990909_dh.doc

DECISION MEMORANDUM

TO: COMMISSIONER HANSEN
COMMISSIONER SMITH
COMMISSIONER KJELLANDER
MYRNA WALTERS
STEPHANIE MILLER
DAVE SCHUNKE
TONYA CLARK
RON LAW
JOE CUSICK
WAYNE HART
ED HOWELL
ANGIE VELASQUEZ
WORKING FILE

FROM:

DATE: September 8, 1999

RE: IMPLEMENTATION OF ELECTRONIC FILING FOR TARIFFS/PRICE LISTS, CASE NO. GNR-U-99-1

On July 16, 1999, the Commission issued a Notice of Modified Procedure soliciting comments on the Commission’s proposal to initiate electronic filing of tariffs and price lists. In its Notice, the Commission sought comments regarding its proposed procedures for electronically filing tariffs and price lists. The Commission also asked for comments regarding administrative rules necessary to implement electronic filing “in all matters before the Commission.” Order No. 28095 at 3. In response to its Notice, the Commission received comments from U S WEST Communications and PacifiCorp.

BACKGROUND
The Commission’s Notice contained proposed procedures to implement electronic filing of tariffs and price lists. Order No. 28095 at 1-3. Briefly, the Commission proposed that electronic filing be voluntary and that utilities wishing to file electronically will submit the filing via the Internet to the Commission’s Home Page in Adobe portable document format (PDF). In addition to the electronic filing, the utilities will be required to file a paper “hard” copy with the Commission Secretary.
Utilities desiring to file electronically will obtain one or more passwords that will permit access to a portion of the Commission’s Home Page. The filing utility will fill in an electronic form and subsequently upload the tariffs or price lists. Upon completion of the successful upload, a “receipt” will be electronically presented to the filer. The uploaded filing will then be placed on the PUC’s Home Page under the heading “Proposed Tariff/ Price List.” Once the tariff is approved or the price list becomes effective, the existing tariff or price lists will be updated by the Commission Staff and placed on the Home Page under the heading “Approved Tariff/Price List.” The filer will also be notified by E-mail that the tariff/price list has been approved or received.
The Commission’s Notice stated that the Commission believes its current computer system is adequate to accommodate the electronic filing of tariffs and price lists. It observed that software upgrades or new equipment may be necessary if its computer system becomes overloaded or unable to timely handle the volume of traffic. The Commission also noted that utilities wishing to file electronically will need an Internet service provider, a web browser, Adobe exchange software, a login name and password to the IPUC web server and instruction on how the Commission’s system works.
In addition to the proposed procedures, the Commission also requested comment “on the concept of a rule that would allow for electronic filing in all matters before the Commission.” Order No. 28095 at 3. The Commission also sought comments regarding the Commission Secretary’s ability to grant waivers or make exceptions to persons unable to make electronic filings. Id.

COMMENTS
The Commission received only two written comments in response to its electronic filing proposal. These comments are reviewed in greater detail below.
PacifiCorp
In its comments, PacifiCorp supported the Commission’s incremental approach to electronic filing. Comments at 1. The Company agreed with the proposal to allow utilities “the option of filing tariffs and price lists electronically with one paper copy mailed separately.” However, the Company noted that there may be instances where documents included in other electronic filings (i.e., not tariffs/price lists) may not lend themselves to be converted to a PDF format. Such items might be photographs, maps, oversize spreadsheets or documents containing trade secrets or other confidential material. These possible exemptions to PDF format support the concept of having the Commission Secretary grant an exemption or waiver from an electronic filing rule applicable to all documents.
PacifiCorp also expressed concern regarding the Commission’s ability to upload voluminous documents that may not only be difficult to upload but may also “be time consuming for the viewer to page through.” Id. at 2. The Company commented that the Commission may find it necessary to put a page limit on electronic filing and require paper filings for large documents. In setting a page limit, the Commission may wish to consider a dots per inch (dpi) “standard since a document scanned and PDF’d at 250 dpi will take up less room on the server than the same document scanned at 600 dpi.” Id. Given the number of parties that may wish to file electronically, PacifiCorp was concerned that the users may experience delay and/or glitches in the electronic filing software which could result in missed filing deadlines. The Company inquired whether the Commission’s software is capable of handling multiple users uploading large files at the same time or does it form a queue of “first come, first served”?
Addressing the request concerning rules, PacifiCorp suggests that the Commission experiment with electronic filing for a period of time prior to promulgating any rules. “Such a process would provide the Commission and parties experience helpful in identifying issues and formulating appropriate rules.” Id. at 1. The Company also stated that there may be many instances where it is not necessary or appropriate for utilities to electronically file in “all matters.” PacifiCorp commented that electronic filing should only be required in formal docketed matters and not other instances such as the Company’s annual report, its results of operation, etc.
The Company concluded by suggesting that the Commission consider creating a work group to discuss concerns or solutions during the initial phase of the electronic filing process. Id. at 2.

