20050713Comments.pdf

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Boise, Idaho 83702
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ATTORNEYS AT LAW
!Di\HO PUBLIC
UTILITIES COMMISSION
www.stoel.com
July 13, 2005
MARY S. HOBSON
Direct [phone]
mshobsonCiYstoel.com
VIA HAND DELIVERY
Paul Kjellander
Idaho Public lTtilities Commission
472 West Washington Street
PO Box 83720
Boise, ill 83720-0074
Marsha H. Smith
Idaho Public Utilities Commission
472 West Washington Street
PO Box 83720
Boise, ill 83720-0074
Dennis S. Hansen
Idaho Public Utilities Commission
472 West Washington Street
PO Box 83720
Boise, ill 83720-0074
Re:Case No. WST-O5-
Dear Commissioners:
Qwest Corporation ("Qwest") seeks the Commission s indulgence in considering these
late-filed comments in response to the Commission s May 27 2005 Notice of Request for
Additional Public Comment in Case No. WST - T -05-1 regarding whether the Commission should
adopt new rules with respect to ETC designation in light of the Federal Communication
Commission s (FCC) proposed requirements for ETC designation in its recent order.
INTR 0 D U CTI 0 N
In the ETC Order the FCC set forth standards it would apply in order to certify and
award federal universal service fund ("FUSF") support to federally designated ETCs. The FCC
also "encourage( dJ state commissions to consider the requirements adopted in this Report and
In the Matter of Federal-State Joint Board on Universal Service released March 17, 2005, in CC Docket
No. 96-, FCC Release No. FCC 05-46 (the ETC Order
Oregon
Washington
California
Utah
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Paul Kjellander
Dennis S. Hansen
Marsha H. Smith
July 13, 2005
Page 2
Order when examining whether the state should designate a carrier as an ETC ,2 but "decline (
to mandate that state commissions adopt our requirements for ETC designations.,,3
Although Qwest will generally address whether the Commission should adopt the FCC'
proposed requirements, it
..
-es-.that-any-such
requirements, if adopted, should only apply to companies that actually receive FUSF high cost
support. Although Qwest does participate in the Federal Lifeline and Link-up programs, it has
received high cost FUSF support in Idaho only in northern Idaho and on a relatively modest
basis.
Regarding the FCC's proposed requirements, some of the requirements are appropriate
others less so. In evaluating the proposed requirements, the Commission should evaluate the
purpose for such requirements: to make sure FUSF high cost support is used for the intended
purposes. As set forth in more detail below, some of the proposed requirements do not
effectively meet these purposes, or unnecessarily duplicate other requirements already existing in
state or federal law. Qwest's comments to specific requirements are set forth below.
COMMENTS ON SPECIFIC FCC REQUIREMENT PROPOSALS
~ 54.202(B)
Submit a five-year plan that describes with specificity proposed
improvements or upgrades to the applicant's network on a wire
center-by-wire center basis throughout its proposed designated
service area. Each applicant shall demonstrate how signal quality.
coverage or capacity will improve due to the receipt of high-cost
support; the proiected start date and completion date for each
improvement and the estimated amount of investment for each
proiect that is funded by high-cost support; the proiected start
dated and completion date for each improvement and the estimated
amount of investment for each proiect that is funded by high cost
ETC Order, ~ 59.
Id.~ 61.
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Dennis S. Hansen
Marsha H. Smith
July 13, 2005
Page 3
support; specific geographic areas where the improvements will be
made; and the estimated population that will be served as a result
of the improvements. If an applicant believes that service
improvements in a particular wire center are not needed. it must
explain its basis-for-this-etennination and-demonstrate how
funding will otherwise be used to further the provision of
supported services in that area;
This requirement, and the accompanying annual reporting requirement relative to five
year plans in ~ 54.202(B), are not useful, and should not be adopted, for the following reasons:
(1) A five-year plan is too long in today s telecommunications marketplace to provide useful
information; (2) dependable plans for future activity depend on a predictable distribution of
support, and FUSF high-cost support is often unpredictable; and (3) carriers do not typically plan
investment at the wire center level, and as a result, requiring planning at the wire center level is
both not useful and could skew investments away from their most efficient purposes. Finally,
any event, because investment plans contain the most sensitive competitive information, if any
requirements about any future plans are imposed, those requirements should also include
provisions that guarantee that such plans are kept confidential and unavailable to any
competitors.
First, the five-year time horizon is too long. Today s telecommunications market evolves
by the month and by the day. Five years ago, wireless service was far more expensive and far
less prevalent than it is today. Few if any cable operators provided telephone service. Voice
over internet protocol, or V oIP, existed only in rudimentary form and was not available from
commercial providers. Today, wireless services and cable telephony are effectively competing
for and even replacing wire line services at ever-increasing rates. VoIP, though in its nascent
stages, is widely predicted as yet another effective alternative to traditional wireline telephony.
Carrier bankruptcies, mergers, and acquisitions are happening at an accelerating pace. As a
result of these and other factors, Qwest does not plan any of its network investments five years
out, and expects that few other carriers do.
These realities of the current marketplace mean that any plan a carrier might submit to
comply with the proposed requirements would be all but meaningless beyond a year or two.
