20030604Technical Hearing - Day 1.pdf

Vol2Ti~1.txt

BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION

IN THE MATTER OF THE APPLICATION OF)
QWEST CORPORATION FOR ) Case No.
DEREGULATION OF BASIC LOCAL ) QWE-T-02-25
EXCHANGE RATES IN ITS BOISE, NAMPA,)
CALDWELL, MERIDIAN, TWIN FALLS, )
IDAHO FALLS, AND POCATELLO ) TECHNICAL HEARING
EXCHANGES. )
___________________________________)

HEARING BEFORE

COMMISSIONER PAUL KJELLANDER(Presiding)
COMMISSIONER DENNIS S. HANSEN
COMMISSIONER MARSHA H. SMITH

PLACE: Commission Hearing Room
472 West Washington Street
Boise, Idaho

DATE: June 4, 2003

VOLUME II - Pages 35 - 332

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1 BOISE, IDAHO, WEDNESDAY, JUNE 4, 2003, 9:30 A.M.
2
3
4 COMMISSIONER KJELLANDER: Well, good morning.
5 This is the time and place for a hearing in Case No.
6 QWE-T-02-25, also referred to as In the matter of the
7 Application of Qwest Corporation for deregulation of basic
8 local exchange rates in its Boise, Nampa, Caldwell, Meridian,
9 Twin Falls, Idaho Falls, and Pocatello exchanges.
10 My name's Paul Kjellander; I'm the Chairman of
11 today's proceedings. To my right is Commissioner
12 Dennis Hansen, and to my left is Commissioner Marsha Smith.
13 As we begin today, we'll start with the
14 appearances of the parties, and let's begin with Qwest.
15 MS. HOBSON: Good morning, Mr. Chairman. I'm
16 Mary Hobson from the Stoel Rives law firm. And also appearing
17 on behalf of Qwest today is Adam Sherr, who is from the Qwest
18 law department and located in Seattle, Washington.
19 MR. SHERR: Good morning.
20 COMMISSIONER KJELLANDER: Thank you, and welcome
21 to the Commission.
22 Let's move now to the Deputy Attorney General for
23 the Commission Staff.
24 MR. STUTZMAN: Thank you, Mr. Chairman.
25 Weldon Stutzman, Deputy Attorney General, on behalf of the
35

HEDRICK COURT REPORTING COLLOQUY
P. O. BOX 578, BOISE, ID 83701
 1 Commission Staff.
2 COMMISSIONER KJELLANDER: Thank you.
3 Mr. Gannon.
4 MR. GANNON: Thank you, Mr. Chairman.
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5 COMMISSIONER KJELLANDER: Talk in your
6 microphone.
7 MR. GANNON: Oh, sorry. John Gannon appearing on
8 behalf of the Intervenors Meierotto, et al, and with me today
9 is Gary Neal, one of the Intervenors, and seated at the back
10 table is Sidney Meierotto and Tina Meierotto.
11 COMMISSIONER KJELLANDER: Thank you, and good
12 morning.
13 Let's move to Mr. Randall from Verizon.
14 Mr. Randall, we'll have you come forward and there's a
15 microphone in front of you. If you hit "touch" and a red light
16 comes on, then you're active.
17 MR. RANDALL: Good morning. I'm Dean Randall
18 from Verizon Northwest, and we're an Intervenor in this
19 proceeding, and I'm just here today to observe the proceeding
20 and I don't plan on having any cross-examination questions.
21 COMMISSIONER KJELLANDER: Okay. We'll hold you
22 to that until you change your mind.
23 MR. RANDALL: Thank you.
24 COMMISSIONER KJELLANDER: Thank you.
25 Is there anyone else that we've missed as an
36

HEDRICK COURT REPORTING COLLOQUY
P. O. BOX 578, BOISE, ID 83701
 1 Intervenor who needs to be recognized?
2 If not then, we'll move forward then with
3 preliminary matters. Are there any preliminary matters that
4 need to come before the Commission? Mr. Gannon.
5 MR. GANNON: Mr. Chairman, we did have a Motion
6 to file a very short surrebuttal testimony by Mr. Neal relating
7 to a specific issue that was raised in the rebuttal testimony
8 of Mr. Teitzel, and we would offer that.
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9 COMMISSIONER KJELLANDER: We do have that, and is
10 there any objection to the surrebuttal request?
11 MS. HOBSON: Yes, Mr. Chairman. Qwest objects to
12 the surrebuttal request on the grounds that we didn't receive
13 it until appearing in the hearing room this morning, we have
14 not had an opportunity to review it, our witnesses have not had
15 an opportunity to review it, and as a result of that, even
16 though it is very brief and I can glance through it, we haven't
17 had the opportunity to explore any of the claims that are being
18 made in the testimony.
19 COMMISSIONER KJELLANDER: Okay. Well, since it
20 is surrebuttal, what we can do is take that up a little bit
21 later and we'll still consider it an active Motion, we won't
22 rule on it at this point, and perhaps after our -- we'll see
23 how things proceed, but clearly I think before either noon or
24 shortly after the lunch break today we can come back to this as
25 the first order of business. Would that be appropriate?
37

HEDRICK COURT REPORTING COLLOQUY
P. O. BOX 578, BOISE, ID 83701
 1 MS. HOBSON: Thank you.
2 MR. GANNON: And I do want to apologize to
3 Ms. Hobson. I did fax it over late yesterday afternoon, but
4 apparently it got lost somewhere.
5 COMMISSIONER KJELLANDER: And are there any
6 objections from any of the other parties in the case? If not,
7 we'll proceed with that.
8 Any other preliminary matters that need to come
9 before the Commission?
10 If not, then Ms. Hobson, if you'd like to call
11 your first witness; and as we move forward, just as a question
12 for clarification, do you intend to do your direct and rebuttal
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13 simultaneous?
14 MS. HOBSON: Yes, Mr. Chairman, we do.
15 COMMISSIONER KJELLANDER: Thank you.
16 MS. HOBSON: And as a point of clarification,
17 Mr. Gannon also handed me objections to the rebuttal testimony
18 of one of the witnesses. I don't know if this is a preliminary
19 matter, if you intend to take this up when the witness
20 Mr. Teitzel testifies, or if you're waiving this objection at
21 this time.
22 COMMISSIONER KJELLANDER: Mr. Gannon.
23 MR. GANNON: Thank you, Mr. Chair. What I
24 thought was in view that Ms. Hobson didn't get the objections
25 yesterday, I would just raise that issue at the time
38

HEDRICK COURT REPORTING SOUBA (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Mr. Teitzel testifies, and under the Rule. And
2 they are in writing. I did that as a matter of convenience for
3 everybody rather than --
4 COMMISSIONER KJELLANDER: Okay. So it's your
5 preference then to take it up at the time the witness takes the
6 stand?
7 MR. GANNON: That's fine.
8 MS. HOBSON: Thank you for that clarification.
9 Qwest calls John Souba.
10
11 JOHN F. SOUBA,
12 produced as a witness at the instance of Qwest Corporation,
13 being first duly sworn, was examined and testified as follows:
14
15 DIRECT EXAMINATION
16 BY MS. HOBSON:
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17 Q. Would you please state your name for the
18 record?
19 A. My name is John Souba.
20 Q. And where do you work and in what capacity?
21 A. I work for Qwest Communications. I'm the acting
22 regulatory director for Idaho, located here in Boise.
23 Q. And in your capacity as acting regulatory
24 director, did you prepare certain prefiled testimony dated
25 December 17, 2002, consisting of 26 pages?
39

HEDRICK COURT REPORTING SOUBA (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 A. I did.
2 Q. Do you have any changes, corrections, or
3 deletions to make to that testimony at this time?
4 A. Yes, I have two minor changes:
5 First, I would direct you to page 20 on line 13.
6 The second part of that sentence, it says Customers receive a
7 $12 credit. It should be $13.
8 And then second -- I guess we haven't gotten to
9 the exhibits yet. I'll wait.
10 Q. With that correction to your testimony, if I were
11 to ask you the questions contained in the prefiled testimony
12 today now that you've been sworn, would your answers be the
13 same?
14 A. Yes, they would.
15 Q. And did you also file certain exhibits labeled
16 Exhibit 1 and 2 with your testimony?
17 A. Yes, I did.
18 Q. And I guess you also filed revised versions of
19 those exhibits, did you not?
20 A. Yes, I did.
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21 Q. They are still labeled -- or, I'm sorry. You
22 filed a revised version of Exhibit 2?
23 A. Correct.
24 Q. Do you have any other corrections or changes to
25 make to Exhibits 1 and 2?
40

HEDRICK COURT REPORTING SOUBA (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 A. Just one minor change: Unfortunately, the
2 revised Exhibit 2 indicates page 1 of eight for each one of
3 those pages, so page 1 is, of course, correct, but page 2
4 indicated Boise should be page 2, Caldwell should be page 3,
5 Idaho Falls should be page 4, Meridian should be page 5, Nampa
6 should be page 6, Pocatello page 7, Twin Falls page 8.
7 Q. Okay.
8 COMMISSIONER SMITH: Mr. Chairman.
9 COMMISSIONER KJELLANDER: Certainly. I think
10 that the fact that the order in our books may not reflect what
11 you just said, you may need to go just a little bit slower.
12 Q. BY MS. HOBSON: Would you please repeat that,
13 Mr. Souba?
14 A. Sure. Page 2 should be Boise and page 3 is
15 Caldwell. Page 4 is Idaho Falls. Page 5 is Meridian. Page 6
16 is Nampa. Pocatello is page 7. Finally, Twin Falls is page 8
17 of eight.
18 Those are the only corrections.
19 Q. Thank you.
20 MS. HOBSON: Is the Commission prepared for me to
21 move on?
22 COMMISSIONER KJELLANDER: Yes.
23 Q. BY MS. HOBSON: Okay. Mr. Souba, in your
24 capacity as an acting regulatory director, did you also prepare
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25 and file certain rebuttal testimony dated September 21, 2003,
41

HEDRICK COURT REPORTING SOUBA (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 consisting of --
2 COMMISSIONER KJELLANDER: Ms. Hobson, you need to
3 move just a little closer to your microphone.
4 MS. HOBSON: I was trying not to do the leaning
5 over thing.
6 COMMISSIONER SMITH: Maybe it will move to the
7 other side.
8 Q. BY MS. HOBSON: Did you prepare and file certain
9 rebuttal testimony dated April 21, 2003, consisting of 38
10 pages?
11 A. I did.
12 Q. Do you have any changes, additions, corrections,
13 or deletions to make to that testimony at this time?
14 A. Yes, I do. On page 32, I will be updating the
15 comments received, the written comments received from the
16 Commission. These were based upon comments that have been
17 passed to the Company as of yesterday from Mr. Fadness.
18 So I would like to start on line 16. Where we
19 indicated the end of that line "45" customers, that should be
20 "59."
21 Then on line 17 where it indicates "three"
22 organizations, that should be "seven" organizations.
23 Once again, on line 17, "45" should change to
24 "59."
25 On line 18, instead of "eight" customers -- eight
42

HEDRICK COURT REPORTING SOUBA (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 is written out there -- it should be "nine."
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2 On line 20, where it says "Leaving 37 customers,"
3 that should be "Leaving 50 customers."
4 Dropping down to line 22, starting that sentence,
5 "six" instead of "two" of the three organizations. Instead of
6 "three," it should be "seven." So it would read "Six of the
7 seven organizations."
8 And then on line 23 at the end, instead of "37,"
9 that should be "50."
10 Moving to page 33 on line 1 at the end, instead
11 of the number "nine," that should be "21."
12 On line 2 where it says While "28" opposed, that
13 should be "29."
14 Dropping down to the bottom of the page on
15 page -- or, line 23, of the "37," again that should be "50."
16 Moving to the next page, on line 9, I believe the
17 "28" customers should be "29."
18 Again at the bottom of line 23, We have received
19 "28," that should be "29."
20 That's all.
21 Q. With those changes, Mr. Souba, if I were to ask
22 you the testimony -- or, the questions that are contained in
23 the prefiled testimony dated April 21, 2003, today, would your
24 answers be the same?
25 A. Yes, they would.
43

HEDRICK COURT REPORTING SOUBA (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Q. Did you have any exhibits to your rebuttal
2 testimony?
3 A. I did not.
4 Q. Thank you.
5 MS. HOBSON: With that, Mr. Chairman, I would
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6 move that we spread Mr. Souba's direct and rebuttal testimony
7 on the record as if read, and that Exhibits 1 and 2 be
8 admitted.
9 COMMISSIONER KJELLANDER: Thank you, Ms. Hobson.
10 Without objection then, we'll spread the testimony of
11 Mr. Souba, both direct and rebuttal, across the record as if
12 read, and also admit Exhibits 1 and 2, so hearing no
13 objections --
14 (The following prefiled direct and
15 rebuttal testimony of Mr. Souba is spread upon the record.)
16
17
18
19
20
21
22
23
24
25
44

HEDRICK COURT REPORTING SOUBA (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest

1 (The following proceedings were had in
2 open hearing.)
3 (Qwest Exhibit Nos. 1 and 2, having been
4 premarked for identification, were admitted into evidence.)
5 COMMISSIONER KJELLANDER: Then I believe we're
6 ready for cross.
7 MS. HOBSON: If the Commission Chair will indulge
8 us, I have just a very few clarifying questions before we turn
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9 Mr. Souba over for cross.
10 COMMISSIONER KJELLANDER: Okay, Ms. Hobson.
11 Q. BY MS. HOBSON: Mr. Souba, you indicated that
12 three organizations had filed comments by April 21st. Could
13 you identify what those organizations were?
14 A. Yes. The AARP filed comments against our
15 Application.
16 Filing comments supporting our Application were
17 the Chamber of Commerce of Boise and the Chamber of Commerce of
18 Twin Falls.
19 Q. And since you have updated the total number of
20 written comments received, which organizations have now filed
21 comments with the Commission?
22 A. Again, our total has moved from three to seven,
23 so we have four new organizations that have provided written
24 comments. All four of those provided comments supporting
25 Qwest's Application. Those are the Association of Idaho.
109

HEDRICK COURT REPORTING SOUBA (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 A. Counties, the Association of Idaho Cities, the
2 Idaho Association of Realtors, and the Communication Workers of
3 America Labor Organization representing 1,000 members here in
4 Idaho.
5 Q. Thank you.
6 MS. HOBSON: With that, I tender Mr. Souba for
7 cross-examination.
8 COMMISSIONER KJELLANDER: Thank you, Ms. Hobson.
9 Let's move to Deputy Attorney General
10 representing the Staff.
11 MR. STUTZMAN: Thank you, Mr. Chairman.
12
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13 CROSS-EXAMINATION
14
15 BY MR. STUTZMAN:
16 Q. Mr. Souba, how many of those recent comments from
17 the four new organizations were filed as a result of a request
18 made by Qwest for them to file comment?
19 A. While I don't have personal information in that
20 regard, it may be appropriate to ask that question of
21 Mr. Schmit. I would not be surprised if Qwest had contacted
22 all four of those organizations prior to them providing those
23 comments.
24 Q. Thank you. Let's turn to your Exhibit 2. Now,
25 Exhibit 2 shows all Title 61 access lines for Qwest in
110

HEDRICK COURT REPORTING SOUBA (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Southern Idaho from December 1999 to December 2000. Is that
2 correct?
3 A. Yes, it is.
4 Q. Let's look at first at the Nampa exchange, which
5 I guess now is page 6 of the exhibit, just by way of an
6 example. Doesn't it show an increase in access lines from
7 December '99 to September of last year of approximately 1,100
8 customers or lines?
9 A. Yes, it does, from December of '99 through
10 December of 2000.
11 Q. Right. But it also shows a peak in access lines
12 were 32,000 -- I put it at 32,250 in December of 2000, and that
13 that amount declined to 31,900, approximately, as of September
14 of last year. Is that correct?
15 A. It appears to be correct, yes.
16 Q. And that's roughly a difference of 350 lines?
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17 A. That appears to be correct.
18 Q. Now, this chart reflects both business and
19 residential lines, does it not?
20 A. Title 61 lines, which would include residence and
21 business.
22 Q. Right. So we can't tell by looking at this
23 exhibit how many are business and how many are residential
24 lines?
25 A. No.
111

HEDRICK COURT REPORTING SOUBA (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Q. Do you know how many of the 350 lines that
2 declined in the Nampa exchange from December of 2000 through
3 September of last year resulted from small businesses closing
4 their doors?
5 A. I do not.
6 Q. Do you know how many were caused by residential
7 customers dropping a second line when they obtained DSL
8 service?
9 A. I do not.
10 Q. Do you know how many were dropped by small
11 businesses or residential customers scaling back costs in tough
12 economic times?
13 A. I do not.
14 Q. Do you know how many of the 350 lines in the
15 Nampa exchange were due to people dropping wireline service and
16 going only with wireless service?
17 A. I do not.
18 Q. Exhibit 2 on the Pocatello exchange, page 7,
19 shows that the line counts between December of '99 to December
20 of 2000 declined, and in each of the other six exchanges the
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21 lines increased during that period. Is that right?
22 A. Correct.
23 Q. Do you know what caused the decline in the
24 Pocatello lines during the period that the other six exchange
25 lines were increasing?
112

HEDRICK COURT REPORTING SOUBA (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 A. I don't have specific information regarding the
2 Pocatello exchange, but I believe that there were some major
3 employers that went out of business or moved their operations
4 from the Pocatello area that could have had this kind of an
5 impact.
6 Q. Okay. Thank you. Let's look at the Meridian
7 exchange. I'm not sure what page that is.
8 A. That is page 5.
9 Q. Okay. It shows total basic local exchange
10 customer lines have increased from December '99 through
11 September 2nd. Is that correct?
12 A. Yes, it does, yes.
13 Q. And if my numbers -- if I'm reading it correctly,
14 it's roughly an increase of 1,400 lines during that period?
15 A. I would agree to that, subject to check.
16 Q. Thank you. And, again, we can't tell from this
17 exhibit how many are residential and how many are business
18 lines?
19 A. Correct.
20 Q. Do you know how many of the 1,400 line increase
21 in Meridian were due to new businesses opening their doors in
22 Meridian?
23 A. I do not.
24 Q. Do you know how many were due to businesses
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25 adding a line for a fax machine?
113

HEDRICK COURT REPORTING SOUBA (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 A. I do not.
2 Q. Do you know how many of the 1,400 line increases
3 were due to businesses or even residential customers adding a
4 line to connect to a computer?
5 A. I do not.
6 Q. That is something a basic local exchange customer
7 can do, is it not?
8 A. Yes, they can.
9 Q. A Title 61 residential customer can use their
10 line or even get a dedicated second line and connect to a
11 computer, and that's a Title 61 basic local exchange service,
12 is it not?
13 A. Yes, it is.
14 Q. Thank you.
15 MS. HOBSON: I object. I believe we need a
16 clarification of the term "dedicated line."
17 MR. STUTZMAN: It's irrelevant for the purpose of
18 the question. If a Title 61 customer can use the access line
19 as the service is the point of the question. So it doesn't
20 matter to me if it's dedicated or not. So I'll rephrase the
21 question if Counsel is more comfortable.
22 MS. HOBSON: For the record, Mr. Chairman, the
23 term "dedicated line" often means that it is a high-capacity
24 line, in which case it would not be subject to Title 61, and
25 that was my concern. Mr. Souba is doing a nice job of speeding
114

HEDRICK COURT REPORTING SOUBA (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 the hearing along this morning, but I didn't get an opportunity
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2 to point that out.
3 COMMISSIONER KJELLANDER: Okay.
4 MR. STUTZMAN: Thank you. Appreciate that
5 clarification.
6 Q. BY MR. STUTZMAN: In any event, Mr. Souba, when a
7 residential -- a Title 61 residential customer or
8 small-business customer uses their access line for a fax
9 machine or to connect to a computer, that is billed by Qwest as
10 basic local exchange service. Right?
11 A. It is.
12 Q. Now, Exhibit 1 shows an increase in wireless
13 subscribers from approximately 167,000 in 1999 to roughly
14 540,000 in June of last year, which is roughly an increase of
15 373,000 wireless subscribers, and that's for all of Idaho.
16 Correct?
17 A. Yes, it is.
18 Q. In your direct testimony, you say that with the
19 tremendous growth in wireless subscribership over the last
20 three years, there is little doubt the customers have embraced
21 wireless technology as a competitive alternative to traditional
22 land line service.
23 Is it your testimony that had it not been for
24 wireless service, Qwest's basic local exchange lines would have
25 increased by 370,000 lines in the last four years?
115

HEDRICK COURT REPORTING SOUBA (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 A. No, it is not. However, it is Qwest's contention
2 that some number of thousands of those lines may well have come
3 to the Company were it not for wireless competition.
4 Q. Are you offering any evidence in this case to
5 show what the line -- number of lines would have increased in
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6 the Meridian exchange if it had not been for wireless
7 service?
8 A. No, I am not.
9 Q. If Qwest today, Mr. Souba, wanted to put together
10 a package of basic local exchange service to include call
11 waiting, voicemail, three-way calling, and 200 intrastate long
12 distance minutes, and charge 34.99 for it, could it do that
13 today?
14 A. Yes, it could.
15 Q. If Qwest wanted to raise the price of that
16 package to 39.99, could it do that?
17 A. Yes, it could.
18 Q. If Qwest wanted to lower the price of the package
19 to 29.99, could it do that?
20 A. It could within the confines of the fact that the
21 Company would not be allowed to discount the revenue stream
22 associated with the basic exchange line itself. So as long as
23 the discounts were being taken by the optional Title 62
24 services, yes, it could.
25 MR. STUTZMAN: That's all I have, Mr. Chairman.
116

