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Home My WebLink About01182002.docDECISION MEMORANDUM TO: COMMISSIONER KJELLANDER COMMISSIONER SMITH COMMISSIONER HANSEN JEAN JEWELL RON LAW LOUANN WESTERFIELD TONYA CLARK JOE CUSICK DOUG COOLEY RANDY LOBB BEV BARKER LYNN ANDERSON GENE FADNESS WORKING FILE FROM: DATE: JANUARY 18, 2002 RE: AMENDED RATE CENTER CONSOLIDATION PLAN FOR QWEST, CASE NO. USW-T-99-21 On December 5, 2001, Qwest revised its recommended list of exchanges to be consolidated into rate center “clusters.” On December 21, 2001, the Commission issued an Amended Notice of Application and a Second Notice of Modified Procedure in this matter. Pursuant to the Notices, the Commission Staff and Citizens Communications filed comments. BACKGROUND In September 1999, the Commission initiated this investigation to examine actions which may delay the need for additional telephone area codes. At the time, the Commission noted that the consolidation of rate centers is one method of conserving NXX prefixes and ultimately delaying the need for a new area code. As local exchange competition emerges, each new local service provider must obtain an NXX code for each rate center (exchange) in which it desires to offer service. For example, a competitor providing service throughout the Qwest Treasure Valley calling area, would normally obtain 18 NXX codes (corresponding to the 18 exchanges in the calling region). Rate center consolidation reduces the number of rate centers in a local calling area and, consequently, allows for greater conservation of NXX prefixes. In its Second Notice of Modified Procedure, the Commission also noted that there were other methods of delaying the exhaustion of the 208 area code. Number pooling allows telephone numbers to be allocated to service providers in blocks of 1,000 numbers instead of the existing common network-mandated blocks of 10,000 numbers. On November 6, 2001, the Commission petitioned the FCC to implement number pooling in the Boise metropolitan area in 2002. The FCC has yet to rule on the Commission’s Petition. Finally, in response to the North American Numbering Plan Administrator’s notice that Idaho’s 208 area code was scheduled to exhaust in 2003, the Commission found it appropriate to propose that Idaho be geographically split into three distinct area code regions. In Order No. 28902, the Commission found that it does not need a new area code if the FCC grants the Commission authority to require number pooling in Idaho. On reconsideration, the Commission reaffirmed its decision to split Idaho into three geographic areas each with its own area code. In Order No. 28924 issued January 11, 2002, the Commission affirmed its belief that new area code(s) would not be required if number pooling is implemented in a timely manner. THE PRESENT APPLICATION On December 5, 2001, Qwest revised its recommended list of exchanges to be consolidated into rate center clusters. The Company observed in its December filing that the Commission had delayed ruling on its proposed consolidation because of several pending Extended Area Service (EAS) Applications. Now that these EAS Applications have been resolved, Qwest is now recommending that 42 rate centers be consolidated into eight clusters. The table below lists the proposed clusters in Qwest’s September 2000 and its December 2001 Applications. Those Qwest exchanges not included in the clusters would remain as separate rate centers. September 2000 Recommended Clusters December 2001 Recommended Clusters Emmett, Kuna, Melba, Meridian, Middleton, Star Glenns Ferry and Mountain Home Hailey and Ketchum Pocatello and American Falls Bancroft, Downey, Grace, Lava Hot Springs, McCammon, Montpelier, Preston, Soda Springs Idaho Falls, Rexburg, Rigby, Ririe, Roberts, Shelley (including Firth) Twin Falls and Jerome Bliss, Buhl, Castleford, Eden/Hazelton, Gooding, Hagerman, Kimberly, Murtaugh, Shoshone/Dietrich, Wendell Emmett, Kuna, Melba, Meridian, Middleton, Star Glenns Ferry and Mountain Home Hailey and Ketchum Boise and Idaho City American Falls, Bancroft, Downey, Grace, Lava Hot Springs, McCammon, Montpelier, Pocatello, Preston, Soda Springs Idaho Falls, Rexburg, Rigby, Ririe, Roberts, Shelley (including Firth) Cottonwood and Grangeville Bliss, Buhl, Castleford, Eden/Hazelton, Gooding, Hagerman, Jerome, Kimberly, Murtaugh, Shoshone/Dietrich, Twin Falls, Wendell Emmett, Kuna, Melba, Meridian, Middleton, Star Glenns Ferry and Mountain Home