20100827reconsideration_order_no_32059.pdf

Office of the Secretary
Service Date
August 27, 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-08-
ORDER NO. 32059
I. PROCEDURAL HISTORY
In November 2008 , Time Warner Cable Information Services (Idaho), LLC ("Time
Wamer" or "Company ) filed an Application for a Certificate of Public Convenience and
Necessity ("CPCN") pursuant to Idaho Code ~~ 61-526 through 528 , Rule 111 and Commission
Order No. 26665 to provide "competitive facilities-based local and interexchange
telecommunications services within Idaho.Application at 1. Commission Staff and Time
Warner 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. Staff was the only party to submit written comments regarding Time Wamer' s
Application. On January 29, 2010, Time Warner submitted a written response to Staffs
comments. Subsequently, Staff and representatives of the Company entered into another series
of discussions during which the parties agreed that Time Wamer would be permitted to file a
written reply to Staff s comments.
On February 23, 2010, the Commission issued an Order denying Time Warner
Application for a CPCN. Order No. 31012. The Commission found that a CPCN was not
necessary because Time Wamer will not be offering "basic local exchange service" to Idaho
customers. On March 16, 2010, Time Warner filed a Petition for Reconsideration and the
Commission set the matter for an evidentiary hearing.
On June 10 2010, the Commission held its technical hearing and ordered the parties
to file post-hearing briefs no later than July 9, 2010. Based upon the entire record in this case
the Commission affirms its initial Order that Time Wamer does not need a CPCN to operate as a
wholesale carrier in Idaho.
ORDER NO. 32059
II. TIME WARNER'S APPLICATION AND SUPPLEMENT
Time Warner is a Delaware corporation and lists its principal place of business as:
290 Harbor Drive, Stamford, Connecticut 06902-8700. Application at 2. Time Warner 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. In its Application, Time Warner 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
Time Warner is requesting authority to provide "retail and wholesale facilities-based
intrastate telecommunications services to commercial customers in all existing telephone
exchanges in the state of Idaho.Id. at 6.The Company stated that it will utilize the facilities
owned by its cable affiliate, as appropriate. Id. at 5. Time Warner s 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. Time Warner disclosed in its Application that it plans to enter into ICAs
with Verizonl and Qwest - both ILECs operating in Idaho.
Id. at 7.
In the supplement to its Application, Time Warner reiterated that its "Local
Interconnection Service, described in Section 3.3 of its proposed tariff. . . falls within the
parameters of' the Idaho Code ~ 62-603(1) definition of "basic local exchange service.
Supplement 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.
III. COMMISSION ORDER NO. 31012
In our prior Order, the Commission found that "(Time Warner s) 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." Order No. 31012 at 4. In doing so
the Commission found that the express language of Idaho Code ~ 62-604 mandates that Time
Warner s Application "shall be exempt from the provisions of Title 61 , Idaho Code.Id.
(quoting Idaho Code ~ 62-604).The Commission s finding responded to Time Warner
On July 1 2010, Frontier Communications Corporation acquired control ofVerizon s basic local and intrastate toll
operations in Idaho. For purposes ofthis case we shall continue to refer to Verizon.
ORDER NO. 32059
argument that the Company could opt to be governed by Title 61 if it so chooses. The
Commission noted that the "word' shall' in Idaho Code ~ 62-604 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." Id.
Title 62 is applicable to Time Warner because the Company had not been issued a
Certificate of Public Convenience and Necessity, on or before January 1 , 1988 , to provide basic
local exchange service in Idaho. Id. at 5. The Commission noted Time Warner s patent
acknowledgement that it would "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. (quoting Time Warner s Supplement to Application at 5). Thus
the services (Time WarnerJ proposes to offer do not meet the statutory definition of 'basic local
exchange services ' as the term is defined in Idaho Code ~ 62-603(1)." Order No. 31012 at 5.
Instead of offering access lines to residential and small business customers, the Company "will
enable other service providers to do so.Id.
