20091030Decision Memo.pdf

DECISION MEMORADUM
TO: COMMSSIONER KEMPTON
COMMISSIONER SMITH
COMMISSIONER REDFORD
COMMISSION SECRETARY
COMMSSION STAFF
LEGAL
FROM:WELDON STUTZMA
DEPUTY ATTORNY GENERA RuL - i- - 0 ~-o(
DATE: OCTOBER 30, 2009
SUBJECT: DOCKET NO. 31-4101-0901
COMMSSION REVIEW OF THE TELEPHONE CUSTOMER
RELATIONS RULES
Commission Proposed Language:
001. TITLE AN SCOPE (RULE 1).
The name of this chapter is the "Customer Relations Rules for Telephone Corporations
Providing Local E*change or Inastte MTS/WS Service§ in Idaho Subject to Customer
Service Regulation by the Idaho Public Utilities Commission Unàer the Pl:lic Utilities La-w or
the TelecoHll:nications A.ct of 1988," (The Telephone Customer Relations Rules). For
companies subject to Commission regulation under Title 62, Idaho Code, these rules apply to
companies providing local exchange service as defined in Section 62-603, Idaho Code. This
chapter has the following scope: These rules provide a set of fair, just, reasonable, and non-
discriminatory rules to address recurring areas of disagreement between local exchange
companies and MTS/WATS other telephone companies and customers with regard to deposits,
guarantees, biling, application for service, denial of service, termination of service, complaints
to telephone companies, biling for interrpted service, and provision of certain information
about customers to authorities. (7 1 93)L-
Verizon Proposed Language:
001. TITLE AN SCOPE (RULE 1).
The name of this chapter is the "Customer Relations Rules for Telephone Corporations
Providing Local E*change or Inrastate MTS/WAS Service§ in Idaho Subject to Customer
Service Regulation by the Idaho Public Utilities Commission Unàer the Pl:hlic Utilities Law or
the Telecomml:nications Act of 1988," (The Telephone Customer Relations Rules). For
companies subject to Commission regulation under Title 62, Idaho Code, these rules apply to
companies providing local exchange service as defined in Section 62-603, Idaho Code. This
chapter has the following scope: These rules provide a set of fair, just, reasonable, and non-
DECISION MEMORADUM 1
discriminatory rules to address recurrng areas of disagreement between local exchange
companies and MTS/WPJS other telephone companies and customers with regard to deposits,
guarantees, billng, application for service, denial of service, termination of service, complaints
to telephone companies, biling for interrpted service, and provision of certain information
about customers to authorities. These rules only apply to services provided to residential and
small business customers and do not apply to multi-state business customers or businesscustomers with five (5) or more lines in Idaho. (7 1 93)L-
Commission Proposed Language:
005. DEFIIONS (RULE 5.)
l(~. Small Business TelefJlt9Re Service. "Small business telephone service" means
telecommunication service furnished to a business or institutional entity, whether an individual,
parership, corporation, association or other business or institutional form, for occupational,
professional, or institutional purposes, to customers who do not subscribe to more than five (5)
local access lines within a building, i.e., service provided to small business customers as defmedin Section 62-603(11), Idaho Code. (7 1 99)L-
Qwest Position:
This language should be updated to conform to the present language of §62-60 (11),
Idaho Code, which focuses on the number of lines associated with a paricular biling address
rather than the physical building location of lines to determine whether a customer is or is not a
small business customer.
Qwest Proposed Language:
l(~. Small Business TelefJlt9Re Service. "Small business telephone service" means
telecommunication service furnished to a business or institutional entity, whether an individual,
parership, corporation, association or other business or institutional form, for occupational,
professional, or institutional purposes, to customers who do not subscribe to more than five (5)
local access lines within fl é'liJding which are biled to a single biling location, i.e., service
provided to small business customers as defined in Section 62-603(11), Idaho Code.(7 1 99)L-
Commission Proposed Language:
10!!. DEPOSIT REQUIMENTS -- LECS (RULE 1MI.
01. Residential Customers. No looal exohange company providing local exchange
service shall demand or hold any deposit from any OlHeHt residential customer or applioan for
service without proof that the customer or applioan is likely to be a credit risk or to damage the
property of the local exchange company or Mr other companies for which it bils. A history of
DECISION MEMORADUM 2
late payment or lack of previous history with the local exchange company does not, in itself,
constitute such proof. A local exchange company shall not demand or hold a deposit under this
rule as a condition of service from a residential customer or applioan unless one or more of thefollowing criteria applies: (7 1 93)L-
a. The customer or applioan has outstanding a prior residential service account wi
any telephone oompaH' that aoomeà ,,,itin the last ful:r (4) years and at the time of application
for service remains unpaid and not in dispute. (7 1 93)L-
b. The customer's or applioan's service from any telephone oompan)' has been
temporarily denied or terminated within the past four (4) years for one (1) or more of thefollowing reasons: (7 1 93)( )
1.Non-payment of any undisputed delinquent bil;(7-1-93)
Qwest Position:
The second sentence of Rule 100.01 is not justified. A provider of
telecommunications service should be allowed to consider a "history of late payment" as proof of
credit risk that justifies requesting a deposit to guarantee payment for future service. In fact,
such history is used by the national credit reporting agencies as a factor in determining a
consumer's credit worthiness.
