20100812final_order_no_32046.pdf

Office of the Secretary
Service Date
August 12 2010
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
vs.
CASE NO. VZN-IO-
JOHN BREWSTER,
Complainant,
VERIZON NORTHWEST, INc.,
ORDER NO. 32046
Respondent.
In December 2009, John Brewster filed an informal complaint with Commission Staff
against Verizon Northwest Inc.l Mr. Brewster argued that Verizon s line extension policy of
allowing only its approved contractor to install and splice new service cable was unreasonable.
Attempts to resolve his informal complaint were unsuccessful and Mr. Brewster filed a "formal
complaint" on February 3 , 2010. On April 8, 2010, the Commission issued a summons and the
Company filed its answer on April 29, 2010. The Company requested dismissal of the complaint
for failure to state a claim and lack of jurisdiction. For reasons set out in greater detail below, the
Commission grants Verizon' s Motion to Dismiss.
MR. BREWSTER'S COMPLAINT
Mr. Brewster is seeking a line extension for telecommunications needs at his home
outside of Harrison, Idaho. He and Verizon have agreed on a route and configuration for the line
extension, which will extend more than 7 900 feet. Mr. Brewster hired a contractor to dig a trench
and place conduit in the trench for the service line. The remaining work consists of placing
pedestal terminals, pulling copper wire through the newly installed conduit, and wire splicing.
Under Verizon s tariffs (price lists), the Company is to perform these latter three services. The
Company s most recent quote for completing the remaining work is approximately $38 000. Mr.
Brewster s contractor submitted a bid of $14 387 to complete the same work. Due to the
significant difference in cost, Mr. Brewster would like to utilize his contractor to complete the
work.
I On July 1 2010, while this complaint was still pending, Frontier Communications Corporation acquired control of
Verizon s local and long-distance telephone operations in Idaho.
ORDER NO. 32046
Mr. Brewster maintains that, because of the excessive length of his line extension, his
situation fits within the Company s "unusual conditions" clause in its price list. The price list
provides that "a departure from the rate and special conditions specified in this schedule may be
made on behalf of the Company when a line extension involves unusual or disproportionately
large construction expenditures as compared with the usual types of plant construction.
Complaint, Attch. 1 at p. 5. Mr. Brewster argues that this language should permit him to use his
own contractor. In the alternative, Mr. Brewster asks that the Commission Staff review the cost
estimates of both parties and "help determine an equitable cost estimate" for completion of the line
extension.
VERIZON'S RESPONSE
The Company acknowledges that in order for Mr. Brewster to receIve
telecommunications services, a line extension of approximately 7 900 feet must be constructed.
The Company admits that it allowed Mr. Brewster to hire his own contractor to trench and place
conduit. However, the Company claims that the trenching and conduit were not placed as
planned
, "
requiring Verizon to expend additional engineering and planning time to re-engineer the
project." Answer at p. 3.
The Company refused to allow Mr. Brewster to complete the work with his own
contractor because such treatment is not authorized by the Company s price list. The Company
also asserts that "(a Jfter line extension is constructed, Verizon is responsible for the
maintenance, repair and future reinforcement of the line extension. . . and must, therefore, ensure
that Verizon s network integrity is maintained in order to protect service to other customers.Id.
The Company denies that Mr. Brewster s circumstances fit within its "unusual conditions
provision because the cost of his project is driven by length, not "rock sawing, right-of-way issues
or easement issues.Id. at p. 4.
The Company asserts that it is complying with the terms of its price list and remains
ready, willing, and able to construct Mr. Brewster s line extension upon payment of the estimated
costs. The Company, therefore, argues that Mr. Brewster has failed to state a claim and, as a
result, the complaint should be dismissed. The Company further states that the Commission lacks
jurisdiction to adjudicate this complaint, pursuant to Idaho Code ~ 62-605(5), because it relates to
an economic matter.
ORDER NO. 32046
DISCUSSION AND FINDINGS
I. Commission Jurisdiction . At the outset, it is important to note that, pursuant to
Idaho Code ~ ~ 62-610A and 62-616, the Commission has jurisdiction to resolve the complaint
brought by Mr. Brewster against Verizon. Idaho Code ~ 62-616 states in pertinent part
, "
(tJhe
Commission shall have the authority to investigate and resolve complaints made by subscribers to
telecommunication services which are subject to the provisions of this chapter which concern the
quality and availability of local exchange service or whether price and conditions of service are
in conformance with filed tariffs or price lists.
. ..
" (Emphasis added). The Commission finds
that a hearing is not required to decide the issues presented in Mr. Brewster s complaint.
Therefore, the Commission issues its decision based on the written record submitted including the
materials submitted prior to this matter becoming a formal complaint. See IDAP A 31.0 1.0 1.021.
