20040326Application.pdf

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McDEVITT & MILLER, LLP
Dean J. (Joe) Miller (ISB #1968)
420 West Bannock Street
O. Box 2564-83701
Boise, Idaho 83702
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BRIGGS AND MORGAN, P.
Mark 1. Ayotte (MN #166315)
2200 First National Bank Building
332 Minnesota Street
Saint Paul, Minnesota 55101
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ATTORNEYS FOR WWC HOLDING CO., INC. d/b/a CELLULARONE(ID
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
In the Matter of the Application of WWC )
HOLDING CO., INc. d/b/a CELLULAR- )
ONE(ID Seeking Designation as an Eligible
Telecommunications Carrier that may receive
Federal Universal Service Support
Case No. Wrr---r- (1,/-,:/ J
APPLICATION OF
WESTERN WIRELESS
Introduction
WWC Holding Co., Inc. d/b/a CellularOne(ID ("Western Wireless" or the
Company ), pursuant to 47 u.S.C. ~ 214(e)(2) of the Communications Act of 1934, as amended
(the "Act"), hereby submits this Application for Designation ("Application ) as a federal eligible
telecommunications carrier ("ETC") in the State of Idaho.
Western Wireless does not by this Application seek designation as an eligible
telecommunication carrier for purposes of receiving support from the Idaho Universal Service
Fund pursuant to Idaho Code ~ 62-610 et. seq.
APPLICATION OF WESTERN WIRELESS
Western Wireless licensed provide and provides wireless
telecommunications services in certain designated areas (the "Designated Areas ) of Idaho, as
identified on Attachment 1 and Attachment 2. The Designated Areas identified on Attachment 1
are the rural telephone company study areas and non-rural telephone company wire centers that
Western Wireless serves in their entirety. The Designated Areas identified on Attachment 2 are
the rural telephone company wire centers where Western Wireless does not serve the entire study
area, To effectuate the Idaho Public Utilities Commission s ("Commission ) designation of
Western Wireless in the rural telephone company wire centers identified on Attachment 2, the
Commission must redefine the service area for the areas served by those rural telephone
companies, consistent with 47 C.R. ~ 54.207,
As demonstrated herein, Western Wireless meets all of the requirements for
designation as an ETC in each of these Designated Areas and respectfully requests that the
Commission promptly grant this Application. Western Wireless requests immediate designation
in the rural study areas and non-rural wire centers identified on Attachment 1 , and requests
conditional designation in the wire centers identified on Attachment 2, with designation effective
upon the redefinition of the service area on a wire center basis under the procedures identified in
47 C.R. ~ 54.207.
II.Back~round on Western Wireless
Since 1992, Western Wireless, through its subsidiaries (including WWC Holding
Co" Inc.), has provided telecommunications services to rural communities in the western United
States. Western Wireless currently provides commercial mobile radio services ("CMRS") under
the "CellularOne" national brand name to more than 1,2 million subscribers in 19 States west of
the Mississippi River.The Company owns cellular licenses covering approximately thirty
percent (30%) of the land and two percent (2%) of the population of the continental United
APPLICATION OF WESTERN WIRELESS -
States. In terms of population served, however, Western Wireless' markets cover approximately
nine million people, making the Company the 22nd largest wireless carrier in the country. The
vast majority of the Company s service area has a population density of less than 11 people per
square mile.As such, Western Wireless is uniquely situated to provide state-of-the-art
telecommunications service to rural consumers,
The FCC has regulatory jurisdiction over Western Wireless' provision of CMRS
in all states in which it provides service. The services provided by Western Wireless in Idaho
include analog and digital mobile telephony, data/facsimile, 911 , voice mail, and other features
and services.
III.Statement of Facts Supportin~ Application
Western Wireless Meets All the Requirements for Designation as an Eligible
Telecommunications Carrier
Under 47 U.C. ~ 214(e)(2), the Commission has jurisdiction and authority to
designate Western Wireless as an ETC in the Designated Areas. The requirements for ETC
designation are set forth in 47 U.c. ~ 214(e)(1)-(2) and 47 C.R. ~ 54.101. As set forth
below, Western Wireless: (1) is a common carrier; (2) provides the supported services; and (3)
will meet all service and advertising obligations of an ETc. In addition, in areas served by rural
telephone companies, Western Wireless' ETC designation serves the public interest.
Western Wireless is a Common Carrier
As a CMRS provider, Western Wireless is a "common carrier" under federal law
as required by 47 u.S.C. ~ 214(e)(1). Western Wireless will provide the supported services
using its own facilities, or a combination of its own facilities and leased facilities.
APPLICATION OF WESTERN WIRELESS-
Western Wireless Offers All Required Services and Functionalities
The second requirement for ETC designation is that the applicant provide the
services or functionalities set forth in 47 C.R. ~ 54.101(a)(1)-(9) throughout the requested
designated service areas. 47 U,C. ~ 214(e)(1)(A). Western Wireless currently provides the
services and functionalities identified by the FCC in 47 C.F ,R. ~ 54.10 1 (a). In its Universal
Service Order implementing Sections 214(e) and 254, the FCC identified the specific services
that a carrier must provide to be designated as an ETC and receive universal service support.
the Matter of Federal-State Joint Board on Universal Service CC Docket No. 96-, Report and
Order, FCC 97-157 (reI. May 8, 1997) (" Universal Service Order
).
The required services are
as follows:
Supported Service Does Western Wireless currently
provide the service or function
1. V oice-grade access to the public switched
network
2. Local Usage
3. Dual tone multi-frequency ("DTMF") signaling
or its functional equivalent
4. Single-party service or its functional equivalent
5. Access to emergency services
6. Access to operator services
7. Access to interexchange service
8. Access to directory assistance9. Toll blocking for qualifying Lifeline customers
10,Western Wireless currently provides the nine supported services set forth in 47
c.F.R. ~ 54.101(a)(1)-(9) over its existing network infrastructure in Idaho as follows:
(a) Voice-grade access to the public switched telephone network.Voice-
grade access means the ability to make and receive phone calls within a voice frequency
range of between 300 and 3000 Hertz, a bandwidth of approximately 2700 Hertz. See In
the Matter of Federal State Joint Board on Universal Service CC Docket No. 96-
Fourth Order on Reconsideration, FCC 97-420, ~~ 15-16 (reI. Dec. 30, 1997). Through its
interconnection arrangements with local telephone companies, including Qwest, all Idaho
APPLICATION OF WESTERN WIRELESS--4
customers of Western Wireless are able to make and receive calls on the public switched
network within the prescribed frequency range.