HEDRICK COURT REPORTING SOUBA (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 COMMISSIONER KJELLANDER: Thank you,
2 Mr. Stutzman.
3 Mr. Gannon.
4 MR. GANNON: Good morning. Thank you,
5 Mr. Chairman.
6
7 CROSS-EXAMINATION
8
9 BY MR. GANNON:
Page 16
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10 Q. On page 16 of your testimony, you quoted
11 Mr. Cusick as saying the purpose of regulation is to --
12 COMMISSIONER KJELLANDER: Mr. Gannon, are you on
13 his direct or rebuttal?
14 MR. GANNON: Direct, I'm sorry.
15 COMMISSIONER KJELLANDER: Thank you.
16 Q. BY MR. GANNON: You quoted Mr. Cusick to the
17 effect that regulation is present so that there is not a
18 monopoly charging excessive rates and to protect consumers from
19 an inferior grade of service, as well as rural high-cost areas
20 have to be protected so that they have reasonable, affordable
21 rates.
22 With regard to the first --
23 MS. HOBSON: Excuse me, Mr. Chairman. I'm sorry.
24 I guess I don't have the cite.
25 MR. GANNON: It's page --
117

HEDRICK COURT REPORTING SOUBA (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 COMMISSIONER KJELLANDER: Mr. Gannon, I believe
2 you referenced page 16, and I believe it is in the direct, and
3 I think you're starting at line 9, if there needs to be
4 additional clarification, at the top.
5 MR. GANNON: Actually, it starts -- I'm sorry, it
6 actually starts at line 20 of page 15, and continues to
7 page 16, line 8.
8 COMMISSIONER KJELLANDER: Thank you.
9 Q. BY MR. GANNON: Now, do you concede that there
10 are a substantial number of customers who cannot use a cell
11 phone for their phone needs for their -- for their phone line
12 needs?
13 A. Well, I would agree that there are certain
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14 classes and types of customers for whom cell service may not be
15 their first choice and that a line from Qwest, a basic local
16 exchange service line, is the most appropriate service for
17 them. But that does not mean that they don't meet a statutory
18 test that indicates that they have a choice of provider and
19 that they can complete calls that are switched interactive
20 voice.
21 Q. Let me get more specific: Do you agree that a
22 small-business phone system cannot use a cell phone to operate
23 it?
24 A. No, I would not.
25 Q. Okay. Tell me the name of the -- tell me the
118

HEDRICK COURT REPORTING SOUBA (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 name of the device that can operate a small-business telephone
2 system.
3 A. Well, I would suggest to you that whatever the
4 small business, and here we are talking about only customers
5 with five lines or fewer, that if you had a cell phone for each
6 partner in a law firm, each realtor in a realtor firm, I am
7 perfectly well aware of people that come and trim my trees and
8 their only service that they have is a cell phone, so there's
9 no reason that they can't complete switched interactive voice
10 communication through the use of a standard cell phone
11 instrument, along with some tremendous advantages over a
12 wireline service relative to mobility, et cetera.
13 Q. You're not seriously contending that you can use
14 cell phones as a phone system for a law office, are you?
15 MS. HOBSON: I'm going to object to the form of
16 the question. I don't believe that the term "phone system" has
17 been identified or defined by anyone in this testimony -- or,
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18 in the record. Excuse me.
19 COMMISSIONER KJELLANDER: Mr. Gannon.
20 MR. GANNON: If the witness doesn't understand,
21 I'll be happy to clarify what a small-office phone system is.
22 COMMISSIONER KJELLANDER: I think it probably
23 would be of some assistance.
24 Q. BY MR. GANNON: You're not seriously contending
25 that a cell phone can be used to replace a phone system in a
119

HEDRICK COURT REPORTING SOUBA (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 law office that has call forwarding to individual offices, that
2 allows individual offices to access multiple lines to make
3 phone calls out of the office, that allows an individual office
4 to access multiple lines to receive phone calls that come into
5 the office, that allows three-way -- allows a speakerphone
6 capability and the various other capabilities, rollover
7 capability, that a small office phone system has, are you?
8 A. Well, I would suggest to you that based upon the
9 definition that we are dealing with here in terms of
10 identifying competitive situations, that the cites that you are
11 making regarding customer premise equipment, key systems,
12 multiple appearance of lines, are beyond the definition that we
13 are faced with in the Statute in terms of determining whether
14 or not competition exists and is effective.
15 Q. My question is can I use a cell phone to replace
16 the system that I just described to you?
17 A. If you're talking about a classic key system, a
18 cell phone will not do that.
19 Q. Okay. So you will have to concede then that
20 there are a large, large number of small businesses who are not
21 going to be able to use cell phone technology to replace
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22 their -- to replace or substitute for their -- for their phone
23 system in their small businesses. True?
24 A. Well, this is a situation that affects some
25 number of customers, but it is a fraction of the customers that
120

HEDRICK COURT REPORTING SOUBA (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 would be impacted by the deregulation that we are ceasing here.
2 I will go on to say that your concern may be that
3 these people are going to take a significant rate increase and
4 that a significant rate increase from Qwest would impact all of
5 our small-business lines, regardless of whether they are behind
6 a key system or whether they're sitting behind a single,
7 traditional, no-button set. And so the Company would not be
8 charging a different rate to that key system provider than they
9 would be any of our other customers that are not using a key
10 system, so the Company is going to be constrained in terms of
11 its ability to single out those customers for rate increases.
12 Q. If you raised a business line rate to -- if
13 you -- when you raise a business line rate, those customers are
14 not going to have a choice but to pay it, are they?
15 A. Well, yes, they do. They have the choice to not
16 pay it. They have the choice to drop lines to reduce their
17 bill. They have the choice of going to competition.
18 Q. Well, I believe you said you agreed with me a
19 minute or two ago that those customers can't use cell phone
20 technology for that, for the small-office system?
21 MS. HOBSON: I object to the question. I believe
22 it misstates the witness's testimony, and I believe the tone is
23 argumentative.
24 COMMISSIONER KJELLANDER: Mr. Gannon.
25 MR. GANNON: I'll let the Chair rule on that.
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121

HEDRICK COURT REPORTING SOUBA (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 I'm not trying to be argumentative.
2 COMMISSIONER KJELLANDER: Would you like to
3 rephrase the question?
4 Q. BY MR. GANNON: Correct me if I misunderstood
5 you, but I thought that you agreed with me that there are --
6 that small-office systems cannot use cell phone technology to
7 operate. Is that right?
8 A. There are small businesses that are utilizing
9 customer premises equipment that is not simulated through the
10 use of a cell phone, that is correct.
11 Q. Does that mean that they can't -- cell phone
12 can't operate? Is that what that means, are we on the -- okay.
13 So, for those people, when the -- if the line
14 rates are raised, they have no choice but to pay the higher
15 prices and they do not have a cell phone alternative, do they?
16 A. Their alternatives are defined by the market. In
17 the particular instance that you're talking about, there are a
18 variety of competitive options available, whether they be from
19 people beyond the cell phone community, meaning people like
20 McLeod. There are any number of businesses that provide that
21 CPE type equipment. Now, they can get their lines from a
22 variety of sources as well. So although we are basing our
23 Application here on cell phone use, that does not limit the
24 business community from buying services from other competitors,
25 including McLeod.
122

HEDRICK COURT REPORTING SOUBA (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Q. Is McLeod still in bankruptcy?
Page 21
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2 A. I don't know.
3 Q. They have been, they have filed for bankruptcy,
4 haven't they?
5 A. They were in bankruptcy proceedings at one point,
6 but I don't know where they are now.
7 Q. Now, if there was deregulation, what -- would you
8 agree with me that it would be appropriate to include some
9 safeguards for those who would have no choice but to use Qwest
10 service, and who may be very happy customers of Qwest, by the
11 way?
12 A. I'm not sure what safeguards you're talking
13 about.
14 Q. Well, safeguards, for example, to prevent -- to
15 address billing disputes, disputes over charges, service --
16 service issues?
17 A. Well, frankly, those -- those protections
18 continue following deregulation. Dispute resolution is one of
19 those issues that will be retained by the Commission.
20 And, frankly, I appreciate your cross regarding
21 these functional equivalent issues, but quite frankly, we do
22 have a subject matter witness here in the room who will be
23 testifying later, and that is Mr. Teitzel.
24 Q. Now, with regard to those kind of safeguards,
25 would Qwest be willing to -- the dispute resolution -- let me
123

HEDRICK COURT REPORTING SOUBA (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 back up.
2 The dispute resolution proceeding now is informal
3 with the Commission. Isn't that true?
4 A. They are both. They start informal, and if they
5 can't be resolved on an informal basis, they become formal and
Page 22
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6 come before the Commission with a case number.
7 Q. In order to give added protection to those who
8 would have no choice but to use Qwest's services, do you think
9 that it might be appropriate to have arbitration of bills
10 through a very informal process wherein a written Complaint,
11 along with a bill, is submitted by the customer, Qwest is
12 required to file a written Response, and the bill is
13 expeditiously arbitrated by an independent Commission employee?
14 MS. HOBSON: I'm going to object to the question
15 in that Mr. Souba is not an attorney, this is not covered in
16 his testimony, and I -- I understand Mr. Gannon is asking a
17 question that could call for a legal conclusion regarding
18 arbitration.
19 Apart from that, I guess the Commission is well
20 aware of what its own processes consist of.
21 COMMISSIONER KJELLANDER: Mr. Gannon.
22 MR. GANNON: Basically, Mr. Chairman, we think
23 that there should be additional safeguards for customers who --
24 should deregulation ever occur, there should be additional
25 safeguards for customers who would have no choice but to use
124

HEDRICK COURT REPORTING SOUBA (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Qwest's services.
2 COMMISSIONER KJELLANDER: Mr. Gannon, let me cut
3 to the chase: In the form of either the direct or the rebuttal
4 testimony, is there any line or section of that testimony you
5 can point me to whereby the question has some direct tie-in
6 with regards to the purposes of cross-examination and
7 limitations of cross-examination?
8 MR. GANNON: Yes. I think there were some
9 questions about -- there were a couple of statements that the
Page 23
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10 Commission would continue to regulate prices and services.
11 Page 22 of direct, line 9. No, let's see. Oh, I'm sorry,
12 line 1:
13 Yes. The Company will continue to be subject to
14 deregulation with respect to quality and availability of local
15 exchange service, as well as credit and collection policies and
16 practices.
17 And I believe --
18 COMMISSIONER KJELLANDER: What is your question
19 as tied to that?
20 MR. GANNON: My question is related to
21 strengthening -- is related to his view of strengthening
22 those -- that regulatory -- that particular function as to
23 whether he thinks a very, very informal and expeditious
24 arbitration would be of benefit to both Qwest and to the
25 customer.
125

HEDRICK COURT REPORTING SOUBA (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 COMMISSIONER KJELLANDER: Okay. And, Ms. Hobson,
2 your objection is that that led to a legal conclusion?
3 MS. HOBSON: Yes. My objection is that the term
4 "arbitration" apparently means something different than what
5 the Commission currently does, and I don't believe Mr. Souba is
6 qualified to testify about that, and I don't believe there's
7 any testimony that Mr. Souba could have reviewed that would
8 indicate the content of that term, and so I believe we're just
9 calling for speculation and calling for something that, quite
10 frankly, would probably require the Commission to engage in
11 rule-making.
12 COMMISSIONER KJELLANDER: And the objection is
13 sustained based on that. Thank you.
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14 Mr. Gannon, would you continue?
15 MR. GANNON: Let me ask that -- may I ask that
16 same question and just use a final "Decision" instead of the
17 word "arbitration," or is that --
18 COMMISSIONER KJELLANDER: Mr. Gannon, re-ask the
19 question. If it raises the same objection, we'll deal with the
20 same outcome.
21 MR. GANNON: Thank you.
22 Q. BY MR. GANNON: Mr. Souba, for those customers
23 who would not have a choice, would you think that a forum at
24 the Commission where a Complaint is made by a customer with
25 a -- concerning a bill, a written Response is required from
126

HEDRICK COURT REPORTING SOUBA (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Qwest, and a final Decision is made by a person designated by
2 the Commission as binding on both parties in an expeditious
3 manner would be of benefit to protecting a customer who does
4 not have the cell phone option and would be a benefit to Qwest
5 in their customer relations, so that a fair and final Decision
6 would be made expeditiously and promote harmonious
7 relationships between customers and the Company?
8 A. Mr. Gannon, I presume from your question that you
9 are assuming some failure in the current process. Qwest has
10 engaged in the current process since regulation began and I'm
11 not aware of any failures, nor concerns, over existing
12 arrangements whereby Complaints come into the Commission. The
13 Company has an executive level department that deals with each
14 one of those Complaints and provides an e-mail written Response
15 back to the Commission and attempts to work with the individual
16 involved with the Complaint to resolve it to mutual
17 satisfaction. And, quite frankly, I just can't imagine outside
Page 25
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18 of some rule-making, as suggested by Ms. Hobson, that the
19 Company would want to -- I don't know why the Commission would
20 want to engage in some new process if, in fact, there's no
21 failure with the current one.
22 Q. Mr. Souba, let me amplify: The idea would also
23 include other disputes that are currently not regulated by the
24 Commission. I believe that Qwest recently had some dealings
25 with the Idaho Attorney General over pricing or over services
127

HEDRICK COURT REPORTING SOUBA (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 and nonregulated related issues. Is that correct?
2 MS. HOBSON: I'm going to -- I'm sorry. I'm
3 going to object. I believe it's way beyond the scope of
4 Mr. Souba's testimony. And I don't know that this witness is
5 qualified to testify about Qwest's legal dealings with the
6 Attorney General.
7 COMMISSIONER KJELLANDER: Mr. Gannon, your
8 response?
9 MR. GANNON: I would ask -- I'll withdraw the
10 question.
11 COMMISSIONER KJELLANDER: Thank you.
12 Q. BY MR. GANNON: Are you familiar with Qwest's
13 recent dealings with the Attorney General concerning
14 nonregulated related issues?
15 A. Not with great specificity.
16 Q. Can you tell me what you do know?
17 A. Merely that there was an Agreement between the
18 Company and the Attorney General to make a voluntary
19 contribution of a certain amount of money related to, quite
20 frankly, older occurrences of I believe they were related to
21 sales practices that may not have been deemed to be providing
Page 26
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22 consumers enough information. And that's about all I know.
23 Q. And I will ask you related to those matters, do
24 you think it would be of assistance to customers and the
25 Company to have the procedure that we earlier discussed in?
128

HEDRICK COURT REPORTING SOUBA (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Q. effect at the Commission in order to protect
2 those users of Qwest services who may not have a cell phone
3 option should deregulation occur?
4 A. No, sir, I do not. In fact, there were
5 significant concessions offered up by the Company to the
6 Attorney General in terms of practice changes, et cetera, and
7 training issues to prevent recurrences of the problems that the
8 voluntary payment was made.
9 MR. GANNON: I have no further questions,
10 Mr. Chairman.
11 COMMISSIONER KJELLANDER: Thank you, Mr. Gannon.
12 Are there questions from members of the
13 Commission? Commissioner Smith.
14 COMMISSIONER SMITH: Thank you, Mr. Chairman.
15
16 EXAMINATION
17
18 BY COMMISSIONER SMITH:
19 Q. Mr. Souba, on page 21 of your testimony, you're
20 pointing out that your ability to respond to your wireless
21 competition is limited because of regulation.
22 Has the Company, since 1989, had the ability to
23 or flexibility with regard to businesses that have more than
24 five lines?
25 A. Yes, they have.
Page 27
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129

HEDRICK COURT REPORTING SOUBA (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Q. Have you done any targeted land line promotions
2 or packages for those customers?
3 A. I don't know that the term "package" is
4 appropriate for the larger business community. However, I am
5 aware that the Company has, from a marketing point of view,
6 taken advantage of our pricing flexibility for over-five-line
7 businesses by inking individual case basis prices for unique
8 individual customer needs, and has also many times changed the
9 prices associated with contractual rates, in many cases
10 lowering those, in other cases raising them. They have engaged
11 in wholesale price changes associated with our private line
12 product line; again, certain price increases, certain price
13 decreases, responding to the market.
14 Q. Okay. And so you would anticipate the same sort
15 of thing happening to residential customers and businesses with
16 less -- five lines or fewer?
17 A. Quite frankly, I wouldn't expect anything
18 dramatic that would occur the day after we are deregulated.
19 The Company has not engaged in detailed discussions about, you
20 know, what comes next. I don't believe that this particular
21 case is about deregulation, because all it is is a minor change
22 to a product line that we don't have that pricing freedom, and
23 we do have that pricing freedom already for the vast majority
24 of our prices. It is not necessarily a case about rate
25 increases, because I have had no discussions internally
130

HEDRICK COURT REPORTING SOUBA (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 regarding a anticipated rate increase associated with getting
2 this freedom. It is more of the next evolution of regulation
Page 28
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3 of telecom here in Idaho, and quite frankly, allowing the
4 Company to sink or swim based upon its own marketing prowess
5 and to respond to the market hopefully more quickly without
6 30-day notice to our competitors on those Title 61 services.
7 If I could offer you one example, it may well be
8 that we offer up a lower rate for a flat rate residence line if
9 you're willing to sign up for two years. That's the kind of
10 freedom that we're going to have without Commission oversight.
11 Q. I was confused by something you just said in your
12 answer, that you had the flexibility of the vast majority of
13 your prices?
14 A. The vast majority of our products and services.
15 Q. So your businesses with more than five lines are
16 the bulk of your customers?
17 A. No, but the vast majority of our products and
18 services relate to Title 62 products today; that is, all of our
19 custom calling features, all of our data products, all of our
20 toll products, the --
21 Q. Do a majority of your customers buy those
22 services?
23 A. In a nut shell, yes.
24 Q. On page 15 of your rebuttal testimony, you're
25 continuing your discussion about your full pricing freedom to
131

HEDRICK COURT REPORTING SOUBA (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 raise and lower your rates, and that -- I guess your
2 interpretation that the Legislature decided that where
3 effective competition is present, regulation is not necessary.
4 When a customer orders a line from Qwest -- let's
5 say a 1FB or a 1FR -- do you know what the customer is going to
6 do with that line?
Page 29
60403V~1.txt
7 A. No.
8 Q. So in thinking about your testimony here and this
9 Statute, and I must say that every time we have to go back and
10 deal with a section of Statute that I personally was involved
11 with, it's so distressing as to how you thought it was so clear
12 at the time and later on how these questions arise; but it
13 occurred to me that perhaps there's a big hole in this Statute
14 with regard to the legislative intent and the words that are
15 actually there, because as Mr. Gannon pointed out and you
16 agree, there are some systems that, you know, cell phone
17 doesn't compete for and is not -- can't be used for, and yet if
18 you read the literal meaning of the words you can get to the
19 conclusion that the Company has, which is that the Commission
20 has no choice under this Statute but to stop regulating your
21 basic local exchange rates.
22 So is there a big hole here for people who are
23 using your lines that are under a regulated rate for purposes
24 such as fax machines or other small-business applications that,
25 quite frankly, we all know cell phones are not a substitute
132

HEDRICK COURT REPORTING SOUBA (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 for?
2 A. Whether there's a hole or not I think all swings
3 on a Decision that has not yet been reached by the Commission
4 relative to the Oral Argument that was held earlier, and there
5 is no question that the Company's case was largely formed by
6 our definition, which would not include extension phones, would
7 not include Internet access, would not include faxing
8 capability.
9 Now, in terms of presenting our case, we also
10 present that those capacities exist, but we would be willing to
Page 30
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11 reluctantly agree that they may not be widespread.
12 So based upon the Company's case, I agree that
13 switched interactive voice communication competition is vibrant
14 and robust, and it is eating our lunch related to cellular
15 service, and we are making this Application now because we
16 don't want to wait until cell phone lines outnumber our lines.
17 We want to compete now to prevent a situation where we run into
18 a classic death spiral where we charge more to our remaining
19 customers and then more leave us, and then we charge more to
20 the remaining customers and more leave us.
21 Q. Well, I guess we could debate whether your
22 response to trying to regain part of the cell phone market is
23 going to be on the backs of people who really don't have a
24 substitute in the products that they're using.
25 I guess there's just one other thing I wanted to
133

HEDRICK COURT REPORTING SOUBA (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 ask: When you buy a local line now, you get a listing in the
2 directory?
3 A. Yes, you do.
4 Q. Telephone directory?
5 A. When you buy a Qwest land line, basic local
6 exchange line, you get a directory listing in the White Pages,
7 correct.
8 Q. When you go and sign up for cell phone service,
9 do you get a directory listing?
10 A. You do not. However, if you call Qwest, Qwest
11 would be happy to give you a directory listing for I believe
12 it's a dollar and a half.
13 Q. So if I'm trying to compare the cost of cell
14 phone service with the cost of a land line, I'm going to have
Page 31
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15 to add a directory listing because that's part of my basic
16 local exchange?
17 A. Correct, and I believe Mr. Hart did that in his
18 exhibit.
19 COMMISSIONER SMITH: Thank you.
20 COMMISSIONER KJELLANDER: Thank you, Commissioner
21 Smith.
22 Commissioner Hansen.
23
24
25
134

HEDRICK COURT REPORTING SOUBA (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 EXAMINATION
2
3 BY COMMISSIONER HANSEN:
4 Q. I just kind of have a follow-up I guess of where
5 the questioning of Commissioner Smith, but on page 13 of your
6 direct testimony, lines 8 through 10, you talk about wireless
7 providers offer functionally equivalent alternative to Qwest's
8 basic local exchange service.
9 My question would be has then Qwest -- has Qwest
10 expanded some local exchange service beyond that of just voice?
11 A. I apologize, Commissioner. Page 13 of my direct?
12 Q. Page 13 of your direct testimony, lines 8 through
13 10.
14 A. Okay, excuse me. I was in my rebuttal.
15 And so, Commissioner, your question is whether we
16 have expanded the definition?
17 Q. Have you expanded some of your local exchange
Page 32
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18 service beyond that of just voice?
19 A. I believe that what we're doing there is we are
20 simply discussing the statutory test, and the statutory test is
21 defined by the definition of basic local exchange service,
22 which the Statute tells us is switched interactive voice
23 communication, and so it is that standard that we believe cell
24 phone competition meets in terms of allowing us to meet the
25 test.
135

