20110602Comments.pdf

DONALD L. HOWELL, II
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 3366
RECEIVED
2011 JUN - 2 PH 3: 25
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5918
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF )
T-MOBILE WEST CORP. FOR DESIGNATION) CASE NO. TMW-T-IO-Ol
AS AN ELIGIBLE TELECOMMUNICATIONS )CARRER. )
) COMMENTS OF THE
) COMMISSION STAFF
)
The Staff of the Idaho Public Utilties Commission, by and through its Attorney of
Record, Donald L. Howell II, Deputy Attorney General, submits the following comments.
BACKGROUND
On December 14,2010, T-Mobile West Corp. fied an Application to be designated as an
"eligible telecommunications carier" (ETC) in Idaho. T-Mobile is an existing facilties-based
wireless telecommunications carier serving Idaho customers with basic wireless services and
advanced broadband services. Application at 1. The Company requests ETC designation
pursuant to 47 U.S.c. § 214(e) and this Commission's ETC requirements in Order No. 29841.
Idaho Code § 62-61OD.
STAFF COMMENTS 1 JUE 2, 2011
The Application
T -Mobile is a commercial mobile radio services (CMRS) carrier licensed by the Federal
Communications Commission (FCC) to provide wireless services in various areas of Idaho.
T-Mobile's designated service areas currently include the wire centers of non-rural incumbent
local exchange cariers (ILECs - such as Qwest and Verizon)\ and the wire centers of many rural
ILECs. See Application, Atch. A. T-Mobile seeks ETC status in those Idaho wire centers listed
in Attachment A.
T -Mobile asserts that it wil provide all the universal services supported by the federal
Universal Service Fund (USF) including: voice grade access; local usage; dual tone multi-
frequency signaling; single party service; access to emergency services; access to operator,
interexchange, and directory assistance services; and toll blocking or toll control for qualifying
consumers. Id at 3-4. The Company indicates that it intends to use its own facilties-based
wireless facilities to meet its universal service obligations. Id at 4.
The Application states that T-Mobile is committed to providing the required universal
services throughout its designated ETC service areas, including the FCC's ETC servicing
requirements found at 47 C.F.R. § 54.202. In those instaces when T-Mobile receives a request
for service outside its existing network coverage areas, T -Mobile will provide service within a
reasonable period of time. When the Company receives such a request, it wil explore several
alternatives to provide services including: modify or replace the customer's equipment; deploy a
roof-mounted antenna or other equipment; adjust the nearest cell tower; adjust network or
customer facilties; resell services from another carier's facility; or use or construct an additional
cell site/extender/repeater or other similar equipment. Application at 5. 1fT-Mobile determines
that it cannot reasonably serve a new customer, then it wil report the "unfulfilled request within
thirty (30) days after making such a determination." Id
The Company also commits to advertise the availabilty of its universal service offering
within its proposed ETC service areas by using media of general distribution. Id In addition, the
Company notes that it already has various retail stores and authorized agents throughout its
existing Idaho service area.
i On April i, 20 i i, Century Link and Qwest merged their companies. The combined companies wil use the name
CenturyLink, but the "Qwest" brand wil continue for the next several months. On July i, 20 i 0, Frontier
Communications Corporation acquired control ofVerizon's local and toll operations in Idaho.
STAFF COMMENTS 2 JUNE 2,2011
Once designated as an ETC, the Company wil make available to qualified low-income
customers a discounted service offer that meets the "Lifeline" requirements? T-Mobile plans to
make available to qualifying low-income customers: an affordable wireless handset; 145
"whenever" minutes, 500 night minutes, and 500 weekend minutes per month; and a Lifeline
monthly rate of $6.41. Id at 6. In its Application, T -Mobile also declares that it wil comply with
the Idaho Commission's ETC requirements. In paricular, the Company has fied a two-year
investment plan to better serve customers once it is de~ignated as an ETC. The Company
indicates that it will be able to provide emergency services and that it wil comply with the CTIA
consumer protection code. Id citing Order No. 29841, App. at 3. In August 2010, T-Mobile
notes it was recognized as earning the highest ranking in J.D. Power & Associates' satisfaction
surey for wireless cariers.
In conclusion, T -Mobile asserts that designating it as an ETC would provide a benefit to
customers in its service territory and is in the public interest. Id at 8-10. Besides providing
consumers with competitive pricing and new services, customers wil also benefit from increased
competition. ETC status "wil result in consumers having greater access to wireless
telecommunications services in rual areas, thereby advancing the basic goal of preserving and
advancing universal service." Id at 9. T-Mobile requests that the Commission certify that
T-Mobile may receive federal USF fuds for universal service support. Id at 11.
