20030103Complaint.pdf

TO:
FROM:
DATE:
DECISION MEMORANDUM
COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
JEAN JEWELL
RANDY LOBB
DON HOWELL
LYNN ANDERSON
JOE CUSICK
BIRDELLE BROWN
CAROLEE HALL
DOUG COOLEY
BEVERLY BARKER
MARGE MAXWELL
GENE FADNESS
TONY A CLARK
RON LAW
WORKING FILE
CPt()E~ f- 0 2~tJ
WAYNE BART
JANUARY 3, 2002
RE: HORNER COMPLAINT ABOUT QWEST SPECIAL FACILITIES
CHARGES.
BACKGROUND
On October 30, 2002, Richard Homer contacted the Commission Consumer Staff
complaining about a special facilities charge that Qwest Corporation had indicated he must pay
in order to provide telephone service to an apartment complex he was constructing in Rexburg.
Upon the inquiry of the Consumer Staff, Qwest's executive office complaint staff sustained the
charges, indicating they were imposed in accordance with its Basic Local Exchange Tariff
Section 4, page 4, paragraph 4.
At this point, the complaint was referred to the Telecom Section, who made further
inquiry of Qwest's Idaho Regulatory Staff, as this appeared to be a new application of the
language of the tariff and inconsistent with Staff s understanding of the Commission s policies in
regards to a company s responsibilities for upgrading its facilities inside its network.
DECISION MEMORANDUM JANUARY 3, 2003
On November 13 2002, Qwest's Manager of Regulatory Affairs for Idaho , John Souba
provided a written response to Staffs inquiry explaining the Company s position and indicating
the Company believed the charges were consistent with the language of the tariff, and requesting
that the complaint be brought before the Commission if Staff does not agree that the charges are
valid.
In his response, Mr. Souba indicated the area in question was originally cabled for single-
family residential service and, as Mr. Homer s development was for seven 6-plex apartment
complexes, it required "special" facilities and the imposition of such charges was consistent with
the language of the tariff. Qwest had to install 1400 feet of new 100-pair aerial cable at a cost of
303 in order to provide service to these apartments. Homer was charged $3 528 ($6,303
minus the cost of the actual cable, which Qwest indicated is re-useable.) A copy of Mr. Souba
response is attached.
The specific language of the tariff is as follows:
SPECIAL SERVICE ARRANGEMENTS
SPECIAL AsSEMBLIES, FACILITIES AND FINISHES OF EQUIPMENT
Rates and charges in connection with special assemblies, special
facilities and special finishes of equipment will be based on the
costs involved in each individual case.
STAFF POSITION
Staff maintains that the tariff language cited by Qwest in supporting these charges does
not apply in these circumstances. The facilities Qwest proposes to use to provide the service
the apartments are not "special", but are very typical of the facilities normally used by the
Company to provide service to this type of a development.
Qwest argues that the development ofmulti-farni1y units in an area originally cabled as
residential makes these facilities "special". Staff disagrees. There is nothing uncommon or
special about single-family residential areas that are next to other commercial and/or multi-
family areas being converted to commercial or multifamily use. This is a natural progression as
a community,grows, and is exactly the type of development that a company should plan for and
expect. The costs for keeping up with such natural growth within a company s existing network
are a normal cost of doing business and as such are already built into the rate base of the
DECISION MEMORANDUM JANUARY 3, 2003
company. If the pace of growth increases, Staff believes the proper response is to seek a change
in rates, not to selectively place the burden of that increased growth on some of those responding
to that growth.
The Company also infers in Mr. Souba s response that the current rapid growth in the
Rexburg area, which is due to the changes brought on by the change from Ricks College to
BYU-Idaho; somehow makes this is a "special" development and eligible for different treatment.
The pace of development is seldom constant. It is very normal for this pace to vary from year
year and from location to location. This is also a common occurrence for which companies
especially one the size of Qwest, should expect and plan.
This specific instance is a- clear example of the normal growth for which a company
should expect and plan. The property in question is situated approximately ~ block north of the
intersection of 4th ~est and 4th South in Rexburg, on the east side of 4th West. This section of 4
South is a major arterial through the City of Rexburg. This street used to be Highway 20
(Yellowstone Highway) and one of the busiest highways in the state until the construction of the
new bypass around town. It is still one of the most highly traveled streets in the area. 4th South
remains one of the primary routes to the campus ofBYU-Idaho.
One of the area s nicer motels, the Best Western Cottontree, is located at the northwest
comer of 4th South and 4th West, directly across the street from the property being developed.
The area along 4th South is clearly commercial with multiple businesses, including a Les Schwab
tire store, a used car lot, an auto body shop, a skating rink, and a church, storage units, as well as
other multi-family housing developments. There are other apartment units located on 4th West
south of 4th South, and on the south side of 4th South, between 4th West and 3rd West. (See map
and aerial photo.
Mr. Homer informed Staff that the property was zoned commercial before the
development was proposed, and he had to get it changed to high density residential before
proceeding with his apartment complex. The upper half of the block of the east side of 4th West
between 3rd South and 4th South, the property to the immediate north of the Homer project, is
zoned medium density residential.
In response to questions from Staff, Qwest identified two other developers in the Rexburg
area that had paid charges under similar circumstances in accordance with its interpretation of
DECISION MEMORANDUM JANUARY 3 , 2003
the tariff. Qwest has yet to respond to questions regarding any other such charges in other parts
of its exchange.
Staff believes the imposition of charges in circumstances such as this reflects a change in
Qwest's policy. This opinion is supported by Mr. Homer , who indicated he had not been
charged any amount for providing service to a similar project developed in early 2001. Homer
indicated Qwest had to reinforce the facilities available in that area in order to serve those units
yet he was not charged for that service.
STAFF RECOMMENDATION
Staff recommends the Commission find Qwest's application of its tariff to be in error and
order the charges collected from Mr. Homer in accordance with this interpretation to be
refunded.
Staff also recommends the Company be directed to refund all such charges collected
from any other applicants involving similar interpretations of this tariff section.
COMMISSION DECISION
Does the Commission agree?
i:udmemos/qwest homer complaint dm
DECISION MEMORANDUM JANUARY 3, 2003