990730_cc.doc

DECISION MEMORANDUM

TO: COMMISSIONER HANSEN
COMMISSIONER SMITH
COMMISSIONER KJELLANDER
MYRNA WALTERS
RON LAW
TONYA CLARK
LYNN ANDERSON
STEPHANIE MILLER
JOE CUSICK
DON HOWELL
WAYNE HART
BEV BARKER
WORKING FILE

FROM: CHERI C. COPSEY

DATE: JULY 30, 1999

RE: IN THE MATTER OF THE TARIFF ADVICE SUBMITTED BY RURAL TELEPHONE COMPANY INTRODUCING VACATION SERVICE.– RUR-T-99-01.

On February 9, 1999, Rural Telephone Company submitted revisions to its Local Tariff IPUC No. 2 to the Commission to add a vacation service. Currently, Rural does not offer vacation service. All residential customers presently pay one rate.
In its Tariff Advice, Rural proposes to price vacation service at one half the total monthly network access line rate and to bill any additional items as a fixed monthly service or surcharge. The service would only be available for residential customers. A line connection charge would apply to suspension or restoration of service. Rural requested an effective date of March 12, 1999.
BACKGROUND
Rural provides service in some of the more remote areas of the state that are popular for those seeking recreational opportunities. Rural’s largest exchange, Boise River, covers the Pine and Featherville area along the South Fork of the Boise River and serves an area that is very popular for recreational property owners.
According to U.S. Census Bureau statistics, over 80 percent (80%) of the housing structures in the Pine and Featherville area along the South Fork of the Boise River are recreational or vacation homes. Depending upon the season, this exchange contains between 60 percent (60%) and 80 percent (80%) of Rural’s customers. Recreational property owners may also be located in Rural’s Prairie, Atlanta and Shoup exchanges. More than 50 percent (50%) of Rural’s customers may be likely candidates for this type of service.

Rural also receives a significant part of its revenues from both the federal and state universal service programs. The Commission is currently considering expanded area service for four of Rural’s exchanges in Case Nos. GNR-T-97-9 and GNR-T-98-18. The decision in these cases may also impact the analysis that Staff believes is appropriate for the Commission’s consideration of vacation service. On March 4, 1999, the Commission suspended the operation of this Tariff Advice for six months to allow Staff to investigate and analyze the reasonableness of this proposed tariff. Order No. 27956.
Staff Recommendation
Staff originally recommended that the Commission suspend this Tariff Advice for six (6) months to allow a thorough analysis of the issues surrounding offering this service to Rural customers. After reviewing the proposed tariff vacation rate and considering the impact on Rural’s revenue, Staff believes that the revenue impacts are significant. Staff further believes that comments should be filed and the public be given an opportunity to comment.
Therefore, Staff recommends that the Tariff Advice be processed by Modified Procedure.

Commission Decision
Does the Commission want to process this Petition by Modified Procedure?

___________________________
Cheri C. Copsey

Staff: Wayne Hart

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ORDER NO. 27956 -2-

DECISION MEMORANDUM 3