20030519Reply to Qwest.pdf

WELDON B. STUTZMAN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
ISB NO. 3283
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983
Attorney for the Commission Staff
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BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
QWEST CORPORATION FOR DEREGULATION OF BASIC LOCAL
EXCHANGE RATES IN ITS BOISE, NAMPA,
CALDWELL, MERIDIAN, TWIN FALLS,
IDAHO FALLS, AND POCATELLO EXCHANGES.
CASE NO. QWE-O2-
STAFF'S REPLY
MEMORANDUM TO QWEST
CORPORATION'S ANSWER
AND CROSS PETITION FOR A
DECLARATORY RULING
MOTION TO VACATE
HEARING DATES
The Commission Staff, by its counsel of record, files this Reply Memorandum to
Qwest Corporation s Answer to Petition for a Declaratory Ruling and Cross Petition. In its
Petition for Declaratory Ruling, Staff asks the Commission to rule on the legal construction of
Idaho Code 9 62-622(3), it being clear from the pre filed testimony and exhibits that the parties
substantially disagree on the interpretation of that statute. As the result, the parties defined the
factual issues for an evidentiary hearing based on greatly differing understandings of the statute.
On May 13, 2003 , Qwest filed its Answer to Staffs Petition for Declaratory Ruling and also
filed a Cross Petition asking the Commission to issue an Order approving its interpretation of
Idaho Code 9 62-622(3)(b).
STAFF'S REPLY MEMORANDUM TO
QWEST CORPORATION'S ANSWER AND
CROSS PETITION FOR A DECLARATORY RULING
MOTION TO VACATE HEARING DATES
The initial point of disagreement is over the legislature s use of the term local
services in Section 62-622(3)(b). In its Petition, Staff asks the Commission to issue a declaratory
ruling stating that "the legislature did not intend the term basic local exchange service to be
inserted into subparagraph (b) (of Section 62-622(3)) in place of the term local services." Staff
Petition, p. 10. By its Cross Petition, Qwest asks the Commission to rule that "the term 'local
service ' as used in Idaho Code 9 62-622(3)(b) is a shorthand reference to 'basic local exchange
services' as that term is used in Idaho Code 9 62-622(3) and defined in Idaho Code 9 62-
603(1)." Qwest Answer, p. 22. Clearly this issue most directly identifies the positions of the
parties and their disparate approaches to the case.
Replacing the term local services with the term basic local exchange servIces
however, is only the first step in Qwest's restrictive interpretation of the statute. After inserting
the new term, Qwest then narrows the definition of basic local exchange services; that is, Qwest
contends it is no more than two-way interactive switched voice communication. Qwest thereby
concludes an alternative service is functionally equivalent to basic local exchange service if it is
capable of providing voice communication. Finally, Qwest isolates subparagraph (b) from the
rest of paragraph (3) and the legislature s stated intent in order to strictly limit what it is required
to show for its local rates to be deregulated. Thus, by injecting the term basic local exchange
services into subparagraph (b), and then by applying a restrictive definition of that term, Qwest
narrowly defines first the "functionally equivalent" requirement and ultimately the "effective
competition" standard in Section 62-622(3). Qwest's interpretation results from the goal it seeks
rather than from the canons of statutory construction. Application of the most fundamental
principles of statutory construction requires a declaratory ruling against Qwest's interpretation of
Section 62-622(3).
The Parties Agree on the Established Rules for Statutory Construction.
Principles for construing a statute are well established by the courts and the parties
apparently agree on the principles to be applied. For example, Qwest agrees that "statutory
interpretation begins with the words of the statute and should give the language used its plain
obvious and rational meaning." Qwest Answer, p. 8. Qwest also concedes "that the purpose of
statutory construction is to ascertain and give effect to the legislative purpose.Id. Qwest did
not mention, but apparently does not disagree, that when the legislature enacts a statute, it must
STAFF'S REPLY MEMORANDUM TO
QWEST CORPORATION'S ANSWER AND
CROSS PETITION FOR A DECLARATORY RULING
MOTION TO VACATE HEARING DATES
be assumed the legislature means what is clearly stated unless the result is palpably absurd.
