20110602Allied Wireless, etc.pdf

-~ r'
ORIGINAL
Brooks Harlow
Todd B. Lantor
LUKAS, NACE, GUTIERRZ & SACHS, LLP
8300 Greenboro Drve, Suite 1200
McLean, Virginia 22102
[phone]
[phone] (fax)
Cyntha A. Melilo
GIVENS PURSLEY LLP
601 W. Banock Street
P.O. Box 2720
Boise, ID 83701
[phone]
[phone] (fax)
d~ ~~ ~~ ~~ .~~ 0
,:.~
Attorneys for Allied Wireless Communcations Corpration
Attorneys for Idaho Telecom Allance, CTC Telecom, Inc., Syrga Wireless, LLC, and Rur
Telephone Company
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
In the Matter of the Application ofT- )
Mobile West Corporation For Designation)
as an Eligible Telecommuncations )
Carer Puuat to 47 U.S.C. § 214(e)(2) )
Ca No. TM-T-IO-l
COMMENTS OF ALLIED WIRELESS
COMMUNICATIONS
CORPORATION, IDAHO TELECOM
ALLIACE, CTC TELECOM, INC.,
SYRIGA WIRELESS, LLC AND
RURAL TELEPHONE COMPANY;
PROTEST TO USE OF MODIFIED
PROCEDURE; AND REQUEST FOR
HEARNG
In Order No. 32240, the Idaho Public Utilities Commission (the "Commssion"), in the
above-entitled case, requested comments frm interested pares on T-Mobile West Corpration's
Application for Designation as an Eligible Telecommuncations Carer (the "Application") on or
before June 2, 2011. Alled Wireless Communcations Corpration ("Allied Wireless"), the Idaho
Page 1 - COMMENTS OF ALLIED WIRLESS COMMUCIATIONS CORPORATION,
IDAHO TELECOM ALLIANCE, CTC TELECOM, INC., SYRINGA WIRLESS, LLC AND
RURAL TELEPHONE COMPANY; PROTEST TO USE OF MODIFIED PROCEDUR; AND
REQUEST FOR HEARING
TMW-T-I0-l
Telecom Allance ("ITA") on behalf of its member companes, CTC Telecom, Inc., dba CTC
Wireless ("CTC"), Syrnga Wireless, LLC ("Syrnga Wireless") and Rural Telephone Company,
dba RTC Wireless ("RTC"), respecfuly provide these Comments to the Application ofT-Mobile
West Corporation ("T-Mobile" or "Applicant") for designation as an Eligible
Telecommuncations Carer ("ETC"). For the reasons set forth below, the Commission should
not grant T -Mobile's Application on an expedited, modified procedure basis. Instead, the
Commission should commence an adjudicative proceeding, set the matter for hearng and
should ultimately deny the petition. Allied Wireless, ITA, CTC, Syrga Wireless and RTC
may be collectively refered to herein as the "Commenting Pares."
INTRODUCTION
The Commenting Pares cerainly appreciate that the Commission has, in recent year,
streamlined the process for ETC applications and reduced the administrative burden on ETC
applicants. Indee, Allied is a ver recent beneficiar of the use of modified procedure to grant
ETC status. Order No. 32209, In the Matter of the Application of Alled Wireless
Communications Corporation, Case no. ALL-T-I0-0l (Idaho PUC March 22, 2011)(hereafter
"Alled Order"). However, T-Mobile's ETC Application is unlike any that have yet come before
ths Commission. It is the only application by a prospetive CETC that is about to be acquired
by an even larger national carer, thus briging the legitimacy of T-Mobile's prposed serice
improvement plan into obvious question. It is also the first application by a carer that has
publicly aditted it lacks adequate spect to provide in-building coverage in rual areas.
Under the circumstances, the Commssion canot reasonably conclude that grting
T-Mobile's Application would be in the public interest without a more formal investigation ope
Page 2 - COMMENTS OF ALLIED WIRLESS COMMCIATIONS CORPORATION,
IDAHO TELECOM ALLIANCE, CTC TELECOM, INC., SYRINGA WIRLESS, LLC AND
RURAL TELEPHONE COMPANY; PROTEST TO USE OF MODIFIED PROCEDURE; AND
REQUEST FOR HEARG
TM-T-lO-l
to broad parcipation by other CETCs and other interested pares. Without limitation, the
Commission should take a hard look at the following issues:
1. What are the potential impacts of AT&T's acquisition ofT-Mobile on T-Mobile's
use of Federal Univeral Serce Funds ("FUSF") in Idaho? May AT&T agree or be forced to
relinquish T-Mobile's FUSF support by the FCC as a condition of the FCC's grant ofthe AT&T-
T-Mobile merger application? Why would the FCC not condition AT&T's acquisition of T-
Mobile on AT&T's volunta commitment to forgo USF high-cost support as was required of
Verzon Wireless as a condition of Verzon Wireless' acquisition of Alltei1 and of Sprint as a
condition of Sprint's acquisition of Clearre,2 thereby depriving the State of Idaho of milions
of dollars of FUSF high-cost support indefinitely?3
2. Even settng aside the AT&T merger, is T-Mobile trly committed to expanding
its serice into rural areas ofIdaho? As discussed in detil below, would it not be appropriate for
the Commission to initiate an investigation in light of findings in other state?
1 Applications of Cellco Partership d//a Verizon Wireless and Atlanti Holdings LLC for Consent to Transfer
Control of Licenses, Authoriations, and Spectrum Manager and De Facto Transfer Leasing Arrangements and
Petition for Declaratory Ruling That the Transaction Is Consistent with Section 31 O(b)( 4) of the Communications
Act, WT Docket No. 08-95, Memorandum Opinon and Order and Declartory Ruling, 23 FCC Rcd 1744 (2008)
("Verizon Wireless Merger Order").2 Sprint Nextel Corpration and Clearwre Corpration Applications for Consent to Transfer Control of Licenses,
Leases, and Authoriations, WT Docket No. 08-94, Memoradum Opinon and Order an Declartory Ruling, 23
FCC Rcd 17570 (2008) ("Sprint Nextel Merger Order").3 See, e.g., High-Cost Universal Service Support, Federal-State Joint Board on Universal Service, Request for
Review of Decision of Universal Service Administrator by Corr Wireless Communications, LLC, WC Docket No.
05-337, CC Docket No. 96-5, Order and Notice of Proposed Rulemag, 25 FCC Rcd 12854 (' 20)("Corr
Wireless Order') (instrctig USAC "to resere any reclaimed (hgh-cost support) fuds (suendered by Sprt and
Veron Wireless) as a fiscally responsible down payment on proposed broadband unver sece reform as
recommended in the National Broadban Plan").
Page 3 - COMMENTS OF ALLIED WIRELESS COMMUCIATIONS CORPORATION,
IDAHO TELECOM ALLIANCE, CTC TELECOM, INC., SYRGA WIRLESS, LLC AND
RURAL TELEPHONE COMPANY; PROTEST TO USE OF MODIFIED PROCEDURE; AND
REQUEST FOR HEARING
TMW-T-I0-l
DISCUSSION
I. AT&T's Proposed Acquisition of T-Mobile Requires Further Investigation and
Analysis Before the Commission Can be Certain That T -Mobile's Application is in
the Public Interest.
The Staff appear to have asked T-Mobile to explain the impact of the proposed AT&T
merger on the ETC Application.4 But T-Mobile's answer is woefully inadequate to address the
many potentially signficant issues that the merger creates for T-Mobile's Application.s At ths
early stage of the merger proceeding and absent any discover directed to either AT&T or T-
Mobile, it is prematue to draw any conclusions about the merger impact either way, with the one
exception that the Commission should not be rushed into a decision with limited facts when the
merger calls into question the legitimacy of the serice improvement plan submitted by T-
Mobile, as well as the real possibility that any high-cost support received by T -Mobile might
ultimately be removed from the state's CETC supprt allocation and claimed by the Federal
Communcations Commssion.6
The Texas PUC and its staff appear to have conducted one of the most thorough reviews
to date of aT-Mobile ETC Application. Texas PUC Staff is so concered about the impact of
AT&T's acquisition that the mergeris one of the key reasons Texas PUC Staff is oppsed to
T -Mobile's ETC Application. Texas PUC Staff noted the most obvious concer, which is that
T -Mobile may well win FUSF support in Texas, only to relinquish it shortly thereafter as a
potential FCC merger condition. See generally, Commission Staffs Intial Brief, Application of
4 Since the Staffs discover is not on the PUC's website, the depth and breadth of the Staffs investigation is not
curtly known to Allied Wireless.
5 Accordig to the Apri 20, 2011 Decision Memoradu in ths cas, T -Mobile responded it "wil be the designted
ETC legal entity with the obligations and responsibilties of a unveral sece provider in Idao."6 See Corr Wireless Order, supra.
Page 4 - COMMENTS OF ALLIED WIRLESS COMMUNCIATIONS CORPORATION,
IDAHO TELECOM ALLIANCE, CTC TELECOM, INC., SYRINGA WIRLESS, LLC AND
RURL TELEPHONE COMPANY; PROTEST TO USE OF MODIFIED PROCEDURE; AND
REQUEST FOR HEARING
TMW-T-I0-l
T-Mobile West Corp. For Designation as an Eligible Telecommunications Carrier (Rurl),
SOAH Dkt. 473-10-5443, Dkt. No. 38387 (submtted Apr. 21, 2011)("Texas Staff Brier)? Ths
Commission should share the same concer.
If recent FCC history is a guide, not only wil ths happen, but the reliquished support
wil not return to Idaho. As the Texas PUC Staff noted, this peranent reduction of the CETC
cap in a state could come at a high price to that state and its rual communities. Texas Staff Brief
at 37-38.
There are other reasons to be concerned about the impact of AT&T's acquisition.
Attchment A hereto is a portion of the coverge maps from AT&T's and T-Mobile's websites
showing Idaho. The two carer largely appear to cover the same areas in Idaho. The obvious
question is whether the new cell sites that T -Mobile plans to build using FUSF support are in
areas that AT&T already has coverage? Since T -Mobile fied its build plan confidentially, the
Commenting Paries do not know the answer to this key question.
Without an investigation, it is entirely possible that the combined AT&T/T-Mobile entity
could end up receiving FUSF support to build cell tower in areas where it has aleady built
tower without FUSE suPPrt. This is a matter that the Oregon PUC staff, public counsel, and
private interenors appear to be investigating.
8 It is diffcult to see how allocating scarce and
7 Copy atthed as Attchment C for ease of refernce.S See generally, OPUC Dkt. UM 1511, htt://apps.puc.state.or.usedocketsdocket.asp?DocketI16547. The
state's public counl-te Citien's Utilties Boar well as the Oregon Cable Telecommuncations Association
and United States Cellular have interened. The Orgon PUC has enterd a protective order so tht interenors have
acces to T-Mobile's confidential build plan and coverage maps. The OPUC has ordered thee rounds of pre-filed
testiony and a two day hearg. Id., Prehearg Conference Memoradum (Marh 8, 2011). The fit public
fiing tht would disclose the scope of the issues in Oregon was T -Mobile's scheduled filig of testiony, which
was due yesterday, June 1, 2011. However, on the due date T -Mobile requeste a one day extension of tie to file,
which effectively precludes discussion of the testiony in these Comments.
htt://edocs.puc.state.or.uslefdocs/HNumI511hdal03649.pdf.
Page 5 - COMMENTS OF ALLIED WIRLESS COMMUCIATIONS CORPORATION,
IDAHO TELECOM ALLIANCE, CTC TELECOM, INC., SYRINGA WIRLESS, LLC AND
RURL TELEPHONE COMPANY; PROTEST TO USE OF MODIFIED PROCEDURE; AND
REQUEST FOR HEARIG
TMW-T-IO-l
capped USF high-cost dollar without considerng these key issues is in the State of Idaho's
public interest.