Time Warner 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. Id. (citing Time Warner s Reply Comments at 6).
response
, "
the Commission reiterate ( dJ its long-standing judgment 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.Id. Telephone corporations 'providing
other non-basic local exchange telecommunications services as defined in Idaho Code ~ 62-603'
need only comply with the notice and price list or tariff requirements found in Idaho Code ~~ 62-
604 and 62-606.Id. (quoting Commission Order No. 30991 at 3).
IV. TIME WARNER'S PETITION FOR RECONSIDERATION
Time Warner s Petition requests that the Commission "reconsider its findings" in
Order No. 31012 and "grant (Time Warner sJ Application (for a CPCNJ in an expeditious
manner.Petition for Reconsideration at 2.In its Petition, Time Warner alleges that the
Commission made several legal errors. Time Warner argued that the Commission s denial of its
Application is "unduly discriminatory.Id. at 3. Time Warner cited the applications of ALEC
Telecom, Inc. ("ALEC"), Case No. ALE-09-01; and Eltopia Communications, LLC
ORDER NO. 32059
Eltopia ), Case No. ECL-07-, as evidence that the Commission has granted CPCNs to
wholesale telecommunications providers offering similar services in Idaho. Id. at 3-
Time Warner explained that its "Local Interconnection Service satisfies the definition
of 'basic local exchange services.'" Id. at 7. Alternatively, Time Warner argues that the
Commission has the discretion to grant a CPCN to the Company even if it finds that the
Company does not actually provide "basic local exchange service.Id. Time Warner believes
that the Commission "should apply Idaho law in a manner that advances the strong public policy
interests that favor granting (Time Warner sJ application. . .Id. at 7-
Time Warner believes that there is nothing in the Idaho Code that exempts the
Company from "taking advantage of Title 61 benefits.Id. at 8. Time Warner avers that it
should be allowed to participate in the benefits that accrue under Title 61 "provisions when it is
beneficial to do so.Id. at 8-9. Time Warner states that it is "seeking a CPCN because, in its
experience, incumbent LECs will refuse to interconnect with an entity that does not hold a CPCN
. . .
" and ". . . would be unable to obtain other essential inputs and assistance from entities that
administer numbering and call-routing processes.Id.
Time Warner also accuses the Commission of ignoring "the clear legislative intent
behind Idaho Code ~ 62-604.Id. Time Warner believes that "the Commission s Order
conflicts with well-defined federal law and policy, and would be subject to preemption if not
reconsidered.Id. at 10. "(DJenying (Time Warner sJ request for a CPCN would create a
barrier to entry in violation of federal law and contrary to clear federal and state policies in favor
of greater intrastate competition. . ." and "may leave (Time WarnerJ without the ability to obtain
telephone numbers, route calls, and obtain whatever other inputs are necessary to operate as a
CLEC.Id. at 11.
Finally, Time Warner asserts that the Commission s findings constitute a clear barrier
to Time Warner s entry into the Idaho market. Id. at 12. Thus, Time Warner contends that the
Commission s decision "is subject to preemption under federal law. . . .Id.
V. STANDARDS FOR RECONSIDERATION
Reconsideration provides an opportunity for a party to bring to the Commission
attention any question previously determined and thereby affords the Commission with an
opportunity to rectify any mistake or omission.Washington Water Power Co. v. Kootenai
Environmental Alliance 99 Idaho 875, 879, 591 P.2d 122, 126 (1979). The Commission may
ORDER NO. 32059
grant reconsideration by reviewing the existing record by written briefs, or by evidentiary
hearing. IDAP A 31.01.01.311.03.
If reconsideration is granted
, "
the matter must be reheard, or written briefs, comments
or interrogatories must be filed, within thirteen (13) weeks after the date for filing petitions for
reconsideration. "Idaho Code ~ 61-626(2).The commission must issue its order upon
reconsideration within twenty-eight (28) days after the matter is finally submitted for
reconsideration.Id. Commission Rule 311 "determines when a matter that is reconsidered is
finally submitted for purposes of Section 61-626. . .." IDAPA 31.01.01.332. A matter is
deemed "submitted for decision. . . no later than twenty-eight (28) days after hearing is closed
when a hearing is held. . . ." IDAPA 31.01.01.311.