HEDRICK COURT REPORTING SOUBA (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 In terms of our basic local exchange service,
2 quite frankly, dial tone is dial tone. It is up to customers
3 to do what they want with it.
4 Q. Well, I guess my question would be if you look at
5 especially measured service -- for an example, I think we
6 discussed this earlier in a prehearing conference, but to me,
7 isn't that billed if you're looking at a local dial-up for
8 Internet provider or sending a local fax or something like
9 this, isn't that -- isn't that classified as, billed out as, a
10 local service?
11 A. Yes, it is. When you go offhook and place a
12 local call from a measured line, you are metered, and so if you
13 use that call to access the Internet and are on the Internet
14 for an hour, you are metered 60 minutes for that call. Most of
15 our customers are really quite sophisticated about making a
16 decision to move to measured service and it would be unlikely
17 in terms of a good economic decision for a residential customer
18 with measured service to access the Internet that way, unless
19 the outbound calls that they planned on making, including their
20 calls to the Internet, were going to be less than three hours a
21 month, which are provided, you know, without charge, that are
Page 33
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22 included in the price for measured service, and then we meter
23 after that at two cents a minute.
24 Q. But a customer that is on measured service, if
25 they were to give up their land line and go to wireless, they
136

HEDRICK COURT REPORTING SOUBA (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 wouldn't be able to have that local function that they have
2 right now. Is that right?
3 A. To be able to access the Internet? Actually, you
4 can access the Internet from cell phones, and they are actively
5 marketed to do so.
6 Q. Could you -- how about -- and I know we talked a
7 little bit about directory assistance. Did I understand you
8 correctly that a person, for a dollar -- is it $1.50 or
9 whatever -- could be put on the directory assistance, their
10 cell number, or did I misunderstand?
11 A. Well, I think you did understand it. It's a
12 terminology issue at this point. A directory listing in our
13 White Pages book is available to any cell phone user regardless
14 of their cell provider. All they need to do is call the
15 Company and request a listing in our White Pages, and we will
16 do that for $1.50 a month.
17 Q. $1.50 a month?
18 A. Correct.
19 Q. Thank you. That's all I have.
20 COMMISSIONER KJELLANDER: Thank you,
21 Commissioner Hansen.
22
23
24
25
Page 34
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137

HEDRICK COURT REPORTING SOUBA (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 EXAMINATION
2
3 BY COMMISSIONER KJELLANDER:
4 Q. Mr. Souba, I have just one, maybe two, questions,
5 and I hate to pick on a phrase you used, but if I keyed in on
6 it, it was the comment in response to Commissioner Smith's
7 question where you said that wireless competition is "eating
8 our lunch." And I think that is the crux of all of it is
9 trying to demonstrate that it's eating your lunch.
10 Yet when you were asked a series of questions
11 from Mr. Stutzman, the response to those questions dealing with
12 the impact of the economy on small business was, I don't know.
13 And I'm not faulting you for not knowing the answer.
14 I guess what I'm trying to get to is wouldn't the
15 answer to those questions be somewhat beneficial to this
16 Commission as we try to determine just what impact wireless is
17 having on your Company, and whether it has something to do with
18 the economy, whether it has something to do with only the fact
19 that wireless is out there and people are changing their
20 habits? Wouldn't that be helpful in trying to determine
21 whether or not legitimately and factually that wireless
22 competition is, quote, "eating our lunch"?
23 A. Unfortunately, Commissioner Kjellander, we are
24 providing you the information that we have available to us, and
25 our source for the cell phone line numbers is Alyson Anderson
138

HEDRICK COURT REPORTING SOUBA (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
Page 35
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 1 who tracks those for purposes of billing I believe it's the TRS
2 charge. And so the unregulated cell phone industry doesn't
3 care to share their information about their marketing prowess
4 or their successes or failures, and so we were forced to use
5 information that we have available. And what we have in terms
6 of information available from Alyson is a dramatic rise in cell
7 phone subscribership. They are gaining 25 percent year over
8 year increases in cell phone lines, and within one year there
9 will be more cell phone lines than there are wired lines.
10 As Qwest continues since our charts indicated
11 December of 2000 losing lines, the 14,000 lines that we've
12 already been able to document that we have lost -- and, no, I
13 can't tell you that they were because -- only because of cell
14 phones -- but the 14,000 lines that we've lost represent
15 $4 million a year of revenue. And so the Company is asking for
16 the opportunity to meet that threat head on, and eliminate a
17 vestige of regulatory oversight that increases the Company's
18 expense and reduces its ability to react rapidly in the market.
19 Q. Mr. Souba, does Qwest offer wireless services in
20 Idaho?
21 A. Yes, it does.
22 Q. Can you tell me, do you have any idea of the
23 number of land lines that you may have lost to Qwest wireless?
24 I'm assuming that that's data that you can get from a wireless
25 provider.
139

HEDRICK COURT REPORTING SOUBA (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 A. I don't have that information. Although we have
2 a wireless service in Idaho, it is a fraction of the total size
3 of the wireless market. It is a small player, and it has to do
4 with local coverage. And so each provider has a niche, if you
Page 36
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5 will, and we see that in Mr. Teitzel's charts in terms of what
6 areas they cover. As a result of the coverage area for Qwest
7 wireless today, they are not a big player.
8 And so in terms of the statutory definition and
9 the need for us to have a competitor that is not an affiliate,
10 we did not include Qwest wireless information, so I don't have
11 any information for you today.
12 Q. So then would it be your contention then that
13 Qwest wireless services as an affiliate might be taking
14 possibly some of those lines that you contend wireless is
15 eating up?
16 A. I would be willing to concede that.
17 Q. Thank you.
18 COMMISSIONER KJELLANDER: Commissioner Smith has
19 a question.
20
21 EXAMINATION
22
23 BY COMMISSIONER SMITH:
24 Q. I was interested in your comment in your answer
25 now that each wireless provider kind of has its own little
140

HEDRICK COURT REPORTING SOUBA (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Q. niche, so it occurred to me that based on what a
2 customer requires, you may or may not be able to find a
3 alternative provider if your niche isn't covered by some
4 wireless company?
5 A. The evidence that we have presented in the
6 case -- and Mr. Teitzel has specific exhibits -- show the
7 outline of coverage areas for each one of the cellular
8 providers, and I don't believe that there are any subscribers
Page 37
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9 within the Qwest seven exchanges that don't have an option of
10 cellular provider. Whether they would have in their particular
11 corner of the exchange all seven or not, I don't know.
12 But I do know this: I know that I regularly
13 get -- field calls from customers who are quoted line extension
14 charges to extend land line service to them from Qwest and
15 choose to use cellular as a far cheaper alternative.
16 COMMISSIONER SMITH: Thank you.
17 COMMISSIONER KJELLANDER: There are no further
18 questions from the Commission. Let's move now to redirect.
19 MS. HOBSON: Thank you.
20
21 REDIRECT EXAMINATION
22
23 BY MS. HOBSON:
24 Q. Mr. Souba, so go to the last first. When you
25 referred to "niche" just a minute ago, were you referring to
141

HEDRICK COURT REPORTING SOUBA (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 geography or marketing niche?
2 A. Both.
3 Q. And so when you clarified what is available to
4 customers, were you talking about what is available to them
5 geographically?
6 A. Both geographically and in terms of plan
7 differences, it would be quite an exercise to be a consumer and
8 to review every single plan available from every carrier, which
9 is the challenge that parties in this case have done in
10 reviewing Mr. Hart's exhibit.
11 Q. Thank you. Do you recall earlier this morning
12 Mr. Stutzman was asking you some questions about use of an
Page 38
60403V~1.txt
13 access line for fax or Internet use? Do you remember those
14 questions?
15 A. I do.
16 Q. When you answered his questions, do you intend to
17 convey that such use of fax or Internet is part of the
18 definition of "basic local exchange service"?
19 A. I absolutely do not.
20 Q. Can you tell us why that is your emphatic
21 opinion?
22 MR. STUTZMAN: I'm going to object to that
23 question. It calls for a legal analysis by this witness.
24 We've already briefed the legal issue, this particular legal
25 issue, before the Commission. I don't think it's necessary or
142

HEDRICK COURT REPORTING SOUBA (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 helpful to go there.
2 COMMISSIONER KJELLANDER: Ms. Hobson.
3 MS. HOBSON: Yeah, Mr. Chairman, Mr. Stutzman
4 opened the door by asking a number of questions that were,
5 quite frankly, very misleading, and what I'm trying to do on
6 redirect is clarify Qwest's position for this witness, and I
7 believe I should have the opportunity to do so since
8 Mr. Stutzman's questions muddied the waters here.
9 COMMISSIONER KJELLANDER: Mr. Stutzman.
10 MR. STUTZMAN: The point of the question is to
11 ask for a legal analysis by Mr. Souba, who is not an attorney,
12 who is not prepared to provide a legal analysis. It's not
13 appropriate.
14 COMMISSIONER KJELLANDER: And the objection on
15 that point would be sustained. If there's another way to get
16 towards the information that you would like to do by rephrasing
Page 39
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17 your question, please do.
18 Q. BY MS. HOBSON: Mr. Souba, recognizing that you
19 are not an attorney, have you had the opportunity to review the
20 Idaho Statutes that underlie the testimony you presented in
21 this case?
22 A. I have.
23 Q. And do you have an opinion as merely a layman but
24 a representative of Qwest as to why Internet access and fax use
25 are not included in the definition, in your layman's opinion?
143

HEDRICK COURT REPORTING SOUBA (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 MR. STUTZMAN: To which I'll object. It's the
2 same thing, same result. Not recognizing -- taking a label off
3 of it is not -- recognizing he's not qualified to give the
4 opinion definitely doesn't change the fact that he's rendering
5 a legal opinion.
6 COMMISSIONER KJELLANDER: Ms. Hobson.
7 MS. HOBSON: Mr. Chairman, the objection was that
8 he was being asked to provide a legal opinion. He is not being
9 asked to provide a legal opinion. Mr. Souba has filed
10 testimony, as do virtually every other witness that comes
11 before you, someplace in this case about how they interpret the
12 Statutes and what they deem to be relevant for this Commission
13 to understand, and I think Mr. Souba, like everyone else, is
14 entitled to give his opinion.
15 COMMISSIONER KJELLANDER: Ms. Hobson, I'm going
16 to sustain the objection again, and let me just point out and
17 perhaps maybe you could clarify for me, but if I recall, the
18 Oral Argument that we had earlier did allow for those positions
19 to be firmly placed in the record. Is that correct?
20 MS. HOBSON: You had the opportunity to hear Oral
Page 40
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21 Argument from the attorneys on the legal ramifications in the
22 case, yes.
23 COMMISSIONER KJELLANDER: So that should be
24 sufficient, I think, for the Commission to determine at
25 whatever point in time the legal interpretation of the Statute
144

HEDRICK COURT REPORTING SOUBA (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 based on what we do have on the records. I guess as far as
2 Qwest's position, I do feel fairly confident that I think I
3 understand it. To the extent we might be able to move on with
4 that in play then, again, I will sustain the objection and ask
5 you to move forward.
6 MS. HOBSON: Okay. Thank you, Mr. Chairman.
7 Q. BY MS. HOBSON: You were asked several questions
8 about your Exhibit No. 2. Do you remember those questions?
9 A. I do.
10 Q. Can you just tell the Commission, do you have any
11 information as to how many customers in Idaho, in Qwest
12 territory in Idaho, disconnected their service because of DSL
13 use, disconnected their wire lines because of DSL use?
14 A. Yes. We filed Response to Discovery
15 indicating -- well, actually I filed in my testimony the fact
16 that DSL subscribers had identified 1,400 lines that went out
17 of service as a result of DSL allowing you to be online plus
18 making calls at the same time. So of the 14,000 lines,
19 approximately 1,400 were related to DSL.
20 Q. Thank you. And you were also asked a question
21 about the impact of the economy on line reduction?
22 A. Yes.
23 Q. Can you tell us what the impact of the economy
24 has been on wireline -- or, excuse me -- wireless subscription
Page 41
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25 of the same period of time?
145

HEDRICK COURT REPORTING SOUBA (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 A. The economy appears to have absolutely no impact
2 on wireless subscribership, which in Idaho is even growing
3 faster than national trends. Again, Alyson Anderson's words
4 were 25 percent a year.
5 Q. Mr. Gannon asked you a number of questions about
6 an office system, and I believe you used the term "key system."
7 Can you explain to us just very briefly what you mean by the
8 term "key system"?
9 A. I'm using the term "key system" to represent a
10 telephone instrument with a hand set, and across the top are,
11 say, five buttons and each button represents a telephone
12 number, and each set can access each of the five lines. There
13 may be another button, a sixth button, that is an intercom
14 button, and by pressing that intercom button you can press a
15 two-digit code or one-digit code and reach other members within
16 the firm without using an outside line.
17 Q. Are there various providers of key systems?
18 A. Absolutely. There is a tremendous number. The
19 phone book is full of them.
20 Q. So that's a competitive -- the equipment itself
21 is a competitive product?
22 A. Yes, it is.
23 Q. Are you familiar with the term "rollover
24 service"?
25 A. Yes, I am. The Company typically uses the term
146

HEDRICK COURT REPORTING SOUBA (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 "hunting."
Page 42
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2 Q. And is that a product that is offered for sale by
3 Qwest?
4 A. Yes, it is.
5 Q. Is it a Title 61 or a Title 62 product?
6 A. It is a Title 62 product.
7 Q. So the Commission doesn't regulate that price
8 today?
9 A. They do not.
10 Q. Are customer premises equipment prices regulated
11 by the Commission?
12 A. They are not.
13 Q. Are inside wire prices regulated by the
14 Commission?
15 A. They are not.
16 Q. Thank you, Mr. Souba.
17 COMMISSIONER KJELLANDER: Thank you, Mr. Souba.
18 I guess the earliest witnesses get the hungriest lions, so
19 thank you for being first.
20 (The witness left the stand.)
21 COMMISSIONER KJELLANDER: I think at this point
22 what we'll do is before we allow you to call your second
23 witness, take a ten-minute break, and we'll try to keep it to
24 ten minutes so we can get back here and get going. Thank you.
25 (Recess.)
147

HEDRICK COURT REPORTING SHOOSHAN (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 COMMISSIONER KJELLANDER: And if all the parties
2 are here, we'll go back on the record, and Ms. Hobson, we're
3 ready for you to call your next witness.
4 MS. HOBSON: Thank you, Mr. Chairman.
5 Qwest calls Harry M. Shooshan the Third, also
Page 43
60403V~1.txt
6 known as "Chip" Shooshan.
7
8 HARRY M. SHOOSHAN III,
9 produced as a witness at the instance of Qwest Corporation,
10 being first duly sworn, was examined and testified as follows:
11
12 DIRECT EXAMINATION
13
14 BY MS. HOBSON:
15 Q. Are you ready, Mr. Shooshan?
16 A. Yes. Had to find the "on" switch here.
17 Q. Thank you. Would you please state your name for
18 the record?
19 A. My name is Harry M. Shooshan.
20 Q. And who are you employed by and in what capacity?
21 A. I am with the consulting firm Strategic Policy
22 Research, and I'm a principal in that firm.
23 Q. Okay. And are you appearing in this case on
24 behalf of Qwest Corporation?
25 A. Yes, I am.
148

HEDRICK COURT REPORTING SHOOSHAN (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Q. In your capacity --
2 You were retained by Qwest as an expert witness.
3 Is that correct?
4 A. Yes, I was.
5 Q. In your capacity as an expert witness for Qwest,
6 did you prepare and cause to have filed with this Commission
7 certain direct testimony dated December 17, 2002, consisting of
8 20 pages?
9 A. Yes.
Page 44
60403V~1.txt
10 Q. Do you have any changes, corrections, additions,
11 deletions to make to that testimony?
12 A. No, I don't.
13 Q. And, Mr. Shooshan, if I were to ask you the
14 questions contained in that testimony today now that you have
15 been sworn, would your answers be the same?
16 A. They would be.
17 Q. In addition to that direct testimony,
18 Mr. Shooshan, did you have an exhibit designated
19 Exhibit No. 18?
20 A. Yes.
21 Q. And that consists of several pages. It is your
22 vitae. Is that what it is?
23 A. Yes.
24 Q. Do you have any changes to make to that exhibit?
25 A. No.
149

HEDRICK COURT REPORTING SHOOSHAN (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Q. And also, Mr. Shooshan, did you prepare certain
2 rebuttal testimony dated September 21, 2003, (sic) that
3 consists of 30 pages?
4 A. Yes.
5 Q. Do you have any changes, deletions to make to
6 that testimony at this time?
7 A. No, I don't.
8 Q. Did you have any exhibits with that testimony?
9 A. No, not that I recall.
10 Q. If I were to ask you the questions contained in
11 your rebuttal testimony, would your answers be the same this
12 morning?
13 A. They would be.
Page 45
60403V~1.txt
14 MS. HOBSON: Mr. Chairman, with that, I would ask
15 that we spread Mr. Shooshan's direct and rebuttal testimony on
16 the record as if read, and I would move the admission of
17 Exhibit 18.
18 COMMISSIONER KJELLANDER: Thank you, Ms. Hobson.
19 Without objection, we'll spread the direct and rebuttal
20 testimony across the record as if read, and also admit
21 Exhibit 18.
22 (The following prefiled direct and
23 rebuttal testimony of Mr. Shooshan is spread upon the record.)
24
25
150

HEDRICK COURT REPORTING SHOOSHAN (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest

1 (The following proceedings were had in
2 open hearing.)
3 (Qwest Exhibit No. 18, having been
4 premarked for identification, was admitted into evidence.)
5 MS. HOBSON: And I tender Mr. Shooshan for
6 cross-examination.
7 COMMISSIONER KJELLANDER: Mr. Gannon, why don't
8 we start with you this time.
9 MR. GANNON: I don't have -- I don't have any
10 questions for Mr. Shooshan.
11 COMMISSIONER KJELLANDER: Thank you, Mr. Gannon.
12 Let's move to Mr. Stutzman.
13 MR. STUTZMAN: Thank you, Mr. Chairman.
14
15 CROSS-EXAMINATION
16
Page 46
60403V~1.txt
17 BY MR. STUTZMAN:
18 Q. Good morning, Mr. Shooshan.
19 A. Good morning, sir.
20 Q. At the conclusion of your direct testimony,
21 you were asked the question: In your opinion, does the
22 evidence presented in this case support the relief being
23 sought.
24 And your response is: Yes -- excuse me -- in my
25 opinion, the direct evidence offered by Qwest's other witnesses
201

HEDRICK COURT REPORTING SHOOSHAN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Mr. Souba, Mr. Teitzel, and Dr. Lincoln, establishes the
2 presence of effective competition from a number of wireless
3 providers in each of the seven Southern Idaho exchanges.
4 Do I understand, sir, that you are not offering
5 any evidence yourself specific to the seven local exchanges in
6 this case?
7 A. That's correct.
8 MR. STUTZMAN: Thank you. That's all I have.
9 COMMISSIONER KJELLANDER: Thank you,
10 Mr. Stutzman.
11 Are there questions from members of the
12 Commission?
13 No questions from the Commission.
14 Redirect?
15 MS. HOBSON: I have no redirect. No redirect.
16 COMMISSIONER KJELLANDER: Thank you,
17 Mr. Shooshan.
18 THE WITNESS: Thank you, Mr. Chairman.
19 (The witness left the stand.)
20 COMMISSIONER KJELLANDER: And would you like to
Page 47
60403V~1.txt
21 call your next witness?
22 MS. HOBSON: Qwest calls Dr. Douglas Lincoln.
23
24
25
202

HEDRICK COURT REPORTING LINCOLN (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 DOUGLAS J. LINCOLN, PH.D.,
2 produced as a witness at the instance of Qwest Corporation,
3 being first duly sworn, was examined and testified as follows:
4
5 DIRECT EXAMINATION
6
7 BY MS. HOBSON:
8 Q. Dr. Lincoln, will you state your name for the
9 record?
10 A. Douglas J. Lincoln.
11 Q. And by whom are you employed and in what
12 capacity?
13 A. I'm employed by Boise State University as a
14 professor of marketing in the College of Business and
15 Economics.
16 Q. Have you been retained by Qwest as an expert
17 witness in this case?
18 A. I personally have not been retained. The
19 contract between Qwest is with the University through the
20 Center for Management Development in the College of Business
21 and Economics, and I am under contract with that center.
22 Q. But you appear today to provide testimony on
23 behalf of Qwest. Is that correct?
24 A. That's correct.
Page 48
60403V~1.txt
25 Q. Okay. And in your capacity with regard to Qwest,
203

HEDRICK COURT REPORTING LINCOLN (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 did you prepare certain prefiled testimony consisting of 40
2 pages? This is direct testimony dated December 17, 2002?
3 A. I did.
4 Q. Do you have any changes, corrections to make to
5 that testimony at this time?
6 A. I do have one.
7 Q. Would you tell us what that is, please?
8 A. In page 36, on line 5. On page 36, line 5, to
9 the right, the percent "62" percent should be "85" percent.
10 And this is the percent of small-business respondents that
11 could solely rely on cellular service, nonvoice and reasons
12 added back in.
13 Q. Do you have any other changes to make to your
14 direct testimony?
15 A. No.
16 Q. Dr. Lincoln, if I were to ask you the questions
17 that are contained in your prefiled direct testimony now that
18 you have been sworn, would your answers be the same?
19 A. Yes.
20 Q. Dr. Lincoln, did you prepare certain exhibits in
21 connection with the prefiled testimony?
22 A. Yes, I did.
23 Q. They have been previously marked as Exhibits 3
24 through 11. Is that correct?
25 A. Correct.
204

HEDRICK COURT REPORTING LINCOLN (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Q. Do you have any changes to make to those exhibits
Page 49
60403V~1.txt
2 at this time?
3 A. I do not.
4 Q. Dr. Lincoln, did you prepare and cause to have
5 filed with this Commission certain rebuttal testimony dated
6 April 16, 2003, that consists of -- excuse me -- consists of
7 50 pages, including, it appears, two pages that are not
8 testimony but are attachments to the testimony? Is that
9 correct?
10 A. Correct.
11 Q. Do you have any corrections, additions, changes
12 to make to that testimony at this time?
13 A. I do not.
14 Q. Or to those attachments?
15 A. No.
16 Q. If I were to ask you the same questions that are
17 contained in your prefiled rebuttal testimony, would your
18 answers be the same this morning?
19 A. They would be.
20 MS. HOBSON: Mr. Chairman, with that, I move to
21 spread Dr. Lincoln's direct and rebuttal testimony on the
22 record as if read, and move the admission of Exhibits 3 through
23 11.
24 COMMISSIONER KJELLANDER: Before we move forward
25 on that, I have a blank exhibit page in my book that has what
205