Inama v. Boise County ex rei Bd. of Commissioners Idaho -' 63 P.3d 450 (2003).
Similarly, if the statute is not ambiguous, there is no need to engage in statutory construction.
Inama Idaho -' 63 P.3d 450
- ("
If the statute is not ambiguous, this Court does not
construe it, but simply follows the law as written ). The Supreme Court also concludes that
(a)mbiguity is not established merely because differing interpretations are presented to the
Court; otherwise, all statutes would be considered ambiguous.Id. Finally, if a statute
ambiguous, then it must be interpreted to accomplish the intent and purpose of the legislature.
State Dewebre 133 Idaho 663 , 991 P.2d 388 (Ct. App. 1999).
Qwest does not argue that the statute is ambiguous, but nonetheless interprets Section
62-622(3) without applying the basic principles of statutory construction. For example, Qwest
rejects the specific words used by the legislature, but makes no attempt to demonstrate the statute
is ambiguous or that the result of using the words selected by the legislature is palpably absurd.
Likewise, while putting its own interpretation on the statute, Qwest completely disregards the
legislature s stated intent for application of Section 62-622(3), as well as a Commission
precedent applying the statute in light of the legislature s purpose and intent. In contrast, Staffs
interpretation accepts the words used by the legislature in Section 62-622(3). In addition, Staff
acknowledges the expressed intent of the legislature and explains how the language of the statute
is consistent with the legislature s intent. If the words of Section 62-622(3)(b) are accepted as
written and are given their plain, obvious and rational meaning, and if effect is given to the
legislative intent and purpose, Qwest's interpretation ofthe statute must be rejected. Application
of these principles requires the declaratory ruling requested by Staff.
Section 62-622(3)(b) Does Not Contain the Term Basic Local Exchange Services and There
Is No Basis for Adding It to the Paragraph.
It must be noted first that Qwest seeks to change or add to the words selected by the
legislature, in derogation of the first principle of statutory construction. Qwest rejects the term
local services used by the legislature and instead inserts the term basic local exchange services in
its place, without explaining how Section 62-622(3) is ambiguous or the result palpably absurd
by the legislature s use of the term it selected. In fact, the legislature s use of the term local
STAFF'S REPLY MEMORANDUM TO
QWEST CORPORATION'S ANSWER AND
CROSS PETITION FOR A DECLARATORY RULING
MOTION TO VACATE HEARING DATES
services rather than basic local exchange services is entirely logical and consistent with the
legislature s purpose and intent for Section 62-622(3).
By Section 62-622(3), the Commission is to cease regulating Qwest's basic local
rates only when effective competition exists. The legislature recognized by subparagraph (b) that
competition for local service customers might arise from something other than a facilities-based
provider. Under that scenario, a company providing functionally equivalent, competitively
priced local services might in fact be directly competing for Qwest's basic local service
customers.
Use of the term local servIces is consistent with the notion that the alternative
servIce, although not identical may nonetheless be functionally equivalent to basic local
exchange service. The legislature is inviting a comparison of the different products to determine
whether they are functionally equivalent, and ultimately, whether they effectively compete for
customers. It simply is not possible to determine whether two products are functionally
equivalent without understanding the various functions of the two products. Likewise, it is not
possible to determine whether the products are actually competing for customers without
evaluating whether customers are buying them for different purposes. The legislature wisely did
not restrict the "functionally equivalent" comparison by defining that term because to do so
might artificially narrow the necessary comparison. Far from being ambiguous or palpably
absurd, the legislature s use ofthe term local services is entirely logical, reasoned, and consistent
with the purpose of the statute.
Qwest's goal is to limit the functionally equivalent review, so Qwest restricts the
definition of basic local exchange services after inserting it into subparagraph (b). By describing
basic local exchange services as no more than voice communication, Qwest claims "that data-
related services, being excluded from the definition of "basic local exchange services" under
Idaho Code 9 62-603(1), are irrelevant to the evidence Qwest must offer in this docket." Qwest
Answer, p. 2. By replacing the term local services with the term basic local exchange services
Qwest believes it can restrict the functionally equivalent test to a determination that the
alternative product provides voice communication.
