20120316Comments.pdf

NEIL PRICE
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 6864
RECEIVED
2012 MAR 16 PH il: 43
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 FIRST AMENDED )
APPLICATION OF TRACFONE WIRELESS, )
INC. FOR DESIGNATION AS AN ELIGIBLE )
TELECOMMUNICATIONS CARRER )
)
)
CASE NO. TFW-T-09-01
COMMENTS OF THE
COMMISSION STAFF
The Staff of the Idaho Public Utilties Commission, by and through its Attorney of
Record, Neil Price, Deputy Attorney General, submits the following reply comments in Case
No. TFW-T-09-0L.
PROCEDURAL BACKGROUND
On September 19,2011, the Commission issued Order No. 32358, Final Order on
Reconsideration. The Order re-affirmed the Commission's previous determination in Order
No. 32301 that TracFone Wireless, Inc. ("TracFone" or "Company") is responsible for payment
of fees required by the Idaho Telephone Assistance Program Act (ITSAP), Idaho Code § 56-901,
et seq. With respect to payment of fees required by the Idaho Emergency Communications Act
(IECA), Idaho Code § 31-4701, et seq., the Order provided that TracFone could either "remit the
applicable fees, or seek an official ruling from the IECC (Idaho Emergency Communications
Commission), or another tribunal with relevant jurisdiction, as to whether the fees applied..."
Order No. 32358 at 11-12.
REPL Y COMMENTS 1 MARCH 16,2012
On October 28,2011, TracFone fied a Notice of Appeal of Reconsideration Order
No. 32358 with the Idaho Supreme Cour, Docket No. 39331-2011. In its Appeal, the Company
alle'ges that the Commission erred by denying TracFone's Application for Designation as an
Eligible Telecommunications Carrier (ETC) due to non-payment of fees required by ITSAP and
the IECA.
Subsequent to the filing of TracFone's appeal, Commission Staff (Staft) and TracFone
(hereinafter collectively referred to as "the Paries") engaged in negotiations to determine
whether the Paries could reach a reasonable compromise that would comport with the
Commission's Orders.
On Februar 8, 2012, TracFone fied a Stipulation and Motion requesting a Commission
Order approving the terms of the Paries' Settlement Agreement.
On Februar 17,2012, the Commission issued a Notice of Proposed Settlement inviting
interested paries to submit comments on the proposed Settlement. See Order No. 32463.
On March 9, 2012, the Commission received comments from the Idaho Telecom Allance
and CTC Telecom, Inc. The Commission also received public comments from the Idaho
Emergency Communications Commission, the Idaho Association of Counties, and the Idaho
Sheriffs Association.
INTERVENORS AND PUBLIC COMMENTS
The Idaho Emergency Communications Commission (lECC)
On March 9, 2012, the IECC submitted comments regarding the proposed Settlement. In
the letter, the IECC objects to the proposed Settlement Stipulation and TracFone's Application to
be designated as an ETC. The IECC believes that the proposed Settlement does not sufficiently
address the fact that TracFone is curently in violation of Idaho law and does n~t address the fees
owed by TracF one from 2004 - 2011.
The IECC believes that TracFone's refusal to collect and remit the fees that it is legally
obligated to collect constitutes an unfair business practice and is contrary to protecting those
citizens that TracFone claims it wil assist through its Lifeline services. IECC believes that a
declaratory judgment action to determine the applicability of the E-911 fees is unecessar
because TracFone's legal obligations are clear. Accordingly, the IECC requests that the
REPL Y COMMENTS 2 MARCH 16,2012
Commission reconsider the proposed Settlement Stipulation and deny the application until
TracFone's complies with existing law.
Idaho Sheriffs' Association (lSA)
On March 9,2012, the ISA submitted comments regarding the proposed Settlement
Stipulation. In its letter to the Commission, the ISA states that it opposes the proposed
Settlement Stipulation and TracFone's Application to become an ETC. ISA believes that the
proposed Settlement Stipulation does not sufficiently address the fact that TracFone is currently
in violation of Idaho law because the Company has not been remitting Emergency
Communications Fees to Idaho's 44 counties as required by Idaho Code § 31-4804.
