20250411Staff Comments.pdf

RECEIVED
April 11, 2025
ADAM TRIPLETT IDAHO PUBLIC
DEPUTY ATTORNEY GENERAL UTILITIES COMMISSION
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 10221
Street Address for Express Mail:
11331 W CHINDEN BLVD, BLDG 8, SUITE 201-A
BOISE, ID 83714
Attorney for the Commission Staff
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF ZIPLY FIBER )
PACIFIC,LLC, DB/A ZIPLY FIBER'S ) CASE NO. ZFP-T-24-02
APPLICATION FOR DESIGNATION AS AN )
ELIGIBLE TELECOMMUNICATIONS )
CARRIER IN THE STATE OF IDAHO TO ) COMMENTS OF THE
RECEIVE FEDERAL LIFELINE SUPPORT ) COMMISSION STAFF
COMMISSION STAFF ("STAFF") OF the Idaho Public Utilities Commission
("Commission"),by and through its Attorney of record, Adam Triplett, Deputy Attorney
General, submits the following comments.
BACKGROUND
On April 11, 2024, Ziply Fiber Pacific, LLC dba Ziply Fiber("ZFP" or the"Company")
applied to the Idaho Public Utilities Commission("Commission") for designation as an Eligible
Telecommunications Carrier("ETC") in the State of Idaho ("Application I")to participate in the
Lifeline program of the Universal Service Fund and receive federal financial support to provide
lifeline services to qualified households in Idaho. On August 7th, 2024, the Company submitted a
request to the Commission to withdraw its Application 1. The request was granted effective
August 21, 2024. On October 03, 2024, the Company submitted another Application to the Idaho
STAFF COMMENTS I APRIL 10, 2024

Public Utilities Commission ("Commission") for designation as an ETC in the State of Idaho
("Application 2").
The Universal Service Fund ("USF")' is a system of telecommunications subsidies and
fees managed by the United States Federal Communications Commission ("FCC"). It was
established in 1997 in compliance with the Telecommunications Act of 1996. The USF aims to
promote universal access to telecommunications services in the United States. The fund supports
initiatives such as connecting schools and libraries to high-speed internet, helping rural hospitals
adopt telemedicine, ensuring low-income households have basic communication services, and
investing in broadband in underserved communities. The USF consists of four programs:
Connect America Fund, Lifeline, Schools and Libraries (E-rate), and Rural Health Care.
The Lifeline prograM2 helps to make communication services more affordable for low-
income consumers. Lifeline provides subscribers with a discount on qualifying monthly
telephone services, broadband Internet service, or bundled voice-broadband packages purchased
from participating wireline or wireless providers. Lifeline provides a monthly discount of up to
$9.25 for eligible low-income subscribers and up to $34.25 per month for eligible subscribers on
Tribal lands.
The Company stated that it is seeking an ETC designation to receive financial support
from the Federal USF Lifeline program to provide services throughout the entire State of Idaho,
including tribal lands. The Company requested that its designation as an ETC include the
authority to participate in and receive reimbursement from the Idaho Telecommunications
Service Assistance Program' ("ITSAP"). Application 2 at 1-2.
THE APPLICATION
The Company is a Delaware Limited Liability Company headquartered at 135 Lake
Street South, Suite 155, Kirkland, Washington 98033. It is affiliated with Ziply Wireless, LLC.
Additionally, the Company is also affiliated with Ziply Fiber Northwest, LLC, and Ziply Fiber of
Idaho, LLC two Incumbents Local Exchange Carriers ("ILECs") who are holders of the ETC
' Universal Service Fund I Federal Communications Commission
z Lifeline Support for Affordable Communications I Federal Communications Commission
'Idaho Code 3 56-901 establishes a telecommunications service assistance program(ITSAP)within the department
of health and welfare to provide eligible recipients with a reduction in costs of telecommunications services to
promote universal service. The program aims to maximize federal"lifeline"and"link-up"contributions to Idaho's
low-income customers.
STAFF COMMENTS 2 APRIL 10, 2024

