20010709Final_Order_No_28766.pdf

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Office of the Secretary
Service Date
July 9, 2001
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION OF
Z- TEL COMMUNICATIONS, INC. FOR A
CERTIFICATE OF PUBLIC CONVENIENCE AND
NECESSITY TO PROVIDE LOCAL EXCHANGE
TELECOMMUNICATIONS SERVICES.ORDER NO. 28766
CASE NO. GNR- T -00-
On November 29 2000, Z-Tel Communications, Inc. (Z-Tel) filed an Application for
a Certificate of Public Convenience and Necessity. On May 21 , 2001 , the Commission issued a
Notice of Application and Notice of Modified Procedure that required all written comments to be
filed by the parties within twenty-one (21) days of its issuance. Order No. 28734. The
Commission Staff was the only party to file written comments and it recommended approval of
the Application but denial of the waivers requested by Z- Tel. Based on the comments, the law
and the record, the Commission grants the Company s Application but denies the waivers
requested by Z- Tel.
THE APPLICATION
Tel proposes to provide basic local exchange service to residential and business
customers throughout Idaho in addition to the long distance services the Company currently
offers. These local services will be provided using the unbundled network element platform
(UNE-P), which qualifies it to be classified as a facilities-based provider. Z-Tel initially plans to
offer service in the Qwest service area, mirroring Qwest's basic local calling scopes
immediately upon the approval of its Application and the establishment of resale arrangements
with Qwest.
Tel Communications was incorporated in the State of Delaware on January 15
1998 under the name of Olympus Telecommunications Group. It has since changed its name to
Z- Tel Communications, Inc., a subsidiary of Z- Tel Technologies, Inc. The Company has more
than 256 000 residential access line subscribers in its service areas and nearly $150 million in
assets. Z-Tel states that because its Idaho operations are provided by UNE-, its only costs will
be for leasing the UNE-P and some administrative and sales overhead. Z-Tel says no new funds
will be required to expand its services in Idaho.
ORDER NO. 28766
Targeting primarily the needs of residential customers, Z- Tel intends to provide
bundled telecommunications services including long distance, local exchange service, voice
mail, selected custom calling features, access to emergency services, operator services and
directory assistance.The Company currently offers a "seamless integration of personal
organizational tools" so that customers can initiate calls, forward messages, and configure and
Finally, Z-Tel asserts that itsmanage their own service requirements over the Internet.
Application is in the public interest and serves the public convenience and necessity by
promoting competition, thus raISIng quality of service, lowering prices, and stimulating
economic development.
WAIVERS
Z- Tel has requested exemption from the following Commission Rules:
IDAPA 31.41.01 , Rules 101 to 103.02 permitted customer guarantees
in lieu of deposits and required a guarantee form to be held on file with
the Commission. Z-Tel requested exemption from the requirement
that they must file these forms.
IDAPA 31.41.02, Rule 102.3 requires each local exchange company
that applies for a rate change for any service regulated by this
Commission under Title 61 to issue press releases advising customers
of its application to change rates. Z- Tel has requested exemption from
this rule because it does not anticipate sufficient market share to
warrant the expense. Instead, it proposes to maintain services and
rates on its web site to keep the customer informed. In addition, Z- Tel
says "consumers will be informed of rate increases by bill insert.
Therefore, the additional step of notification via press release
unnecessary. "
IDAPA 31.41.02, Rule 502 requires the Company to restore local
service within 24 hours (or 16 hours in case of emergency). If the
company fails to restore service within the required time frame, the
company must issue a credit equal to the montWy rate for one month
of basic local exchange service. Z-Tel requests a waiver from "the
requirement to adopt and pursue a maintenance program for outside
plant facilities and equipment" to the extent that it offers service on a
UNE-P or resold basis from incumbent providers.
IDAPA 31.41.01 , Rule 601 requires each local exchange company to
provide at least one directory annually at no charge to each of its
customers. This directory is to include the names, addresses and
telephone numbers of customers in that exchange, and of the local
exchange company and of the Commission. Z-Tel requests an
ORDER NO. 28766
exemption from the requirement to publish local directories but
proposes that the required information will be included in the
incumbent local exchange carrier (LEC) directory, which will be
distributed to Z- Tel customers.
. IDAPA 31.41.01 , Rule 602 requires the company to provide a
summary of the Commission s rules to customers at least once a year
and at commencement of service. This summary may be included at
least once a year in a regular mailing of the Company s bill or printed
in the telephone directory. IDAPA 31.41.02, Rule 501 makes
essentially the same requirement to inform customers of Idaho s laws
regarding telephone solicitation (Idaho Code ~ 48-1001 et seq.
).
Tel
maintains that such information is published in the consumer pages of
the incumbent local telephone directory and therefore does not need to
be redistributed by Z-Tel on an annual basis.
Finally, Z-Tel has requested waivers of any reporting requirements
asserting that they "(1) are not consistent with the demands of the
competitive market, and (2) they constitute an undue burden on a
competitive provider. . . .
STAFF COMMENTS
Based on its review of Z-Tel's Application, Staff found that the Company s filing
satisfied all the requirements of the Commission s Rules and Procedural Order No. 26665. Staff
recommends that the Commission approve Z-Tel's Application for a Certificate of Public
Convenience and Necessity to provide local exchange service in the State of Idaho.
Furthermore, Staff recommends the Commission deny Z-Tel's request for waiver from
Commission Rules for the following reasons:
IDAPA 31.41.01. Rules 101 to 103.: References to customer
guarantees have been deleted from this rule and no longer apply. Staff
recommends that Z-Tel's request for waivers from IDAPA 31.41.01
Rules 101 to 103.02 regarding customer guarantees be dismissed.
