20020328Farmers ITA Comments.pdf

Conley Ward ISB #1683
GIVENS PURSLEY LLP
277 Noith 6th Street,Suite 200
P.O.Box 2720
Boise,ID 83701
[phone]
[phone] (fax)
Attorneys for Fanners Mutual Telephone
and Idaho Telephone Association
S:\MACS\CEW\FARMERSMUTUAL\Level 3 Comm\Comments.rtf
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF CASE NO.:LEV-T-02-01
LEVEL 3 COMMUNICATIONS,LLC TO
AMEND AND EXPAND ITS CERTIFICATE COMMENTS OF FARMERS MUTUAL
OF PUBLIC CONVENIENCE AND TELEPHONE COMPANY AND IDAHO
NECESSITY TO PROVIDE FACILITIES-TELEPHONE ASSOCIATION
BASED LOCAL EXCHANGE AND
INTEREXCHANGE
TELECOMMUNICATIONS SERVICES
STATEWIDE
Farmers Mutual Telephone Company ("Farmers")and the Idaho Telephone Association
("ITA")files these Comments in response to the Idaho Public Utilities Commission's
("Commission")Notice of Application and Notice of Modified Procedure,Order No.28963,in
the above-entitled case.In support of their Comments,Farmers and the ITA state as follows:
Identification of the Parties
Farmers is a telephone cooperative that provides local exchange service and other
telecommunications service in the area in and around Fruitland,Idaho.Farmers is also a
member of the ITA,a non-profit association that represents the interests of twelve rural
telephone companies that provide local exchange service and other telecommunications services
in rural areas of Idaho.All of the ITA member companies qualify as "rural telephone
FARMERS MUTUAL COMMENTS --1
companies"under the provisions of The Telecommunications Act of 1996 (hereafter "Act").See
47 U.S.C.§l53(37).
Level 3 Communications,LLC ("Level 3"),the Applicant in this case,is a
competitive local exchange carrier that has been previouslyauthorized to provide facilities-
based local exchange and interexchangeteleconununications services within the Idaho service
territories of Qwest and Verizon.Level 3 now seeks general authorityto expand its services
statewide,and specific authorityto enter Farmers'Idaho service territory.
Comments
Level 3's Application states that its ultimate objective is to provide facilities based
telecommunications service throughout the State of Idaho.Application at 3.For the present,
however,Level 3 intends to use the services of third party carriers or tariffed LEC offerings to
provide service in rural areas.Application at 3-4.According to the Application,the immediate
impetus for Level 3's proposed expansion is its desire to provide points of presence in rural areas
for Level 3's major Internet Service Provider ("ISP")customers.This expansionis alleged to be
in the public interest because it will benefit "consumers who currentlyhave to dial long-distance
for access to internet service providers."Application at 3.Finally,the Application notes that
Level 3's initial expansion will be into the Farmers'service territory.Id.
Farmers and the ITA find it difficult to accept at face value Level 3's stated reason
for the expansionof its certificate.Given the large extended area service ("EAS")regions in
southern Idaho,the overwhelming majority of rural telephone company customers have toll free
dial up access to a host of ISPs.In the case of Farmers'customers,for instance,they can reach
any ISP with a point of presence anywhere in the Boise toll free area.Assuming Level 3 has a
presence in Boise,Twin Falls,and Pocatello or Idaho Falls,almost all of the rural telephone
company customers can reach Level 3's ISP customers without incurringa toll charge.
FARMERS MUTUAL COMMENTS --2
Nevertheless,neither Farmers nor the ITA object to the expansion of Level 3's
certificate of convenience and necessity to include Farmers'service territory,provided certain
reasonable conditions are attached.First,as Level 3's Application concedes,Farmers'existing
exemption from the requirements of Section 251(c)of the Act cannot be terminated in this
proceeding because Level 3 has not met the Section 251(f)(l)(A)prerequisitesfor such
termination.Second,Farmers'failure to protest Level 3's Application should not be interpreted
as a waiver ofits right under Section 2Sl(f)(2)to seek a suspension or modification of the
obligations imposed by Sections 251(b)or 251(c)of the Act.
The ITA is,however,opposed to Level 3's request for statewide authority,at least
insofar as it would extend to ITA members other than Farmers.The high cost rural areas served
by ITA members are particularlyvulnerable to unfair "cherrypicking"of their few low cost,
high volume customers.This is doublytrue for the fully regulatedmembers of the ITA,who
don't have the rate flexibilityto respond to selective competitive attacks on their best customers.
In recognition of this fact,Congress provided that state commissions can require a competitive
carrier seeking entry into a rural telephone company's service territory to meet an eligible
telecommunications carrier's obligations to offer,and market,universal services throughout the
rural company's territory "before being permitted to provide such service."47 U.S.C.§253(f)
(emphasis added).In essence,Congress acknowledged that in rural telephone company service
areas,fair competition may have to be an all or nothing proposition.
In the present case,Level 3 has made no attempt whatever to show it intends to offer
the full range of universal services or compete for all the customers in the rural telephone
companies'service territories.On the contrary,the tenor of its Application suggests it intends to
engage in precisely the sort of selective marketing that led Congress to enact Section 253(f).
This is not fair competition,and it serves neither the public interest nor the interests of most rural
FARMERS MUTUAL COMMENTS ---3
telephone company customers.It can serve only to drive up costs for non-targeted rural
customers and increase Idaho Universal Service Fund levies and disbursements.
At the very least,Level 3's application for statewide authorityshould not be
processed under modified procedure.In view of the importance of the public policy issues
involved,the Commission should conduct an investigation and evidentiary proceedings before
deciding whether to grant new,and unconditional,competitive certificates in rural telephone
company service areas.The ITA is confident that,if the Commission does so,it will find that
the public interest requires adoption of the Section 253(f)protections against cherry picking as a
precondition for competitive local exchange carrier certificates in most,ifnot all,rural telephone
company service territones.
RESPECTFULLYSUBMITTED this 26 day of March,2002.
Con y Ward
GIVENS PURSLEY LLP
Attorneys for Farmers Mutual Telephone
FARMERS MUTUAL COMMENTS --4
CERTIFICATEOF SERVICE
I HEREBY CERTIFY that on the day of March,2002,I caused to be served atrueandcorrectcopyoftheforegoingbythemethodindicatedbelow,and addressed to thefollowing:
Jean Jewell
Idaho Public Utilities Secretary
472 W.Washington Street
P.O.Box 83720
Boise,ID 83720-0074
U.S.Mail Fax x By Hand
Dean J.Miller
McDevitt &Miller,LLP
537 West Bannock,Suite 215
P.O.Box 2564
Boise,ID 83702
x U.S.Mail _Fax By Hand
Gregory L.Rogers,Esq.
Level 3 Communications,LLC
1025 Eldorado Boulevard
Broomfield,CO 80021
x U.S.Mail Fax _By Hand
TiÊa Smith
FARMERS MUTUAL COMMENTS -5