status and provide voice and data telecommunications services to residents and businesses in the
State of Idaho.
The Company is authorized to do business in Idaho and provides communication services
to Idaho customers via a fiber-optic network. It obtained a Certificate of Authority to transact
business in Idaho as a Foreign Limited Liability Company from the Idaho Secretary of State on
August 2, 2022.4 On December 8, 2022, the Company was granted a Certificate of Public
Convenience and Necessity("CPCN")by Commission Order No. 35618, in Case No. ZFP-T-22-
01 and authorized to operate as a competitive local exchange carrier("CLEC") in Idaho to
provide wholesale transport, retail broadband, Voice over Internet Protocol ("VoIP") service, and
local exchange services. See Order No. 35618 at 3 and CPCN certificate No. 540. The Company
stated that it is currently a facilities-based CLEC with a fully constructed fiber-optic network
over which it currently offers a full suite of communications services to customers in Idaho.
Id at 2.
The Company asserted that it meets all the statutory and regulatory requirements for
designation as an ETC in the State of Idaho. Thus, the Company requested that the Commission
expeditiously designate its ETC status for the provision of voice and broadband services in the
Designated Service Area. Id at 12.
STAFF ANALYSIS
Staff reviewed the Company's Application 2. Staff evaluated the merits of the
Company's Application 2 based on the requirements set forth by the 1996 Act, FCC regulations,
and Idaho Public Utilities Commission Order Nos. 29841 and 35126.
On November 12, 2024, Staff sent their first Production Request to the Company, which
requested that the Company provide additional information and documents in support of its
Application 2. On December 2, 2024, the Company responded to Staff s requests. On February
19, 2025, Staff sent their second Production Request to the Company, requesting additional
supportive documentation and the Company responded to these requests on March 7th, 2025. On
both of these occasions, the Company did not provide Staff with the requested information.
After careful analysis, Staff have concluded that the Company has failed to adequately
demonstrate that it can fulfill the obligations of a Lifeline-only ETC provider. As a result, Staff
4 As confirmed by Staff on the Secretary of State website and also shown in Exhibit 1 to the Application.
STAFF COMMENTS 3 APRIL 10, 2024

would recommend that the Commission deny Application 2. Staff believe that the Company
should not be granted the ETC designation status in the State of Idaho. The reasons for this
recommendation are based on the Statutory Designation Requirements that the Company failed
to meet, as listed below:
1. Provide the Universal Services - Own Facilities:
The Company did not meet the Own Facilities requirement, which states that: "A
common carrier designated as an eligible telecommunications carrier under paragraph (2),(3), or
(6) shall be eligible to receive universal service support in accordance with section 254 of this
title and shall, throughout the service area for which the designation is received: (A) offer the
services that are supported by Federal Universal Service support mechanisms under section
254(c), either using its own facilities or a combination of its own facilities and resale of another
carrier's services (including the services offered by another eligible telecommunications carrier)
and (B) advertise the availability of such services and the corresponding charges using media of
general distribution." 47 U.S.C. § 214(e)(1).
In paragraph 16 of Application 2, the Company stated that it certifies that it provides
service through facilities owned and operated by itself or its affiliates. However, it is unclear to
Staff what facilities the Company will be using to provide Lifeline services.
In Production Request No.30, Staff specifically asked the Company to clarify and provide
supporting documents showing the existence of these facilities or in the alternative provide Staff
with an FCC Compliance Plan 5. The Company did not provide evidentiary documentation to
Staff. Staff made another request for supporting documents in its Production Request No. 35.
The Company responded by saying that its assertions are sufficient. This response did not assist
Staff in the processing of Application 2, as it is not in compliance with the FCC's Lifeline
Reform Order6.
2. Advertising:
s The FCC Compliance Plan is a measure required by the Commission for carriers seeking to avail themselves of the
blanket facilities forbearance granted in the Lifeline Reform Order.It outlines certain measures to prevent waste in
the Lifeline fund. Lifeline Compliance Plans&ETC Petitions I Federal Communications Commission
6 In the Lifeline Reform Order,the FCC conditionally granted forbearance from the Act's facilities requirement to
all telecommunications carriers seeking Lifeline-only ETC designation,subject to the following conditions: (1)
compliance with certain 911 and enhanced 911 public safety requirements;and(2)Bureau approval of a compliance
plan providing specific information regarding the carrier and its service offerings and outlining the measures the
carrier will take to implement the obligations contained in the Order. 127459.doc
STAFF COMMENTS 4 APRIL 10, 2024