IDAPA 31.41.02. Rule 102.3 : Rule 102.3 applies to fully regulated
rates of companies that fall under Title 61 regulation, which Z- Tel' s do
not. An exemption is not necessary because the Rule does not apply.
IDAPA 31.41.02. Rule 502 : Staff recommends that Z-Tel's request to
waive the Commission s Quality of Service rule be denied. An
underlying provider provides service to its customer, Z- Tel, but will
not provide service for any Z-Tel resale customer. Consequently, Z-
Tel must accept responsibility for quality service to its customers. If
the Company must incur additional costs to be responsible, those costs
ORDER NO. 28766
should either be included in a negotiated agreement with the
underlying provider or included in the rates as a cost of doing
business.
IDAPA 31.41.01. Rule 601:While each local exchange company is
required to "provide" a directory with the customer s number and
other numbers in the exchange, there is no requirement that each local
exchange company must "publish" its own directory. As long as Z-Tel
ensures that its customers and the company itself are listed in the
incumbent LEC's directory, and that at least one such directory is
provided to Z-Tel's customers at no charge, then Z-Tel will be in
compliance with this Rule. No exemption is necessary.
IDAPA 31.41.01. Rule 602 and IDAPA 31.41.02. Rule 501 : Staff
recommends that Z- Tel's request for waivers from the requirement to
provide their customers with annual and ongoing information
regarding the Commission Rules and the customers rights under the
Telephone Solicitation Act be denied. Staff does not believe that Z-
Tel is in a position to ensure that the incumbent LEC does and will
continue to publish the information in its phone book. However, Staff
would be satisfied if Z-Tel maintained a summary of these rules and
laws on its web page and sent its customers an annual bill message that
directed them to its web site to review the rules. Although most of Z-
Tel's customers will be Internet users , Staff recommends that Z-Tel
accommodate those who are not by including in its annual bill
message an offer to mail a copy of these rules upon request.
Waiver of any Reporting Requirements:Staff recommends that Z-
Tel's request for exemption from filing reports with this Commission
be dismissed because it is not complete and does not specify what
reports it is not willing to file. Staff is not sure what reporting
requirements Z- Tel finds burdensome and recommends that Z- Tel
clarify this request for exemption from reporting requirements so that
the Commission can determine which reports Z- Tel finds burdensome
and why. Upon receiving such information, the Commission can take
whatever further action is necessary.
COMMISSION FINDINGS
Based on the comments, the law and the record, the Commission grants the
Application. The Commission further finds that the requested waivers from Commission rules
are denied for the following reasons:
IDAPA 31.41.01 , Rules 101 to 103.02 regarding customer guarantees
and IDAP A 31.41., Rule 102.3 regarding publishing customer
notices do not apply to Z-TeL Consequently, Z-Tel's request to be
exempted from these rules is dismissed.
ORDER NO. 28766
. Z-Tel's request for waiver from IDAPA 31.41.01 , Rule 601 requiring
a free directory per customer is unnecessary because its proposal to
include its customers' listings in the incumbent LEC directory and
distribute copies to its customers meets the requirements of this rule.
Because an incumbent LEC may use an annual direct mailing to notify
customers of Commission Rules at any time, Z- Tel cannot be assured
that an incumbent LEC will continue to publish the requested
information in its telephone directory. Consequently, Z-Tel's request
for waivers from IDAPA 31.41.01 , Rule 602 and IDAPA 31.41.02
Rule 501 requiring companies to provide their customers with annual
and ongoing information regarding the Commission Rules and their
customers' rights under the Telephone Solicitation Act (Idaho Code
48-1001 et seq.is denied. Z-Tel may inform its customers at the time
of enrollment and once a year thereafter how the information is
accessible to them via the Internet. Z- Tel must also offer to mail paper
copies of rule summaries to customers upon request.
Because Z- Tel intends to offer services that originate on an incumbent
LEC's network, Z-Tel must accept responsibility for eliminating
service problems that originate on the incumbent LEC's network.
Because Z- Tel contracts directly for incumbent LEC services, Z- Tel is
the only party that can seek recourse for such service problems and
must do so on its customer s behalf. Thus, Z-Tel's request to waive
the Commission s Quality of Service rule (IDAPA 31.41.02, Rule 502)
is denied.
Tel'request for exemption from filing reports with this
Commission is dismissed for lack of specificity because it does not
explain what reports it is not willing to file. Z- Tel may make another
application that provides this Commission with sufficient information
regarding the specific exemption it seeks.
ORDER
IT IS HEREBY ORDERED that Z- Tel Communications, Inc. is granted a Certificate
of Public Convenience and Necessity to provide basic local exchange services.
IT IS FURTHER ORDERED that the waivers from Commission rules requested by
Z- Tel are hereby denied.
THIS IS A FINAL ORDER. Any person interested in this Order or in interlocutory
Orders previously issued in this case may petition for reconsideration within twenty-one (21)
days of the service date of this Order with regard to any matter decided in this Order or in
interlocutory Orders previously issued in this case. Within seven (7) days after any person has
ORDER NO. 28766
petitioned for reconsideration, any other person may cross-petition for reconsideration. See
Idaho Code ~ 61-626.
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho, this ~ #..
day of July 2001.
~~
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MARSHA H. SMITH, COMMISSIONER
Out of the Offfce on this Date
DENNIS S. HANSEN, COMMISSIONER
ATTEST:
O:GNRTOO39 In2
ORDER NO. 28766