HomeMy WebLinkAbout20111110NCI to Staff 24-37.pdf
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
In the Matter of the Application of Nexus ) CASE NO. NCI-T-11-01
Communications, Inc. for Designation as an )
Eligible Telecommunications Carrier for Low ) RESPONSES OF NEXUS
Income Support Only ) COMMUNICATIONS TO
) SECOND PRODUCTION
) REQUEST OF THE
__________________________________________) COMMISSION STAFF
Nexus Communications, Inc. (“Nexus”) respectfully submits the following responses to
the Commission‟s second production request.
REQUEST NO. 24: On page 1 of the Responses of Nexus Communications to First
Production Request of the Commission Staff (“Responses”) to Request No. 1, the
Company states it does not currently have any customers in Idaho. However,
according to the Program Coordinator of the Idaho Emergency Communications
Commission (IECC), Nexus remitted 911 fees to Bannock, Boundary, and Kootenai
Counties. Please explain.
RESPONSE:
Nexus Communications, Inc., of Columbus Ohio does not have any subscribers
(either wireline or wireless) in the state of Idaho. Although Nexus has no knowledge of
these fees, it is possible that they may be paid by another entity with a similar name
unrelated to Nexus.
REQUEST NO. 25: On page 5 of the Responses to Request No. 11, Nexus states its
President, Steve Fenker, will be available Monday through Friday 9am to 6pm to
take all consumer complaints and can be reached on 740.549.1092. Please explain if
a Lifeline customer will be assessed a long distance charge to call the 740 area code
telephone number and if monthly minutes will be deducted for this call. In addition,
please explain how consumer complaints will be handled when Mr. Fenker is not
available to receive calls.
RESPONSE:
Nexus clarifies that its Lifeline customer service representatives will work
directly and on a day-to-day basis with consumers in an effort to resolve complaints
received directly from the Company‟s wireless subscribers. A subscriber can contact a
customer service representative seven days a week from 7A.M. - 9 P.M. CST by dialing
877-870-9444 from any landline phone or by dialing *611 from the subscriber‟s wireless
handset. Nexus also maintains live customer service representatives who are available
24/7 at 1-877-944-9444 who will respond immediately to all subscriber complaints.
Calls placed from a wireless handset in this manner will not result in a decrease in a
subscriber‟s wireless minutes.
In the event those efforts are unsatisfactory and any complaint is escalated to the
Commission or other state agency, Nexus has designated Mr. Fenker as the contact
person that will work directly with the Commission or other state agency to resolve any
remaining issues. Consistent with the response to Request No. 11, Mr. Fenker will be
available to work with the requesting agency Monday through Friday 9am to 6pm.
REQUEST NO. 26: On page 7 of the Responses to Request No. 13, the Company
does not explain the number of usage minutes per month a Lifeline customer will
receive, nor the additional minutes of use when a $3 to $50 usage cards are
purchased. Please state exactly how many minutes per month will be available to
the Idaho Lifeline customers and the exact number of minutes an additional card
represents (i.e. $0.20 per minute?). Please see Request No. 28 and No. 37.
RESPONSE:
Nexus offers three standard wireless Lifeline service plans in jurisdictions where
the Company has been designated as an eligible telecommunications carrier (“ETC”).
These three plans offer initial minutes of 68, 125 and 250 available at no monthly cost to
the subscriber after application of the Lifeline discount. The same plans will be made
available to Idaho consumers, and are as follows:
Plan* “Free”
Minutes**
Unused
Minutes/SMS
Rate for
Domestic Text
Rate
International
Text
1 250 Neither carry over
to next month
One text per
airtime minute
Not Available
2 125 Both carry over
to next month
One text per
airtime minute
$0.20 per text
sent or received
3 68 Both carry over
to next month
Two texts per
airtime minute
$0.20 per text
sent or received
* Standard national plans; number of minutes same in all states; other variances per state law or
order of state commission.
** “Free” refers to the out-of-pocket cost to qualified Lifeline subscribers after application of the
discount.
Idaho subscribers will also have the opportunity to purchase the following
additional airtime cards as detailed in the chart below:
Card Denomination Minutes Per Minute Rate
$3.00 20 $0.15
$5.00 40 $0.13
$10.00 120 $0.08
$20.00 300 $0.07
$30.00 500 $0.06
$45.50 Unlimited voice and text Not applicable
$50.00 950 $0.05
Nexus‟ service is prepaid, a payment model that is the standard throughout much
of the rest of the world, and one that provides a simple yet very effective tool to manage
limited family budgets.