Even submitting such plans with the idea that they would be revised could create false
impressions in the minds of the Commission or any person who views the plans. Qwest is
concerned that even if plans were submitted with an abundance of qualifying language, carriers
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Dennis S. Hansen
Marsha H. Smith
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might be penalized or criticized if technology or market conditions cause a change in direction.
Requiring carriers to submit plans which they have no realistic expectation will be fulfilled
serves no legitimate purpose, and the five year time horizon should be reduced to a period of one
year.
Second, plans over any time horizon require the planning carrier to have a reasonable
expectation as to the amount of FUSF support that might be received over that time horizon.
Current FUSF distribution methods do not provide any reasonable expectation as to the amounts
received. The receipt of funding can be unpredictable and may not be factored into its
previously filed plans. In any given year, depending on the nationwide distribution of line
counts and the then-current FUSF high cost fund distribution methodology, a company s FUSF
high cost support could evaporate entirely, or increase substantially. Companies have no control
over these factors, and accordingly cannot accurately plan their investment of such funds if
received. Any planning requirements should have the same certainty that funding distributions
do - and since funding distributions are uncertain, any plans based on those distributions will
also be uncertain, and therefore minimally useful. Moreover, as noted above, inaccurate
projections about future investment could actually be counterproductive. This uncertainty
further counsels reducing the period for which future investment plans are required to a
maximum of one year.
Third, carriers often do not plan investment on a wire center basis. Investments are often
planned that have statewide, or even region-wide benefits. For example, a carrier could
implement information systems that provide its service technicians with more reliable
information about technical problems more quickly, and those systems would help improve
reliability and quality of service for all customers of that carrier in rural Washington, urban
Washington, and other states where that carrier operates. Requiring planning at the wire center
level would provide a disincentive to carriers to implement system-wide service improvements
that could not easily be attributed to specific wire centers. To avoid such improper skewing of
investment, more useful information would be obtained by requiring plans to be submitted only
at the statewide level.
Finally, any requirement to submit plans of future investment must be accompanied by
measures to carefully protect that information from competitors. If carriers' plans to invest in a
certain system or community are known, competitors might avoid those areas, or might plan to
implement their own systems in year one if they know another carrier is not planning to invest in
a particular area until year four. In such an event, the carrier planning investment in year four
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might modify its plans, and service quality would suffer. Future plans are probably the most
sensitive of competitive information, and should be treated with appropriate sensitivity. Any
requirements adopted should therefore include strict confidentiality provisions, so that
competitors cannot learn each others ' future plans.
~ 54.209 (2)
(2)Detailed information on any outage as the term is defined
in 47 C.R & 4.5. of at least 30 minutes in duration for
each service area in which an eligible telecommunications
carrier is designated for any facilities it owns. operates.
leases. or otherwise utilizes that potentially affect
least ten percent of the end users served in a designated
service area; or (Q) a 911 special facility. as defined in 47
R. 94.5W. Specifically. the eligible
telecommunications carrier s annual report must include
information detailing: W the date and time of onset of the
outage; (h) a brief description of the outage and its
resolution; the particular services affected;
geographic areas affected by the outage; ~s taken to
prevent a similar situation in the future; and ill the number
of customers affected;
* * *
(4)The number of complaints per 1.000 handsets or lines;
These requirements do not ensure that FUSF support is spent for the intended purposes
and duplicate existing requirements. Federal ETCs and other carriers are already required to
provide detailed information regarding outages to the FCC. In New Part of the Commission
Rules Concerning Disruptions to Communications Report and Order and Further Notice of
Proposed Rulemaking, 19 FCC Rcd 16830, 16923-, ~ 4.5 (2004) (Outage Reporting Order),
the FCC imposed outage reporting requirements on carriers. These requirements are also
comprehensive, and are ultimately transmitted to the Department of Homeland Security.
Duplicating these outage reporting requirements is inefficient and poses compliance burdens for
carriers who have to measure and report outages based on several different methodologies.
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Dennis S. Hansen
Marsha H. Smith
July 13 , 2005
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Moreover, outage reporting requirements do not provide assurance that FUSF high cost
funds are being spent for intended purposes. They simply provide information about outages
which could result from a number of factors. Accordingly, these reporting requirements should
not be adopted. If the state does adopt outage reporting requirement, they should be consistent
with the FCC requirements, including the ability to submit such reports on a confidential basis.
The requirement in subpart 4 also is redundant and unnecessary. The number and nature
of Commission complaints already resides at the Commission. Companies would be merely
restating information already known by the Commission. Merely taking the number of
complaints, dividing it by 1 000 and then resubmitting it back to the Commission is inefficient as
it adds no value by itself and, thus, should not be adopted.
CONCLUSION
Qwest appreciates the opportunity to comment on the issues. Qwest recognizes that it is
important for those entrusted with distributing FUSF high cost funds to know that that support is
needed and is being used for its intended purposes. Any rules adopted towards this end
however, must be carefully examined to make sure they are useful and not duplicative of exiting
rules.
Very truly yours
Attorney for Qwest Corporation
MSH:blg
Boise-185680.1 0029164- 00093