(b) Local usage. Western Wireless provides its customers with an amount of
local usage, free of charge, as required by 47 c.F.R. ~ 54.101(a)(2). Unlimited local
usage is not required of any ETC. In the Matter of Federal-State Joint Board on
Universal Service CC Docket 96-, Order and Order on Reconsideration, FCC 03-170
(reI. July 14 2003) July 2003 Order
).
Western Wireless will include local usage in all
of its service offerings, and intends to offer unlimited local usage as part of at least one of
its service offerings. Western Wireless also will comply with any specific local usage
requirements adopted by the FCC in the future and required of federal ETCs.
(c) DTMF signaling, or its functional equivalent. DTMF is a method of
signaling that facilitates the transportation of call set-up and call detail information.
Universal Service Order ~ 71. The FCC recognized that "wireless carriers use out-of-
band digital signaling mechanisms
....
(IJt is appropriate to support out-of-band
signaling mechanisms as an alternative to DTMF signaling.Id. Western Wireless
currently uses out-of-band digital signaling and in-band multi-frequency signaling that is
functionally equivalent to DTMF signaling,
(d) Single-party service or its functional equivalent
. "
Single party service
means that only one party will be served by each subscriber loop or access line, in
contrast to a multi-party line. A CMRS provider meets the requirement when it offers a
dedicated message path for the length of a user s particular transmission. 47 C.R. ~
54.101(a)(4). Western Wireless provides a dedicated message path for the length of all
customer calls.
(e) Access to emergency services. The fifth supported service is the ability to
reach the appropriate public safety answering point ("PSAP") by dialing "911." 47
R. ~ 54.101(a)(5); Universal Service Order ~ 72, The FCC also requires that a
carrier must provide access to enhanced 911 , or "E911 " which includes the capability of
providing both automatic numbering information ("ANI") and automatic location
information ("ALI"), when the PSAP submits a compliant request to the carrier. To
qualify as a compliant Phase I E911 request under the FCC's rules, the PSAP must "
capable of receiving and utilizing the data elements associated with the service, and a
mechanism for recovering the (PSAP'SJ costs of the enhanced 911 service (must be J in
place," 47 C.R. ~ 20.18G), Western Wireless currently provides all of its customers
with access to emergency services by dialing 911 and stands ready to provide E911
service to its customers once a PSAP submits a compliant request for E911 service.
Western Wireless has not received any requests for either Phase I or Phase II E911
service in Idaho. The Company will work with PSAPs within its designated service areas
to make E911 service available according to federal requirements.
(f) Access to operator services Access to operator services means any
automatic or live assistance provided to a consumer to arrange for the billing or
completion, or both, of a telephone call. 47 C.R. ~ 54.101(a)(6). Western Wireless
meets this requirement by providing all of its customers with access to operator services
APPLICATION OF WESTERN WIRELESS-
provided by either the Company or other entities (e.
g.,
LECs, interexchange carriers
IXCs ), etc.
(g)
Access to interexchange service. As explained by the FCC, an ETC must
offer consumers access to interexchange service for the purposes of making and receiving
toll or interexchange calls. 47 c.F.R, ~ 54.101(a)(7); Universal Service Order ~ 78; see
also 47 u.S.C. ~ 332(c)(8). Equal access to interexchange service the ability of a
customer to access a presubscribed long distance carrier by dialing 1 +number, is not
required. 47 u.S.C. ~ 332(c)(8); Universal Service Order ~ 78; see July 2003 Order
~~ 14-, 33. Western Wireless presently meets this requirement by providing all of its
customers with the ability to make and receive interexchange or toll calls through direct
interconnection arrangements the Company has with several IXCs. Additionally,
customers are able to reach their IXC of choice by dialing the appropriate access code.
Consequently, Western Wireless satisfies this service requirement.
(h) Access to directory assistance
. "
Access to directory assistance" means the
ability to place a call directly to directory assistance. 47 c.F.R. ~ 54.101(a)(8). Western
Wireless meets this requirement by providing all of its customers with access to directory
assistance by dialing "411" or 555-1212,
(i) Toll limitation for qualifying low income consumers, An ETC must offer
toll limitation" services to qualifying Lifeline customers at no charge, 47 c.F.
~ 54.101(a)(9), "Toll limitation" is either "toll blocking" or "toll control" if the carrier
cannot provide both, or both "toll blocking" and "toll control" if the carrier can provide
both. 47 C.F ,R. ~ 54.400( d). Western Wireless is not currently capable of providing toll
control, but does offer toll blocking services for lifeline customers in States where it has
been designated as an ETC. Western Wireless will utilize toll blocking technology to
provide the service to its Lifeline customers, at no charge, in the Designated Areas in
Idaho, as required by law.
Western Wireless Will Advertise the Availability of Supported
Services
11.The third requirement for ETC designation is that the applicant advertise the
availability of the supported services and charges therefor using media of general distribution,
47 u.S.C. ~ 214(e)(1)(B). The Company currently offers and advertises the federally supported
services throughout its requested designated service areas, through several media, including
newspaper, television, radio, and billboard advertising. Western Wireless also maintains various
retail store locations throughout its authorized service areas, which provide an additional source
APPLICATION OF WESTERN WIRELESS -
of advertising. Once designated, Western Wireless will advertise the availability of and charges
for its universal service offerings through media of general distribution.
