GNRT994_cc2.doc

CHERI C. COPSEY
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
Idaho Bar No. 5142

Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983

Attorney for the Commission Staff

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE JOINT APPLICATION OF IDAHO TELEPHONE ASSOCIATION MEMBERS FOR APPROVAL OF THEIR RESPECTIVE PLANS TO IMPLEMENT INTRASTATE, INTRALATA DIALING PARITY. )
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CASE NO. GNR-T-99-4

COMMISSION STAFF COMMENTS
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COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its Attorney of record, Cheri C. Copsey, Deputy Attorney General, and submits the following comments for the Commission’s consideration in Case No. GNR-T-99-4 of the dialing parity plans of certain Idaho Telephone Association members.
BACKGROUND
Following the implementation of the Telecommunications Act of 1996, many states challenged the jurisdictional authority of the Federal Communications Commission (“FCC”) to implement the Act. In 1997, the Eighth Circuit Court of Appeals held that the FCC had exceeded its authority when it promulgated rules to implement various sections of the Act. Among other things, the Eighth Circuit held that the FCC lacked jurisdiction to promulgate its dialing parity rules 47 CFR §51.205-51.217. The FCC appealed to the United States Supreme Court. On January 25, 1999, the United States Supreme Court reversed, in part, the Eighth Circuit and held, inter alia, that the FCC has jurisdiction to implement the Act’s local competition provisions, including those rules addressing dialing parity. AT&T v. Iowa Utilities Board, 119 S.Ct. 721 (1999).
In response, the FCC issued Order No. 99-54 revising the schedule for implementation of dialing parity. Order No. 99-54 established new deadlines for all local exchange carriers (“LECs”) to implement intraLATA dialing parity. Specifically, all local exchange carriers are required to submit dialing parity plans to the respective state commissions by April 22, 1999. State commissions were given until June 22, 1999, to review and approve those plans. Approved intraLATA toll dialing parity plans were directed to be implemented within thirty days of approval.
Toll dialing parity, also referred to as “1 plus equal access” or carrier presubscription, allows a customer to pre-select a carrier for intrastate, intraLATA toll calls and then access his chosen carrier simply by dialing 1 plus the telephone number. Without dialing parity, a customer wishing to use a specific toll carrier may be required to dial a series of numbers before dialing the telephone number. Until recently, intrastate, intraLATA toll traffic for the customers of each of these companies was carried by U S WEST Communications, unless a customer dials around to reach a different toll carrier. Recently, however, several of the Applicants have terminated their contracts for toll service with U S WEST and formed IXC subsidiaries – switching all former U S WEST customers to the Applicant’s IXC subsidiary.
On April 22, 1999, in response to the new schedule, certain members of the Idaho Telephone Association (“ITA”) filed a Joint Application with the Commission for an Order approving their respective intraLATA toll dialing parity implementation plans. These ITA member companies offer local telephone exchange service in various communities throughout Idaho.
ITA members, Farmers, Cambridge, Council, Midvale, Sawtooth, Silver Star, Teton, CTC, and Fremont submitted the same intraLATA toll dialing parity plan. ITA members Albion, Custer, Lakeside, Rockland, Filer, Mud Lake, Oregon-Idaho, Rural and Westel submitted individual plans.
ITA MEMBER DIALING PARITY PLANS AND STAFF RECOMMENDATIONS
Each of these Applicants offer local exchange service within the southern Idaho LATA, with the exception of one Midvale exchange that is located in the northern Idaho LATA. (see 47 CFR §51.213). Upon implementation of toll dialing parity, customers will be able to presubscribe to a carrier for both their interLATA and intraLATA toll calls. This means that originating customers will be able to dial toll calls to their preferred carrier without having to use any extra digits or access codes (other than the prefatory “1” or “0”).
A. Implementation schedule.
FCC Order 99-54 requires that intraLATA toll dialing parity plans be submitted to state commissions by April 22, 1999, and approved by those state commissions by June 22, 1999. Dialing parity plans are required to be implemented “no later than thirty (30) days after the date on which the plan is approved.” This seems to indicate that the cut-over must be completed within thirty (30) days.
According to the dialing parity plans filed for the ITA companies, while implementation in each plan will begin by July 1999, none of the companies will be able to complete the programmed cut-over within thirty (30) days after the date on which the plan is approved. The Applicants assert that the proposed schedules comply with the spirit, if not the letter, of the FCC’s order because “implementation” will be under way before July 22, 1999. Furthermore, the ITA requested that the Commission make any Order that approves the respective plans effective June 22, 1999, in order to give the LECs the maximum amount of time to begin the implementation process. ITA also requested that the Commission exercise its authority under Section 251(f)(2) of the Act to modify the FCC’s implementation schedule to allow a later dialing parity cut over date.
