20190108Comments.pdf

SEAN COSTELLO
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720.0074
(208) 334-03t2
IDAHO BAR NO. 8743
RECEIVED
?[}3 JfiH.B PH I:25
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
NEWMAX,LLC DBA INTERMAX NETWORKS
FOR DESIGNATION AS AN ELIGIBLE
TELECOMMUNICATIONS CARRIER
CASE NO. NEW.T-18.01
COMMENTS OF THE
COMMISSION STAFF
STAFF OF the Idaho Public Utilities Commission, by and through its Afforney of
record, Sean Costello, Deputy Attorney General, submits the following comments.
BACKGROUND
On November 5, 2018, Newmax, LLC dba Intermax Networks ("Intermax" or the
"Company") appliedl to the Commission for an order designating it as an eligible
telecommunications carrier (ETC) in Idaho. The Company asks to be an ETC in specific Idaho
census block groups so it can receive funding it was provisionally awarded under the Federal
Communications Commission (FCC) Connect America Fund Phase II Auction ("CAF II
Auction"). Application at l-2.
I Intermax filed a Supplemental Statement on Local Usage Plans with the Commission on December 3,2018.
STAFF COMMENTS 1 JANUARY 8,2019
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Overview of the Connect America Fund Phase II Auction
On January 31,2018, the FCC issued an Order on Reconsideration concerning its
Connect America Fund initiative, which enabled the FCC to move forward with the CAF II
Auction, in which service providers competed to receive up to $1.98 billion to offer voice and
broadband service in unserved high-cost areas.2 That Order followed a series of orders
establishing the details of the CAF II Auction.3 Under this program the FCC will disburse up to
$198 million annually for providers - including competitive providers such as competitive local
exchange carriers, cable operators, fixed wireless ISPs, satellite broadband, or altemative
providers such as electric utilities and governmental entities - to deploy broadband networks in
high-cost unserved price cap areas.
On August 28,2018, the FCC announced the Auction 903 results. The FCC designated
Intermax as a winning bidder in 42 Census Block Groups in Idaho. Funding is contingent on
Intermax demonstrating that it meets the FCC's technical and financial qualifications, including
obtaining ETC designation from the Idaho Public Utilities Commission by February 25,2019,
for the service area. ETC designation by this Commission is, therefore, a prerequisite for
Intermax's eligibility for funding.a
THE APPLICATION
Intermax is a facilities-based, locally owned, independent internet, voice, data and IT
Managed Services provider in the Inland Northwest. Intermax's services include "regional fiber,
LTE and microwave networks in Kootenai, Bonner, Benewah, and Boundary counties."
Application at 3. The Company also offers a variety of fixed terrestrial broadband services,
including fiber, cable Internet, and fixed point to multi-point wireless broadband services.
Intermax also offers voice services using Voice over Intemet Protocol ("VoIP") technology. The
service for which the Company requests designation is set forth in the Company's Application
Id. at 6-7.
The Company states it qualifies for ETC designation under the Federal
Telecommunications Act (47 U.S.C. $ 21a(e)(l)), the Federal Communications Commission's
2 Connect America Fund, et al., Order on Reconsideration, 33 FCC Rcd 1380 (2018).
3 See, e.g., Connect America Fund et al. Report and Order and Further Notice of Proposed Rulemaking, 31 FCC Rcd
s949 (2016).
4 Auction 903 Results Notice, para. 15, n. I l.
2STAFF COMMENTS JANUARY 8,2019
eligibility rules (47 C.F.R. $ 5a.101(a)), and other requirements set forth by this Commission,
outlined in the Appendix to Commission Order No. 29841 . Id. at 5-9.
The Company asserts it satisfies the requirements for designation as an ETC in that it:
(1) has common carrier status; (2) commits and is able to provide services supported by federal
universal support mechanisms; (3) will advertise the availability of supported services; (4) will,
through its ETC designation, advance the public interest, convenience and necessity; (5) has
contacted the Coeur d'Alene Tribe and has provided relevant and necessary Tribal notifications;
(6) commits and is able to provide supported services as required by this Commission for ETC
status; (7) is capable of managing traffic and maintaining functionality without an external power
source; (8) complies with applicable consumer protection and service quality standards; and (9)
will comply with annual reporting requirements established by this Commission. 1d.
