20101217Prehearing Issues Brief.pdf

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D. NEIL PRICE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
Idaho State Bar No. 6864
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Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF TRACFONE WIRELESS, INC. FOR
DESIGNATION AS AN ELIGIBLE
TELECOMMUNICATIONS CARRER
)
) CASE NO. TFW-T-09-01
)
) PREHEARING ISSUES BRIEF OF
) THE COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilties Commission, by and through its
attorney of record, D. Neil Price, Deputy Attorney General, and, pursuant to the Commission's
directive, does hereby submit Staffs Pre hearing Issues Brief regarding the Application of
TracFone Wireless, Inc. for designation as an eligible telecommunications carier.
I. PROCEDURAL HISTORY
On October 29, 2009, TracFone Wireless, Inc. ("TracFone" or "Company") fied an
Application, pursuant to Section 214( e )(2) of the Communications Act of 1934, for designation
as an eligible telecommunications carier ("ETC"). Application at 1. TracFone is seeking ETC
designation solely for the purose of providing Lifeline service under its trade name SafeLink
Wireless and wil not seek funds from the federal Universal Service Fund. Id.
On January 15, 2010, Commission Staff submitted a decision memorandum
recommending that the Commission deny TracFone's Application. On February 5, 2010, the
Commission issued an Order denying TracFone's Application. See Order No. 30996.
On March 1, 2010, TracFone filed a Petition for Reconsideration and an Amended
Application for ETC designation. On March 8, 2010, Commission Staff fied an Answer to
PREHEARIG ISSUES BRIEF 1
TracFone's Petition. Subsequently, TracFone submitted a letter withdrawing its Petition for
Reconsideration and expressing its support for a process that would facilitate a Staff review and
recommendation regarding its Amended Application within 60 days.
On April 26, 2010, Staff and TracFone filed a Joint Stipulation Regarding First
Production Requests of the Commission Staff
On May 14, 2010, CTC Telecom, Inc. dba Snake River PCS ("CTC") and Idaho
Telecom Allance ("ITA") each filed, pursuant to Commission Rule of Procedure 71, IDAPA
31.01.01.071, a Motion to Intervene Out of Time and Petition to Intervene.
On May 19,2010, TracFone fied, pursuant to Commission Rule of Procedure 75,
IDAPA 31.01.01.075, a Motion in Opposition of TracFone Wireless, Inc. to Petitions to
Intervene ofCTC Telecom, Inc. dba Snake River PCS and Idaho Telecom Allance.
On May 28, 2010, the Commission issued an Order granting CTC and ITA's Petitions
to Intervene. See Order No. 31096. The Commission also mandated that the paries hold a
scheduling conference "in order to develop an appropriate schedule going forward in this case,
including a hearng if needed." Id. at 3.
On August 13, 2010, TracFone fied a Notice of Expanded Lifeline Offering of
TracFone Wireless, Inc. TracFone notified the Commission that, commencing on August 16,
2010, its Lifeline customers in Idaho would be given the option to choose one of three different
monthly plans, more fully described in the Notice.
On November 15, 2010, representatives for TracFone, ITA, CTC and Commission
Staff convened a scheduling conference at the Commission's offices and forwarded their
recommendations to the Commission.
On November 24, 2010, the Commission ordered the parties to submit a prehearing
brief outlining the legal and factual issues involved in the cases no later than December 17, 2010.
See Order No. 32127.
II. STATEMENT OF JURISDICTION
"The (Commission) is hereby vested with power and jurisdiction to supervise and
regulate every public utility in the state." Idaho Code § 61-501. The Commission "has full
jurisdiction and authority to designate cariers as ETCs pursuant to the federal
Telecommunications Act of 1996. . . ." Order No. 29841 at 2.
PREHEARIG ISSUES BRIEF 2
In order to be designated as an ETC, the telecommunications provider must: (1) be a
"common carrier" as defined by 47 U.S.C. § 153(10); (2) offer throughout its proposed service
areas the universal services set forth in 47 C.F.R. § 54. 101 (a) either by using its own facilties or
a combination of its own facilities and the resale of another carrier's services; and (3) must
advertise the availability of its universal service offering and the charges therefore using media
of general distribution. 47 U.S.C. § 214(e)(1); Id. at 3. Additionally, TracFone has the burden of
demonstrating that the public interest would be served by granting its ETC Application. Id. at 8.