Hailey and Ketchum Pocatello and American Falls Bancroft, Downey, Grace, Lava Hot Springs, McCammon, Montpelier, Preston, Soda Springs Idaho Falls, Rexburg, Rigby, Ririe, Roberts, Shelley (including Firth) Twin Falls and Jerome Bliss, Buhl, Castleford, Eden/Hazelton, Gooding, Hagerman, Kimberly, Murtaugh, Shoshone/Dietrich, Wendell Emmett, Kuna, Melba, Meridian, Middleton, Star Glenns Ferry and Mountain Home Hailey and Ketchum Boise and Idaho City American Falls, Bancroft, Downey, Grace, Lava Hot Springs, McCammon, Montpelier, Pocatello, Preston, Soda Springs Idaho Falls, Rexburg, Rigby, Ririe, Roberts, Shelley (including Firth) Cottonwood and Grangeville Bliss, Buhl, Castleford, Eden/Hazelton, Gooding, Hagerman, Jerome, Kimberly, Murtaugh, Shoshone/Dietrich, Twin Falls, Wendell THE COMMENTS A. Summary of Previous Comments 1. Qwest’s Comments. In general, Qwest “supports this Commission’s interest in preserving NXX codes in Idaho.” Comments at 2. In its comments, Qwest stated that it adheres to two general principles. First, the Company anticipates that the current dialing patterns for intra- and interLATA tolling calls will not change. Second, the Company believes that it is essential to protect the integrity of the present E911 routing system. Qwest maintains that the public interest would be served by consolidating many of its rate centers and, over the course of this case, the Company has worked with the Commission Staff to explore several consolidation scenarios. Qwest stated that what makes rate center consolidation possible is the alignment of local calling between exchanges. However, there are several exchanges that should not be included in a cluster. For example, Nampa, Caldwell, Blackfoot, and Burley should not be included in any cluster because there are no Qwest exchanges with precisely the same calling area as these exchanges. Id. at 6. Qwest commented that one possible drawback to immediate rate center consolidation has to do with future extended area service (EAS) expansion. More specifically, if the Commission implements rate center consolidation, then future “EAS expansion must occur by rate center, not by individual exchange.” Id. This requirement arises because “once a rate center is consolidated, there is no longer any methodology whereby the network can distinguish between ‘pieces’ of the rate center so that some calls remain local while others be treated as toll.” Id. at 7. Turning to the issue of cost recovery for consolidation, Qwest did “not anticipate requesting compensation for the implementation of rate center consolidation in Idaho. . . due to the limited scope of the implementation required.” Id. at 9. Costs to implement rate center consolidation would be limited to reprogramming the Company’s billing system and would not require additional hardware in the network. Consequently, “[n]o request is being made at this time. . . .” Id. The Company estimated that it would take six months to implement the billing system updates required for consolidation and notify other carriers of network changes. It would take another six months to prepare number block donations for pooling. Finally, Qwest commented on the issue of E911 default routing. Default routing of 911 calls are “very rare and occur when calls placed to 911 either: (1) fail to carry their automatic number identification (ANI); or (2) the automatic line identifier (ALI) database does not contain 911 public service answering point (PSAP) routing information for the ANI that was sent. If rate centers are consolidated, there may be more than one PSAP in some rate center clusters. Qwest maintained that if this occurs, each “service provider [must] establish a unique trunk group for each default PSAP located in each end office serving area.” 2. Verizon Reply Comments. In its reply comments, Verizon recommended that the Commission adopt rate center consolidation for Qwest in southern Idaho. In recommending consolidation, Verizon asserted that the following criteria should apply to any proposed rate center consolidation. In particular, Verizon suggested that consolidation rate centers should be contiguous and capable of local number portability, have identical local calling areas, and identical local exchange service rates. In addition, Verizon recommended that: a) Consolidation not create undo technical implementation complications for service providers without establishing cost recovery mechanisms as part of the consolidation process. b) Rate centers should not be consolidated across LATA or area code boundaries. c) Consolidation must not affect the provision of critical emergency services such as 911. 