STAFF ANALYSIS
Staff reviewed Intermax's Application and conducted an analysis of the Company's
fulfillment of the Federal Telecommunications Act of 1996,the Connect America Fund
requirements, and Commission OrderNo. 29841. In addition, Staff analyzed the public interest
benefits of awarding the Company a conditional ETC designation. Specific state and federal
requirements for ETC designation are discussed in more detail below.
Public Interest Analysis
When applying the public interest test in an Application for ETC designation, Staff
believes there are two primary considerations that merit discussion. First, Staff verifies that the
Company will contribute to the appropriate Idaho Funds. Second, Staff analyzes whether the
Company's Application raises "cream skimming" concerns.
In the Company's Application, Intermax confirmed that upon approval as an ETC in
Idaho, the Company would participate in the appropriate Idaho programs, specifically the Idaho
9-1-l program and any future reporting requirements deemed appropriate for competitive
telecommunications providers. The Company requests ETC designation for entire census blocks
in areas where price cap carriers previously declined support to serve and, therefore, no cream
skimming analysis is required. Id. at7 and Exh. 1. Thus, Staff believes Intermax satisfies the
public interest considerations.
1JSTAFF COMMENTS JANUARY 8,2019
Network Improvement Plan
In the Idaho ETC Designation Order, a two-year network improvement and progress
report is required for all ETCs receiving high-cost support. See OrderNo. 29841 at 18.
However, the FCC waived the requirement for a winning bidder to file a five-year plans as part
of the ETC designation process. Thus, Staff agrees that a network improvement plan is not a
requirement for Intermax's ETC Application.
Ability to Remain Functional in Emergencies
The Company states that it has the ability to remain functional in emergency situations in
accordance with Commission Order 29841 and 47 C.F.R. $ 5a.202(a)(2). Application at 8.
Intermax asserts that it "will have adequate amounts of back-up power to ensure functionality
without an external power source . . . maintains a redundant middle-mile/backbone network with
redundant paths and network rings. Power outage protection is available at all sites either by
means of significant battery backup or gas-powered generators." Application at 8. Staff agrees
Intermax satisfi es this requirement.
Other ETC Designation Requirements
Additional requirements for ETC designation are detailed in Appendix 1 of Order No.
29841and are discussed in more detail below.
1. Common Carrier Status. Intermax is a common carrier as defined in U.S.C. Tittle 47
Id. at 5-6.
2. Provide Universal Services. Intermax will provide all required services and
functionalities as set forth in Section 5a.101(a) of the FCC's Rules (47 C.F.R.
$ s4.101(a)). Id. at 6-7.
3. Advertising. Intermax will advertise the availability and rates for its services described in
the Application through media of general distribution as required by 47 U.S.C.
$ 21a(e)(1)(B). Id. at7.
4. A Commitment to Consumer Protection and Service. Intermax commits to satisffing all
such applicable State and Federal requirements related to consumer protection and
service quality standards. Id. at 8.
5 +7 c.F.R. g 5a.202(a)(l)(ii)
STAFF COMMENTS 4 JANUARY 8,2019
5. Description of the Local Usage Plan. Intermax has provided a description of its local
usage plan. Id. at 6.
STAFF RECOMMENDATIONS
Based on its review of the Company's Application, Staff believes that the Application
demonstrates the Company's commitment to fulfill the obligations of an ETC in Idaho. The
Company will provide all universal services supported by the federal USF throughout its service
territory; it has addressed all of the public interest questions that accompany an ETC
Application; and it will provide a local usage plan. Thus, Staff believes Intermax's Application
for designation as an ETC in Idaho is in the public interest and should be approved.
Respectfully submitted this R'b day of Janu ary 2019
Sean Costello
Deputy Attorney General
Technical Staff: Daniel Klein
i:umisc/comments/newt 18. I scdk comments
5STAFF COMMENTS JANUARY 8,2019
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 8TH DAY OF JANUARY 2019,
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF" IN
CASE NO. NEW-T.18-01, BY MAILING A COPY THEREOF, POSTAGE PREPAID,
TO THE FOLLOWING:
MICHAEL R KENNEDY
PRESIDENT
NEWMAX LLC dba INTERMAX
74OO MINERAL DR STE 3OO
COEUR D'ALENE ID 838I5
CAITLINE E O'BRIEN
SMITH + MALEK PPLC
60I E FRONT AVE, SUITE 304
COEUR D'ALENE ID 83814
CERTIFICATE OF SERVICE