Western Wireless Requests Designation Throughout Each of the Designated
Areas
12.An applicant for ETC designation may be designated in an area served by a non-
rural telephone company for a service area determined by the Commission.47 U.C. ~
214(e)(5), For areas served by a rural telephone company, Section 214(e)(5) of the Act provides
that the ETCs designated service area shall be the the rural telephone company s study area, A
rural telephone company s "study area" is generally defined as all of the company s existing
certificated exchange area in a given state. Universal Service Order ~ 172, n, 434. However
the FCC's rules recognize that the study area is subject to redefinition if the FCC and the
Commission establish a different service area in accordance with 47 C.R. ~ 54.207(c)-(d).
13.Western Wireless is currently licensed to provide and provides signal coverage
throughout the Designated Areas and will offer and advertise its service offerings throughout
these areas. Western Wireless serves the entire study area of the rural telephone company
identified on Attachment 1 , and thus satisfies Section 214(e)(5)'s service area requirement as to
that service area.For this rural telephone company study areas, as well as the non-rural
telephone company service area identified on Attachment 1 , Western Wireless seeks immediate
ETC designation.
14,The study areas of the rural telephone companies identified on Attachment 2
not correspond identically with Western Wireless' licensed coverage area or existing signal
coverage in Idaho, As a result, it is necessary in this proceeding for the Commission to redefine
the service area for these areas from the study area to the wire center level, pursuant to 47 C.
~ 54.207, to enable Western Wireless to meet the ETC requirements under 47 U.c. ~ 214(e).
APPLICATION OF WESTERN WIRELESS-
Western Wireless' request for ETC designation in the wire centers on Attachment 2 is subject to
the redefinition of the service area for purposes of Western Wireless' designation in the areas
served by the companies identified.
15,The Act and the FCC's regulations require the FCC and the State to act in concert
to develop an alternative service area for an area served by a rural telephone company, The sole
requirement in establishing a service area other than the study area is that the FCC and the State
commission each give full consideration to the Joint Board's recommendations and explain their
rationale for reaching a different conclusion, 47 U.C, ~ 214(e)(5); 47 C.R. ~ 54.207(b);
Virginia Cellular, LLC Petition for Designation as an Eligible Telecommunications Carrier In
the Commonwealth of Virginia CC Docket No. 96-Memorandum Opinion and Order FCC
03-338, ~ 41 (reI. Jan. 22, 2004) Virginia Cellular As explained more fully below
redefining the service area standard for certain rural telephone company service areas in this
proceeding is fully consistent with the Joint Board's recommendations,
Western Wireless Should be Designated as an Additional ETC in Areas
Served by Qwest
16.Western Wireless requests immediate designation in the areas served by Qwest, a
non-rural telephone company. When designating an additional ETC in areas served by a non-
rural telephone company, "a State commission shall upon its own motion or upon request
designate a common carrier that meets the requirements of paragraph (1) as an eligible
telecommunications carrier..,47 US.C. ~ 214(e)(2) (emphasis added).As noted above
Western Wireless meets the requirements to be designated as an ETC. Western Wireless is a
common carrier, provides the required supported services, and will meet all service and
advertising obligations of an ETc.Under the Act, there are no further requirements for
APPLICATION OF WESTERN WIRELESS -
designation in non-rural areas, Therefore, Western Wireless should be designated as an ETC in
the areas served by Qwest.
Designation of Western Wireless as an ETC for the Designated Areas in the
State of Idaho Would Serve the Public Interest
17.For areas served by rural telephone companies , the Commission must find that
designation serves the public interest in accordance with 47 U.C, ~ 214(e)(2), Designation of
Western Wireless as an ETC in its Designated Areas will serve the public interest.
18.The public interest determination required under Section 214( e) of the Act
depends on whether the designation of the additional ETC will promote competition, and if so
whether consumers will ultimately realize benefits related to competition and the new services
provided,The public interest determination should consider whether the benefits of an
additional ETC outweigh any potential harm, Virginia Cellular ~ 28. The express purposes of
the Act in this regard are as follows: "To promote competition and reduce regulation in order to
secure lower prices and higher quality services for American telecommunications consumers and
encourage the rapid deployment of new telecommunications technologies," Pub. L. No.1 04-
104, 110 Stat. 56 (1996) (emphasis added).
19.Competition in the telecommunications industry is, as a general matter, in the
public interest, and the hallmark of a competitive marketplace is the maximization of consumer
choice. It is also clear that the public interest is served where there is a reasonable expectation
that competition may have beneficial impacts for consumers. As it applies to the designation of
an additional ETC in an area served by a rural telephone company, the public interest necessarily
must focus on the benefits of competition to the rural consumer.
20.The Commission must also apply the public interest factor in a way that advances
universal service as contemplated by the Act. Congress gave the FCC responsibility to create
APPLICATION OF WESTERN WIRELESS -
rules and policies "for the preservation and advancement of universal service," 47 US.
~ 254(b). States must respect and defer to those FCC determinations, States cannot use a public
interest standard to affect a result contrary to FCC directives. The FCC, for example, has
directed that a State cannot deny an application because a CMRS provider may not meet "the
regulatory requirements that govern ILECs, including privacy, marketing, service provisioning,
and service quality requirements, as well as carrier oflast resort (COLR) obligations.Universal
Service Order ~ 142. The Commission must always remain consistent with the Act and FCC
directives as it makes the public interest determination under Section 214( e )(2).