The facts are not in dispute. Mr. Brewster requires a line extension of approximately
900 feet in order to receive telecommunications services at his home in Harrison, Idaho. Mr.
Brewster was permitted to use his own contractor for trenching and placing conduit. However
before he can receive service, Mr. Brewster must have pedestal terminals installed and copper wire
run through the conduit. The Company s most recent quote for completion of the project is
approximately $38 000? Mr. Brewster s private contractor submitted a bid of $14 387 for the
same work. The Company will not allow Mr. Brewster to use his contractor to complete the work.
2. Use of Private Contractor.Verizon s line extension price list reads, in pertinent
part:
All line extensions will be owned and maintained by the Company. The
applicant may furnish and place the required supporting structure, for their
entire service drop only, in lieu of applicable service drop charges. All
supporting structures will be placed in accordance with construction
specifications of the Company, however in all instances the ownership of the
structures shall be entirely vested in the Company.
I.P.C. Price List No.Section 4, Sheet 66 (Line Extension Charges, December 1 2005). The
actions and position of the Company are consistent with its price list. The Company permitted
Mr. Brewster to place his own trench and conduit (although the Company noted that the work was
not done properly), thereby mitigating some of the costs that might have otherwise been assessed
2 The Commission makes no finding regarding the veracity of the latest bid by the Company, e., the bid does not
appear to be offset by the $3 000 customer allowance. Price List No., Section 4, Sheet 68.
ORDER NO. 32046
for the project. However, the price list does not allow a customer to place his own pedestal
terminals, or to pull or splice the service wire. The Company s justification for its position is
sound. If Verizon is responsible for maintenance, repair and future reinforcement of the line
extension then it is reasonable for the Company to want to maintain control of how the wire is
placed, spliced, connected, etc. While the Commission understands Mr. Brewster s desire to use
his own contractor in an effort to avoid the more costly alternative, we cannot find that the
Company s position is unreasonable.
3. Unusual Conditions. The Commission has addressed what amounts to an "unusual
condition" in numerous prior cases. An unusual condition is a construction condition not normally
encountered that imposes additional, project-specific, costs.IPC-08-, Order No. 30682.
Unusual conditions have also been found when a service location is so isolated or inaccessible that
the costs of construction become unreasonably excessive. U-I000-I00 , Order No. 22027. The
Commission has specifically declined to classify length as an unusual condition.3 Mr. Brewster
circumstances do not amount to unusual conditions because the project estimate is entirely the
result of length of the line extension, not terrain or land features that would increase the costs of
the extension. Therefore, the "unusual conditions" clause ofVerizon s price list is inapplicable.
It is the Commission s understanding that Verizon utilizes a single-source contractor
for its line extension projects. Utilizing a single-source contractor does not allow for competitive
costs and charges. Such a policy may explain the large disparity between the Company s quote to
finish Mr. Brewster s project and Mr. Brewster s contractor s bid. A competitive bidding process
would better acknowledge fluctuating costs in our current, weakened economic climate, and still
allow the Company to control the quality of the work performed. The Company could also qualify
multiple contractors and maintain an approved contractors list so that customers may choose a
contractor from a Company-approved list.See UWI-96-, Order No. 26898.These
alternatives would promote price competition and provide customers with a choice of contractors
that the Company deems qualified to do the work.Therefore, the Commission encourages
Verizon to explore the use of a competitive bidding process and/or an approved contractors list for
its line extension projects and other similar work. The Commission finds these alternatives to be a
3 "We also reject both the Staff and the Company s alternative positions that line extensions in excess of a certain
footage could be classified as unusual or special construction." U-l 002-58, Order No. 20974.
ORDER NO. 32046
more equitable solution for customers than the Company s current policy of utilizing a single-
source contractor.
In summary, the Commission has jurisdiction to decide this complaint and that
Verizon s price list provides that the Company shall pull and splice its own cable. In addition
unusual conditions" does not apply to the facts of this case. Consequently, the Commission
grants V erizon' s Motion to Dismiss.
ORDER
IT IS HEREBY ORDERED that Verizon s Motion to Dismiss is granted.
Consequently, John Brewster s complaint against Verizon is denied.
THIS IS A FINAL ORDER. Any person interested in this Order may petition for
reconsideration within twenty-one (21) days of the service date of this Order. Within seven (7)
days after any person has petitioned for reconsideration, any other person may cross-petition for
reconsideration. See Idaho Code ~ 61-619.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this
day of August 2010.
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MARSHA H. SMITH, COMMISSIONER
MACK A. REDFO
~~,
ATTEST:
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Commission Secretary
O:VZN-IO-
ORDER NO. 32046