HEDRICK COURT REPORTING LINCOLN (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 appears to be wording within an advertisement or a commercial
2 that appeared during a Super Bowl ad. Is that to be considered
3 an exhibit along with Dr. Lincoln's rebuttal, or do I just have
4 a miscue in my book?
5 MS. HOBSON: Mr. Chairman, if I may, I believe
Page 50
60403V~1.txt
6 you are looking at page 49 of the rebuttal testimony. Is that
7 correct?
8 COMMISSIONER KJELLANDER: Oh, is that part of the
9 direct testimony, because I have an exhibit sheet before that,
10 so --
11 MS. HOBSON: I apologize to the Commission. I
12 don't actually recall why, but these pages 49 and 50 are
13 actually offered as attachments to his testimony, rather than
14 exhibits bearing exhibit numbers, but they should bear the --
15 page numbers 49 and 50 are sworn to by Dr. Lincoln, as I
16 understand it, and part of his testimony.
17 COMMISSIONER KJELLANDER: Thank you for that
18 clarification.
19 Without objection then, we would spread the
20 direct and rebuttal testimony of Dr. Lincoln across the record
21 as if read, and also admit Exhibits 3 through 11.
22 MS. HOBSON: Thank you.
23 (The following prefiled direct and
24 rebuttal testimony of Dr. Lincoln is spread upon the record.)
25
206

HEDRICK COURT REPORTING LINCOLN (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest

1 (The following proceedings were had in
2 open hearing.)
3 (Qwest Exhibit Nos. 3 through 11, having
4 been premarked for identification, were admitted into
5 evidence.)
6 MS. HOBSON: And we tender Dr. Lincoln for
7 cross-examination.
8 COMMISSIONER KJELLANDER: Thank you. Let's begin
Page 51
60403V~1.txt
9 with Mr. Stutzman.
10 MR. STUTZMAN: Thank you, Mr. Chairman.
11
12 CROSS-EXAMINATION
13
14 BY MR. STUTZMAN:
15 Q. Good morning, Dr. Lincoln.
16 A. Good morning.
17 Q. I'd like to start with your survey, which I think
18 the results of which are reflected in Exhibits 8 and
19 Exhibit 10. Is that right?
20 A. That would be correct, main findings.
21 Q. And I want to start with the question on
22 competitive pricing. First of all, the people that
23 participated in the survey were all Qwest local customers. Is
24 that right?
25 A. Could you tell me, which segment are you talking
295

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 about? Are you talking about small-business or residential?
2 Q. Let's say residential.
3 A. Are we in Exhibit A -- 8? Excuse me.
4 Q. Eight, yeah.
5 A. Are you referring to a specific page of that
6 exhibit or just in general?
7 Q. Well, do I need to refer to a page to ask if all
8 the people that participated in the survey were Qwest wireline
9 customers?
10 A. We left with a pricing question, so I thought you
11 were alluding to the pricing question, so I apologize.
12 Yes, they were known Qwest basic exchange service
Page 52
60403V~1.txt
13 customers.
14 Q. Thank you. So none of the respondents were
15 relying solely on a cell phone for their local calling needs,
16 were they?
17 A. By definition, they would not be.
18 Q. Instead, they were using their cell phones as
19 some kind of supplement to their wireline service that they
20 currently subscribed to?
21 A. They may have and may not. I did not ask them.
22 Q. The question on pricing in the survey was as
23 follows: Do you think the monthly price of using cell phone
24 service for your household is about the same, more than, or
25 less than the price of using traditional service?
296

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 A. Correct.
2 Q. Isn't it likely that most of the respondents had
3 in mind their use of a cell phone as a supplement to wireline
4 service when they were thinking of the relative cost?
5 MS. HOBSON: I'm going to object to the form of
6 the question. I don't know that the word "supplement" has been
7 clearly defined in the question -- or, in the proceedings to
8 this point, and I believe that Mr. Stutzman's question is
9 misleading because of that.
10 COMMISSIONER KJELLANDER: Mr. Stutzman, would you
11 clarify what you mean by "supplement" for the benefit of the
12 witness?
13 MR. STUTZMAN: Yeah, I thought we had, but we
14 already established that they were using the cell phones
15 in addition to their wireline phone and not using the cell
16 phone exclusively. That was the definition I had in mind.
Page 53
60403V~1.txt
17 MS. HOBSON: Thank you.
18 COMMISSIONER KJELLANDER: Mr. Lincoln, or
19 Dr. Lincoln, do you need the question rephrased?
20 THE WITNESS: Well, I did -- the survey did not
21 ask them how they use their cell phone.
22 Q. BY MR. STUTZMAN: Okay.
23 A. But we do know that if there is a cell phone in
24 the household that was not being used exclusively would they
25 not have Qwest service.
297

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Q. And I think you made clear in your testimony that
2 you were interested in your survey engaging customers'
3 perception about pricing competitiveness. Is that right?
4 A. Correct.
5 Q. But a statement that you made in your rebuttal
6 testimony makes that abundantly clear. It's on page 33. You
7 make the following statement:
8 I do not believe that studying the published
9 prices of competitors is a very valid approach for the purpose
10 of assessing pricing competitiveness. A better approach
11 involves studying actual consumer price perception. Such
12 perceptions will increase consumers' willingness to substitute.
13 Until they learn that their perceptions are different than
14 reality, perceptions will drive their behavior.
15 Did I read that correctly, Dr. Lincoln?
16 A. Correct.
17 Q. When it comes to pricing competitiveness,
18 perception is better than reality?
19 A. Correct.
20 Q. Was it your -- in fact, your entire survey was
Page 54
60403V~1.txt
21 designed to assess customer perceptions, was it not?
22 A. Correct.
23 Q. I want to look at some of the other survey
24 results. Let's look at Exhibit 10 which shows the results for
25 business customers, and I want to make sure I understand what
298

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 you did with response to the second question, and that question
2 was the following: For the purpose of making and receiving
3 local calls, could your business solely rely on cell phone
4 service.
5 Is that the question?
6 A. Correct.
7 Q. So the question as presented asked whether
8 something is within the realm of possibilities. Right?
9 A. Could it be a substitute.
10 Q. Right. And according to page 2 of Exhibit 10, if
11 I'm reading this correctly, 260 of 398 small-business customers
12 said -- responded with the answer "no"?
13 A. That's correct.
14 Q. And then the 260 who said "no" and the 16 who
15 were unsure were asked a follow-up question. Is that right?
16 A. That's correct.
17 Q. And that question was: If your response to the
18 previous question was "no," what is the reason you feel that
19 way?
20 Correct?
21 A. Correct.
22 Q. And the results of that question are on page 3 of
23 Exhibit 10. As I understand it, those who responded to the
24 follow-up question with reasons about data transmission and
Page 55
60403V~1.txt
25 directory listing or hunting were added to the "yes" column on
299

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 whether or not they could rely solely on cell phones for local
2 service. Is that correct?
3 A. That's correct.
4 Q. So as a result of the first follow-up question,
5 you changed 196 "no" or "unsure" answers to "yes"?
6 A. The answers were not changed.
7 Q. You transferred them to the --
8 A. We created a new set of data.
9 Q. Okay. Then continuing on, as I understand it,
10 the 75 respondents who stated some other reason they could not
11 solely rely on cell service for local calling were asked
12 another follow-up question. Am I right?
13 A. Right.
14 Q. And 22 of those 75 had mentioned data
15 transmission, directory listing, or hunting issues, so their
16 response was added to the "yes" column. Correct?
17 A. In essence.
18 Q. Right. Incidentally, what if a respondent gave a
19 multiple answer? In other words, if one of the reasons given
20 was data related or directory listing, did you transfer that
21 response to the "yes" column?
22 A. They weren't duplicated, just counted once. So
23 if they said data, if they said fax and hunting, they were only
24 counted once.
25 The question was the main reason, so I don't
300

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 recall -- I don't recall people giving more than one reason.
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2 The interviewer recorded the first response that they gave.
3 Q. So you're not aware of multiple responses then?
4 A. No.
5 Q. Okay. In any event, by that process, of 276
6 small-business respondents who initially stated it was not
7 possible for them to solely rely on cell phones for making and
8 receiving local calls or were unsure if they could, you
9 recorded them as -- you recorded 218 of them as responding
10 "yes," or at least you transferred that data to the positive
11 column?
12 A. Correct.
13 Q. So what was initially a 31 percent "yes" response
14 became an 85 percent "yes" response?
15 A. Yes, it would by that process.
16 Q. Now, those 218 respondents now counted as "yes"
17 respondents didn't actually change their opinion about their
18 ability to utilize solely on cell phones?
19 A. No. We did not try to change their opinion.
20 Q. As I understand it, you followed a similar
21 process with the residential respondents?
22 A. Exactly.
23 Q. And, initially, the response to the question was
24 50 percent who said they could, and by the follow-up question
25 in that process that's used, over 62 percent were then deemed
301

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 as having responded positively to the question?
2 A. Correct.
3 Q. Now, Dr. Lincoln, you even publicized a figure
4 for the residential customers, didn't you?
5 A. I don't know what you mean, published.
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6 Q. Was there an article in the Idaho Statesman on
7 Sunday, May 18th, that included a pie chart? It was an article
8 on wireless subscribers in Idaho, and I think you're quoted in
9 the article and included in it is a pie chart that shows a
10 figure of 62.2 percent of customers that said they could rely
11 solely on cell phones. Did you provide that information to the
12 Statesman?
13 MS. HOBSON: I'm going to object. Do you have
14 the article that you can show the witness so that he can see
15 what it is you're quoting from?
16 MR. STUTZMAN: I do. I can do that if it
17 would --
18 COMMISSIONER KJELLANDER: Mr. Stutzman, if you
19 would approach the witness.
20 MR. STUTZMAN: Thank you.
21 THE WITNESS: Well, I've read this article and am
22 familiar with it. Is your question did I give them a pie
23 chart?
24 Q. BY MR. STUTZMAN: My question is did you provide
25 that 62.2 percent figure to the reporter that wrote the
302

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 article?
2 A. I provided copies of exhibits which were publicly
3 available to the interviewer.
4 Q. Which exhibits did you provide to the reporter?
5 A. Exhibits 8 and 10.
6 Q. Okay. Did you -- did the reporter know how
7 narrowly the question was framed on the ability to rely solely
8 on cell phone for local -- for making and receiving local
9 calls?
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10 MS. HOBSON: I'm going to object to the question.
11 I don't know that is relevant to the prefiled testimony of the
12 witness what a reporter may or may not have known when he wrote
13 a news article which has not been offered into evidence, is not
14 being sponsored by Qwest.
15 COMMISSIONER KJELLANDER: Mr. Stutzman.
16 MR. STUTZMAN: I'll let it go, Mr. Chairman.
17 I'll move on.
18 Q. BY MR. STUTZMAN: Now, Exhibit 7 shows the number
19 of survey participants in each of these seven exchanges. Is
20 that right?
21 A. The number and some demographics of them.
22 Q. Sure, some other information. Let's look at the
23 Meridian exchange. First of all, do you recall how many
24 Title 61 access lines are in the Meridian exchange?
25 A. I would not know that.
303

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Q. Your Exhibit 7 shows that 33 residential
2 customers and 24 business customers in the Meridian exchange
3 participated in the survey. Am I reading that right?
4 A. That's correct.
5 Q. How many of the 33 residential customers
6 initially said they couldn't rely solely on cell phone service
7 for local calling?
8 A. I did not analyze the data to that level.
9 Q. Didn't your survey -- don't you have that
10 information available as part of your survey?
11 A. I have the data sets available which one could
12 analyze to answer that question.
13 Q. Did you provide that information to Staff as part
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14 of a Discovery Response?
15 A. They have the raw data, yes.
16 Q. Can you tell from that raw data how many of the
17 33 residential customers initially said they could rely on cell
18 phone service?
19 A. Are you saying did I or could I?
20 Q. Could you?
21 A. Could I, yes.
22 Q. Do you have that with you?
23 A. No, I do not.
24 Q. Can I provide a copy of that to you?
25 A. I guess so.
304

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 MS. HOBSON: While we're doing that, Dr. Lincoln,
2 can you speak up?
3 THE WITNESS: Oh, okay.
4 Q. BY MR. STUTZMAN: Dr. Lincoln, do you recognize
5 what I've handed you?
6 A. Looks like Discovery Responses.
7 Q. Right. And this is Discovery Response that Qwest
8 provided to Staff. Is that right?
9 A. I don't remember specific -- are you referring to
10 all the pages or --
11 Q. Well, look at the first page. Does your name
12 appear on the first page, in the bottom?
13 A. Yes, it does, and now I do remember that I was
14 asked to provide cross-stem analysis on seven exchanges.
15 Q. So this is information that you provided that --
16 A. That's correct.
17 Q. You put it together and provided to Staff.
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18 Correct?
19 A. That's correct.
20 Q. And this information, as I understand it, shows
21 the exchange by -- the specific exchange participants in the
22 survey. Is that correct?
23 A. That's correct.
24 MS. HOBSON: And, excuse me, Mr. Stutzman.
25 Mr. Chairman, if we could have the number of the Data Response
305

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 in the record, I think this might become more clear.
2 COMMISSIONER KJELLANDER: Mr. Stutzman.
3 MR. STUTZMAN: Yes, it's Data Response No. --
4 Qwest No. 28, was provided to Staff -- I don't have -- as a
5 Supplemental Response on February 27th of this year, and I'd
6 like to move at this point for it to be admitted into the
7 record.
8 MS. HOBSON: Do we know which set? Can we know
9 which set of Data Responses? I don't have a copy.
10 MR. STUTZMAN: (Indicating.)
11 MS. HOBSON: Thank you, Weldon.
12 COMMISSIONER KJELLANDER: And do you have copies
13 for others?
14 MR. STUTZMAN: Yes.
15 COMMISSIONER KJELLANDER: Thank you.
16 MR. STUTZMAN: My assistant isn't being very
17 helpful.
18 COMMISSIONER KJELLANDER: And could you repeat
19 your request more specifically?
20 MR. STUTZMAN: Yes. I'd like to move that this
21 be admitted on the record. Dr. Lincoln has identified it.
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22 It's information he prepared and provided to Staff as far as
23 Discovery Response and I'd like to be admitted on the record as
24 Staff has identified it, as Staff Exhibit 113.
25 COMMISSIONER KJELLANDER: Without objection, we
306

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 will admit Staff exhibit, document presented to us numbered
2 113.
3 (Staff Exhibit No. 113, having been
4 premarked for identification, was admitted into evidence.)
5 MR. STUTZMAN: Thank you.
6 Q. BY MR. STUTZMAN: Dr. Lincoln, looking at
7 Exhibit 113, can you tell me how many of the 33 residential
8 customers in the Meridian exchange initially said they could
9 rely solely on cell phone service?
10 COMMISSIONER KJELLANDER: Mr. Stutzman, for my
11 clarification, could you point me to a page in this exhibit?
12 MR. STUTZMAN: Yes. It would be page 3 of 16.
13 COMMISSIONER KJELLANDER: Thank you.
14 THE WITNESS: Okay, the answer for everyone
15 looking is found in a row labeled Meridian. Under the yes
16 column, 11 people out of 33, one-third.
17 Q. BY MR. STUTZMAN: How many of the 24 business
18 customers in Meridian said they could rely solely on cell phone
19 service as part of their initial response, and that page --
20 A. Page 11.
21 Q. Thank you. Page 11.
22 A. Five out of 24, 20.8 percent.
23 Q. Thank you. If 16 customers in a pool of over --
24 of approximately 22,000 access lines, if you'll accept that as
25 a number, approximate number of access lines in Meridian, if 16
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307

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 customers in that pool say they could rely solely on cell phone
2 service for local calls, does that tell you that effective
3 competition exists in the Meridian exchange?
4 A. Let me back up. The purpose of the study was to
5 assess if competition existed within the seven exchanges in
6 total. The population was defined as the seven exchanges
7 together, and the hope, the sample size, the statistical
8 confidence, and the reporting is based on that; and the reason
9 for that is Qwest is applying for deregulation of all seven
10 exchanges in total, not an exchange-by-exchange deregulation
11 process. If that would have been the case, then it would be
12 different sample sizes for each of these seven exchange areas.
13 So I cannot draw statistical inferences for any of these seven
14 exchanges, not very strongly.
15 Q. So just to make sure I understand, the numbers
16 are too small for individual exchanges to draw --
17 A. You could draw some statistical inferences, but
18 you'd have a wide range of margin of error because the sample
19 size would be relatively small to that population of that
20 particular exchange.
21 Q. Deciding issues of public interest, Dr. Lincoln,
22 do you think this Commission should base its Decisions on
23 customer perceptions or on reality?
24 A. I would certainly hope that they base their
25 Decision on both, and the reason I state that and my important
308

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 A. part of the perception is we know in marketing
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2 that consumers' perceptions of the situation will influence
3 their behavior. If 50 percent of the respondents in households
4 in these areas believe that they could make all their local
5 phone calls using a cell phone, that is what will influence
6 their behavior.
7 Q. Is there anything that -- is there any direction
8 in the Idaho Statute under which Qwest has filed its case that
9 suggests the Commission should base its Decision on customer
10 perception?
11 A. I don't believe --
12 MS. HOBSON: I'm going to object to the question.
13 I don't believe that Mr. Stutzman should be inquiring of a
14 witness who's not attempting to give legal conclusions about
15 legal conclusions.
16 COMMISSIONER KJELLANDER: That is sustained.
17 MR. STUTZMAN: Thank you. That's all I have,
18 Mr. Chairman.
19 COMMISSIONER KJELLANDER: Mr. Gannon.
20 MR. GANNON: Thank you, Mr. Chairman.
21
22 CROSS-EXAMINATION
23
24 BY MR. GANNON:
25 Q. Good morning, Dr. Lincoln.
309

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 A. Good morning.
2 Q. I've been in grocery stores where --
3 COMMISSIONER KJELLANDER: Could you turn on your
4 microphone or move closer, please?
5 MR. GANNON: Oh, I'm sorry.
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6 Q. BY MR. GANNON: I've been in grocery stores where
7 somebody -- where an individual will be going up and down the
8 aisles and tabulating the prices that a particular store is
9 charging. Is there a name for those kinds -- for that
10 occupation?
11 A. Mystery shoppers, sometimes they're called.
12 Q. And they usually work -- what, they're working
13 for a competitor and they're checking the prices?
14 A. And there's independent contracting companies
15 that that's the service they offer.
16 Q. And then the competitor finds out what their
17 competing grocery store is --
18 A. Kind of a syndicated service it may offer.
19 Q. Is that a pretty -- is that something that that's
20 done a lot in the retail industry?
21 A. I'm going --
22 MS. HOBSON: I'm going to object to this line of
23 questions. I don't believe that it is in any way related to
24 Dr. Lincoln's testimony, and I think it's irrelevant.
25 MR. GANNON: That's my last question.
310

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 COMMISSIONER KJELLANDER: That was your last
2 question?
3 MR. GANNON: On -- yes.
4 COMMISSIONER KJELLANDER: Okay. I think it would
5 be helpful for us if, for no other reason to kind of gain an
6 idea of what direction you're heading with some of the
7 questions, if you may be able to give us some indication
8 through the testimony.
9 MR. GANNON: I'm going to the methodology of
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10 making pricing surveys.
11 COMMISSIONER KJELLANDER: Okay. If you could
12 move forward with your questions then.
13 Q. BY MR. GANNON: And is that -- is that a method
14 that is used widely in the retail industry to compare prices?
15 A. I don't think I can answer that.
16 MS. HOBSON: I'm going to object again. I'm
17 sorry, maybe I didn't make myself clear. I don't believe that
18 Dr. Lincoln has provided any testimony about this sort of
19 pricing information gathering, and I don't think it's
20 appropriate to this.
21 COMMISSIONER KJELLANDER: And that objection is
22 sustained.
23 Q. BY MR. GANNON: Okay. Well, the reason I ask
24 that question is -- is that when -- when you developed
25 Exhibit 5 from information provided by Qwest, you indicated
311

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 that the information for prices was garnered from promotional
2 tools such as Web sites, newspaper advertisements, et cetera.
3 Is that correct?
4 A. Correct.
5 Q. And you did not physically go to the Sprint store
6 or the T-Mobile store or the other stores and actually survey
7 firsthand what the actual prices they were charging at a given
8 time were, did you?
9 A. No, I did not. And the reason I did not was the
10 purpose of this exhibit was only to display examples of what's
11 available in the marketplace, but not to provide a exhaustive,
12 this is all that's out there, this is exactly what everything
13 costs and what you get for what you pay. It was meant to be an
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14 example of the spectrum of offerings that were occurring at
15 that particular point in time. As you well know, it's changed
16 dramatically since this was put together last fall.
17 Q. Would you agree with me that the best way to make
18 a determination as to the actual prices that people are paying
19 for their -- or, that people are paying their cell phone
20 providers at a given time is to do a store-by-store survey and
21 such as they do in the retail industry that I alluded to
22 earlier?
23 A. A better way would be to survey people and have
24 them get their bills out and tell you what they're paying.
25 Q. All right, that would be the best way. And you
312

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 didn't do that either?
2 A. No, because there was no reason to do that for
3 this exhibit. This exhibit was only meant to give an example
4 of the types of offerings available. It's a telephone survey
5 that provided the perceptions of what people think prices are,
6 which is much more important to them than what they may be.
7 Q. And going back to the first part of your answer
8 then, if Mr. Teitzel did not conduct such a survey as surveying
9 people's actual cell phone bills -- well, let me rephrase that.
10 The best kind of survey then in order to
11 determine the prices that cell phones are costing would have
12 been for whatever witness is testifying to have gone to people
13 who are actually paying cell phone bills and comparing them?
14 MS. HOBSON: I'm going to object. I think it's
15 inappropriate to ask this witness about the methodologies
16 employed by other witnesses in this case, including Staff, by
17 the way. And so we would ask that Mr. Gannon ask the questions
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18 of those witnesses that actually provided other exhibits.
19 COMMISSIONER KJELLANDER: Mr. Gannon.
20 MR. GANNON: Well, Mr. Chairman, I -- and I
21 haven't laid the foundation, but based on Dr. Lincoln's resume
22 and 30 years of experience in marketing, I just did assume that
23 these would be questions that probably he's the most
24 appropriate witness to ask since he is an expert in marketing
25 and --
313

