20030909Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
FROM:DON HOWELL
DATE:SEPTEMBER 8, 2003
RE:QWEST AND STAFF'S JOINT APPLICATION FOR APPROVAL OF THE
PARTIES' AGREEMENT REGARDING TOLL RESTRICTION SERVICE
CASE NO. QWE-03-
On July 30 2003 , Qwest Corporation and the Commission Staff (the parties) filed
a Joint Application to approve their agreement concerning toll restriction service.Toll
restriction" service prohibits a Qwest customer from accessing a long-distance carrier on any line
on which the service is installed. As set out in greater detail below, the parties proposed that toll
restriction in Qwest's southern Idaho operating territory be removed as a Title 62 service and
placed under the Commission s Title 61 jurisdiction. In addition, the parties proposed that the
monthly rates for toll restriction be increased but these rate increases would be mitigated by
elimination of the non-recurring (installation) charge for residential customers in both northern
and southern Idaho. The parties requested an effective date of October 1 , 2003.
In Order No. 29314 issued August 7 , 2003 , the Commission issued a Notice of
Application and Notice of Modified Procedure requesting public comment on the Joint
Application. The Commission requested written comment be filed no later than September 4
2003. The Commission received seven public comments, most objecting to the proposed rate
Increase.
THE JOINT APPLICATION
A. Procedural History
In their Joint Application, the parties observed that the regulatory status of toll
restriction has been in conflict since 1997. App. at 2. In a 1997 rate case, Qwest's predecessor
(D S WEST) argued that toll restriction should be a price-deregulated service offered under the
DECISION MEMORANDUM
Commission s Title 62 authority, Idaho Code 9962-601 et seq. Conversely, the Staff argued
that the service should be price regulated under the Commission s traditional regulatory authority
found in Title 61 of the Idaho Code. In Order No. 27100, the Commission concluded that toll
restriction should be regulated under Title 61. Qwest subsequently appealed this determination
to the Idaho Supreme Court. Id.
While the appeal was pending, Qwest and the Staff entered into a settlement
Stipulation regarding the appropriate regulatory status for toll restriction. The parties agreed that
toll restriction should remain a Title 62 service but that it should be offered under fixed rates and
terms for a period of three years. The monthly residential rate was proposed to be $0.25 and the
monthly single-line business rate was proposed to be $1.00. Customers in the Idaho
Telecommunications Service Assistance Program (IT SAP) would receive toll restriction at no
charge. Residential and single-line business customers ordering the service in southern Idaho
would be assessed a non-recurring installation charge of $13.50 except that this charge would be
waived on the first line for residential customers requesting toll restriction service at the time
they initiated local service.
In October 1998 , a majority of the Commission approved the terms of the Stipulation
in Order No. 27785. Id. at 4. That Order provided that the terms of the Stipulation should run
for a period of three years. In addition, Qwest voluntarily dismissed its appeal.
Near the end of the three-year period, Staff discovered that Qwest had inadvertently
assessed the non-recurring charge on new residential customers ordering toll restriction and had
misbilled some of its ITSAP customers. Consequently, the parties executed another Stipulation
in September 2001. The second Stipulation required Qwest to refund money to affected
customers and extended the terms of the original Stipulation through the end of calendar year
2002.This latter Stipulation was approved by the Commission in Order No. 28862 in
October 2001. Id.
B. The Present Settlement
In an attempt to settle the ongoing controversy regarding the appropriate regulatory
treatment of toll restriction service, the parties entered into settlement negotiations. These
negotiations culminated in a new agreement, the terms of which are presented in the Joint
Application. As set out on pages 5-6 of the Application, the new agreement contains the
following provisions:
DECISION MEMORANDUM
1. In southern Idaho Qwest will file appropriate tariff revisions to move toll
restriction service for residential and business customers with five or fewer
lines from a Title 62 service to a Title 61 service. Toll restriction service
in Qwest's northern Idaho service territory will remain under Title 61.
2. The Parties propose that the monthly rates for toll restriction for residential
customers be increased from $.25 per line to $.75; and from $1.00 to $2.
per business line. Residential and business customers in both northern and
southern Idaho will be charged the same monthly rates.
