10062000.doc

SUPPLEMENTAL
DECISION MEMORANDUM

TO: COMMISSIONER HANSEN
COMMISSIONER SMITH
COMMISSIONER KJELLANDER
JEAN JEWELL
RON LAW
LOU ANN WESTERFIELD
RANDY LOBB
TONYA CLARK
DAVE SCHUNKE
BEV BARKER
JOE CUSICK
DOUG COOLEY
LYNN ANDERSON
WORKING FILE

FROM: DON HOWELL

DATE: OCTOBER 6, 2000

RE: RATE CENTER CONSOLIDATION FOR QWEST
CASE NO. USW-T-99-21

This memorandum supplements a previous memorandum regarding rate center consolidation dated September 27, 2000. After this item was placed on the Commission’s decision agenda for September 29, the Staff asked that the matter be held so that Staff may consider other ramifications of rate center consolidation.
As set out in the initial memorandum, rate center consolidation conserves NXX codes and forestalls the need for a new area code. What the Staff wanted to further consider was whether there are any unintended consequences as a result of consolidation. Upon further reflection, Staff wanted to bring two additional point to the Commission’s attention.
1. Increasing Mileage for Long Distance Telephone Calls. One adverse consequences of consolidating a number of exchanges into a single rate center pertains to long-distance calls made between a “consolidated” exchange and an adjacent or nearby exchange outside a consolidated area or EAS region. When an exchange’s rate center is consolidated with other exchanges’ rate centers, the new consolidated rate center will probably be moved to near the “center” of the consolidated exchanges. Thus, the distance from the new consolidated rate center to the exchange outside the region may be increased (or in a higher mileage band) than the initial distance between the two exchanges. This, in turn, may lead to higher changes for calls between the two exchanges for customers whose carriers have narrow mileage banded rates.
The chart below illustrates this concern. The rate for a call from Murtaugh (located in the Magic Valley EAS region) to Burley (located outside the Magic Valley region) would likely increase because of rate center consolidation. Murtaugh’s new consolidated rate center will probably move to the west, thereby increasing the distance between the new rate center and Burley’s rate center. For example, Sprint’s MTS rates for such a call may increase by approximately $.09 per minute to $.39 cents per minute. See attached rate sheet.

The scope of this concern is difficult to quantify. If there was a significant amount of calling between the two exchanges at the time the Commission was considering implementation of the Qwest EAS regions, the “outside” exchange might have been included in the region unless it was more logically included in another EAS region. Conversely, if the “outside” exchange did not have a sufficient level of calling traffic to other nearby exchanges or there was not a sufficient community-of-interest among the exchanges, then it there may have been insufficient reasons for including the exchange in the EAS region.
2. Will Consolidation Really Reduce the Number of NXX Codes Requested by CLECs. This second issue has to do with the degree or extent of NXX conservation if rate center consolidation is implemented. In the initial memorandum, it was stated that a competitor desiring to provide service throughout the Treasure Valley EAS region would need about 18 NXX codes, or one for each exchange. If consolidation is implemented in the Treasure Valley region, then a competitor may need only six or seven NXX codes to serve the entire region.
Based upon information obtained from the North American Numbering Plan Administrator, six CLECs have been assigned NXX codes for the Boise exchange. Of those six, three did not have any NXXs in any of the 19 exchanges with which Boise has EAS. One had an NXX in one additional EAS exchange; one had NXX in two EAS exchanges; and finally, one had NXXs in six EAS exchanges. Consequently, it appears that CLECs do not uniformly serve the entire EAS calling region. The Twin Falls and Eastern Idaho regional calling areas have similar situations. In total, under Qwest’s proposed consolidation, it appears that existing CLECs would continue to need all but two of 60 NXXs to which they have already been assigned in Qwest exchanges.
It appears that CLECs only request NXX codes in those exchanges where they think they will actually need them so consolidation may not appreciably dampen the demand for an otherwise low NXX demand. Nonetheless, implementing rate area consolidation may save a substantial number of NXXs in the future. The arrival of CLECs intending to serve all the exchanges in a regional EAS calling area may hasten the exhaustion of the NXX codes. In addition, it may be useful to implement consolidation as evidence of the Commission’s concern of area code exhaust before it seeks permission from the Federal Communications Commission (FCC) to implement 1,000-block number pooling or reclamation of unused NXX codes.

Donald L. Howell, II

bls/M:uswt9921_dh3
SUPPLEMENTAL
DECISION MEMORANDUM 3