Where telephone companies are not rate-regulated and customer non-payment cannot
be passed on as a general cost of a doing business to other customers, telephone companies
should be given the freedom to consider rational business considerations in determining when a
deposit to guarantee payment is appropriate.
Similarly, in 100.01.b., the Company should be allowed to consider non-payment of any
past undisputed bil as grounds for asking a customer for a deposit for future service. The
limitation that non-payment can only be considered if it occurred in "the past four (4) years" is
without justification. The mere passage of time does not change the fact that prior denial or
termination of service could reasonably indicate that the customer is a non-payment risk.
Requiring a customer to make a deposit is a fair and reasonable way to limit the telephone
companies' risk while stil allowing customers to obtain service. Since the Commission is no
longer regulating the economic operations of Title 62 companies, it should not impose rules that
limit the companies' flexibilty in making rational business decisions as to which customers
represent a risk. Indeed, the differences in how companies choose to deal with such questions
DECISION MEMORADUM 3
could be a way in which companies differentiate themselves from competitors (i.e., some may
require deposits while others may charge higher rates etc.).
In the negotiated rulemaking, the Commission Staff suggested that the four year
period should be retained because it reflects the statute of limitations on the providers' ability to
recover from the customer for an unpaid debt. Although Qwest objects to this overly simplified
summary of the possible effect of the statute of limitations, the Staff argument is beside the
point. The issue for consideration under this rule is what the Company is allowed to consider
when assessing whether it should ask for a deposit from a customer. Whether or not the
Company could today initiate a court case against the customer to recover the bad debt is not
determinative (in fact, the Company may even have an unpaid judgment against the customer,
yet the rule would preclude seeking a deposit if four years have passed, regardless the customer's
legal duty to pay).
What is important in determining whether a deposit is appropriate is that the customer
demonstrated he/she is a risk for non-payment. The Company should be allowed to consider that
customer behavior in assessing whether a deposit should be required.
Qwest Proposed Language:
10!!. DEPOSIT REQUIMENTS -- LECS (RULE 10l!.
01. Residential Customers. No looal e*ohange company providing local exchange
service shall demand or hold any deposit from any current residential customer or applioan for
service without proof that the customer or applioan is likely to be a credit risk or to damage the
propert of the local exchange company or Mr other companies for which it bils. A hiæ,. ~f
Jflæ fJflJ/l'ent eF f.k 9;ffJFe';ie'l histery' with the Je6m 6*hælge 6e1'fHiWY døes net, iN itself
68i'tiHiæ s'l6h fJFfe.f: A local exchange company shall not demand or hold a deposit under this
rule as a condition of service from a residential customer or applioan unless one or more of thefollowing criteria applies: (7 1 93)( )
b. The customer's or applioant's service frm any telephone oompany has been
temporarily denied or terminated wiin the past f6'lF (4) yefls for one (1) or more of thefollowing reasons: (7 1 93)( )
Commission Proposed Language:
104~. '¥RITTEN EXPLANATION FOR DENI OF SERVICE OR REQUIMENT
OF DEPOSIT -- LECS (RULE 104~.
Upon reElest of the applioan or ol:stomer, lf the local exchange company Hl requires a cash
DECISION MEMORADUM 4
deposit as a condition of providing service, then it shall immediately provide an writoo
explanation to the applioai or customer stating the precise reasons why it req\:ires a deposit el
denies servioe is required. The applioan or customer shall be given an opportnity to rebut these
reasons. The applioant or o\:stomer m\:st he orally notified of the right to a written e*planation In
the event of a dispute, the customer must be advised that an informal or formal complaint may befied with the Commission. (7 1 93)L-
Verizon Position:
VerIzon recommends the Commission remove the reference to "cash." By deleting
the word "cash," it is clear that the requirements of this rule apply to all required deposits,
whether they are paid in currency or by check, credit card, debit card or any other means.
Verizon Proposed Language:
104~. WRTTEN EXPLANATION FOR DENIAL OF SERVICE OR REQUIMENT
OF DEPOSIT -- LECS (RULE 104~.
Upon req\:est of the applioan or o\:stomer, lf the local exchange company Hl requires a 6f
deposit as a condition of providing service, then it shall immediately provide an writen
explanation to the applioant or customer stating the precise reasons why it req\:Ires a deposit el
denies serioe is required. The applicant or customer shall be given an opportnity to rebut these
reasons. The applioan or o\:stomer m\:st he orally notified of the right to a writen e*planation In
the event of a dispute, the customer must be advised that an informal or formal complaint may befiled with the Commission. (7 1 93)L-
Commission Proposed Language:
10+~. RETUR OF DEPOSIT -- LECS (RULE 10+~.
02. Existing Customers. The deposit, with aoomed interest, m\:st eiter he oredited
to the o\:stomer's 6\:rrent hil or he refunded promptl)' BY the looal e*ohange oompany when: If
the customer has paid all undisputed bils and has no more than one 0) late payment during the
past twelve (2) consecutive months of service, the telephone company shall promptly return the
deposit (with accrued interest) by crediting the customer's current account or issuing a refund.
