’s review of the emergency petition filed by MCI and AT&T regarding payphone subsidies (Case No. GNR-T-97-5). There has been a considerable amount of data exchanged and a number of conversations between myself and each of the parties, but as most of this has been informal, I thought it best to summarize my understanding of the current status of the discussions. In response to the data requests of Staff, MCI, AT&T, U S WEST, GTE and most other utilities provided those parties that had signed the necessary agreements with proprietary information. My analysis of that information indicated the payphone operations of all Idaho LECs were either self supporting, or any deficit that was present was so small that changes to access charges were not appropriate at this time. I informally told MCI and AT&T of my findings and they asked me to look at a model developed by MCI, which they claimed provided a more thorough analysis than I had conducted. I was provided a copy of the model in August, and based upon the analysis for U S WEST included with the model, again concluded no subsidy existed. In early September, I provided U S WEST, MCI and AT&T a copy of a draft report which included my conclusion that no changes to access charges were appropriate at this time. MCI promptly responded with a revised version of the model, which included significantly greater detail. This model did identify a subsidy for U S WEST. The basic calculations included in the model did not vary considerably from that of my own analysis, but this model used data from ARMIS reports as inputs, rather than the data provided directly by U S WEST. The ARMIS data differed significantly from the U S WEST data in a number of key elements, which is the primary reason for the different conclusion. John Souba October 6, 1997 Page 2 With MCI’s permission I provided U S WEST with a copy of the analysis, including the ARMIS input data, and requested a response as to why the data was different between the two sources and whether the conclusion was accurate. One of the more significant discrepancies was the number of company-owned payphones. U S WEST informally indicated a possible explanation may be the ARMIS data included semi-public pay phones, while the data provided by U S WEST did not. U S WEST requested an opportunity to look into it more thoroughly and indicated they would get back to me. A few days later, U S WEST indicated discussions/negotiations were being conducted between AT&T/MCI and U S WEST on a corporate-wide level (14 states), and that U S WEST was in the process of preparing forward-looking cost studies for those discussions. They preferred to wait until those numbers were available before responding to my request so that the numbers provided to Idaho could be consistent with those provided to the 14-state discussions. These numbers were expected to be available by mid-October. U S WEST indicated these discussions might result in a corporate-wide settlement of this issue. In light of these discussions, I indicated a willingness to wait for the corporate-wide numbers. I also indicated that if the parties were trying to resolve this dispute among themselves, I wanted to give those discussions an opportunity to succeed. I suggested it may be appropriate to put the Idaho proceedings on the back burner until the corporate-wide discussions are concluded, one way or the other. As the Commission’s orders approving the April 15 payphone deregulation tariffs left open the possibility of a refund of any overpayments since April 15, should the Commission ultimately find that further rate adjustments were appropriate, I believe the risk of jeopardizing the corporate-wide negotiations exceeds the risk of a delay in this matter. Therefore, unless I am presented with reasons for proceeding otherwise, I intend to defer any further action on this matter for 45 to 60 days, or until I hear the negotiations have concluded. I hope this update is useful. Please let me know if my understanding of any of the actions in this case needs to be revised. Sincerely, Wayne Hart Telecommunications Analyst WH:gdk:i:wpfiles/utelcomm/payslow.ltr October 6, 1997 Mary S. Hobson Stoel, Rives LLP Suite 1900 101 S. Capitol Blvd. Boise, ID 83702-5958 Dear Mary: I thought I would provide an update of the status of the discussions in the Commission’s review of the emergency petition filed by MCI and AT&T regarding payphone subsidies (Case No. GNR-T-97-5). There has been a considerable amount of data exchanged and a number of conversations between myself and each of the parties, but as most of this has been informal, I thought it best to summarize my understanding of the current status of the discussions. In response to the data requests of Staff, MCI, AT&T, U S WEST, GTE and most other utilities provided those parties that had signed the necessary agreements with proprietary information. My analysis of that information indicated the payphone operations of all Idaho LECs were either self supporting, or any deficit that was present was so small that changes to access charges were not appropriate at this time. I informally told MCI and AT&T of my findings and they asked me to look at a model developed by MCI, which they claimed provided a more thorough analysis than I had conducted. I was provided a copy of the model in August, and based upon the analysis for U S WEST included