Of course, basic local exchange servIce does more than provide voice
communication, and the definition is not as limited as Qwest contends. The statutory definition
STAFF'S REPLY MEMORANDUM TO
QWEST CORPORATION'S ANSWER AND
CROSS PETITION FOR A DECLARATORY RULING
MOTION TO VACATE HEARING DATES
begins with "the provision of access lines " and its functions include data-related services via the
access lines.In fact, Qwest's Basic Local Exchange Tariff currently on file with the
Commission provides a rate for single lines "connected to customer-provided computer and/or
computer systems equipment capable of information processing and/or storage.Qwest
Corporation Basic Local Exchange Tariff, Southern Idaho, Section 5 , Page 37. The identified
rate for a single, flat rate access line connected to a customer s computer is "IFA " a small
business rate fully regulated by the Commission under Title 61 as part of Qwest's basic local
exchange service. A copy of page 37 of Qwest's Basic Local Exchange Tariff is attached to this
memorandum.
Qwest mischaracterizes Staff s interpretation to mean "the legislature intended that to
prove the existence of effective competition for basic local exchange service, an incumbent must
prove that customers have 'functionally equivalent' and 'competitively priced' access to the
internet." Qwest Answer, p. 9. The point is the legislature by the language selected recognized a
full review of functions must take place to determine whether two products are actually
competing for customers. Staff accepts the language adopted by the legislature to enable a
meaningful review of functions, and thus a meaningful review of whether effective competition
exists.
Qwest, on the other hand, proposes to change the statutory language, and its
adjustment to the statute is not based on principles of statutory construction. Qwest merely
asserts the legislature used the term local services in subparagraph (b) as a "short-hand"
reference to basic local exchange services. To make its argument, Qwest points out that the
legislature several times used abbreviated references in Section 62-622, stating "the legislature
used more short-hand references (12) to 'basic local exchange services ' than it used the long-
hand form of that term (11)." Qwest Answer, p. 11.
Staff acknowledged in its initial memorandum that the legislature uses a short-hand
reference to basic local exchange services in paragraph (2) of Section 62-622. In two separate
sentences, each containing the full term basic local exchange services, the legislature later in
each sentence used the terms such local service" or such services " clearly referring to basic
local exchange services used earlier in the same sentence. At other points in the statute, the
legislature s use of a shorter term must refer to something other than basic local exchange
STAFF'S REPLY MEMORANDUM TO
QWEST CORPORATION'S ANSWER AND
CROSS PETITION FOR A DECLARATORY RULING
MOTION TO VACATE HEARING DATES
services, as is evident from the context. The legislature s frequent use of the term basic local
exchange services throughout Section 62-622 generally demonstrates it used the complete term
when intending to reference those services. The more important point is that determining the
legislature s intent requires that the words selected be read in the particular context in which they
appear, and it must be assumed that the words used were deliberately selected by the legislature.
Significantly, the context and purpose of the language selected by the legislature for
paragraph (3) itself demonstrates the legislature s use of local services in subparagraph (b) was
deliberate. Paragraph (3) is the only part of Section 62-622 that addresses deregulation of basic
local exchange rates, subparagraph (b) describing one of the means by which competitive
services may appear. If the term basic local exchange services is inserted into subparagraph (b) a
ridiculous redundancy occurs. In addition to being functionally equivalent and competitively
priced, the legislature provides that the alternative local services must be "reasonably available to
both residential and small business customers.Part of the definition of basic local exchange
service is "the provision of access lines to residential and small business customers." Idaho
Code 9 62-603(1) (italics added). If the definition is read into subparagraph (b), as Qwest
advocates, the paragraph would require, in part, access lines "to residential and small business
customers" that are also "reasonably available to both residential and small business customers.
Logically, the legislature s use of the term local services required it to add the phrase
reasonably available to both residential and small business customers" because that is not part
of a definition for local services.