3. Staff Reply Comments. Staff agreed that reducing the number of rate centers reduces the number of NXX codes each new service provider needs to serve a local calling area. In the long run, rate center consolidation “prolongs the life of the 208 area code and avoids the expense of adding a second area code for Idaho.” Staff Comments at 2. The Staff stated that the cost, if any, in implementing rate center consolidation is far outweighed by the benefits. Id. at 3. The conservation of numbers in assigning single NXX codes for each cluster justifies consolidation. Staff asserted that given the benefits of consolidation, no specific cost recovery mechanism is necessary. Id. Staff also endorsed the comments of Qwest that all exchanges included within a single rate center must share the same local calling area. Id. at 4. Turning to the issue of 911 calling, the Staff observed that it was likely that more than one PSAP will be present in each clustered rate center. The Staff also agreed with Qwest that the “over whelming majority of calls to 911. . .should not present a problem.” Id. at 5. In those rare circumstances when calls do not contain the necessary ANI or ALI information, each new telephone service provider “will need to establish a new trunk group to each default PSAP in a rate center.” Id. Staff believes that calls to southern Idaho 911 systems all deliver ANI to the PSAP. 4. Qwest Supplemental Comments. On September 19, 2000, Qwest filed supplemental comments in this matter with an updated consolidation proposal. The Company observed that several outstanding EAS cases had been concluded and that the FCC was beginning to require number utilization thresholds before additional prefixes are assigned to rate centers. B. The Current Comments As previously mentioned, the Commission only received the comments in response to a Second Notice of Modified Procedure. Citizens Communications and the Staff submitted comments. 1. Staff Comments. After reviewing Qwest’s modified rate center proposal, the Staff continues to believe that it is appropriate and reasonable for Qwest to implement rate center consolidation. In its comments, the Staff stated that the current “consolidation proposal includes rate centers that are contiguous[, and] have the same local calling area, does not cross LATA boundaries, and will have no adverse impact to the provision of 911 service. Rate center consolidation also decreases the demand for prefixes while increasing the effectiveness of 1,000 block pooling by increasing the scope of rate centers from which to pool numbers.” Staff Comments at 5. Staff reiterated that costs, if any, associated with implementing rate center consolidation are far outweighed by the benefits. Staff does not believe that customer rates will be affected or that any specific cost of recovery mechanism is necessary. Staff recognized that some customers who are on distance-sensitive toll plans may see increases in their per-minute toll rates when new vertical and horizontal (V&H) coordinates are established for a consolidated rate center. This impact may be more pronounced for customers located in exchanges immediately outside large local calling areas. However, the Staff believe that the number of affected customers will be very small given the popularity of simple per-minute calling plans and the expansion of EAS routes throughout Idaho. Id. at 6. To mitigate any adverse impacts, Staff recommended that carriers notify their customers of the coming changes and the option for simple toll-per-minute toll plans. Staff also repeated that consolidating rate centers now may impact the Commission’s ability to implement EAS’s in the future. With this issue in mind, Staff believes that it is appropriate to remove the Emmett, Melba, Murtaugh, Rigby, and Roberts exchanges from the consolidation proposal. Consequently, Staff proposes the following rate center consolidation compared to the Qwest December 2001 proposal. Qwest December 2001 Recommended Clusters Staff Recommended Clusters Emmett, Kuna, Melba, Meridian, Middleton, Star Glenns Ferry and Mountain Home Hailey and Ketchum Boise and Idaho City American Falls, Bancroft, Downey, Grace, Lava Hot Springs, McCammon, Montpelier, Pocatello, Preston, Soda Springs Idaho Falls, Rexburg, Rigby, Ririe, Roberts, Shelley (including Firth) Bliss, Buhl, Castleford, Eden/Hazelton, Gooding, Hagerman, Jerome, Kimberly, Murtaugh, Shoshone/Dietrich, Twin Falls, Wendel. Cottonwood and Grangeville Kuna, Meridian, Middleton, Star Glenns Ferry and Mountain Home Hailey and Ketchum Boise and Idaho City American Falls, Bancroft, Downey, Grace, Lava Hot Springs, McCammon, Montpelier, Pocatello, Preston, Soda Springs Idaho Falls, Rexburg, Ririe, Shelley (including Firth) Rigby and Roberts Bliss, Buhl, Castleford, Eden/Hazelton, Gooding, Hagerman, Jerome, Kimberly, Shoshone/Dietrich, Twin Falls, Wendell Cottonwood and Grangeville Staff’s proposal provides for slightly less consolidation than Qwest’s current plan but still allows 38 rate centers to be consolidated while giving the Commission some flexibility in the future for EAS routes. In its recent update to its consolidation plan, Qwest requested that the Commission allow it 21 days to advise the Commission of the implementation schedule if rate center consolidation is ordered. Although Staff recognizes that Qwest will need at least three months to notify carriers of new V&H changes, Staff is also aware that the Commission has asked the FCC to accelerate Idaho’s number pooling timetable. “Because it is preferable to have consolidation done before pooling begins, Staff believes that Qwest should be prepared to accelerate its consolidation timetable if Idaho’s [pooling] request is granted by the FCC.” Staff Comments at 7. Consequently, Staff believes that it is appropriate for the Commission to allow Qwest 21 days in which to present its implementation schedule “with the understanding that the Company may need to accelerate an implementation date if the FCC grants” the Commission’s pooling request. Id. Citizens Comments. In its comments, Citizens expressed serious concerns with two of the proposed consolidations. Under Qwest’s most recent proposal, Cluster No. 1 would consolidate Emmett, Kuna, Melba, Meridian, Middleton, and Star into a single rate center. Citizens asserted that this consolidation would significantly impact its customers located in the Sweet exchange. The Company noted that Citizens’ Sweet exchange currently has EAS to Emmett but not to the other exchanges in the proposed cluster. Citizens’ Comments at 2. Including Emmett in the first cluster would require that the Sweet EAS to Emmett be expanded to all the exchanges in the cluster or that the EAS be eliminated. Citizens noted that either option will impact the Company and its customers. “If EAS is granted to the entire cluster, the proposed consolidation will result in higher rates to recover lost revenues and incremental expense that may be required to handle additional traffic. If EAS is eliminated, customers in Sweet will no longer be able to make toll-free calls to the county seat.” Id. Citizens also expressed concern with the proposal to consolidate the Cottonwood and Grangeville exchanges into a single rate center. The Company noted that its Elk City exchange has local option calling to Grangeville but not to Cottonwood. If the proposed consolidation of these exchanges were approved, Citizens would need to increase the price of its local calling plan to recover lost revenues and incremental expenses of adding Cottonwood as a terminating exchange. Id. at 2-3. Citizens did not disclose any revenue impacts in its comments. Finally, Citizens requested that the Commission hold a hearing “to further explore the impact of rate center consolidation on customer rates and local calling scope.” Id. at 3. COMMISSION DECISION Does the Commission wish to implement rate center consolidation? What does the Commission want to do about the Staff recommended adjustment about removing Emmett, Melba, Murtaugh, Rigby, and Roberts from the list of consolidated exchanges? What does the Commission wish to do concerning the proposal to consolidate the Cottonwood and Grangeville exchanges given that Citizens’ Elk City exchange has an optional local calling plan to Grangeville? How about the Citizens’ Emmett to Sweet EAS? Does the Commission wish to hold a public hearing as requested by Citizens? Does the Commission wish to allow Qwest to file an implementation schedule within 21 days of the Order? Does the Commission wish to address the need for an accelerated implementation schedule if the FCC were to approve the Commission’s number pooling request? Does the Commission wish to address cost or any other issue? vld/M:USWT9921_dh5