Another development in the AT&T merger that is too recent for Texas PUC Staff to have
included in its brief are recent statements and testimony by AT&T witnesses to the effec that
AT&T does not need or plan to use FUSF to complete its 4G build out. AT&T's Chairman,
Chief Executive Offcer and President, Randall Stephenson, recently testified before Congress
concerg the many benefits that the proposed acquisition would provide to rual Amercans:
Ths transaction wil benefit consumer in many ways: improving serce
quality and network capacity, fosterg inovation, increasing competitive
pressure, and helping to ensure that Amerca remains the global leader in
mobile broadband. Consumer all across the nation will share in these
benefits as the transaction will allow the combined company to build out
an advanced new 4G LTE network and bring state-of-the-ar mobile
broadband to over 97 percent of the Amercan population - more than any
other provider and far more than AT&T alone was plang before the
tranaction.
Ths represents a private maret solution to effectively address the
important public policy objectve of bringing high-speed mobile
broadband to rual, suburban and urban communities across the nation -
all without any subsidies or taxpayer dollars. Ths means private capital
investment, much of which would not occur but for ths trsaction, wil
drive substantial benefits - including private sector jobs in the combined
company, in the vendors who support its efforts, in the communties
sered by the expanded LTE coverge, and in the larger ecosystem of
innovative firms whose serces wil ride on the netork (emphasis
added).9
9 "How Wil the Propose Merger Between AT&T and T-Mobile Affect Wirless Telecommunication
Competition?" United States Hous of Reprsentatives Committee on the Judiciar; Subcommittee on IntellectuPropert, Competition and the Interet, Hearg conducted May 26, 2011, at
htt://judiciar.house.govlheargslear 05262011.htm.
Page 6 - COMMENTS OF ALLIED WIRLESS COMMUNCIATIONS CORPORATION,
IDAHO TELECOM ALLIANCE, CTC TELECOM, INC., SYRGA WIRLESS, LLC AND
RURAL TELEPHONE COMPANY; PROTEST TO USE OF MODIFIED PROCEDURE; AND
REQUEST FOR HEARING
TMW-T-lO-l
In his earlier testimony, Mr. Stephenson explicitly agreed that AT&T would, "accept as a
condition of the merger a prohibition on AT&T from using any Univeral Serice Fund money
for its rual broadband build-out."lo
Before designating T -Mobile as an ETC, eligible to receive high-cost support purortedly
neeed to build out its proposed ETC serce area, the Commission must exame
Mr. Stephenson's comments and deterne what AT&T will do in Idaho ifit acquires T-Mobile.
Wil it build out the entire proposed ETC serce area with 4G L TE on its own, without high-cost
support? The Commission needs to know, and T-Mobile is in no position today to know
AT&T's tre intentions, let alone make commitments as to what wil realy happen with USF
support after the merger.
II. Is T -Mobile Truly Commtted and Able to Expand Its Servce Into Rural Areas?
Whle several state commssions have approved T-Mobile's ETC applications, other are
thoroughly investigating and apparently finding reasons to be concered about the public interest
separte and apar from the merger questions. One of the biggest questions is T-Mobile's
commtment and abilty to meangfly expand serce into ru areas. Again, due to T-
Mobile's confidential fiings, it is diffcult to know exactly what the facts are in the other states,
just as here in Idaho. But reading between the lines, one can get the idea. As Texas PUC Staff
stated:
T -Mobile's proof that its designation wil provide a "materal benefit" sees to
rely entiely on its new and planed cell site deployment and its Serce
Improvement Plan (SIP). (Footnote omitted). Yet, the information provided by T-
Mobile in its deployment plan and it SIP is vily meaningless. (Followed by 8
lines of redacted text.) * * * Additionally, T-Mobile's allocation methodology
10 htt://ww.senate.gov/fulayersCommlayer/commlashPlayer.cfi?fi=judiciar51111&st=xx
Page 7 - COMMENTS OF ALLIED WIRLESS COMMUCIATIONS CORPORATION,
IDAHO TELECOM ALLIANCE, CTC TELECOM, INC., SYRINGA WIRLESS, LLC AND
RURAL TELEPHONE COMPANY; PROTEST TO USE OF MODIFIED PROCEDURE; AND
REQUEST FOR HEARING
TM-T-lO-l
makes it impossible to tell whether T -Mobile plans to invest any paricular
amount of money in Texas, much less in any paricular rual study area, because
many "network" components can be located anywhere. (Followed by 15 lines of
redacted text.) * * * T-Mobile must show that if it is designated as an ETC it
commits to provide some new primar benefit in and for the ru study areas for
which it seeks designation.
Two examples help explai Staffs position (Followed by 3~ pages of
redacted text.)
Texas Staff Brief at 20-26. Whatever is in T-Mobile's secret build plan, it has raised great
concer in states where pares have be able to dig beneath the surace of the boilerlate
representations made by T-Mobile in its public fiings. The Commssion should commence a
formal docket and subject T-Mobile's plans to fuer scrtiny to ensure that T-Mobile meets the
requirements to be an ETC.
Of the four major wireless carer, T-Mobile may have the least expansive coverage in
Idaho's rural areas. Attachment B hereto is T-Mobile's coverage map in the Northwest. T-
Mobile's coverage appear to follow the Interstate highways and, to some extent, major
secondar highways. It is a "red flag" that should cause any state commssion to investigate the
situation thoroughy to ensure not only that T -Mobile is committed to expanding coverage to
high cost rual areas, but also that it is capable of doing so. Therefore, the Commission should
ensure that T-Mobile's intial and all subsequent build plans are properly targeted to high cost
areas of the State, not just fillng in urban and suburban coverage. Again, public data is scarce,
but Texas PUC Staffs investigation found the following:
(T -Mobile submitted a) list of new and proposed cell sites, its maps and its SIP.
Yet, the combination of the information provided in these exhbits demonstate
that T-Mobile has not made a specific or enforceable commtment to improve
signal quality, coverage, or capacity or otherise fuer the provision of the
supprted serces in its requested rul study areas. (4 lines redacted) Therefore,
it is unclea whether or how much signal improvement might result in any given
Page 8 - COMMENTS OF ALLIED WIRLESS COMMUCIATIONS CORPORATION,
IDAHO TELECOM ALLIANCE, CTC TELECOM, INC., SYRINGA WIRLESS, LLC AND
RURAL TELEPHONE COMPANY; PROTEST TO USE OF MODIFIED PROCEDURE; AND
REQUEST FOR HEARING
TMW-T-lO-l
rual study area. Additionally, it appear that T -Mobile's priar reason for
requesting some rual study area is because they neighbor high value non-rual
areas in which T -Mobile canot get high-cost support. Therefore, since all of the
new cell sites deployed by T -Mobile in the futue wil provide 4G data speeds, i!
appear that T-Mobile wil be building its new 4G network in non-rual areas on
the backs of its rul customer and their rual ILECs. T -Mobile has not
demonstrated that any federal high cost support it receives as an ETC wil be used
to improve signal quality, coverage, or capacity, or otherse be used to further
the provision of supported serces in the rual study areas for which it seeks
designation.
Texas Staff Brief at 35-36 (emphasis added). T -Mobile may be facing similar challenges to and
concers about its build plans in Oregon, although since T-Mobile recently requested a
continuance there, the issues have not yet been publicly identified. See Note 8, supra.
Ths Commssion knows it need not rubber stap ETC applications. See, e.g., Order
Nos. 29541, 30212, and 30867 in IAT Communications, Inc. dba NTCH-Idaho, Inc. and NPCR,
Inc. dba Nextel Partners (Case No. GNR- T -03-08) and Inland Cellular Telephone Company
(Case No. INC-T-06-02) and CTC Telecom, Inc. (Case No. CTL-T-09-01)(parally dened). The
Commission denied those applications because they "failed the public interest test due to either
paral serce area coverge or by placing too much emphasis on competition . . . rather than
explaining how the parcular application's ETC designation would benefit all customer in its
ETC serce area." Alled Order at 4 (emphasis added). T-Mobile's ETC Application appear
to suffer from both of these infirmities which the Commission noted in its recent order
designatig Alled Wireless an ETC.
T -Mobile proposes ETC designation in 70 non-rual wire center and a handful of
adjacent ru ILEC study areas. Is ths another case ofT-Mobile "building in non-rual area on
the backs of its ru cutomer"? An investigation is neeed to ensure that the public interest is
sered, not just T-Mobile's.
Page 9 - COMMENTS OF ALLIED WIRLESS COMMCIATIONS CORPORATION,
IDAHO TELECOM ALLIANCE, CTC TELECOM, INC., SYRINGA WIRLESS, LLC AND
RURAL TELEPHONE COMPANY; PROTEST TO USE OF MODIFIED PROCEDURE; AND
REQUEST FOR HEARING
TM-T-lO-l
CONCLUSION
The Commission should not approve T-Mobile's ETC Application based on the record
curently before it or on an expedited, modified procedure basis. Puuant to Commission Order
32240, page 3, the Commenting Paries hereby protest the use of modified procedure in this
matter. T-Mobile has failed to provide suffcient information to deterine the effect of the
proposed AT&T merger on T-Mobile's build-out plans and use of FUSF fuds, and the
Commenting Pares respectfully request the opportty to conduct discover and present
evidence. Puruant to Commission Order 32240, page 3, the Commenting Paries hereby
request a hearng be set in this matter.
Respectfully submitted this 2nd day of June 2011.
LUKAS, NACE, GUTIERRZ & SACHS, LLP~/¡/~
Brooks E. Harlow
Attorneys for Alled Wireless Communcations
Corpration
GIVENS PURSLEY LLP
~~tta Y1ff
CyntMa A. Melilo
Attorneys for Idaho Telecom Allance, CTC
Telecom, Inc., Syrnga Wireless, LLC and Rural
Telephone Company
Page 10 - COMMENTS OF ALLIED WIRLESS COMMUCIATIONS CORPORATION,
IDAHO TELECOM ALLIANCE, CTC TELECOM, INC., SYRGA WIRLESS, LLC AND
RURAL TELEPHONE COMPANY; PROTEST TO USE OF MODIFIED PROCEDUR; AND
REQUEST FOR HEARING
TMW-T-I0-l
ÇlBIWS;AIE 2E~JjBYJS;1ì
I HEREBY CERTIFY that on the 2nd day of June 2011, I caused to be sered a tre and
correct copy of the foregoing by the method indicated below, and addressed to the following:
Jean Jewell
Idaho Public Utilties Commission
472 West Washington Street
Boise, ID 83702
~u.s.Mail
Overght Mail
Hand Deliver
Fax [phone])
Mark P. Trinchero
Davis Wright Tremaine LLP
1300 SW Fift Avenue, Suite 2300
Portland, OR 97201
marktrnchero tIdwt. com
U.S. Mail
Overght Mail
Hand Deliver
Fax
Electrnic Mail
-~LfØCynt; A. Meli ïO *
Page 11 - COMMENTS OF ALLIED WIRELESS COMMUCIA TIONS CORPORATION,
IDAHO TELECOM ALLIANCE, CTC TELECOM, INC., SYRINGA WIRLESS, LLC AND
RURAL TELEPHONE COMPANY; PROTEST TO USE OF MODIFIED PROCEDUR; AND
REQUEST FOR HEARING
TMW-T-I0-l
ATTACHMENT C
(attched)
Page 14 - COMMENTS OF ALLIED WIRELESS COMMCIA TIONS CORPORATION,
IDAHO TELECOM ALLIANCE, CTC TELECOM, INC., SYRGA WIRLESS, LLC AND
RURAL TELEPHONE COMPANY; PROTEST TO USE OF MODIFIED PROCEDUR; AND
REQUEST FOR HEARING
TM-T-lO-l
,
"
SOAH DOCKET NO. 473-10-5443
DOCKET NO. 38387
APPLICATION OFT-MOBILE WEST §
CORPORATION FOR DESIGNATION §AS AN ELIGIBLE §
TELECOMMUNICATIONS CARRER §
(RURAL) PURSUANT TO 47 U.S.C. §
§ 214(e) AND P.U.C. SUBSTANTIVE §RULE 26.418 §
BEFORE THE STATE OFFICES
COMMISSION STAFF'S INITIAL BRIEF
OF .( ~ A
\-: -e /\~
ADMINISTRATIVE HEA~~ \ ~
~~ '" ,¿~~ ~ ~
't c!.~~ v.
