20061127Comments.pdf

GIVE SLEY LLP
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Gary G. Allen
Kristen A. Atwood
Kelly T. Barbour
Peter G. Barton
Christopher J. Beeson
William C. Cole
Michael C. Creamer
Thomas E. Dvorak
Roy Lewis Eiguren
Jeffrey C. Fereday
Martin C. Hendrickson
Steven J. Hippler
Debora K. Kristensen
Anne C. Kunkel
Via Hand Deliverv
November 27 2006
Ms. Jean Jewel
Executive Secretary
Idaho Public Utilities Commission
472 W. Washington Street
O. Box 83720
Boise, ID 83720
Re:Idaho Telephone Association s Comments
Case No. INC-06-
Our File: 1233-196
Dear Jean:
Jeremy G. ladle
Michael P. Lawrence
Franklin G. lee
David R. Lombardi
John M. Marshall
Kenneth R. McClure
Kelly Greene McConnell
Cynthia A. Melillo
Christopher H. Meyer
L. Edward Miller
Patrick J. Miller
Judson B. Montgomery
Angela K. Nelson
Deborah E. Nelson
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W. Hugh O'Riordan, lL.M.
Angela M. Reed
H. Barton Thomas, lL.M.
Scott A. Tschlrgl, lL.M.
J. Will Varin
Conley E. Ward
Robert B. White
Terri R. Yost
RETIRED
Kenneth L. Pursley
Raymond D. Givens
James A. McClure
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I am enclosing the original and eight copies ofIdaho Telephone Association s Comments
regarding Case No. INC- T -06-02. Please file the original and return a conformed copy in the
self-addressed stamped envelope.
Should you have any concerns, please feel free to contact me.
Lori Anderson, Assistant
Enclosures
S:\CLlENTS\l233\196\LA to IPUC Filing ITA's Comments.DOC
Conley E. Ward (ISB #1683)
GIVENS PURSLEY LLP
601 West Bannock Street
O. Box 2720
Boise, Idaho 83701-2720
Telephone: [phone]
Facsimile: 208-388-1300
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Attorneys for Idaho Telephone Association
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITION OF
INLAND CELLULAR FOR DESIGNATION
AS ELIGIBLE TELECOMMUNICATIONS
CARRIERS UNDER 47 U.C. ~ 214(e)(2)
Case No: INC-06-
IDAHO TELEPHONE ASSOCIATION'
COMMENTS
The Idaho Telephone Association ("ITA"), by and through its attorneys Givens Pursley
LLP, files these Comments in response to the Petition of Inland Cellular for Designation as an
Eligible Telecommunications Carrier ("Petition ). For the reasons stated below, the ITA
respectfully submits that the Commission must deny Inland Cellular s Petition for eligible
telecommunications carrier ("ETC") status within the service territories of three rural telephone
companies, Citizens Telephone Co. ofIdaho ("Citizens ), Potlatch Telephone Company
Potlatch"), and Inland Telephone Company ("Inland"
As the Petition readily admits, the primary purpose ofInland Cellular s filing is to gain
eligibility for distributions from the federal Universal Service Fund ("USF"). Petition
Supplement at 1. In the case of competitive ETC applications in areas served by rural telephone
companies, federal provides that the Commission must deny such application unless it "shall find
the designation is in the public interest." 47 U.C. Sec. 214(e)(2). This Commission has
IDAHO TELEPHONE ASSOCIATION'S COMMENTS - 1
previously established the criteria to be used in its public interest analysis in such cases in Order
No. 29841 , issued on August 4 2005. That order wisely reserves to the Commission the right to
examine all relevant factors in ETC cases, Order No. 29841 at 16, but it also sets forth a number
of clear tests that must be met before a competitive ETC application will be granted for rural
study areas. The ITA submits that Inland Cellular s Petition fails to meet Order No. 29841'
standards in at least two respects.
One of Order No. 29841' s requirements is designed to insure that incumbent rural
telephone companies are protected from a form of unfair competition known as "cream
skimming," in which the competitive ETC serves only the most profitable or attractive parts of
an incumbent's service territory. Order No. 29841 states:
In instances where an ETC applicant seeks designation below the study level of a rural
telephone company, the Commission shall also conduct a cream skimming analysis that
compares the population density of each wire center in which the applicant seeks
designation against the wire centers in the study area in which the ETC does not seek
designation.
Order No. 29841 at 16.
In the present case, it is unclear whether the Petition proposes to serve the entirety of the
Inland and Potlatch study areas. But it is quite clear that the Petition does not propose coverage
of the entirety of Citizens service territory. In fact, the Petition admits that it will only be able to
provide service in a portion of the two Citizens wire centers in which it seeks ETC status. This is
cream skimming almost by definition, and in any case there is no evidence in the record that
would enable the Commission to conduct the cream skimming analysis required by Order No.
29841.
More important is the Petition s failure to meet Order No. 29841's requirements that are
designed to insure that USF support is in fact "necessary to preserve and advance universal
IDAHO TELEPHONE ASSOCIATION S COMMENTS - 2
service " as required by federal law. See 47 U.C. Sec. 253(b). To that end, Order No. 29841
requires applicants for ETC status in rural telephone company service areas to provide a two year
network improvement plan that explains exactly how USF support will be spent and how those
expenditures will advance universal service.