B. U S WEST
The Company commended the Commission for pursuing the transition of many of its regulatory procedures into the electronic medium. The Company asserted that the current volume of information necessary for the Commission and other utilities to process dictates a more efficient medium to replace paper for filing and storage. U S WEST concurred that electronic filing will increase the Commission’s efficiency and streamline its regulatory oversight.
U S WEST agreed that electronic filing should be voluntary “at least until a period of testing convinces the Commission and those companies who choose to work with this proposal that the electronic option is efficient and economical.” U S WEST Comments at 3. As was the case with PacifiCorp, U S WEST recommended that the Commission implement electronic filing incrementally for a period of no less than one year. This would allow the Commission to obtain experience and address problems before the promulgation of a rule. The Company supported granting the Commission Secretary authority to make exceptions and/or grant waivers to those unable to make electronic filings. Id.
Beyond the filing of tariffs and price lists, U S WEST stated that the Commission’s procedures need “much more clarification before the Company can endorse expansion to [other] areas.” Id. The Company expressed concern that a single model for electronic filing may not adequately address the breadth and scope of all the Commission’s various processes. “For example, matters involving significant amounts of highly confidential information or matters which have very little interest to any segment of the industry or the public may not prove to be suitable candidates for an electronic process.” Id. at 3-4. The Company suggested that an appropriate starting point for the expansion of electronic filings may be to encourage voluntary filings of annual reports or non-confidential testimony and exhibits in cases of public or industry interests.
In addition to its general comments set out above, U S WEST also identified four specific areas that warranted further review and consideration. These areas are discussed below.
1. Security. U S WEST suggested that the Commission employ hypertext transfer protocol secure (HTTPS) software to provide a secure, encrypted transmission path to a secured partition within the Commission’s server. The Company maintained that this is a standard method used in the Internet today to conduct electronic commerce and to protect confidential/proprietary documents.
2. Back-up server. The Company urged the Commission to consider other computer sites which would serve as a back-up in case of failure of the Idaho server. U S WEST suggested that the Commission consider entering a partnership with a neighboring state to act as mirror sites for one another. “This would allow electronic filing to continue in the event the Idaho Commission server was down.” Id. at 2. While such a procedure may not be necessary for the initial implementation of electronic filings of price lists and tariffs, the Company urged the Commission to address this issue now since establishment of redundant systems could be a time-consuming process.
3. Archiving. The Company observed that the Commission’s proposal does not mention development of an electronic system for archiving files and superceded tariffs. The Company maintained that development of such a system is important to the transition to an electronic medium. Along this line, U S WEST urged the Commission to consider establishing the electronic filing as the official filing in a particular matter. While the Company understands the practical and legal considerations why a paper copy must accompany the electronic filing, the electronic system should be designed to replace the existing paper record. If this is not the objective, “there is a danger that this process will simply create an additional layer of activity which drains, rather than conserves, the Commission and industry resources.” Id. at 3.
4. Hot-links. The Company suggested that rather than maintain a copy of the electronic tariffs/price lists on its Home Page, that the Commission merely establish “hot-links” to its set of tariffs/price lists. In other words, the tariffs/price lists would be available on the utility’s server rather than on the Commission’s server. In the long run, this may be much more effective because U S WEST and other utilities already maintain a full set of proposed and effective tariffs on their external web sites.
STAFF ANALYSIS
Both U S WEST and PacifiCorp agreed with the Commission’s proposal that the electronic filing of tariffs/price lists should be on a voluntary basis and be performed on an experimental or trial basis. Both commentors also agreed that filing tariffs/price lists was an appropriate starting point for electronic filing. U S WEST recommended that the Commission continue its voluntary program of electronic filing of tariffs/price lists for at least a year.
Both parties suggested that the Commission refrain from promulgating any formal rules until the conclusion of the trial period. Experience gained from the trial would allow the Commission to identify and address problems before the promulgation of rules. For example, U S WEST expressed concern that a single model for electronic filing may not be adequate to accomplish the electronic filing of all the Commission’s various processes.
Both commentors also addressed concerns or posed questions about the electronic filing process. Although the Staff did not file written comments in this matter, it does have information which may assist the Commission in evaluating the issues and questions raised by the parties. Many of the questions raised by the parties are addressed in the “Users Manual” for the electronic filing of tariffs/price lists. The Users Manual is attached for your review. Some of the computer screens depicted in the Manual may change slightly as the Commission Staff prepares for the implementation of electronic filing. These issues are discussed below.