(3 30 01)L-
Qwest Position:
This proposal has the effect of applying an additional limitation to the Company's
retention of deposits from residential customers. The current version of the rule does not give
residential customers "one free late payment." Certainly a late payment, paricularly if it occurs
late in the twelve month period, could be evidence that the customer is at risk for not making his
payments. If that occurs, the continuation of the deposit is an important tool in managing
DECISION MEMORADUM 5
business risk. There is no evidence this added regulatory limitation is necessary or desirable.
Instead, unless the customer has completed one full year of on-time payments (as contemplated
under the rule), when to refund deposits should be a business decision of the telephone company
that wil be tempered by the competitive market pressures associated with customers having
alternatives.
Qwest Proposed Language:
Qwest proposed that 105.02 should be eliminated or, at minimum, remain unchanged
with regard to residential customers.
Commission Proposed Language:
201. ISSUANCE OF BILL8ING STATEMENTS -- CONTENTS OF BILLS --
RESIDENTIA AN SMAL BUSINSS SERVICE (RULE 201).
01. Local Exchange Service. Bilsing statements for residential and small business
local exchange service sh must be issued on a regular basis.., and must contain thefollowing information: (7 1 93)L-
c. The due date of the hil by which payment must be received, unless the customer
has authorized automatic monthly payment. If automatic payment is authorized, the biling
statement must reflect the actual or earliest possible date that funds wil be withdrawn from abank account or charged to a credit card account; (7 1 93)L-
Qwest Position:
Qwest agrees with the changes proposed for the first sentence of subparagraph c.
However, Qwest strongly disagrees with the second sentence. The addition of a requirement for
''the actual or earliest possible date" for optional bil-paying arangements severely limits the
value of allowing such arrangements and, in the case of the option of automatic credit payment,
imposes costs and difficulties that are in no way justified by any appropriate regulatory concern.
The automatic credit card payment issue: It is important to understand that
customers who have opted to have their bils paid by pre-aranging to have their credit cards
charged automatically each month stand in a unique relationship to all other customers using the
methods that are presently available to customers for bil payment.
Customers must make an affrmative choice to have a credit card automatically biled
as a means of paying their monthly bil. At the time they choose that option they are told their
DECISION MEMORADUM 6
credit card wil be charged three to five days after their bil date and they consent to this
arrangement. They receive a biling statement that allows them to keep track of their
expenditures, but they are not expected to take any action on that biling statement; instead they
have chosen to have a credit card automatically charged by the Company. They also enjoy the
"float" of having their telephone bil paid but not writing a check for several weeks later, i.e.,
until they pay their credit card company. Customers who have this arrangement are unique in
that they do not actually par with any of their own money until they pay the credit card bil,
which in most cases wil be weeks after it is charged to pay the phone bilL.
Traditional customers who, for example, receive a bil and then write a check and
mail it to the Company benefit from knowing when the bil must be paid to avoid making a late
payment. The first sentence of the proposed 201.01 c. accomplishes that goal. Customers who
have aranged to have payment automatically withdrawn from a checking or saving account,
while also choosing an optional method, can at least arguably benefit from being able to predict
when their account wil be reduced by the amount of the bil to avoid overdrafts, etc. Qwests
bils provide that information and these arrangements are not at issue here.
Customers paying by automatic credit card arrangements have none of these
concerns. The proposed rule's insistence that these customers must be informed each and every
month when their credit card wil be automatically charged serves no beneficial purpose. These
customers stil have the opportunity to challenge the bil and receive a credit (or perhaps a
refund) from the telephone company if they have a verified biling concern. They also have the
option of not paying their credit card bil (or at least that portion of it that is disputed) until their
biling .issue is resolved. They do not run the risk of late payment and they are in complete
control as to when their checking account is reduced by the amount of the credit card bil
associated with their telephone charges.
Complying with the proposed Rule wil penalize Qwest and customers without
producing any advantage: While printing the date the credit card wil be charged on the bil
may intuitively seem like a small thing, it is not. The added requirement would be costly to
Qwest. In fact, any change in biling format is very expensive to implement-paricularly, as here,
when it is required only in Idaho and for only a small portion of the customers. This requirement
would also unduly limit the ability of telephone companies like Qwest to offer optional biling
arrangements to customers. For example, future optional payment arrangements may also be
DECISION MEMORADUM 7
impacted by the language requiring notice as to when some phase of the automatic process wil
take place, making such future options too diffcult or costly to implement. Imposing such a
requirement in the proposed rule aimed at optional programs, chosen by customers for their own
convenience, could mean Idaho customers may not be offered the advantages of future optional
arangements.
Limiting customer options runs against the grain of the legislative enactments of the
Idaho Legislature and of Congress and against the stated objectives of this Commission to
"simplify(J regulatory requirements and allow() companies more flexibilty to respond to
customers' service requests." The second sentence of proposed Rule 201.01 subparagraph "c"
produces this result without offering any offsetting customer advantage. Qwest has offered
automatic credit card payment arangement to literally thousands of Idaho customers for several
years. To the best of the Company's information it has received only one customer complaint
during all that time.
One customer complaint: The customer whose complaint brought this issue to the
Commission's attention had been using automatic credit card billng for about two years when he
was inadvertently overcharged by $1.32. When the error was brought to the Company's
attention, the charge was reversed and the customer received a credit for the full amount of the
overcharge the following month (i.e., his credit card was automatically charged $1.32 less than it
would otherwise be charged and he was thereby made whole.)