REQUEST NO. 27: As follow up to the Responses to Request No. 20 on page 10-11,
please verify that an unopened text message from the Company to the Lifeline
customer will NOT be considered usage and, as such, nullify the “inactive” status of
the Lifeline customer.
RESPONSE:
The receipt of an unopened text message is NOT considered “utilization” under
Nexus‟ 60-day de-enrollment policy and, as such, will not nullify the “inactive” status of
the Lifeline subscriber. Nexus de-enrolls from Lifeline all accounts that incur zero
utilization for sixty (60) days. As stated in the response to Request No. 20, pursuant to
Nexus‟ 60-day policy “„[u]tilization‟ is defined as any transaction including…opening a
text message” (emphasis added). This is confirmed in the written explanation of Nexus‟
60-day policy in its Terms and Conditions of Service, which was provided as Exhibit B to
Nexus‟ response to staff‟s First Production Request.
REQUEST NO. 28: On page 1 of the Agreement, the airtime usage rate of $0.20 per
minutes is listed. Please confirm that this is the intended per minute rate for
Lifeline customers in Idaho.
RESPONSE:
Nexus believes that this question is referring to Nexus‟ Terms and Conditions of
Service, and will assume that all references in the questions to “Agreement” are to
Nexus‟ Terms and Conditions. The passage referred to in the Terms and Conditions
reads:
Per Minute Rates: Airtime, when used for standard voice usage
cellular calls, is valued at and will be decremented at $0.20 per
minute of use. (emphasis added)
Nexus confirms that the airtime usage rate that will be applicable to Idaho subscribers
will be $0.20 per minute.
REQUEST NO. 29: On page 1 of the Agreement, a Monthly Access Fee is described.
Please explain if this fee will be applicable in Idaho, and explain why Virginia
customers are exempt from paying this fee.
RESPONSE:
Nexus‟ service activation fee (“SAF”) is applicable in all jurisdictions in which it
operates. While Nexus does not operate in Virginia, it does offer wireless services in
West Virginia. Nexus‟ ETC designation order from the West Virginia requires Nexus to
waive the balance of its SAF not covered by Link Up funding.
REQUEST NO. 30: On page 1 of the Agreement, it states that when additional
airtime is added to the account before the current balance expires, the existing
balance will carry over to the new expiration date. Please explain if all unused
minutes will carry over, or if the carry over feature is only activated with the
purchase of additional minutes.
RESPONSE:
Consistent with the information provided in the response to Request No. 26,
unused initial minutes provided with the 125 and 68 minute plans carry over to the
following month, and unused initial minutes provided with the 250 minute plan do not
carry over. All additional minutes purchased expire after 90 days unless additional
minutes are purchased within the 90 days.
REQUEST NO. 31: On page 2 of the Agreement, domestic and international text
message rates are listed respectively as $0.10 and $0.20 per text message. Please
explain if Lifeline customers will also have usage deducted when sending or
receiving text messages. Can customers choose not to have text?
RESPONSE:
Lifeline subscribers‟ accounts are deducted usage when sending a text message or
“retrieving” (opening) a received text message. A subscriber that does not wish to use
the text feature may refrain from sending or retrieving (opening) texts.
REQUEST NO. 32: On page 3 of the Agreement, only a brief mention is made that
a compatible handset is required. Please explain if the Company provides a handset
to its Lifeline customers.
RESPONSE:
Nexus provides a free handset to qualified Lifeline subscribers. This is consistent
with the “Description of Annual Recertification/Verification” section of Nexus‟ Terms
and Conditions of Service, which provides “applicants who successfully submit a
REACHOUT WIRELESS™ application if and when required and for [Lifeline] applicants
who meet the specific eligibility requirements, those approved applicants will receive a
free cellular phone provided by REACHOUT WIRELESS™.” Specifically, a Lifeline
specialist will review the application to ensure compliance with state Lifeline
requirements. Upon approval, a free handset is shipped to the applicant with the initial
amount of free minutes preloaded. The cost of those handsets, including delivery to the
consumer, will be borne solely by Nexus and will not be covered in any way by support
from the Universal Service Fund.
As part of Nexus‟ “green” efforts, Nexus offers the option for the subscriber of
using a handset he or she already owns. Using existing handsets is an effective way of
reducing negative environmental impacts and avoiding waste, and Nexus customer
service representatives encourage our subscribers to use handsets that may otherwise end
up being discarded or sitting wastefully unused.