with the model, again concluded no subsidy existed. In early September, I provided U S WEST, MCI and AT&T a copy of a draft report which included my conclusion that no changes to access charges were appropriate at this time. MCI promptly responded with a revised version of the model, which included significantly greater detail. This model did identify a subsidy for U S WEST. The basic calculations included in the model did not vary considerably from that of my own analysis, but this model used data from ARMIS reports as inputs, rather than the data provided directly by U S WEST. The ARMIS data differed significantly from the U S WEST data in a number of key elements, which is the primary reason for the different conclusion. Mary S. Hobson October 6, 1997 Page 2 With MCI’s permission I provided U S WEST with a copy of the analysis, including the ARMIS input data, and requested a response as to why the data was different between the two sources and whether the conclusion was accurate. One of the more significant discrepancies was the number of company-owned payphones. U S WEST informally indicated a possible explanation may be the ARMIS data included semi-public pay phones, while the data provided by U S WEST did not. U S WEST requested an opportunity to look into it more thoroughly and indicated they would get back to me. A few days later, U S WEST indicated discussions/negotiations were being conducted between AT&T/MCI and U S WEST on a corporate-wide level (14 states), and that U S WEST was in the process of preparing forward-looking cost studies for those discussions. They preferred to wait until those numbers were available before responding to my request so that the numbers provided to Idaho could be consistent with those provided to the 14-state discussions. These numbers were expected to be available by mid-October. U S WEST indicated these discussions might result in a corporate-wide settlement of this issue. In light of these discussions, I indicated a willingness to wait for the corporate-wide numbers. I also indicated that if the parties were trying to resolve this dispute among themselves, I wanted to give those discussions an opportunity to succeed. I suggested it may be appropriate to put the Idaho proceedings on the back burner until the corporate-wide discussions are concluded, one way or the other. As the Commission’s orders approving the April 15 payphone deregulation tariffs left open the possibility of a refund of any overpayments since April 15, should the Commission ultimately find that further rate adjustments were appropriate, I believe the risk of jeopardizing the corporate-wide negotiations exceeds the risk of a delay in this matter. Therefore, unless I am presented with reasons for proceeding otherwise, I intend to defer any further action on this matter for 45 to 60 days, or until I hear the negotiations have concluded. I hope this update is useful. Please let me know if my understanding of any of the actions in this case needs to be revised. Sincerely, Wayne Hart Telecommunications Analyst WH:gdk:i:wpfiles/utelcomm/payslow.ltr October 6, 1997 Fred Logan State Mgr-Regulatory/Govt. Affairs GTE Northwest, Inc. P.O. Box 1100 Beaverton, OR 97006 Dear Fred: I thought I would provide an update of the status of the discussions in the Commission’s review of the emergency petition filed by MCI and AT&T regarding payphone subsidies (Case No. GNR-T-97-5). There has been a considerable amount of data exchanged and a number of conversations between myself and each of the parties, but as most of this has been informal, I thought it best to summarize my understanding of the current status of the discussions. In response to the data requests of Staff, MCI, AT&T, U S WEST, GTE and most other utilities provided those parties that had signed the necessary agreements with proprietary information. My analysis of that information indicated the payphone operations of all Idaho LECs were either self supporting, or any deficit that was present was so small that changes to access charges were not appropriate at this time. I informally told MCI and AT&T of my findings and they asked me to look at a model developed by MCI, which they claimed provided a more thorough analysis than I had conducted. I was provided a copy of the model in August, and based upon the analysis for U S WEST included with the model, again concluded no subsidy existed. In early September, I provided U S WEST, MCI and AT&T a copy of a draft report which included my conclusion that no changes to access charges were appropriate at this time. MCI promptly responded with a revised version of the model, which included significantly greater detail. This model did identify a subsidy for U S WEST. The basic calculations included in the model did not vary considerably from that of my own analysis, but this model used data from ARMIS reports as inputs, rather than the data provided directly by U S WEST. The ARMIS data differed significantly from the U S WEST data in a number of key elements, which is the primary reason for the different conclusion. Fred Logan October 6, 1997 Page 2 With MCI’s permission I provided U S WEST with a copy of the analysis, including the ARMIS input data, and requested a response as to why the data was different between the two sources and whether the conclusion was accurate. One of the more significant discrepancies