Overall the proposed language for the second sentence of subparagraph "c" fails to
recognize the competitive realities that new billng and payment methods continue to emerge in
the marketplace. Such arangements, like automatic credit card payments, are optional for
customers. Qwest s proposed language satisfies the intent to require a statement date and a due
date for traditional biling and payment methods that wil continue to exist, while allowing
future, optional billng/payment arrangements to be offered without undue limitations.
Qwest Proposed Language:
c. The due date of the hil by which payment must be received, unless the customer
has authorized optional biling or pament method: aiomatio monthly payment. If amomatio
paJ'Hent is aihorI:ed, the hiling sttement m\:st refleet the aoæal or earliest possihle date that
funds wil he vi'thdrawn from a han aoOO\:nt or oharged to a oi:dit oard aoOO\:nt; (7 1 93)L-
DECISION MEMORADUM 8
Commission Proposed Language:
302:l. GROUNS FOR DENI OR TERMATION OF LOCAL EXCHAGE
SERVICE WITH PRIOR NOTICE (RULE 302:1).
A telephone company may deny or terminate local exchange service to a customer or applioant
without the customer's or applioant's permission, but only after adequate notice has been given
in accordance with these rules, for one (1) or more of the following reasons: ~
06. Obligation to Connect Service. Nothing in this rule requires the telephone
company to connect service for a customer who owes money on an existing account or from a
previous account if the unpaid bil is for service provided within the past four (4) years. L-
Qwest Position:
This regulation precludes telephone companies from denying service to a customer
who owes for past service, if that service was rendered more than four years ago. Once again the
rule provides that some companies in a competitive market must provide service to those who
have not paid undisputed past bils. Meanwhile, no similar rule applies to cellular/wireless,
Internet, or cable competitors. The regulation is an obvious hold-over from the time when
Commission-regulated companies were the sole providers of telephone service and bad debt
could be incorporated in Commission-regulated rates. Such provisions have no place in a
competitive market.
Once again in the negotiated rulemaking the Staff suggested that the statutes of
limitations would bar a company from bringing a suit to recover a bad debt after four years. This
is irrelevant. As the Rule is written, the Company could have brought and won such a case
within the past four years, yet the Company would be required to offer service to the customer
once four years had passed, even if he evaded payment of a court judgment. Moreover, under
proposed Rule 100.0 1.b.i., the Company would not even be permitted to collect a deposit from
the customer. Both of these rules ignore the reality that failure to pay undisputed bils for
services that have been received makes these customers poor prospects for the future.
Customers who do not pay undisputed bils are a bad debt risk and telephone corporations
should be allowed the freedom to exercise their business judgment as to how to deal with them.
There is no valid justification for limiting a company's ability to protect itself from known risks
through means such as refusing to connect if an unpaid debt is found. If there is a concern that
"old" bils may not be actually owed or are disputed, such issues can be properly addressed in the
DECISION MEMORADUM 9
complaint process. There has been no history of problems on this topic to justify imposition of
these restrictions on Title 62 companies.
Qwest Proposed Language:
Qwest proposes deleting closing phrase, "if the unpaid bil is for service provided
within the past four (4) years," from the proposed Rule 302.06.
06. Obligation to Connect Service. Nothing in this rule requires the telephone
company to connect service for a customer who owes money on an existing account or from a
previous account ifthe 'l1'id hil is foF se:yiee TtFf,ided withiN the Ttflst fo'lF (4) )'eflS. L-
Commission Proposed Language:
3043. REQUIMENTS FOR NOTICE BEFORE TERMATION OF LOCAL
EXCHAGE SERVICE (RULE 304~.
01. SeveR Day Initial Notice. If the telephone company intends to terminate local
exchange service under Rule 30~l, it must send to the customer wrtten notice of termination
mailed at least seven (7) calendar days before the proposed date of termination. This written
notice must contain the information required by Rule 30ê1. (3 30 01)L-
03. Additional Notice. If the telephone company has not terminated service within
twenty-one (21) days after the proposed termination date as specified in a wrtten notice, the
telephone company must again provide notice under Subsections 3041.01 and 3041.02 if it stilintends to terminate service. (3 30 01)L-
30~. CONTENTS OF NOTICE OF INTENT TO TERMATE LOCAL EXCHAGE
SERVICE (RULE 306!.
01. Contents of Notice. The written or oral notice of intent to terminate local
exchange service required by Rule 3041 must state: (1 5 95)L-
Verizon Position:
Verizon recommends that the Commission authorize the use of electronic notices to
terminate service when the customer has agreed to electronic biling. Electronic notice of
termination wil actually provide a customer who has elected electronic billng with faster notice
since it eliminates the mailng time associated with sending a notice of termination through the
maiL. Further, since the customer has elected electronic biling, the customer's electronic address
is known to the provider thereby reducing the risk that the customer would not actually receive
the notice. Finally, this approach saves the provider postage and other costs of mailing and
DECISION MEMORADUM 10
lowers a provider's cost of doing business. In the event the provider receives a rejection of an
electronic notice, Verizon recommends that the provider would then be required send a written
termination notice to the customer by mail at least seven calendar days prior to termination. If
this recommendation is accepted, corresponding changes should be made to Rule 304 concerning
the contents ofthe notice.