VI. COMMISSION DECISION AND FINDINGS
The Idaho Legislature has delegated to the Commission the authority to administer
the Telecommunications Act of 1988, as amended ("the Idaho Act"), and applicable federal law.
Idaho Code ~~ 62-602(5); 62-615(1). The Commission "issues Certificates of Public
Convenience and Necessity to competitive local exchange carriers seeking to provide local
exchange services in Idaho." Commission Rules of Procedure 114, IDAP A 31.01.01.114. "The
Commission uses the certification process to register and review applications to provide local
telecommunications services.Id.; see also Commission Order No. 26665.
Based upon our review of the entire record in this case, the Commission finds that
Time Warner s Petition for Reconsideration should be denied. Simply stated, Time Warner
Application reveals that the Company does not plan to offer "basic local exchange service" to
customers within Idaho. As explained in greater detail below, Time Warner s proposed
operation falls outside of the Commission s jurisdiction and authority.
A. Background
As competition began to emerge in long-distance telecommunications markets, the
Idaho Legislature enacted the Idaho Telecommunications Act of 1988. Idaho Code ~~ 62-601
seq. The Legislature sought to introduce competition in all telecommunications services except
the provision of local exchange service to residential and business customers with fewer than
five (5) access lines. Idaho Code ~ 62-622 (1997). Briefly, those telephone corporations
2 The Commission ordered, and TWCIS verbally assented to, the submission of simultaneous legal briefs no later
than July 9, 2010, which is more than 28 days beyond the date of the hearing, June 9, 2010. Tr. at pp. 87-88.
ORDER NO. 32059
operating under Title 61 were subject to the Commission s traditional economic regulation
authority for services. On the other hand, telephone corporations offering telecommunications
services subject to the new Title 62 authority were no longer subject to the Commission
economic regulation. At that time, all telephone companies under the Commission s jurisdiction
had been granted a CPCN under Idaho Code ~ 61-526.
Section 62-604 of the Idaho Act provides that any new telephone corporation would
become subject to the provisions of the Commission s Title 62 authority. In pertinent part
Section 62-604 provides:
Any telephone corporation
. . .
which did not on January L 1988, hold a
certificate of public convenience and necessity issued by the commission and
which does not provide basic local exchange service, shall, on and after the
effective date (July 1988) of this act be subiect to the provisions of this
chapter and shall be exempt from the provisions of title 61 , Idaho Code.
Idaho Code ~ 62-604(1)(a) (emphasis added). In other words, those telephone corporations
which did not hold a CPCN on January 1988, were thereafter "exempt from the provisions of
title 61." When enacted, the Idaho Telecommunications Act of 1988 provided that the existing
CPCNs issued to "incumbent local exchange carriers
" ("
ILECs ) under Section 61-526 were
intended to "represent an exclusive service area franchise.Idaho Code ~ 62-615(1)
(subsequently repealed in 1997). Thus, carriers such as Qwest's predecessors became subject to
both Title 61 and Title 62: Title 61 for the provision of its basic local exchange service; and
Title 62 for the provision of all other telecommunications services.
In 1996, Congress enacted the Telecommunications Act of 1996 ("the federal Act"
thereby introducing competition in all areas of telecommunications, including basic local
exchange service. 47 US.C. ~ 151 et seq. In particular, Section 253 of the federal Act prohibits
states from enacting any statute or rule which prohibits "the ability of any entity to provide any
interstate or intrastate telecommunications service." 47 US.c. ~ 253.
Following enactment of the federal Act, the Idaho Legislature amended the Idaho
Telecommunications Act and repealed the monopoly franchise provision pertaining to basic local
3 The incumbent local exchange companies such as Mountain Bell, u.S. West (predecessors to Qwest) and AT&T
(providing long-distance, interLATA services) had Certificates issued by the Commission pursuant to Idaho Code
61-526.
Idaho Code ~ 62-603(6) ("Incumbent telephone corporation means a telephone corporation or its successor which
was providing basic local exchange service on or before February, 8 , 1996.