Granting ETC Designation Will Facilitate Competition to the Benefit
of Consumers
21.The benefits of competition are presumed - increased competition can be
expected to lead to better service and the provision of new, innovative services, In the Matter of
Western Wireless Corp. Petition for Designation as an Eligible Telecommunications Carrier in
the State of Wyoming, CC Docket No. 96-, Memorandum Opinion and Order, DA 00-2896
~~ 16-22 (reI. Dec. 26 2000) Wyoming Order
22.Granting ETC status to Western Wireless will recognIze the importance of
allowing rural consumers a choice of providers for their telecommunications needs. Consumers
should be able to choose services based on their own needs, and not just the service of the
incumbent LEC. When the Commission designates a competing carrier as an additional ETC
rural consumers choose their service provider on the basis of the most advantageous pricing,
services, service quality, customer service, and service availability.And because Western
Wireless' network supports the provisions of data services , customers will be able to combine
basic universal services with advanced services if they so desire. The benefits of increased
competitive choice for consumers are in the public interest. Virginia Cellular ~ 29,
APPLICATION OF WESTERN WIRELESS -
23,Even many rural telephone companies recognize the public interest benefits of
wireless services. The South Dakota Telecommunications Association ("SDTA") recently stated
that:
As consumers come to expect greater mobility, it will be necessary for the
traditional wireline telephone carriers to incorporate wireless into their service
offering. In rural America, this mobility has greater significance, since everyday
life often requires traveling over great distances. Moreover, accidents, vehicle
breakdowns and medical emergencies have potentially more dire consequences in
rural areas, if help is not summoned immediately. Effective and affordable
wireless communications can greatly mitigate the reduced availability of
emergency services in such area. In addition, fixed and mobile wireless offers the
potential to bring broadband data/internet access to rural communities more
quickly and less expensively than traditional wireline technologies.
24,Having this choice is important to rural consumers because Western Wireless
universal service offerings will provide benefits not otherwise available from the landline LECs.
For example, current service offerings by incumbent LECs have restricted local calling areas and
are bound by the limitations of landline technology. Western Wireless provides an expanded
local calling area, which is of great benefit to rural consumers who otherwise have to pay toll
charges to reach local government offices, health care providers, businesses or family outside of
a restricted landline calling area. See Universal Service Order ~ 114. Western Wireless' service
also provides the benefits of mobility, which has great appeal to many rural consumers. Virginia
Cellular ~ 29. Western Wireless provides innovative service offerings that will be tailored to
consumers' needs.
25.In addition to increased choices, Idaho s rural consumers can also expect lower
rates and better service resulting from competition in the marketplace,Western Wireless
See In the Matter of Facilitating the Provision of Spectrum-Based Services to Rural Areas and
Promoting Opportunities for Rural Telephone Companies to Provide Spectrum-Based Services
WT Docket No. 02-381 Comments of South Dakota Telecommunications Association at p. 2
(filed Feb. 3, 2003).
APPLICATION OF WESTERN WIRELESS -
provides 24-hour customer service, technical and operational support, which is more responsive
than the support currently available from many LECs,
26.Western Wireless is committed to providing high service quality to its customers
consistent with the public interest. Specifically, Western Wireless has adopted and complies
with the Cellular Telecommunications and Internet Association ("CTIA") Consumer Code for
Wireless Service, which sets forth certain principles, disclosures and practices for the provision
of wireless service to the benefit of consumers.
27.The FCC has confirmed that competition and universal serVIce are to be
accomplished together, and that rural consumers are entitled to achieve universal service goals
through the benefits of competition:
Commenters who express concern about the principle of competitive neutrality
contend that Congress recognized that, in certain rural areas, competition may not
always serve the public interest and that promoting competition in these areas
must be considered, if at all, secondary to the advancement of universal service.
We believe these commenters present a false choice between competition and
universal service.A principal purpose of section 254 is to create mechanisms that
will sustain universal service as competition emerges,We expect that applying
the policy of competitive neutrality will promote emerging technologies that, over
time, may provide competitive alternatives in rural, insular, and high cost areas
and thereby benefit rural consumers For this reason, we reject assertions that
competitive neutrality has no application in rural areas or is otherwise inconsistent
with section 254,
Universal Service Order ~ 50 (emphasis added).
28.The FCC and other State commissions have considered and rejected speculative
claims that competition will hurt rural consumers. The FCC has rejected arguments that the
designation of an additional ETC in rural telephone company service areas would reduce
investment in infrastructure, raise local service rates, reduce service quality to consumers, or
result in loss of network efficiency:
We reject the general argument that rural areas are not capable of sustaining
competition for universal service support. We do not believe that it is self-evident
APPLICATION OF WESTERN WIRELESS -
that rural telephone companies cannot survive competition from wireless
providers. Specifically, we find no merit to the contention that designation of an
additional ETC in areas served by rural telephone companies will necessarily
create incentives to reduce investment in infrastructure, raise rates, or reduce
service quality to consumers in rural areas. To the contrary, we believe that
competition may provide incentives to the incumbent to implement new operating
efficiencies, lower prices, and offer better service to its customers,
Wyoming Order, ~ 22. Similar claims were raised in Western Wireless' application for ETC
designation in Minnesota. Faced with claims that rural LECs could not respond to competition
and would go out of business, the Minnesota Public Utilities Commission found it more likely
that competition would "perform its widely recognized function of motivating the incumbents to
find and implement new operating efficiencies, lowering prices and offering better service in the
process.2 The Washington Utilities and Transportation Commission ("WUTC") has similarly
dismissed as "overly speculative" rural LEC concerns that ETC designation would erode
universal service for consumers.
Granting ETC Designation Will Advance Universal Service by the
Provision of New Telecommunications Services to Rural Consumers
29.Further, wireless technology and networks have been rapidly deployed in the past
15 years. This deployment and network expansion must continue if rural consumers will have
full access to this technology in the future. The use of federal universal service support to
provide universal services and extend wireless networks in rural areas in Idaho clearly benefits
the public interest by ensuring these networks will be available to deliver basic and advanced
services to Idaho consumers. In addition, designating Western Wireless as an ETC may allow
In the Matter of Minnesota Cellular Corporation s Petition for Designation as an Eligible
Telecommunications Carrier Docket No. P-5695/M-98-1285 , ~ VIII.C (Oct. 27, 1999).
1n the Matter of the Petition of United States Cellular Corp., et al. for Designation as Eligible
Telecommunications Carriers Third Supplemental Order Granting Petition for Designation as
Eligible Telecommunications Carrier, Docket No, UT-970345, ~ 46 (Jan. 27 , 2000).
APPLICATION OF WESTERN WIRELESS -
consumers who are not currently receiving telephone service of any kind an opportunity to obtain
telephone service for the first time. There is simply no question that the designation of Western
Wireless as an ETC will advance universal service to rural areas consistent with the public
interest.