There is no basis for Qwest to assume the legislature intended the term basic local
exchange services be inserted into Section 62-622(3)(b) where it instead used the term local
servIces.In fact, the first canon of statutory construction prevents that assumption.The
language specifically adopted by the legislature must be accepted and applied.Only if
application of the specific words used by the legislature creates an absurd result can a good faith
attempt be made to differently interpret the words selected by the legislature. If that step is
reached, the legislature s language must be interpreted to be consistent with and to apply the
intent of the legislature in the statute.
Qwest's Interpretation Contravenes the Intent and Purpose of the Legislature.
STAFF'S REPLY MEMORANDUM TO
QWEST CORPORATION'S ANSWER AND
CROSS PETITION FOR A DECLARATORY RULING
MOTION TO VACATE HEARING DATES
Application of the fundamental principle of statutory construction, that the legislative
intent and purpose of the statute be given effect, also defeats Qwest's constrained interpretation
of Section 62-622(3). Qwest acknowledges the purpose of statutory construction is to ascertain
and give effect to the legislative purpose, and purportedly agrees the interpretation of Section 62-
622(3)(b) must be in harmony "with the remainder of Title 62.Qwest Answer, pp. 8-
Notably however, Qwest completely ignores the specific, directly relevant, expressed intent of
the legislature for the Commission s interpretation and application of Section 62-622(3). In
contrast, Staff s interpretation of the statute fully recognizes and furthers the legislature s intent
both as expressed in Section 62-622(3) as well as in Idaho Code 9 62-602(2).
The directive of Section 62-622(3) is for the Commission to cease regulating Qwest's
basic local rates only when effective competition exists. Lest there be any question that the
legislature intended actual, effective competition to exist before local service rates are
deregulated, the legislature reaffirmed its intent in Section 62-602(2). There the legislature states
that effective competition throughout a local exchange calling area will involve a significant
number of customers having both service provider and service option choices and that actual
competition means more than the mere presence of a competitor. Instead, for there to be actual
and effective competition there needs to be substantive and meaningful competition throughout
the incumbent telephone corporation s local exchange calling area.Idaho Code 9 62-602(2)
(italics added).
The Commission previously construed Section 62-622(3) in light of the legislature
specific intent in Section 62-602(2). Staff discussed in its previous memorandum that the
Commission already rejected part of Qwest's interpretation of Section 62-622(3) as inconsistent
with the legislature s intent. As a quick reminder, the Commission concluded in Order No.
28369 entered in Case No. USW-99-15 (the Burley case), that a subparagraph of Section 62-
622(3) cannot be interpreted to defeat the legislature s intent that competition be actual
effective, substantive and meaningful before local rates are deregulated.Qwest not only
advocates the same interpretation the Commission rejected in the Burley Order, it does
without making any attempt to explain how its interpretation is different here or to convince the
Commission to overrule the conclusion it reached in the earlier Order. It is noteworthy that
STAFF'S REPLY MEMORANDUM TO
QWEST CORPORATION'S ANSWER AND
CROSS PETITION FOR A DECLARATORY RULING
MOTION TO VACATE HEARING DATES
Qwest's Answer does not make any attempt to explain its interpretation of Section 62-622(3) in
light of the Commission s previous decision.
Any good faith effort to interpret a statute must be based on the purpose and intent of
the legislature. That is, after all, the very goal in construing a statute. Inexplicably, although
purporting to interpret Section 62-622(3) to further the legislature s purpose, Qwest fails to
address or even acknowledge the legislature s stated intent in Section 62-602(2). Likewise
Qwest ignores the Commission s existing interpretation of Section 62-622(3) in the Burley
Order. It is fair to assume Qwest ignores the legislature s intent because it does not fit its own
narrow purpose and interpretation of Section 62-622(3)(b). That approach defies a fundamental
tenant of statutory construction; that is, to ascertain and give effect to the intent and purpose of
the legislature. Far from diligently attempting to interpret the statute to further the legislative
intent, Qwest's interpretation is contrary to the legislature s stated purpose, and seems calculated
to defeat it.