ORDER NO. 32059
exchange service in Idaho Code ~ 62-615(1) (repealed in 1997). With the passage of the federal
Act, telephone corporations were allowed to offer local exchange service in competition with
ILECs. New telephone corporations, i., post-l 996, desiring to offer local exchange services are
generally referred to as "competitive local exchange carriers
" ("
CLECs ). After passage of the
federal Act, the Commission issued Procedural Order No. 26665 setting out the information to be
provided by new providers of local exchange service. In Order No. 26665, the Commission
determined that "the certification process is the appropriate mechanism for examining
applications to become a local telecommunications provider in Idaho.Id. at 2. Although the
Commission no longer issues CPCNs under Idaho Code 9 61-625 to telephone corporations, it
does "register" new CLECs by issuing a "certificate" under Commission Rule 114, IDAP A
31.01.01.114.
In 2005, the Legislature amended Sections 62-604 and 62-605 of the Idaho Code to
allow telephone corporations that held a CPCN as of January 1 , 1988, and previously regulated
under Title 61 , to elect to have their basic local exchange services regulated under Title 62. In
other words, all ILECs could choose to remove their basic exchange service from the
Commission s Title 61 authority. In 2009, the Commission promulgated Rule 114 which
delineated the information that must be furnished by CLECs when applying for a registration
Certificate. As stated the Commission explained in Rule 114, supra p. 6, the Commission "uses
the certification process to register and review applicants to provide telecommunications
services." IDAPA 31.01.01.114. The Commission no longer issues Certificates or CPCNs to
telephone corporations under Section 61-526 but used the industry term "Certificate" or "CPCN"
to register new CLECs.
B. Issues on Reconsideration
1. Is Time Warner entitled to a CPCN pursuant to Title 61?
Time Warner argues that the Commission erred when it found that the Company was
exempt from Title 61 and therefore outside of the Commission s jurisdictions to regulate because
it does not offer "basic local exchange services." Time Warner also argues that the Commission
erred when it found the Company was not a "telephone corporation" under Title 61 as defined by
Idaho Code 9 61-121. For its part, Staff asserted in its brief that Time Warner is not a telephone
corporation because the Company does not contemplate offering its wholesale
telecommunications services directly to the public. Staff Brief at 3. Alternatively, Time Warner
ORDER NO. 32059
believes that an exemption from Title 61 regulation does not, ipso facto, amount to an exemption
from the benefits of that chapter.
Commission Decision: Both Time Warner and Staff arguments miss the mark on this
point. What Time Warner does not recognize (or at least acknowledge) is that Title 61 and Title
62 both contain the identical definition for what constitutes a "telephone corporation." As
defined by our Legislature:
Telephone corporation means every corporation providing
telecommunications services for compensation within this state.
Idaho Code 99 62-603(10) and 61-121(1). The Legislature has also defined "telecommunication
service" as:
The transmission of two-way interactive switched signs, signals, writing,
images, sounds, messages, data, or other information of any nature by wire
radio, light waves, or other electromagnetic means. . . which originate and
terminate in this state, and are offered to or for the public, or some portion
thereof, for compensation.
Idaho Code 99 62-603(9) and 61-121(2). What distinguishes these two identical statutes
regarding the definition of the term "telephone corporation" is their application.
As Staff has pointed out, the controlling statute for applicability is Idaho Code 9 62-
604(1)( a):
(a )ny telephone corporation. . . which did not, on January 1 , 1988 , hold a
certificate of public convenience and necessity issued by the commission and
which does not provide basic local exchange service, shall, on and after the
effective date (July 1 , 1988) of this act, be subject to the provisions of this
chapter and shall be exempt from the provisions of title 61 , Idaho Code.
Idaho Code 9 62-604(1)(a) (emphasis added).