PacifiCorp expressed concerns that there may be instances where electronic filing is not appropriate for certain types of documents such as photographs, maps, or documents containing trade secrets. U S WEST also expressed concern that the Commission utilize software that provides a secure, encrypted transmission path. As explained in Part 2 of the Users’ guide, the Staff anticipates that some of documents may not lend themselves to be converted to a PDF format. Consequently, guideline No. 1 provides that exhibits and maps may be exceptions to the electronic file process.
One of the reasons for starting with tariffs/price lists was that such documents are not generally considered to be trade secrets or confidential. In instances where confidential information may be contained in the transmittal letter or other background documents, the Users’ Manual contemplates in general guideline No. 9 that confidential documents shall be filed with the Commission on floppy disks. In addition, the Commission has recently proposed to amend its Rules of Procedure. In particular, the Commission’s proposed rules contemplate procedures for the filing and safeguarding of confidential and trade secret information. If adopted, the Commission’s proposed procedural rules would govern how confidential or trade secret information is to be filed. As is currently the case, trade secret confidential information when filed in paper form should be clearly marked and the transmittal sheet should advise the Commission Secretary that the transmittal includes documents alleged to be trade secret or confidential.
PacifiCorp expressed concerns regarding the Commission’s ability to upload large documents. For purposes of electronic filing, the Users Manual contemplates the maximum file size is three million bits of data. This is roughly 700 pages of printed material. If documents are larger than 300 pages, then the Manual instructs the filer to divide the document into several parts.
3. Both commentors inquired whether the Commission’s software and equipment is capable of handling multiple users uploading files at the same time. In addition, U S WEST also urged the Commission to consider whether other computer sites could serve as an appropriate back up in case of failure of the Commission’s server. As currently configured, the Staff contemplates that the Idaho server will be able to accommodate multiple up-loadings. As is the case with any electronically transmitted document, the equipment of the sender, the transmission path, and the server of the receiver all affect transmission and up-loading speeds.
Turning to U S WEST’s question about a back-up server, the Staff is exploring the possibility of identifying a back-up server with a sister state. The problem currently confronting the Commission is that surrounding states have not fully implemented electronic filing, as is the case with Michigan and Connecticut. Staff anticipates that as the electronic filing trial proceeds, that this issue will be further scrutinized.
4. U S WEST also inquired about development of the electronic system for archiving files and superceded tariffs. Although the Company recognized the practical and legal consideration, it suggested that the Commission take the long-term view that electronic filing will become the “official” filing for the Commission. If this is not the ultimate objective, the Company maintained that there is “a danger that this process will simply create an additional layer of activity which drains, rather than conserves, the Commission and industry resources.”
Based upon U S WEST’s comment, the Staff recommends that the Commission create a filing site for superceded or cancelled electronic tariffs/price lists. Although Staff believes that it is appropriate to maintain such an electronic archiving system, Staff recommends that the Commission not place these documents on the Home Page due to the possibility of confusion. As proposed by the Commission, all newly submitted electronic tariffs/price lists would be initially placed in a “pending” file. At such time as the pending tariff/price list become effective, they would be moved to the “effective” or approved site on the Commission’s Home Page.
Turning to U S WEST’s other comment that electronic files should become the Commission’s official files, Staff believes that it is a laudable goal. However, adoption of electronic filing as the Commission’s official files would require changes to the Commission’s Administrative Rules as well as statutes. Staff believes that there is plenty of time as the Commission incrementally implements electronic filing to revisit this question.
5. Finally, U S WEST suggested that rather than maintain electronic tariffs/price lists on the Commission’s Home Page that the Commission merely establish “hot-links” so that tariffs and price lists would be maintained by the utilities rather than the Commission. Staff believes that while such redundancy is reasonable, that the Public Utilities Law requires that tariffs/price lists be filed and maintained by the Commission. Idaho Code § 61-305 provides that every public utility “shall file with the Commission such schedules showing its rates, tolls, etc. In addition, Idaho Code § 62-606 requires Title 62 telecommunications utilities to file with the Commission tariffs or price lists. Consequently, it is Staff’s opinion that the statutes require that the Commission maintain such tariffs/price lists. Again, this may be a matter which will be reviewed and revisited as the Commission gains experience with electronic filing.