30.Designation of Western Wireless as an ETC will provide an incentive to the
incumbent LECs in the Designated Areas to improve their existing networks in order to remain
competitive, resulting in improved services to consumers.The benefits - of competition are
presumed - increased competition can be expected to lead to better service and the provision of
new, innovative services. Wyoming Order ~~ 16-22, Western Wireless will provide benefits of
mobility, large local calling areas, and where requested by the PSAP, GPS location assistance for
customers dialing 911.
31.Further, designation of Western Wireless as an ETC will also serve the public
interest because Western Wireless will provide all of the supported services required by the
Commission, will participate in the Lifeline and Link-Up programs as required by the FCC's
Rules, and will otherwise comply with all FCC Rules governing universal service programs
which are designed to ensure that the public interest standards of the Act are achieved. Allowing
Western Wireless access to universal service subsidies will allow Western Wireless to continue
to enhance and expand its network infrastructure to better serve consumers in underserved, high-
cost areas of Idaho, and to compete with other carriers on a level playing field.
No Rural LEC Will Experience Any Significant Adverse Impact from
Western Wireless' ETC Designation to Justify Denying Consumers
the Benefits of Competition
32.The designation of Western Wireless as an ETC in the requested Designated
Areas will not result in any significant adverse impact to any rural telephone company. None of
APPLICATION OF WESTERN WIRELESS -
the areas in which Western Wireless is seeking designation is incapable of supporting an
additional ETC.
33,Under the current federal universal service funding mechanisms, rural telephone
companies will continue to receive funding based on an embedded cost methodology until at
least 2006. This extended transition period - as well as their continued receipt of implicit
subsidies within intrastate access rates - ensures the rural companies can move successfully to
competitive markets.
34.Western Wireless' designation will also ensure the continued affordability of
telecommunications services in rural areas in Idaho. Western Wireless competitively markets a
variety of service offerings, and Western Wireless' service plans are offered to rural customers at
the same rates offered in urban areas.
35.Western Wireless' designation will not adversely burden the federal universal
service fund.
36.Accordingly, the designation of Western Wireless as an ETC will serve the public
interest.
IV.The Commission Should Conditionally Desi~nate Western Wireless as an ETC in
Wire Centers Where it Can Provide Universal Services
37.Section 214( e)( 5) of the Act defines the term " service area" as a geographic area
established by a State commission for the purpose of determining universal service obligations
and support mechanisms. 47 U.C. ~ 214(e)(5). For an area served by a rural LEC, Section
214(e)(5) and 47 c.F.R. ~ 54.207(b) provide that the term "service area" means the rural
telephone company s "study area.
38.Western Wireless' request for ETC designation in the areas of the rural telephone
companies listed on Attachment 2 is subject to the Commission s action to redefine the service
APPLICATION OF WESTERN WIRELESS -
area from the study area to the wire center level. As stated above, the Act and the FCC's rules
provide that the service area of a rural telephone company shall be the "study area" of the rural
telephone company, until and unless the FCC and the State commission both agree to redefine
this standard.47 U.C. ~ 214(e)(5); 47 C.R. ~ 54.207(b).Federal rules provide the
mechanism by which the FCC will process a request by a State commission for redefinition of a
service area standard. 47 C.R. ~ 54.207. The decision to redefine the service area must be
made after taking into account recommendations of the Federal-State Joint Board. Id.
Redefining the Service Area Is Consistent With Joint Board Standards
39,The FCC identified three factors initially recommended by the Joint-Board, which
should be considered by the Commission and the FCC when determining the appropriateness of
redefining the service area to the level of the wire center. The first factor is the risk that a
competitor would selectively target service only to the lowest cost areas of the rural ILEC's study
area, a process labeled as "cream-skimming." The FCC noted that if a competitor were required
to serve a rural telephone company s entire study area, the risk of "cream-skimming" would be
reduced because a competitive ETC would be prevented from selectively targeting service only
to the lowest cost exchange of the rural ILEC's study area. Universal Service Order ~ 189. As
the Joint Board explained:
We note that some commenters argue that Congress presumptively retained study
areas as the service area for rural telephone companies in order to minimize
cream skimming" by potential competitors. Potential "cream skimming " is
minimized because competitors, as a condition of eligibility, must provide
services throughout the rural telephone company s study area, Competitors would
thus not be eligible for universal service support if they sought to serve only the
lowest cost portions of a rural telephone company s study area.
In the Matter of Federal-State Joint Board on Universal Service CC Docket 96-, 12 FCC
Rcd. 87, ~ 172 (reI. Nov, 8, 1996) Joint Board Recommendations
APPLICATION OF WESTERN WIRELESS -
40.Second, a State commission and the FCC must consider the regulatory status
enjoyed by rural telephone companies under the Act.The FCC determined that initially
establishing a service area requirement based on the study area of a rural telephone company was
appropriate, at least temporarily, in recognition of the different competitive footing afforded to
smaller rural telephone companies which are exempt from certain of the Act's requirements.
Universal Service Order ~ 189; Virginia Cellular ~ 41. In making its recommendation, the
Joint Board had reasoned:
For example rural telephone companies are initially exempt from the
interconnection, unbundling, and resale requirements of 47 u.S.C, ~ 251(c). The
1996 Act continues this exemption until the relevant state commission finds, inter
alia, that a request of a rural telephone company for interconnection, unbundling,
or resale would not be unduly economically burdensome, would be technically
feasible, and would be consistent with section 254, Moreover, while a state
commission must designate other eligible carriers for non-rural areas, states may
designate additional eligible carriers for areas served by a rural telephone
company only upon a specific finding that such a designation is in the public
interest.
Joint Board Recommendations ~ 173.