ISA asserts that revenues from 911 fees have been diminished due to TracFone's failure
to comply with Idaho law. Furher, ISA states that TracFone has not made any attempt to
negotiate a process for collecting the IECC fees. Therefore, ISA requests that the Commission
reconsider the proposed Settlement and deny TracFone's Application until the Company
complies with existing law.
Idaho Association of Counties (lAC)
On March 9,2012, the lAC submitted comments regarding the proposed Settlement. In
its letter to the Commission, the lAC states that it concurs with the objections presented by the
IECC. The lAC states that counties, as well as some cities, rely upon the 911 fees for fuding
support of emergency communications systems statewide. The lAC argues that it is unfair to
allow any provider to evade its responsibilties under Idaho law. Therefore, the lAC requests
that the Commission reject the proposed Settlement Stipulation and deny TracFone's Application
until the Company complies with existing law.
Idaho Telecom Allance (ITA) and CTC Telecom, Inc., dba CTC Wireless (CTC)
On March 9, 2012, ITA and CTC fied joint comments in response to the proposed
Settlement Stipulation. The IT A and CTC oppose the proposed Settlement Stipulation because
partial payment of past due ITSAP fees dating back to 2004 is not in the public interest. The
ITA and CTC argue that Idaho Code § 56-904 requires the Commission to require all
telecommunications carers in Idaho to impose the ITSAP surcharge fee upon all end users.
Intervenor Comments at 5.
The IT A and CTC believe the proposed Settlement should be rejected because the terms
of the proposed Settlement Stipulation do not comport with Commission Order Nos. 32301 and
REPL Y COMMENTS 3 MARCH 16,2012
32358. Id. at 8. ITA and CTC believe that the Commission should refuse to grant ETC status to
TracFone until the Company pays all past due ITSAP fees and fully complies with any cour
order resulting from its challenge of the applicabilty of911 fees. Id. at 13. Alternatively, ITA
and CTC request that the Commission institute another comment period to obtain new evidence
regarding the economic impact of TracFone's non-payment of fees and enter additional findings
of fact and conclusions of law regarding the public interest standard. Id. at 13-14.
STAFF COMMENTS
Staffhas reviewed all the Comments fied in response to the proposed Settlement and
respectfully disagrees with the IECC, ISA, lAC, ITA and CTC. Staff believes that the nine (9)
conditions of the Settlement Stipulation are fair, just, and reasonable, and in the public interest,
or otherwise in accordance with law or regulatory policy. Order No. 32463 at 1-3.
After filing its Notice of Appeal ofthe Commission's Order on Reconsideration,
TracFone contacted Staff in an effort to begin Settlement discussions. Staff agreed and engaged
in Settlement discussions with two importnt considerations in mind: 1) the potential risk of
fuher litigation before the Idaho Supreme Cour; and 2) the potential impact of the Settlement
on other traditional and prepaid wireless companies.
In reaching the proposed Settlement Stipulation with TracFone, Staff assessed the risk of
an adverse decision by the Idaho Supreme Court overrling Final Order No. 32301. Staff
believed that the most prudent course of action was to take control of the outcome by way of a
Settlement. Staff focused on reaching a Settlement that would comport with the most important
!
elements as well as the spirit and intent of the Commission's Orders.
The proposed Settlement represents a compromise regarding ITSAP fees that Staff
believes comports with the spirit and intent of Commission Order No. 32301. The argument
regarding applicabilty of 911 fees wil be resolved in the appropriate venue where the IECC,
IT A, CTC and any other interested paries can present their respective arguments. Therefore, the
term of the proposed Settlement requiring TracFone to file a declaratory judgment to determine
the applicability of the E-911 fees strictly adheres to the Commission's directive that "another
tribunal with relevant jurisdiction. ..determine whether the 911 fees apply to TracFone." Order
No. 32358 at 11-12. The proposed Settlement also states that in the event that the District Cour
determines that TracFone is subject to the IECC fees, and should TracFone fail to reimburse the
REPL Y COMMENTS 4 MARCH 16,2012
IECC as outlined in the proposed Settlement or elects to seek judicial review of an adverse ruling
by the Cour that the Company owes IECC fees, TracFone agrees that the Commission may
revoke its ETC designation, until the judicial review is complete. Order No. 32463 at 3. Based
, on this information regarding the issue of 911 fees, Staff believes that this proposal represents a
reasonable resolution of the disputed issue on appeal before the Idaho Supreme Cour.