Staff Recommendation. Staff recommends that the Commission exercise its Section 251(f)(2) authority and modify the FCC requirement for a July 22, 1999, cut-over. All the ITA companies are rural companies “with fewer than 2 percent of the Nation's subscriber lines installed in the aggregate nationwide.” Therefore, Staff asserts that the Act clearly grants the Commission authority to modify Section 251(b)(3) dialing parity obligations if “consistent with the public interest, convenience, and necessity,” the Commission finds it necessary to “avoid imposing a requirement that is technically infeasible,” to “avoid a significant adverse economic impact on users of telecommunications services generally,” or “to avoid imposing a requirement that is unduly economically burdensome.” Staff asserts that such a modification is necessary in general for these rural companies to “avoid imposing a requirement that is technically infeasible.” Moreover, modification is clearly “consistent with the public interest, convenience, and necessity.”
B. IntraLATA Cut-Over Dates.
1. Farmers, Cambridge, Council, CTC, Fremont, Midvale, Sawtooth, Silver Star and Teton. According to the dialing parity plans filed for Farmers, Cambridge, Council, CTC, Fremont, Midvale, Sawtooth, Silver Star and Teton implementation will begin by June, 1999. However, none of the companies will be able to complete the programmed cut-over until August 31, 1999. Fremont and Teton cannot complete the cut-over until August 31, 1999, because Fremont and Teton share a switch and to make the switch two-PIC capable the switch software must be upgraded. The earliest available installation date for the necessary software upgrades is August 8, 1999. Farmers, Cambridge, Council, CTC, Midvale, Sawtooth, and Silver Star have monthly billing cycles that mail mid month. Pending a June 22, 1999 Commission approval, the next billing cycle would release customer notifications in mid July. Therefore, a prefatory 30-day customer notification period places the earliest reasonable cut over date in August, 1999.
The ITA requested that the Commission make any Order that approves the respective plans effective June 22, 1999, in order to give the LECs the maximum amount of time to begin the implementation process. The ITA also requested that the Commission exercise its authority under Section 251(f)(2) of the Act to grant these rural ITA companies a “suspension” to allow the August 31, 1999 dialing parity cut over date.
Staff Recommendation. Staff recommends that the Commission approve the proposed implementation schedules with an August 31, 1999, cut over date, for these companies. Staff also recommends the Order be made effective June 22, 1999. Finally, Staff recommends that the Commission exercise its Section 251(f)(2) authority and modify the FCC requirement for a July 22, 1999, cut-over for Farmers, Cambridge, Council, CTC, Fremont, Midvale, Sawtooth, Silver Star, and Teton. Staff asserts that such a modification is necessary for these rural companies to “avoid imposing a requirement that is technically infeasible.” Modification is clearly “consistent with the public interest, convenience, and necessity.”
2. Albion, Filer, Lakeside, Mud Lake, Rockland and Westel. Albion, Filer, Lakeside, Mud Lake, Rockland and Westel proposed an intraLATA cut-over date of August 1, 1999. Like the other ITA companies, each of these companies have monthly billing cycles that mail mid month. Pending a June 22, 1999 Commission approval, the next billing cycle would release customer notifications in mid July. Therefore, a prefatory 30-day customer notification period places the earliest reasonable cut over date in August, 1999.
Staff Recommendation. Staff recommends that the Commission approve the proposed implementation schedules with an August 1, 1999, cut over date, for these companies. Staff also recommends the Order be made effective June 22, 1999. Finally, Staff recommends that the Commission exercise its Section 251(f)(2) authority and modify the FCC requirement for a July 22, 1999, cut-over for Albion, Filer, Lakeside, Mud Lake, Rockland and Westel. Staff asserts that such a modification is necessary for these rural companies to “avoid imposing a requirement that is technically infeasible.” Modification is clearly “consistent with the public interest, convenience, and necessity.”
3. Rural. Rural proposed an intraLATA cut-over date of July 26, 1999. Like the other ITA companies, Rural has monthly billing cycles that mail mid month. Pending a June 22, 1999 Commission approval, the next billing cycle would release customer notifications in mid July.