41.The third factor to be considered is whether any administrative burdens might
result from the redefinition of the service area standard. A rural telephone company s universal
service support payments are currently based on a rural company s embedded costs determined at
the study area level.Universal Service Order ~ 189. The Joint Board initially expressed
concern that rural telephone companies might have difficulty calculating costs on a less-than-
study area level. The Joint Board stated:
Another reason to retain existing study areas is that it is consistent with our
recommendation that the determination of the costs of providing universal service
by a rural telephone company should be based, at least initially, on the Company
embedded costs. Rural telephone companies currently determine such costs at the
study area level. We conclude, therefore, that it is reasonable to adopt the current
study areas as the service areas for rural telephone companies rather than impose
the administrative burden of requiring rural telephone companies to determine
embedded costs on a basis other than study areas.
APPLICATION OF WESTERN WIRELESS -
Joint Board Recommendations ~ 174.
42.Despite its initial decision to adopt the study area as the service area standard for
a rural telephone company, the FCC has now stated a policy favoring redefinition in instances
where a rural carrier s study area is large and/or non-contiguous. The FCC has expressly urged
State commissions to explore redefinition for purposes of ETC designations when competitive
ETCs and wireless carrier might not be able to provide facilities-based service throughout a rural
company s entire study area. The FCC cautioned that requiring a new entrant to serve a non-
contiguous service area as a prerequisite to ETC eligibility would impose a "serious barrier to
entry, particularly for wireless carriers " and would be "particularly harmful to competition in
rural areas, where wireless carriers could potentially offer service at much lower costs than
traditional wire line service.Universal Service Order ~ 190.
43.Western Wireless requests that the Commission redefine the service areas of the
rural telephone companies listed on Attachment 2 from the study area to the boundaries of the
individual wire centers for purposes of designating Western Wireless as an ETC under 47 u.S,
~ 214( e). The study areas of these rural telephone companies contain multiple wire centers.
all , the study areas of the three rural telephone companies listed on Attachment 2 contain 29
separate wire centers.Redefining the service area into 29 separate service areas based on
individual wire centers for purposes of ETC designations will promote competition by
eliminating a barrier to entry into the universal service market. This approach also would enable
Western Wireless to be designated a federal ETC in the wire centers within its existing licensed
and signal coverage area consistent with the public interest determination of the Commission.
44.The Commission can proceed to redefine the service area to a wire center basis
while appropriately taking into account the three factors noted by the Joint Board and adopted by
the FCC. The first factor, relating to the risk of cream-skimming, is not present. Western
APPLICATION OF WESTERN WIRELESS -
Wireless seeks redefinition of the service area standard to an individual wire center basis so it
can be designated as an ETC in those areas for which it is licensed and has the ability to provide
facilities-based services. Moreover, redefining the service area to the wire center will not result
in any effects of cream-skimming based on a consideration of the relative high cost and low cost
wire centers within the incumbent's study area. Virginia Cellular ~ 42. Redefinition to an
individual wire center basis will also preserve and advance universal service by establishing
designated service areas that are more reflective of the areas actually served, Redefinition
furthers competition and protects the incumbents from selective targeting of specific wire centers
with the lowest cost and highest support, In short, there will be no opportunity for cream-
skimming.
45.The risk of "cream-skimming" has been substantially eliminated by subsequent
FCC action, Under the FCC's existing universal service support mechanisms , a rural telephone
company receives high-cost universal service support based on the average of its embedded costs
throughout the carrier s entire study area. See 47 c.F.R. ~~ 54.301 and 54.303. As a result, a
rural telephone company s support on a per-line basis will be the same throughout its study area
even though the costs of serving customers in that study area may vary widely, This averaging
may create "artificial barriers to competitive entry in the highest-cost areas and artificial entry
incentives in relatively low-cost portions of a rural carrier s study area" because a competitor
may try to serve only the low-cost, high-support areas and ignore the more costly areas to serve,
In the Matter of Federal-State Joint Board on Universal Service CC Docket No. 96-, and
the Matter of Multi-Association Group (MAG) Plan for Regulations of Interstate Services of
Non-Price Cap Incumbent Local Exchange Carriers and Interexchange Carriers CC Docket
No. 00-256, Fourteenth Report and Order, Twenty-Second Order on Reconsideration, and
Further Notice of Proposed Rulemaking in CC Docket No. 96-45 and Report and Order in CC
Docket No. 00-256, FCC 01-157, ~~ 144-164 (rei. May 23, 2001) Fourteenth Report and
Order
APPLICATION OF WESTERN WIRELESS -
46.To minimize the opportunity for such cream-skimming, the FCC offered rural
telephone companies the option to "disaggregate
" -
i.e.target - the federal universal service
support amounts they receive to the higher-cost portions of their study areas. In so doing, rural
carriers were given the opportunity to disaggregate and target support - if they were truly
concerned about cream-skimming - to ensure that a competitive ETC would receive less per-line
support in low-cost areas and, conversely, to ensure that a competitive ETC would only receive
higher per-line support in truly high-cost portions of their study areas. Thus, the risk of cream-
skimming by an ETC applicant seeking designation for less than the study area has been
practically eliminated because the incumbent rural telephone company can utilize the
disaggregation process to target its per-line support to better reflect the actual costs of service
different areas throughout its entire study area. Indeed, Cambridge Telephone Company and
Citizens Telecom Idaho, which make up 13 of the 14 wire centers where Western Wireless seeks
conditional ETC designation, have already filed to disaggregate and target their high-cost
support.Virginia Cellular ~ 35 , n.112. As the FCC noted:
Rural telephone companies
. .
, now have the option of disaggregating and
targeting high-cost support below the study area level so that support will be
distributed in a manner that ensures that the per-line level of support is more
closely associated with the cost of providing service. Therefore, any concern
regarding "cream-skimming" of customers that may arise in designating a service
area that does not encompass the entire study area of the rural telephone company
has been substantially eliminated.
See http://www.universalservice.org/hc/ disaggregation! checklistlidaho .xls.