¿.~ c.~"á':
Respetfully Submitted,
Margaret Uhlig Pemberton
Division Director
Legal Division
Keith Rogas
Deputy Division Director
Legal Division
Karen S. Hubbard
Manging Attorney
Legal Division~~
Susa E. Goodson
Attorney-Legal Division
Stae Bar No. 24045960
[phone]
[phone] (facsimile)
Public Utility Commission of Texas
1701 N. Congrss Avenue
P.O. Box 13326
Austin, Texas 78711-3326
DATE: APRIL 21, 2011
/3 'i
TABLE OF CONTENTS
I. SUMMARY OF POSITION ........... ...... ........... ... ............................ ...... ...................... 4
III. PROCEDURAL HiSTORy................... ................ .............. ... ... .... ...... ........... ...... 11
IV. DOES T-MOBILE'S APPLICATION FOR ETC DESIGNATION IN RURAL ILEC
STUDY AREAS SATISFY THE APPLICABLE REQUIREMENTS OF 47 C.F.R. §
54.201,47 U.S.C. § 214(E), P.U.C. SUBST. R. 26.412 AND P.U.C. SUBST. R. 26.418?
(PRELIMINARY ORDER ISSUE NO. 1)........................................................................12
V. DO THE FACTS DEMONSTRATE THAT T-MOBILE'S APPLICATION FOR ETC
IS IN THE PUBLIC INTEREST AS REQUIRED BY P.U.C. SUBST. R. 26.418(E)(2)?
(PRELIMINARY ORDER ISSUE NO. 2).........................................................................16
a. Has T-Mobile's appliction demonstrated that it is in the public interest by demonstrating that
ETC designation wil reult in a IIrUlI benefi above and beond the sllllus quo of T-Moblle's exllng
operlilloll in ils requested ETC stnke areas? ........................._......................-.................-......................... i 7
b. In what speifi ways would designation of T -Mobile as an ETC in its requested service area be in
the public interest as aserted in its application in terms of benefits from competitive pricing and new
services? ........................................_.._..............................................................................................._........_...29
Co In what speifi ways would designation ofT-Mobile as an ETC in its requested service are be in
the public interest as assrted in its application in terms of the provision of a higher level of service
quality and better customer service? ...................-...................................................-._............-...................29
Vi. HAS T-MOBILE'S APPLICATION PROVIDED SUFFICIENTLY DETAILED
SERVICE AREA MAPS SUCH THAT ANY PERSON MAY ASCERTAIN WHETHER A
CUSTOMER FALLS WITHIN T -MOBILE'S REQUESTED ETC SERVICE AREA?
(PRELIMINARY ORDER ISSUE NO. 3)........................................................................31
VII. DOES T-MOBILE'S APPLICATION ADEQUATELY DEMONSTRATE AN
ABILITY AND UNCONDITIONAL WILLINGNESS TO SERVE END USERS
THROUGHOUT ITS REQUESTED ETC SERVICE AREA, CONSISTENT WITH THE
COMMISSION'S PRECEDENT IN PRIOR ETC APPLICATIONS BY WIRELESS
CARRIERS, INCLUDING THE COMMISSION'S DECISIONS IN THE DOBSON
CELLULAR AND NEXTEL PARTNERS CASES? (PRELIMINARY ORDER ISSUE NO.
4) ............................................................................................................................31
VII. IS T-MOBILE LICENSED BY THE FCC TO PROVIDE SERVICE IN ALL THE
PROPOSED RURAL ILEC STUDY AREAS FOR WHICH IT IS SEEKING ETC
DESIGNATION AND DOES T -MOBILE'S CURRENT FCC LICENSED NETWORK
PROVIDE SUFFICIENT COVERAGE (WITH SUFFICIENT CALL QUALITY
THROUGHOUT THE REQUESTED ETC SERVICE AREA? (PRELIMINARY ORDER
ISSUE NO. 5) ................................................................................................................35
2
ix. HAS T-MOBILE'S APPLICATIONS ADEQUATELY DEMONSTRATED THAT
ANY FEDERAL HIGH COST SUPPORT IT MIGHT RECEIVE AS AN ETC WILL BE
USED TO IMPROVE SIGNAL QUALITY, COVERAGE, OR CAPACITY, OR
OTHERWISE BE USED TO FURTHER THE PROVISION OF SUPPORTED
SERVICES IN THE SERVICE AREA? (PRELIMINARY ORDER ISSUE NO. 6)..........35
X. DOES T-MOBILE'S APPLICATION DEMONSTRATE THAT T-MOBILE WILL
COMPLY WITH THE PUBLIC UTILITY REGULATORY ACT (PURA) § 55.015 AND
THE TEXAS LIFELINE RULE, P.U.C. SUBST. R. 26.412, INCLUDING LIFELINE
DISCOUNTS ON ALL BUNDLES AND/OR PACKAGES OF SERVICES THAT T-
MOBILE OFFERS TO ALL OF ITS CUSTOMERS? (PRELIMINARY ORDER ISSUE
NO. 7) ..............................................................................................................................36
XI. IS THE MARCH 21, 2011 ANNOUNCEMENT THAT AT&T HAS ENTERED
INTO AN AGREEMENT WITH DEUTSCHE TELEKOM TO ACQUIRE T-MOBILE USA
RELEVANT TO THIS APPLICATION, AND IF SO, IN WHAT WAY? ..........................37
XI.I. CONCLUSION ....................................................................................................38
3
SOAH DOCKET NO. 473-10-544
DOCKET NO. 38387
APPLICATION OF T -MOBILE WEST §BEFORE THE STATE OFFICESCORPORATION FOR DESIGNATION §AS AN ELIGIBLE §OFTELECOMMUNICATIONS CARRIER §(RURAL) PURSUANT TO 47 U.S.C.§ADMINISTRATIVE HEARINGS§ 214(e) AND P.U.C. SUBSTANTIVE §RULE 26.418 §
COMMISSION STAFF'S INITIAL BRIEF
I. SUMMARY OF POSITION
This is an application of T-Mobile West Corporation ("T-Mobile") to be designated an
Eligible Telecommunications Carier (ETC) so that it may receive federal universal service funds
(FUSF) in varous ru study areas in the state of Texas. First, a brief explanation of the
universal service fund is warted. Congress stated in the Federal Telecommunications Act
("FT An) that "Consumers in all regions of the Nation, including low-income consumers and
those in rural, insular, and high cost ar, should have access to telecommunications (...J
services, that are reasonably comparable to those services provided in urban aras and that are
available at rates that are reasnably comparable to rates charged for similar services in urba
aras." i In order to support carers in this etfort the FTA furher established a univeral service
fund so that there would be "specific, predictable and sufficient Federal and State mechanisms to
preserve and advance universal service.'2 A telecommunications carier can seek such funding
after it has been certified as an ETC by a state regulatory commission3 and it meets the varous
obligations tor such universal service funding.4
i Telecommunications Act of 1996, 47 U .S.C.A 254(b)(3) (West 200 i & Supp. 2002) (FTA § 254(b) (3).
2 See/or example. ITA § 254b)(5).
3 See generally FTA § 214(e)(l) and (2).
4 See generally IT A § 254(b); P.U.C. SUBST. R. Chapter 26, Subchapter P.
4
T -Mobile is a facilties-ba Commercial Mobile Radio Service (CMRS)5 provider with
its own switching, network facilties, cell sites, trsmit and receive radios, and spectrum in
Texas. 6 On June 6, 2010, T-Mobile tiled its Application for Designation as an Eligible
Telecommunications Carer (RURAL) Puruant to 47 U.S.C. §214(e) and P.U.C. Subst. R.
26.4 i 8 (Application). T -Mobile seeks designation as an ETC in portions of Texas served by
rul incumbent local exchange carers (R-ILEC) that were identified in its application.7 If T-
Mobile is designted as an ETC in the rul study aras for which it seeks designation it wil be
eligible to receive high-cost support for the customers from the FUSF for the customers it serves
that are located in those study areas. In its Application, T-Mobile stated that it "is a façilties-
basd wireless telecommunications carer with its own switching, trport, cell sites, and
assoiated telecommunications facilties in its proposed designated ETC service area.8 While an
ETC may meet its universal service obligation by combining its own facilties with the resale of
another caer's services, T-Mobile intends to us its own facilties to meet its universa service
obligation. ''9
As explained in this brief, for the following reasons, T-Mobile West Corpration (T-
Mobile or the Company) should not be grted designation as an ETC in portions of Texas
served by rul telecommunications carers under 47 U.S.C. §214(e) and pursuant to P.U.C.
SUBST. R. 26.418.
· T -Mobile has numerous rural study areas in which it has such poor signal strength
that Sta is unble to determine whether the service provided could actuly be
used to provide the seices required of an ETC.
5 47 C.F.R. §20.3, P.U.C. SUBST. R. 26.5(40).
6 Direct Testimony of Daniel Piekazyk at 8.7 T-Mobile West Application for Designon as an Eligible Telecommunications Carrier (Rurl) at 2,
referencing Attachment A (Application).
g Application at 6.
9 T-Mobile West Application for Designation as an Eligible Telecommunications Carer (Rurl) at 6 (June
28,2010) (Application).
5
..
· T -Mobile plans to place the majority of its new cen sites in non-ru areas that
border rual areas; its new cell sites wil provide four gigabit data speed to the
non-rual customers with only a seondar benefit to the neighbonng ru wire
center.
· In some places T -Mobile does not have its own facilties but relies on "parner"
service, yet T-Mobile does not characterize the services it provides on a "parner"
carer's network as resale or as unbundled network elements (UNEs) and has
provided no infonnation on its "paner" carer's signal strngt or service
quality.
· T-Mobile has not made an unconditional commitment to serve throughout its
requested service aras as require by P.U.C. SUBST. R. 26.418(g)(l)(B)(ii).
· T-Mobile wrngfully considers the six-step proess described in 47 C.F.R.
§54.202(a)(1)(i)(B) to be a "condition" on a carer's obligation to demonstrte its
willngness to serve thoughout a rual study area.
· T -Mobile has failed to demonstrate that its designation as an ETC in the portions
of Texas served by rual telecmmuncations carer is in the public interest.
Under Texas and FCC rules, the grant of FUSF support is based on ownership of
facilties to serve certain areas tht are more expensive to serve, and both the federal and Texas
rues require that the company seeking the designation own facilties to provide the service in the
areas in which it would be designate as an ETC or have access to the facilties of other cariers
through a purchas of UNEs or a resale agreement. These roes are intended to ensure that actual
facilties have been deployed to support the provision of service to the ara tor which the
designation is sought. T-Mobile's application does not comply with these roes. In the areas
where T -Mobile does plan to instl new facilties, the facilties are not located so that they wil
actully improve service to the rul customers who ar the intended beneficiares of rual FUSF
support. Instead, these high-capacity facilities ar clearly designed and located with the
6
objective of improving serice to non-rural aras where T-Mobile is competing for customers
who want service that goes well beyond the basic services that FUSF is intended to support. The
requirements in Texas and Federal Communications Commission (FCC) rules also have a
competitive policy implication. The Public Utilty Commission of Texas (Commission) ha held
other competitive carers that applied for ETC status to a high stadad of compliance with the
rules. In order to maintain competitive neutrality with respet to telephone providers, the
Commission should hold T-Mobile's application to the same standads.