Nexus also notes that all handsets provided by Nexus are E911 compliant and
capable of initiating calls to 911 without regard to whether they are “active,” initialized,
or have remaining prepaid balances pursuant to the requirements of 47 C.F.R. § 20.18.
REQUEST NO. 33: On page 3 of the Agreement, the Service Activation Fee is
detailed. Please explain if this activation fee is applicable in Idaho? If so, what
activation expenses are incurred by the Company?
RESPONSE:
In an effort to offset the cost associated with the initial enrollment and
provisioning of service to the Company‟s wireless subscribers, Nexus imposes a standard
service activation fee (“SAF”) of $72.00, which is applicable to all new service
activations including Lifeline subscribers.
The SAF recovers the cost of the service ordering process along with the back-
office functions necessary to activate an account on the network so that the subscriber‟s
telephone will become functional. These are the same essential functions that are behind
the service activation fees of wireline carriers. Should Nexus be unable to recoup this
cost, at least in part, it would have no alternative other than to redirect financial resources
that the Company would otherwise use to deploy advertising and outreach efforts
designed to promote the existence of Lifeline and Link Up for qualified subscribers.
Nexus, unlike other competitors in the wireless Lifeline market, is not a publicly-
traded multinational corporation and does not have the ability to cross-subsidize its
Lifeline subscriber against a large base of contract post-paid subscribers. The wireless
industry is accustomed to average revenues per subscriber of approximately $50.00. The
Lifeline wireless model provides exponentially lower per subscriber revenues. A smaller
provider like Nexus must have another means of recovery, which in the case of Nexus is
the charging of a SAF. Whereas most other competitors in the wireless industry typically
overcome this gap with long term contracts and early termination fees, Nexus has
customarily and consistently charged a SAF for both our wireline and wireless
subscribers.
REQUEST NO. 34: On page 4 of the Agreement, it states that REACHOUT
WIRELESS™ rates and service are subject to change without notice. Please
explain if this condition will be applicable in Idaho.
RESPONSE:
Nexus will commit to not making any substantive changes in the company‟s
Lifeline offering until such changes would be approved by the Commission.
Additionally Nexus will commit to comply with Rule 600 to the extent those
requirements are applicable to prepaid providers of wireless service. Nexus will provide
subscribers, upon initiation of service and as a part of the Company‟s welcome kit, with
access to the Company‟s Terms and Conditions of Service available by directing to the
Company‟s website. Subscribers that do not have access to the Internet access will be
directed to make request to have a copy of the Company‟s Terms and Conditions of
Service mailed to them via the United States Postal Service (USPS) by calling Nexus‟
customer service at 1-877-870-944 from any phone. Subscribers may also request to have
a copy of the Terms and Conditions of Service mailed to them by dialing *611 from the
subscriber‟s wireless handset.
The Rule governing Information to Customers is codified in 31.41.01, Rule 600
of the Idaho Administrative Code. Specifically, Rule 600 requires each telephone
company providing local exchange service to make the following information available
to its customers:
A summary of the general terms and conditions under which service is provided;
A clear, concise explanation of:
1. All goods and services for which the customer is billed, including those
goods and services provided as a part of a package;
2. All recurring charges associated with individual goods and services or
package of goods and services for which the customer is billed;
3. Any early termination fees that apply if the customer terminates service
prior to the end of a service agreement or contract period;
4. The Company‟s dispute resolution procedures and a statement that an
informal or formal complaint may be filed with the Commission; and
5. If the customer subscribes to non-published service, the circumstances
under which the Company will release information about the customer or
the customer‟s service and to who it will be released.
Information must be provided to the customer in writing upon initiation of service and
whenever a material change in the terms and conditions of service or charges for goods
and services takes place.
REQUEST NO. 35: On page 5 of the Agreement, chargeable time is explained. The
charge for an outgoing call begins when the user presses “send.” Chargeable time
ends after the user presses “end” or a similar key, but not until the wireless
telephone’s signal of call disconnect is received by the Company’s facilities and the
call disconnect signal has been confirmed. Please explain what the Company’s
average times are to connect and disconnect calls after the user presses the
appropriate key or button. What guarantees, if any, does the Company have
regarding average connect and disconnect times?
RESPONSE:
As is common for all wireless carriers, call connect and disconnect times vary by
subscriber location. However, the average time for a call to be connected to the Public
Switched Telephone Network (PSTN) once the subscriber has pressed the SEND key is 5
seconds while the average time for a call to be disconnected from the PSTN after the
END key has been affirmatively pressed is 3 seconds.