Staff Recommendation. Staff recommends that the Commission approve the proposed July 26, 1999, cut over date, for Rural. This is only four (4) days beyond the FCC schedule and is reasonable. Staff also recommends the Order be made effective June 22, 1999. Finally, Staff recommends that the Commission exercise its Section 251(f)(2) authority and modify the FCC requirement for a July 22, 1999, cut-over for Rural. Staff asserts that such a modification is necessary for Rural to “avoid imposing a requirement that is technically infeasible.” Modification is clearly “consistent with the public interest, convenience, and necessity.”
4. Custer. Custer proposed an intraLATA cut-over date of August 16, 1999. Like the other ITA companies, Custer has monthly billing cycles that mail mid month. Pending a June 22, 1999 Commission approval, the next billing cycle would release customer notifications in mid July. Moreover, Custer is a cooperative.
Staff Recommendation. Staff recommends that the Commission approve the proposed August 16, 1999, cut over date, for Custer. Staff also recommends the Order be made effective June 22, 1999. Finally, Staff recommends that the Commission exercise its Section 251(f)(2) authority and modify the FCC requirement for a July 22, 1999, cut-over for Custer. Staff asserts that such a modification is necessary for Custer to “avoid imposing a requirement that is technically infeasible.” Modification is clearly “consistent with the public interest, convenience, and necessity.”
5. Oregon-Idaho. Oregon-Idaho proposed an intraLATA cut-over date coincident with their interLATA cut-over date of September 28, 1999. Pending a June 22, 1999 Commission approval, the next billing cycle would release customer notifications June 28, 1999.
Staff Recommendation. Staff recommends that the Commission approve the proposed September 28, 1999, cut over date, for Oregon-Idaho. Staff also recommends the Order be made effective June 22, 1999. Finally, Staff recommends that the Commission exercise its Section 251(f)(2) authority and modify the FCC requirement for a September 28, 1999, cut-over for Oregon-Idaho. Staff asserts that such a modification is necessary for Oregon-Idaho to “avoid imposing a requirement that is technically infeasible.” Modification is clearly “consistent with the public interest, convenience, and necessity.”
C. Notification to IXCs.
1. Farmers, Cambridge, Council, CTC, Fremont, Midvale, Sawtooth, Silver Star and Teton. Under the plans submitted on behalf of Farmers, Cambridge, Council, CTC, Fremont, Midvale, Sawtooth, Silver Star and Teton, all carriers that currently offer interLATA toll service to the customers of the LECs will be requested to confirm whether they intend to offer intraLATA service. Those responses will be due July 1, 1999. Any other carrier that requests to offer intraLATA service by July 1, 1999, will be added to the list of available intraLATA carriers.
Staff Recommendation. Staff recommends that the Commission approve the proposed process and schedule for interexchange carrier notification.
2. Albion, Filer, Lakeside, Mud Lake, Rockland and Westel. Albion, Filer, Lakeside, Mud Lake, Rockland and Westel proposed that all carriers that currently offer interLATA toll service to the customers in their respective exchanges will be requested to confirm whether they intend to offer intraLATA service. Those responses will be due June 22, 1999. This notification to IXC’s will be mailed out May 22, 1999. Any other carrier that requests to offer intraLATA service by July 22, 1999, will be added to the list of available intraLATA carriers.
Staff Recommendation. Staff recommends that the Commission approve the proposed process and schedule for interexchange carrier notification.
3. Rural. Rural proposed that all carriers that currently offer interLATA toll service to the customers in the Rural exchanges will be requested to confirm whether they intend to offer intraLATA service. This notification to IXCs will be mailed out June 24, 1999, and the carrier must respond by July 22, 1999. Any other carrier that requests to offer intraLATA service by July 22, 1999, will be added to the list of available intraLATA carriers.
Staff Recommendation. Staff recommends that the Commission approve the proposed process and schedule for interexchange carrier notification.
4. Custer. Custer proposed that all carriers that currently offer interLATA toll service to the customers in the Rural exchanges will be requested to confirm whether they intend to offer intraLATA service. This notification to IXCs will be mailed out June 22, 1999, and the carrier must respond by July 22, 1999.
Staff Recommendation. Staff recommends that the Commission approve the proposed process and schedule for interexchange carrier notification.
5. Oregon-Idaho. Oregon-Idaho has already sent notices to all carriers that are registered in the Oregon and Idaho will be requested to confirm whether or not they intend to offer interLATA service, intraLATA service, or both. This notification to IXCs was mailed out April 2, 1999. Any other carrier that requests to offer intraLATA service will be added to the list of available intraLATA carriers.
Staff Recommendation. Staff recommends that the Commission approve Oregon-Idaho’s notification process.