The FCC has adopted, either formally or infonnly, policies to control or reduce the
amount of FUSF support for basic local telephone service. In par, these policies stem from
increases in the level of FUSF support that have been awarded to competitive loc exchange
carers. Another bais for these policies is the adoption of a Nationa Broadban Plan that
contemplates that support for basic local service would be phasd out and would be replaced by a
Connect America Fund, which would support broadband deployment in unserved and
underseed areas. These policies include a cap on payments, by state, to competitive ETCs.
This cap means that as additional competitive cariers are designted as ETCs and acquire
customers, the amount of support for the competitive ETCs in a state is shaed among the
cariers, reducing the amount of support for all of them. A second policy that the FCC has
adopted is to condition the approval of a merger among telecommuncations carers on their
agreement to surnder their ETC status. A third policy is a recent decision that if an ETC gives
up its designation, the cap for each state for support to competitive ETCs is reduced by the
amount of support that the carer reeived in each state.
The impact of these FCC polices on Texas could mean that if this application is grted,
T-Mobile would begin receiving FUSF support which in the first instace would reduce the
level of support for other competitive ETCs in Texas. In order to obtain FCC approval of the
proposed T-Mobile merger with AT&T, it is likely that T-Mobile would have to agr to
surrnder this status. It seems likely that Commission action on the T -Mobile application for
ETC status wil occur before FCC action on the merger, so tht if the Commission were to grant
7
the application, T -Mobile would begin receiving FUSF support, and the amount it is receiving
when the merger is approved would then be lost to Texas competitive ETCs.
If the T -Mobile application were fully compliant with the FCC and Commission rules,
the Commission would be facing a perhaps diffcult choice between nea-term investents by T-
Mobile in facilties in high-cost areas that could improve service options for customers in those
aras versus the likely future loss of FUSF support statewide. But the Commission faces a far
clearr choice in this matter, because T -Mobile is not investing in facilties to sere customers in
high-cost areas. To a large extent, it is relying on parner argements that do not reresent an
investment in facilties to serve these areas. Moreover, its investments in facilties are clearly
aimed at enhancing service to non-rural customers, by providing high-speed, mobile data service.
It is beneficial to Texas customers to have a company that is willng to make this investment, but
this is not an investment that the FUSF supports. In effect, T -Mobile plans to milk the FUSF
support for rul areas to fud its competitive effort in non-ru areas. The Application is not
consistent with FCC and Commission rues, and it is contr to the public interest. The issues
of non-compliance with the Lifeline rule ar not so fundaenta, and T-Mobile could amend its
tarffs to comply with the rule. In the absnce of a commitment from T -Mobile to conform its
tarffs to the Commission rule, the Application should be denied.
II. LEGAL FRAMEWORK FOR USF AND ETC DESIGNATION
The Communications Act of 1934, as amended (the Act) requires the FCC to develop
univers service policies to ensure, among other things, that consumers in rual and high cost
areas have serices that are reasnably comparble to those provided in urban areas at reasonably
compable rates.IO In order to receive federal universl serice support, a telecommunications
carer must be designated an ETC under section 214(e) of the Act and must offer the supported
10 ITA § 254(b).
8
services thrughout that entire service area.l i A common carer designted as an ETC by a
State commission puruant to paragraph 214(e)(2) shall be eligible to receive univers service
support in accordance with setion 254 of the Act. A carer that is designated as an ETC shall
throughout the service area for which the designation is received: (1) offer the services that ar
supported by Federa universal service support mechanisms under section 254(c) of the Act,
either using its own facilties or a combination of its own facilties and resale of another carer's
services (including services offered by another ETC); and (2) advertise the availabilty of such
services and the charges therefore using media of genera distrbution.12 If an area is served by a
rural telephone company, the Act defines the service ara for purse of designating an ETC to
be the rual telephone company's entire study area.13 Before designating an additiona ETC for
an area served by a rural telephone company, the relevant State commission shal find that the
designation is in the public interest.14
A State commission may adopt regulations not inconsistent with the FCC's rues to
preserve and advance univers service. iS However, a State commission may adopt regulations
to provide for additional definitions and stadards to preserve and advance universal service
within that State only to the extent that such regulations adopt additional specific, predictable,
and suffcient mechanisms to support the FCC's definitions or stadas that do not rely on or
burden Federal universal service support mechanisms.J6 P.U.C. SUBST. R. 26.418, relating to
Designation of Common Carers as Eligible Telecommunications Cariers to Receive Federal
Universal Serice Funds, provides the Commission's cnteria, requirements and proedures for
ETC designation made by the Commission.
Generally, P.U.C. SUBST. R. 26.418 mirrors the federa requirements, with the exception
of the additional requirements provided in 47 C.F.R. §54.202, which apply to ETC designations
made by the FCC. The Commission ha not tbnnally adopted the additional requirements
II FT A § 254 e).
12 FTA § 214(e)(I).
13 FTA § 214(eX5); Federal.State Joint Board on Univeral Service, CC Doket No. 96-5, Report"and
Order, 12 FCC Rcd. 8776, 8880-81, par 187.188 (1997).
14 FTA § 214(eX2).
IS FTA § 254(f).
16 FT A § 254f).
9 (:~.
provided in 47 C.F.R. §54.202, but the Commission has in.a series of ETC decisions elaborated
on the comprehensive requirements in P.U.C. SUBST. R. 26.418, and some of the §54.202
requirements are already reflected in those decisions.l The Commission also stated that some
aspects of §54.202 have been addressed by the Commission in previous ETC dockets under its
public interest analysis, but that others have not.18 For example, the 47 C.F.R. §54.202(a)(1)(ii)
requirement that applicant's submit a five-year plan tor network upgrades and reporting
requirements for network outages have not been ordered by the Commission.19 However, Staff
has requested and been provided nve-year plans for network upgrades in recent ETC
applications with the Commission.2o
For ETC designtions in rural service areas, 47 U.S.C. 214(e) and P.U.C. SUBST. R.
26.4 18 require the Commission to conduct a public interest anysis. The public interest analysis
for ETC designations in rual areas is necessarily strngent.21 The FCC has said that the value of
increased competition, by itself, is not suffcient to satisfy the public interest test in rual areas.22
When the FCC undertes a public interest analysis for an application for a competitive ETC
designation in a rual area it weighs numerous factors including the benefits of increased
competitive choice, the impact of multiple designations on the universa service fud, the unique
advantages and disadvantaes of the competitor's service offering, any commitments made
17 Application of Mid-Tex Cellular. Ltd. for Designation as un Eligible Telecommunications Carrier
(ETC), Doket No. 30666, Preliminary Order at 3 (May 6, 2005) (citing to Application of NPCR d/b/a Nextel
Partners for Eligible Telecommunications Carrier Designation, Doket No. 27709, Orer at 8-9 (June 30, 200)
(Mid-Tex Order); Application of WWC Texas RSA Limited Partnership. d/b/a Cellularone (Western Wireles) to
Amend its Designation as an Eligible Telecommunications Carrier (ETC) in Certain Areas Served by Non-Rural
Telephone Companies, Doket No. 28688, Orer at 3 (Nov. 24, 200); Application of Dobson Cellular Systems. Inc.
for Designation as a Federal Eligible Telecommunications Carrier and Petition to Redefine Certain Rural Service
Areas, Doket No. 28462, Order at 2 (Jan. 14,2005) (Dobs Redefinition Order).
18 Mid-Tex Order at 3.
19 Id.
20 Application of Worldcall Interconnect Inc for Designation as an Eligible Telecommunications Carrier
and Eligible Telecommunications Provider, Doket No. 35728, Order No. 18, Notice of Approvalfor Designation as
an Eligible Telecommunications Carier and Eligible Telecommunications Provider at 4 -5. (Janua 9, 2009);
Application of Worldcall Interconnect Inc.Jor Designation as an Eligible Telecommunications Carrier and Eligible
Telecommunications Provider, Docket No. 36077, Order No.9, Notice of Approval for Designation as an Eligible
Telecommunications Carrier and Eligible Telecommunications Provider, at 3 - 4. (Januar 9, 200) Application of
Mid-Tex Cellular. LTD. to Amend its Designation as an Eligible Telecommunications Carrier (ETC) Pursuant to
P.u.c. SUBS R. 26.4/8 and for Designation as an Eligible Telecommunications Provider (ETP) Pursuant to
P.u.c. SUBSr. R. 26.4/7, Commission Stafls Final Recommendation at Pg 10 (Februar 14,2011)
21 /n the Matter of the Federal-8tatejoint bord on Universal Service Virginia Cellular. LLC Petition forDesignation as an Eligible Telecommunications Carrier in the Commonwealth of Virginia, CC Doket No. 96-45,
Memoradum Opinion and Order, 19 FCC Rcd. 1563, 1565, pa4 (2004) (Virginia Cellular Order).
22 ¡d.
10
regaring quality of service provided by competing providers, and the competitive ETC's abilty
to provide the supported services throughout the designted ara within a reasnable time.2 The
FCC also imposed certain ongoing conditions on the commitments made by a wireless
competitive ETC applicant because of the increased frquency of petitions for competitive ETC
designtions and the potential impact of such designations on consumer in rual area.24
Sta has conducted an analysis ofT-Mobile's Application relative to whether it is in the
public interest to designated T-Mobile as a competitive ETC in the rural study areas for which it
seeks designation, including a "cream skimming" analysis. T -Mobile does not believe a "cream
skimming" analysis can be usd in the analysis of its Application beaus it has requested
designation for entir rural study areas. 25 However, this is not corrct. The FCC has not
prohibited state commissions from conducting a "cream skimming" anysis for ETC
designations in their rual-areas. The FCC has only recommended tht the states follow its lead
on this issue.26 In this case T-Mobile is the firs wireless additiona or competitive ETC (C-ETC)
application that the Commission has reviewed that will have a virtually staewide ETC
designation. Therefore, T-Mobile's impact on federal and stae universal service fuds and
funding, other carers and Texas consers wil be larger than that of any other C-ETC in
Texas. In this context, it is appropriate, as par of its public interest anysis, for the Commission
to consider a "cream skimming" analysis ofT-Mobile's Application.
III. PROCEDURAL HISTORY
On June 28, 2010, T-Mobile fied its Application of T-Mobile West Corporation for
Designation as an Eligible Telecommunications Carer (Rura) (Application). On July 14,2010,
T-Mobile's Application was deemed suffcient for fuer review. This proceeding was referred
to the Stae Offce of Administrative Hearngs (SOAH) on July 26, 2010. Texas Statewide
Telephone Cooperative, Inc. (TSTCI), DialToneServices, L.P. (DTS), United Telephone
Company of Texas, Inc. d//a CentwLink; Centrl Telephone Compay of Texas, Inc. d//a
CenturLink; CenturyTel of San Maros, Inc. d//a CenturLink; CenturyTel of Lake Dallas,
23 td.
24 Id.
25 Rebuttal Testimony of Gene DeJordyat 12.26 In ihe Maller of Federal Slate Joint Board on Universal Service. CC Doket No. 96.45, Report and
Order at par 49 (reI. Marh 17.2005).
II
..