was the number of company-owned payphones. U S WEST informally indicated a possible explanation may be the ARMIS data included semi-public pay phones, while the data provided by U S WEST did not. U S WEST requested an opportunity to look into it more thoroughly and indicated they would get back to me. A few days later, U S WEST indicated discussions/negotiations were being conducted between AT&T/MCI and U S WEST on a corporate-wide level (14 states), and that U S WEST was in the process of preparing forward-looking cost studies for those discussions. They preferred to wait until those numbers were available before responding to my request so that the numbers provided to Idaho could be consistent with those provided to the 14-state discussions. These numbers were expected to be available by mid-October. U S WEST indicated these discussions might result in a corporate-wide settlement of this issue. In light of these discussions, I indicated a willingness to wait for the corporate-wide numbers. I also indicated that if the parties were trying to resolve this dispute among themselves, I wanted to give those discussions an opportunity to succeed. I suggested it may be appropriate to put the Idaho proceedings on the back burner until the corporate-wide discussions are concluded, one way or the other. As the Commission’s orders approving the April 15 payphone deregulation tariffs left open the possibility of a refund of any overpayments since April 15, should the Commission ultimately find that further rate adjustments were appropriate, I believe the risk of jeopardizing the corporate-wide negotiations exceeds the risk of a delay in this matter. Therefore, unless I am presented with reasons for proceeding otherwise, I intend to defer any further action on this matter for 45 to 60 days, or until I hear the negotiations have concluded. I hope this update is useful. Please let me know if my understanding of any of the actions in this case needs to be revised. Sincerely, Wayne Hart Telecommunications Analyst WH:gdk:i:wpfiles/utelcomm/payslow.ltr October 6, 1997 David Hackett NW Payphone Assn. Miller/Nash 4400 Two Union Square 601 Union St. Seattle, WA 98101-2352 Dear Mr. Hackett: I thought I would provide an update of the status of the discussions in the Commission’s review of the emergency petition filed by MCI and AT&T regarding payphone subsidies (Case No. GNR-T-97-5). There has been a considerable amount of data exchanged and a number of conversations between myself and each of the parties, but as most of this has been informal, I thought it best to summarize my understanding of the current status of the discussions. In response to the data requests of Staff, MCI, AT&T, U S WEST, GTE and most other utilities provided those parties that had signed the necessary agreements with proprietary information. My analysis of that information indicated the payphone operations of all Idaho LECs were either self supporting, or any deficit that was present was so small that changes to access charges were not appropriate at this time. I informally told MCI and AT&T of my findings and they asked me to look at a model developed by MCI, which they claimed provided a more thorough analysis than I had conducted. I was provided a copy of the model in August, and based upon the analysis for U S WEST included with the model, again concluded no subsidy existed. In early September, I provided U S WEST, MCI and AT&T a copy of a draft report which included my conclusion that no changes to access charges were appropriate at this time. MCI promptly responded with a revised version of the model, which included significantly greater detail. This model did identify a subsidy for U S WEST. The basic calculations included in the model did not vary considerably from that of my own analysis, but this model used data from ARMIS reports as inputs, rather than the data provided directly by U S WEST. The ARMIS data differed significantly from the U S WEST data in a number of key elements, which is the primary reason for the different conclusion. David Hackett October 6, 1997 Page 2 With MCI’s permission I provided U S WEST with a copy of the analysis, including the ARMIS input data, and requested a response as to why the data was different between the two sources and whether the conclusion was accurate. One of the more significant discrepancies was the number of company-owned payphones. U S WEST informally indicated a possible explanation may be the ARMIS data included semi-public pay phones, while the data provided by U S WEST did not. U S WEST requested an opportunity to look into it more thoroughly and indicated they would get back to me. A few days later, U S WEST indicated discussions/negotiations were being conducted between AT&T/MCI and U S WEST on a corporate-wide level (14 states), and that U S WEST was in the process of preparing forward-looking cost studies for those discussions. They preferred to wait until those numbers were available before responding to my request so that the numbers provided to Idaho could be consistent with those provided to the 14-state discussions. These numbers were expected to be available by mid-October. U S WEST indicated these discussions might result in a corporate-wide settlement of this issue. In light of these discussions, I indicated a willingness to wait for the corporate-wide numbers. I also