CONCLUSION
In matters brought before it, this Commission is functionally equivalent to a court of
law. Like any court, it is the duty of the Commission to accept and enforce the statutes as
enacted by the legislature, to construe them as written and to further the intent of the legislature.
Cases filed under relevant statutes are to be decided according to the law as written, not by
gamesmanship or a marketing campaign.
The Staffs interpretation of Section 62-622(3) is simply a straightforward
application of the statute as enacted by the legislature. Qwest's interpretation, on the other hand
amounts to a significant re-write of the statute. By Qwest's interpretation, subparagraph (b)
would read:
(b) There is competitively priced voice communication service reasonably
available to both residential and small business customers from a
telephone corporation unaffiliated with the incumbent telephone
corporation.
In addition, the legislature s stated intent in Section 62-602(2), that competition be actual
effective, substantive and meaningful before local rates are deregulated, would be a nullity. If
that is what the legislature intended, drafting it that way is a simple matter.
STAFF'S REPLY MEMORANDUM TO
QWEST CORPORATION'S ANSWER AND
CROSS PETITION FOR A DECLARATORY RULING
MOTION TO VACATE HEARING DATES
A good faith interpretation of a statute begins with the language of the statute
accepting it as written, construing it to accomplish the intent and purpose of the legislature.
Qwest changes the words of the statute and ignores the stated legislative intent. Application
the canons of statutory construction require a declaratory ruling that (1) the legislature did not
intend the term basic local exchange services to be inserted into Section 62-622(3)(b) in place of
the term local services, (2) a review of the features of a product alleged to be "functionally
equivalent" is not limited to a determination that the product provides voice communications
and (3) an applicant filing under Section 62-622(3) for deregulation of basic local rates must
show that actual, effective, substantive and meaningful competition exists for the applicant's
basic local exchange service.
MOTION TO VACATE HEARING DATES
The Commission Staff, by its counsel of record, moves for an Order from the
Commission vacating the hearing dates in this case currently set for June 4-, 2003. Staff
represented in its Petition for Declaratory Ruling that the parties substantially disagree on the
interpretation of Idaho Code 9 62-622(3), resulting in confusion and inconsistency that would be
resolved by the Commission providing a ruling on the legal construction of the statute. Since
Staff filed its Petition and Memorandum, Qwest filed a Cross Petition for Declaratory Ruling and
Memorandum, asking the Commission to issue an Order approving its interpretation of Section
62-622(3).
It is clear from the Petition and Cross Petition the parties substantially disagree on
the legal interpretation of Section 62-622(3), and that a declaratory order from the Commission
will resolve the dispute. It is equally clear at least one party s case will be significantly affected
by the Commission s Order. That is a positive result, however, because "the evidentiary hearing
will be much more efficient and useful, focusing on relevant facts rather than witness statements
of the legal analysis of Section 62-622(3)." Staff Petition, p. 2.
The interpretation of a statute is solely a legal issue for the Commission
determination, and both parties are asking the Commission to provide a ruling in this case.
Because the parties' prefiled testimony was prepared with vastly different understandings of the
STAFF'S REPLY MEMORANDUM TO
QWEST CORPORATION'S ANSWER AND
CROSS PETITION FOR A DECLARATORY RULING
MOTION TO VACATE HEARING DATES
relevant law, the Commission s decision will significantly affect the case. In fact, counsel for
Qwest stated to Staff counsel the Company would not proceed to hearing on June 4 if the
Commission rules against Qwest's interpretation of Section 62-622(3). Likewise, if the
Commission rules against Staff s interpretation, Staff will withdraw its prefiled testimony and
exhibits in order to prepare them consistent with the legal guidance provided by the Commission.
Once the Commission issues its declaratory Order, the issues for hearing will be
simplified and the parties will be able to agree on what facts are relevant for an evidentiary
hearing.Evidence will focus on relevant factual disputes rather than on different witness
opinions about the statute s interpretation. The hearing scheduled for June 4-, 2003 should be
vacated to allow both parties time to reassess their case in light of the Commission s decision
and refile testimony and exhibits to be consistent with the Commission s declaratory Order.
