20250304Decision Memo.pdf

DECISION MEMORANDUM
TO: COMMISSIONER LODGE
COMMISSIONER HAMMOND
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
FROM: MICHAEL DUVAL
DEPUTY ATTORNEYS GENERAL
DATE: MARCH 4, 2025
SUBJECT: IN THE MATTER OF ZIPLY FIBER OF IDAHO, LLC'S AND ZIPLY
FIBER NORTHWEST, LLC'S FAILURE TO PROVIDE ADEQUATE
SERVICE AND MAINTENANCE OF PLANT IN SERVICE PURSUANT
TO IDAHO CODE §§ 62-601 THROUGH 62-624; CASE NO. GNR-T-25-02.
Ziply Fiber of Idaho, LLC and Ziply Fiber Northwest, LLC ("Companies") are related
telecommunication companies that, along with several other related entities, provide
telecommunications service in several locations around Idaho. The Companies are "telephone
corporations" offering "telecommunication services" as defined by Idaho Code § 61-121 and are
public utilities regulated by the Idaho Public Utilities Commission ("Commission"). Idaho Code
§§ 61-121, -129.
BACKGROUND
After receiving several customer complaints, Commission Staff ("Staff') conducted an
initial investigation of the Companies. The results of this investigation led Staff to believe that the
Companies had failed to adequately maintain their system, leaving customers in certain areas
without reliable service due to crosstalk, static,or other transmission problems. Staff also indicated
that the Companies have failed to respond timely to service outage reports from customers as
required by Telephone Customer Relations Rule 502,IDAPA 31.41.01.502. Staff further disclosed
that customers had reported the Companies had instructed their technicians to disregard customer
requests that might require infrastructure investment. Staff also indicated that the Companies had
18 open informal complaints as of January 31, 2025.
Additionally, the Companies had 87 informal complaints during the preceding calendar
year and 1,124 such complaints since 2016. In sum, Staff asserted that the Companies may have
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attempted to charge customers in an unreasonable fashion, failed to maintain adequate service,
failed to adequately respond to customer complaints, and may have failed to comply with the
Commission's requirements to withdraw or discontinue service to a service area(s). Idaho Code
§§ 61-301, 302, 303, and 62-612.
PROCEDURAL HISTORY
During the Commission's February 4, 2025, Decision Meeting, Staff presented a decision
memorandum recommending that the Commission issue a Notice of Hearing and Order to Show
Cause why the Companies had failed to maintain equipment and provide reliable service to
customers. The Commission orally adopted Staff s recommendation to schedule a Show Cause
Hearing. The Commission also held that the show cause hearing in this case should be combined
with Mike Ayers' formal complaint. See Case No. CTC-T-24-01. However, the Commission has
yet to issue a written order on this matter.
STAFF RECOMMENDATION
Since the February 4, 2025, meeting, the Companies have engaged in meaningful
communication with Staff, expressing interest in further understanding their alleged violations of
the Commission's mandates and the desire to address any deficiencies. Staff believes that this
behavior warrants a change in course.Accordingly, Staff recommends that the Commission vacate
its prior decision to hold a Show Cause Hearing and open a formal investigation into the
Companies. The purpose of this investigation will be to determine whether the Companies have
attempted to charge customers in an unreasonable fashion, failed to maintain adequate service,
failed to adequately respond to customer complaints, and may have failed to comply with the
Commission's requirements to withdraw or discontinue service to a service area(s). Staff believes
that such an investigation will provide a better understanding of the status of the Companies'
system and provision of services. Additionally, if the investigation reveals any deficiencies, the
Parties will have greater flexibility to address them without further formal Commission action.
The Commission has followed a course of action like that described above. In Case Nos.
SMR-R-19-01 and BGR-R-19-01, the Commission ordered that Show Cause Hearings be held to
determine if St. Maries River Railroad Company and its affiliate BG & CM Railroad, Inc. should
be penalized for alleged violations of the Commission's mandates. However, once the companies
involved addressed the Commission's concerns, the Orders to Show Cause were vacated. Order
Nos. 34380 and 34381. Staff believes that the Company has now expressed a sufficient desire to
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address any relevant service issues and asks that the Commission close GNR-T-25-02 and instead
initiate an investigation to ensure that the alleged issues are properly examined and, where
appropriate,addressed.While the issues surrounding Mike Ayers formal complaint might intersect
and be resolved by Staff s investigation, Staff believes that Mike Ayers formal complaint should
continue until its conclusion.
COMMISSION DECISION
Does the Commission wish to:
1. Vacate its decision to issue a Notice of Hearing and Order to Show Cause and
close this case (i.e., Case No. GNR-T-25-02)?
2. Open a formal investigation of the Companies to ensure compliance with Idaho
law and Commission mandates?
3. Issue an order clarifying that Mike Ayers' formal complaint shall proceed in
the absence of a Show Cause Hearing on this matter?
4. Anything else?
Michael Duval
Deputy Attorney General
I:\Legal\TELECOM\GNRT2502_Ziply Show Cause\memos\GNRT2502_Invest_dec_md.docx
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