Merger
On March 20,2011, AT&T anounced plans to acquire T-Mobile USA, including all
of its wholly owned subsidiaries such as T-Mobile West. In a production request, Staff asked
about the impact of the proposed merger on the ETC Application. T-Mobile answered that
notwithstanding the proposed merger, it "wil be the designated ETC legal entity with the
obligations and responsibilties of a universal service provider in Idaho."
2 The Lifeline program is intended to provide universal service to eligible low-income customers by using USF
revenues to make telecommunications service more affordable. Idaho participates in the residential Lifeline program
pursuant to Idaho Code § 56-901 and Order No. 21713.
STAFF COMMENTS 3 JUE 2, 2011
ST AFF ANALYSIS
Staff has reviewed the T-Mobile Application and has conducted an analysis of the
Company's fulfillment of the federal Telecommunications Act of 1996 ("the Act") and of
Commission Order No. 29841. In addition, Staff has analyzed the merits of awarding ETC
designation in the non-rural wire center service areas.3
Rural Wire Centers
The T-Mobile Application includes all wire centers currently served by the 12 Idaho rual
incumbent local exchange carriers (ILEC). Id Atch. A.
The Act treats rual and non-rural service areas differently for the puroses of ETC
designation. When a carier meets the statutory ETC requirements and requests designation in a
rural area served by an ILEC, the Act gives the State Commission more discretion than in the
non-rural areas. The Act states that the State Commission may grant ETC designation to the
additional carier provided that ETC designation of the additional carrier is in the public interest.
47 U.S.C.§ 214(e)(2).
Under the Act and Order No. 29841, greater emphasis is placed on scrutinizing the public
interest issues for ETC Applications in rual service areas. Rural wire centers often have widely
disparate population densities, and therefore, highly disparate cost characteristics. As such, Staff
believes the public interest analysis plays a more important role when reviewing an ETC
designation in rural service areas.
Public Interest Analysis
Under Section 214 of the Act, the State Commission must determine that an ETC
designation is consistent with the public interest, convenience and necessity. 47 U.S.C.
§ 214(e)(2). In accordance with the Act, and the ETC requirements of the FCC rules, the
Commission has stated:
In adopting the FCC's proposed public interest analysis, this
Commission adopts an analytical framework for making a public
3 The term "service area" denotes a geographic area established by a State Commission for the purpose of
determining universal service obligations and support mechanisms. In the case of a rural telephone company, service
area is defined as a company's study area unless and until the FCC and the State Commission, after taking into
account recommendations of a Federal-State Joint Board instituted under section 41 O( c), establish a different
definition of service area for such company. 47 U.S.C. § 214(e)(5).
STAFF COMMENTS 4 JUNE 2, 2011
interest determination. This framework necessarily involves the
consideration of certain enumerated factors, such as the benefits to
consumer choice, the unique advantages and disadvantages of the
applicant's service offering, and, where applicable, consideration of
creamskimming. However, the Commission may consider other
relevant public interest determinations in its public interest
determination.
Order No. 29841 at 15-16.
This Commission has consistently applied the public interest analysis in previous
decisions. The Commission denied the ETC Applications of wireless cariers, IAT
Communications, Inc. dba NTCH-Idaho, Inc., and NPCR, Inc dba Nextel Partners (Case No.
GNR- T -03-08). In addition, the Commission partially denied, Inland Cellular Telephone
Company (Case No. INC-T-06-02) and CTC Telecom, Inc. (Case No. CTL-T-09-01), because
those applicants failed to cary out their burden of demonstrating that their Applications for ETC
designation in rural areas were in the public interest. See Order Nos. 29541, 30212 and 30867.
These Applications failed the public interest test by proposing parial service area coverage or by
placing too much emphasis on competition and relying on approved state and federal applications
in very different service areas rather than explaining how the particular applicant's ETC
designation would benefit all customers in its ETC service area.
Applicants have the burden of proof to demonstrate that the public interest is served by
designating them as an ETC in these rural areas. Order No. 29541 at 6 citing Virginia Cellular,
LLC Petition/or Designation as an ETC, 19 F.C.C.R. 1563 (2004). The T-Mobile Application
makes five public interest arguments: 1) the Company meets all requirements for designation as
an ETC; 2) ETC designation is in the public interest because consumers wil benefit from
competitive pricing and new services, such as T -Mobile Lifeline Plan; 3) as T -Mobile expands it
network in Idaho, consumers wil benefit from a high level of service quality and more service
options; 4) the designation wil not adversely impact the universal service fund; and 5) benefits of
increased competition. Id at 8-10.