The primary goal of construing a statute is to give effect to the intent of the
Legislature. Sherwood v. Carter 119 Idaho 246 254, 805 P.2d 452, 460 (1991). The starting
point for construing a statute is the literal wording of the statute.Wolf v. Farm Bureau
Insurance 128 Idaho 398 , 404, 913 P.2d 1168, 1174 (1996). When interpreting a statute, courts
will normally give the language of the statute its ordinary, plain and rational meaning in order to
determine the intent of the Legislature. City of Boise v. Industrial Commission 129 Idaho 906
935 P.2d 169 (1997). Administrative agencies are "clothed with power" to construe the law "
a necessary precedent to administrative action.JR. Simplot Co. v. Idaho State Tax
ORDER NO. 32059
Commission 120 Idaho 849 , 854, 820 P.2d 1206, 1211 (1991). There is no occasion for judicial
construction of a statute unless it is ambiguous, absurd or in conflict with other statutes. Gibson
v. Bennett, 140 Idaho 270, 108 P .3d 417 (2005).
We find that Idaho Code 9 62-604(1)(a) is unambiguous. As quoted above, Section
62-604(1)(a) sets forth two conditions: first, it applies to telephone corporations which did not
hold a CPCN from the Commission on January 1 , 1988; and second
, "
does not provide basic
local exchange service." There is no dispute that the Company does not have a CPCN issued by
the Commission prior to January 1 , 1988.
Turning to the facts of this case, the Commission found, and the Company does not
contest, that Time Warner has not been issued a CPCN. See Order No. 31012 at
Consequently, the Commission must next determine whether Time Warner was providing or
intends to provide basic local exchange service.
Idaho Code defines "basic local exchange services" in the following manner:
Basic local exchange service" means the provision of access lines to
residential and small business customers with the associated transmission of
two-way interactive switched voice communication within a local exchange
calling area.
Idaho Code 9 62-603(1). An "access line is a customer s physical servIce line or cable
connection running from the residential or small business customer s premises to the carrier
switching office. Thus
, "
basic local exchange service" is the provision of access lines directly to
residential and small business customers.
Throughout its Application and testimony, Time Warner has consistently stated that it
will not offer its services to residential and small business customers. (Emphasis added). The
Company will offer its services on a purely "wholesale basis" and "enable other service
providers to offer residential and small business customers a competitive choice in telephone
services. . .." Time Warner Supplement to Application at 5; see also Tr. at p. 22, ll. 14-
(Emphasis added) (Testifying that Time Warner would offer its "services to its retail VoIP entity,
which will provide services - VoIP services - to end-user customers.) Time Warner "will be
essentially a carrier s carrier.Id. at p. 23. Consequently, we find that Time Warner will not be
offering basic local exchange service, i., providing access lines to residential and small
business customers , but will offer its wholesale services to other telecommunications
corporations.
ORDER NO. 32059
Returning to Idaho Code 9 62-604(1)(a), it is clear that Time Warner neither held a
CPCN on January 1 , 1988, nor does it provide or intend to provide basic local exchange service
to Idaho customers. Consequently, Time Warner is "subject to the provisions of this chapter
(Title 62, Chapter 6) and shall be exempt from the provisions of title 61 , Idaho Code.Idaho
Code 9 62-604(1)(a) (emphasis added). Because Time Warner is exempt from the provisions of
Title 61 , the Commission cannot grant it a CPCN pursuant to Section 61-526.
As we held in Order No. 31012 Idaho Code 9 62-604 "removed any discretion" as to
whether the Commission could regulate Time Warner under Title 61 of the Idaho Code. The
Commission s authority is not limitless. "An administrative agency is a creature of statute
limited to the power and authority granted it by the Legislature. . ..Welch v. Del Monte Corp.
128 Idaho 513 , 514, 915 P.2d 1371 , 1372 (1996). The "PUC has no authority not given it by
statute.McNeal v. Idaho PUC 142 Idaho 685, 691, 132 P.2d 442, 448 (2006) quoting Utah
Power Light v. Idaho PUC 107 Idaho 47 685 P.2d 276 281 (1984). The Commission is a
legislative agency and cannot exercise authority not previously given to it by the Idaho
Legislature.