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 COMMISSIONER KJELLANDER: And what I would
2 request just as the Chair is that, again, as we look at the
3 cross-examination, we have to keep this tied pretty closely to
4 the testimony that's been sponsored by the witness.
5 MR. GANNON: Okay.
6 COMMISSIONER KJELLANDER: So in that context, if
7 there's some direct questions you need to ask of Mr. Teitzel,
8 it might be best to wait until that time and place.
9 MR. GANNON: Okay.
10 COMMISSIONER KJELLANDER: Thank you.
11 MR. GANNON: All right.
12 Q. BY MR. GANNON: As I understand it, the Qwest
13 personnel reviewed the survey questions prior to the survey
14 being used?
15 A. Yes.
16 Q. And can you tell me who reviewed them?
17 MS. HOBSON: I'm going to object. I believe that
18 this may probe attorney-client privileged conversations.
19 MR. GANNON: Okay. I will withdraw the question
20 if that's --
21 COMMISSIONER KJELLANDER: Thank you, Mr. Gannon.
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22 Q. BY MR. GANNON: And I note that Question No. 7
23 was omitted from the residential survey. What was Question
24 No. 7?
25 A. Can you refer to a -- where you're getting a no
314

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 No. 7 existed?
2 Q. On page -- we were provided with Qwest's
3 Responses and Objections to First Interrogatories, and I
4 believe there are 51 -- a large number of pages. Staff 01-003T
5 and they are numbered in the upper right-hand column 1 through
6 86. And the residential survey that I'm referring to is
7 page 6, 7 -- 6 and 7. Those are the questions that were asked.
8 MS. HOBSON: I'm going to ask that the witness be
9 shown the document that you're looking at.
10 MR. GANNON: Sure. Sure.
11 COMMISSIONER KJELLANDER: Mr. Gannon, if you
12 could approach the witness with that information?
13 MR. GANNON: (Indicating.)
14 COMMISSIONER KJELLANDER: Mr. Gannon, is it your
15 intent to introduce this as an exhibit?
16 MR. GANNON: I would -- I was just going to ask
17 him, Mr. Chairman, what the question seven was.
18 MS. HOBSON: And for the record --
19 MR. GANNON: And it may be that there's no reason
20 to.
21 MS. HOBSON: Mr. Chairman, for the record, Qwest
22 would ask that the entire Data Request and Response be marked
23 for purposes of the record.
24 COMMISSIONER KJELLANDER: Thank you. Without
25 objection, and --
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315

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 MS. HOBSON: Is there a question pending?
2 MR. GANNON: Yes. I just asked Dr. Lincoln what
3 the missing question seven was.
4 THE WITNESS: It appears to me that this is a
5 typo, that there is no missing question but the question eight
6 should have been numbered No. 7 on this exhibit.
7 In the interview, there was a total number of
8 questions were different on two different surveys. The
9 business questions started with a qualifying question: Did you
10 have five lines or less. That was not a question on the
11 residential, so that may explain why there are not exactly the
12 same number of questions.
13 COMMISSIONER KJELLANDER: I think we do need to
14 get this in as an exhibit and we need to give it an exhibit
15 number, and Mr. Gannon, I need to pull out another book to get
16 to your numbering, so you're going to have to bear with me for
17 just a moment.
18 And I believe it will be 209, an exhibit number.
19 MR. GANNON: Can we make it 212, because I have
20 three other exhibits that were already prenumbered.
21 COMMISSIONER KJELLANDER: Without objection, this
22 will be labeled as Exhibit 212.
23 MS. HOBSON: Mr. Chairman, with a clarification
24 again that what is being labeled as 212 is the entire Data
25 Response and not merely the pages that appear to be excerpted
316

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 and handed to Mr. Lincoln.
2 COMMISSIONER KJELLANDER: Okay.
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3 MS. HOBSON: We have no objection under those
4 circumstances.
5 COMMISSIONER KJELLANDER: So then we now have
6 what's labeled then as Exhibit 212. Thank you.
7 (Intervenor Exhibit No. 212 was marked for
8 identification.)
9 COMMISSIONER KJELLANDER: Mr. Gannon, if you
10 would continue, please?
11 Q. BY MR. GANNON: I note with the residential
12 survey that 50 percent made a "yes" answer and 40 percent were
13 "no," and approximately ten percent were in an "unsure"
14 category. You asked a follow-up of the 40 percent "no"
15 questions.
16 A. And also the "unsure"s.
17 Q. And the "unsure"s. But you asked no follow-up of
18 the 50 percent "yes" questions, did you?
19 A. It would not make sense to.
20 Q. Because you were satisfied with their answer?
21 A. Because they said they could substitute cell
22 phone for their basic local exchange service.
23 Q. You made no attempt in a follow-up question to
24 address whether the -- those who answered "yes" had accurate
25 perceptions as to whether their "yes" answer was -- was an
317

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 answer that they would -- was an answer that was correct for
2 them, did you?
3 A. Well all perceptions are accurate to individuals
4 that give them. I don't understand the question.
5 Q. Okay. Well, for example, you could have asked
6 the 50 percent who answered "yes," you could have asked them if
Page 71
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7 they had extension phones in their houses, couldn't you?
8 A. My understanding of the Statute in which this
9 Application occurs is it does not have anything to do with
10 on-premise equipment.
11 Q. You could have asked them that question though,
12 couldn't you?
13 A. It would be a waste of time and money to do that.
14 Q. You could have asked them questions whether they
15 had a fax machine in their house?
16 A. You know, I consider that irrelevant. It would
17 be a waste of time and money.
18 Q. You could have asked them a question of whether
19 they realized that if they wanted to stay in the phone book,
20 they would have to pay $18 a year and would that bother them?
21 A. And I guess I would ask them, Do you have an
22 unlisted number which you pay X amount of dollars for that?
23 It would be nice information to know from a
24 marketing manager for a company, but I saw it as totally
25 irrelevant to the issue at hand here.
318

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Q. You could have asked them at -- you asked them if
2 they could use a cell phone. You could have asked questions to
3 determine at what threshold they would use a cell phone,
4 couldn't you?
5 A. Again, that would not -- that is not what my
6 understanding is necessary to test the Statute in this case,
7 because that line of question would take providing all --
8 thousands of different scenarios for which you'd have to get
9 hundreds of consumer responses to. In other words, I'd have to
10 lay out exactly umpteen different types of situations to find
Page 72
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11 out if someone would use a cell phone to call their grandmother
12 on Sunday morning before she went to church while she was in
13 the kitchen cooking something, as an example, and that would
14 not really take us anywhere.
15 Q. You could have asked them if it would bother them
16 that if they had used a -- that if they used a cell phone, they
17 would lose their phone number and have to change that number
18 portability; and you would have asked a better question than I
19 just did, but you could have asked them that question?
20 A. Again, I do not see that it would address the
21 research objective that I was trying to accomplish.
22 Q. What is that research objective again?
23 A. In this particular question is did people see
24 them as functionally equivalent. Do they see cell phones as
25 being able to do the same thing as a basic local exchange
319

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 service, and that is, make and receive two-way switched voice
2 calls.
3 Q. Now, I've put one of your quotes -- this is a
4 quote from your rebuttal on page 18, line 19 to 21, page 19,
5 line 1 through 11. You make the statement that consumers buy
6 and consume products because of their value in use. Consumers
7 buy products according to their perceived benefits. They buy
8 products for what they want or expect them to do -- expect them
9 to do for them.
10 Is that correct?
11 A. Correct.
12 Q. So if you wanted to really test whether these
13 "yes" answers were really "yes" answers, wouldn't you really
14 have to make a follow-up question and make sure that those --
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15 and determine the depth or the depth of focus of the particular
16 respondent at that particular time?
17 A. Absolutely not in this case.
18 Q. Okay.
19 A. I'm calling you in a telephone survey and I'm
20 asking you for the purposes of making and receiving local phone
21 calls from your household, could you solely rely on cellular
22 service. It's up to you to think of do I like the phones, do I
23 like a wire, do I want an extension, can I get a fax. It's up
24 to you to think of all those parameters that are important to
25 you, and they're very different for all of us. And so by the
320

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 simplicity of our question without delving into five million
2 different variations of issues, we asked the consumer and the
3 small-business person to think of those things and give them
4 their response.
5 Q. Do you think the average respondent in your
6 particular survey was focused on the uses of a cell phone
7 versus land line at the particular time they were called?
8 A. I would presume so.
9 Q. I mean, for example, if they were asked do they
10 support or oppose the war in Iraq, people talk about that, they
11 know about that, it's on their mind. Right?
12 A. They could give you a response, yes.
13 Q. You hit somebody at six o'clock in the evening
14 and say, Hi, I'm doing, you know -- and bring this -- bring
15 this issue up, is that something they're really thinking
16 about?
17 A. In all surveys that are run the way they should,
18 people have the option to say, "I'm not sure," which they did
Page 74
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19 in this survey. I'm busy now, I'm eating, I do not want to
20 answer your survey; hanging up simply to screen with voice
21 messaging.
22 All that happened. People were told the general
23 purpose of the survey was to find out perceptions about cell
24 phone uses versus traditional phone for voice calling. If they
25 didn't want to participate they didn't have to. They could
321

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 take as long as they wanted to to answer questions, and they
2 were not directed towards any particular responses.
3 Q. You know what's kind of interesting is -- is you
4 have the directory listing response listed in I believe it's
5 Question No. 3 or 4 in this survey?
6 A. Right.
7 Q. And some people said that directory listing,
8 can't get in the directory or something like that?
9 A. It's their perception.
10 Q. And you indicated that is a misperception or
11 misunderstanding?
12 A. That's my understanding, yes.
13 Q. Right. And you felt that was valuable. Didn't
14 you feel that that was valuable, a valuable thing to know,
15 because you asked the question?
16 A. For the purpose of determining the reason -- the
17 main reason they could not solely rely on it is because they
18 thought they would not be able to have a phone number in the
19 directory. But we know by fact that is untrue.
20 Q. And you felt that was an important thing to
21 devise in a survey. Correct? Right?
22 A. Correct.
Page 75
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23 Q. Okay. But you didn't think it was an important
24 thing to figure out with respect to the 50 percent "yes"
25 answers, did you?
322

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 A. Again, those people when they said "yes" had
2 thought of those things. They had either -- they had either
3 not thought about directory listing at all, or they had thought
4 about directory listing and thought that might be nice not to
5 have my number in the book because Qwest is going to charge me.
6 Q. But we will never know that, because you didn't
7 ask the question?
8 A. No, and I said we did not need to.
9 Q. Now, you added 12 percent to the 50 percent to
10 get the 62 percent?
11 A. Well, I didn't add. When you analyze the data
12 considering these people now are in this camp versus where they
13 were originally, that changes the picture.
14 Q. And the 12 percent --
15 A. Moves it up 12 percent.
16 Q. And the 12 percent were data transmission
17 people?
18 A. Nonvoice reasons, we would call them.
19 Q. Okay. Now, there's another question you didn't
20 ask is you didn't ask that 12 percent if they had -- if there
21 answer would be "yes" if they took data transmission out of the
22 picture, did you?
23 A. No, I didn't.
24 Q. You -- and in -- and I believe you earlier
25 testified you were taking the main reason for each -- you were
323
Page 76
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HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 taking one reason -- one reason -- from each respondent.
2 Correct?
3 A. Correct.
4 Q. So if a respondent -- some of that 12 percent
5 might have said, well, there's another reason, and let me tell
6 you. Correct?
7 A. Could tell us another nonvoice reason.
8 Q. Okay. And then they would not be in that
9 12 percent that you've added to the 50 percent. Is that
10 correct?
11 A. That's correct.
12 Q. Okay. Now, with the small-business survey, you
13 had 31 percent "yes" and approximately 60 percent "no"; and,
14 again, you did not ask any of the 31 percent in the "yes"
15 category any follow-up questions to determine their
16 understanding of whether they could use the cell phone or
17 not?
18 A. No, again for the same reasons I gave you with
19 the residential: Wouldn't address the research issue.
20 Q. Most businesses are pretty anxious to have their
21 phone answered. Right? I mean, you want --
22 A. We teach them in marketing to do that.
23 Q. You bet. And I don't understand why -- and I'm
24 referring you to an exhibit.
25 MR. GANNON: May the witness refer to an
324

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Exhibit 6, page 1?
2 MS. HOBSON: Is this Exhibit 6 to his testimony?
Page 77
60403V~1.txt
3 MR. GANNON: Yes.
4 THE WITNESS: Page 1, you said?
5 Q. BY MR. GANNON: Yes. And if you look at line 1,
6 33 percent of business lines weren't answering their phone?
7 A. Did not answer it on the specific call times, the
8 first call time.
9 Q. Right, or the second or the third or --
10 A. And I do not recall how long the interviewing
11 firm let the number ring before they hung up, so I really can't
12 go anywhere with that. I mean, did they wait one minute or
13 three minutes or two minutes?
14 Q. That indicates there may be some kind of problem
15 with the phone lines you were furnished or --
16 MS. HOBSON: I object. I think that calls for
17 speculation. Dr. Lincoln has already said he can't go anywhere
18 with why the business lines were not answered.
19 COMMISSIONER KJELLANDER: Any response to that,
20 Mr. Gannon? Sustained, and let's move forward.
21 MR. GANNON: Okay.
22 Q. BY MR. GANNON: In asking the question on the --
23 on the data, on the nonvoice reasons for the business, business
24 survey, you asked for the main reason, correct, of the
25 respondent?
325

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 A. That's correct.
2 Q. And that main -- and would you agree with me that
3 there might have been other reasons why they could not use a
4 cell phone?
5 A. Sure, there could have been.
6 Q. And, therefore, if there could have been other
Page 78
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7 reasons why they would have answered "no" to that, to I believe
8 it's question two, if there could have been other reasons, then
9 it doesn't make sense just to take that nonvoice reason answer
10 and add it to the 31 percent, does it?
11 A. Well, yes, it does, because we're interested, in
12 my understanding of the Statute, dealing with two-way switched
13 voice, basic local exchange service, that we were looking at a
14 study to determine if people could use cell phones instead of
15 the traditional Qwest service for that purpose. When they said
16 "no" to the first question, we want to know if one reason, any
17 one -- one or more reasons were data. If they were nondata
18 reasons, then it was irrelevant to our -- what the study
19 sought.
20 Nonvoice reason would be, I don't like those damn
21 things, you know, the buttons aren't big enough or whatever.
22 And those, to me, are a matter of consumer
23 preferences. They're not hard data of the issue. What I
24 prefer in the phone service to me is outside the extent of the
25 Statute of can customers of small businesses get basic local
326

HEDRICK COURT REPORTING LINCOLN (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 exchange service. Whether they prefer to have three extension
2 phones or five fax machines, to me, conducting this study, was
3 an in -- irrelevant issues. So if those other answers, the
4 other reasons for not saying they solely could rely were these
5 other reasons, to me, they're outside the scope of what they're
6 trying to measure in this study. And, again, if they had more
7 than one data reason, if they said fax and listing and no
8 directory, they all still fall in the same category as nonvoice
9 reasons.
10 Q. So who would you include in the "no" category
Page 79
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11 then in answer to question two?
12 A. Question two is the first question, solely rely.
13 Q. Yes. Who, in your opinion, could legitimately
14 answer that question "no" based upon what you just said?
15 A. I -- it would be people that have a preference
16 for other voice alternatives.
17 Q. Okay. And that would be a legitimate "no"
18 answer. And some of those people would presumably be in
19 that -- I can't remember the figure now -- 40-odd percent that
20 you're adding to the 31 percent. Correct?
21 A. Fifty-four percent, approximately.
22 Q. Fifty-four percent?
23 A. Yeah, could be.
24 Q. Yes.
25 MR. GANNON: I don't have any further questions.
327

HEDRICK COURT REPORTING LINCOLN (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 COMMISSIONER KJELLANDER: Thank you, Mr. Gannon.
2 Are there questions from members of the
3 Commission? Commissioner Smith.
4 COMMISSIONER SMITH: Thank you.
5
6 EXAMINATION
7
8 BY COMMISSIONER SMITH:
9 Q. Mr. Lincoln, or Dr. Lincoln, on page 1 of
10 Exhibit No. 11, I made a few what I felt were typographical
11 corrections and I just want to confirm that I got them right.
12 So on line 4 of the Respondent comment, am I correct to delete
13 the "a"? Somebody probably said, Cost per minute is too
14 high?
Page 80
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15 A. Well, Commissioner Smith, these were verbatim
16 typed as people -- people either used those exact words or the
17 interviewer made a typo, and there are a number of those.
18 Q. Okay.
19 A. So those are not words I typed.
20 Q. Right, I didn't expect, but I just wanted to make
21 sure I'm understanding the content of what people probably said
22 to you, and four lines down --
23 A. I would suspect that example is the person doing
24 the interview hit an extra key.
25 Q. And then four lines down where it says Not every
328

HEDRICK COURT REPORTING LINCOLN (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 here has cell phones: Not everywhere, something like that?
2 A. I'd be speculating. Not everyone or --
3 Q. On page 34 of your must be rebuttal -- it is
4 rebuttal -- you're talking about incentives of customers to
5 switch, and I guess you were here earlier this morning when I
6 think it was Mr. Souba testified that Qwest is also in the cell
7 phone business, wireless business?
8 A. Right.
9 Q. Both wireline and wireless. I guess when I read
10 that, it occurred to me if you're an entity that's both in the
11 wireline business or wireless business, you maybe don't care if
12 your customers move from your wireline to your wireless
13 business?
14 A. I would not know that.
15 Q. Some of your -- I guess the Company filed this as
16 a seven-exchange package?
17 A. That's my understanding.
18 Q. When you did your study, you did it as a
Page 81
60403V~1.txt
19 seven-exchange package?
20 A. Correct.
21 Q. So if the Commission is required to make a
22 determination separately for each local calling area, would you
23 perceive that your study might have limited usefulness in
24 that?
25 A. What that would impact would be the level
329

HEDRICK COURT REPORTING LINCOLN (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 precision. I mean, the study is designed to provide a
2 95-percent confidence level, which means if you went out and do
3 this again, 95 times out of 100 you would find the same results
4 but with a margin of error 4.9 percent. So we report a
5 statistic of 50 percent, but in the full study it means that
6 we're 95 percent sure that a true percent falls between 54.9
7 percent and 45.1 percent.
8 Well, the smaller sample size -- I think the
9 Boise exchange there were 48 people maybe in business or
10 residential. With that small of sample size, that precision
11 might go out to plus or minus 12 percent around the 50 percent,
12 if 50 percent were, in fact, the findings for Boise. I'm not
13 sure what it is.
14 So there's a greater error in a conclusion that
15 you make.
16 Q. Okay. I guess I was also looking at -- oh,
17 sorry, I've now strayed into a new witness's testimony.
18 COMMISSIONER SMITH: Thank you, Commissioner.
19 COMMISSIONER KJELLANDER: Further questions from
20 members of the Commission.
21 If not, then we're ready for redirect.
22 MS. HOBSON: Just one moment, please.
Page 82
60403V~1.txt
23
24
25
330

HEDRICK COURT REPORTING LINCOLN (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 REDIRECT EXAMINATION
2
3 BY MS. HOBSON:
4 Q. Dr. Lincoln, Mr. Stutzman asked you about the
5 survey participants and whether or not they were wireline
6 users. Do you remember that question?
7 A. Yes.
8 Q. Why did you survey Qwest wireline customers and
9 not just those who exclusively use cell phones?
10 A. We did that to be conservative. We knew if we
11 also surveyed and sampled those people through their cell phone
12 numbers that we would, by definition, be hitting people that
13 already switched from traditional basic local exchange service
14 to cell phone service, so that would tend to overinflate the
15 basic conclusions of the study.
16 Q. Thank you.
17 MS. HOBSON: And I have no more redirect.
18 COMMISSIONER KJELLANDER: Thank you.
19 Well, Dr. Lincoln, we appreciate your testimony,
20 and you're excused for the time being.
21 (The witness left the stand.)
22 COMMISSIONER KJELLANDER: I don't know if you
23 want to have any of your witnesses that have already testified
24 be excused for the remainder of the hearing or not.
25 MS. HOBSON: Not at this point, no.
331

Page 83
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HEDRICK COURT REPORTING COLLOQUY
P. O. BOX 578, BOISE, ID 83701
 1 COMMISSIONER KJELLANDER: I think we're at about
2 a point where it gets as good as it gets to break for lunch,
3 and it would be our intent then to break until 1:15, at which
4 time we'll come back and I believe you have two more witnesses,
5 if I'm not mistaken. Is that correct?
6 MS. HOBSON: I believe that's about right.
7 COMMISSIONER KJELLANDER: Thank you. We'll go
8 off the record and return at 1:15.
9 (Noon recess.)
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
332

HEDRICK COURT REPORTING COLLOQUY
P. O. BOX 578, BOISE, ID 83701
Page 84
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1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
1

HEDRICK COURT REPORTING COLLOQUY
P. O. BOX 578, BOISE, ID 83701

1 BOISE, IDAHO, WEDNESDAY, JUNE 4, 2003, 1:16 P.M.
2
3
4 COMMISSIONER KJELLANDER: We'll go back on the
Page 1
60403V~2.txt
5 record, and before we broke for lunch, we were ready for
6 Qwest's next witness, so Ms. Hobson.
7 MR. SHERR: Mr. Sherr will pick up here. Qwest
8 calls David Teitzel.
9
10 DAVID L. TEITZEL,
11 produced as a witness at the instance of Qwest Corporation,
12 being first duly sworn, was examined and testified as follows:
13
14 MR. SHERR: Chairman, Adam Sherr for Qwest. I do
15 have a question for clarification before we get going.
16 At the beginning of the hearing, we discussed the
17 objections that Mr. Gannon had handed Qwest. I didn't know if
18 it might be good to take this up now rather than between.
19 COMMISSIONER KJELLANDER: Thanks for the
20 reminder. I do believe that that was the conclusion that we
21 had at the beginning of the proceedings today, which was to
22 take this up upon Mr. Teitzel's presence on the stand, so we're
23 prepared to do that now. Mr. Gannon.
24 MR. GANNON: Thank you, Mr. Chairman. Pardon me.
25 I gave one of my copies to the reporter and one copy to Qwest.
333