Inc. d//a Centur Li nk; CenturTel of Port Aransas, Inc. d//a Centur Link (collectively
CentuLink), Valley Telephone Cooperative, Inc. (Valley), Conslidated Communications of
Texas Company and Consolidated Communications of Fort Bend Company (collectively
Consolidated) were grated intervention statuS.27
A Preliminar Order was adopted by the Commission on Augut 19,2010. The hearng
on the merits originally scheduled for Deember 15-16,2010, was delayed to March 22-23, 2011
because the undersigned Commission attorney had emergency surgery. Staff appreciates T-
Mobile and all other paies cooperation with this delay. The hearng on the merits was held on
March 22-23, 2011. This filing is StaWs initial post-hearng brief. This brief addrsses the
issues raised in the August 19,2010 Preliminar Order and the impact on the Application of the
March 20, 2011 anounced acquisition by AT&T, Include ofT-Mobile's parnt company.
iv. DOES T-MOBILE'S APPLICATION FOR ETC DESIGNATION
IN RURAL ILEC STUDY AREAS SATISFY THE APPLICABLE
REQUIREMENTS OF 47 C.F.R. § 54.201,4.7 U.S.C. § i14(E), P.U.C.
SUBST. R. 26.41i AND P.U.C. SUBST. R.26.41S? (PRELIMINARY
ORDER ISSUE NO.1)
Within each relevant service ara, 47 U.S.C. 214(e) reuires an ETC to provide the
services required. of an ETC using its own facilties or a combination of its own facilties and
resale.28 The Commission has said that a carer must offer evidence that it is capable of and
committed /0 providing the supported services upon designation.29 P.D.C. SUBST. R.
26.4 1 8(g)( 1 )(B)(ii) requires applicants to show that the applicant assumes the obligation to offèr
each of the services that are supported by the FUSF support mechanisms under 47 U.S.C.
§254(c) to any customer in the service area for which it seeks designation,3o Additionally,
P.D.C. SUBST. R. 26.418(c)(1) requires T-Mobile to provide the services supported by universl
27 SOAH Order NO.3 at 1 (August 4,2010); SOAH Order NO.4 at i (August 16,2010).
28 FTA § 214(e).
29 Nextel at 5 (citing to Application of Dobson Cellular Systems. Inc. for Designation as an Eligible
Telecommunications Carrier and Petition to Redefine Certain Rural Service Areas, Docket No. 28462, Orer on
Remand at 2 ( May 19, 2004), and Application of WWC Texas RSA Limited Partnership. d/b/a CellularOne
(Western Wireless) to Amend its Designation as an Eligible Telecommunications Carrier (ETC) Designation in
Certain Areas Served by Non-Rural Telephone Companies, Doket No. 28688, Order on remand at 1-2 (May 28,
200)).
30 P.U.C. SUBST. R. 26.4 1 8()( 1 )(B)(ii).
12
service support mechanisms as provided in 47 C.F.R. 54.101. Therefore in any given service
ara, T-Mobile must demonstrate that it is has suffcient signal strength using its own facilities to
provide the services required of an ETC to at least one customer.
The FCC's rules clarfy the term "facilties," as 47 C.F.R. 54.201(e) provides that "(fJor
the purposes of this section the term facilties mea any physical components of the
telecommunications network that are used in the transmission or routing of the services that ar
designated tor support puruat to subpar B of this par. Subsection (t) of that section provides
that "(fJor purpses of this section, the term "own facilities" includes, but is not limited to,
facilties obtained as unbundled network elements puruat to pa 5 i of this chapter, provided
that such facilties meet the definitions of the term "facilties" under this subpar." Subsection
(g) of this setion provides that "(a) state commission shall not require a common carer, in
order to satisfy the requirements of pargraph (d)(t) of this setion, to us facilties that are
located within the relevant service area, as long as the carer uses the facilties to provide the
services designated for support . . . within the servce ara." Staff has several issues with T-
Mobile's application in this regard.
First, T -Mobile stated that the backhaul backbone services that it uss to provide service
in Texas ar a "facility" for purpses of 47 U.S.C. § 2l4(e)3l and Staffagrs. However, Sta
does not agree that showing that a backhaul backbone pipe travels thugh a ru study area,
absent any other facilties in that study area, satisfies 47 U.S.C. § 214(e), beause absent other
facilties in or very near the service area, such as cell sites, T -Mobile canot provide the services
required of an ETC in that service area. By analogy, if an oil compay had a pipeline ruing
thrugh a service area, but no service sttions, could anyone in the service area access the
gasline in the pipeline? The anwer is clearly no.
Second, T -Mobile relies on "parer service" to provide service in many rual service
area.32 Yet, T-Mobile has not stated that "paer service" is resale, or that it is an unbundled
31 Tr. at 297 (Marh 23, 2011).
32 See generally Direct Testimony of Daniel Piekarzyk, DP-4.
13
network element (UN E). Since "parner service" is not T-Mobile's own facilty or an UNE, it is
not a '"facilty" for purses 47 U.S.C. § 214(e). In addition, T-Mobile did not provide any
infonnation on the quality of service (i.e. signal strngth and coverage area) provided by its
"parners." Therefore, in those rura study aras in which T-Mobile can only offer service by
using a '"paer's" service, T -Mobile should not be designated as an ETC.
Third, T -Mobile provides inadequate signal strength in some rura study aras.
Inadequate signal strength shows inabilty and lack of commitment by T -Mobile. Ms. Kayser
stated that she reviewed T-Mobile's maps and concluded that the quaity of signal provided and
the coverage area don't allow for all end users throughout entire study areas to receive adequate
service from T-Mobile.J3 Staff witness Ms. Liz Kayser testified that T-Mobile depicted its
coverage area in shades of purle, with darker purle indicating a strong signal and lighter purle
indicating a poor signal strength and therefore inadequate servce.34
Furher, Ms. Kayser testified that if the signal strength in a given wire center is so weak
that it is unusable, T -Mobile cannot avail itself of the six-step process provided in 47 C.F.R.
54.202(a)(l)(i)(B).5 Ms. Kayser testified that in rural study ar, T-Mobile ha not
demonstrted it is able to serve a single customer in that study area using its own facilties as
required in 47 U.S.C. 214(e) unless its strongest signal strength reaches at least some portion of
the rura study area.36 In rul study aras reached by T-Mobile's strongest signals, if there ar
some customers that T-Mobile canot serve, the company is then pennitted to tae advantage of
the six-step process provided in 47 C.P.R. 54.10t(a)(I)(i)(B).37
Ms. Kayser's testimony is consistent with Dobson where the six-step process was
invoked only after a discussion of Dobson's generally adequate signal strength,
acknowledgement of certin "dead spots," and Dobson's unconditional commitment to see any
33 Direct Testimony of Liz Kayser at 12.
34 Id
35 Id
36 Tr. at 303 (Marh 23, 201 I)
37 Tr. at 301 (March 23, 2011).
14
consumer within the studyårea; including its commitment to tae additiona steps if a customer's
signal coverage was unsatisfactory.38 Dobson sought certification in only four rural study
areas.39 The T-Mobile Application dwars the Dobson application. Yet even in a much smaller
application, the Commission required Dobson to notify the Commission if it could not provide
service after taking the additional steps, and the Commission would determine whether Dobson
had failed to meet its service obligations:lo Ms. Kayser's testimony is also consistent with the
language of 47 C.F.R. 54.202(a)(1)(i). which requires a commitment to serve all customers
making a reasnable request for service. and requires ETCs to provide service within a
reasonable period of time, if the potential customer is withn the applicant's licensed service ara
but outside its existing network coverage. . . then lists the six-step process.41
T-Mobile's questioning on this subject seems to indicate that T-Mobile believes that even
with unusble signal strength, it is permitted to avail itself of the six-step process provided in 47
C.F.R. 54.202(a)(1)(i)(B) to attempt to reach customers that make a reonable request for
service.42 T -Mobile seems to make the arguent that an unusable weak signal or even a
paer's service satisfies 47 U.S.C. 214(e) and that the six-step process then satisfies the service
obligations of P.U.C. SUBST. R. 26.418(g)(I)(B)(ii). Sta disagrees. Unless T-Mobile
demonsrates that it has usable signal strength in each rural study ara with which it can provide
the services required of an ETC to at leat one customer in that rura study area, it has not
demonstrted that it is able to provide the services require of an ETC as required in 47 U.S.C.
214( e) and is therefore not eligible for designation in that study area.
38 Application of Dobson Cellular Systems. Inc. for Designation as an Eligible Telecommunications
Carrier (Etc) Pursuant to 47 U.S.C 2l4(e) and P.u.c. SUBST. R. 26.418, Doket No 29144, Order at 13-14, Findings
of Fact 47.50 (Feb. 2, 2005) (Dobson Orer)
39 Application of Dobson Cellular Systems, Inc. for Designation as an Eligible Telecommunications
Carrier (Etc) Pursuant to 47 U.S.C 214(e and P.u.c. SUBST R. 26.418, Doket No 29144, Application, Attachment
B (Janua 19,200).
40 Id. at 14, Finding offact 5 l.
41 47 C.F.R. 54.202(a)(l)(i)
42 Tr. At 239 (March 22, 201 I); Tr. at 300-305 (Marh 23, 201 I).
IS
Although an ETC is given time to extend its service to reach all customers within a given
service area afer designation, it is required to demonstrate that upon designation it is able to
provide the supported services using its own facilities or a combination of its own facilties and
resale.43 T-Mobile seems to confuse the six-step process in 47 C.F.R. 54.10l(a)(1) with the time
an ETC is given to extend service thrughout a service ara after designation. But that is not
corrct. The time a carrer is given to extend service thoughout a service ar aftr designation
stas frm the asumption that the carer is able to provide the supported services withn the
service area. It does not mean a carer is entitled to designation in a rual study in which it is not
capable of providing the services required of an ETC to any customer. The six-step process is
par of the commitment to serve by a carer that has demonstrated its abilty and commitment to
serve upon designation. T-Mobile canot bas it abilty to serve on the six-step process in 47
C.F.R. 54.101(a)(1); it must show its abilty to sere at leat a single customer in a given study
area. For all these reasns, T-Mobile has not met its burden to prove that it satisfies the
applicable requirements of 47 C.F.R. 54.101, 47 U.S.C. 214(e), P.U.C. SUBST. R. 26. 412 or
P.U.C. SUBST. R. 26.418.
v. DO THE FACTS DEMONSTRATE THAT T-MOBILE'S
APPLICATION FOR ETC IS IN THE PUBLIC INTEREST AS
REQUIRED BY P.V.C. SVBST. R. 26.418(E)(2)? (PRELIMINARY
ORDER ISSUE NO.2)
In order for T -Mobile to prove that its designation as a C-ETC in the rul areas listed in
its Application is in public interest the Company must demonstrte that ETC designation wil
result in a material benefit above and beyond the status quo of its existing operations in the
43 Nextel at 5 (citing to Application of Dobson Cellular Systems. Inc. for Designation as an Eligible
Telecommunications Carrier and Petition to Redefine Certain Rural Service Areas, Doket No. 28462, Order on
Remand at 2 ( May 19, 200), and Application of WWC Texas RSA Limited Partnership. d/b/a CellularOne
(Western Wireless) to Amend its Designation as an Eligible Telecommunications Carrier (ETC) Designation in
Certain Areas Served by Non-Rural Telephone Companies, Docket No. 28688, Order on remad at 1 -2 (May 28,
2004)).
16
requested rural ETC service areas.44 Although the Commission has declined to adopt specific
criteria for assessing the public interest, as they ar depedent on the facts of each individua
case, the Commission has stated that applicants could include detal on the following issues: (1)
service offerings, including additional service offerngs for the proposed ETC designation aras,
(2) additional service quality commitments, (3) detailed covemge aras, (4) continuation of
service commitments, such as back-up power capabilty, (5) consumer protection stadads, and
(6) information regarding how the company wil better serve the consumer if granted
designations.45
a. Has T -Mobile's application demonstrated that it is in the
public interest by demonstrating that ETC designation
wil result in a material benefit above and beyond the status
quo ofT-Mobile's existing operations in its requested ETC
service areas?
