20040526Comments.pdf

WELDON B. STUTZMAN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 3283
F I L. E D
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Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
QWEST COMMUNICATIONS CORPORATION
FOR AN AMENDMENT TO CERTIFICATE OF
PUBLIC CONVENIENCE AND NECESSITY NO. )
402 TO PROVIDE LOCAL EXCHANGE
TELECOMMUNICATIONS SERVICES.
CASE NO. QCC-04-
COMMENTS OF THE
COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
Attorney of record, Weldon B. Stutzman, Deputy Attorney General, in response to Order No.
29496, the Notice of Application and Notice of Modified Procedure in Case No. QCC-04-
issued on May 12, 2004, and submits the following comments.
BACKGROUND
On April 2, 2004, Qwest Communications Corporation (QCC) filed an Application for
amendment of its Certificate of Public Convenience and Necessity. The Commission on
September 3, 2002, approved Certificate No. 402 to QCC granting it authority to provide basic
local exchange services within Verizon Northwest Inc. ' s service area. QCC now seeks to amend
its Certificate to enable it to provide local services throughout the State of Idaho, including within
the service area of Qwest Corporation (QC). QCC asked that its Application be processed by
Modified Procedure, and requested that the comment period be shortened to 14 days.
STAFF COMMENTS MAY 26, 2004
STAFF ANALYSIS
When Staff reviewed the original QCC application for a CPCN to provide competitive
basic local exchange service it raised a number of questions about the possible consumer
confusion that could develop with two "Qwests" (QCC the CLEC and QC the ILEC) competing
for basic local exchange customers in the same marketplace. Staff felt there could be potential
harm to the public interest from consumer confusion caused by the additional "competition" that
QCC would add to the marketplace. At that time, QCC dealt with those concerns by amending its
application to remove the QC service area from its application and the Commission approved that
reduced service area. In this application, QCC seeks to have the QC service area added to the area
in which it may provide basic local service.
Staff still has the same concerns that it raised with the original application. Staff believes
that allowing two Qwests to actively compete in the same marketplace for the same products and
customers may lead to consumer confusion. Therefore, Staff examined this application to
determine the extent to which it would likely lead to such consumer confusion.
As originally submitted, this Application for an Amendment failed to clearly identify what
services QCC intended to market and to which types of customers. The few services that were
identified did not include any basic local exchange services for which a CPCN is required. Staff
sought clarification of the Company s intentions and the Company s response indicated it did not
intend to provide basic local exchange service to residential or small business customers in the
near term. As this response indicated that no changes to its Certificate were necessary, Staff asked
the Company to clarify the reason an amendment to the Company s CPCN was needed. The
Company responded with a letter from Qc's Director of Regulatory Affairs, clarifying that QCC
did not intend to actively seek residential and small business customers at this time, but wanted the
authority to serve some customers in relation to the large business markets to which it would be
actively marketing its services on a regional or national basis. As a result of national marketing,
QCC may have an opportunity to provide service to large customers with remote offices that
would qualify as small businesses, and the Company stated that it needed the flexibility to be able
to provide basic local exchange services to these customers under a single corporate entity if it was
to effectively compete in the marketplace.
STAFF COMMENTS MAY 26, 2004
STAFF RECOMMENDATION
As clarified, QCC's intended operation will not involve two Qwest's actively
competing in the same marketplace for the same customers with the same products. Staff believes
the identified QCC operation will be sufficiently limited such that it will not lead to significant
confusion for most basic local exchange customers. Staff recommends that the Commission
monitor the performance of QCC and QC and if customer confusion becomes a problem, the
Commission may take steps at that time to deal with it.
Staff recommends that the Commission approve QCCs Application for an Amendment to
its CPCN to change the service area to include the entire State of Idaho.
Respectively submitted this 2- ~VL- day of May 2004.
Q -L-/
Weldon B. Stutzman
Deputy Attorney General
Technical Staff: Wayne Hart
i:umisc/comments/qcctO4.1 wswh
STAFF COMMENTS MAY 26, 2004
CERTIFICATE OF SERVICE
HEREBY CERTIFY THAT I HAVE THIS 26TH DAY OF MARY 2004
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. QCC-04-, BY MAILING A COpy THEREOF POSTAGE PREPAID
TO THE FOLLOWING:
MARY S HOBSON
STOEL RIVES LLP
SUITE 1900
101 S CAPITOL BLVD
BOISE ID 83702-5958
ADAM L SHERR
Q WES T
1600 7TH AVE ROOM 3206
SEATTLE WA 98191
JJf
SECRET Y
CERTIFICATE OF SERVICE