STAFF RECOMMENDATION
The Commission’s Procedural Rule 132 requires that utilities file an original and three copies of their tariff schedules with the Commission. IDAPA 31.01.01.132. For Title 62 telecommunications companies, Rule 204 also requires an original and three copies of the price list or tariff to be filed with the Commission. IDAPA 31.42.01.203. Title 62 Rule 101 contemplates that all proceedings under the Telecommunications Act will be conducted pursuant to the Commission’s Rules of Procedure. Procedural Rule 13 provides that “the Commission may permit deviation from [its procedural] rules when it finds compliance with them is impractical, unnecessary or not in the public interest.” IDAPA 31.01.01.013.
Because the electronic filing of tariffs/price lists is on a voluntary and experimental basis, the Staff does not believe that it is necessary to change the two rules specifying the number of copies to be filed with the Commission. Consequently, companies not participating in the electronic filing will submit the requisite number of copies required in the two rules. For those utilities participating in the electronic filing process, then the Commission pursuant to its authority in Rule 13 may allow participants to file one electronic and one original paper copy with the Commission.
The preparation of the software necessary to up-load electronic tariffs/price lists is proceeding on schedule. The Staff contemplates that the necessary software will be ready by September 30, 1999. Staff recommends that the Commission begin its electronic filing of tariffs/price lists on or after October 18, 1999. This will permit the Staff to first run a few internal trials then actually run some utility generated trials to check the system. This period between September 30 and October 18 may also be utilized to up-load all the tariffs or price lists for those companies desiring to participate in the trial period. For companies desiring to participate in the trial, it will be necessary to up-load all their tariffs and price lists rather than just the subsequent amendments to tariffs and price lists.
Staff also recommends that rather than attaching the Users Manual to the Order for 800 utilities, that the Order implementing electronic filing merely recite that the Manual is contained on the Commission’s web site.

Commission Decision
Does the Commission wish to proceed with the implementation of electronic filing for tariffs and price lists?
Does the Commission approve of the draft Users Manual?
Does the Commission wish to implement electronic filing on or about October 18, 1999?
Does the Commission find pursuant to Procedural Rule 13, that it is reasonable to reduce the number of copies to be filed electronically for participants in the electronic filing trial?
Is there anything else?

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DECISION MEMORANDUM 9