28203.doc

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE JOINT APPLICATION OF CERTAIN MEMBERS OF THE IDAHO TELEPHONE ASSOCIATION FOR AUTHORITY TO REVISE THE IDAHO RURAL EXCHANGE CARRIERS TARIFF NO. 2 ADDING AN EQUAL ACCESS RECOVERY CHARGE. )
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CASE NO. GNR-T-99-20

ORDER NO. 28203
On September  10, 1999, the Idaho Telephone Association (“ITA”) filed a Joint Application on behalf of Albion Telephone Company, Fremont Telcom, Columbine Telephone Company, Inc. dba Teton Telecom Communications, Cambridge Telephone Company, Direct Communications, Inc., Rural Telephone Company and Silver Star Company requesting authority to revise their respective Idaho Rural Exchange Carriers Tariff No. 2 adding an equal access recovery charge (EARC) for each of the respective companies. The EARC adds the terms, conditions and rates for providing intraLATA toll dialing parity in Idaho pursuant to the Commission’s Order No. 28064.
The Joint Application originally proposed an effective date of October 10, 1999. The Commission suspended the tariff by Order No. 28182.
Staff and AT&T Communications of the Mountain States, Inc. filed comments on November 9, 1999.
Based on the comments, the record and the law, the Commission approves the Joint Application.
BACKGROUND
On June 8, 1999, the Commission approved intrastate, intraLATA toll dialing parity plans filed by members of the Idaho Telephone Association (ITA). Order Nos. 28064 and 28065. 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 the 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. The Telecommunications Act of 1996, 47 U.S.C. § 251(b)(3), requires all local exchange carriers (LECs) to provide toll dialing parity to competing providers of telephone exchange service and telephone toll service, and to permit all such providers to have nondiscriminatory access to telephone numbers, operator services, directory assistance, and directory listing, with no unreasonable dialing delays. Those orders anticipated that costs associated with providing toll dialing parity would be recovered through an equal access recovery charge (EARC) to be determined when those costs were known.
Pursuant to Order Nos. 28064 and 28065, an Application dated September 10, 1999, was filed on behalf of Albion Telephone Company, Fremont Telcom, Columbine Telephone Company, Inc. dba Teton Telecom Communications, Cambridge Telephone Company, Direct Communications, Inc., Rural Telephone Company and Silver Star Company. The Joint Application contained revisions to the Idaho Rural Exchange Carriers Tariff No. 2 by adding an EARC for each of the respective companies. The EARC adds the terms, conditions and rates for providing intraLATA toll dialing parity in Idaho pursuant to Order Nos. 28064 and 28065.
Each of the listed ITA companies informed Commission Staff that toll dialing parity (equal access) was successfully completed as set out in each plan approved by the Commission.
JOINT APPLICATION
The proposed revisions to each carrier’s Idaho Rural Exchange Carriers Tariff No. 2 include the following proposed EARC for each of the listed companies in conformance with Order Nos. 28064 and 28065.
Company Incremental Expenses Est. Originating Minutes EARC
Albion $41,270 5,770,611 / yr. $0.00362/min
Cambridge/Council $18,485 2,645,482 / yr. $0.00349/min
Direct Communications $16,668 436,984 / yr. $0.01907/min
Fremont Telcom $66,790 1,682,012 / yr. $0.01985/min
Rural Telephone $5,853 655,684 / yr. $0.00446/min
Silver Star Telephone $6,288 144,761 / yr. $0.02172/min
Teton Telecom $40,116 490,433 / yr. $0.04090/min