In Commission Order No. 35126, the Commission states that"the advertising
requirement stipulates that an ETC applicant must demonstrate that it will advertise the
availability of its universal service offerings and the charges therefore using media of general
distribution."See 47 U.S.C. § 214(e)(1)(B).
The Company did not provide Staff with the requested documentary evidence requested
in Production Request No. 10, which was a sample showing the telephone service plans that will
be sold to Lifeline customers and the charges. Staff made another request, in Production Request
No. 33, and the Company did not provide a sample, which does not satisfy the stipulation above.
3. Public Interest:
The Company did not fully satisfy the public interest standard. Under the Federal Act,
state commissions shall determine whether granting the requested ETC designation is
"consistent with the public interest, convenience, and necessity."47 U.S.C. § 214(e)(2). The
statutory requirement states that"The ETC applicant must demonstrate that the ETC
designation is consistent with the public interest, convenience, and necessity; and, in the case
of an area served by a rural telephone company, demonstrate that the public interest will be
met by an additional designation." Commission Order No.35126 Appendix at 2. In
Commission Order No. 29841, page 4, the Commission stated that in determining when an
ETC application is "consistent with the public interest, convenience, and necessity," this
Commission essentially adopted the cost-benefit analysis set forth by the FCC and"weigh[ed]
whether the potential benefits of ETC designation outweigh the potential harms." Clear Talk
Order at 6 (citing Virginia Cellular, LLC Petition/or Designation as an ETC, 19 F.C.C.R.
1563, 1574 (2004)); VC[Order at 3. In the Clear Talk Order, the Commission also
enumerated the public interest factors specifically applicable to applications for ETC
designation in rural telephone company service areas. The Commission found
that the value of increased competition, by itself, is not sufficient to satisfy
the public interest test in rural areas. Instead, in determining whether
designation of a competitive ETC in a rural telephone company's service
area is in the public interest, we weigh 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 the quality of the 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.
STAFF COMMENTS 5 APRIL 10, 2024

Clear Talk Order at 6(quoting Virginia Cellular, 19 F.C.C.R. at 1574).
The Clear Talk Order highlights fundamental issues regarding the lack of public interest
in the Company's Application 2, such as competition, and the impact of ETC status on the USF.
These issues are further discussed below:
a. The Company—Parent Company—Affiliates
In response to Production Request No. 31, the Company has provided Ziply Fiber Corp
Names organizational chart. The chart shows that Northwest Fiber, LLC is the parent company
of Ziply Fiber Pacific, LLC, the Company, and its affiliates, Ziply Wireless, LLC, Ziply Fiber
Northwest, LLC, and Ziply Fiber of Idaho, LLC.
All four affiliate companies currently conducting business in Idaho have obtained the
Certificate of Authority from the Idaho Secretary of State and have been granted a CPCN by the
Commission. Two of the Company's affiliates, Ziply Fiber Northwest, LLC, and Ziply Fiber of
Idaho, LLC are holders of the ETC designation for portions of Idaho.
All four affiliates are managed by the same management team and are headquartered at
135 Lake Street South, Suite 155, Kirkland, Washington 98033. They provide the same or
similar products to customers in Idaho.
Staff believes that there is no increased consumer choice when there a group of
companies that will have overlapping service areas, such as these, receive federal financial
support to provide services in the same area. i.e., the whole state of Idaho, with similar services,
the same management team, and are all owned by a single-parent company, Northwest Fiber
LLC. The unique benefits derived from the competitor's service offering are lost. As a result,
there would be an adverse impact on the USF, as demonstrated below:
b. ETC—USF—LIFELINE SERVICE—Rural Digital Opportunity Fund ("RDOF")
ETC designation status is evaluated pursuant to Section 214(e)(2) of the Federal
Telecommunications Act of 1934, as amended(the"1996 Act"), and the rules, regulations, and
requirements of the Idaho Public Utilities Commission("Commission") Orders No. 29841 and
35126. The ETC designation allows a carrier to be eligible for financial support from the FCC's
Universal Service Fund. 47 U.S.C. § 214(e). An ETC designation is a requirement to receive this
federal financial support to provide Lifeline service and allows the Company to participate in the
STAFF COMMENTS 6 APRIL 10, 2024