3. Qwest will individually notify each customer who subscribes to toll
restriction service of the proposed rate changes.
4. As part of its rate adjustments, Qwest will file changes to its northern and
southern Idaho schedules to eliminate the respective $24.00 and $13.
non-recurring (installation) charges for residential customers ordering the
service. In addition, the non-recurring charge for northern Idaho business
customers will be reduced from $24.00 to $13.50. Business customers in
both northern and southern Idaho will be assessed the same $13.50 non-
recurring charge.
5. ITSAP customers will not be charged for toll restriction.
6. The Staff will not seek a rate reduction in Title 61 toll restriction rates
outside a general rate case in either northern or southern Idaho.
The parties agreed that adoption of the Joint Application will settle the regulatory
controversy. They also maintained that the proposed rates are reasonable and approval of the
Joint Application is in the public interest. Each party supported the Application by including a
witness declaration.
As part of the Joint Application, Qwest submitted proposed price lists/tariff schedules
incorporating the proposed terms and conditions set out in the Joint Application. Pursuant to
Telephone Customer Relations Rule 102, Qwest individually notified approximately 38 000
customers who subscribed toll restriction in northern and southern Idaho.1 IDAPA 31.41.02.102.
C. Declarations
1. Qwest.In support of the Application, Qwest offered the declaration of John F.
Souba, Idaho Regulatory Affairs Manager. Mr. Souba explained that Qwest supports the
1 Qwest reports that there are 35 233 residential customers and 676 business customers that subscribe to toll
restriction in southern Idaho. In its eight northern Idaho exchanges, 1 728 residential and 362 business customers
subscribe to toll restriction.
DECISION MEMORANDUM
adoption of the Application for several reasons. First, he observed that proposing toll restriction
be subject to the Commission s Title 61 jurisdiction "is a big concession on Qwest's part....
Declaration at'tl7. He notes that Qwest has long advocated that toll restriction is not properly
characterized as a Title 61 "basic local exchange service." In addition, the Company argued toll
restriction was not subject to the "claw-back" provisions under Idaho Code 9 62-605(5) because
it was not offered prior to the effective date of the 1988 Telecommunications Act codified in
Title 62. He stated that approval of the Joint Application would lay this controversy to rest and
avoid further litigation before the Commission or the Courts. Id.
Second, he asserted the approval of the Joint Application will allow Qwest to offer
toll restriction under the same terms and conditions for all Idaho customers whether they are
located in northern or southern Idaho. This offers efficiencies to both the Company and the
Staff, as well as minimizing customer confusion. Third, he declared that Qwest has installed
new central office switching equipment in Lewiston at an investment of $7 million. Id. 'tI8.
Qwest has not sought to recover this investment but the proposed rate increase will offset the
investment.
Finally, he stated that despite the proposed monthly increase, the rates are reasonable.
He noted toll restriction rates in effect prior to the 1997 rate case were $1.00 per month for
residential customers.Id. at 'tI6.Although the Application proposes increases for both
residential and business customers, the suggested rates "are very low compared with other
states....Id. at 6. See attached chart. In addition, he maintained the increases are mitigated by
elimination of the non-recurring installation charge of $24.00 and $13.50 for residential
customers in northern and southern Idaho, respectively. The non-recurring charge for business
customers in northern Idaho will be reduced from $24.00 to the level of the southern Idaho
business non-recurring charge of $13.50. Moreover, ITSAP customers will continue to receive
toll restriction service without charge. Id. at'tl8.
He concluded that the Joint Application presents a reasonable and appropriate
resolution of these toll restriction issues. "Granting the relief requested by the Joint Application
will allow the Company and Staff to focus on other issues and avoid the further expenditure of
time and expenses on this issue.Id. at'tl11.
2. Staff.Also attached to the Application was the declaration of Staff member
Beverly Barker, supervisor of the Consumer Assistance Section. Without repeating the toll
DECISION MEMORANDUM
restriction history, she noted Staffs primary goal is to promote universal service by preserving
the Commission s jurisdiction over toll restriction once and for all. She explained toll restriction
service promotes universal service by allowing customers to obtain local exchange service
without paying a deposit. "It also allows customers to obtain or retain local exchange service
while making payments on past due or prior bills.Declaration at 'tI1. She also insisted toll
restriction limits prevents toll calls, thereby providing customers a greater degree of control over
the ultimate amount of their telephone bills.
