20030729Decision Memo.pdf

TO:
FROM:
DATE:
RE:
DEC~SION l\1EMORANDUM
COMMISSIONER KJELLANDER
COMMISSIONER SMITH'
COMMISSIONER HANSEN
COMMISSION SECRETARY
JOE CUSICK
NANCY HARMON
LEGAL
WORKING TILE
, CAROLEE HALL
........
v;;J..N~ 7-cf 3/(/~
JULY 10, 2003
VERIZON NORTHWEST, INc. (VERiZON) TARIFF ADVICE 03-12,
REQUESTING COMMISSION AUTHORIZATION TO JJ.\tIPLEMENT AN
INTERSTATE, INTRALATALOCAL CALLING PLAN AND RATE
INCREASE FOR THE CUSTOMERS IN THE ROCK CREEK
EXCHANGE TO CALL SPOKANE, W ASIDNGTON.
INTRODUCTION
on July 8 2003, Verizon filed its Tariff Advice No. 03-12 seeking Commission approval
to implement an interstate intraLATA local calling area from the Rock Creek exchange into
Spokane
, .
Washington. The filing also requests a rate increase of $4.95 per month for residential
customers and $16.30 for business customers. Currently there are nine (9) residential customers
and one (1) business customer who would be affected by this proposal. Staffhas been working
with the customers of the Rock Creek exchange and the Company since January 2003 to resolve
. this issue
BACKGROUND
In late January 2003, the Consumer Division received an inquiry from a Verizon
customer in the Rock Creek calling area. The customer, Mr. Dan Hopson, asked why after ten
years the nine customers in Rock Creek were still not able to call Spokane toll free as the
neighboring customers of Setters are. The Consumer Division forwarded Mr. H~pson s inquiry
to the Telecom Staff for further investigation.
DECISION MEMORANDUM - 1 -July 10, 2003
Staff contacted Mr. Hopson, who explained that for more than ten years he and his
neighbors were using a Foreign Exchange (FX) line for their toll calling into Spokane. Due to a
reassessment by Verizon, the FX line was going to be assessed interstate charges, unlike it had in
the past. This reassessment resulted in a significant rate increase for Mr. Hopson. Mr. Hopson
has the only business line in the Rock Creek exchange.
After further discussions with Mr. Hopson he explained that Rock Cree~ had, on many
occasions, attempted to obtain a calling plan that mirrored the neighboring COIilmunity of Setters;
however, for some unknown reason they were never successful in getting it completed and felt
that it had been overlooked on a number of occasions. Setters is located approximately three
miles north of Rock Creek. Both Setters and Rock Creek are in the Spokane LATA and sit on
the border between Idaho and Washington.
Currently, the Setters customers who subscribe to Verizon s "Community Plus Service
have unlimited calling to the following areas: Setters, Rockford, W A., Rock Creek, Spokane
W A and TensedJBluebell. The nine (9) customers in the Rock Creek exchange, using V erizon' s
Community Plus Service" have unlimited calling to: Rock Creek, Fairfield, W A., Evergreen,
Setters, TensedlBluebell.
Staff contacted Verizon to discuss the concerns of the Rock Creek customers and to see if
there ~ould be an informal resolution reached among the parties. After extensive research into
the calling areas the Company came back with a proposal.
Verizon proposed that the Rock Creek calling area be opened up to reflect the Setters
calling area under two conditions. First, the Company requested that the rates for the Rock
Creek customers be increased to mirror the rates that the Setters customers currently pay for the
same calling area. Secondly, the Company questioned if there were any Federal
Communications Commission (FCCj-guidelines or state jurisdictional issues that would prohibit
the implementation of this interstate intraLATA local calling plan.