During the hearng on the merits, T-Mobile relied diretly on the Commission's finding
in Nextel Partners conceming the issue of "material benefit." T-Mobile's attorney asked T-
Mobile witness Mr. Piekarzyk the following question: "(alnd the Commission concluded in
Nex/el that increased choice for telecommwiications service and increased access to enhced
services results in Texas consumers being more likely to have lower prices, higher quaity and
the deployment of new telecommwiications technologies. Do you recall that?"46 Mr. Piekarzyk
answered "yes."47 Yet, the question and Mr. Piekaczyk's answer are absolutely wrng and
misleading. The quoted Nextel Partners finding is a geneml presumption that the Commission's
applies in non-rural area C-ETC designation applications, which are per se in the public
interest.48 Quite the opposite is true tor C-ETC designation applications in rural areas. In rul
44 Application ofNPCR, Inc. d/b/a Nextel Partnersfor Eligible Telecommunications Carier Designation,
Docket No. 27709, Final Order at 9 (June 30,200) (ordeñng ETC applicants in ru aras to demonstrte that
designation is of matñal benefit above and beyond the status quo of its existing operations in the requested areas)
(Nextel Parers).
45 Id
46 Tr at 314 (Marh 23, 2011).
47 Jd
48 Nextel Partners at 12.
17
C-ETC applications, the applicant has the burden to prove their designation is in the public
interest. 49 The application is subject to strngent review. so The review is fact specific.si
In conducting the review of ru C-ETC applications, the FCC weigh whether the
benefits of an additional C-ETC outweigh any potential har.52 The FCC weigh numerus
factors, including the benefits of increasd compeitive choice, the impact of multiple
designations on the universal service fud, the unique advantaes and disadvantages of the
competitor's service offerng, any commitments made regaring quaity of telephone service
provided by competing providers, and the competitive ETC's abilty to provide the supprted
services thrughout the designated service ara within a reasnable time frae.s3 Consistently
and recently, the FCC stated that it is reining in high-cost support to C-ETCs because it results in
"duplicative voice services."54 Therefore there is no genera presumption tht the customer
benefit frm increasd competition makes a C-ETC designation in a rura study area per se in the
public interes. Instead T -Mobile must prove that its designation will result in a "material
benefit" that wil go above and beyond the status quo of its existing operations in the rul stuy
areas for which it seks designation in order to wart approvaL.
T-Mobile's application preseted unique challenges for Commission review. Sta ha
never reviewed a wireless C-ETC application that is effectively a statewide application. Prior
wireless C-ETC applications have involved much smaller geographic scopes, with one or two
49 Application of WWC Texas RSA Limited Partnership, d/b/a Cellularone (Western Wireless) for
Designation as an Eligible Telecommunications Carrier in Certain Areas served by Rural telephone Companies,
Docket No. 30710, Order at 9, Conclusion of Law No. I I (August 16,2005) (Western Wireles Order) (citing to
Nextel Partners and Dobson. the applicat bear the burden of showing that its designation would be in the public
interest for rurallLEC study area).
so In the Matter of the Federal-State joint board on Universal Serice Virginia Cellular. LLC Petition for
Designation as an Eligible Telecommunications Carrier in the Commonwealth of Virginia, CC Docket No. 96-45,
Memoradum Opinion and Orer, 19 FCC Rcd. 1563. 1565, par4 (200).
5 I Dobson Order at 6.
52 In the Matter of Virginia Cellular. LLC Petition for Designation as an Eligible Telecommunications
Carrier in the Commonwealth of Virginia, CC Doket No. 96-45, memorandum Opinion and Order, FCC 03-338,
Par. 28 (reI. Jan. 22. 200) (Virginia Cellular).
53 Virginia Cellular at par. 4.
54 In the Matter ofHigh-ost Universal Service Support. WC Doket No. 05-337, Order at,. 5 (Deembe
30,2010).
18
wire centers, and the carers have demonstrated that their desigÍation was in the public interest
by committing to inftrcture investments within their designted ar that speifically and. "
directly benefited the customers in that area. For example, in Docket No. 29144, Dobson
Cellular Systems, Inc. (Dobson) sought designation in four rul study areas. 55 As a condition of
designation, Dobson agreed to build thr cell site towers to provide sign strength and
reception improvements within its rual study areas, follow the Cellular Telecommunications and
Internet Association's (CTIA) consumer Code for Wireless Service, add six hours of back-up
power, install two portble generators dedicated to serving the ETC area, and purhase a Cell on
Light Truck (COLT) to ensur continuity of servce. 56
In Docket No. 30666, Mid-Tex Cellular, Ltd. (Mid-Tex) sought designation in two ru
studyar.57 As a condition of designtion, Mid-Tex agreed to constrct an additiona 12 cell
site towers within two year to improve capacity and coverge within its designated areas, equip
each cell site with a permanent backup generator capable of at leas six hour of bakup power,
purchase a mobile cell site to serve the designated areas in an emergency, follow the CTIA' s
consumer Code for Wireless Service, and to include some amount of locl usge in ever service
plan that was eligible for universal service support. 58
In Doket No. 35252, Texas RSA 7BX, L.P. (Texas RSA) sought designation in one rural
study ara that contaned thirten exchages. 59 Texas RSA agreed to use universal servce
support for Phas II E911 when it was reuested, to deploy equipment to support data
tranmission services thoughout the area, to provide continued maintenace of the network
55 Application of Dobson Cellular Systems. Inc. for Designation as an Eligible Telecommunications
Carrier (Etc) Pursuanlto 47 US.C 114(e and P.UC. SUBS R.16.418, Docket No 29144, Application, Atthment
B (Januar 19,200).
56 Application of Dobson Cellular Systems, Inc. for Designation as an Eligible Telecommunications
Carrier (Etc) Pursuant to 47 US.C 114(e and P.UC. SUBST R. 26.418, Doket No 29144, Order at 6 (Febru 2,
2005).
57 Application of Mid-Tex Cellular Ltd for Designation as an Eligible Telecommunications Carrier
(ETC), Docket No. 30666, Application, Attachment B (Januar 20, 2005)
58 Application of Mid-Tex Cellular Ltd for Designation as an Eligible Telecommunication Carrier
(ETC), Doket No. 3066, Order at 4-5(Augut 9, 2005)59 Application of Texas RSA 7BS. LP. d/b/a peoples Wireles Services for Designation as an Eligible
Telecommunications Carrier, Docket No. 35252, Application, Atthment C (January 18,2008).
19
including battery back-up of its cell sites and to deploy back-up power generators to all of its
cellular tower sites, if granted ETC designation.6O Thus historically, the Commission required
some kind of specific build-out plan within the rual study ara. Additionally, carers have bee
ordered to provide new serices, new infrastrcture, new service quality assurce, and/or new
emergency backup as evidence that their designation would provide a material benefit above and
beyond the status quo of their existing operations in thir requested ETC service areas.
T -Mobile's proof tht its designation will provide a "material benefit" seems to rely
entirely on itS new and planned cell site deployment and its Service Improvement Plan (SIP).61
Yet, the information provided by T-Mobile in its deployment plan and it SIP is virtually
meaningless.
While Staff appreciates the necessity and importce of "network" investments by
carers, the fact is all carers, even landline carers, are converting to "soft switches," even
replacing old electronic/digital switches that ar not fully amortized, becaus of the extremely
low cost to acquire, install and maintain "soft switches." More importtly, while an insuffcient
"network," whether because of too few switches or not enough backbone bandwidth, might
60 Application of Texas RSA 78S, L.P. luh/a peoples Wireless Services for Designation as an Eligible
Telecommunications Carrier, Doket No. 35252, Orer NO.3 at 4 (Marh 10,2008).
61 Rebuttl Testimony of Daniel Piekazyk, Exhibit DP-8, List of Cell Sites Built in 2010 (OP-8) and
Planned for 20 i 1 and DP-IO, Servce Improvement Plan or sip (DP-I O.
62 See generally Diret Testimony of Daniel Piekarzyk, Dp.I O.
63 Tr. at 148.149 (Marh 22, 201 I).
64 Tr. at 149.
20
. .
result in insuffcient resources for some users for some caUs, on the whole it is infrastructure
investments much closer to the end usr, such as cell sites, that impact whether a wireless
carer's service is actually usable for the services required of an ETC. Without cell sites in the
vicinity of the end user customer, they have no signal, or a signl that is too weak to be useful,
and can never make any calls, regardless of whether the overall "network" is suffcient.
Additionally, T-Mobile's allocation methodology makes it impossible to tell whether T-Mobile
plans to invest any particular amount of money in Texas, much less in any paricular rural study
area, because many "network" components ca be located anywhere.
dditionally, since all new cell sites installed by I-Mobile will
operate at "40" data Speeds,67 it seems clear that T-Mobile's intent is to build out its high-speed
6S See generally Direct Testimony of Daiel Piekarczyk, Exhibit DP.S.
66 Rebutt Testimony of Daniel Piekazyk, Exhibit 4.
67 Tr. at 223 (March 22, 201 I).
2\
.
",-i
data network using universal service support intended for voice services provided for customers
in rural study areas~ while making no commitment to provide an improved signal, additional
services~ additional network protections~ or additional customer service to rural T -Mobile
customers.
The Commission does not impose a "needs bad" test on C-ETC applicants.68 However,
the Commission does look at the applicant's new commitments, such as infratructure spending
commitments and capital expenditures as a result of its designation, reporting to the Commission
on customer complaints and customer satisfaction, etc.69 The Commission has require
applicants to track their expenses and investments in each rual study ara, and submit it to the
Commission on an annua basis,7o Therefore T-Mobile must show that if it is designated as an
ETC its commits to provide some new primar benefit in and for the rura study areas for which
it seeks designation.
Two examples help explain Staffs position
3 11 p g F 3 §g § J
68 Dobson Order at 6-7.
691d.
70 Id at 7-8; Application of New Cingular Wireless PCS, LLC for Designation as an Eligible
Telecommunications Carrier (ETC) in Lieu of Dobson Cellular Systems. Inc. Pursuant to 47 U.s.c. § 214(e and
P. U. C. SUBST. R. 26.4/8, Doket No. 36346, Order NO.8 at 5 (April 7, 200).
71 Direct Testimony of Daniel Piekarzyk, Exhibit DP-4, La Salle County (Staff understands that T-
Mobile believes it provided bates stampe map with its confidential fiing on September 24, 2010; however,
Centrl Records doe not have such a filing and Staff does not have a bates stamped copy of T-Mobile's maps as
provided in DP-4. Therefore, Staff wil footnote to the specific county or generally if more than one county is
implicated in the text).
72 Id
22
-
..
73 Based on approximate distance from Cotulla to Milett being l l.l miles.
74 ld.
75 ld.
76 ld.
77 Tr. at 181 (Marh22, 20 II).
23
78 Rebuttl Testimony of Jeff Hooper at 5.791d
80 Direct Testimony of Daniel Piekazyk. Exhibit DP-4, Willamson County.
24
81 Tr. at 181 (Marh 22, 201 I).
82 Direct Testimony of Daniel Piekaczyk, Exhibit DP. I 0 at 31.
83 Diret Testimony of Daniel Piekarzyk, Exhibit DP-4, Wiliamson County.
84 Direct Testimny of Daniel Piekazyk, Exhibit DP. i 0 at 3 I.
85 Direct Testimony of Daniel Piekazyk, Exhibit DP-4, Wiliamson County.
86 Diret Testimny of Daniel Piekazyk, Exhibit DP. 10 at I.
87 Dirct Testimony of Daniel Piekazyk, Exhibit DP-4, Wiliamson County.
88 Direct Testimony of Daiel Piekazyk, Exhibit Dp.I 0 at I.
25
In the cases cited above, the carers that were grted ETC designation committed to
new inftrctue, new levels of customer service, new equipment to deal with emergencies
and/or offered new packages of service to their customers in their designated rura study areas.