D. Notification to Customers.
Each of the Applicants state they plan to mail the customer notification as a bill insert. Some will mail it in both the first and the second billing cycle after the Commission issues an order approving the LEC's plan. The Consumer Assistance Division Staff contends that this is an important opportunity for customers and that a separate one time mailing is justified. Consumer Assistance Division Staff recognizes that there may be an additional cost incurred but in the past many consumers have indicated that they do not always read additional information stuffed in billing envelopes. Consumer Assistance Division Staff also recommends that both the companies and the Commission initiate an aggressive public awareness effort through the media.
The Telecommunications Division Staff does not oppose the use of a separate mailing to inform customers regarding intraLATA dialing parity but is concerned about adding any cost to the equal access recovery charge. This is particularly true because the benefits of a separate mailing versus a bill insert, if any, are not quantifiable.
1. Farmers, Cambridge, Council, CTC, Fremont, Midvale, Sawtooth, Silver Star and Teton. Farmers, Cambridge, Council, CTC, Fremont, Midvale, Sawtooth, Silver Star and Teton proposed to send a notification to customers to inform them of the coming opportunity they will have to choose an intraLATA carrier on the first billing cycle after the Commission has approved the LECs implementation plan. None of these companies included a draft customer notice for Staff or Commission review with the Application. Instead, the companies generally suggested that a proposed customer notification will include a list of those IXCs that have chosen to participate as intraLATA carriers. A second, identical customer notification will be sent out on the second billing cycle after the Commission approves the LEC’s implementation plan.
According to the plans, those customers who respond to the customer notification before August 31, 1999, will have their intraLATA presubscription choice programmed into the switch on the cut-over date of August 31, 1999. The implementation plans suggest a sixty (60) day “grace” period after the cut-over date wherein customers may make or change their intraLATA carrier choice free of charge. The proposed grace period ends October 31, 1999. Thereafter, each intraLATA PIC change will cost $5.00.
Staff Recommendation. Staff agrees that a $5.00 charge for intraLATA PIC changes is reasonable. However, Staff recommends that the Commission require a one-hundred-twenty (120) day "grace" period following the implementation date be approved. This would allow customers adequate time to evaluate carrier choices and see specific billing results. Although the carriers’ proposal does not address it, Staff further recommends that existing interLATA PIC "freezes" do not automatically transfer to the intraLATA PICs and are only extended to the intraLATA selection upon affirmative request from the customer.
These companies did not include a draft notice for Commission approval in their Application. Therefore, as a general comment, Staff recommends that no notices be sent to customers without prior Commission approval in order to ensure that such notices are competitively neutral and easily understood. In light of this, Staff has attached a proposed customer notification that Staff believes clearly informs the customer, is competitively neutral, lists the available carriers, and describes what will happen if no action is taken by the customer. This notice is similar to other notices approved by other commissions. The Staff recommends the Commission order that the Staff’s proposed sample notice be used.
2. Albion, Filer, Lakeside, Mud Lake, Rockland and Westel. Albion, Filer, Lakeside, Mud Lake, Rockland and Westel proposed to send customers a notice on July 8, 1999, to inform them of the coming opportunity they will have to choose an intraLATA carrier as a bill insert. A copy of the proposed notice was included in the Application. The proposed notice lists the available IXC carrier choices as determined by the responses these companies receive from the IXCs. It addresses what will happen to those customers who do not respond by making a carrier selection. Those customers who respond to the customer notification before July 29, 1999, will have their intraLATA presubscription choice programmed into the switch on the respective cut-over dates.
The implementation plans also include a sixty (60) day "grace" period after the cut-over date wherein customers may change their intraLATA carrier choice one additional time free of charge. The proposed grace period ends October 1, 1999. Thereafter, each intraLATA PIC change will result in a $5 PIC change fee.
Staff Recommendation. Staff reviewed the draft customer notices and finds them to be clear and competitively neutral. Though this three (3) week period is not the thirty (30) day public notice required for changes by Idaho Code § 61-307, Staff finds that this time frame is adequate given the proposed customer “free PIC” period following implementation. Therefore, Staff recommends that the Commission approve the Albion, Filer, Lakeside, Mud Lake, Rockland and Westel proposed customer notice and notification schedule. The Staff finds there is good cause for the Commission to approve an exception of Idaho Code § 61-307 in order to expedite the implementation of this service.
Staff supports the proposed customer notice. However, Staff recommends that the Commission require a 120-day "grace" period following the implementation date to allow customers adequate time to evaluate carrier choices and see specific billing results.
Although the proposals do not address it, Staff further recommends that existing interLATA PIC "freezes" do not automatically transfer to the intraLATA PICs and are only extended to the intraLATA selection upon affirmative request from the customer.
