20100223final_order_no_31012.pdf

Office of the Secretary
Service Date
February 23 2010
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF TIME WARNER CABLE INFORMATION
SERVICES (IDAHO), LLC FOR A
CERTIFICATE OF PUBLIC CONVENIENCE
AND NECESSITY TO PROVIDE LOCAL
EXCHANGE AND INTEREXCHANGE
TELECOMMUNICATIONS SERVICES WITHIN THE STATE OF IDAHO
CASE NO. TIM- T -08-
ORDER NO. 31012
On November 14, 2008, Time Warner Cable Information Services (Idaho), LLC
TWCIS" or "Company ) filed an Application for a Certificate of Public Convenience and
Necessity (CPCN) pursuant to Idaho Code 99 61-526 through -528, IDAPA 31.01.01.111 and
Commission Order No. 26665 to provide competitive facilities-based local and interexchange
telecommunications services within the State of Idaho. Staff and representatives of TWCIS
entered into a prolonged period of discussions regarding the Company s initial Application. On
November 14 2009, the Company filed a supplement to its Application.
On December 4 2009, the Commission issued a Notice of Application and Modified
Procedure. Commission Staff was the only party to submit written comments regarding TWCIS'
Application. Subsequently, Staff and representatives of the Company entered into another series
of discussions during which the parties agreed that TWCIS would be permitted to issue a written
reply to Staffs comments. On January 29 2010, TWCIS submitted a written response to Staffs
comments.
THE APPLI CA TI 0 N AND SUPPLEMENT
TWCIS is a Delaware corporation and lists its principal place of business as: 290
Harbor Drive, Stamford, Connecticut 06902-8700. Application at 2. TWCIS is registered with
the Idaho Secretary of State as a foreign limited liability company and lists CT Corporation
System, 300 N. Sixth Street, Boise, Idaho 83702, as its Idaho registered agent for service. Id.
its Application, TWCIS states that it is a "competitive telecommunications company" offering
facilities-based wholesale and retail intrastate telecommunications services" to "commercial
and wholesale customers statewide.Id. at 2, 5.
TWCIS seeks authority to provide "retail and wholesale facilities-based intrastate
telecommunications services to commercial customers in all existing telephone exchanges in the
ORDER NO. 31012
state of Idaho.Id. at 6. The Company will utilize the facilities owned by its cable affiliate, as
appropriate. Id. at 5. The Application also reveals that the Company has not yet identified all of
the facilities required for its services
, "
as the architecture will depend upon future customer
location, customer demand and the outcome of interconnection agreement ("ICA") negotiation
with incumbent local exchange carriers ("ILECs Id. at 5-6. TWCIS disclosed in its
Application that it plans to enter into ICAs with Idaho ILECs, Verizon and Qwest. Id. at 7.
In the supplement to its Application, TWCIS reiterated that its "Local Interconnection
Service, described in Section 3.3 of its proposed tariff. . . falls within the parameters of' the
Idaho Code 9 62-603 (1) definition of "basic local exchange service.Supplement to Application
at 4-5. The Company also emphasized that granting a CPCN "will be consistent with the
competition objectives embodied in federal and state law. . . .Id. at 11.
STAFF COMMENTS AND RECOMMENDATION
Staff reviewed TWCIS' Application and supplement and recommended that the
Commission deny the Company s request for a CPCN. Staff Comments at 7. Staff remarked that
TWCIS is a "wholesale provider" of telecommunications service "to retail companies and not to
the public or end users.Id. at 4. Accordingly, Staff does not believe that TWCIS offers
telephone service " as the term is defined in Idaho Code 99 61-121(2) or 62-603(13). Id.
Because the Company does not offer telephone service, it then cannot be considered a
telephone corporation' in accordance with that definition in Idaho Code 61-121(1) or 62-
603(14).Id.
Staff then went on to address substantive portions of the Company s CPCN
Application. Staff agreed that TWCIS' Application provided all of the requisite information for
a CPCN as set out in Commission Order No. 26665. Id. However, Staff disputed TWCIS'
assertion that the Company will offer "a form of basic local exchange service.Id. at 5 (quoting
TWCIS Application at 4). Staff believes that "providing service to a company that is going to
provide service to residential and small business customers" does not meet the statutory
definition of "basic local exchange service " as the term is defined in Idaho Code 9 62-603(1).
Id. at 5. It is Staffs position that telecommunications service providers, such as TWCIS , who
offer something other than basic local exchange service, are exempt from the Commission
CPCN process. Id. at 6.
ORDER NO. 31012
Staff maintained that denying TWCIS' Application cannot reasonably be construed as
a "barrier to entry" into the Idaho market. Id. Staff noted that "Idaho statutes allow easier entry
into the market" than the federal Communications Act of 1934 ("federal Act"
).
Id. Staffs
interpretation of the Commission s authority regarding the issuance of a CPCN to wholesale
providers would specifically exempt TWCIS from a state regulatory process. Id. Staff is
therefore incredulous as to how such a permissive interpretation could be viewed as either a
barrier to entry or otherwise contrary to the policy objectives favoring entry by facilities-based
competitors such as TWCIS. Id.
TWCIS REPLY COMMENTS
In its reply comment, TWCIS assures the Commission that it is not seeking additional
regulation by applying for a CPCN in Idaho. TWCIS Reply Comments at 2. To the contrary,
TWCIS is seeking a CPCN because, incumbent LECs need not, therefore choose not to
interconnect with entities that do not hold a CPCN granted by the relevant state commissions.