Ms. Barker listed several other reasons supporting the adoption of the Joint
Application. First, placing toll restriction under the Commission s Title 61 regulatory authority
assures customers that the Commission will have full regulatory oversight with respect of the
rates, terms and conditions of this service. Second, adoption of the parties' agreement will
provide for regulatory certainty and will allow both the Staff and Qwest to focus their resources
on other matters. Third, moving toll restriction to Title 61 for both residential customers and
business customers with five or fewer lines in southern Idaho is consistent with Commission
Order No. 27715. In that Order, the Commission designated the nine core universal services as
Title 61 basic local exchange services including "toll limitation.Id. at'tl2. Fourth , adoption of
the Application makes the terms and condition for toll restriction in both northern and southern
Idaho consistent. This regulatory symmetry will avoid customer confusion and be more efficient
for both the Staff and the Company. Id. at 3.
Finally, Ms. Barker acknowledged the Application proposes to increase the monthly
charge for residential and business toll restriction service. She noted that the elimination of the
non-recurring residential charge and the reduction in the northern Idaho non-recurring charge for
business customers is a substantial benefit the new customers. Id. at 4. She concluded that the
reduction or elimination of non-recurring charges mitigates to some degree the impact of the
increase in monthly rates for this service. In summary, the Staff argued that the rate proposal is
only one component of a comprehensive resolution of the toll restriction controversy. Id. at'tl 5.
PUBLIC COMMENTS
As previously indicated, the Commission received seven public comments. None
the comments address the regulatory realignment of toll restriction but six comments oppose the
proposed monthly rate increases. One customer asked why he should be charged for a service
(access to the toll network) that he does not want. He characterized the proposed increase as
DECISION MEMORANDUM
nothing more than another 'money grab. ", Another customer with income "well below the
poverty level " questioned whether the proposed increase was cost justified.
customer with rental properties stated he had numerous "problems with this
servIce. Perhaps Qwest should be required to make the service work properly before they
increase the price by (200% J." Another customer from Caldwell indicated that Qwest does not
deserve an increase in this price "considering the way they do business. They give the customers
the run-around when the customer calls for help on a particular concern...." The comments are
attached for your review. Staff has contacted or attempted to contact those customers who
indicated that they had experienced problems with their toll restriction service in order to resolve
any remaInIng Issues.
COMMISSION DECISION
What is the Commission s decision regarding this Joint Application?
j)~
Don Howell
Vld/M:QWETO315 dh2
DECISION MEMORANDUM
TOLL RESTRICTION
STATE RATES
STATE USOC Res Mo. Rate Res NRC Bus Mo. Rate Bus NRC
Colorado RTY 20.
E&NS Tariff &
Price List 10.4.4
24.24.
Idaho No.RTY
E&NS Tariff
10.4.4
No NRC on main line;13.
Idaho - So.RTY 13.50 applies on add'
E&NS Catalog lines and 1 chrg p/order
10.4.4
Iowa KX9 Low NRSC applies 4.41 29.10 plus low
E&NS Tariff 13.NRSC 22.
10.
Montana RTY No Charge 27.
E&NS Tariff
10.4.
Nebraska KX9
'; "
. ;12.27.
E&NS Catalog
10.
New Mexico RTY N() C~arge 17.
E&NS Tariff
10.4.
No. Dakota KX9 NRSC applies 33.75 plus NRSC
E&NS Price curr rate 12.curr rate 17.
Schedule
10.4.
Oregon RTY No Charge 24.
E&NS Tariff
10.4.
South KX9 25.25.
Dakota
E&NS Catalog
10.
Utah *RTY No Charge 26.40
E&NS Tariff 00 for zone C 27.50 for zone C
10.
Washington RTY No Charge 24.
E&NS Tariff
10.4.4 (price list
for bus)
Wyoming RTY 27.27.
E&NS Price
Schedule
10.4.
Note: Telephone Assistance Plan qualified customers are provided Long Distance Restriction at no charge.