III. ISSUES FOR CONSIDERATION
Commission Staff believes that the Commission's decision regarding TracFone's
Application for designation as an ETC in Idaho hinges upon whether granting the Application
would be "consistent with the public interest, convenience, and necessity. . . ." Id. at 3.
Staff has serious concerns as to whether the usage "plans" referenced in TracFone's
filings wil offer fair and adequate pricing standards for Idaho's low-income consumers - the
primary market for TracFone's service offerings. See TracFone's Notice of Expanded Lifeline
Offering at 1-2. TracFone markets its SafeLink Wireless Lifeline service as a "free" plan.
However, all three Lifeline plans offered by the Company contain a finite number of "free
minutes" ranging from 250 to 68 "free minutes" per month. Id. Staff is concerned that the
aforementioned plans act as an enticement for low-income consumers to enter into agreements
for ostensibly "free" service with the strong likelihood that these consumers wil later be
subjected to substantial overage charges.
These concerns are exacerbated by TracFone's lack of commitment to contribute to
funds that support telecommunications services in Idaho: the Idaho Telecommunications Service
Assistance Program ("ITSAP"), Telecommunications Relay Services ("TRS") Fund, and the
E911 Service Fund.
The ITSAP was instituted in order to "maximize federal 'lifeline' and 'link-up'
contributions to Idaho's low-income consumers." Idaho Code § 56-901(1). The Program
depends upon the support of telecommunications carriers i operating in Idaho, paricularly those
cariers who, like TracFone, directly market their service offerings to low-income consumers.
Recipients of ITSAP funding must "meet narowly targeted eligibility criteria based solely on
i A "telecommunications carrier" is defined by statute as any "telephone corporation providing . . . personal
communications services and mobile radio services for compensation." Idaho Code § 56-901(2).
PREHEARING ISSUES BRIEF 3
income or factors directly related to income established by the deparment of health and
welfare." Idaho Code § 56-901 (3). Staff believes that, if TracF one is granted ETC status, there
wil be an enormous amount of overlap between ITSAP funding recipients and TracFone's
customer base.
TracFone has also failed to commit to contributing to the TRS Fund. The TRS Fund
offers essential services to a segment ofIdaho's population, hearing-impaired or speech-impaired
persons, which is disproportionately economically disadvantaged and obviously included within
TracFone's targeted Idaho market.
. . . Telephone corporations providing interstate or intrastate telephone
services provide telecommunications relay services (TRS) for individuals who
are hearing-impaired or speech-impaired that wil allow them to engage in
telephone communication in a manner functionally equivalent to that of
individuals without hearing or speech impairments.
Idaho Code § 61-1301. Thus, Staff believes that any ETC certification should be contingent
upon the Company contributing to the TRS Fund.
Finally, TracFone boasts access to emergency services and that its customers will
receive an E911-compliant handset free of charge. See First Amended Application at 24.
Neverthless, the Company has made no indication or assertion that it plans to pay into the fud
that supports these critical emergency services. Thus, Staff questions whether it is in the public
interest of Idaho customers to allow TracFone to be designated as an ETC without requiring the
Company to collect and remit E911 fees.
CONCLUSION
Staff respectfully requests that the Commission proceed in this case pursuant to
Modified Procedure. The Commission should establish a reasonable comment period which
would allow the intervening parties, CTC and ITA, to fully participate in the process. Staff
canot identify any relevant factual issues that are subject to dispute in this case.
TracFone has been relatively candid in its various filings regarding the business
model it would employ in Idaho if the Company were granted ETC status. Therefore, a technical
hearing is not waranted because it would not significantly inform the Commission's decision in
this matter.
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Respectfully submitted this 17th day of December 2010.
AfQ-,
Neil Price
Deputy Attorney General
PREHEARIG ISSUES BRIEF 5
CERTIFICATE OF SERVICE
I hereby certify that on the 17th day of December, 2010 I served the foregoing
document, Prehearing Issues Brief of the Commission Staff in Case No. TFW-T-09-01 via
electronic mail upon the following paries:
CTC Telecom, Inc. dba Snake River PCS:
Molly O'Leary, ISB# 4996
Richardson & O'Leary PLLC
E-mail: molly(ßrichardsonandolear.com
Idaho Telecom Allance:
Cynthia A. Melilo, ISB# 5819
Givens Pursley LLP
E-mail: cam(ßgivenspursley.com
TracFone Wireless, Inc.
Dean J. Miler, ISB# 1968
McDevitt & Miler, LLP
E-mail: joe(ßmcdevitt-miler.com
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Deputy Attorney General
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