Id. at 3. Competitive carriers without a CPCN are also disadvantaged in that they often lack
access to telephone numbers and connections with 911 public service answering points
PSAPs Id. According to TWCIS , a rejection of its Application would have the practical
effect of barring the Company from providing local exchange services. Id. The Company
believes that such an outcome would be contrary to the public interest and violate federal and
state law. Id.
In support of its conclusion that the "Idaho Code does not preclude the grant of a
CPCN to TWCIS " the Company references the Commission s "broad authority under the Idaho
Code to 'do all things necessary to carry out the spirit and intent of the provisions of this act.
. . .'"
Id. (quoting Idaho Code 9 61-501). In TWCIS' view, the Commission should take into
account TWCIS' need to obtain a CPCN in order to interconnect with incumbent providers and
then assess whether the law allows the Commission to grant the requested authority. Id. at 4.
TWCIS also claims that the Commission has in the past granted CPCN Applications
of "similarly situated carriers" - citing Eltopia Communications LLC and ALEC Telecom, Inc.
as contemporary examples. Id. According to TWCIS, there is "no conceivable basis for
distinguishing TWCIS' Application from these carriers ' applications.Id. at 5. Dissimilar
treatment of TWCIS' Application would be deemed discriminatory and "cannot be justified and
would not be sustained by any court oflaw.Id.
ORDER NO. 31012
TWCIS also argues that Titles 61 and 62 of the Idaho Code must be read in
conjunction with the admonition found in Section 253 of the federal Act which states that "(n)o
State or local statute or regulation. . . may prohibit or have the effect of prohibiting the ability of
any entity to provide any interstate or intrastate telecommunications service.Id. Thus
according to TWCIS, Titles 61 and 62 should not be read in a manner that "would thwart a
competitive carrier s ability to enter the Idaho market by interconnecting with incumbent
carriers. . . .Id.
Moreover, the Company argues that "the strongly pro-competitive principles of
federal and state law counsel against any such reading.Id. TWCIS reiterates that it is seeking a
CPCN in order "to exercise its federally conferred rights as a competitive local exchange carrier
including in particular the right to obtain interconnection. . . .Id. at 6.
Finally, if TWCIS' Application is denied , the Company requests that the Commission
issue an order clearly stating that TWCIS may interconnect with incumbent LECs in Idaho and
operate as a wholesale telecommunications carrier without a CPCN. Id. Absent such an Order
the Company claims that it would be subject to "arbitrary and capricious treatment vis-a-vis
wholesale providers that have obtained a CPCN from this Commission.Id.
COMMISSION DECISION AND FINDINGS
Based upon our review of TWCIS' Application and the record in this case , including
Staffs comments, the Commission finds that TWCIS' filing does not satisfy the cumulative
requirements for the issuance of a CPCN as set out in the Idaho Code, the Commission s Rules
and Commission Order No. 26665. In doing so, the Commission finds that the express language
of Idaho Code 9 62-604 dictates that TWCIS' Application for a CPCN is "subject to the
provisions of (that) chapter" and "shall be exempt from the provisions of Title 61 , Idaho Code.
The Commission is not convinced by TWCIS' argument that the Commission is not
precluded by law from granting a CPCN to TWCIS. Supplement to Application at 3. To the
contrary, the inclusion of conditional language followed by the word "shall" in Idaho Code 962-
604 strongly suggests that the legislative intent was to remove any discretion as to whether a
telephone corporation could opt to be governed by Title 61. Thus, upon a Commission inquiry
and finding that the telephone corporation "did not on January 1 , 1988 , hold a certificate of
public convenience and necessity issued by the commission and, does not provide basic local
ORDER NO. 31012
exchange services. . ." the telephone corporation is specifically exempted from the regulatory
structure found in Title 61 of the Idaho Code.
TWCIS has never been issued a CPCN to provide basic local exchange services in
Idaho. Further, TWCIS concedes that it will offer its services on a "wholesale basis" and will
merely "enable other service providers to offer residential and small business customers a
competitive choice in telephone services. . . .Id. at 5. Given these facts, the Commission finds
that the services TWCIS proposes to offer do not meet the statutory definition of "basic local
exchange services" as the term is defined in Idaho Code g 62-603(1). The Company does not
allege that it will provide access lines to residential and small business customers but rather that
it will enable other service providers to do so.
TWClS has also requested that the Commission issue a statement declaring that a
CPCN is not a prerequisite to operate as a wholesale telecommunications provider or for
interconnection with an Idaho ILEC. See TWCIS Reply Comments at 6. Accordingly, the
Commission reiterates its long-standing position that a CPCN is not required for telephone
corporations offering non-basic local exchange services or to obtain interconnection with the
network of an Idaho ILEC. Telephone corporations "providing other non-basic local exchange
telecommunications services as defined in Idaho Code 9 62-603" need only comply with the
notice and price list or tariff requirements found in Idaho Code 99 62-604 and 62-606. See
Order No. 30991 at 3.
ORDER
IT IS HEREBY ORDERED that the Application of Time Warner Cable Information
Services (Idaho), LLC for a Certificate of Public Convenience and Necessity to provide local
exchange telecommunications services within the State of Idaho is denied.
THIS IS A FINAL ORDER. Any person interested in the Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order with regard to any
matter decided in this Order. Within seven (7) days after any person has petitioned for
reconsideration, any other person may cross-petition for reconsideration. See Idaho Code g 61-
626.
ORDER NO. 31012
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this ;;23;
day of February 2010.
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. KEMPTON, P IDENT
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MARSHA H. SMITH, COMMISSIONER
MACK A. REDFORD, C
ATTEST:
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D. J wel'
Commission Secretary
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ORDER NO. 31012