HEDRICK COURT REPORTING TEITZEL (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 I can't find the third company.
2 MS. HOBSON: John.
3 MR. GANNON: I've got it.
4 Mr. Chairman, objection one and two are very
5 similar and we don't have an objection if this -- if these
6 two -- if this particular testimony and these two exhibits are
7 offered only to show that there is a claim being made by these
8 companies, but if it's offered for any other purpose, then we
Page 2
60403V~2.txt
9 would object. I don't know what purpose it's being offered.
10 Ms. Hobson --
11 COMMISSIONER KJELLANDER: Who's handling this?
12 MR. SHERR: Adam Sherr.
13 COMMISSIONER KJELLANDER: Adam, let me make sure
14 I get your last name. Is it Sherr?
15 MR. SHERR: Right.
16 COMMISSIONER KJELLANDER: Mr. Sherr, your
17 response?
18 MR. SHERR: Thank you. I think I need at this
19 point to respond to this document in whole, because we were
20 handed it this morning and it consists of 15 separate
21 objections to different parts of the testimony, and I probably
22 can state all of my responses -- my response to all of this at
23 once since I have to be honest, I have not had an opportunity
24 to review each of those sections and to analyze Mr. Gannon's
25 objections or discuss it with Mr. Teitzel.
334

HEDRICK COURT REPORTING TEITZEL (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Qwest is very concerned with this document, these
2 objections documented, if what this is is a Motion to Strike.
3 It's unclear based on the objections. To the extent Mr. Gannon
4 simply wants those objections noted for the record, Qwest is
5 comfortable with that. If this is a Motion to Strike, we
6 believe it's problematic for two reasons.
7 First being its untimeliness. Qwest's rebuttal
8 testimony was filed on April 21st, and it wasn't handed to us
9 until this morning. It appears that it is marked as being
10 received on June 3 by the Commission, but we did not receive it
11 until this morning. Rule 256 of the Commission's Rules states
12 that for both procedural and substantive Motions, 14 days
Page 3
60403V~2.txt
13 notice is generally appropriate. And in this case, for
14 example, Staff filed the Motion to Strike on April 22nd, the
15 day after Qwest filed its rebuttal testimony, so instead wait
16 until literally the ten minutes prior to the hearing to hand
17 this to Qwest is fairly prejudicial and we don't have an
18 opportunity to give any meaningful response.
19 Also, as to the specific objections, as far as I
20 can see, I see the word "hearsay" sprayed throughout this
21 document. Of course, Commissions generally take a broader view
22 of the admissibility of evidence. Rule 261 states that the
23 Commission doesn't originally follow the Rules of Evidence. It
24 talks about hearsay often being permitted.
25 The objections that are stated here to the extent
335

HEDRICK COURT REPORTING TEITZEL (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 they're about hearsay or foundation seem to go to the weight of
2 the evidence, the weight that you should give to the evidence,
3 but not necessarily to whether you should be entitled to see
4 the testimony.
5 If Mr. Gannon has a problem with particular
6 citations that are in Mr. Teitzel's testimonies, it seems to me
7 what would have been appropriate would have been for him to
8 have brought a copy of whatever it is that's being cited and
9 used it as a cross exhibit to show whether Mr. Teitzel's
10 recounting or citation is true or not true, and waiting until
11 ten minutes before the hearing and handing us this document is
12 not an appropriate way to go.
13 So we'd ask that to the extent this is a Motion
14 to Strike, it be denied. And if this is Mr. Gannon simply
15 wanting to indicate his objections for the record, Qwest has no
16 objection to that.
Page 4
60403V~2.txt
17 COMMISSIONER KJELLANDER: Mr. Gannon.
18 MR. GANNON: Mr. Chairman, we did fax these over
19 yesterday at around 3:30 or 4:00 and I do have a fax receipt
20 for that. I can't find it at the moment.
21 But regardless of the -- in looking at Rule 261,
22 it looked to me like the time to make the objection is when the
23 testimony is offered. Is that -- and maybe I misread that.
24 COMMISSIONER KJELLANDER: Before we get too
25 clogged into the Rule, I think that Mr. Sherr had made some
336

HEDRICK COURT REPORTING TEITZEL (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 reference about the intent of the objections and whether the
2 objection was to strike or if it was merely to get these items
3 on the record for objection purposes within the record itself.
4 Is there any clarification you could add for the intent,
5 because I will say as I look at this, I don't see that there's
6 a request to strike. What is the intent?
7 MR. GANNON: The intent would be the first, and
8 also to strike because for the reasons stated. The hearsay, I
9 recognize hearsay is admissible to some extent in these
10 hearings, but a lot of this is double or triple hearsay and
11 that's where we had a concern that other experts or opinions
12 were coming in without any foundation for those opinions, and
13 actually for even the experts. I mean, there are quotes from
14 an individual in Atlanta who is a telecommunications expert of
15 some kind, but there's no detail as to who the gentleman is
16 other than his name, his qualifications, and he made some
17 statements, and that comes into evidence. Now, if it's --
18 again, if it's being -- it appeared to me that in reading the
19 testimony, that it was offered as evidence of what that opinion
20 was of the gentleman in Atlanta, and in that case, it was in --
Page 5
60403V~2.txt
21 the opinion was contained in a newspaper article. So that
22 makes it double hearsay and really not the kind of foundation
23 that I think we would want in considering the issues in this
24 case.
25 There is a number like that, and then there's --
337

HEDRICK COURT REPORTING TEITZEL (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 most of these -- most of these objections are in -- within that
2 perspective, except that there are also some reports that are
3 cited -- IDC reports, they are called -- and it seemed to me
4 that if they were going to -- that if a witness is going to
5 quote from a report, that it is improper to then claim the
6 report is privileged and confidential but we can quote from a
7 certain part of the report as evidence. And that seemed to
8 raise a -- that raises a concern not only with regard to the
9 rules of evidence, but also with regard to the public record.
10 Certainly, there are trade secrets and we don't want to get
11 into trade secrets, but these are reports -- I believe there's
12 five objections directed to reports of another entity, not
13 Qwest, and in connection with that entity some of the
14 statements in those reports are actually quoted in the
15 testimony.
16 COMMISSIONER KJELLANDER: Thank you, Mr. Gannon.
17 Why don't we seek response, Mr. Sherr, and then
18 we'll also hear if the other Intervenors have any other
19 comments they'd like to weigh in on.
20 MR. SHERR: Thank you. I'll be brief.
21 As to the issue of the reports and the fact that
22 Qwest has relied upon them, the fact is that the one particular
23 report I believe that Mr. Gannon is talking about is
24 proprietary and Qwest had to pay the company that published it
Page 6
60403V~2.txt
25 in order to use it, and it was asked for in Discovery by Staff
338

HEDRICK COURT REPORTING TEITZEL (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 and it was provided on a confidential basis with Staff.
2 That -- you know, confidential information is used all the time
3 in hearings before the Commission. That's what the protective
4 order process is for. So to make a statement that the
5 Commission should never make any statements based on
6 confidential information is wholly at odds with what
7 Commissions do all the time.
8 So that's my response to -- beyond what I said
9 already, that's my response to Mr. Gannon's statements.
10 COMMISSIONER KJELLANDER: Thank you, Mr. Sherr.
11 How about Deputy Attorney General representing
12 Staff?
13 MR. STUTZMAN: Thank you, Mr. Chairman. I'll
14 just weigh in briefly as although I think Mr. Gannon may
15 technically be correct, I do think the objections probably go
16 as to the weight of the evidence rather than the admissibility.
17 I think there's a real question about the relevance if there's
18 been no effort made to connect it to a situation in Idaho, and
19 I'm not sure that's been done. But I think that issue is a
20 question of the weight of the testimony rather -- at the
21 evidence, rather than its admissibility.
22 HEARING OFFICER: Thank you, Mr. Stutzman.
23 Let's see. We have two documents that I believe
24 we need to take care of, and I believe the Commission has heard
25 some discussion there. Why don't we take a quick recess. The
339

HEDRICK COURT REPORTING TEITZEL (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
Page 7
60403V~2.txt
 1 Commission can deliberate on that, and then we'll take up the
2 second Motion on the surrebuttal.
3 MR. SHERR: Thank you.
4 COMMISSIONER KJELLANDER: Okay.
5 (Recess.)
6 COMMISSIONER KJELLANDER: We'll go back on the
7 record. The Commission had an opportunity to review the
8 Request made by Mr. Gannon, and first of all, we want to thank
9 you for presenting this in written form. That makes it a lot
10 easier to digest and to review.
11 I think that the comment made by Mr. Stutzman
12 probably is what, in essence, rules the day on this one, and
13 that is that what it really boils down to is the weight of the
14 testimony, and I think that the Commission, during its time of
15 full deliberation, will be able to place the appropriate weight
16 on that testimony to determine how, or if, we perceive to be
17 hearsay and what weight we want to give it at that time. But,
18 again, certainly appreciate the Motion brought to us and the
19 detail of it, and thank you very much and wish you timeliness
20 at least from this perspective.
21 Also, with regards to the Motion for surrebuttal,
22 I'm going to jump the gun. Why don't we wait until Mr. Neal is
23 on the stand.
24 So with that then, I believe we're ready to move
25 forward.
340

HEDRICK COURT REPORTING TEITZEL (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 MR. SHERR: Thank you, Mr. Chairman. I'd like to
2 hand out to the Bench some revised exhibits which have been
3 distributed to the other parties in this case. May I approach?
4 COMMISSIONER KJELLANDER: Yes.
Page 8
60403V~2.txt
5 MR. SHERR: (Indicating.)
6
7 DIRECT EXAMINATION
8
9 BY MR. SHERR:
10 Q. Good afternoon, Mr. Teitzel.
11 A. Good afternoon, Mr. Sherr.
12 Q. Could you please state your name for the
13 record?
14 A. Yes. My name is David Teitzel. That's spelled
15 T-E-I-T-Z-E-L.
16 Q. And by whom are you employed?
17 A. Employed by Qwest Communications.
18 Q. And in what position?
19 A. I'm director of product and market issues in the
20 public policy organization.
21 Q. Could you please, for the record, state your
22 business address?
23 A. Yes. I'm at 1600 Seventh Avenue in Seattle,
24 Washington, and the zip code is 98191.
25 Q. Thank you. Do you have in front of you direct
341

HEDRICK COURT REPORTING TEITZEL (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 testimony filed on December 17, 2002, bearing your name, and
2 Exhibits 12 through 17?
3 A. Yes, I do.
4 Q. Were those documents prepared by you or under
5 your direction in your capacity at Qwest?
6 A. Yes, they were.
7 Q. Do you have any corrections to those documents?
8 A. I've got one very minor correction to exhibit --
Page 9
60403V~2.txt
9 to my direct testimony, which is not marked as an exhibit, at
10 page 8 on 4. There's an extraneous word there. The word "to,"
11 the second word in, should be stricken. It should say: With
12 Qwest's voice grade land line service.
13 And that is the extent of my changes to my direct
14 testimony. I do have a change on Exhibit 19 I'd like to
15 offer.
16 Q. I'm sorry, to what exhibit?
17 A. I'm sorry, Exhibit 13. I apologize.
18 Q. Exhibit 13.
19 A. On page 1 of Exhibit 13, there's a fourth column
20 in, it says Measured Bus, M-E-A-S B-U-S. There's a typo there.
21 That price for measured business service says "25.51." That
22 should read "23.51' in each instance.
23 That same correction would apply to the next
24 page, page 2 in the same column, as well as page 3, the second
25 column in.
342

HEDRICK COURT REPORTING TEITZEL (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Q. Do you have any other corrections to your direct
2 testimony or those exhibits?
3 A. I do not.
4 Q. Okay. And with those corrections, do you believe
5 this testimony and these exhibits are true and correct to the
6 best of your knowledge?
7 A. Yes, I do.
8 Q. If I were to ask you these same questions today,
9 would your answers be the same?
10 A. Yes, they would.
11 Q. Do you also have in front of you rebuttal
12 testimony?
Page 10
60403V~2.txt
13 A. Yes, I do.
14 Q. And that is dated April 21. Is that correct?
15 A. That is correct.
16 Q. And also in front of you exhibits numbered 19
17 through 27?
18 A. Yes, I do have those.
19 Q. And were these documents prepared by you or under
20 your direction in your capacity at Qwest?
21 A. Yes, they were.
22 Q. Do you have any corrections to these documents?
23 A. I do have several. At -- starting at page 25,
24 lines 19 through 21, approximately --
25 MR. STUTZMAN: I'm sorry. What page?
343

HEDRICK COURT REPORTING TEITZEL (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 THE WITNESS: I'm sorry. Page 25, lines 19
2 through 21. Subsequent to the filing of my rebuttal testimony,
3 Mr. Wayne Hart, on behalf of Staff, adjusted some numbers for
4 evening and night, weekend, usage, his percentages, and since
5 those numbers are also revised, I'd like to reflect those
6 revised numbers in my testimony. So let me read the entire
7 sentence as it should read into the record.
8 Starting at line 19, I would say: In his recent
9 revisions to his Exhibit 101, Mr. Hart has calculated estimates
10 of residential evening, night, weekend usage of 41.6 percent,
11 35.4 percent, 17.5 percent, and 28.2 percent.
12 Q. BY MR. SHERR: And would the rest of that
13 sentence be the same?
14 A. It would.
15 On the following page, page 26, I would like
16 to -- line 2 -- add three words at the end of the sentence. It
Page 11
60403V~2.txt
17 would say "Estimates are incorrect even as revised," referring
18 to Mr. Hart's revised numbers.
19 And then at line 4, I apologize, I just had these
20 in the wrong order, but these numbers should read the values
21 are 43 percent, 36 percent, 18 percent, and 29 percent.
22 That is the extent of the changes on that page.
23 At page 42 in footnote 22, there's a reference to
24 an IDC -- IDC Study No. 29018, and that should be "28018."
25 And that concludes my revisions to the body of
344

HEDRICK COURT REPORTING TEITZEL (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 the testimony itself.
2 Q. Any revisions to the Exhibits 19 through 27?
3 A. Yes, I do have some changes to report in
4 Exhibit 19. Mr. Stutzman, on behalf of Staff, called yesterday
5 to have us help him reconcile how these numbers were derived,
6 and during that discussion we found that I had a double-counted
7 for the Federal Universal Service Fund surcharge of 2.95
8 percent in the calculation. That change only affected the line
9 items on Exhibit 19 to say with features. I have corrected
10 those numbers and we have distributed revised exhibits today.
11 And I can report to you that in addition, in
12 Qwest's measured rate with features column, revised that number
13 by 27 cents. That would be in the second column in the left on
14 the first page.
15 For the Qwest flat rate line items, that with
16 features, those numbers changed by 45 cents.
17 On the second page of Exhibit 19, the Qwest
18 measured rate value was modified by 45 cents also, and I carry
19 down to each line item.
20 And the Qwest business flat rate column that says
Page 12
60403V~2.txt
21 low usage, average usage, high usage, those numbers all change
22 by 84 cents.
23 I would like to emphasize also that you can see
24 shading on this exhibit. The purpose of that shading is to
25 illustrate for the Commission and the parties where there is a
345

HEDRICK COURT REPORTING TEITZEL (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 differential of $10 or less between a wireless rate and a
2 comparable Qwest wireline rate, and none of those shaded boxes
3 changed. The conclusions did not shift.
4 Q. Mr. Teitzel, before you move on, did you also
5 make a change on the left-most column at the bottom where it
6 says ClearTalk?
7 A. I did, I'm sorry. "ClearTalk Southern Idaho"
8 should actually read "ClearTalk Eastern Idaho," so that
9 correction has also been reflected on this exhibit.
10 Q. Any other changes to your exhibits?
11 A. The exhibits that underlie Exhibit 19 are shown
12 in Exhibit 20. I have distributed a revised exhibit set to the
13 parties today and it takes out the effect of the double
14 addition of the Federal Universal Service Fund element. Again,
15 that number is developed by multiplying the line rate by 2.59
16 percent. That number was counted twice and it's now been
17 corrected.
18 And, Mr. Sherr, I believe that is the extent of
19 my corrections.
20 Q. Okay. And with those corrections, do you believe
21 that your rebuttal testimony and Exhibits 19 through 27 are
22 true and correct to the best of your knowledge?
23 A. Yes, I do.
24 Q. And if I were to ask you the same questions
Page 13
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25 today, would your answers be the same?
346

HEDRICK COURT REPORTING TEITZEL (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 A. Yes, they would.
2 MR. SHERR: Mr. Chairman, I would move the
3 admission of Exhibits 12 through 17 and 19 through 27, and ask
4 that Mr. Teitzel's direct and rebuttal testimony be spread on
5 the record.
6 COMMISSIONER KJELLANDER: And with those changes,
7 there being no objection, we will spread the testimony of both
8 the direct and the rebuttal across the record as if read, and
9 admit Exhibits 12 through 17 attached to direct and Exhibits 19
10 and (sic) 27 associated with rebuttal.
11 MR. SHERR: Thank you.
12 COMMISSIONER KJELLANDER: There is no 18.
13 (The following prefiled direct and
14 rebuttal testimony of Mr. Teitzel is spread upon the record.)
15
16
17
18
19
20
21
22
23
24
25
347

HEDRICK COURT REPORTING TEITZEL (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest

Page 14
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1 (The following proceedings were had in
2 open hearing.)
3 (Qwest Exhibit Nos. 12 through 17 and 19
4 through 27, having been premarked for identification, were
5 admitted into evidence.)
6 COMMISSIONER SMITH: Mr. Chair.
7 COMMISSIONER KJELLANDER: Yes.
8 COMMISSIONER SMITH: I would just note that
9 previously, Exhibit No. 20 was provided to us on colored paper,
10 as is appropriate for a confidential exhibit, thereby we treat
11 it separately, we keep it separately, and Exhibit 20 handed to
12 me just now is on white paper. So does that mean that we don't
13 have to treat this as confidential?
14 MR. SHERR: No, and I'm very glad you brought
15 that to our attention. In our scramble to fix these last
16 night, we obviously did not appropriately put them on colored
17 paper. As you'll see, it still indicates it's a confidential
18 exhibit, but we can provide copies on yellow.
19 COMMISSIONER SMITH: Well, the Commission tries
20 to be scrupulously careful about how it treats information
21 claimed to be proprietary, so this, I think, is a cause for
22 concern that inadvertently something could go wrong with these
23 pages.
24 COMMISSIONER KJELLANDER: All right. Thank
25 you.
450

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 MR. SHERR: And Mr. Teitzel's available for
2 cross-examination.
3 COMMISSIONER KJELLANDER: Okay. Let's begin with
4 Mr. Stutzman.
Page 15
60403V~2.txt
5 MR. STUTZMAN: Thank you, Mr. Chairman.
6
7 CROSS-EXAMINATION
8
9 BY MR. STUTZMAN:
10 Q. Good afternoon, Mr. Teitzel.
11 A. Good afternoon, sir.
12 Q. You may have misunderstood some things that you
13 responded to in Staff's testimony, so I'd like to see if I
14 could clear those up.
15 First of all, at page 52 of your rebuttal, you
16 make a statement that Dr. Johnson maintains that most consumers
17 restrict use of wireless service to calls made in their car.
18 Right? Do you see that?
19 A. I'm sorry. That was page 52 of rebuttal?
20 Q. Page 52 of your rebuttal.
21 A. Yes, I do.
22 Q. Do I have the wrong page?
23 COMMISSIONER SMITH: It's in the question.
24 Q. BY MR. STUTZMAN: Oh, it's in the question, I'm
25 sorry. It's phrased in the question, lines 16 through 19. And
451

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 your reference for that is Dr. Johnson's testimony on page 17,
2 lines 12 through 14?
3 A. That is correct.
4 Q. I'd like to hand you a copy of that page from
5 Dr. Johnson's testimony and have you read those lines, please.
6 A. Thank you.
7 Q. Starting with the sentence on line 11.
8 A. Would you like me to read --
Page 16
60403V~2.txt
9 Q. Please read it out loud.
10 A. Okay. The sentence starting on line 11:
11 This implies that the vast majority of
12 residential customers never use their mobile phone for calls
13 they place using a conventional phone. In other words, most
14 consumers only use mobile phone when they need to place a call
15 while traveling around, because of the usage fees associated
16 with wireless calls, comma, poorer sound quality, comma,
17 physical discomfort, comma, or other reasons.
18 Q. When you said that Dr. Johnson maintains that
19 most people restrict their use of their cell phone to car
20 usage, what were you referring to in those lines?
21 A. I think I was referring to the second sentence
22 that says: In other words, most consumers only use mobile
23 phone service when they need to place a call while traveling
24 around.
25 Q. Do you agree with me that the concept of
452

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 "traveling around" sometimes is quite a bit more than just
2 driving your car around?
3 A. I agree. It would be mobile at a location
4 outside the home.
5 Q. Thank you. On page 11 of your rebuttal, at
6 line 10, you say that in his testimony, Mr. Hart stated that,
7 quote: Consumers know when they pick up a wireless phone
8 they're making a trade-off between mobility and service
9 quality. Closed quote.
10 Do you see that in your testimony?
11 A. I'm sorry, I'm not there. It's page 11 of my
12 rebuttal?
Page 17
60403V~2.txt
13 Q. Page 11. I'm sorry, page 10. My apology.
14 A. And the line number again, please?
15 Q. Line 10, starting -- the sentence starts on 10.
16 The quote is on line 11, starting on line 11.
17 A. I see that.
18 Q. Okay. And you attribute that quoted portion to
19 Mr. Hart, do you not?
20 A. Yes, I do.
21 Q. And wasn't that, in fact, a quote in Mr. Hart's
22 testimony from a wireless industry spokesman? And do you have
23 Mr. Hart's testimony?
24 A. I do not have it on the stand with me.
25 MR. CUSICK: (Indicating.)
453