With regard to other prepaid wireless cariers, Staff believed the TracFone proceedings
would impact all wireless cariers, especially the rapidly growing prepaid wireless industry.
Thus, Staff believed that it was necessary to assess the possible repercussions of any
requirements imposed on TracFone and the impact it would have on all prepaid wireless cariers.
Staff believed it was important to negotiate a Settlement with TracFone that maintains the spirit
and intent of the Commission's findings and at the same time, when applied to other prepaid
carriers, establishes a clear and unambiguous position that these cariers are required to remit
payments to the ITSAP fud.
Staff emphasizes that TracFone has agreed that its ETC designation wil be conditionaL.
Order No. 32463 at 2. The proposed Settlement contains adequate measures to ensure that
TracFone meets all of its obligations. If TracFone fails to comply with the terms of the proposed
Settlement the Commission can revoke the Company's ETC designation. Id. at 3.
In response to the ITA and ICA comments that "nowhere does the statute grant the
Commission the authority to waive the mandatory surcharge,") Staff believes that the
Commission possesses the requisite authority to endorse the compromise agreement reached by
Staff and TracFone. The Idaho Legislature has conveyed to the Commission the authority to
exercise appropriate discretion regarding the recovery of penalties or fees owed by regulated
telephone corporations. Idaho Code § 62-620 reads:
Any telephone corporation who violates or fails to comply with any final order,
decision, rule or regulation duly issued by the commission pursuant to this chapter
shall be subject to a civil penalty of not to exceed two thousand dollars ($2,000)
for each day that the violation continues. . . Any such action may be
compromised or discontinued on application of the commission upon such terms
as the cour shall approve and order. (Emphasis added).
i Intervenors' Comments at 5.
REPL Y COMMENTS 5 MACH 16,2012
While this statute does not directly apply to the ITSAP or 911 fees applicable to TracFone, it
demonstrates that the Commission has been empowered by the Legislatue to compromise
monetary penalties owed by regulated telephone corporations in other contexts.
Finally, with the exception of the ITSAP and 911 fees, Staff believes that TracFone meets
all other requirements of an ETC under Section 214( e) of the federal Communications Act of
1934 (the Act), as amended and Order No. 29841. Staff believes that the Commission's finding
that TracFone is required to remit ITSAP and 911 fees wil be resolved through a reasonable
compromise as outlined in the proposed Settlement. Therefore, Staff recommends that the
Commission approve the TracFone Settlement Stipulation and the Company's Application for
designation as an ETC.
Respectfully submitted this Ib ~ day of March 2012...
¡J~~NQe
Deputy Attorney General
Technical Staff: Grace Seaman
i:umisc:commentstfw09, I npgs reply comments
REPL Y COMMENTS 6 MARCH 16,2012
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 16TH DAY OF MARCH 2012,
SERVED THE FOREGOING REPLY COMMENTS OF THE COMMISSION STAFF,
IN CASE NO. TFW-T-09-01, BY E-MAILING AND MAILING A COPY THEREOF,
POSTAGE PREPAID, TO THE FOLLOWING:
MITCHELL F. BRECHER
DEBRA MCGUIRE MERCER
GREENBERG TRAURIG, LLP
2101 L STREET NW SUITE 1000
WASHINGTON DC 20037
E-mail: brecherm(ßgtlaw.com
mercerdm(ßgtlaw.com
RICHARD B. SALZMAN
TRACFONE WIRELESS INC
9700 NW 11 TH AVENUE
MIAMI, FL 33178
E-mail: rsalzman(ßtracfone.com
MOLLY O'LEARY
RICHARDSON & O'LEARY
PO BOX 7218
BOISE ID 83707
E-mail: molly(ßrichardsonandolear.com
CYNTHIA A MELILLO
GIVENS PURSLEY LLP
PO BOX 2720
BOISE ID 83701
E-mail: cam(ßgivenspursley.com
DEAN J MILLER
McDEVITT & MILLER
PO BOX 2564
BOISE ID 83701-2564
E-mail: joe(ßmcdevitt-miler.com
~~~.K'~
SECRETARY
CERTIFICATE OF SERVICE