These surcharges are to be imposed on the participating interexchange companies over a 24-month period for all intraLATA toll calls.
STAFF COMMENTS
Staff reviewed the respective proposed incremental costs calculated by the companies’ consultants at GVNW, including the supporting workpapers, and concluded that the cost recovery based on intraLATA toll usage is reasonable. Because the costs for Fremont, Teton and Silver Star appeared so high, Staff carefully examined the high perminute rate proposed. Staff noted that Fremont and Teton share a switch that required software upgrades in order to implement dialing parity and that the company that provides the dialing parity software charges very high Right-To-Use fees. Staff verified the fee amounts with the vendor and verified that this and other costs were allocated between Fremont and Teton.
However, Staff recognized that this limits the amount of originating minutes over which to spread the collection of the EARC. In addition, Fremont, Teton and Silver Star serve customers in an area where much of the intraLATA toll has been reduced by extended area service (EAS). Therefore, Staff suggested that the number of minutes over which to spread the collection of the EARC may be reduced proportionately. Although Silver Star does not pay the high Right-To-Use fees, low originating intraLATA toll minutes caused by EAS make Silver Star’s recovery rate also higher than expected.
Staff analyzed the respective proposed dialing parity costs and method for recovery for the listed companies and was surprised by the per-minute recovery rate of some of the ITA companies. However, Staff believes that in accordance with FCC 96-333 and DA 98-2534, the respective methods for recovery from all intraLATA toll providers is competitively neutral and that these incremental costs would not have been incurred “but for the implementation of dialing parity.” Staff found that the 24-month recovery period is appropriate but, due to some of the unusually high recovery rates, recommended a thorough Commission review period for each company at the end of the first year to determine the effectiveness of recovery and, if necessary, the Commission may adjust the recovery rate or time frame at that time.
AT&T COMMENTS
AT&T did not comment on the reasonableness of the costs on which the companies based the proposed EARCs because the information was filed as proprietary. However, it urged the Commission to require the companies to “true up” the costs and submit them to the Commission for review after one year of implementation. AT&T expressed concern about the EARC proposed by Teton, Silver Star and Direct Communications because it pointed out that these EARCs would substantially increase their respective access rates and likely cause interexchange carriers to refrain from offering intraLATA toll service in those exchanges.
FINDINGS
The Commission has jurisdiction over Albion, Fremont, Teton, Cambridge/Council, Direct Communications, Rural and Silver Star and these matters by virtue of Title 61, Idaho Code and specifically Idaho Code  61-303, -503, -507, -622 and -623. The Commission further finds that the methods for cost recovery from all intraLATA toll providers is competitively neutral and consistent with FCC 96-333 and DA 98-2534. No intraLATA toll provider opposes the revisions. The Commission further finds that these incremental costs would not have been incurred “but for the implementation of dialing parity” and are, therefore, appropriately charged to the intraLATA toll providers. Because dialing parity creates equal access to intraLATA toll, the Commission finds that cost recovery based on intraLATA toll usage is reasonable. The Commission also finds that the 24-month recovery period is appropriate. The Commission further finds that it is appropriate to review those costs after the first year and order an adjustment if necessary.
O R D E R
IT IS HEREBY ORDERED that the revised Idaho Rural Exchange Carriers Tariff No. 2, adding an equal access recovery charge (EARC) for Albion Telephone Company, Fremont Telcom, Columbine Telephone Company, Inc. dba Teton Telecom Communications, Cambridge Telephone Company, Direct Communications, Inc., Rural Telephone Company and Silver Star Company be approved, as proposed in the Joint Application, subject to a review at the end of the first year of recovery.
IT IS FURTHER ORDERED that Albion Telephone Company, Fremont Telcom, Columbine Telephone Company, Inc. dba Teton Telecom Communications, Cambridge Telephone Company, Direct Communications, Inc., Rural Telephone Company and Silver Star Company shall submit their respective costs and recovery information to the Commission Staff at the end of one year of recovery.
THIS IS A FINAL ORDER. Any person interested in this Order (or in issues finally decided by this Order) or in interlocutory Orders previously issued in this Case No. GNR-T-99-20 may petition for reconsideration within twentyone (21) days of the service date of this Order with regard to any matter decided in this Order or in interlocutory Orders previously issued in this Case No. GNR-T-99-20. Within seven (7) days after any person has petitioned for reconsideration, any other person may crosspetition for reconsideration in response to issues raised in the petition for reconsideration. See Idaho Code § 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho, this
day of December 1999.

DENNIS S. HANSEN, PRESIDENT

MARSHA H. SMITH, COMMISSIONER

PAUL KJELLANDER, COMMISSIONER

ATTEST:

Myrna J. Walters
Commission Secretary

O:gnrt9920_cc2

The Joint Application also included Custer Telephone Cooperative, Filer Mutual Telephone Co. and Project Mutual. Telephone Cooperative. However, the Commission does not regulate tariffs for mutual and cooperative telephone companies. Idaho Code §§ 61-104 and 61-121.

ORDER NO.  28203 -1-

Office of the Secretary
Service Date
December 22, 1999