20050617Comments.pdf

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KIRA DALE PFISTERER
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 6571
!LED
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2005 JUN 1 7 'H 4:
IDl\l:IO PUBLIC
tlTI1.tTIES COHMrSSlOtt
Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
HOLDING CO., INC. DBA CELLULAR-ONE(ID )
SEEKING DESIGNATION AS AN ELIGIBLE
TELECOMMUNICATIONS CARRIER THAT M))
RECEIVE FEDERAL UNIVERSAL SERVICESUPPORT
CASE NO. WST-O5-
COMMENTS OF THE
COMMISSION STAFF
COMES NOW the Staff of the Idaho Public Utilities Commission, by and through its
Attorney of record, Kira Dale Pfisterer, Deputy Attorney General, and submits the following
comments in response to Order No. 29791 issued on May 27 2005.
BACKGROUND
On February 25 , 2005 , in the Federal-State Joint Board on Universal Service CC Docket
No. 96-45 (FCC 05-46) (hereinafter the FCC Order
),
the Federal Communications
Commission (FCC) adopted additional minimum requirements for a telecommunications carrier
to be designated as an eligible telecommunications carrier (ETC), and thus be eligible to receive
federal universal service funds (USF). The FCC Order builds on the existing statutory
framework for ETC designation. Staffhas reviewed the FCC Order and recommends that the
Commission adopt and utilize these same requirements when reviewing ETC Applications.
STAFF COMMENTS JUNE 17, 2005
The Telecommunications Act of 1996 (the "1996 Act") grants state commissions the
authority to determine whether a telecommunications carrier meets the requirements to be
designated as an ETC. 47 U.SC. 99 214(e)(2) and 254; 47 C.R. 9 54.201. To encourage
competition and universal service, the 1996 Act allows qualifying telecommunications carriers to
receive universal service support for providing service in high cost areas of the nation.
Most ETC designation proceedings are performed by the state commissions pursuant to
47 U.C. 9214(e)(2). Where a carrier is not subject to state jurisdiction, the FCC is responsible
for ETC designations under 47 U.C. 9214(e)(6). The rules promulgated by the FCC and
discussed in the FCC Order are for those instances in which the FCC is designating the ETC.
The requirements outlined in FCC Order are not binding upon the state commissions, but are
permissive guidelines that the FCC encourages the states to adopt in a manner that is consistent
with state law and policies. The FCC also encourages the state commissions to adopt these
requirements in the interest of uniformity and predictability and to improve the long-term
sustainability of the federal USF.
The New ETC Requirements
In the recent Order, the FCC adopted five basic ETC eligibility requirements, a
framework for conducting the required public interest determination, and annual reporting
requirements. To satisfy the basic eligibility requirements, the FCC requires that an ETC
Applicant to:
(5)
provide a five-year plan demonstrating how high-cost universal service support will
be used to improve its coverage, service quality, or capacity in every wire center for
which it seeks designation and expects to receive universal service support;
demonstrate its ability to remain functional in emergency situations;
demonstrate that it will satisfy consumer protection and service quality standards;
offer local usage plans comparable to those available from the incumbent local
exchange carrier (LEC) in the areas for which it seeks designation; and
acknowledge that it may be required to provide equal access if all other ETCs in the
designated service area relinquish their designation pursuant to Section 214( e)( 4)
the 1996 Act.
(1)
(2)
(3)
(4)
In addition to these five requirements, the FCC Order also addresses a number of other
issues, including a public interest analysis to be applied whenever a carrier seeks ETC status in
an area already served by at least one ETC , and annual certification and reporting requirements
that bolster the initial designation requirements. The FCC makes these requirements applicable
STAFF COMMENTS JUNE 17, 2005
on a prospective basis to all ETCs previously designated by the Commission. Previously
designated ETCs must submit evidence demonstrating how they comply with this new ETC
designation framework by October 1 2006.
ST AFF COMMENTS
Staff recommends that the Commission adopt each of the five basic requirements , the
public interest analysis, and the annual reporting requirements. The merits of each requirement
are discussed in greater detail below.
ETC Elh!ibilitv Requirements
1. Commitment and Ability to Provide the Supported Services: ~ 54. 202 (a) (1) (A) and (B)
The FCC requires: (1) a specific commitment from the Applicant to provide service
throughout the proposed service area to all customers making a reasonable request for service;
and (2) the submission of a five-year network improvement plan. The rule also further describes
what constitutes a reasonable request for service and what should be included in the five-year
network improvement plan.
The FCC's requirement regarding the commitment and ability to provide the supported
services, as reflected in 47 C.R. 9 54.202(a)(l)(A) and (B) is consistent with past decisions by
the Idaho Commission. In Order No. 29541 , the Commission states
, "
A carrier requesting ETC
status is not required to provide 'ubiquitous' service throughout its service area prior to being
designated as an ETC. However, an Applicant must demonstrate that the capability and
commitment to provide service is something more than a 'vague assertion' of intent on the part
of a carrier to provide service.Western Wireless 15 F .R. at 15178 at ~ 24 (2000). Thus
an Applicant must reasonably demonstrate to the state commission its ability and willingness to
provide service upon designation. To demonstrate a commitment to serve an entire area for
which it seeks designation, the Commission expects an Applicant to provide some evidence that
it has a generalized plan to meet the needs of consumers in rural areas and the goals of universal
service. Id.