Other Public Interest Considerations
When applying the public interest test in an Application for ETC designation, Staff
believes there are other considerations that have not been mentioned, but merit discussion.
STAFF COMMENTS 5 JUNE 2,2011
1. Contributions to Idaho Programs. As in the more recent Applications for Certificate of
Public Convenience and Necessity (CPCN), the Commission grants a CPCN subject to certin
conditions. One of these conditions is a carier's contribution to the Idaho Universal Service
Fund (USF), Idaho Telephone Relay Service (TRS), and Idaho Telephone Service Assistace
Program (ITSAP). The Commission also considers any future reporting deemed appropriate for
competitive communications providers. Staff believes that if these requirements are appropriate
for a CPCN, then it should also be appropriate for an ETC designation that is subject to greater
scrutiny than a CPCN. Staff believes that these conditions, pursuant to Idaho Code, also apply to
an ETC designated company.
2. Cream Skimming Analysis. In evaluating the public interest portion of an ETC
Application, the Commission weighs whether the potential benefits of ETC designation outweigh
the potential harms. One consideration is whether the Applicant is committed to providing
universal service thoughout the rual areas or, if not, whether the potential for cream skimming
exists. Staff believes the Company avoids the appearance of cream skimming where the
Application includes all wire centers in a designated service area. Staff notes that the T -Mobile
Application includes a 2011 and 2012 network improvement plan (Application, Confidential
Attachment B), with wire center specific details.
In addition to the information contained in the T-Mobile Application, Staff believes the
Company is required to meet the public interest tests discussed in Other Public Interest
Considerations (above) even when they are not explicitly stated in the Application. In sum, the
Staff determines that T -Mobile's Application demonstrates that ETC designation is in the public
interest.
Network improvement Plan
The two-year network improvement plan must describe with specificity proposed
improvements or upgrades to the applicant's network on a wire center-by-wire center basis
throughout its proposed designated service area. Order No. 29841 at 18.
As mentioned earlier, T-Mobile presents detailed information outlining its network
improvement plan for years 2011 and 2012. The service improvement plan includes capital and
operating expenditures for each wire center. Application, at Confidential Exhibit B.
STAFF COMMENTS 6 JUNE 2, 2011
Staff believes T-Mobile provides a reasonable improvement plan. Additionally, with grant
of ETC designation, companies must anually submit a Two-Year Network Improvement Plan
and Progress Report to maintain the ETC designation. This annual requirement wil hold the
Company accountable for making a reasonable effort to implement the network improvement
plan. See Appendix Reporting Requirement, Order No. 29841.
Abilty to Remain Functional in Emergencies
The Commission explained in Order No. 29841 that it understands "different cariers in
different industries and geographic areas wil have different technological challenges and
opportunities to meet these fuctional requirements," especially in an emergency. Order No.
29841 at 10. To demonstrate the abilty to remain functional during emergencies, the ETC
applicant must show that it has a "reasonable amount of back-up power to ensure functionality
without an external power source, is able to re-route traffic around damaged facilities, and is
capable of managing different traffic spikes resulting from emergency situations." Id at 11.
In its Application, T -Mobile describes the components that make up its fault-tolerant
network. Application, Exhibit D. These components are, portable back-up generator at various
network locations throughout T-Mobile's network that can be deployed in an emergency; the
ability to reroute traffic around damaged or out-of-service facilities through the deployment of
cell-on-wheels (COWs); redundant facilties and dynamic rerouting of traffic over alternate
facilties; a network control center that monitors network traffc; and fixed generators with battery
back up systems at a majority of sites. Id Based on these factors, Staff believes the fault-tolerant
network, as described in this Application, provides adequate support to demonstrate the
Company's abilty to remain fuctional in an emergency.
Other ETC Designation Reguirements
Additional requirements for ETC designation, not previously discussed, are detailed in the
Appendix 1 of Order No. 29841 and discussed more fully below.
1. Common Carier Status. T-Mobile Telecom is a Commercial Mobile Radio Services
(CMRS) carier providing "mobile service" as defined in 47 U.S.C. § 153(27). Application at 3.
2. Provide the Universal Services. T -Mobile offers the federally designated services
listed at 47 U.S.C. § 54.1O(a). Id at 3-4.