The Idaho Legislature has delegated to the Commission the authority to administer
the Idaho Public Utilities Laws, and applicable federal law. Idaho Code ~~ 62-602(5), 62-
615(1). The relevant language of Idaho Code ~ 62-604 is plain, clear and unambiguous. Our
Supreme Court has said that statutes "relating to the same subject matter, although an apparent
conflict, are to be construed in harmony, if reasonably possible.State v. Barnes 133 Idaho 378
380 987 P.2d 290 292 (1999). Statutes which are in pari materia are to be construed together to
further legislative intent. Id. at 382, 987 P.2d 292. Although the definition of "telephone
corporation" is the same for Title 61 and Title 62, it is Sections 62-604 and 62-605 that indicate
when a telephone corporation is subject to Title 62. Construing Section 62-603(14) with the
latter two statutes results in harmony and subjects new telephone corporations to the provisions
of Title 62. As our Legislature found in Section 62-602(4): "The telecommunications industry
is in a state of transition from a regulated public utility industry to a competitive industrv. The
legislature encourages the development of open competition in the telecommunications industry
in accordance with the provisions of Idaho law and consistent with the federal
telecommunications act of 1996." (Emphasis added).
ORDER NO. 32059
Finally, we note that the Idaho Supreme Court has long held that an agency
interpretation of its statutes is given "considerable weight" when the agency reasonably
interprets a statute that it has the responsibility to administer
, "
the statutory language does not
treat the precise issue, and. . . any of the rationales underlying the rule of deference are present."
Pearl v. Bd. of Professional Discipline of Idaho State Bd. of Medicine 137 Idaho 107, 113
3d 1162, 1168 (Idaho 2002)(citing Simplot v. Idaho State Tax Comm 120 Idaho 849 , 820
2d 1206 (Idaho 1991).
The Commission agrees with Time Warner that it is a "telephone corporation " albeit
a Title 62 telephone corporation. The Commission recognizes that it issues "Certificates" under
Rule 114 to Title 62 telephone corporations seeking to provide "local exchange service in
Idaho." Under Commission Rule 114, we use the "certification process to register and review
applications to provide local telecommunications services.See also supra p. 5. However, as
noted above, Time Warner is not seeking to provide local exchange service - the provision
access lines to residential and small business customers.
Nevertheless, the Commission cannot go beyond its own enabling statutes and issue a
Title 61 CPCN to Time Warner when it is specifically exempted from Title 61 regulation by law.
The Commission cannot find on the one hand that it lacks the authority to regulate a
telecommunications provider under Title 61 and then act under that Title with respect to an entity
that is exempt.
2. Whether the denial of Time Warner s Application amounts to discriminatory treatment?
Time Warner also argued that denying its Application would subject the Company to
discriminatory treatment. The Company cited ALEC and Eltopia as other wholesale providers
who have previously been issued a CPCN by the Commission.
Commission Decision: Inasmuch as the Commission has previously issued at least
two Title 62 CPCNs to other wholesale telecommunications providers who may not currently
offer basic local exchange services in Idaho , the Commission is committed to appropriately
addressing the matter through an investigatory process to verify that recipients of CPCNs are
actually providing basic local exchange service to customers in Idaho. ALEC's Title 62 CPCN
5 Time Warner cites Cox Idaho Telecom, LLC and Millennium Networks, LLC as VoIr service providers that have
been granted CPCNs by the Commission. See Time Warner Brief at p. 9. Time Warner neglects to mention that
both Cox and Millennium are providing direct access to the public switched network to residential and small
business customers.
ORDER NO. 32059
is conditioned upon ALEC providing local exchange service within one year. Order No. 30944.
Thus, if ALEC has not satisfied the condition, then the Commission may revoke ALEC's Title
62 Certificate registration.
As Staff witness Seaman explained in her testimony to the Commission, ALEC stated
in its Application that it has "future plans. . . to expand its offering to retail, private line service
and residential customers.Application at p. 5; Tr. at 62. Eltopia s illustrative tariff stated
service offerings, rates, terms and conditions applicable to the furnishing of local exchange
services to residential and small business within the Coeur d' Alene (sic), Idaho Service Area.