On April 15, 2003, Mr. Hopson provided Staff with a list of Rock Creek customer
names, addresses and phone numbers. He had personally contacted each customer and provided
- Staffwith the result of his own personal survey. He asked each of the customers if they would
be willing to pay an additional $4.95 per month to have local calling into Spokane. His results
showed that nine out of nine (100%) said "yes." Staff contacted each of the customers and did a
follow up telephone survey to confirm Mr. Hopson s fmdings. Staffwas only able to reach eight
out of the nine customers on Mr. Hopson s list. All eight commented that they "absolutely
DECISION MEMORANDUM - 2-July 10, 2003
needed it" and would be "delighted" if they could call Spokane toll free. The ninth person was
not at home when I called, however, his son voted "yes" for him. All of the customers were
more than willing to pay the additional charge of $4.95 per month and indicated to Staff that they
did all of their shopping in Spokane as it w:as too far to drive over the mountain pass into
Plummer/ Worley. They also explained that their doctors and prescription medications were
purchased in Spokane and by having toll free calling, it would be a financial benefit.
On April 16, 2003, Staff contacted the Federal Communications Comnllssion and asked
what, if any, action would be required to implement a one way interstate intniLAT A toll free
calling area from the Rock Creek exchange into Spokane, Washington. The response that Staff
received (which is attached for your convenience) was that the provision of interstate
intraLATA expanded local calling service between Idaho and Washingt?n would not need to be
approved by the FCC. However, this is subject to Verizon filing appropriate interstate regulatory
filings with the FCC. Essentially, because it is a one way interstate, intraLATA.. calling plan, and
the Company agrees to implement it for its customers, the Idaho Commission has the authority to
grant it.
DISCUSSION
Because there are only nine customers involved with this interstate intraLATA local
callipg plan into Spokane, Staff did not request any cost studies as the revenue will be de-
minimus. Currently the residential rate in the Rock Creek exchange is $15.10 per month. With
the rate increase of$4.95 the new rate will be $20.05 and will afford the customers a local
calling plan that they have wanted for more than ten years. The current business rate is $24.35
per month and will increase to $40.65 per month. There is only one business customer in the
Rock Creek exchange, Mr. Hopson, who has shown that he is more than willing to pay this rate
for the opportunity to call Spokane toll free and thereby eliminate the increased expense of
paying inte!state rates for his FX line.
The customers, Company and Staff have worked very hard to resolve this issue
. informally as well as addressing the jurisdictional and FCC issues. Staff believes that the Rock
Creek exchange customers will receive a great benefit with the implementation of this calling
plan, which will offset the rate increase requested by the Company. Moreover, this rate increase
will be for V erizon' s Community Plus Service and does not affect the other two calling plans
(Basic Calling Service and Community Calling Service) offered by the Company, therefore
DECISION MEMORANDUM - 3 -July 10, 2003
sho~ld a customer wish to not have the Spokane calling area they can choose a less expensive
more limited, calling plan.
STAFF RECOMMENDATION
Staff recommends that the Commission grant the interstate, intraLA T A local calling plan
into Spokane, Washington for the Rock Creek exchange customers along with the rate increase
requested by the Company. The rate increase for Community Plus Service will be as follows:
SERVICE CURRENT NEW RATE
Residential One-Party $15.$20.
Business One-Party 24.40.
Business Multi-Line 27.35 45.
Central Office Located Trunk 20.38.
CentrNet CustoPAK 40.58.
COMMISSION DECISION
Does the Commission wish to approve the local calling plan with the proposed rate
increase to become effective August 29, 2003?
ulchaIllDECISION MEMOSNenzon 03-12 Reck Creek LCP
DECISION MEMORANDUM - 4-July 10, 2003
Carolee Hall
From:
Sent:
To:
Subject:
Dennis Johnson (DCJOHNSO~fcc.gov1
Wednesday, April 23, 2003 8:57 AM
Carolee Hall
Expanded local calling
Ms. Hall,
Thank you for your question regarding the provision of interstate, intrah~TA expanded
local calling service between Idaho and Washington. Because the service you described isint~aLATA, ~he fCC would not need to approve the service for the purposes of expanding the
calling region. This statement is, however, without prejudice to any interstate tarriffsor other appropriate regulatory filings that must be filed with the 'FCC. If you have any
further questions please call me at 202.418.0809. Thank you,DeI"!-nis Johnson
Attorney
Federal Communications Commission