STAFF COMMENTS 7 JUE 2,2011
3. Advertising. T-Mobile plans to advertise the availabilty of each of the supported
services as detailed in the Application, throughout its licensed service area, by media of general
distribution. Id at 5-6
4. The Commitment and Abilty to Provide Supported Services. T -Mobile is committed
to answering all reasonable requests for service within its proposed ETC service area. Id at 5.
5. A Commitment to Consumer Protection and Service. T-Mobile wil comply with all
applicable Idaho service quality standards and consumer protection rules, and wil also abide by
the Consumer Protection Standards established by the Cellular Telephone Industry Association
(CTIA) consumer code. Id at 7.
6. Description of the local Usage Plan. T-Mobile asserts that it provides several different
rate plans with varing amounts of local usage that are compatible to the offerings of the ILECs.
The price plans are set forth at ww.t-mobile.com. Id at 8.
7. Tribal Notification. T-Mobile states that it wil comply with this requirement. No
further information was provided with the Application. Id.
Staff believes T-Mobile meets the aforementioned ETC designation requirements.
High-Cost Federal Funding
The original goal of the federal Universal Service Fund (USF), under the
Telecommunications Act of 1934, was to provide at least one access line for basic telephone
service to every household in the U.S., and at a reasonable, subsidized cost.
Staff is aware of the high-cost federal fuding issues for rural areas. Staff recognizes and
is concerned about the growth of high-cost fuds, paricularly as it relates to Competitive ETCs
(CETC). The escalating high-cost fund is an ongoing concern that is being addressed at the
federal leveL. On April 29, 2008, the FCC adopted the Federal-State Joint Board on Universal
Service's recommendation to impose an interim emergency cap on the amount of high-cost
support that CETCs may receive. See FCC 08-122. Specifically, effective May 1,2008, total
annual CETC support for each state wil be capped at the level of support that CETCs in that state
were eligible to receive during March 2008 on an annualized basis. All newly designated and
existing CETCs in Idaho wil share the high-cost USF support in the amount that was distributed
to Idaho CETCs in March 2008. The only exception to this interim cap is if a CETC: (1) fies
cost data demonstrating that its costs meet the support threshold in the same maner as the ILEC;
STAFF COMMENTS 8 JUNE 2, 2011
or (2) serves tribal lands or Alaska Native regions. The interim cap will remain in place until the
FCC adopts comprehensive reform measures. Id
The Commission is not in a position to alter public policy regarding the federal USF draw.
The Commission must follow the rules and regulation even if troubled by the outcome. In the
meantime, Staff does not believe it should recommend denial of an ETC Application that
reasonably meets all of the statutory requirements for an ETC designation. Denial of an ETC
Application also denies the rural consumers the benefit of Idaho Telephone Service Assistance
Program (ITSAP), federal Lifeline and Linkup support, as well as other potential technological
and safety benefits that may be offered by the CETC. Staff wishes to note, however, that to the
extent the areas are already served, these benefits are available to the consumers through the
ILECs or other wireless cariers.
STAFF RECOMMENDATION
Staff has reviewed the application ofT-Mobile West for designation as an ETC. Staff
believes that the Application demonstrates 'a commitment on the par of the Company to fulfill the
obligations of an ETC in Idaho. The Company will provide all universal services supported by
the federal USF through its terrtory, it has provided a two-year network improvement plan, the
Company has addressed all of the public interest questions that accompany an ETC application,
and will provide multiple pricing plans which wil increase customer choice, including a Lifeline
plan.
Staff believes that the application ofT-Mobile West for designation of an ETC is in the
public interest and should be approved.
Respectfully submitted this z day of June 2011.
Donald L. Ho ell, II
Deputy Attorney General
Technical Staff: Grace Seaman
i:umisc:commentstmwtlO.ldhgs comments
STAFF COMMENTS 9 JUNE 2, 2011
CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 2ND DAY OF JUE 2011, SERVED
THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN CASE
NO. TMW-T-1O-01, BY MAILING A COpy THEREOF, POSTAGE PREPAID, TO
THE FOLLOWING:
MARK P TRINCHERO
DAVIS WRIGHT TREMAINE
1300 SW FIFTH AVE
STE 2300
PORTLAND OR 97201
E-MAIL: marktrinchero§dwt.com
TERIOHTA
SENIOR CORPORATE COUNSEL
T-MOBILE USA INC
12920 SE 38TH ST
BELLEVUE WA 98006
,b~SECRE~AR~ ~
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