See In the Matter of Federal-State Joint Board on Universal Service Petitions for
Reconsideration of Western Wireless Corporation Designation as an Eligible
Telecommunications Carrier in the State of Wyoming, CC Docket No. 96-, Order on
Reconsideration, FCC 01-311 , ~ 12 (rei. Oct. 19, 2001), Western Wireless Reconsideration
Petition
APPLICATION OF WESTERN WIRELESS -
47,The second Joint Board factor relating to the special status of rural LECs can also
appropriately be taken into account by redefining the service area to a wire center basis.
Redefinition to an individual wire center basis will not compromise or impair the unique
treatment of these companies as rural telephone companies under Section 251 (f) of the Act.
Consequently, the companies will still retain the statutory exemptions from interconnection
unbundling and resale requirements under 47 U. S. C. ~ 251 (c) even if the service area standard is
redefined for purposes of Western Wireless' ETC designation. Moreover, redefinition will not
affect the total amount of high-cost support that an incumbent rural telephone company will
receive. Virginia Cellular ~ 43.
48.The Act's public interest factor for the designation of an additional ETC in the
service areas of these rural telephone companies under 47 U.c. ~ 214(e)(2) will also remain in
place. The continued existence of the public interest standard was noted by the FCC as
safeguard available to a State commission to support a redefinition request for service areas to
less-than-study area level.Universal Service Order ~ 190. This public interest factor will
remain as an effective check to prevent the designation of an additional competitive ETC who
may seek to target only low cost areas or otherwise pose a detriment to the rural consumers of
the incumbents,Thus, the incumbent LECs would retain their unique status and special
treatment as rural telephone companies under the Act consistent with the Joint Board'
recommendations if the service area standard were redefined to an individual wire center basis.
49.The third and final Joint Board factor relating to the administrative ease
calculating the costs of the rural telephone companies on a less-than-study area level is likewise
not an issue. There are no administrative costs to consider because any federal universal service
support available to a competitive ETC in an area served by one of the rural telephone companies
APPLICATION OF WESTERN WIRELESS -
would be determined based on the per-line support available to the incumbent telephone
company itself. 47 C.R. ~ 54,307(a). This current funding mechanism will remain in place for
at least another three years, when the FCC is expected to make changes to the funding
mechanism for rural telephone companies. Moreover, redefining the service area will not require
any rural telephone company to determine its costs for purposes of universal service support on a
basis other than the study area level. Virginia Cellular ~ 44.
50.Accordingly, the Commission should act to redefine the service area for those
rural telephone companies indicated on Attachment 2 to an individual wire center basis in order
to foster competition and bring new telecommunications services to rural Idaho. Consistent with
the factors articulated by the FCC based on the Joint Board's recommendations, the Commission
should order the redefinition of the service area for the rural telephone companies identified in
Attachment 2 to the wire center boundaries.
Redefinition is Necessary to Promote Competition and Advance Universal
Service
51.The redefinition of the serVIce area is also necessary for the promotion of
competition and the advancement of universal service. The three rural telephone companies are
certificated to provide service in 29 wire centers throughout Idaho. At present, Western Wireless
provides the FCC's supported services to 85% or more of the population in 14 of those wire
centers. Unless the service area standard is redefined, Western Wireless is precluded from being
designated as an ETC in any of the 29 wire centers because Western Wireless cannot serve
throughout the entire study areas, When, as here, the study area of a rural telephone company
stretches across the State, it is practically impossible for Western Wireless or any other facilities-
based carrier to compete. This is not an issue of cream-skimming. It is simply the result of the
practical limits of Western Wireless' authorized service boundaries.
APPLICATION OF WESTERN WIRELESS -
52.The redefinition of the service area from the study area to the individual wire
center level is necessary to promote competition and advance universal service. Redefinition is
in the public interest because it will enable Western Wireless, and other competitors, to bring
new services and new technologies to customers of Idaho s rural telephone companies, who now
have no choice of universal service providers, Unless the Commission establishes a different
definition of the service area for the three companies in this proceeding, those wide-ranging
study areas will pose an impenetrable barrier to entry not only for Western Wireless, but also any
other competitive carrier, especially cellular providers, seeking ETC status, Because competitor
and incumbent service territories are geographically different, it would be nearly impossible for
any other competitive carrier to compete.
53,These large and non-contiguous study areas create a disincentive to competition,
The Washington Utilities and Transportation Commission ("WUTC") appropriately recognized
this type of barrier to entry when it successfully petitioned the FCC to redefine the study areas of
rural LECs in its State. The WUTC noted: "The designation of the service area impacts the ease
with which competition will come to rural areas.... The wider the service area defined by the
state commission, the more daunting the task facing a potential competitor seeking to enter the
market.,,8 The WUTC concluded that smaller service areas for the designation of ETCs in rural
areas will promote competition and speed deregulation. !d. at 9.
54.The FCC has previously determined that redefinition of the service area from the
study area to the individual wire center facilitates local competition by enabling new providers to
Petition for Agreement With Designation of Rural Company Eligible Telecommunications
Carrier Service Areas at the Exchange Level and for Approval of the Use of Disaggregation of
Study Areas for the Purpose of Distributing Portable Federal Universal Service Support
Washington Util. & Transp. Comm , Docket No, 970380, ~ 3 (Aug. 24 1998).
APPLICATION OF WESTERN WIRELESS -
serve relatively small areas.9 The FCC noted: "We find that our concurrence with rural LEC
petitioners' request for designation of their individual exchanges as service areas is warranted in
order to promote competition.Id. The FCC concluded that Washington s "effort to facilitate
local competition justifies (the FCC's) concurrence with the proposed service area designation.
Id.
55.The redefinition of service area from the study area to individual wire centers will
foster competition in Idaho, Redefinition will enable Western Wireless and other carriers to
offer competitive universal service to the customers of these rural telephone companies. This
fostering of competition comports with the goals of the Act and the FCC's directives.
Accordingly, this Commission should order that the service area for the three rural telephone
companies listed on Attachment 2 is redefined from the study area to an individual wire center
basis for ETC designation purposes.
