20010719Decision Memo.pdf

DECISION MEMORANDUM -\
TO:COMMISSIONER HANSEN
COMMISSIONER SMITH
COMMISSIONER KJELLANDER
JEAN JEWELL
RANDY LOBB
DON HOWELL
LYNN ANDERSON
JOE CUSICK
CAROLEE HALL
WAYNE HART
BIRDELLE BROWN
BEVERLY BARKER
RON LAW
TONYA CLARK
WORKING FILE
FROM:DOUG COOLEY
DATE:JULY 19,2001
RE:NEW ACCESS TARIFF AND LOCAL EXCHANGE TARIFF FILED BYMIDVALETELEPHONEEXCHANGE,INC.
On January 29,2001,the Commission received a filing for a new local exchange tariff on
behalf of Midvale Telephone Exchange,Inc.(Midvale).Midvale is a Title 61 telephone company
serving approximately one thousand customers in six exchanges around Idaho.
According to the accompanying cover letter,the new tariff will replace Midvale's existing
local exchange tariff and Sawtooth Telephone Company's local exchange tariff.These companies
merged in December 1999 (See Order No.28233).
Since the Company filed its proposal,it has agreed to modify it in regard to a proposed
vacation rate.Thus,the Company filed a new cover letter on June 23,2001,asking that the new
local tariff,as revised,become effective July 23,2001.
THE NEW LOCAL TARIFF
The proposed local exchange tariff contains the same rates that are currentlyin the Midvale
local exchange tariff in almost every case.Very few customers in the Sawtooth exchange
DECISION MEMORANDUM l JULY 19,2001
(Stanley)may see minor rate changes as the old Sawtooth Telephone tariff is consolidated into the
new Midvaletariff.Staffreviewed these rate changes and found them to be on optional services
and typically favor the customer.Also,Staffs analysis shows the revenue impacts for the
Company will be minimal.Also,by merging Sawtooth Telephone and Midvale Telephone,many
archaic services,such as Centrex and fire alarm systems,have been eliminated.
Midvale also is proposing a new structure for vacation service.The existing vacation
service allows one period of up to four months of the year to be billed at half the local residential
rate.The local rate for exchanges with the existing vacation service is $21.63 per month.Duringthevacationperiod,no incoming or outgoing calls are provided and there is a connection charge
($25.00)when full service is reestablished.
The vacation service Midvale initiallyproposed in its new tariff allows the option of either
50%off the local rate all year long or the ability to disconnect service for any period of time,but
retain the phone number for futureuse.The Company proposed to offer these vacation service
alternativesto both residential and business customers that qualify.To qualify for the first option,
customers must demonstrate that they currentlypay for full telephoneservice in another exchange.
During the proposed vacation service,customers would be able to both send and receive calls.
Under the second option,customers pay a monthlynumber reservation fee of $4.95.
Staff reviewed the new proposed vacation structure and discussed its concerns with the
Company.Staff is generally concerned about a vacation rate that might be so attractive that it
encourages customers to migrate to this service and thereby decrease the Company's revenues.Midvale believes the revenue loss will be minimal and anticipates reduced administrative expenseswilloffsetanyrevenuelosses.Nonetheless,Midvale agreed to revise its proposal and set vacation
rates at 75%of the local rate ($16.23 residential and $30.51 business),and also agreed that itwouldnotseekrecoveryofanyrevenuelossassociatedwithvacationservicethroughtheIdaho
USF.
STAFF RECOMMENDATION
Staff reviewed Midvale's new local exchange tariff and does not object to it,as revised,by
setting the rate for vacation service at 75%of the local rate,with the provision that Midvale
Telephonenot seek Universal Service Funds related to any vacation service revenue losses.Staff
DECISIONMEMORANDUM 2 JULY 19,2001
further recornmends a review of Midvale's vacation service and revenues after one year of the
revised structure.
COMMISSION DECISION
Should the Commission approve Midvale's new local exchange tariff,as revised,including
the provision to establish vacation service at 75%of the local rate?
Doug Cooley
DC:gdk:i:udmemos/new midvale tariff2
DECISIONMEMORANDUM 3 JULY 19,2001