FCC's RDOF� Broadband initiative program for additional federal financial support to provide
services. The ETC designation grants the Company access to all USF programs, not just the
Lifeline-only program. As stated in Commission Order No.29841, it is imperative to ensure that
the recipient will act in the public interest. This is illustrated in the case below.
c. Case No CAB-T-24-01 Cable One-- Application Requesting to Relinquish ETC
Designation
The adverse impact of an ETC designation on the USF is demonstrated in the
letter$ ("Letter") that the FCC sent to Cable One VoIP LLC d/b/a Sparklight. This has prompted
Cable One to submit a request to relinquish its ETC designation, which was granted by
Commission Order No. 35008 in Case No. CAB-T-21-01.
The Letter expressed concerns about the adverse impact unnecessary additionalrecipients
have on the USF program. The Letter stated that:
One of the Commission's core Universal Service Fund policy objectives is to avoid
funding deployment in areas that already receive voice and broadband service from an
unsubsidized provider. Accordingly, the Rural Digital Opportunity Fund was intended to
focus on areas "wholly unserved by 25/3 Mbps"broadband service.' Concerns have
nonetheless been raised that certain areas included in the Rural Digital Opportunity Fund
auction are already served by one or more service providers that offer 25/3 Mbps
broadband service or otherwise raise significant concerns about wasteful spending, such
as parking lots and international airports.10
d. Additional ETC designations
The Company stated that the Grant of the petition ensures that it will be best positioned to
offer supportive services to existing and future customers. The Company can provide high-
quality services, including the ability to offer faster broadband speeds to a greater proportion of
its customers in rural areas. The Company's fiber-based voice service offers a high-quality
product for rural customers, and its broadband services provide speeds of up to approximately 1
Gbps or higher to customers.Id. at 5.
7 https://www.fcc.gov/auction/904
Auction 904• Rural Digital Opportunity Fund I Federal Communications Commission
8 Staff Exhibit 2-RDOF A904 LF Letter to Applicants-0024177222-Cable One VoIP LLC
'Rural Digital Opportunity Fund et al.,WC Docket No. 19-126 et al.,Report and Order,35 FCC Rcd 686, 689,
para. 5 (2020)(Rural Digital Opportunity Fund Order).
io See, e.g.,Letter from Alexi Maltas, SVP&General Counsel,Competitive Carriers Association,et al.,to Marlene
H.Dortch, Secretary,FCC,WC Docket No. 19-195 et al. (filed May 6,2021)(CCA Ex Parte Letter).
STAFF COMMENTS 7 APRIL 10, 2024