Notices
56.Western Wireless will be represented by, and all pleadings, communications
notices and orders should be served upon:
Dean J. Miller
McDevitt & Miller LLP
420 West Bannock Street
O. Box 2564, Boise-8370l
Boise, Idaho 83702
208-336-6912 (fax)
j oe~mcdevitt - miller ,com
In the Matter of Petition for Agreement With Designation of Rural Company Eligible
Telecommunications Carrier Service Areas and for Approval of the Use of Disaggregation of
Study Areas of the Purpose of Distributing Portable Federal Universal Service Support
Memorandum Opinion and Order, CC Docket No. 96-, DA 99-1844, ~ 8 (rel. Sept. 9, 1999).
APPLICATION OF WESTERN WIRELESS -
Mark 1. Ayotte
Briggs and Morgan, P .
2200 First National Bank Building
St. Paul, Minnesota 55101
651-223-6450 (fax)
mayotte~briggs.com
57.Western Wireless has brought this Application to the attention of parties likely to
be interested in this proceeding by mailing a copy of this Application to the persons listed on the
attached Certificate of Service.
VI.Conclusion
The Act establishes clear, consistent and competitively fair mechanisms for allowing
carriers, including a CMRS provider, to be designated as an ETC for the purpose of federal
universal service support.Western Wireless provides the supported services, satisfies all
applicable requirements, and can and will meet the obligations of an ETC. For rural customers
Western Wireless ' designation as an additional ETC will bring new technology, lower rates , and
better service, and so is clearly in the public interest.
Western Wireless respectfully requests the Commission to follow the directives and
principles of the Act and to grant its Application by issuing an order designating Western
Wireless as an ETC in the rural telephone company study areas and the non-rural wire centers
listed on Attachment 1 pursuant to 47 U.c. ~ 214(e). Western Wireless further requests an
order conditionally designating Western Wireless as an ETC in the wire centers of the rural
telephone companies as set forth in Attachment 2 subject to the Commission redefining the
service areas from the study area to the wire center level for the rural telephone companies
identified, consistent with the purposes of 47 c.F.R. ~ 54.207.
APPLICATION OF WESTERN WIRELESS -
Respectfully submitted
Dated: March Lt;, 2004 WWC HOLDING CO.
One(ID
~~~
INc. d/b/a Cellular
McDEVITT & MILLER, LLP
Dean J. (Joe) Miller
420 West Bannock Street
O. Box 2564-83701
Boise, Idaho 83702
Phone [phone]
Facsimile [phone]
BRIGGS AND MORGAN, P.
Mark J. Ayotte (MN # 166315)
2200 First National Bank Building
332 Minnesota Street
Saint Paul, Minnesota 55101
Phone [phone]
Facsimile [phone]
COUNSEL FOR APPLICANT WWC
HOLDING CO., INc. d/b/a CELLULAR
ONEQl)
APPLI CATION OF WESTERN WIRELES S -
STATE OF WASIDNGTON)
: ss
County of King
, James H. Blundell, being first duly sworn, deposes and says that he is the
Executive Director of External Affairs, Western Wireless Corporation, the corporate
parent of WWC Holding Co., Inc., the Applicant herein; that he has read the foregoing
Application and knows the contents thereof and that the same are true to the best of his
knowledge and belief,
if
'//
fJ!ZfL
ctI..--
SUBSCRIBED AND SWORN to before me thisdtR day of March, 2004
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APPLICATION
ATTACHMENT 1
RURAL TELEPHONE COMPANY STUDY AREA FOR WHICH WESTERN
WIRELESS SEEKS ETC IMMEDIATE DESIGNATION
Com Name
Farmers Mutual Telephone Co.
Stud Area Code
472221
NON-RURAL TELEPHONE COMPANY WIRE CENTERS FOR WHICH
WESTERN WIRELESS SEEKS ETC IMMEDIATE DESIGNATION
Company Name Wire Center Locality Wire Center Code
Qwest Corporation Cottonwood CTWDIDOI
Emmett EMMTIDMA
Grangeville GA VLIDOI
Kamiah KAMHIDO 1
Kooskia KOSKIDO I
New Plymouth NPMOIDMA
Weiser WESRIDMA
1612069vl
A TT A CHMENT 2
RURAL TELEPHONE COMPANY WIRE CENTERS FOR WHICH
WESTERN WIRELESS SEEKS CONDITIONAL ETC DESIGNATION SUBJECT TO
REDEFINITION OF THE SERVICE AREA
Company Name Wire Center Locality Wire Center Code
Cambridge Telephone Co.Cambridge CMBRIDXC
Council CNCLIDXC
Cuprum CPRMIDXC
Indian Valley INVYIDXC
Citizens Telecom Idaho - Frontier Cascade
Comm. of Idaho CSCDIDXC
Donnelly DNL YIDXC
Garden Valley GRVYIDXC
Horseshoe Bend HRBNIDXC
McCall MCCLIDXC
New Meadows NWMDIDXC
Riggins RGNSIDXC
Sweet SWETIDXC
White Bird WHBRIDXX
Midvale Telephone. Exchange, Inc.Midvale MDV AIDXC
CERTIFICATE OF SERVICE
I certify that the original and seven copies of the foregoing Application of
Western Wireless were filed on March4'e-, 2004 with:
Jean Jewell, Secretary
Idaho Public Utilities Commission
O. Box 83720
Boise, Idaho 83720-0074
and true and correct copies were forwarded on Marchzy,., 2004, via the
methodes) indicated below, to the following:
Conley Ward
GIVENS PURSLEY, LLP
O. Box 2720
Boise, Idaho 83701-2720
Attorneys for Idaho Telephone
Association;
Morgan W. Richards, Jr.
MoFF AT THOMAS
101 So. Capitol Blvd., 10th Floor
O. Box 829
Boise, Idaho 83701-0829
Attorneys for Citizens Telcom
Mary S. Hobson
STOEL RIVES, LLP
101 S. Capitol Blvd., Suite 1900
Boise, Idaho 83702-5958
Attorneys for Qwest Communications
Allan T. Thoms
VERIZON
17933 NW Evergreen Parkway
O. Box 1100
Beaverton, Oregon 97075
~qd!~.
1611475v7
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