1 Federal-State Joint Board on Universal Service, CC Docket No. 96-45 (FCC 05-46) ~ 2.
STAFF COMMENTS JUNE 17 2005
This requirement also supports the statutory requirements of the 1996 Act. Section
254(e) of the 1996 Act requires that any financial support received in furtherance of the goal of
universal service must be used only for the provisioning, maintenance and upgrading of facilities
and services for which the support is intended. Staff supports the new FCC Annual Reporting
Requirements as a condition of continued universal service support to ensure that ETCs continue
to comply with the conditions of the ETC designation and the universal service funds are used
for their intended purposes.
2. Ability to Remain Functional in Emergency Situations: ~ 54. 202(a) (2)
Staff believes that an Applicant's ability to demonstrate functionality during emergency
situations is an important public safety goal. It is the Staff s opinion that consumers have the
right to expect an ETC designated carrier to plan and be prepared for reasonable emergency
situations that may occur in their designated service areas. Emergency planning by an ETC
designated carrier demonstrates their commitment to quality of service and reliability. In order
to meet this requirement, an ETC Applicant should demonstrate it has a reasonable amount of
back-up power to ensure functionality without an external power source, is able to reroute traffic
around damaged facilities, and is capable of managing traffic spikes resulting from emergency
situations (FCC 05-, ~ 25).
3. Consumer Protection: ~ 54. 202(a) (3)
Staff agrees with the Joint Board recommendation that State commissions exercising
jurisdiction over ETC designations should have the flexibility to either follow the Commission
framework or impose other requirements consistent with federal law to ensure that supported
services are offered in a manner that protects consumers. The FCC encourages states that
impose requirements on the ETC to do so only to the extent necessary to further universal
service goals. This practice is consistent with Section 254(b) and was used as a guideline by the
Idaho Commission in the ClearTalk Order No. 29541.
The Staffbelieves it is reasonable and consistent to expect an ETC to provide a set of
fair, just, reasonable, and non-discriminatory rules to address consumer complaints. Staff agrees
with the FCC that a commitment to comply with the Cellular Telecommunications and Internet
Association s Consumer Code for Wireless Service will satisfy this requirement for wireless
STAFF COMMENTS JUNE 17, 2005
ETC applicants (FCC 05-, ~ 28).2 Staff believes additional commitments may be required on
a case-by-case basis, as provided in the FCC Rules, but has no additional consumer protection
requirements to recommend at this time.
4. Local Usage: ~ 54. 202 (a) (4)
In the FCC Order the FCC determined that an ETC should provide some minimum
amount of local usage as part of its "basic service" package of supported services, but declined to
specify the exact amount of local usage required. Staff believes consumers should have a choice
of service comparable to the incumbent local exchange company s (ILEC) basic service package.
This may not be a fully flat rated plan, but it should be sufficient to allow minutes of use that
will meet most customer needs. Determining whether a service offering is "comparable" to that
offered by the ILEC will depend on the circumstances of each ETC application.
5. Equal Access: ~ 54. 202(a) (5)
Equal access includes, but is not limited to, the ability to access the presubscribed long
distance carrier of the customer s choice by dialing a single digit "1" versus a multiple digit
access code (NXX).
Under Section 214( e)( 4), a State commission shall permit an ETC to relinquish its
designation as an ETC carrier in any area served by more than one ETC. Prior to permitting a
telecommunications carrier designated as an ETC to cease providing universal service in an area
the State commission must determine how the customers will be served by the remaining ETC or
ETCs. The State commission should examine whether it is in the public interest to require the
remaining ETC to provide equal access. Further, the commission may treat another carrier as the
incumbent LEC if the carrier occupies a position in the market that is comparable to the position
occupied by the departing ILEC, if the carrier has substantially replaced an ILEC, and if such
treatment is consistent with the public interest, convenience and necessity. An obligation
2 Under the CTIA Consumer Code, wireless carriers agree to: (1) disclose rate and terms of service to customers; (2)
make available maps showing where service is generally available; (3) provide contract terms to customers and
confirm changes in service; (4) allow a trial period for new service; (5) provide specific disclosures in advertising;
(6) separately identify carrier charges from taxes on billing statements; (7) provide customers the right to terminate
service for changes to contract terms; (8) provide ready access to customer service; (9) promptly respond to
consumer inquiries and complaints received from government agencies; and (10) abide by policies for protection of
consumer prIvacy.
ST AFF COMMENTS JUNE 17, 2005
imposed on ILECs is the requirement to offer equal access in connection with their wireline
servIces.
As a public interest determination, Staff feels this obligation should also be imposed on
any common carrier applying for ETC designation should the ILEC or other ETCs in that service
area relinquish their ETC designation.