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Q. BY MR. STUTZMAN: Is the quoted portion of the
2 sentence attributed or made by -- in Mr. Hart's testimony --
3 made by a wireless industry spokesman and not Mr. Hart?
4 A. I'm trying to read the entire section here in
5 context here. Just a moment.
6 You are correct, that quoted section is
7 attributed to a gentleman by the name of Travis Larson,
8 industry spokesman.
9 Q. Thank you. So it would be appropriate to
10 attribute that to the person who made the statement?
11 A. That's fair.
12 Q. Okay. Thank you. I want to ask you some
13 questions now about your Exhibits 19 and 20. I want to first
14 look at 20, page 1. Yes, we may be talking about numbers that
15 Qwest regards as proprietary, so I don't know how you want to
16 deal with it now: Let me proceed until it looks like somebody
Page 18
60403V~2.txt
17 is going to say something proprietary or deal with it
18 upfront?
19 MR. SHERR: I can tell you which numbers without
20 saying the numbers are confidential and which ones are not, and
21 I believe on Exhibit 20, all the numbers -- and I'm sure
22 Ms. Hobson will correct me if I'm wrong -- the only ones that
23 we consider confidential are those numbers on the line that
24 states Qwest usage level in minutes, at the top below the
25 indications of low, average, high. There are numbers below
454

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 those designations. So there's six total numbers on each page.
2 I believe those are the only ones we consider to be
3 confidential.
4 MR. STUTZMAN: Well, I appreciate that, and I
5 guess I'll proceed and then if we start talking about numbers,
6 we'll deal with it.
7 Q. BY MR. STUTZMAN: Okay, Mr. Teitzel, I just want
8 to make sure that I understand what you did in making these
9 price comparisons. Page 1, just using that as an example, is a
10 comparison of Qwest's local service rates and plans offered by
11 Edge Wireless. Is that correct?
12 A. That is correct.
13 Q. And on the left side is a comparison with Qwest
14 residential measured service?
15 A. That is correct.
16 Q. And on the right hand of the page is a comparison
17 with Qwest's flat rate service?
18 A. That's right.
19 Q. First off, what percentage of Qwest residential
20 customers in these exchanges are measured service customers?
Page 19
60403V~2.txt
21 A. I don't have the precise percentage with me.
22 It's a much lower percentage, clearly, than flat.
23 Q. Is it approximately one percent?
24 A. I believe the number is higher than one percent.
25 One percent, slightly less than five. I don't have the precise
455

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 number.
2 Q. What percentage of local exchange small-business
3 customers are flat rate customers?
4 A. The majority of our flat rate business
5 customers -- I should say the majority of our business
6 customers are flat rated, and I don't have the precise
7 percentages on the stand with me.
8 Q. Would it be similar percentage with the
9 residential?
10 A. The majority be in excess of 90 percent I'm
11 certain would be flat rated business.
12 Q. All right. Then let's focus on comparison of
13 flat rated service. Now, let's look at -- I want to go down
14 the column under the Average heading. And I was going to say
15 the minutes there but I guess I won't do that, but there's a
16 number there that reflects the usage, the minutes of use by an
17 average, flat-rated customer. Right?
18 A. Yes, there is.
19 Q. If you work your way down that column, the first
20 number you come to under the Local 1000 column that's a total
21 number is $84.56. Correct? And that represents the cost of
22 the Local 1000 wireless plan?
23 A. Represents the cost of that plan, plus Federal
24 excise tax, Federal Universal Service Fund fees, and the Idaho
Page 20
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25 Telephone Assistance Plan. It's a combination of those
456

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 elements.
2 Q. All right. Then you continue on down to the next
3 total figure and that is the Qwest price, 25.89, and that also
4 includes the Qwest line rate of 17.50, plus the various fees
5 and the taxes that some of which you've just mentioned with
6 wireless service. Right?
7 A. That's right. Qwest's wireline customers pay
8 those fees plus some additional fees, and the aggregate of
9 those elements totals 25.59.
10 Q. Then the next number down is the difference
11 between those two, so if I'm an average customer and I'm
12 looking at the Edge Wireless Local 1000 plan and I'm making a
13 price comparison, I'm going to be looking at a price difference
14 of $58.67 a month. Is that correct?
15 A. In that comparison, that's correct.
16 Q. The next number down, you don't regard that
17 number as confidential?
18 A. No.
19 Q. The next number down is $6.41, and that is the
20 average -- well, explain to me how you arrived at that number.
21 A. That is the average residential feature revenue
22 per access line in the state of Idaho. Essentially --
23 Q. I'm sorry. Go ahead.
24 A. Essentially, we took the total amount of revenue
25 generated by the various features residential customers buy and
457

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 divided that by the total lines in service, residential lines
Page 21
60403V~2.txt
2 in service. It's a broad average.
3 Q. So it's not what the average customer pays that
4 buys features, it's the average spread across the entire
5 line?
6 A. That's true.
7 Q. Now, in your list of fees under the Local 1000
8 plan for Edge Wireless, you didn't make an adjustment for
9 directory listing. Is that right?
10 A. I did not.
11 Q. So if I were considering that plan and I wanted a
12 directory listing, I would have to add $1.50 a month to that?
13 A. That would be true.
14 Q. And are you aware that a new law takes effect in
15 Idaho this summer that will add a 9-1-1 fee to wireless
16 service?
17 A. I am aware the law has been passed, and I believe
18 that allows for a certain charge of up to a dollar, but I had
19 not seen precisely what that surcharge will be. As of now,
20 that surcharge does not appear in wireless customers' bills.
21 Q. And isn't it true that wireless carriers are
22 starting to charge for number portability?
23 A. I had examined several wireless customers' bills
24 who happened to be Qwest employees and have not seen a number
25 portability charge on those wireless bills as of yet.
458

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Q. But are you aware that that is starting to happen
2 in the industry?
3 A. I am aware the number portability for wireless
4 will be implemented in November of this year. Now, whether or
5 not the wireless carriers pass those fees along, frankly, I
Page 22
60403V~2.txt
6 just don't know. They have not done so as of yet.
7 Q. Thank you. Now, I did want to focus more on the
8 minutes of use and how you arrived at that. I'm not sure I can
9 do it without talking about the numbers.
10 MR. SHERR: With that said, I believe we'll
11 probably have to do it on a confidential record. If we're
12 going to discuss the number, those numbers are confidential.
13 COMMISSIONER KJELLANDER: So I guess what you're
14 requesting then is that we clear the room of anyone who hasn't
15 signed the confidentiality agreement, so that would be
16 basically everybody except the direct parties to the case. And
17 is there a way to sort of package this up together so that we
18 don't clear the room and then come back, and then clear it
19 again and then come back?
20 MR. STUTZMAN: I'd try to do that.
21 COMMISSIONER KJELLANDER: Do you need a few
22 moments to put that together?
23 COMMISSIONER SMITH: Mr. Chairman, I just had a
24 question of whether he could ask the methodology without
25 getting the specific numbers, whether they consider that
459

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 proprietary.
2 MR. SHERR: The methodology itself is not
3 proprietary, but I'm kind of guessing where Mr. Stutzman is
4 going to go; could be wrong. If he's going to be looking at
5 Exhibit 21, every number on there is confidential.
6 Is that true, Mr. Teitzel?
7 THE WITNESS: That's true.
8 COMMISSIONER KJELLANDER: Okay. Well, I think
9 that what we'll need to do then is to clear the room. And do
Page 23
60403V~2.txt
10 you need a few extra moments then, Mr. Stutzman, just to
11 collect those questions so we can get this all handled in one
12 fell swoop?
13 MR. STUTZMAN: Well, I think I'm okay.
14 COMMISSIONER KJELLANDER: Then why don't we go
15 off the record and clear the room, and be back on the record in
16 less than four or five minutes.
17 (Recess.)
18
19
20
21
22
23
24
25
460

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
Page 24
60403V~3.txt
1 BOISE, IDAHO, WEDNESDAY, JUNE 4, 2003, 2:18 P.M.
2
3
4 COMMISSIONER KJELLANDER: We'll be back on the
5 record, and Mr. Stutzman, you were in the process of going
6 through your cross and it is still your turn.
7 MR. STUTZMAN: Thank you, sir.
8
9 DAVID L. TEITZEL,
10 produced as a witness at the instance of Qwest Corporation,
11 having been previously duly sworn, was further examined and
12 testified as follows:
13
14 CROSS-EXAMINATION
15
16 BY MR. STUTZMAN:
17 Q. So, Mr. Teitzel, then, if I'm an average user
18 today and I'm looking at the Edge Wireless plans, I would be
19 considering the Local 2000 plan rather than the Local 1000,
20 correct, based on minutes of use?
21 A. I'm sorry, was your question based on my exhibit
22 as it exists or an assumption that data is included in the
23 usage?
24 Q. On the assumption that I'm interested in finding
25 a plan for my total minutes of use.
470

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 A. Please define for me "total minutes of use."
2 This is a fundamental difference, I think. We're defining
3 minutes of use to be two-way basic exchange switched voice
4 communication. Are you incorporating data in that definition,
Page 1
60403V~3.txt
5 dial-up data?
6 Q. I'm incorporating total minutes of use for my
7 telephone. Am I going to consider an Edge Wireless plan with
8 considering my total minutes of use?
9 A. I'm not trying to be difficult. Just bear with
10 me a moment. The framing of my testimony is around the premise
11 that dial-up Internet usage is separate and apart from the
12 definition of local exchange service by Statute in the state.
13 If you're asking me to disregard that for a second and assume
14 total usage a customer uses for any purpose, then the value
15 shown here would be higher, approximately double.
16 Q. Well, I guess what I'm asking you to assume is
17 that I'm a customer who is considering making this switch and
18 I'm looking at the various plans. I want to find one that's
19 competitively priced for what I'm using my telephone for and
20 provide the same service, and I don't see anything on the -- at
21 least on the Edge Wireless page, as an example, that's going to
22 appeal to me. Is that fair enough?
23 A. Well, in terms of a customer assessing
24 competitive options, if they're looking at serving their voice
25 needs, what we're representing here is a reasonable comparison,
471

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 very valid comparison. This is the kind of decision the
2 customer might go through. For their -- I'm sorry. For the
3 data use, they may use satellite, they might use Cable One
4 broadband, other options out there, but for voice
5 communications, this is a very representative comparison.
6 Q. In other words, cellular is not a good option for
7 meeting my data needs?
8 A. Depends on the type of data being used. For very
Page 2
60403V~3.txt
9 high speeds, broadband cable might be a better choice. For
10 standard Internet surfing, text messaging, exchanging e-mails,
11 there are wireless options out there.
12 Q. Exhibit 19 I think is just a compilation of all
13 of the price differences that are contained in Exhibit 20. Is
14 that correct?
15 A. That is correct.
16 Q. And on the -- as I understand it, on the left
17 side of the Qwest measured rate side, you used the 2002 hold
18 times to make those -- in the calculations to make those
19 comparisons. Correct?
20 A. No, I used the hold times represented on
21 confidential Exhibit 22 we just spoke about -- excuse me --
22 Exhibit 21 we just spoke about.
23 Q. Well, I'm looking at pages 3 and 4 of that
24 exhibit, measured business and measured residence, and under
25 the average hold time column, that's identified as 2002?
472

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 A. I apologize. I misunderstood your question. If
2 you're asking about measured services, we used 2002 data for
3 both call rate and hold time, because over the same period of
4 time from 1991 to 2002 looking at the call rate trending, the
5 measured rates were -- measured call hold time rates stayed
6 fairly flat. They didn't exhibit the rapid ramp-up that flat
7 rated service did.
8 Q. Okay. So the numbers that are affected by the
9 use of the 1996 hold times are just the flat rate numbers?
10 A. Flat rate residence and flat rate business.
11 Q. And those are all the numbers on the right side
12 of the page, Exhibit 19?
Page 3
60403V~3.txt
13 A. That's right.
14 Q. Thank you. That's all I have.
15 A. Thank you.
16 COMMISSIONER KJELLANDER: Mr. Gannon.
17
18 CROSS-EXAMINATION
19
20 BY MR. GANNON:
21 Q. Mr. Teitzel, in considering whether the land line
22 is effectively competing with the cell phone, in your
23 testimony, you did discuss other aspects of cell phone or
24 other -- other technological aspects of cell phones in
25 extolling the virtues of cell phones versus land lines, didn't
473

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 you?
2 A. Yes, I did.
3 Q. You said, well, cell phones are mobile, didn't
4 you, on two occasions in your testimony?
5 A. I did.
6 Q. And you said that the cell phone companies are
7 offering some features -- additional features such as voice
8 messaging and others that are being offered by both wireline
9 and cell phones. Correct?
10 A. Yes, that's true.
11 Q. And you said that there was a package that you
12 can buy with a cell phone that made it very attractive. Is
13 that true?
14 A. That is also true.
15 Q. Okay. So those aspects of cell phone usage which
16 you have in your testimony are outside this very, very narrow
Page 4
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17 definition of basic local exchange service; ie., voice to voice
18 transmission. Correct?
19 A. I don't think I necessarily go there entirely. I
20 think the definition that we're dealing with in this proceeding
21 concerns two-way switched voice communication. I think
22 features like call forwarding, call waiting, are strictly
23 related to voice. They're features that a voice customer often
24 uses, residential and business, in facilitating their use of
25 voice service.
474

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Q. So you would agree with me then that extension
2 phones which facilitate the voice service would also be a
3 consideration in choosing the land line or the cell phone?
4 A. Well, the extension phones are on the customer
5 side of the network interface. It's something that Qwest has
6 no oversight nor control of in terms of how the customer uses
7 that phone in their side of the NI, so I would not categorize
8 that as I would a feature.
9 Q. I see. Even though the voice is transmitted
10 through those extension phone systems that both offices and
11 homes have in this state?
12 A. Technically, the voice is transmitted through an
13 extension, I would agree with that.
14 Q. Okay. Now, well, certainly mobility is not part
15 of the transmission, this voice-to-voice -- this narrow
16 definition you're talking about, is it?
17 A. No, I don't think we ever maintained -- I
18 certainly didn't maintain, nor did any other witness that I'm
19 aware of for Qwest -- that a wireless service is identical in
20 its functionality to a wireline service. I think mobility is
Page 5
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21 one attribute that customers will assess when they look at the
22 value, total value of wireless versus wireline offering.
23 Q. Right. That is something that you said in your
24 testimony you would consider, isn't it?
25 A. Yes.
475

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Q. Okay. So if we're going to consider the
2 mobility, why aren't we going to consider on the wireline side
3 the extension phones, the fax machine, the data transmission,
4 portability of phones, phone numbers, the charges for the
5 directory listing, and all these other factors? Why do we just
6 consider -- why do you just consider mobility?
7 A. Looking at mobility as a value adder. The
8 customer is going to look at the package and look at what they
9 pay Qwest versus what they pay a wireless company potentially
10 when they're making the buy decision. I don't believe there is
11 any recurring fee to be paid for an extension phone, for
12 example. I think that's not part of the price decision a
13 customer looks at.
14 In going further, again, we've -- we believe,
15 Qwest believes, that the Statute is very clear. This
16 proceeding concerns voice two-way switched local exchange
17 communications. This does not contemplate exchanging bits of
18 data between two fax machines, for example.
19 Q. But yet in your testimony -- your testimony --
20 you've added in mobility and some of these features that you're
21 talking about as advantages for cell phones, haven't you?
22 A. I did argue that mobility would be part of the
23 value decision that a customer would look at.
24 Q. And the use of extension phones in a
Page 6
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25 3,000-square-foot home would likewise be something -- a factor
476

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 in a customer's choice as to the value of the Qwest basic land
2 line versus a cell phone. Isn't that true?
3 A. Well, I think an extension might be considered by
4 a customer in their decision-making process, and the question
5 in my mind is whether that relates to the statutory test Qwest
6 must meet in this proceeding. I would suggest to you it
7 doesn't.
8 Q. How about as far as the pricing being competitive
9 between the cell phone and the land line? Doesn't it come in
10 as a factor as to whether they are competitively priced? In
11 other words, what do you get?
12 A. Would you clarify? What do you get for wireline?
13 Q. What do you get when you pay $42 for a land line
14 versus what do you get if you pay 49.95 for a cell phone?
15 Isn't a customer -- I'm sorry.
16 A. I think customers will look at attributes. For
17 example, if they buy back in the future example for a moment:
18 If a Qwest wireline customer has a range of features, let's say
19 two features on their line, and they're looking at a comparable
20 plan, wireless plan that would be attractive from a price
21 perspective, they're going to assume that they're paying for
22 these features today, those features would be included in the
23 wireless package. That's part of that comparison that I
24 illustrated in my exhibits here, especially Exhibit 19. Again,
25 I don't believe there's any recurring fee that I'm aware of for
477

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 an extension phone, so I don't think that's part of the price
Page 7
60403V~3.txt
2 decision at all.
3 Q. Okay. Let's pretend that you're -- that you're a
4 customer and I tell you, well, I can sell you this 39.95 cell
5 phone package, but you have a 3,000-square-foot house, you've
6 got a cell phone for the house. Well, in order to operate your
7 extension system you're going to have to buy a $150 cell
8 socket, you're going to have to keep the cell phone there all
9 the time, and you're going to have to keep it plugged in so it
10 stays charged. If one of your kids takes the cell phone out
11 and goes wandering around with it, then your extension phones
12 don't work. But I can sell you this for 39.95.
13 Or you can buy a Qwest land line where you can
14 have an extension phone system in your house, you can run your
15 fax machine, you can run your computer, you can keep your phone
16 number for the rest of your life, you get a free listing in the
17 phone directory that doesn't cost you $18 a year and if you're
18 a business it doesn't cost you $72 a year, and there's several
19 other advantagess to having this Qwest wireline.
20 Don't you think that customer is going to
21 consider all of those factors in deciding which -- which
22 technology to buy?
23 A. The customer might very well consider those
24 factors.
25 Q. Okay.
478

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 A. The question is should they be considered in this
2 proceeding in determining whether or not wireless service is a
3 functionally equivalent, reasonably available, reasonably
4 priced alternative to Qwest wireline. Again, I think we
5 presented evidence that it definitely is.
Page 8
60403V~3.txt
6 Now let me also say in your example, you talked
7 about $100 or $125. I can't recall the precise number you used
8 on the cell side. If the customer is moving into a house and
9 has to wire the house, have an electrician place inside wiring,
10 it will be certainly more than that amount. So examples can be
11 brought up or illustrated to point out there are variations.
12 It very much depends on the customer's individual needs or
13 individual preferences.
14 Q. Well aren't we talking about effective
15 competition, not reasonable, but it's effective competition?
16 Isn't that the term?
17 A. Well, again, I want to be careful on terminology
18 here. I don't think effective competition is the term. I
19 think it's functionally equivalent, reasonably priced,
20 reasonably available by Statute, as I recall. We're not
21 testifying that wireless service is identical or virtually
22 identical to wireline. Is it a reasonable alternative? Sure
23 it is.
24 Q. Well, let me just conclude this by, Doctor,
25 showing you Dr. Lincoln's testimony which you adopted in your
479

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 testimony, and you said Dr. Lincoln discusses in his testimony
2 how customers base purchasing decisions on all attributes of
3 alternative services. And you agree with that, don't you?
4 MR. SHERR: Your Honor, Mr. Chairman, I'll
5 interpose an objection just for clarification. Mr. Gannon just
6 said that Mr. Teitzel adopted Mr. Johnson's testimony.
7 MR. GANNON: No, it was Dr. Lincoln's.
8 MR. SHERR: Excuse me. Dr. Lincoln's testimony.
9 I'll withdraw my statement.
Page 9
60403V~3.txt
10 THE WITNESS: And your question again, please?
11 Q. BY MR. GANNON: And you still agree with that
12 statement, that statement that you made in your rebuttal
13 testimony, don't you?
14 A. Well, I think, again, I do agree with that
15 statement, because customers will consider what they will
16 consider. I think that was illustrated in our research in this
17 proceeding. Customers view that wireless is a reasonable
18 alternative for wireline for whatever reason they may
19 perceive.
20 Q. Well, I believe the question was could they
21 use -- well, at any rate.
22 And just to clarify, the business listing with a
23 cell phone is $72 a year, correct, it's not the $1.50 a month?
24 A. It is $6 a month. That would equate to 72,
25 that's correct.
480

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Q. Cell phones can't choose long distance carriers.
2 That's true, isn't it?
3 A. They cannot. You can certainly select
4 alternative wireless providers to carry your long distance
5 service.
6 Q. By getting another cell phone though?
7 A. True.
8 Q. Now, you've talked about in your testimony, you
9 mentioned a fax machine that could -- that was wireless is a
10 Possio?
11 A. That is correct.
12 Q. Do you know where that's manufactured?
13 A. I recall it being manufactured in Germany. I'm
Page 10
60403V~3.txt
14 not positive, but I believe that's true.
15 Q. Would Sweden sound about right?
16 A. I'll accept that.
17 Q. Do you know what the price of the Possio is?
18 A. I don't have that number on the stand with me. I
19 don't recall it as I sit here.
20 MR. GANNON: May the witness be shown this
21 document, exhibit -- I have it marked as Exhibit 211 and
22 it's --
23 Oh, I need to keep one of those.
24 COMMISSIONER KJELLANDER: Is this a new exhibit?
25 MR. GANNON: Yes. I assume it will be an
481

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 exhibit. Thank you, Mr. Chairman.
2 Q. BY MR. GANNON: In your Answers to
3 Interrogatories, you indicated that the -- that the fax device
4 that you describe on page 67 of your rebuttal testimony was
5 available at one place in the United States called The High
6 Tech Store?
7 A. That's what we've learned, yes.
8 Q. And this device works with Verizon, Cingular, and
9 ALLTEL wireless services?
10 A. That's what we were informed, yes.
11 Q. That's the only fax device that you identified in
12 your testimony. Correct?
13 A. That's the only one that I could locate.
14 Q. And having you -- referring to Exhibit 211, does
15 that appear to be the price list for this device from The High
16 Tech Store and page 2 appeared to be a description of the
17 Possio PM70?
Page 11
60403V~3.txt
18 A. This appears to be a price list for the spring of
19 2003.
20 Q. And the Possio 70 -- PM70 is $1,195?
21 A. I'm looking for that number here. Would you
22 repeat it?
23 Q. Bottom of page 1, I believe.
24 A. That is correct.
25 Q. And the Possio PM70s can use either Nokia 900 or
482

