20100323Answer to Time Warner's Petition.pdf

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 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 -08-01
STAFF'S ANSWER TO
TIME WARNER'S PETITION
FOR RECONSIDERATION
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
attorney of record, D. Neil Price, Deputy Attorney General, and, pursuant to Commission Rile
of Procedure 331.05, does hereby submit Staffs Answer to the Petition for Reconsideration.
PROCEDURAL BACKGROUND
On November 14, 2008, Time Warer Cable Information Services (Idaho), LLC
("TWCIS" or "Company") filed an Application for a Certificate of Public Convenience and
Necessity (CPCN) pursuant to Idaho Code §§ 61-526 through -528, IDAPA 31.01.01.111 and
Commission Order No. 26665 to provide competitive facilties-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 fied a supplement to its Application.
STAFF'S ANSWER TO TIME WARNER'S
PETITION FOR RECONSIDERATION 1
On December 4,2009, the Commission issued a Notice of Application and Modified
Procedure. Thereafter, Commission Staff was the only pary to submit written comments
regarding TWCIS' Application. Subsequently, Staff and representatives of the Company entered
into another series of discussions during which the paries agreed that TWCIS would be
permitted to issue a written reply to Staffs comments. On January 29,2010, TWCIS submitted
a written response to Staff s comments.
On February 23, 2010, the Commission issued an Order denying TWCIS'
Application for a CPCN. See Order No. 31012. On March 16,2010, TWCIS fied a Petition for
Reconsideration of the Commission's Order.
STAFF'S ANSWER TO TIME WARNER'S
PETITION FOR RECONSIDERATION
1. TWCIS' Application for a CPCN is Inapposite to the Applications Submitted by ALEC, Inc.
and Eltopia Communications, LLC.
In its Petition, TWCIS alleges that the Commission's decision to deny the Company a
CPCN was unduly discriminatory because the Commission has previously granted CPCN's to
"cariers that proposed to provide services comparable to those proposed by TWCIS." TWCIS
Petition at 3-5. In making its argument of disparate treatment, TWCIS specifically referenced
the Applications of ALEC, Inc. ("ALEC"), Case No. ALE-T-09-01, and Eltopia
Communications, LLC ("Eltopia"), Case No. ECL- T -07 -01. Id. at 3-4.
Staff notes that it had numerous discussions with representatives for ALEC prior to
submitting its recommendation that ALEC receive a CPCN to provide local exchange
telecommunications services in Idaho. During those discussions, ALEC indicated that it
intended to provide local exchange services to small business customers and to eventually
expand its offerings to include residential customers. This statement was supported by the
Company's ilustrative tariff and price list pages 50 through 52, and on pages 47 through 49 in
the Company's final tariff currently on fie with the Idaho Public Utilties Commission. Among
the various service offerings, the ALEC tariff lists monthly rates for: Business Exchange Access
Line Service, optional custom calling features, directory listings (including non-published and
non-listed numbers), directory assistance, busy line verification and interrpt service. These
services are typically associated with end-users. See Application of ALEC, Inc., Idaho PUC
Tariff No. 1.
STAFF'S ANSWER TO TIME WARNER'S
PETITION FOR RECONSIDERA nON 2
This stands in stak contrast from Staffs discussions with Time Warer. The
Company's representatives have explicitly stated that its intent was to be a provider of wholesale
services in Idaho, and the Company did not intend to offer end-user services. The proposed price
list submitted in the Application supports this business strategy. Nothing in the proposed price
list suggests that the Company plans to offer end-user services. The only reference to end-user
services in the price list is a reference to employee rates where it states that the "Company may
offer special rates or rate packages to its employees or employees of its affiiates." See Proposed
Price List, page 41.
Moreover, Staffs recommendation that the Commission approve ALEC's
Application was conditionaL. Staff recommended that ALEC agree to the following conditions
prior to the issuance of a Certificate: (1) compliance with the Number Pool Administrator and
Order No. 30425 mandating number resource utilization forecast (NRUF) reporting; (2)
contribution to the Idaho Universal Service Fund, Idaho Telecommunications Relay System
(TRS) Idaho Telephone Assistance Program (ITSAP) and any futue reporting requirements
deemed appropriate for competitive telecommunications providers; (3) filing a final and
complete price list with the Commission containing all of its rates, terms and conditions; and (4)
an agreement from the Company to relinquish its certificate and any telephone numbers if,
within one year of the issuance of a CPCN, the Company is not offering local exchange
telecommunications services in Idaho. See Commission Order No. 30944. Thus, ALEC
stipulated to special conditions, including but not limited to, the relinquishment of its certificate
if it failed to offer local exchange telecommunications services in Idaho within a year. i
TWCIS also referenced the Application of Eltopia Communications, LLC
("Eltopia"), Case No. ECL-T-07-01, as support for its argument that the Commission's denial of
its Application for a CPCN constituted "blatant discrimination against TWCIS. . .." TWCIS
Petition at 5. In response, Staff reiterates the assessment it made in its comments regarding
Eltopia's 2007 Application for a CPCN: "Eltopia's service has the capability to provide both
voice and data services over the same tru, and in some cases, the customer may desire fewer
than five voice lines, which would qualify as basic local exchange service." See Staff
Comments, Case No. ECL-T-07-01 (emphasis added).
i See a/so Case Nos. BVN-T-09-01 (Order NO.3 1030), ENT-T-09-01 (Order No. 30950), ITN-T-09-01 (Order No.