Verizon Proposed Language:
304~. REQUIMENTS FOR NOTICE BEFORE TERMATION OF LOCAL
EXCHANGE SERVICE (RULE 304~.
01. SeveR Day Initial Notice. If the telephone company intends to terminate local
exchange service under Rule 30il, it must send to the customer written notice of termination
mailed at least seven (7) calendar days before the proposed date of termination or electronic
notice at least seven (7) calendar days before the proposed date of termination to those
customers who have elected electronic biling. This writteN notice must contain the informationrequired by Rule 3061. (3 30 01)L-
03. Additional Notice. If the telephone company has not terminated service within
twenty-one (21) days after the proposed termination date as specified in a WFitteN notice, the
telephone company must again provide notice under Subsections 304J.01 and 304J.02 if it stilintends to terminate service. (3 30 01)L-
30~. CONTENTS OF NOTICE OF INTENT TO TERMATE LOCAL EXCHAGE
SERVICE (RULE 306Ð.
01. Contents of Notice. The written, electronic or oral notice of intent to terminate
local exchange service required by Rule 304J must state: (l 5 95)L-
Commission Proposed Language:
3l(~. INSUFFICIENT GROUNS FOR TERMATION OF LOCAL EXCHAGE
SERVICE (RULE 3l-OID.
01. Termination Prohibited. No customer shall be given notice of termination of
local exchange services nor shall the customer's local exchange service be terminated if the
unpaid bil cited as grounds for termination is: (1 1 95)L-
M!. Less TltaR Fifty DollaFs. The s\:stomer's I:paid hil sited as gro\:nds fur
termination is ILess than fift ($50) dollars,:; (7 1 99)L-
l: Inside '",ire maintenanoe. For service provided four (4) or more years ago unless
the customer made a payment on the bil within the past four (4) years, or the customer signed a
written payment agreement and then failed to pay; (3 30 01) ( )
DECISION MEMORADUM 11
Qwest Position:
Regarding subparagraph "a," there is no basis for limiting the size of an undisputed
bil to $50. That amount is roughly two months of local exchange service. Whether a customer
delinquency is suffcient to justify termination should be a business decision of the telephone
company, since it is naturally limited by business constraints (e.g., costs). Terminating service to
customers for minor delinquencies would likely prove a poor business strategy. However,
requiring that all companies carry customers who are nearly two months delinquent without
recourse makes no business sense and has no valid regulatory basis. Contrar to when this rule
was initially adopted, customers have many alternatives to their current company including
wireless, cable, and Internet-based services. Telephone companies should be granted the freedom
to decide when they disconnect a customer who refuses to pay undisputed bils for past service.
Subparagraph "d," like proposed Rules 1 00.0 1.b.i. and 302.06 prohibits telephone
companies from relying on undisputed delinquent bils for services rendered more than four
years previously as a basis for disconnection of service. This paricular reversion is marginally
better than the other two articulations of this idea, in that it does recognize two exceptions to
what is elsewhere simply a blanet rule. While this is an improvement, it is stil overly
restrictive. As stated above, the mere passage of time does not absolve a customer of his
responsibility to pay for the services he has received. Whether or not a company should use
unpaid past bils as a basis for requiring a deposit, refusing to connect service, or disconnecting
existing service should be a business decision within the context of the competitive marketplace.
Those cases in which the customer has a dispute or concern about said bils can and should be
handled in the complaint process. Meanwhile customers have options, including pre-paid
cellular/wireless service that wil enable them to enjoy the benefits of telecommunications
service.
Qwest Proposed Language:
Qwest proposes that subparagraphs 308.0L.a. and 308.01.d. be deleted as
unwaranted.
Verizon Position:
It is not clear to Verizon if the $50 dollar threshold described in this rule applies only
to local exchange service. Verizon recommends that the subsection .01 be clarified to state that
the unpaid balance specifically relates only to local exchange service and further requests that the
DECISION MEMORADUM 12
threshold be lowered to $30. A $30 threshold is consistent with the majority of the states within
which Verizon operates. In the event Verizon is unable to terminate local exchange service to a
customer whose outstanding balance is between $30 and $50, Verizon could lose revenues and
incur additional costs in the event Verizon is unable to collect amounts due for local exchange
service. The lost revenue as well as any collection costs incurred becomes an additional cost of
doing business which Verizon ultimately wil pass onto other consumers.
Verizon Proposed Language:
3l(~. INSUFFICIENT GROUNS FOR TERMNATION OF LOCAL EXCHAGE
SERVICE (RULE 3l(ID.
01. Termination Prohibited. No customer shall be given notice of termination of
local exchange services nor shall the customer's local exchange service be terminated if the
unpaid bil for local exchange service cited as grounds for termination is: (1 1 95)( )
Qt!. Less TltaR Fifty Dollars. The o\:stomer's \:npaid hil oited as gro\:ds fur
termination is lLess thanJi thirty ($JjO) dollars..; (7 1 99)L-
Commission Proposed Language:
3ll9. RESTRICTIONS ON TERMATION OF LOCAL EXCHAGE SERVICE
OPPORTUNITY TO AVOID TERMNATION OF LOCAL EXCHAGE SERVICE
(RULE 3ll...