Public Interest Determination: & 54.202~
In addition to the five basic eligibility criteria discussed above, the FCC Requirements set
forth the analytical framework the Commission may use to determine whether the public interest
would be served by an applicant's designation as an ETC. The new fact-specific requirements
provide better-defined guidelines for conducting the public interest analysis. The new FCC
public interest guidelines include: 1) cost-benefit analysis; 2) potential for creamskimming
effects; and 3) impact on the universal service support fund.3 These guidelines are consistent
with past decisions of this Commission and Staff supports the various considerations.
Sections 214 and 254 of the 1996 Act require the State commission to determine if the
ETC application is consistent with the public interest, convenience and necessity. The public
interest benefits of a particular ETC designation must be analyzed in a manner that is consistent
with the purposes of the 1996 Act itself, including the fundamental goals of promoting
competition and preserving universal service; ensuring the availability of quality
telecommunications services at just, reasonable, and affordable rates; and promoting the
deploYment of advanced telecommunications and information services to all regions of the
nation, including rural and high-cost areas. Before designating an ETC, the Commission must
make an affirmative determination that such designation is in the public interest, and must take
into consideration the specific characteristics of the proposed service area, whether the area is
served by a rural or non-rural carrier.
The public interest determination has been extensively used by this Commission in the
past when evaluating ETC applications. In the Clear Talk Order No. 29541 , the Commission
stated
, "
In order to be designated as an ETC in a study area by a rural telephone company, the
applicant must demonstrate and the Commission must find that it would be in the public interest.
3 Federal-State Joint Board on Universal Service, CC Docket No. 96-45 (FCC 05-46) ~~ 44-57.
ST AFF COMMENTS JUNE 17, 2005
A secondary issue is whether the Applicants are committed to bringing competition and
providing universal services throughout these rural areas. ,,
The Commission has determined that the Applicants have the burden to demonstrate that
the public interest is served by designating them as an ETC in rural areas. In evaluating the
public interest " this Commission weighs whether the potential benefits of ETC designation
outweigh the potential harms.
In Order No. 29591 , the Commission noted the FCC's more stringent public interest
analysis for ETC designations in rural telephone company service areas weighed numerous
factors including: the benefits of increased competitive choice; the impact of multiple
designations on the universal service fund; the unique advantages and disadvantages of the
competitor s service offering; any commitments made regarding quality of telephone service
provided by competing providers; and the competitive ETC's ability to provide the supported
services throughout the designated service area within a reasonable time frame. Order No.
29541 at p.quoting Virginia Cellular, LLC Petition for Designation as an ETC, 19 F.
1563, 1565 (2004).
As demonstrated above, the public interest analysis included in the new FCC Rules
essentially mirrors that applied in this Commission s most recent ETC proceedings. Staff
supports this analysis.
Annual Reportin2 Requirements: & 54.202(!!1
The FCC encourages state commissions to impose the annual certification and reporting
analysis, as outlined in the FCC Order on all previously designated ETCs. This would avoid
duplicative or inapplicable eligibility criteria and reporting requirements. Staff believes that
adoption of the new ETC requirements, which staff strongly supports, could become empty
promises unless the additional annual reporting is provided to the Commission. Such reporting
is necessary to ensure that the build-out of facilities, service availability, emergency
preparedness, and quality of service are maintained by all ETCs. These reporting requirement
will also ensure that universal service funds are used for their intended purposes.
4 Clear Talk Case No. GNR-03-, Order No. 29541
, p.
ST AFF COMMENTS JUNE 17, 2005
CONCLUSION
Staff agrees with the FCC, that a rigorous ETC designation process ensures that only
fully qualified Applicants receive designation as ETCs and that all ETC Applicants are prepared
to serve all customers within the designated service area. Uniform standards allow for a more
predictable application process among the states. Staff supports the Commission s adoption of
the new FCC requirements regarding: (l) the five basic ETC eligibility requirements; (2) the
public interest analysis, and (3) the annual reporting requirements. Staff believes these new
requirements build on the framework of the Commission s past decisions regarding ETC
designation and further refine the analysis employed. By adopting the new requirements, the
Commission will ensure that those companies approved as ETCs have demonstrated a
commitment to the principles of universal service and competition and that only fully qualified
carriers that are capable of and committed to providing universal service will be able to receive
support. Staff does not comment on the annual certification requirements, as they remain largely
unchanged and this Commission has no discretion in determining whether or not to adopt them.
Respectfully submitted this ~ay of June 2005,
Kira Dale Pfis
Deputy Attorney General
Technical Staff:Grace Seaman
i:umisc:comments/wsttO5.1 kfgs
STAFF COMMENTS JUNE 17, 2005
CERTIFICATE OF SERVICE
HEREBY CERTIFY THAT I HAVE THIS 17TH DAY OF JUNE 2005
SERVED THE FOREGOING COMMENTS OF THE COMMISSION STAFF, IN
CASE NO. WST-05-, BY MAILING A COpy THEREOF POSTAGE PREPAID
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