indicated that if the parties were trying to resolve this dispute among themselves, I wanted to give those discussions an opportunity to succeed. I suggested it may be appropriate to put the Idaho proceedings on the back burner until the corporate-wide discussions are concluded, one way or the other. As the Commission’s orders approving the April 15 payphone deregulation tariffs left open the possibility of a refund of any overpayments since April 15, should the Commission ultimately find that further rate adjustments were appropriate, I believe the risk of jeopardizing the corporate-wide negotiations exceeds the risk of a delay in this matter. Therefore, unless I am presented with reasons for proceeding otherwise, I intend to defer any further action on this matter for 45 to 60 days, or until I hear the negotiations have concluded. I hope this update is useful. Please let me know if my understanding of any of the actions in this case needs to be revised. Sincerely, Wayne Hart Telecommunications Analyst WH:gdk:i:wpfiles/utelcomm/payslow.ltr October 6, 1997 Conley Ward Givens, Pursley & Huntley P.O. Box 2720 Boise, ID 83701-2720 Dear Conley: I thought I would provide an update of the status of the discussions in the Commission’s review of the emergency petition filed by MCI and AT&T regarding payphone subsidies (Case No. GNR-T-97-5). There has been a considerable amount of data exchanged and a number of conversations between myself and each of the parties, but as most of this has been informal, I thought it best to summarize my understanding of the current status of the discussions. In response to the data requests of Staff, MCI, AT&T, U S WEST, GTE and most other utilities provided those parties that had signed the necessary agreements with proprietary information. My analysis of that information indicated the payphone operations of all Idaho LECs were either self supporting, or any deficit that was present was so small that changes to access charges were not appropriate at this time. I informally told MCI and AT&T of my findings and they asked me to look at a model developed by MCI, which they claimed provided a more thorough analysis than I had conducted. I was provided a copy of the model in August, and based upon the analysis for U S WEST included with the model, again concluded no subsidy existed. In early September, I provided U S WEST, MCI and AT&T a copy of a draft report which included my conclusion that no changes to access charges were appropriate at this time. MCI promptly responded with a revised version of the model, which included significantly greater detail. This model did identify a subsidy for U S WEST. The basic calculations included in the model did not vary considerably from that of my own analysis, but this model used data from ARMIS reports as inputs, rather than the data provided directly by U S WEST. The ARMIS data differed significantly from the U S WEST data in a number of key elements, which is the primary reason for the different conclusion. Conley Ward October 6, 1997 Page 2 With MCI’s permission I provided U S WEST with a copy of the analysis, including the ARMIS input data, and requested a response as to why the data was different between the two sources and whether the conclusion was accurate. One of the more significant discrepancies was the number of company-owned payphones. U S WEST informally indicated a possible explanation may be the ARMIS data included semi-public pay phones, while the data provided by U S WEST did not. U S WEST requested an opportunity to look into it more thoroughly and indicated they would get back to me. A few days later, U S WEST indicated discussions/negotiations were being conducted between AT&T/MCI and U S WEST on a corporate-wide level (14 states), and that U S WEST was in the process of preparing forward-looking cost studies for those discussions. They preferred to wait until those numbers were available before responding to my request so that the numbers provided to Idaho could be consistent with those provided to the 14-state discussions. These numbers were expected to be available by mid-October. U S WEST indicated these discussions might result in a corporate-wide settlement of this issue. In light of these discussions, I indicated a willingness to wait for the corporate-wide numbers. I also indicated that if the parties were trying to resolve this dispute among themselves, I wanted to give those discussions an opportunity to succeed. I suggested it may be appropriate to put the Idaho proceedings on the back burner until the corporate-wide discussions are concluded, one way or the other. As the Commission’s orders approving the April 15 payphone deregulation tariffs left open the possibility of a refund of any overpayments since April 15, should the Commission ultimately find that further rate adjustments were appropriate, I believe the risk of jeopardizing the corporate-wide negotiations exceeds the risk of a delay in this matter. Therefore, unless I am presented with reasons for proceeding otherwise, I intend to defer any further action on this matter for 45 to 60 days, or until I hear the negotiations have concluded. I hope this update is useful. Please let me know if my understanding of any of the actions in this case needs to be revised. Sincerely, Wayne Hart Telecommunications Analyst WH:gdk:i:wpfiles/utelcomm/payslow.ltr