The two year network improvement plan must describe in specificity proposed
improvements or upgrades to the applicant's network on a wire center-by-wire center
basis throughout its proposed designated service area. Each applicant shall demonstrate
how signal quality, coverage or capacity will improve due to the receipt of high-cost
support; the projected start date and completion date for each improvement and the
estimated amount of investment for each project that is funded by high-cost support; the
specific geographic area where the improvements will be made; and the estimated
population that will be served as a result of the improvements.
Order No. 29841 at 9.
The ITA can find nothing in Inland Cellular s Petition that constitutes even colorable
compliance with this portion of the Commission s Order. The original Petition contained little
more than a general allegation that Inland Cellular projects an estimated total 2006-2007
investment of $2, 1 00 000 at a handful of Idaho sites, together with the bald assertion that these
improvements "will increase the availability of service for rural Idaho. . . ." Petition, Paragraph
26. A supplemental filing on September 26, 2006 explained that some of the items budgeted for
2006 have been postponed until 2007, and it added a brief paragraph describing budgeted
operation and maintenance expenditures for 2007 and 2008, together with an acknowledgement
that "the capital improvement budget for 2008 has yet to be completed and approved." Petition
Supplement at 7.
Even with the inclusion of the supplementary material, the Petition contains only about a
page and a half of generalized narrative about budgeted improvements, and a considerable
portion of that is devoted to descriptions of data and broadband data services, which are not
IDAHO TELEPHONE ASSOCIATION'S COMMENTS - 3
supported services under current USF rules, 1 and projected operation and maintenance expenses
which are largely irrelevant. There is no wire center by wire center list of improvements or
upgrades, no wire center by wire center cost estimates, no explanation of how these projects will
improve "signal quality, coverage or capacity," no projected start and completion date for
individual projects, no explanation of the portion to be funded by high cost support, and no
estimate of the population to be served. In fact, as of late 2006, Inland Cellular has no capital
improvement budget for 2008, which makes any sort of two year plan literally impossible.
Furthermore, the Company specifically refuses to commit to any specific improvements on the
grounds that it normally redirects funds as needed, and "the Company must have this flexibility
in order to remain competitive." Petition Supplement at 6-
It would be one thing if the ITA's objections quibbled over the details ofInland
Cellular s "two year plan " but this is blatant non-compliance with a clear Commission directive.
If the Commission accepts this filing, the public interest finding required by statute and Order
No. 29841 is effectively meaningless.
WHEREFORE, the ITA respectfully requests that the Commission deny Inland
Cellular s Application for ETC status in the areas served by rural telephone companies.
Respectfully submitted this 27th day of November, 2006.
GIVENS PURSLEY LLP
By: ~lU6A
Attorneys for Idaho Telephone
Association
I In fact, the Petition can be read to imply that some portion of the $2 100 000 in claimed universal service
improvements will actually be used to provide data capabilities.
IDAHO TELEPHONE ASSOCIATION S COMMENTS - 4
CERTIFICATE OF SERVICE
I hereby certify that on this 27th day of November, 2006, I caused to be served a true and
correct copy of the foregoing by the method indicated below, and addressed to the following:
Ms. Jean Jewel
Executive Secretary
Idaho Public Utilities Commission
472 W. Washington Street
O. Box 83720
Boise, ID 83720
James K. Brooks
Inland Cellular
103 S. 2nd Street
O. Box 688
Roslyn, W A 98941
Citizens Telecommunications Company ofID
DBA Frontier Communications of ID
Ingo Henningson, Manager, Regulatory
4 Triad Center, Suite 200
Salt Lake City, UT 84180
The Coeur d' Alene Tribe
Chief James Allen, Tribal Chairman
850 A Street
O. Box 408
Plummer, ill 83851
Inland Telephone Company
Douglas Weis, President
P. O. Box 171
Roslyn, W A 98941
Nez Perce Tribal Executive Committee
Rebecca Miles, Chairman
O. Box 305
Lapwai, ID 83540
Potlatch Telephone Company, Inc.
TDS Telecom
Gail Long, Regulatory Contact
O. Box 1566
Oregon City, OR 97045
IDAHO TELEPHONE ASSOCIATION S COMMENTS - 5
u.S. Mail
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Qwest Corporation
Theresa Jensen, Director-Regulatory
1600 - 71 st Avenue, Room 1806
Seattle, W A 98191
Verizon Northwest, Inc.
David Valdez, Vice President
1800 41 st Street
O. Box 1003
Everett, W A 98206
Potlatch Telephone Company, Inc.
Barry L. Hjort
Guillory & Hjort
2111 West Boulevard
Rapid City, SD 57701
Potlatch Telephone Company, Inc.
Morgan W. Richards, Jr.
804 East Pennsylvania Lane
Boise, Idaho 83706
IDAHO TELEPHONE ASSOCIA nON S COMMENTS - 6
S. Mail
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