01. When Termination Nat iA",lIowed of Service is Prohibited. Unless the o\:stomer
affeoted has oonsented in vR'iting, looal exohange servioe shall not he terminated on any Friday
afer twelye noon or on aH' Satrda)', S\:da)', legal holidays reoognized hy the state of Idaho, or
afer I\'Ielve noon on aH' day immediately hefure any legal holiday, or at any time when the
telephone Gompany's h\:siness offoes are not open for h\:siness, eExcept as authorized by Ra
3Q3.Q1 and 3Q3.Q2, or for non residential o\:stomers, as aHorized hy an)' S\:hseotion of Rule
30J~..or this rule, service provided to a customer shall not be terminated: Looal 6*ohange
servioes ma)' he terminated only hetween the ho\:rs of 8 a.m. and 4 p.m., e*oept as aHorized hyRiles 3Q3.Q1 and 3Q3.Q2. (1 1 95)L-
!: On any Friday, Saturday, Sunday, legal holidays recognized by the state of Idaho,
or on any day immediately preceding any legal holiday; or L-
b.At any time when the telephone company is not open for business.()
DECISION MEMORADUM 13
Qwest Position:
This proposed rule change actually expands the hours during which a telephone
company is prohibited from terminating a customer's service in those cases in which all
requirements of notice and grounds for termination are met. The new rule would prohibit
terminations on Friday's before noon every week, and the whole of every day preceding a legal
holiday (even a minor one). The current rule has permitted terminations on a more relaxed basis
for nearly 15 years. There has been no need demonstrated to add to the regulatory burden
limiting the hours during which terminations can occur. This Qwest objection also impacts
proposed Rule 309.02 subparagraphs b. and d., which inexplicably incorporate these new
limitations even where, as in subparagraph d, it appears the intent of the new language is to give
the telephone company an exception to the general rule, in cases in which it is unable to gain
access to its equipment during normal business hours.
Whether or not some companies may choose to expand the hours they do not
terminate service, there is no basis for the Commission to enlarge the regulatory requirements,
paricularly where current practices have not been shown to be inadequate. These items should
be left to the discretion of the telephone companies as business decisions that would naturally
consider risk to the company's propert and facilities.
Qwest Proposed Language:
Qwest proposes that the language of the current Rule 311 be restored and all
additional limitations on the times during which terminations can be conducted be rejected.
Verizon Position and Proposed Language:
This rule generally prohibits termination of service on certin days of the week
(Fridays, Saturdays and Sundays) or on legal holidays. Verizon opposes these limitations
concerning when a provider may terminate service because they ignore the relevant
consideration: whether the provider's customer service center is open to receive payments such
that the customer can avoid termination. In other words, the intent of this rule seems to be to
avoid putting the customer in a situation where he or she does not have the opportnity to make a
payment to avoid termination. So the rule should be drafted to focus on whether that opportnity
exists.
For example, Verizon customers can call Verion customer service centers and make
payments over the telephone by debit and credit cards thereby preventing the termination of
DECISION MEMORADUM 14
service on a real time basis. And when Verizon customers may make payments by telephone
through its customer service centers, receipt of payments by telephone protects customers from
being improperly terminated. Thus, to account for these opportnities (and to avoid
unnecessarily increasing the carrier's costs), Verizon respectfully requests that the Commission
allow a provider to terminate basic local exchange service whenever a provider's customer
service center is open to receive payments. Accordingly, Verizon requests that the Commission
delete subsection. Ola and move the current language in subsection .0 1.b be into subsection .01.
Verizon also requests that the Commission delete subsections .02.b, c, and d and move the
current language in subsection .02.a. be into subsection .02, as follows:
3ll9. RESTRICTIONS ON TERMIATION OF LOCAL EXCHAGE SERVICE --
OPPORTUNTY TO AVOID TERMATION OF LOCAL EXCHAGE SERVICE
(RULE3~.