30995) and MNT-T-08-02 (Order No. 30794).
STAFF'S ANSWER TO TIME WARNER'S
PETITION FOR RECONSIDERATION 3
In contrast, TWCIS' Application does not reveal any promissory intent by the
Company to offer, now or in the immediate future, services which would qualify as basic local
exchange service. Instead, TWCIS assures the Commission that its proposed Local
Interconnection Service "will be offered on a wholesale basis to facilities-based providers of
interconnected VolP services. . ." and not to end use customers. TWCIS Petition at 6 (emphasis
added). As previously stated, serving as the wholesale provider of services that may ultimately
qualify as basic local exchange service once they are actually delivered to residential and small
business customers does not constitute the provision of "basic local exchange service," as
outlined in Idaho Code § 62-603(1). Staff Comments, Case No. TIM-T-08-01 at 5.
2. The Commission's Authority to Issue a CPCN to TWCIS is Constrained by Statute.
If the Company concedes that it does not meet the definition of a "telephone
corporation" for purposes of the Idaho Code § 62-604 exemption then the Commission should
ignore TWCIS' plea for a CPCN. In its Petition, TWCIS argues that a Commission finding that
the Company does not meet the statutory definition of a "telephone corporation" removes any
"basis for using Idaho Code § 62-604 to preclude TWCIS from seeking a CPCN." TWCIS
Petition at 8.
TWCIS' argument is misguided. The plain language of Title 61 delineates that the
Commission has the authority to issue a CPCN to either a "street railroad corporation, gas
corporation, electrical corporation, telephone corporation or water corporation. . . ." Idaho Code
§ 61-526. The Company cannot have it both ways. If TWCIS declares that it is not a qualifying
"telephone corporation" then the Commission should accept the Company's admission and
consider the matter closed.
a. TWCIS' Application Should Be Evaluated Based on its Owr Relative Merit or
Lack Thereof.
TWCIS does not stop there. The Company argues that even if it is "exempt" from the
provisions of Title 62 nothing in the definition of that word, "or Idaho Code § 62-604, requires
an exempt pary to forego, or precludes the Commission from faciltating benefits or advantages
otherwise available for similarly situated entities." Id. at 9. In other words, rather than
requesting that the Commission to issue a CPCN because the CPCN enabling statute is generally
applicable to the Company, TWCIS seems to argue that it is entitled to a CPCN because "other
similarly situated entities" have received the benefits of a CPCN.
STAFF'S ANSWER TO TIME WARNER'S
PETITION FOR RECONSIDERATION 4
Assuming that TWCIS' assertion is accurate and its proposed services are similar to
other telecommunications providers that have previously received a CPCN from the
Commission, Staff contends that TWCIS' Application should be evaluated based solely upon the
relevant statutory criteria and legal authority. The Commission is not bound by its prior rulings.
See Commission Rule 326; IDAPA 31.01.01.326. Inasmuch as other "similarly situated entities"
have been granted a CPCN in contravention of Idaho Code, Staff wholly supports appropriate
actions by the Commission to rescind their certificates.
3. A CPCN is not a Prerequisite for Entry into the Idaho Telecommunications Market.
TWCIS is not prejudiced by the Commission's decision to deny its Application for a
CPCN. The denial of the Application does not discourage "effective competition" because it
does not prevent TWCIS from obtaining interconnection with incumbent local exchange cariers.
See Idaho Code § 62-602 (emphasis added). As the Commission noted in its previous Order, "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." Order No. 31012. "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. (citing Order No. 30991 at 3.)
CONCLUSION
Staff respectfully requests that the Commission deny TWCIS' Petition for
Reconsideration of Commission Order No. 31012 denying the Company's Application for a
CPCN.
Respectfully submitted this Q3rJday of March 2010.
pj;:~Nee
Deputy Attorney General
N:TIM-T-08-01_np_Staff Answer
STAFF'S ANSWER TO TIME WARNER'S
PETITION FOR RECONSIDERATION 5
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 23rd DAY OF MARCH 2010,
SERVED THE FOREGOING STAFF'S ANSWER TO TIME WARNER'S PETITION
FOR RECONSIDERATION, IN CASE NO. TIM-T-08-01, BY E-MAILING AND
MAILING A COPY THEREOF, POSTAGE PREPAID, TO THE FOLLOWING:
GARY WENGROFSKY
MANAGER REGULATORY
TIME WARNER CABLE INC
290 HARBOR DR
STAMFORD CT 06902
E-mail: twc.phone.complaints¡ftwcable.com
JOHN R HAMMOND JR
FISHER PUSCH & ALDERMAN LLP
PO BOX 1308
BOISE ID 83701
E-mail: jrh¡ffpa-Iaw.com
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SECRETARY
CERTIFICATE OF SERVICE