Staff is sympathetic to the needs of the Idaho low-income customers and customers in
rural areas. Staff do not believe that this alone is a compelling public interest argument. Staff
carefully assessed the added benefits of granting ETC designation to another competitive eligible
telecommunications carrier("CETC") in a service area where other CETCs currently offer the
same or similar service. In this Application, the Company does not appear to offer any unique
services, nor does it present a compelling advantage to the low-income customers it intends to
serve. The Company stated that"it will offer calling plans comparable to those offered by ILECs
in the Designated Service Area". Id at 11. However, those ILECs currently offer Lifeline and
Link-Up in the same ETC-designated service area. In addition, other wireless and wireline
companies offer Lifeline and Link-Up in the same designated service area.
The Company did not provide adequate information to support its assertion that a lack of
demand or a need exists for another ETC in the designated service area. Staff do not believe that
the Company has met the burden of proof to grant ETC status to the Company.
4. Tribal Notification
An ETC applicant seeking FTC`designation for any part of tribal lands shall provide a
copy of its application to the affected tribal government or tribal regulatory authority, as
applicable, at the time it files its application with the Commission. Evidence of such notification
should be provided to the Commission. This is required in statute 47 C.F.R. § 54.202,
in Commission Order Nos. 29841 and in Commission Order No. 35126.
In Application 2, the Company provided contradictory information regarding the tribal
notification requirement. In paragraph 21 of Application 2, the Company stated that"it does not
provide service on any Tribal Lands currently and therefore it is not required to provide a copy
of its application to any tribal governments". However, on page 1 of Application 2, the Company
confirmed thaf``ZFP, i.e., the Company, seeks ETC designation for the entire state of Idaho
(including tribal lands) in the designated service area, to receive Lifeline support in the state of
Idaho and authorization to participate in the Idaho Telecommunications Service Assistance
Program("ITSAP")". Additionally, in responding to Staff s Production Request No.10, the
Company stated that"we conduct annual tribal outreach within our service area describing
Federal Lifeline benefits"but did not provide documentary evidence of notification of
Application 2 to the tribal authorities.
STAFF COMMENTS 8 APRIL 10, 2024

5. The Ability to Remain Functional in Emergencies
The statutory requirement in Commission Order No. 35126 states that the ETC applicant
must demonstrate that it has a reasonable amount of backup power to ensure functionality
without an external power source; can re-route traffic around damaged facilities and can manage
traffic spikes resulting from emergencies. In response to Production Request No.29, the
Company provided a two-page narrative statement to demonstrate that it has the ability to remain
functional in emergencies. However, Production Requests No. 29 specifically requested that the
Company provide supporting documents. Within the statement, the Company listed the measures
it uses to provide reliable service. Staff had no way of verifying the credibility of these listed
measures without supporting documentary evidence. In Production Request No. 34, Staff
requested clarification by requesting supporting documentation. The Company did not produce
any documentation to meet this requirement.
STAFF RECOMMENDATION
After careful review of Application 2 and the Idaho ETC designation requirements,
Staff is not convinced that the Company has made a compelling argument to satisfy-the
requirements to be granted ETC status in the State of Idaho. Therefore, for reasons outlined
above, Staff recommends the Commission deny the Company's Application for an ETC
Designation within the State of Idaho.
Respectfully submitted this 10th day of April 2025.
Adam Triplett
Deputy Attorney General
Technical Staff. Johan Kalala-Kasanda
I:\Utility\UMISC\COMMENTS\ZFP-T-24-02 Comments Lead-In.doex
STAFF COMMENTS 9 APRIL 10, 2024

CERTIFICATE OF SERVICE
I HEREBY CERTIFY THAT I HAVE THIS 1 Oth DAY OF APRIL 2025, SERVED
THE FOREGOING COMMENTS OF THE COMMISSION STAFF , IN CASE NO. ZFP-
T-24-02, BY E-MAILING A COPY THEREOF, TO THE FOLLOWING:
JESSICA EPLEY
ZIPLY FIBER PACIFIC LLC
135 LAKE ST S STE 155
KIRKLAND WA 98033
E-MAIL: jessica.e ley�ic,ziply.com
PATRICIA JORDAN, ECRETARY
CERTIFICATE OF SERVICE