01. When Termination Nat Allowed of Service is Prohibited. Unless the oHstomer
affèoted has oonsented in writing, looal exohange servioe shall not he terminated on any Friday
after twel','e noon or on any Samràa)', S\:nda)', legal holida)'s reoognized hy the state of Idaho, or
after twelye noon on any day immediate i)' hefure an)' legal holida)', or at any time when the
telephone oompany's h\:siness offioes are not open fur h\:siness, eExcept as authorized by R\
303.01 and 303.02, or fur non residential o\:stomers, as aHthorized hy aH' S\:hseotion of Rule
30J..f~ or this rule, service provided to a customer shall not be terminated", at any time when the
telephone company is not open for business. Looal ex:ohange servioes ma)' he terminated only
hetv;een the ho\:rs of8 a.m. and 4 p.m., e*oept as a1orized hy R1les 303.01 and 303.02.(1 1 95)( )
!: 0I fly Frida); Sa.', S'lNdGl\ legf helida)'s reoegnked hy the stflte eUdahe,
er eN fl)' dat' immediflte!)' 19reeeding ælt' J.m helidev: er f:
lk At fl'/ time when the tele19hene 6fmt)ælt' is Net et)eN fOr h'liness.f:
02. PersoRRel to iA..Htltor~e ReeoRReetioR. Eaoh telephone oompany proyiding looal
exohange servioe shall haye persormel availahle after the time of termination 'iVho are a\:hofÎed
to reoonneot servioe if the oonditions oited as gro\:nds fur termiRation are oorrected to the
telephone oompany's satisfaction. C\:stomers may he asked to Pa)' reoormection fees hefure
restoration of servioe. Times When Service May Be Terminated. Service may be terminated:
Service may be terminated at any time when there is a dangerous condition pursuant to Rule
302.01 or the telephone company is ordered to do so pursuant to Rule 302.02:
(1195)L-
!: At æl)' time when there is fl dangr-e'l eeNditieN t)'lrs'lt tø R'lJe 302.01 er thetelet)heNe 6fm19ælY is erdered te de se t)'lrs'lælt te R'lle 302.02: f:
DECISION MEMORADUM 15
b. BetweeN the he'lrs ef 8 fl.m. 6I 5 8.m., AleNdav th'lgh Th'lst:\ fOF fl)'r-eflseN fl'ltherized év R'lJes 3(.1 en 302; f=
~ BetweeN the he'l"s ef 8 fl.m. æld 5 8.m. eN Frid8'' feF i/f 'le ef se~'iee
8'l"S'lælt te R'lle 302. (.3 eF ifthe 8Femises fI 'leee'l8ied tm sendee hfl éeeN fléflened;' eFf=
lk BetweeN the he'l"s ef 5 8.m. 6I 9 n.m., AIeNdcw thFetth Th'lFsd8''. if the
telenheNe eemnflN)' is 'lNfléJe te gfliN fleess te its eg'linmeNt thng the NeFlm é'liness he'lFS
eF feF iJJgflJ 'le efsePiiee n'l"S'lælt te R'lJe 302. (,3. f=
Frontier Communications of Idaho Position and Proposed Language:
Restrictions on termination of Service: would allow termination to occur any time if
premises are unoccupied and service has been abandoned, or for ilegal use of service. Frontier
recommends moving from subpargraph c and d to subparagraph a as follows:
!: At any time when there is a dangerous condition pursuant to Rule 302.01. or ifthe
premises is unoccupied and service has been abandoned, or for ilegal use of service pursuant to
Rule 302.03, or the telephone company is ordered to do so pursuant to Rule 302.02; L-
Commission Proposed Language:
50!!. QUALITY OF SERVICE (RULE SOl.
01. Service Standards. Each telephone company providing local exchange service
pursuant to Title 61 or Title 62, Idaho Code, as applicable, and each eligible telecommunications
carrier (ETC) is required to employ prudent management and engineering practices to ensure that
customers receive the best quality of service practicable. Each telephone company is required to
adopt and pursue a maintenance program aimed at achieving effcient operation of its systems to
render safe, adequate and uninterrpted service. These programs must include guidelines for
keeping all plant and equipment in good repair, including the following: (7 1 93)L-
50J~. REPAI SERVICE STANARS (RULE 5(ß~.
01. Restoration of Servce. When a telephone company providing local exchange
service p\:rs\:an to Title 61, Idaho Code, is informed by a customer of a service outage as
described in Subsection 50lQ.02, the telephone company must: (7 1 99)L-
b. Restore service within twenty-four (24) hours after the report of the outage if no
emergency exists, except that outages reported between noon on Saturday and 6 p.m. on the
following Sunday must be restored within fort-eight (48) hours or by 6 p.m. on the following
Monday, whichever is sooner. If the telephone company does not restore service within the times
required by this subsection the telephone company must credit the customer's account for an
amount equal to the monthly rate for one (1) month of local exchange service. (7-1-93)
DECISION MEMORADUM 16
Qwest Position:
The current version of the rule is appropriately limited to services offered by
companies regulated under Title 61, Idaho Code, i.e., to those companies who are fully regulated
by the Idaho Commission. Although competitive local exchange cariers have been legally
permitted to operate in Idaho since the passage of the Federal Telecommunications Act of 1996,
this rule, by its terms has not applied to them or to companies, such as Qwest, who elected to
remove their basic local exchange services from Title 61 regulation. Now, without justification
or any demonstration of inadequate service, the Commission proposes extending this rule to
companies who have operated successfully without it for many years.
There is no basis for applying these two rules to Title 62 telephone companies. Few
areas provide such ripe opportnities for competitive differentiation than service quality--
paricularly in customer-impacting areas like service restoration. Market demands, not
government regulation, drive these aspects of service quality. These rules may have been
appropriate for fully-regulated companies, but there is no reason to retain them for telephone
companies when cable, wireless, VoIP, etc., do not have such regulations. Service quality is a
significant means by which customers choose between competing providers. Accordingly,
remedies for poor service should be a business decision of telephone companies in response to
market demands.
Qwest Proposed Language:
Delete language applying these two rules to Title 62 companies.
Commission Proposed Language:
604. PUBLIC NOTICE (RULE 604).
Telephone companies must give "public notice" of all proposed changes in rates as required by
Section 62-606, Idaho Code. Public notice must be reasonably designed to call affected
customers' attention to the proposed changes in rates. Legal advertisements alone wil not be
considered adequate public notice. Individual notice to all customers affected wil always
constitute public notice. Notices must be provided to individual customers at least thirty (30)days before change is effective. L-
Qwest Position:
This language tracts the provisions of § 62-606, Idaho Code, except for the obvious
exception of the last sentence, which deviates from the language of the Legislature. The Rule
DECISION MEMORADUM 17
goes beyond the requirement of the statute and requires that telephone companies provide 20
additional days (making a total of 30 days) advance notice to customers of changes to "tariffs
and price lists."