* Utah business- $3.00 mo. rate and $27.50 NRC in Competitive Zone
11/21/02
Jean Jewell
From:
Sent:
To:
Subject:
Ed Howell
Wednesday, August 20, 2003 10:47 PM
Jean Jewell; Ed Howell; Gene Fadness; Tanya Clark
Comment acknowledgement
WNW Form Submission:
Wednesday, August 20 , 2003
9: 46: 33
Case:
Name:
Street Address:
City: meridian
State: ID
ZIP: 83642
Home Telephone:
E-Mail:
Company: qwestmailinglistyes no: yes
Comment description: I recently got a notification from qwest that they were going to
triple my monthly rate for having a toll restriction on my line. Have they submitted a
Reason for their request to increase this charge Threefold? I can t imagine that it
suddenly costs them Three times as much money for me NOT to use their service than it did
last month or last year. Being one of the "poor" (well below the poverty level) in our
state I am inclined to balk and question any time soITlebody want to charge me more money
for essentially ' nothing
' .
Transaction ID: 8202146.Referred by: http: //www.puc. state. id. us/ scripts/polyform. dll/ipucUser Address: 65.178.113.115
User Hostname: 65.178.113.115
(j)
Jean Jewell
From:
Sent:
To:
Subject:
Ed Howell
Wednesday, August 20, 20038:05 AM
Jean Jewell; Ed Howell; Gene Fadness; Tanya Clark
Comment acknowledgement
WNW Form Submission:
Wednesday, August 20 , 2003
7:05:18 AM
Case: QWE-T-03-
Name:
Street Address:
City: Idaho Falls
State: ID
ZIP: 83404
Home Telephone:
E-Mail:
Company:
Comment description: From the customers point of view, why should we pay more -or any-
money to prevent companies from attaching to my service without solicitation? It seems
like backwards enterprise to be induced to pay for the right to not recieve something. If
there is a reason for this charge -which 1'm sure there is- then it needs to be passed on
to those companies that would benefit from those lines without the toll restriction
Transaction ID: 820705.Referred by: http: I Iwww.puc. state. id. usl scripts/polyform. dIll ipuc
User Address: 198.60.99.194
User Hostname: 198.60.99.194
, l A!tJ.J -;/tJtJ
/-'
Your Qwestlnf~rmatiol:l,Update:
For Idaho, ResidentiaJ ,CJlstomers
,At Qw~st, we make every effort to keep you well i1Ifoimed' abOl1t ~ny ctiar1geS'i~ your proalicts,rates'and 'service'
, ", ' '' '
litles Commission (IPUG) to change the
rate fa' Toll Restriction Service for Qwest Residential Customers In Idaho. If approved, your rate would change
as of Octo er1,20 ' tJO/ I( CurrenUl:'!onthly Rate
' $.
25"
Proposed;r!lonlhly Rate $.75 " self y Jet:'
Plus appllcJ!ble tax and surcharges
The impact of this rate change will be less than lwo1enths of one percent increase 10 Owesrs annual regulatedrevenues,
Qwest's application is a proposal, which is subject to public review and an IPue decision, A copy of the
application is available at the offices of Owest and the IPUC or may be viewed on the IPUC's website-
www,ouc,state.id,
If you have any questions, please call the number at the lop of the first pageof your monthly phone bill, or call
800'244-1111,Oneofourrepresentativeswillbeh~pytohelpyou, /
/;",
PLe-Ffs Sc;teJJ yOV)'(.. IF..v.C /1~,I'jl fi;~
-,0ETSt??J'J1:e 1?e~/Le t-VI iIf sell ~.Jest.
10 ReSO8lOJ
~ .
I"il 'f'. . fvc Spirit'fSer~rc/J-J3)L-j
/'
a/v IJt
~ "-,-_.._-"-' --
Jean Jewell
From:
Sent:
To:
Subject:
Ed Howell
Friday, August 15 , 2003 8:20 PM
Jean Jewell; Ed Howell; Gene Fadness; Tonya Clark
Comment acknowledgement
WNW Form Submission:
Friday, August 15, 2003
7: 20: 04
Case: QWE-T-03-
Name:
Street Address:
City: Bountiful
State: utah
ZIP: 84010
Home Telephone:
E-Mail:
Company: QWEST
mailing list yes no: no
Comment description: I have had numerous problems with this service. Perhaps Qwest
should be required to make the service work properly before they increase the price by300%. Absent some fix , they should be required to compensate consumers when we have to
wade through their "customer service " organization.
