StipforHighCostFund.doc

WELDON B. STUTZMAN
DEPUTY ATTORNEY GENERAL
IDAHO PUBLIC UTILITIES COMMISSION
PO BOX 83720
BOISE, IDAHO 83720-0074
[phone]
IDAHO BAR NO. 3283

Street Address for Express Mail:
472 W. WASHINGTON
BOISE, IDAHO 83702-5983

Attorney for the Commission Staff

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE INVESTIGATION TO DETERMINE AN APPROPRIATE COST MODEL USING FORWARD-LOOKING ECONOMIC COSTS FOR CALCULATING THE COSTS OF BASIC TELECOMMUNICATION SERVICES IN IDAHO
)
)
)
)
)
)
)
CASE NOS. GNR-T-00-2
GNR-T-97-22

STIPULATION FOR THE
NON-RURAL HIGH COST
FUND

IN THE MATTER OF THE INVESTIGATION TO ESTABLISH THE IDAHO HIGH COST FUND AS REQUIRED BY IDAHO CODE § 62-610A THROUGH F.
)
)
)
)
)

STIPULATION
COME now Qwest Corporation, Idaho Telephone Association, Citizens Telecommunications of Idaho, Inc., TDS Telecom, Century Telephone of Idaho and the Staff of the Public Utilities Commission, by and through their respective attorneys of record and pursuant to Rule 272 of the Commission’s Rules of Procedure, IDAPA 31.01.01.272, and present the following settlement and stipulation for the Commission’s consideration.
1. Following a protracted effort by the parties to establish a high cost fund for non-rural companies in Idaho using national computer models, the Commission convened a prehearing conference in this case on September 18, 2000. The purpose of the conference was to discuss “alternatives to adoption of the FCC cost model, or any of the currently advocated models, as a means of complying with the legislature’s directive to establish a high-cost universal service fund” pursuant to Idaho Code § 62-610F. The Commission directed the parties to “help [the Commission] devise a simple, practical, understandable scheme for Idaho’s non-rural USF using readily available data and information so that we can quickly resolve these issues and complete this process.” Tr. p. 1022. This Stipulation results from the parties’ effort to comply with the Commission’s instructions.
2. The FCC Synthesis Model will be used only for the identification of non-rural high cost areas within the State. Using the FCC model, the relative high cost areas are identified, as set forth in Attachment A to this Stipulation. The high cost areas are divided into five groups for determining break points for support zones.
3. Two zones should be created in certain high-cost wire centers as depicted in Attachment A. Zone 1, also known as the base rate area, is identified as the high-density, low-cost area and is not eligible for support from the fund. Zone 2 is comprised of those areas outside the base rate area that are low-density, high-cost areas and are eligible for support from the high cost fund.
4. An eligible telecommunications carrier (ETC) must make formal application to the Commission to receive support payments from the high-cost fund. The parties to this Stipulation agree that their initial application(s) must demonstrate that the proposed draw will be revenue neutral; i.e., that there will be a dollar for dollar reduction in the ETC’s Title 61 rates to match the amount of support it will receive from the high cost fund. Thereafter any additional requests for draws from the fund must be consistent with the provisions of Idaho Code § 62-610F.
5. When an ETC requests funds from the high cost fund, it may be necessary to identify specific customer locations in the applicable Zone 2 area where the funds will be targeted. The fund Administrator, as part of the fund administration duties, will be responsible for identifying specific customer locations if necessary. Identifying physical locations for customers may require geocoding and mapping for those customers in a two-zone support area. In single zone support areas (all customers are located in Zone 2), identification by NXX and exchange maps may be sufficient. The Administrator shall be responsible for establishing a database to track customers within the high cost areas to ensure that the funding is portable for competitors and to safeguard against over or under collection from the fund. The requesting carrier will provide whatever information is within its control and its cooperation to the Administrator to assist the Administrator in locating customers.
6. A 650 line per square mile density factor will be used in establishing the base rate areas. Because selecting the density factor is significant in sizing the fund, and because the use of the 650-line number reflects a compromise by the parties, the Commission should review the appropriate line per square mile factor within five years, or upon a formal request from an eligible telecommunications carrier.
7. Once the fund is initiated and a surcharge approved, the parties recommend the initial fund amount should be no less than $2 million or more than $6 million for non-rural companies. The surcharge to fund the high-cost fund shall be imposed on customers as set forth in Idaho Code § 62-610F(2).
High-cost fund support shall be used “to preserve and advance universal service within the state of Idaho.” Idaho Code § 62-610F(2). Pursuant to Idaho Code § 62-610C, the Commission should “designate those service(s) which should be made available to consumers by eligible telecommunications carriers to meet their obligation to provide universal service.”
9. This Stipulation provides a structure for the Commission to establish the non-rural high cost fund. However, the parties do not believe it is necessary at this time for the Commission to determine and impose a surcharge to provide funds to the new high-cost fund. At some point in the future when an ETC makes a formal request for support from the fund, the Commission can determine the appropriate surcharge. In the meantime, imposing a new surcharge on customers can be avoided, and companies may pursue other regulatory efforts, such as re-balancing rates or establishing a maximum basic local exchange rate pursuant to Idaho Code § 62-622, that may further delay the need to fund the new high-cost fund.
10. The parties shall support this Stipulation and recommend its adoption by the Commission, which may represent a departure from testimony and exhibits already prefiled by the parties. It is not necessary that a party formally withdraw its previously filed testimony or exhibits in order to support this Stipulation. In addition, there may be issues not addressed in the Stipulation that the parties are free to present to the Commission in testimony to be prefiled pursuant to the schedule adopted by the Commission.
11. This Stipulation results from the parties’ effort to comply with the Commission’s instructions. The parties acknowledge that this Stipulation is the product of negotiations and compromise. Except as specifically set forth herein and except in any action to enforce this Stipulation, nothing in this Stipulation (or any supporting testimony, presentation or briefing), shall be (i) cited or construed as precedent or as indicative of the parties’ positions on a resolved issue, or (ii) asserted or deemed to mean that a party agreed with or adopted another party’s legal or factual assertions or methodologies, in any other proceeding, including those before this Commission, any other state utility commission, the state courts of Idaho or of any other state, the federal courts, or the Federal Communications Commission.
12. This Stipulation shall not be construed against any party on the basis that it was the drafter of any or all portions of this Stipulation.
Respectfully submitted this day of December 2000.

For: IPUC Staff

Weldon B. Stutzman
Deputy Attorney General

For: QWEST CORPORATION

Mary S. Hobson
Stoel Rives LLP

For: ITA

Conley Ward
Givens Pursley LLP

For: Citizens Telecommunications of Idaho, Inc.
Century Telephone of Idaho and TDS Telecom

Morgan W. Richards
Moffatt, Thomas, Barrett, Rock & Fields, Chartered

For: AT&T COMMUNICATIONS

David S. Harmon
Mary B. Tribby

For: VERIZON NORTHWEST, INC.

Christopher S. Huther
Preston Gates Ellis & Rouvelas Meeds LLP

For: VERIZON WIRELESS

Ronald L. Williams
Attorney at Law
Anne Hoskins
Verizon Wireless

M:gnrt002_gnrt9722_ws_stip2
STIPULATION FOR THE
NON-RURAL HIGH COST FUND 3