Staff requests the Commission hear argument on its Motion to Vacate Hearing Dates
during the oral argument on the Petitions for Declaratory Order set for Thursday, May 22, 2003
at 10:00 a.
Respectfully submitted this 9~ay of May 2003.
.()
-L.---.
. /
Weldon B. Stutzman
Deputy Attorney General
for the Commission Staff
bls/N:QWETO225 ws8
STAFF'S REPLY MEMORANDUM TO
QWEST CORPORATION'S ANSWER AND
CROSS PETITION FOR A DECLARATORY RULING
MOTION TO VACATE HEARING DATES
SOUTHERN IDAHO
Issued: 8-14-2000
Qwest CorporationBasic Local ExchangeTariff SECTION 5
Page 37
Release I
Effective: 8-18-2000
IDAHO PUBLIC UTILITIES COMMISSIONAPPROVED EFFECTiVE
SEP 2 9 'AUG 18 '
~"A. )2 SECRET ARY
5. EXCHANGE SERVICES
LOCAL EXCHANGE SERVICE
LOCAL SERVICE OPTIONS (Cont'
B. Computer Port Access
I. The following rates and charges will apply to CO access lines connected to
customer-provided computer and/or computer ' systems equipment capable of
information processing and/or storage.
2. Foreign Central Office, FX, Exchange Service Extension, or other incremental
charges will be applied in addition to the following rates and charges.
3. The following rates and charges are in addition to the equipment with which the
lines are associated.
NONRECURRING MONTHLY
USOC CHARGE RATE
. Flat rate access line, each IF A (1)(1)
. Additional flat rate access
line, each AFV (1)(1)
. Measured rate access line
each B4Q (2)(2)
. Additional measured rate access
line, each A4Q (2)(2)
(1 )
(2)
Rates and charges same as 1FB in 5.2.4.
Rates and charges and measured usage charge same as LMB in 5.2.
ADVICE No. 00-07-
5102000-037
CERTIFICATE OF SERVICE
HEREBY CERTIFY THAT I HAVE THIS 19TH DAY OF MAY 2003
SERVED THE FOREGOING STAFF'S REPLY MEMORANDUM TO QWEST
CORPORATION'S ANSWER AND CROSS PETITION FOR A DECLARATORY RULE
AND MOTION TO VACATE HEARING DATES, IN CASE NO. QWE-02-, 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
ADAM L SHERR
QWEST
1600 7TH AVE, ROOM 3206
SEATTLE, WA 98191
CONLEY WARD
GIVENS PURSLEY LLP
277 N 6TH ST, SUITE 200
PO BOX 2720
BOISE, ID 83701-2720
CLAY R STURGIS
MOSS ADAMS LLP
601 W RIVERSIDE, SUITE 1800
SPOKANE, WA 99201-0663
DEAN J MILLER
McDEVITT & MILLER LLP
PO BOX 2564
BOISE, ID 83701
BRIAN THOMAS
TIME WARNER TELECOM
223 TAYLOR AVE NORTH
SEATTLE, W A 98109
SUSAN TRAVIS
WORLDCOM INc.
707 17TH STREET, SUITE 4200
DENVER, CO 80202
MARY JANE RASHER
AT&T COMMUNICATIONS OF THE
MOUNTAIN STATES INc.
10005 S GWENDEL YN LANE
HIGHLANDS RANCH, CO 80129-6217
MARLIN D ARD
WILLARD L FORSYTH
HERSHNER, HUNTER, ET AL
180E 11TH AVE POBOX 1475
EUGENE, OR 97440-1475
DEAN RANDALL
VERIZON NORTHWEST INc.
17933 NW EVERGREEN PKWY
BEAVERTON, OR 97006-7438
JOHN GANNON
ATTORNEY AT LAW
1101 W RIVER, SUITE 110
BOISE, ID 83702
BEN JOHNSON
BEN JOHNSON ASSOCIATES INc.
2252 KILLEARN CENTER BLVD
TALLAHASSEE, FL 32308
~ol~
SECRETARY
CERTIFICATE OF SERVICE