3. Rural. Rural proposed to send customers a notice on July 26, 1999, to inform them of the coming opportunity they will have to choose an intraLATA carrier as a bill insert. A copy of the proposed notice was included in the Application. The proposed notice lists the available IXC carrier choices as determined by the responses these companies receive from the IXCs. It addresses what will happen to those customers who do not respond by making a carrier selection. Those customers who respond to the customer notification before July 26, 1999, will have their PIC programmed into Rural's switch without delay. Because Rural already has the ability to make intraLATA PIC choices, those requests will be processed as soon as the customer responds to the notification.
Rural's implementation plan has a 90-day "grace" period for customers after the cut-over date wherein customers may change their intraLATA carrier choice one additional time free of charge. The proposed grace period ends October 26, 1999. Thereafter, each intraLATA PIC change will result in a $5 PIC change fee.
Staff Recommendation. Staff reviewed the draft customer notice and found it to be clear and competitively neutral. Staff recommends approval of Rural’s proposed customer notice. However, Staff recommends that the Commission require a 120-day “grace” period following the implementation date to allow customers adequate time to evaluate carrier choices and see specific billing results.
Although the Rural proposal does not address it, Staff further recommends that existing interLATA PIC “freezes” do not automatically transfer to the intraLATA PICs and are only extended to the intraLATA selection upon affirmative request from the customer.
Although this schedule does not strictly include the 30 day public notice required by Idaho Code § 61-307, Staff finds that this time frame is adequate given the proposed customer “free PIC” period following implementation. Therefore, Staff recommends that the Commission approve the Rural proposed customer notice and notification schedule. The Staff finds there is good cause for the Commission to approve an exception of Idaho Code § 61-307 in order to expedite the implementation of this service.
4. Custer. Custer proposed to send customers a notice on August 1, 1999, to inform them of the coming opportunity they will have to choose an intraLATA carrier as a bill insert. A copy of the proposed notice was included in the Application. The proposed notice lists the available IXC carrier choices as determined by the responses these companies receive from the IXCs. It addresses what will happen to those customers who do not respond by making a carrier selection. Those customers who respond to the customer notification before August 14, 1999, will have their PIC programmed into Custer’s switch on the cut-over date of August 16, 1999.
Custer’s implementation plan has a sixty (60) day “grace” period for customers wherein customers may change their intraLATA carrier choice one additional time free of charge. The grace period ends October 16, 1999. Thereafter, each intraLATA PIC change will result in a $5 PIC change fee and a $10 office processing fee being charged.
Staff Recommendation. Staff reviewed the draft customer notice and finds it to be clear and competitively neutral. Staff recommends approval of Custer’s proposed customer notice. However, Staff recommends that the Commission support a 120-day “grace” period following the implementation date to allow customers adequate time to evaluate carrier choices and see specific billing results.
This schedule does not include the 30-day public notice normally required by Idaho Code § 61-307. However, Custer is not subject to this statute. Therefore, Staff recommends that the Commission approve the Custer proposed customer notice and notification schedule.
5. Oregon-Idaho. On June 28, 1999, Oregon-Idaho will send a notice to all customers in a bill insert to inform them of the coming opportunity they will have to choose an intraLATA carrier. Oregon-Idaho proposed that this notice will be competitively neutral and will list the available carrier options in random order. Those customers who respond to the customer notification before August 18, 1999, will have their intraLATA presubscription choice programmed into the switch on the cut-over date of September 28, 1999. Those customers who do not respond by August 18, 1999, will receive a second notice informing them of the intraLATA carrier that was allocated to them by default and, again, asking them to make a different selection if they so choose. Customers will have a “grace” period until January 28, 2000, within which to make PIC changes without incurring a PIC charge. Oregon-Idaho included a draft notice with its Application.
Staff Recommendation. Staff reviewed the proposed notice and found it to be clear and competitively neutral. Therefore, it recommends the Commission approve the proposed notice and the proposed schedule. Moreover, the “grace” period is adequate.
E. Existing Customers Who Do Not Actively Choose.
Determining the default IXC when a customer does not affirmatively choose the intraLATA carrier has important implications for introducing competition in local exchange markets. In other states where dialing parity has been implemented, the incumbent local exchange carrier (ILEC) has been permitted to become the default intraLATA carrier for customers who do not actively choose a carrier. In nearly all of the ITA Applicant carrier exchanges, the ILEC does not currently offer intraLATA long distance service. Until recently, the intraLATA long distance carrier for the majority of the ITA LECs was U S WEST Communications, Inc. U S WEST provided that service pursuant to an agreement with the ILEC.