Nexus‟ switch routinely analyzes call connect and disconnect times looking for
discrepancies in the average. Call begin and end times outside of a predetermined set of
parameters are reported to the Company. The Company has been able to confirm that all
complaints to date about call connect time have been a result of a subscriber‟s failure to
affirmative press the SEND key after entering the phone number. In all cases to date
where the call end time has exceeded the allowable time frame, Nexus has been able to
confirm the cause as a failure on the part of the subscriber to affirmatively press the END
key.
REQUEST NO. 36: Starting on page 7 of the Agreement, each state’s Lifeline
eligibility requirements are listed. The states listed in the Agreement do not match
those listed on the website. For example, California and Maryland are not listed in
the Agreement and Wisconsin is not listed on the website. Please explain this
discrepancy.
RESPONSE:
As of the date of submission of a copy of the Agreement (Exhibit B) to the
Commission, Nexus was in the process of updating its Terms and Conditions of Service
located on the Company‟s website. As of this date, the Terms and Conditions on the
Company‟s website has now been updated. Wisconsin is listed as No. 8, Maryland is
listed as No. 10 and California is listed as No. 13.
REQUEST NO. 37: In the State of Texas ETC Application case, Nexus recently
agreed to the following conditions:
Lifeline customers will not be charged against monthly minutes for
taxes, fees, or surcharges.
Lifeline customers will not be charged a reconnect fee or the
recurring monthly fee.
The Company will delete verbiage that states it can change a
customer’s phone number at any time for any reason.
Increase the number of free minutes per month from 68 to 120 for
Lifeline customers.
Additional purchased minutes for Lifeline customers can be
purchased at $0.10 per minute.
Lifeline customer will not be required to use minutes to call *611
customer service.
Please explain if the Texas ETC conditions alter the Company’s ETC Application in
Idaho.
RESPONSE:
Some of the conditions listed above are applicable to all jurisdictions while others
are a result of negotiation between Nexus and the Public Utility Commission of Texas.
For example, the following conditions are applicable to all jurisdictions, including Idaho:
Lifeline customers will not be charged a monthly recurring fee;
Lifeline customers will not be required to use minutes to call *611 customer
service.
In the case of the first condition immediately above, Nexus is now offering
qualified Lifeline customers in all jurisdictions including Texas a choice of the rate plans
illustrated in the response to Request No. 26 and does so with no monthly recurring fee.
Upon designation as an ETC, Nexus will offer qualified Lifeline residents in Idaho these
same service plans.
In the case of the second condition immediately above, Nexus does not deduct
from a subscribers available balance for calls placed from a subscriber‟s handset to
Nexus that are dialed via *611.
The rest of the conditions are a result of negotiation and include:
Lifeline customers will not be charged against monthly minutes for taxes, fees, or
surcharges;
Lifeline customers will not be charged a reconnect fee;
The Company will delete verbiage that states it can change a customer‟s phone
number at any time for any reason;
Additional purchased minutes for Lifeline customers can be purchased at $0.10
per minute.
The first and fourth conditions agreed to between the parties are linked together.
Nexus has agreed that it will not decrement the amount of any taxes, fees or surcharges
from a subscriber‟s available balance and will instead absorb these as a cost of doing
business paying all taxes, fees and surcharges out of the revenues generated through the
sale of replenishment minutes. In return, Nexus will offer airtime replenishment minutes
for a flat $0.10 per minute regardless of the denomination selected by the subscriber.
This, in effect, prohibits qualified Lifeline subscribers in Texas from being able to take
advantage of the lower per minute rate available in other jurisdictions with the $10.00
($0.08 per minute), $20.00 ($0.07 per minute), $30.00 ($0.06 per minute) and $50.00
($0.05 per minute) airtime cards.
With regard to the second agreed upon condition, Nexus has agreed to waive its
customary fee for reconnecting a suspended service.
With regard to the third agreed upon condition, Nexus has not agreed to any
conditions that restrict its ability to change a subscriber‟s phone number, but has simply
agreed to inform the subscriber prior to changing his/her wireless phone number.
Respectfully Submitted,
Danielle Frappier
Brian A. Nixon
DAVIS WRIGHT TREMAINE LLP
1919 Pennsylvania Avenue, N.W. Suite 800
Washington, D.C. 20006-3401
Phone: (202) 973-4242
Counsel for Nexus Communications, Inc.
November 10, 2011