In contr, T-Mobile's Application seems to rely on its existing network to bae its entitlement
for designation as an ETC. T-Mobile's own witness Mr. Gene DeJordy testified that where T-
Mobile has already built out it does not need to be an ETC.89
T -Mobile asks for designation as an ETC in 483 rul wire centers.9O
89 Tr. at 188 (Marh 22, 20 I 0).
90 Rebuttl Tesimony of Gene DeJordyat II.
91 See generally Direct Testimony of Daiel Piekarczyk, Exhibit DP-8.
26
The FCC has said that "cream skimming" occurs when an entity offers service only to
those customers who ar the least expensive to serve.96 The FCC staed that population density
is a good metrc for approximating the costs of serving an area, and that one mean of evaluating
cream-skimming has been to compare the population density of the wire centers in which the
competitive ETC seeks to provide service against that of the wire centers in the study area in
which the competitive ETC does not seek to provide service.97 Therefore, Mr. DeJordy's
testimony regarding the relative population density within the ru aras for which T -Mobile
92 AT&T taes no high-cost loop support and therfore does not make an annual certification filing with
the Commission in Docket No. 24481. C-ETCs do not get high-cost loop support unless the Incumbent Local
Exchange Carier taes high cost loop supp.
93 Direct Testimony of Daniel Piekaczyk, Exhibit DP-8 at 13 (2011 List)
94 Direct Testimony of Daniel Piekarzy, Exhibit DP-4, Wiliamson County.
95 Id
96 In the Matter of Telecommunications Carriers Eligible for Universal Service Support Federal State
Joint Board on Universal Service Cellular Properties Petition for Commission Agreement in Redefining the Service
Area of Wabash Telephone Cooperative. Inc. in the State of Ilinois Pursuant to 47 C.F.R. Section 54.207(c), WC
Doket No. 09-197, CC Doket No. 96-45, Order at parS (reI. Marh 7, 2011).
971d
27
seeks designation was no sUrpnse.98 However, if T -mobile is serving a large percentage of the
population in a low population density area, it may be cream skimming beause even in low
population density areas there wil be concentrations of the population and much larger areas
with little or no population. Mr. DeJordy's evidence shows that T-Mobile is 'serving only the
concentrations of population, even in the low density portions of the rual study areas for which
it seeks designation. For example,
However, even ifMr, DeJordy's analysis
were corrt, the FCC also said that population denity was jus "one" method for evaluating
whether cream skimming was occurrng.
Although 47 C.F.R. 54.201(g) permits ETCs to serve end iiers with facilties that are not
within the study area,102 T-Mobile's Application goes beyond the intent of this rule. This
approach is consistent with the FCC and Commission rules and with the FCC's expressions of
concern high cost support should be reined in for "duplicative voice services,"103 T-mobile has
not demonstrted that ETC designation is in the public interest because it will not result in a
98 Rebuttl Testimony of Gene DeJordy at i i.
99 Direct Testimony of Daniel Piekarzyk, Exhibit DP-4, Andersn County.
100 Rebuttal Testimony of Gene DeJordy, Exhibit GO-I at 6.
101 Tr. at 345-347 (Marh 23, 201 l)
102 47 C.F.R. 54.201(g).
103 In the Matter of High-Cost Universal Service Support, we Docket No. 05-337, Orer at 1 5
(December 30, 2010).
28
material benetit above and beyond the status quo of T-Mobile's existing operations in its
requested ru service areas.
b. In what specific ways would designation of T -Mobile as an
ETC in its requested service area be in the public interest
as asserted in its application in terms of benefits from
competitive pricing and new services?
The FCC has said that the value of increased competition, by itself, is not sufcient to
satisfY the public interest test in rura areas.104 Yet, T-Mobile has not demonstrted that it will
offer new "competitive pricing and new services" if it is designated as an ETC. T-Mobile
witness Mr. Daniel Piekarczyk stated T-Mobile's designation as an ETC would be in the public
interest beause consumers wil benefit frm competitive pricing and new services, such as T-
Mobile's Lifeline Plan. lOS Lifeline service is a requirement for carers that are designted as
ETCs; so Lifeline service is not "beneficial new competitive pricing" or a "new services" for
purses of a public interest analysis. Mr. Piekarzyk did not list any new service offerings,
other than Lifeline, that T-Mobile will offer as a result of ETC designation. Mr. Piekarzyk did
not state that T -Mobile wil offer additional free minutes for any plan for which univers service
support is received. The only thing Mr. Piekarczyk said wa that 'orals T-Mobile expands its
network in Texas, existing T-Mobile subscribers and subscribers without existng access to T-
Mobile's service wil benefit from T-Mobile's high level of service quaity and more service
options." Thus, T-Mobile points to its existing pricing and services to satisfY the public interest
requirement. T -Mobile has failed to meet its burden of proof on this issue.
c. In what specific ways would designation of T -Mobile as an
ETC in its requested service area be in the public interest
as asserted in its application in terms of the provision of a
higher level of service quality and better customer service?
104 Id
lOS Diret Testimony of Daniel Piekarczyk at 13.
29
Section IV of this brief discusses the inadequacy ofT-Mobile's signal in some rul area
and with the tàct tht T-Mobile has provided no information relative to the service quality or
signal strength the Commission can expect in its parer's service aras. This section ofthe brief
is T-Mobile's lack of new commitments or to a higher level of service quality or customer
service than it already provides.
T-Mobile already adheres to the CTIA Consumer Code for service quality.I06 T-Mobile
witness Mr. Jeff Hooper stted that T-Mobile already has the capabilty to ensure fuctionality in
emergency situations, has a reasonable amount of back-up power to ensure functionality without
an external power source, is able to reroute trafc arund daaged facilties and is capable of
managing trafc spikes resulting from emergency situations.l07 In its Application, T-Mobile
states that it has the following capabilties to remain functional in emergency situation:
1) Availabilty of fixed and portable back-up power generators at varous network
locations throughout T -Mobile's network that can be deployed in emergency
situations.
2) Abilty to reroute trc around damaged or out-of-sece facilties though the
deployment of cell-on-wheels (COWS), redunant facilties, and dynamic rerouting
of trac over alternate facilties.
3) A network control center that monitors network trac and anticipates traffc spikes,
and can then (i) deploy network facilties to accommodate capacity nees, (ii) change
call routing, and (ii) deploy COWS to temporarly meet trc needs until long-
solutions, such as additional capacity and antenna towers can be deployed.
4) A majority of sites not equipped with fixed generators have battery back-up systems
installed to maintain service in the event of a widespread power outage. lOS
106 Application at 9.
107 Direct Testimony of Jeff Hooper at 6.108 Application at 8-9.
30
Therefore, without universal service support T -Mobile has built a very robust network.
However, from the evidence provided by T -Mobile, it does not appear that T -Mobile is
committing to any new infrtrcture or servces as a result of designation.
It is not clear whether any customers in the
rural study areas for which T -Mobile requests designation that do not currently have access to T-
Mobile service will have access beuse ofT-Mobile's designation as an ETC. Additionally, T-
Mobile points to its existing functionality in emergency situtions and its existing pricing to
support its Application, not a heightened level of service quality and customer service. T -Mobile
has not demonstrated that its designation will result in anything above the status quo of its
existing service relative to the provision of a higher level of service quality or better customer
service.
VI. HAS T-MOBILE'S APPLICATION PROVIDED SUFFICIENTLY
DETAILED SERVICE AREA MAPS SUCH THAT AN PERSON
MAY ASCERTAIN WHETHER A CUSTOMER FALLS WITHIN
T-MOBILE'S REQUESTED ETC SERVICE AREA?
(PRELIMINARY ORDER ISSUE NO.3)
T-Mobile's maps are detailed enough to be able to tell whether a customer falls within
the area for which T-Mobile seeks designation; however these maps do not indicate whether the
customer wil have a signal of sutfcient strength to be usble for the services required of an
ETC. This is espeially true in the areas shown as parer service areas, for which no signal
strngt information ha ben provided.
VII. DOES T-MOBILE'S APPLICATION ADEQUATELY
DEMONSTRATE AN ABILITY AND UNCONDITIONAL
WILLINGNESS TO SERVE END USERS THROUGHOUT ITS
REQUESTED ETC SERVICE AREA, CONSISTENT WITH THE
COMMISSION'S PRECEDENT IN PRIOR ETC APPLICATIONS
31
BY WIRELESS CARRIERS, INCLUDING THE COMMISSION'S
DECISIONS IN THE DOBSON CELLULARlfJ AND NEXTEL
PARTNERS CASES?ilO (PRELIMINARY ORDER ISSUE NO.4)
All ETC designation applicants in Texas are required to demonstrte an abilty and
unconditional wilingness to serve all end users in their ETC service area i II Therefore, T-
Mobile must first make an unconditional commitment to serve all customers thougout its
requested ETC service area.
In Dobson, the Commission placed certn additional conditions on the company,
including Dobson's agrement to provide a conventiona handset and to follow the additional
steps for providing service included in 47 C.F.R. 54.202(a)(1 )(i)(B).112 Therefore, T-Mobile
must also commit to taing the six-steps provided in 47 C.F.R. 54.202(a)(1)(i)(B) to reach those
customers tht do not have suffcient signal quality.
The Commission also imposed certin reportng requirements on Dobson; including a
requirement to track expenses and investment for each study area, and submit the following
infonnation for each study area on an annua basis with the company's FUSF certification
application: (1) an afdavit atesting to the company's anual, as well as aggrgate, expeses and
investment in each study area, with all relevant data attched; (2) the results of an anua
customer satisfaction surey and any relevant backgrund documents, such as a copy of the
survey itself; and (3) the total numbe of complaints received, per 1,000 handsets. 113 Therefore,
if designated, T -Mobìle should be required to provide similar report to the Commission.
Most importtly, T-Mobile must show it has adequate signal strength in ru study
aras to demonstrate its commitment to serve. Ms. Kayser stated that she reviewed T-Mobile's
maps and concluded that the quality of signa provided and the coverae area don't allow for all
109 Dobson Redesignation Order at 7, Finding of Fact 7 A.
110 Application ofNPCR. Inc. d/b/a Nextel Partners for Eligible Telecommunications Carrier Designation,
Docket No. 21709, Order at l I, Finding of Fact l4A (June 30, 200).
ii i P.U.C. SUBST. R. 26.4 l 8(g)( I )(8)(ii).
112 Dobson Order at 1 l, Finding of Fact l 4A.
113 Dobson Order at l 9, Finding of Fac 1008.
32
end users throughout entire study areas to receive adequate service from T-Mobile.1I4 Ms.
Kayser stated that T -Mobile depicted its coverage area in shades of purle, with darker purle
indicating a strong signal and lighter. purple indicating a poor signal strengt and therefore
inadequate service. i i 5
T-Mobile's questioning on this subject indicates tht T-Mobile believes that the six-step
process provided in 47 C.F.R. 54.202(a)(1)(i)(B) is a "condition" on its required unconditional
commitìnent.116 T -Mobile seems to think that even with unusble signal strngt it is permitted
to avail itself of the six-step process provided by in 47 C.F.R. 54.202(a)(1)(i)(B). This position
is inconsistent with the FCC rules and precedent. The six-step process is not a "condition" on
the required unconditional commitment to serve thoughout a service area.