With the exception of Farmers and Mud Lake, these agreements between U S WEST and the individual ITA ILEC have recently been canceled by most the LECs addressed by these comments. U S WEST recently informed the Commission it was terminating its agreement with Mud Lake. Customers in these exchanges had their intraLATA toll carrier switched to a newly formed affiliate of the ILEC (a Title 62 Interexchange Carrier). Staff is concerned that this may be anti-competitive. Indeed, it may violate FCC rules, if not the letter of the rules -- the spirit of the rules. 47 CFR §51.211(d) states:
A LEC that is not a BOC that begins providing in-region, interLATA or in-region interstate toll services in a state on or after August 8, 1997, but before February 8, 1999 shall implement intraLATA and interLATA toll dialing parity throughout that state no later than the date on which it begins providing in-region, interLATA or in-region, interstate toll service.

To date, none of the companies discussed below in these comments has begun offering intraLATA toll dialing parity and no other IXC was given the opportunity to win those customers’ business.
Now that dialing parity is being implemented, those newly created ILEC-affiliated carriers that received all of their exchanges intraLATA toll simply by default should not be given any preferential standing compared to any other IXC operating in Idaho. Consequently, Staff cannot support those parity plans that propose defaulting existing customers to the ILEC’s subsidiary or affiliate. It does not represent a choice that customer affirmatively made.
Moreover, Section 258 of the Act makes it unlawful for any telecommunications carrier to “submit or execute a change in a subscriber’s selection of a provider of telephone exchange service or telephone toll service except in accordance with such verification procedures as the Commission (FCC) shall presubscribe.” Some of the customers who were switched to the ILEC-affiliated IXCs received notice that this would happen. However, in other cases they did not. Letters of Authorization (LOA) were not obtained from these customers.
The ITA suggested that switching those customers to their newly created IXC affiliate represented a pre-emptive maneuver in response to fears that neither U S WEST nor any other carrier would elect to carry that traffic. This could leave the LECs without an intraLATA carrier when dialing parity was implemented. Staff recognizes the distinct possibility that U S WEST will elect to cease providing intraLATA toll service in most rural exchanges if other carriers are available to those customers. However, Staff believes that Idaho statutes make the possibility of customers being left without a carrier unlikely. See Idaho Code § 62-608.
Therefore, in exchanges where U S WEST is still the underlying intraLATA toll carrier and elects to remain so, Staff recommends the Commission require that customers who do not actively choose an intraLATA carrier by the particular plan’s customer notification date, be automatically defaulted to U S WEST. In cases where U S WEST is not the underlying intraLATA toll carrier or elects to terminate that agreement, Staff recommends the Commission require that customers who do not actively choose an intraLATA carrier by plan’s customer notification date, be defaulted to their interLATA or interstate long distance carrier.
The FCC has not clearly defined the requirements regarding existing customers who do not affirmatively choose a carrier. (See FCC Order No. 99-54, footnote 22.) Consequently, Staff believes that defaulting existing customers who do not choose an intraLATA carrier to that customer’s interLATA carrier is reasonable and fair because it represents a choice which that customer has made within an openly competitive environment. In addition, Staff believes this strategy will be the least confusing to customers and less expensive to the LECs compared to “pooling” allocation methods or requiring “dial around” methods.
1. Cambridge, Council, CTC, Fremont, Midvale, Sawtooth, Silver Star, Teton, Albion, Lakeside, Rockland, Rural and Westel. According to the ITA submitted implementation plan, Cambridge, Council, CTC, Fremont, Midvale, Sawtooth, Silver Star, Teton, Albion, Lakeside, Rockland, Rural and Westel all proposed that current customers who do not actively choose a carrier for their intraLATA toll calls will remain with their current carrier. Each of these ILECs elected to end their contractual agreements with U S WEST and create IXC subsidiaries or associate with affiliates. Therefore, the default carrier would be their respective IXC subsidiary.
Staff Recommendation. Staff recommends that in cases where U S WEST is the underlying intraLATA carrier and elects to remain so, those customers who do not actively choose an intraLATA toll carrier by deadline, will default to U S WEST. In cases where U S WEST is not the underlying intraLATA toll carrier or has elected to terminate that agreement in the presence of other carrier options, Staff recommends that customers who do not actively choose an intraLATA carrier by the deadline, be defaulted to their interLATA carrier.
2. Filer, Farmers and Custer. Filer and Farmers are mutual telephone companies and Custer is a cooperative. All have proposed to default current customers who do not actively choose a carrier for their intraLATA toll calls to themselves. Both Filer’s and Custer’s customer notice explain this.