Tr. at p. 63. Further, witness Seaman stated that Commission Staff is aware that in the past there
may have been wholesale service providers that were granted Certificates. Tr. at p. 64. In order
to ensure that, Title 62 CPCNs are now granted appropriately under Rule 114, they are issued on
a "conditional basis" and the carrier must, inter alia, agree to
, "
relinquish its Certificate and
telephone numbers if, within one year of the issuance of the CPCN, the Company is not offering
(basic) local exchange telecommunications services in Idaho." Tr. at p. 64-65.
The Commission has subjected Time Warner to the same level of regulatory oversight
as any other wholesale telecommunications provider applying for a Title 62 CPCN in Idaho. The
Commission has evaluated Time Warner s Application based upon its own merits.The
Commission is taking appropriate steps to verify that Title 62 Certificates are issued to carriers
providing basic local exchange service. The Commission intends to investigate all holders of
Title 62 CPCNs to ensure they are providing basic local service. Eltopia s status will be
evaluated as part of that investigation.
3. Whether the Commission s decision to deny Time Warner s Application for a CPCN is subject
to federal preemption?
Time Warner argues that it is effectively prohibited from operating as a
telecommunications service provider in Idaho without a Title 62 CPCN. See Time Warner Brief
at 13. First, Time Warner argues that its Application for a Title 62 CPCN is a prerequisite to
securing interconnection agreements with incumbent local exchange carriers ("ILECs
essence, Time Warner contends that, but for the Commission s actions in this case, the Company
would be able to successfully negotiate with third parties to secure all of the "essential inputs and
assistance" it needs to provide its services in Idaho. Time Warner s Petition at 9. Because such
an outcome is contrary to the fundamental purposes and intent of both federal law and Title 62 of
ORDER NO. 32059
the Idaho Code, Time Warner believes that the Commission s actions in this case are subject to
federal preemption. Id. at 9-12.
Commission Decision: A Title 62 CPCN is not necessary for a telecommunications
carrier to obtain an interconnection agreement. As we noted in our prior Order, a CPCN is not a
prerequisite to operation as a telecommunications provider or for interconnection with an Idaho
ILEC. See Order No. 31012 at 5. If an Idaho local exchange company refuses to enter into an
interconnection agreement with Time Warner, Time Warner s remedy is to file a complaint with
this Commission. Section 251 of the federal Act requires each telecommunications carrier to
interconnect directly or indirectly with another carrier and an ILEC has a duty to negotiate in
good faith and to interconnect with any requesting telecommunications carrier. 47 D.C. ~
251(a)(1) and (c)(1-2). As Time Warner correctly points out, the Commission has the authority
to implement the federal Telecommunications Act of 1996.Idaho Code ~ 62-615(1).
Both regulatory bodies, the Federal Communications Commission ("FCC") and the
Commission, have held that an ILEC is prohibited from withholding interconnection based upon
a CLEC's failure to receive state certification. See Time Warner Request for Declaratory Ruling
that Competitive Local Exchange Carriers May Obtain Interconnection Under Section 251 of the
Communications Act oj 1934 as amended, to Provide Wholesale Telecommunications Services
to VoIP Providers Memorandum Opinion and Order, 22 FCC Red (WCB 2007). Moreover
both the Ninth Circuit Court of Appeals and the Idaho Supreme Court have held that the federal
Act established an affirmative duty, owed by local exchange carriers, to provide interconnection
unless the incumbent carrier can prove that the interconnection is not "technically feasible.
re Ryder 141 Idaho 918 , 925 , 120 P.3d 736, 743 (Idaho 2005) (citing U WEST
Communications, Inc. v. Jennings, 304 F.3d 950, 960-61 (9th Cir. 2002); 47 C.R. ~ 51.305(e).
Second, Time Warner asserts that the lack of a Title 62 CPCN will prohibit Time
Warner from obtaining telephone numbers. Time Warner Brief at 14. This argument is
meritless and best explained by example. Under both Title 61 and Title 62 , the Commission is
specifically precluded from exercising authority over paging carriers and mobile radio
telecommunications services (i., wireless carriers). Idaho Code ~ 62-603(14) provides that
telephone corporations providing radio paging, (orJ mobile radio telecommunications services.