Ms. Kayser testified that in ru study areas, T -Mobile has not demonstrated it is able to
serve a single customer in the study area using its own facilties as required in 47 U.S.C. 214(e)
unless its strongest signal strngth reaches at leat some portion of the rual study area) 17
Furter, in rura study areas reached by T-Mobile's strngest signals, if there are some customers
that they cannot serve, they ar then pennitted to take advantage of the six-step proess provided
in 47 C.F.R. 54.202(a)(1)(i)(B).118 Ms. Kayser testified that if the signal strngth in a given wire
center is so weak that it is unusable, T-Mobile is not able to serve customers in that wire center,
is not eligible for designation as an ETC, and canot avail itself of the six-step process provided
in 47 C.F.R. 54.202(a)(l)(i)(B))19
Ms. Kayser's testimony is consistent the Commission's decision in Dobson where the
six-step process was invoked only after a discussion of Dobson's generaly adequate signal
strength, acknowledgement of certain "dead spots," and Dobson's unconditional commitment to
serve any consumer within the study ara, and it~ commitment to take aditional steps if a
114 Dire Testimony of Liz Kayser at 12.
115 ¡d.
116 Tr. at 309 - 310 (Marh 23, 2011)
117 Tr. at 303 (Marh 23, 2011)
118 Tr. at 301 (Marh 23, 2011).
119 ¡d.
33
customer's signal coverage was unstisfactory.120 Additionally, in Dobson, the Commission
required Dobson to notifY the Commission if it could not provide service after taking the steps,
and the Commission would determine whether Dobson had failed to meet its service
obligations.iii If designated, T-Mobile should be required to provide similar notification to the
Commission.
As T -Mobile points out, the FCC has said a caer can make the required showing of
offering the supported services by providing a description of the proposed service technology, a
demonstration of the extent to which the carer provides telecommunications services within the
state, a description of the extent to which the carer has entered into interconnection and resale
agreements with others, a sworn afdavit signed by the carer's representative to ensur
compliance, or other means that demonstrate the carer's compliance, or other mean that
demonstrate the carer's abilty and wilingness to provide service upon designtion. in In that
same order the FCC also cautioned that an applicant must make a demonstrtion of the capabilty
and commitment to provide service that is more than a vague assertion of intent on the pa of a
carer to provide service.12 And the Commission has said that a carer must reasnably
demonstrate its abilty and willngness to provide service upon designation."124
Although it is correct that an ETC applicat is not required to serve an entire service area
on the date it is designated, it is required to demonste that in each service area, upon
designation it is able to provide the supported services using its own facilties or a combination
120 Dobson Order at 13-14, Findings of Pact 47-50.
iii Id at 14, Finding of Pact 51.
122 Rebuttl Testimony of Gene DeJordy at 9 (citing to Federal-8tate Joint Board on Universal Service,
Western Wireless Corporation Petition for Preemption of an Order of the South Dakota Public Utilties
Commission, CC Docket No. 96-45, Declartory Ruling, FCC 00248 at pa 24 (reI. Aug. 10, 2000) (South Dakota
Declarator Ruling)).
123 South Dakota Delartory Ruling at par. 24.
124 Nextel at 5 (citing to Application of Dobson Cellular Systems. Inc. for Designation as an Eligible
Telecommunications Carrier and Petition to Redefine Certain Rural Service Areas, Doket No. 28462, Order on
Remand at 2 ( May 19, 2004), and Application of WWC Texas RSA Limited Partnership, d/b/a Ce/lularOne
(Western Wireless) to Amend its Designation as an Eligible Telecommunications Carrier (ETC) Designation in
Certain Areas Served by Non-Rural Telephone Companies, Docket No. 28688, Order on remand at 1 -2 (May 28,
2004)).
34
ofiis ownfaciliies and resa/e.125 An applicant cannot make the showing that it is committed to
provide service throughout its requested ara thrugh tota resale, using a parner's service and it
cannot make this showing with a signal that is so weak it cannot be used to provide the services
required of an ETC. For aU these reasns, T -Mobile has not demonstrated an abilty and
unconditional willngness to serve end users throughout its requested ETC service ara.
VIII. IS T.MOBILE LICENSED BY THE FCC TO PROVIDE SERVICE
IN ALL THE PROPOSED RURAL ILEC STUDY AREAS FOR
WHICH IT is SEEKING ETC DESIGNATION AND DOES T.
MOBILE'S CURRENT FCC LICENSED NETWORK PROVIDE
SUFFICIENT COVERAGE (WITH SUFFICIENT CALL
QUALITY THROUGHOUT THE REQUESTED ETC SERVICE
AREA? (PRELIMINARY ORDER ISSUE NO.5)
T -Mobile is licensed by the FCC to provide service in all of the proposed rul study
areas for which it seeks designation.
IX. HAS T .MOBILE'S APPLICATIONS ADEQUATELY
DEMONSTRATED THAT ANY FEDERAL HIGH COST
SUPPORT IT MIGHT RECEIVE AS AN ETC WILL BE USED TO
IMPROVE SIGNAL QUALITY, COVERAGE, OR CAPACITY,
OR OTHERWISE BE USED TO FURTHER THE PROVISION OF
SUPPORTED SERVICES IN THE SERVICE AREA?
(PRELIMINARY ORDER ISSUE NO.6)
As discussed in setion V.a, T-Mobile's evidence that it will improve sign quaity in the
rural study aras for which it seeks designation is its list of new and proposed cell sites, its maps
and its SIP. Yet, the combination of the infonnation provided in these exhibits demonstrte that
T -Mobile has not made a speific or enforceable commitment to improve signal quaity,
coverage, or capacity or otherwse furter the provision of the supported serices in its requested
rural study areas.
125 FTA § 214(e).
35
. .....
Therefore, it is unclear whether or how much signal improvement might
result in any given rural study area. Additionally, it appear that T-Mobile's primar reason for
requesting some rural study areas is beause they neighbor high value non-rual area in which
T-Mobile cannot get high-cost support. Therfore, since all of the new cell sites deployed by T-
Mobile in the future wil provide 4G data speeds, it appears that T-Mobile wil be building its
new 40 network in non-rul areas on the backs of its rual cusomers and their ru ILECs. T-
Mobile has not demonstrte that any federal high cost support it receives as an ETC wil be
used to improve signal quality, coverae, or capacity, or otherwise be used to furher the
provision of supported services in the rual study aras for which it seeks designation.
x. DOES T-MOBILE'S APPLICATION DEMONSTRATE THAT T-
MOBILE WILL COMPLY WITH THE PUBLIC UTILITY
REGULATORY ACT (PURA)I26 § 55.015 AND THE TEXAS
LIFELINE RULE, P.U.C. SUBST. R. 26.412, INCLUDING
LIFELINE DISCOUNTS ON ALL BUNDLES AND/OR
PACKAGES OF SERVICES THAT T -MOBILE OFFERS TO ALL
OF ITS CUSTOMERS? (PRELIMINARY ORDER ISSUE NO.7)
126 Public Utilty Regulatory Act, TEX. UTIL. CODE ANN. §§ 11.001 - 66.016 (Vernon 2007 & Supp. 2010-
2011).
36
T-Mobile does not include required elements in its proposed taffs that ar in strict
compliance with the application of the Lifeline discount to bundled services.12 T-Mobile should
be directed to re-fie its proposed tariffs to meet the requirements of P.U.C. SUBST. R. 26.412,
including: 1) Lifeline discounts shall include automatic enrollment,128 2) Lifeline customer wil
receive access to bundled pakages at the sae price as other consumers less the Lifeline
discount that shall only apply to that porton of the bundled package bil that is for basic network
service,129 and 3) Lifeline eligibilty shall strictly follows the requirements detaled in P.U.C.
SUBST. R. 26.4l2(d).130
XI. is THE MARCH 21, 20ll ANNOUNCEMENT THAT AT&T HAS
ENTERED INTO AN AGREEMENT WITH DEUTSCHE
TELEKOM TO ACQUIRE T -MOBILE USA RELEVANT TO
THIS APPLICATION, AND IF SO, IN WHAT WAY?
Becaus of the rapid increa in the number of C-ETCs and increasing univers service
contribution burden on consumer, in May 2008, the FCC adopted an interim cap in on high-cost
universl service support for C-ETCs.1J Under this interim cap, support for C-ETCs is stil
calculated using the existing identical support rue, which enables C-ETCs to receive the same
per-line support received by the R-ILEC in its service ara13 If however, the tota support for
C-ETCs in a state excees the interim cap amount for that stte, the support provided to all C-
ETCs in the state is reduced proportionally. 13 In Texas, C-ETC support is already proportionally
reduced to about $0.65 to $0.70 on each dollar of support requesed. 134
In December 2010, in order to rein in high-cost universal service support for "potentially
duplicative voice services," the FCC amended the interim cap rule so that a state's interim cap
127 Direct Testimony of Elizabeth Kayser at 16-17.
128 Direct Testimony of Elizabeth Kayser at 16-17, see a/so P.U.C. SUBST. R.26.412(g)(I)(B).
129 Direct Testimony of Elizath Kayser at 16-17, see a/so P.U.C. SUBST. R. 26.4 12(e)(7).
130 Direct Testimony of Elizath Kayser at 16-17, see a/so P.U.C. SUBST. R. 26.412(d).
131 High-Cost Universal Service Suppot; Federa/-8tate Joint Board on Universal Service. WC Doket no.
05-337, CC Doket No. 96-45. Order, 23 FCC Rcd. 8834, 8837-50. par. 6-39 (2008).
13 Id
133 Id
134 Tr. at 354 (March 23, 201 I).
'i..O_
37
."' '",.. . ~..
amount will be adjusted if a C-ETC serving in the state relinquishes its ETC statu.13s This
change in funding for C-ETCs is consistent with the recommendations in the National
Broadband Plan and could enable funds from th legacy high-cost program to be us more
effectively to advance universal service broadband initiatives.136 The FCC concluded that, on
balance, the public interest would be better served by taing this step to reclaim such support
rather than redistributing it, paricularly as it proeeds with broader reform to traition to a
univers service system that promotes broadband deployment more directly.13 Accordngly, if
a C-ETC relinquishes its C-ETC status in a state, the cap amount for th state will be reduced by
the amount of capped support that the C-ETC was eligible to receive in its final month of
eligibilty, annualized.138
Therefore, since it is not unusua for a caer to "voluntaly" relinquish its ETC
designation in a proceeding before the FCC to gai approval of a merger,139 and for acquired
companies to lose their corprate identity in a merger with AT &T,140 the anouncement two
days before the commencement of the March 22, 2011 hearng on the merits that AT&T, Inc.
and Deutsch Telekom had entered into an agreement for AT&T to acquire T-Mobile USA,141 T-
Mobile's parent company creates the likelihood that t-Mobile is granted ETC status and the FCC
approves the merger, the cap on FUSF funds for C-ETCs in Texas would be permanently
reduced.
XII. CONCLUSION
For all the reasons stated in this brief, T-Mobile's Application for the designation as an
ETC in the rul study areas for which it seeks designtion should be denied.
13S In the Malter of High-ost Universal Service Support, we Docket No. 05-337, Order at 'I 5
(December 30,2010).
136 Id
137 ld
138 Id. at par. 6.
139 Tr. at 183-184 (Marh 22, 201 I)
140 Tr. at 403-404 (Marh 23, 201 I).
141 DTS Exhibit 16; http://www.mobilizeeverything.com/home.php(marh21, 201 I)
38
..
SOAH DOCKET NO. 473-10-5443
DOCKET NO. 38387
CERTIFICATE OF SERVICE
I certify that a copy of this document wil be served on all paries of record on this the
21st of Apnl 2011 in accordance with P.U.C. Procedura Rule 22.74.L~"
Susa E. GooCton
39