Transaction ID: 8151920.Referred by: http: / /www.puc. state. id. us/ scripts/polyform. dll/ipucUser Address: 69.248.138
User Hostname: 69.248.138
" "';;,
Jean Jewell
From:
Sent:
To:
Subject:
Front
Wednesday, August 13 , 2003 7:57 AM
Jean Jewell
FW: Complaint acknowledgement
-----Original Message-----
From: Ed Howell
Sent: Tuesday, August 12, 2003 6:19 PM
To: Front; Beverly Barker; Ed Howell; Tonya
Subj ect: Complaint acknowledgement
Clark
WWW Form Submission:
Tuesday, August 12, 2003
5:19:02
Name:
Street Address:
Ci ty: Caldwell
State: ID
ZIP: 83605
Home Telephone:
Work Telephone: I'm retired
E-Mail:
Home Business: Home
Business Name:
Business Street Address:Business Phone:
Complaint Company: Qwest
Local Provider: Qwest
Contacted utility: No
Complaint description: Hi! I recently received a card from Qwest notifying me oftheir proposed increase in my rates. They do not deserve a
raise, considering the way they do business. They give the customers
the run-around when the customer calls for help Dn a particular
concern, and when they finally find someone nothing ever gets doneanyway. Except maybe (depending upon the customer ) talk them into buying a service or a phone , or whatever. Qwest is a greedy company, they are never satisfiedwith what they have taken from their customers. They have no regards for the poor
if they did they wouldn be hitting the poor as well as everyone else for moremoney. You could call them an equal-opportuniist greedy company. This fifty
50 cent ) raise they are asking from you to accept may not seem much to youbecause of your income ( s
),
obviously you can afford it, and you obvioulsy don
understand the hardships it cre ates on thepoor. Some of the poor only receive a yearly cost-of-living raises, and we have other ways of making up for the loss when a greedy company decided they want a raisein their services. It is even worse, when a company like Qwest only takes from their
customers and does nothing in return. All those people in the past who complainedabout Qwest, and the drop in complaints against Qwest, obviously gave up
complaining against Qwest obviously gave up hope of getting help from the PUC.
tha t 's why the drop in complaints. They felt they weren getting any help from thePUC. i ' still don J t like the way Qwest gives me the run-around. Their high-pressured sales staff won do anything for the customer unless they buy something
they don t want or need, or can t afford. If they are in such need of money, then
perhaps they better find a better qualified manager of their money. Thank you!
---
Transaction ID: 8121719.
Jean Jewell
From:
Sent:
To:
Subject:
Ed Howell
Tuesday, September 02, 2003 11 :18 AM
Jean Jewell; Ed Howell; Gene Fadness; Tonya Clark
Comment acknowledgement
WNW Form Submission:
Tuesday, September 02 , 2003
10:17:39 AM
Case: QWE-T-03-
Name:
Street Address:
City: Idaho Falls
State: ID
ZIP: 83404
Home Telephone:
E-Mail:
Company: Qwest
mailing list yes no: yes
Commen t _des cription: Why should I be charged for a service that I do not want???
If I choose NOT to have "caller ID" installed on my phone , should I
be charged a monthly installment for "opting out" ?
The proposed rate increase (from $0.25 to 0.75 per month) for
toll restriction is nothing more than another "money grab"
I grew weary of paying $5. OO/month for long distance access fees,
even when I made no long distance calls. So, I requested that
my long distance access be "dropped"I couldn I t understand
back then why I was charged for "dropping " the service, but I had
no choice. Now, more and more people have chosen to "drop " their
long distance service. So , what does Quest do? Increase the monthly
fee for NOT having long distance on your line.
I guess the next step for me, will be disconnecting my Quest lineentirely?
Soooo , to justify this rate increase, what increased costs has
Qwest incurred??? Lost customers??
Transaction ID: 921017.Referred by: http: / /www.puc. state. id. us/ scripts/polyform. dll/ipuc
User Address: 134.20.174.159
User Hostname: 134.20.174.159
(jj