The statute calls for advance notice of "not less than 10 days" to customers. This law
has been in effect since 1988 and, to the best of the Company's information, has created no
problems for customers. While it is understandable that the Commission and Staff believe this
change would be nice for customers, it potentially creates havoc for companies who wish to give
actual notice to customers by placing the information in their bils. Although it is often the case
that customers receive their bils a full 30 days in advance of the next biling cycle, vagaries of
the postal system, holidays, or even natural disasters can mean that 30 days become 29 or 28
days after the bils are sent. Moreover biling changes that need to go into effect on a particular
date, e.g., surcharges, can easily be noticed in the preceding bil if the customer is to be given at
least ten days notice, but would require Qwest to give notice two full biling cycles in advance to
achieve a full 30 days for every customer. Such added expense and administrative diffculty is
not justified, particularly where the Legislature has already determined the 10-day interval for
notice meets its intent for balancing the needs of customers and the companies that serve them.
Qwest Proposed Language:
Qwest proposes that ''thiry (30) days" be changed to "ten (10) days."
Frontier Communications of Idaho Proposed Language:
604. PUBLIC NOTICE (RULE 604).
Telephone companies must give "public notice" of all proposed changes in rates as required by
Section 62-606, Idaho Code. Public notice must be reasonably designed to call affected
customers' attention to the proposed changes in rates. Legal advertisements alone wil not be
considered adequate public notice. Individual notice to all customers affected wil always
constitute public notice. Notices of rate increases must be provided to individual customers at
least thir (30) days before change is effective. L-
Commission Proposed Language:
605. TELEPHONE SOLICITATIONS (RULE 605).
Each telephone company providing local exchange service must summarize the provisions of
Sections 48-1001 et seq.. Idaho Code, in an anual insert in a biling statement mailed to
customers or by conspicuous publication in the consumer pages of the local telephone directory.
Local exchange companies may meet the requirements ofthis notice by publishing the following
explanation or one (1) substantially similar: L-
DECISION MEMORADUM 18
IMPORTANT NOTICE CONCERNG PURCHASE
OF GOODS AN SERVICES BY TELEPHONE
You have importnt rights under the Idaho Telephone Solicitation Act. Under this Act it is ilegal
for persons attempting to sell you goods or services by telephone (telephone solicitors):
*To intimidate or harass you in connection with the attempted sale.
.: To refuse to hang up and free your telephone line immediately once you request
them to do so.
.: To misstate the price, quality or availability of goods or services, or to fail to
reveal all material terms relating to the sale of goods or services.
* To advertise, represent or imply that they have the endorsement of any
governent office or agency when they do not.
.: To advertise, represent or imply that they have a valid registration number with
the Attorney General when they do not.
*To use any unfair method of competition or unfair or deceptive practice.
Any person not yet eighteen (18) years old who purchases goods or services pursuant to a
telephone solicitation may cancel the purchase within a reasonable time after the purchase is
made. No parent or legal guardian having custody of a person not yet eighteen (18) years old is
liable for the purchase of goods or services by a person not yet eighteen (18) years old pursuant
to telephone solicitation.
When you agree to purchase goods or services over the telephone, you may have a right to
reconsider and cancel your. agreement for three (3) business days after receiving a written
confirmation of the sale.
A person whose rights are violated by telephone solicitors may have the right to declare a
contract of purchase null and void or invoke other remedies under the Idaho Consumer
Protection Act.
If you believe that a telephone solicitor has done any unlawful acts, you may contact the
/ Attorney General's Office for assistance and information at: 1 [phone] (toll-free) or 334-
2424 (Boise area).L-
Qwest Position:
This Rule effectively burdens telephone corporations with the responsibilty for
educating customers on consumer issues that are of general interest but that do not directly apply
to the goods and services provided by the telephone company. Telecommunications services are
DECISION MEMORADUM 19
simply the medium that some law-breakers choose to employ to prey on consumers. There are
obviously a variety of other media that provide similar opportities to those that wish to take
advantage of the unsuspecting. There is no valid reason to impose these costs and obligations on
telephone companies when cable, wireless, and Internet-based competitors do not have such
burdens.
The cost of educating consumers on this topic should not be borne by Title 62
telephone companies. If the Commission believes such education is required, it could enhance its
website by posting educational material of the tye mandated here. Qwest (and likely other
telephone companies) would be wiling to offer links to the Commission's website for this and
similar purposes. Alternatively, telephone companies could place this information directly on
their public web sites, rather than providing anual bil inserts.
Qwest Proposed Language:
Delete this section or, alternatively, post the material on the Commission's website
and invite telephone companies to offer lins to it on their public websites.
Note: This notice requirement is currently in the Rules because Idaho Code § 48-
1009 requires providers of basic local exchange service "to inform customers of the provisions of
this chapter." Section 48-1009(2) also requires the Commission to "by rule prescribe the form of
such notice."
Weldon B. Stutzman
Deputy Attorney General
blslM:31-41 0 i -090 i _Decision Memo _ ws2
DECISION MEMORAUM 20