. . are exempt from any requirement of this chapter or title 61 , Idaho Code." In other words, the
Commission exercises no regulatory authority over paging or wireless telephone corporations.
ORDER NO. 32059
Consequently, the Commission does not issue Title 62 CPCNs to these types of carriers.
However, these types of carriers obtain telephone numbers from the numbering authority.
Indeed, as Time Warner notes in a footnote, telephone numbers are actually assigned by a federal
agency (the North American Numbering Plan Administrator (NANP A)) that provides
(telephone J numbers "only to entities that are licensed or certificated as carriers under the
(federal TelecommunicationsJ Act." Time Warner Brief at n.38. Again, the fact that the
Commission cannot award paging or wireless carriers a Title 62 CPCN does not prohibit them
from obtaining telephone numbers from NANP A. Likewise, the lack of a Title 62 CPCN issued
under Rule 114 does not prohibit Time Warner from obtaining numbers from NANPA.
It is illustrative that Time Warner has not sought to argue that the Idaho Act should be
invalidated. Rather, the Company argues that is the Commission s denial of its Application that
is subject to federal preemption. This argument betrays a fundamental misunderstanding of the
doctrine. Federal preemption is an attack on the state law at issue and not the administrative
action undertaken pursuant to that law. Federal preemption invalidates state laws when it is clear
that Congress intended federal law to "occupy the legislative field, or if there is an actual conflict
between state and federal law.See Altria Group, Inc. v. Good - U.S. -' 129 S.Ct. 538
543 (2008).
The state law at issue in this case Idaho Code ~ 62-604, does not, explicitly or
implicitly, prohibit Time Warner s entry into the Idaho market. Indeed, state law encourages
competition in the telecommunications industry in accordance with both Title 62 and the federal
Telecommunications Act. Idaho Code ~ 62-602(4). Section 62-604 merely acts as a type of
eligibility "weigh-station" to determine which type of telecommunications providers will be
subject to state regulation. Therefore, it is difficult to envision how a finding that an entity is
exempt from state regulation could be preempted or invalidated by federal law.
Finally, Time Warner complains that it will be prohibited from routing calls to other
carriers without a Title 62 CPCN. However, as explained above, there are many telephone
corporations in Idaho such as wireless companies, pagers, and interexchange carriers which do
not have CPCNs and are able to route calls without a Title 62 CPCN. Time Warner is free to
enter the wholesale market or any telecommunications market within Idaho. That is state law.
Consequently, Time Warner s argument that lack of a CPCN constitutes a barrier to entry is
without merit.
ORDER NO. 32059
VII. CONCLUSION
Therefore, after a careful review of the record and based upon the foregoing analysis
the Commission reaffirms its prior ruling in Order No. 31012 denying Time Warner
Application for a CPCN. The Commission finds that its prior decision is: (1) based upon
substantial evidence; (2) in accordance with the clear legislative intent that the agency does not
have the necessary jurisdiction and authority to regulate Time Warner in the manner it has
requested; and (3) does not constitute an actual impediment to Time Warner s entry into the
Idaho market.
ORDER
IT IS HEREBY ORDERED that Time Warner Cable Information Services (Idaho),
LLC's Petition for Reconsideration of Commission Order No. 31012, denying Time Warner
Application 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 DENYING RECONSIDERA nON.Any party
aggrieved by this Order or other final or interlocutory Orders previously issued in this Case No.
TIM-08-01 may appeal to the Supreme Court ofIdaho pursuant to the Public Utilities Law and
the Idaho Appellate Rules. See Idaho Code ~ 61-627.
ORDER NO. 32059
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 7'~
day of August 2010.
€,/
. KEMPTO IDENT
-------
iJ~
MARSHA H. SMITH, COMMISSIONER
MACK A- REDFORD
ATTEST:
AvA.-VivCLcJ
Barbara Barrows
Assistant Commission Secretary
O:TIM- T -08-- np4 _Reconsideration
ORDER NO. 32059