Staff Recommendation. There are other options for dealing with those customers who do not make a choice. However, because Filer and Farmers are mutual companies and Custer is a cooperative, Staff recommends the Commission approve all the companies’ plans for defaulting customers who do not make a choice to themselves.
3. Oregon-Idaho. Oregon-Idaho had originally intended to leave customers who do not affirmatively choose an intraLATA carrier with their existing carrier -- U S WEST. However, Staff has been notified that, in the presence of other carrier options, U S WEST will elect to cease providing intraLATA toll service in many rural exchanges. In other Idaho exchanges where this has been the case, Staff has recommended that those customers who do not make an intraLATA carrier selection be assigned to their interLATA carriers service. However, Oregon-Idaho is unique in that they are implementing interLATA and intraLATA dialing parity at the same time for their 68 Idaho lines. Therefore, an interLATA carrier selection does not exist.
Staff Recommendation. This situation presents the Commission with several options. The first option involves the Commission requiring U S WEST to remain as the intraLATA carrier until a more appropriate date or situation exists. (See Idaho Code § 62-608). The second option requires an allocation process of some sort that is proportionate to the Oregon-Idaho customers’ affirmative carrier selections. The third option is to default those customers who do not choose an intraLATA carrier to Oregon-Idaho. As a LEC, Oregon-Idaho has the option of becoming the toll carrier. The fourth option is the least preferred by Staff due to the potential for customer confusion. This option involves assigning no-PIC to those customers who do not actively choose a carrier and requiring that they dial around using 101=XXXX codes until they make an affirmative selection.
The FCC has not clearly defined the requirements regarding existing customers who do not affirmatively choose a carrier. (See FCC Order No. 99-54, footnote 22.) Consequently, Staff believes that, in the presence of other carrier options, allocation is the preferred strategy. In addition, Staff believes this strategy will be the least confusing to customers compared to requiring dial around methods and, therefore, recommends this option be ordered.
6. Mud Lake. Mud Lake recently learned that its customers would no longer have U S WEST as their intraLATA long distance carrier. Mud Lake is a cooperative. It has not chosen what plan it will adopt.
Staff Recommendation. In the case of Mud Lake, because Mud Lake is a cooperative, if it chooses to default its customers to itself, Staff would have no objection to that plan. Otherwise, the customers should be defaulted to their interLATA carrier in order to avoid being without any carrier.
F. New Customers.
All of the Applicants’ plans propose that new customers who do not designate an intraLATA toll carrier will have to “dial around” using 101-XXXX carrier access codes until they choose their presubscribed carrier(s).
Staff Recommendation. Staff recommends the Commission approve all of the Applicants’ plans that propose that new customers who do not designate an intraLATA toll carrier will have to “dial around” using 101-XXXX carrier access codes until they choose their presubscribed carrier(s).
G. Business Office Practices.
All of the Applicants’ plans propose to the process intraLATA PIC requests “without undue delay” and “in a competitively neutral manner.”
Staff Recommendation. Staff recommends the Commission approve all of the Applicants’ plans. In addition, Staff recommends that each ILEC be required to process PIC change requests within five (5) business days.
H. Cost Recovery
1. Albion, Cambridge, Teton, Council, CTC, Custer, Lakeside, Rockland, Farmers, Filer, Fremont, Midvale, Mud Lake, Rural, Sawtooth, Silver Star, and Westel.

Each Applicant proposed that the costs related to dialing parity implementation be recovered by imposing a surcharge on intrastate access rates sufficient to recover conversion costs over a 24-month period. Those costs are not yet known.
Staff Recommendation. Staff generally supports recovering costs related to dialing parity implementation by imposing a surcharge on intrastate access rates sufficient to recover conversion costs over a 24-month period. However, because dialing parity creates equal access to intraLATA toll, Staff recommends that cost recovery should be usage based. Therefore, Staff recommends the surcharge be imposed on all intraLATA toll originating access minutes in each of the respective exchanges. Staff generally supports a 24-month recovery period. However, Staff recommends that this method be reviewed at the end of the first year to determine its effectiveness and, if necessary, adjust the recovery rate. Staff would also be willing to consider a one (1) year recovery period if the submitted costs are minimal.
