20151120Decision Memo.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER RAPER
COMMISSION SECRETARY
LEGAL
WORKING FILE
FROM:GRACE SEAMAN
TERRI CARLOCK
DATE:NOVEMBER 20,2015
RE:SILVER STAR TELEPHONE COMPANY,INC.AND COLUMBINE
TELEPHONE COMPANY,INC.’S APPLICATiON FOR APPROVAL OF
TRANSFER OF IDAHO ASSETS,OPERATIONS AND CERTIFICATE;
CASE NOS.COL-T-15-O1 AND SIL-T-15-O1.
On October 29,2015,Silver Star Telephone Company,Inc.(“Silver Star”or “Company”)
and Columbine Telephone Columbine Telephone Company,Inc.(“Columbine”or ‘Company”)
(Collectively “Companies”)filed an Application for Commission approval of the transfer of
Silver Star’s Idaho local exchange assets,operations and certificated service area under
Certificate No.207 to its sister company,Columbine.The Application’s requests that the
Commission approve:fl transfer of Silver Star’s Idaho Title 61 assets and certificated sen’ice
for the Irwin and Wayan,Idaho exchanges to Columbine;2)Silver Star’s subsequent
discontinuance of local exchange service to the Irwin and Wayan exchanges:and 3)amendment
of Columbine’s Certificate No.329 to incorporate the Irwin and Wayan exchanges into
Columbine’s certificated service area within which it is entitled to provide Title 61 services.
Application at 1-2.
Because the proposed asset transfer does not involve discontinuance of sen’ice,as
addressed in Rule 20,and as discussed below.Staff recommends that the Commission approve
the transfer without further process.
The Application
Silver Star is a certificated telephone corporation organized under the laws of the State of
Wyoming and provides telecommunication services,including regulated Title 61 local exchange
DECISION MEMORANDUM 1 NOVEMER 20,2015
services,within the states of Idaho and Wyoming.Silver Star is the incumbent local exchange
carrier (“ILEC”)in Idaho’s Irwin and Wayan exchanges under Certificate No.207.The
Company has served the exchanges for over 50 years and currently serves approximately 500
local exchange customers.RI.at 2.
Columbine is a certificated telephone corporation organized under the laws of the State of
Wyoming providing telecommunication services,including regulated Title 61 local exchanges
services,within the State of Idaho.Columbine is the ILEC in the Idaho exchanges of Driggs,
Tetonia.and Victor under Certificate No.329.Id.Columbine acquired these exchanges from
US WEST Communications in 1997 during the sale of its rural telephone exchanges in southern
Idaho.RI.Columbine was specifically incorporated to serve these exchanges,to facilitate a rate
freeze in the acquired exchanges following the acquisition,and to accommodate the then-
existing IRS 1031 exchange restrictions.Id.
Columbine states that since the 1997 acquisition,it has upgraded the local exchange
switching and transmission facilities to provide state-of-the-art digital telecommunications
service to all of its customers.Id.at 3.Likewise,Silver Star’s exchanges have been upgraded to
the state-of-the-art digital telecommunications facilities.Id.Silver Star is a designated eligible
telecommunications carrier (“ETC”)in Idaho and Wyoming.Id.Both Companies are wholly-
owned subsidiaries of Horizon Communications,Inc.and hold Certificates of Good Standing
with the Idaho Secretary of State’s Office,Id.(Exh.A and B).
Silver Star proposes to transfer all of its customer information and accounts,including
any customer deposits,to Columbine.Customer deposits will be handled by Columbine,
consistent with Commission Rules (See Telephone Customer Relations Rules 31.41.01.100-109)
and Columbine’s revised tariff (See Confidential Preliminary Revised Tariff).These changes
will be transparent to the Irwin and Wayan exchange customers.RI at 4.Silver Star and
Columbine currently maintain separate cost accounting for purposes of Title 61 operations in the
exchanges,and Columbine intends to maintain the exchange separation.RI at 4.Silver Star and
Columbine also affirm that no costs associated with the asset transfer will be assigned as costs to
the Title 61 customers.RI.at 4.Silver Star has provided customer notification of the intended
transfer of service responsibility to Columbine.Id.Exh.C,Finally,Silver Star wishes to
surrender Certificate No.207,contingent upon approval of the asset transfer and amendment of
Columbine’s Certificate No.329 to include Irwin and Wayan exchanges.Id.at 4
DECISION MEMORANDUM 2 NOVEMER 20,2015
The Companies assert that the proposed asset transfer will simplify its management,
operations,and accounting for both companies.The Companies state that the Application
“amounts in essence to a corporate structure name change that will not affect individual customer
service.Id.at 5.Silver Star and Columbine request an effective date of November 30,2015 for
Silver Star’s discontinuance of service.RI.
STAFF ANALYSIS AND RECOMMENDATION
Staff has reviewed the Application,including the revised tariffs,and recommends
Commission approval of Silver Star and Columbine’s Application for approval of the Transfer of
Idaho assets,Operations.and changes in Certificate Nos.207 and 329.
Rule 20,cited in the Application,requires advance notice of discontinuance of
telecommunications service.See IDAPA 31.01.01.020.This case involves the transfer of assets
and operations,but does not involve a discontinuation of service.Because the changes for which
the companies seek approval “will not affect individual customer service”(Application at 5),and
will be transparent to Silver Star’s customers,Staff believes that modified procedure or an
extended notice period is unnecessary.Instead,Staff recommends that the Commission approve
the asset and operations transfer without further process,per Rules 21-22,IDAPA 31.01.01.021 -
022.
Staff requested and reviewed additional documents to more fully understand impacts of
the transfer request.These documents include,but are not limited to:customer deposits,current
and proposed organizational charts,accounting trial balance records to identify the assets to be
transferred,proposed agreements between the parties,proposed Board of Director resolutions,
and draft tariffs.Rural Utility Service (RUS)loans outstanding for Silver Star must be paid or
refinanced.The tinancing aspects are not fully determined at this point but the Companies
recognize that any new loans or guarantee by Columbine requires a separate application and
must be approved by the Idaho Commission.Staff will also audit the post-closing transfer
records.
Staff specifically recommends that the Commission approve:1)transfer of Silver Star’s
Idaho Title 61 assets and certificated service area for the Irwin and Wayan exchanges to its sister
company.Columbine;2)Silver Star’s discontinuance of local exchange service in the Irwin and
Wayan exchanges;and 3)amendment of Columbine’s Certificate No.329 to incorporate the
Irwin and Wayan Exchanges.
DECISION MEMORANDUM 3 NOVEMER 20,2015
COMMISSION DECISION
Does the Commission wish to approve Silver Star Company,Inc.and Columbine
Telephone Company’s Inc.’s Application,Case Nos.COL-T-I5-O1 and SIL-T-15-Ol?
&ro-Ct SCUYJCLfl
Grace Seaman
ft1W CaiJc)
i:udmemos/cDItI 5.I slltl 5.1 dcc mcmo
Tern Carlock
DECISION MEMORANDUM 4 NOVEMER 20,2015