Because the costs for implementing are not yet determined, Staff cannot establish what the amounts will be until those costs are submitted by each company. Once the data is submitted, Staff will review the individual LEC’s cost recovery data to determine its appropriateness. Staff does not believe the intraLATA dialing parity costs will be very significant. According to the FCC order, companies may only recover those incremental costs directly related to the provision of 1+ intraLATA toll dialing parity. Staff recommends the Commission make it clear in any final order that by approving the dialing parity plans, it is not approving those costs. Further, the Commission should expressly reserve the right to review the cost information and disallow costs it determines are not directly related to implementing the plans.
2. Oregon-Idaho. Oregon-Idaho’s plan did not address a method for recovering the costs associated with interLATA and intraLATA implementation. In conversations with Staff, Oregon-Idaho suggested that these costs will be minimal and may not be recovered for the 68 Idaho lines.
Staff Recommendation. Staff recommends that, should Oregon-Idaho have specific costs for implementing intraLATA dialing parity in Idaho, Oregon-Idaho should recover those costs via their cost recovery mechanism for interLATA implementation costs. Since most, if not all, costs associated with intraLATA dialing parity in Idaho are also attributable to Oregon-Idahos coincident interLATA dialing parity implementation, Staff believes that no costs should be recovered for intraLATA implementation in Idaho.
I. Staff Recommendation for Recovery of Waived PIC Charges.
Although none of the plans address the recovery of waived PIC charges, Staff recommends that each LEC be allowed to recover the waived PIC change charges during the free PIC period. Staff recommends that the LECs be allowed to issue a one time bulk bill to each participating IXC, assessing the $5.00 PIC change charge for the total number of lines changed to those carrier’s PIC. It is fair to assess these charges to competing IXCs because they will experience a growth in their respective customer base thereby allowing those one-time charges to be recovered over time. Staff recommends that the IXCs not be allowed to pass those fees on to the end user.
Respectfully submitted this day of May 1999.

___________________________
Cheri Copsey
Deputy Attorney General

Technical Staff: Doug Cooley
Consumer Staff: Carol Cooper

Albion Telephone Co., Cambridge Telephone Co., Columbine Telephone Company, d.b.a. Teton Telecom Communications (an affiliate of Silver Star Telephone Company), Council Telephone Company, Inc., CTC Communications, Inc, (a CLEC affiliate of Cambridge Telephone Co.), Custer Telephone Cooperative, Direct Communications Lakeside, Inc., Direct Communications Rockland, Inc., Farmers Mutual Telephone Co., Filer Mutual Telephone Co., Fremont Telcom Co., Midvale Telephone Exchange, Mud Lake Cooperative, Oregon-Idaho Utilities, Inc., Rural Telephone Co., Sawtooth Telephone Co., Silver Star Telephone Co., and Westel, Inc.
Although Lakeside and Rockland submitted individual dialing parity plans, the Commission recently approved the merger of Lakeside and Rockland. Order No. 27866.

On March 19, 1999, Oregon-Idaho Utilities, Inc. had previously filed an Application with the Commission for an Order approving its intraLATA toll dialing parity implementation plan but joined in this Application. The same proposal was also submitted to the Oregon Public Utilities Commission. Oregon-Idaho offers local telephone exchange service to approximately 68 lines in the Idaho exchange of Jordan Valley.

47 U.S.C.  251(f)(2) Suspensions and modifications for rural carriers. A local exchange carrier with fewer than 2 percent of the Nation's subscriber lines installed in the aggregate nationwide may petition a State commission for a suspension or modification of the application of a requirement or requirements of subsection (b) or (c) to telephone exchange service facilities specified in such petition. The State commission shall grant such petition to the extent that, and for such duration as, the State commission determines that such suspension or modification
(A) is necessary
(i) to avoid a significant adverse economic impact on users of telecommunications services generally;
(ii) to avoid imposing a requirement that is unduly economically burdensome; or
(iii) to avoid imposing a requirement that is technically infeasible; and
(B) is consistent with the public interest, convenience, and necessity. The State commission shall act upon any petition filed under this paragraph within 180 days after receiving such petition. Pending such action, the State commission may suspend enforcement of the requirement or requirements to which the petition applies with respect to the petitioning carrier or carriers.
Oregon-Idaho also submitted a request for suspension to the FCC.
In past cases, both bill stuffers and separate mailings have been used. For example, Citizens did a separate mailing on a postcard and U S WEST proposes to do a separate mailing in its Application.
Draft IXC and customer notices for Teton and Fremont were belatedly received on the date comments were due and have not been reviewed.
This date reflects the fact that before these rules were struck down by the Eighth Circuit, dialing parity was ordered to be in effect by this date. These rules were upheld and reinstated in the United States Supreme Court Iowa decision.

STAFF COMMENTS 1 MAY 18, 1999