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 1,800 series phones?
2 A. That's what it specifies.
3 Q. Or the PCC900, 1,800, 1,900 GSM CellCard. And
4 that --
5 A. I see that.
6 Q. -- that's a European chip that telephone users in
7 Europe use?
8 A. I -- to be honest with you, I'm not aware of
9 whether it's European only or not.
10 Q. Okay. And on page 2, it indicates that you
11 can -- several -- one, two, three, four, five, six, seven,
12 eight, nine lines down, the PM70 helps you stay in touch. You
13 can use it in a temporary office, in a truck, or on a
14 construction site?
15 A. That is one use of this service, yes.
16 Q. And do you know how much replacement cartridges
17 cost for the PM70?
18 A. I do not.
19 Q. Or how much a replacement battery would cost for
20 a PM70?
21 A. I do not.
Page 12
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22 Q. And the only place that you were able to identify
23 it was available was in Washington, D.C. Correct?
24 A. That's correct.
25 Q. Now, you also indicated that there was a company
483

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 called Ascendent Technology that could service small business
2 owners, small business systems. Is that correct?
3 A. Would you refer me to my testimony where I said
4 "small business"? I recall saying Ascendent provides wireless
5 functionality on an integrated basis for PBX systems.
6 Q. So you're -- okay. So you wouldn't be claiming
7 that it is -- it can provide cell phone technology to operate a
8 small-business system such as we described earlier in
9 Mr. Souba's testimony?
10 A. I think Mr. Souba talked about a key system. As
11 I understand it, this would not work with a key system. It's
12 strictly for integrating wireless hand sets into a PBX system.
13 I did not use the term "small business," by the
14 way.
15 Q. Okay. So, actually, the Ascendent Technology
16 doesn't have anything to do with this proceeding since we're
17 only talking one to five lines. Correct?
18 A. Well, there is a statement that concerned me that
19 said that wireless service cannot work with PBX systems. It
20 was as a black-and-white, affirmative statement. That's not
21 correct. This points out there is an alternative.
22 Q. For very large PBX systems. Correct?
23 A. Define "large."
24 Q. Fifty users or more?
25 A. I think it would apply to that type service,
Page 13
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484

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 possibly lower.
2 Q. We're not talking five or ten users, are we?
3 A. An office that had four or five users, it
4 probably would not be a reasonable alternative for that.
5 Q. Okay.
6 A. I do believe, however, that Lucent also offers a
7 PBX integration device that is more salable. To be frank with
8 you, I don't have details as I sit here, but I just want to
9 make it for the record, note for the record, Lucent also offers
10 a service that operates similarly.
11 Q. But you don't know the details?
12 A. I don't have the details as I sit here.
13 Q. And then you indicate in your testimony and you
14 talked about this cell socket, and you talked about the cell
15 socket only being applicable to two or three kinds of phones --
16 of cell phones. Correct?
17 A. I believe the cell socket works with many types
18 of Nokia telephones. I believe it also works with Motorola and
19 I believe Ericsson telephones, certain models.
20 Q. We have 20 or 30 different brands of cell phones,
21 don't we?
22 A. That's true.
23 Q. Now, as I'm understanding it, in the seven
24 exchanges, there are 292,000 lines total, roughly?
25 A. I'll accept that.
485

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Q. And 212,000 are residential?
Page 14
60403V~3.txt
2 A. I believe that's correct.
3 Q. And then about 25,000 are small business?
4 A. I'll accept that, subject to check.
5 Q. And then the balance would be approximately
6 57,000, would be the multiple lines?
7 A. Again, I don't have those numbers in front of me,
8 but I would accept that, subject to check.
9 Q. Sounds about right, give or take a couple
10 thousand. Is that what you're saying?
11 A. It's in the range.
12 Q. Okay. And with regard to the multiple lines, are
13 the vast majority of the multiple lines used for business?
14 A. Yes.
15 Q. And would it be fair to say that about 54,000 --
16 there are about 3,000 residential multiple lines and about
17 54,000 business?
18 A. Again, I don't have those numbers on the stand
19 with me. I would accept that subject to check. I believe
20 that's in range.
21 Q. And then -- so the total business line usage
22 would be about 25 percent of the 292,000, or about 79,000
23 lines, roughly?
24 A. That sounds about right.
25 Q. You had a -- do you know how many of those 24 --
486

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 24- or 25,000 single business lines are tied into multiple
2 systems and how many are just single?
3 A. I'm not sure I follow your change of questions.
4 Restate it.
5 Q. In Dr. Lincoln's survey, he surveyed small
Page 15
60403V~3.txt
6 businesses with one to five lines?
7 A. Right.
8 Q. And then how many of those businesses -- small
9 businesses -- have one line, do you know?
10 A. As I sit here, I don't know.
11 Q. Okay. If we looked at Dr. Lincoln's survey,
12 would we be able to see that? I believe it's in evidence.
13 A. If you could refer me to an exhibit, I'd be happy
14 to look at it.
15 Q. Okay. It would be -- was the exhibit that was
16 just admitted in his testimony, and I believe it was our 212.
17 It's a big, thick one.
18 COMMISSIONER KJELLANDER: Whose exhibit, because
19 the 200 numbers are yours.
20 MR. GANNON: Right. It was -- I believe it was
21 212, that's right. It was the one that --
22 COMMISSIONER KJELLANDER: You just handed us one
23 that was tentatively presented as Exhibit 211.
24 MR. GANNON: Right, and I believe, Mr. Teitzel,
25 is that 212 that you have in front of you?
487

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 THE WITNESS: This exhibit is not numbered,
2 unfortunately.
3 COMMISSIONER KJELLANDER: Which exhibit is this?
4 MR. GANNON: This is the one, Mr. Chairman, that
5 I asked about Question No. 7 and then I had --
6 COMMISSIONER KJELLANDER: Okay, I've got it.
7 Exhibit 212. We don't have that. Thank you.
8 MR. GANNON: And then Qwest asked that the entire
9 package be made an exhibit, so --
Page 16
60403V~3.txt
10 COMMISSIONER KJELLANDER: Okay. I'm on track.
11 Thank you.
12 Q. BY MR. GANNON: If you look at small-business
13 survey question number -- and it would be page 49 of that
14 exhibit -- would you look at Question No. 8?
15 A. I see that.
16 Q. That gives you an idea of number of employees in
17 each particular business?
18 A. Yes. That was distribution based on the random
19 sample of the survey.
20 Q. And would you agree with me that it's highly
21 likely that any -- any -- any business with over five employees
22 would have multiple lines?
23 A. I could not agree with that as a general
24 statement. I would say often that would be true.
25 Q. Well, let's approach it from a different way.
488

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 You think it would be fair to say that half of the 25,000
2 small-business lines are multiple lines?
3 MR. SHERR: I'm going to object. That calls for
4 speculation.
5 COMMISSIONER KJELLANDER: Mr. Gannon, any
6 response?
7 MR. GANNON: If he doesn't know, I would think he
8 could say so. If he does --
9 COMMISSIONER KJELLANDER: I think he could answer
10 appropriately based on his knowledge.
11 THE WITNESS: I frankly don't have the number, as
12 I testified to you in previous questions. I frankly don't
13 know. I would be guessing.
Page 17
60403V~3.txt
14 Q. BY MR. GANNON: Okay. Have you ever run that
15 number?
16 A. I have not personally run the number. I believe
17 it exists. We do keep track of multiple line customers versus
18 single line customers. I simply don't have it.
19 Q. And are you aware of who has that number?
20 Have you ever seen the number? Let me ask that
21 question.
22 A. I have not seen that number recently. I have
23 seen it in the past or a number like it in the past.
24 Q. And what number did you see?
25 A. I simply don't recall the break.
489

HEDRICK COURT REPORTING TEITZEL (X)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Q. Okay.
2 MR. GANNON: That will conclude my cross,
3 Mr. Chair. I'm not going to go into each one of the
4 objections, your Honor.
5 COMMISSIONER KJELLANDER: And, Mr. Gannon, I
6 think we need to get your exhibit which was I think tentatively
7 No. 211 -- and I might be off on that -- that you just handed
8 to us admitted into the record.
9 MR. GANNON: Oh, yes. I would offer that Exhibit
10 211, Mr. Chair.
11 COMMISSIONER KJELLANDER: So without objection.
12 MR. SHERR: Mr. Chairman, actually, I'm sorry to
13 interrupt you, but I do have a concern about this document,
14 wanted to be sure I got it in before you admitted it; that is,
15 it appears the first page -- the first page says page 1 of
16 four, upper right-hand corner, and I would ask that the other
17 pages be admitted as well.
Page 18
60403V~3.txt
18 COMMISSIONER KJELLANDER: Mr. Gannon, do you have
19 those with you today?
20 MR. GANNON: I do have those four pages and I can
21 pull them out. I would caution they're probably not -- they're
22 not relevant because they deal with other products, but -- oh,
23 here it is.
24 COMMISSIONER KJELLANDER: To the extent then that
25 we could get those in a package, the other two pages would be
490

HEDRICK COURT REPORTING TEITZEL (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 included for review.
2 So is there any objection based on that? If not
3 then, we'll admit 211.
4 (Intervenor Exhibit No. 211, having been
5 premarked for identification, was admitted into evidence.)
6 COMMISSIONER KJELLANDER: Are there questions
7 from members of the Commission?
8 COMMISSIONER HANSEN: I had one.
9 COMMISSIONER KJELLANDER: Commissioner Hansen.
10
11 EXAMINATION
12
13 BY COMMISSIONER HANSEN:
14 Q. I just need to kind of clarify a couple of things
15 in my mind. I know you've put a lot of numbers together
16 comparing the wireline and the wireless telephone comparison,
17 but the question I would have is would you agree that most
18 customers who just want local service would compare the
19 regulated flat rate of 17.50 plus fees to the wireless 39 or
20 $49 fee?
21 A. Commissioner Hansen, if a customer wants only
Page 19
60403V~3.txt
22 local service and they're comparing that wireline rate to a
23 wireless rate, they're going to consider what kind of volume
24 they have on their local exchange line. If they're a
25 relatively low volume customer, there are services like Local
491

HEDRICK COURT REPORTING TEITZEL (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Edge, for example, that are priced under $20 as a point of
2 comparison. If they're a high usage customer, there are other
3 plans out there that would be priced as price points. So it
4 would depend on their individual usage characteristics in terms
5 of what plan they may or may not select.
6 Q. Well, this brings me to a case we had. We were
7 holding a hearing on expanded area service in Caldwell, and a
8 little old lady got up and testified and said at that time,
9 because we were looking at raising the rates for local service,
10 and she said, All I use my phone for is local calls, and if you
11 raise my rate, I've either got to discontinue taking the
12 newspaper or I've got to give up my phone, it's that critical,
13 I'm on a fixed income.
14 These people like her, what are they going to
15 compare their cost of service right now on wireline when they
16 compare it to wireless would be my question?
17 A. Your Honor, if I could refer you back to my
18 Exhibit 19 in my rebuttal, I think there are some comparisons
19 there that might be helpful for you. On the first page of that
20 exhibit, we have the residential comparisons, and again, where
21 I shaded the boxes in gray, that shows where a wireless service
22 is priced $10 or less -- excuse me -- priced within $10 of the
23 comparable wireline service. So where the prices are shaded in
24 gray here, it shows that there's affordable alternatives for
25 the customer to select.
Page 20
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492

HEDRICK COURT REPORTING TEITZEL (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 So I think it's important to keep in mind that
2 they don't just have one carrier to select from; there are
3 plans available from several carriers in each of these seven
4 exchanges in Southern Idaho.
5 And also I think it's important to keep in mind
6 that the wireline customer pays additional fees and taxes that
7 the wireless customer doesn't pay. So all those things need to
8 be considered in that decision process.
9 Q. Do you think that most senior citizens, these
10 type of people, do you think they'd be aware of this?
11 A. It does require, I certainly will concede, it
12 does require some awareness, some reading of the newspaper,
13 looking at advertisements by the wireless carriers. I'm sure
14 you're aware of the advertisements are there every day in front
15 of customers. It depends on how -- I guess how aware the
16 person would be at what's out in the market based on what
17 marketing efforts are being made.
18 Q. I see. One other question:
19 Are you aware whether Qwest charges more or less
20 for add-on nonregulated services such as call waiting, call
21 forwarding, messaging, than competitors in these areas that
22 you're asking for deregulation?
23 A. You're asking about wireline competitors now?
24 Q. Uh-huh.
25 A. As I sit here, I don't recall the precise price
493

HEDRICK COURT REPORTING TEITZEL (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 comparisons. I believe it's true that some wireline
2 competitors charge less for certain features and more for other
Page 21
60403V~3.txt
3 features. I don't think there's a common rule of thumb that
4 competitors are always charging less than Qwest.
5 Q. Is this an area that you feel that by adjusting
6 these add-on features, that it would put Qwest in a better
7 position to compete with the competition in these areas?
8 A. To answer your question, your Honor, I personally
9 believe from a marketing perspective that a trend is around
10 packages. I think packages are a way to provide value to
11 customers, to offer discounts based on what's included in the
12 package, and I think Qwest would state and I think our
13 competitors would state packages help with retention of
14 customers. Customers tend to stay with you longer when they
15 have a package. So I think we can offer discounts through
16 certain packaging strategies.
17 Now, as to whether we are going to reduce rates
18 on certain features, that may happen based on competitive
19 realities. Which features, I couldn't testify to.
20 Q. Have you found in Idaho over the last few years
21 that these add-ons have been very popular with the customer?
22 A. Well, I can tell you, Commissioner Hansen,
23 that -- I believe I can state this number as nonconfidential --
24 nearly 60 percent of our residential customers have at least
25 one feature, and quite a bit -- over 60 percent -- of our
494

HEDRICK COURT REPORTING TEITZEL (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 business customers have at least one feature. So by that
2 measure, I would say they are popular. Most customers have
3 features.
4 Q. Have you reduced or adjusted those rates downward
5 in the last couple years?
6 A. To be frank with you, I can't recall when the
Page 22
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7 last price reduction happened. I think there have been price
8 adjustments. I believe voice messaging was adjusted downward;
9 I can't recall precisely when in this state.
10 Q. But you're not sure?
11 A. I don't recall the precise dates.
12 Q. Do you believe that if they were adjusted
13 downward, that it may increase your customers? I mean, you've
14 talked here about the regulated side, wanting to be able to
15 compete there and losing some of your customers to wireless.
16 My question would be isn't there other avenues that you can go
17 after to prevent losing customers and wouldn't this be one of
18 them?
19 A. Well, I think Qwest, in general, from a marketing
20 perspective, needs to be sure that our prices are viewed in a
21 reasonable range of our competitors' prices. If our prices are
22 viewed as being far higher than the wireless package which
23 includes features or wireline CLEC rates that include features,
24 our customers won't stay with us. So we certainly need to be
25 cognizant of competition both from the wireline and wireless
495

HEDRICK COURT REPORTING TEITZEL (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 side.
2 Q. So just one last question: Would that indicate
3 then in the 14 states you operate in, that the add-ons could
4 vary in price from state to state then? Idaho might be very
5 high or we might be in the middle or we'd be low?
6 A. I think our feature prices do vary from state to
7 state, and I think pricing is driven in large part by
8 competitive realities. We have competition in this state not
9 only in the wireless arena, but in the wireline arena through
10 CLECs. That was recognized in the 271 process.
Page 23
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11 Q. Thank you very much.
12 A. Thank you, sir.
13 COMMISSIONER KJELLANDER: Before we move to any
14 additional questions, we're going to take about a ten-minute
15 break. And so we'll go off the record and be back about
16 roughly five, six minutes after 3:00.
17 (Recess.)
18 COMMISSIONER KJELLANDER: We'll be back on the
19 record, and before we get to questions from Commissioner Smith
20 and an opportunity for redirect, I just want to give Mr. Gannon
21 a heads-up: It is our intent to have you put on your witnesses
22 next.
23 MR. GANNON: Yes, Mr. Chairman. I had talked
24 with Mr. Stutzman several times previously about this, and we
25 do have three witnesses here and we have another three that
496

HEDRICK COURT REPORTING TEITZEL (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 would be here first thing in the morning.
2 COMMISSIONER KJELLANDER: Okay. So you may need
3 to split that up.
4 MR. GANNON: And I think the parties are okay
5 with that. We talked about that.
6 COMMISSIONER KJELLANDER: Okay. We'll try to get
7 to at least the first three, because I know that they're
8 probably the only people here that are witnesses that aren't
9 receiving any money for being witnesses, and I'd like to get
10 them back into the real world as soon as possible.
11 MR. GANNON: Thank you for that courtesy.
12 COMMISSIONER KJELLANDER: So being back on the
13 record then, Commissioner Smith, you had some questions.
14 COMMISSIONER SMITH: Yes. Thank you,
Page 24
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15 Mr. Chairman.
16
17 EXAMINATION
18
19 BY COMMISSIONER SMITH:
20 Q. Mr. Teetzel (phonetic)?
21 A. Titezel (phonetic).
22 Q. Titezel (phonetic).
23 A. Thank you.
24 Q. Thank you. On page 13 of your direct testimony,
25 you talk about perhaps the perceptions some people hold about
497

HEDRICK COURT REPORTING TEITZEL (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 wireless service, and you label these misperceptions and
2 perceived limitations.
3 I know it may be kind of philosophical, but
4 earlier today we had testimony from Mr. Lincoln about
5 perception being reality, so I'm just curious where you are on
6 the idea of perception. Is it reality?
7 A. I think perception is part of the decision-making
8 process when customers consider alternatives. It is my
9 testimony here that, in fact, Internet access, text messaging,
10 those sorts of functions are available today with wireless
11 service.
12 Q. So --
13 A. So I was pointing out -- sorry to interrupt.
14 Q. That's okay. So customers' perceptions are
15 basically irrelevant perhaps to the Commission's Decision?
16 A. Perceptions are important from the customer
17 perspective because they're going to drive the purchase
18 decision.
Page 25
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19 Q. How about from the Commission perspective?
20 A. Relative to the Statute, which talks about --
21 again, this is a fundamental issue or one of the fundamental
22 issues in this case -- the basic exchange service concerns the
23 transmission of two-way voice communication. Internet access
24 is not part of that.
25 Q. And neither are customer perceptions?
498

HEDRICK COURT REPORTING TEITZEL (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 A. No. I would suggest that for your
2 decision-making purpose in assessing the Statute and our
3 evidence, the fact that data can or can't be used with wireless
4 really shouldn't be part of the test.
5 Q. Next, on page 23 of your direct, you're referring
6 to your Exhibit 15 and some representations I guess that were
7 made by wireless providers in their ads. I guess that is the
8 substance of Exhibit 15?
9 A. That is the substance, and I'm talking
10 representations.
11 Q. Well, I tried to figure out what ClearTalk was
12 talking about, and when I looked at page 1 of Exhibit 15 and I
13 added their monthly service fee plus their taxes and
14 surcharges, I got $41.82.
15 Then when I added up Qwest's local charges,
16 mainly because I pay this bill every month, I know it's about
17 $26. Sometimes it's $26.11 and sometimes it's $26.22. But
18 anyway, that's the ballpark.
19 So I'm trying to figure out what the $12
20 guarantee is about, and the only conclusion I came to is maybe
21 they turn it into the AG's office for deceptive business
22 practices.
Page 26
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23 A. Well, I guarantee they are asserting that they
24 will assure customers that the price range will be within $12 a
25 month.
499

HEDRICK COURT REPORTING TEITZEL (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Q. Well, I don't see how that's even mathematically
2 possible.
3 A. Well, they're saying when you get the economy of
4 the home phone plus the mobility of wireless for only $12 more
5 per month than you pay for land line, that they guarantee that.
6 So if their guarantee is binding, they would have to stand
7 behind that if a customer can demonstrate that the numbers
8 don't work that way.
9 Q. Well, it seems to me the only way you'd even get
10 close to that is if you add a bunch of stuff which we probably
11 both agree isn't included in basic local exchange service, or
12 if you include $30 for installation.
13 A. The $30 for installation is not part of the
14 recurring fee, it's a one-time charge, but it would certainly
15 take the access line charge plus the CLC or the subscriber line
16 charge and whatever features that customer might have. There's
17 some examples of features shown in their comparison here.
18 Q. So the only way they even get close to that is if
19 they include those features which are not what you would say is
20 basic local exchange service?
21 A. The features are not part of the definition of
22 basic local exchange service, that would be true.
23 Q. And the same thing I thought was true on page 3
24 of Exhibit 15, because when I added up the local residential
25 costs on the left-hand column and came up with my $26.11, I
500
Page 27
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HEDRICK COURT REPORTING TEITZEL (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 compared that to $29.99 plus ten cents a minute if all I'm
2 doing is comparing basic local exchange?
3 A. And once again, this is an illustrative
4 comparison, can be driven very directly by the level of usage
5 the customer has. So this is two points that they've chosen to
6 illustrate in their advertisement, may not represent every
7 customer, clearly would not.
8 Q. In your rebuttal on page 7, you're talking about
9 how wireless service has advanced technologically, if I'm
10 reading that correctly. Is that the thrust of your discussion
11 here?
12 A. Yes, and the concept there is that wireless
13 service was, in the beginning, primarily an analog service and
14 various generations of digital service have now come online
15 through total vision, multiplexing, GSM technologies, that sort
16 of thing, that significantly improved the quality of the
17 call.
18 Q. So did you do a scientific study to confirm this
19 level of improvement and how widespread it is, or are you just
20 relying on anecdotal information?
21 A. I'm relying on the fact that the wireless
22 carriers are rolling these services out. I refer to industry
23 experts both to contrast and compare analog and digital
24 service. Clearly, digital service is a superior service from a
25 quality standpoint.
501

HEDRICK COURT REPORTING TEITZEL (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Q. So you don't have personal knowledge; you're just
2 relying on representations of others?
Page 28
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3 A. And personal knowledge as a user of the service.
4 I do have Verizon service myself. It's a digital service and
5 Verizon works very well for me.
6 Q. Thank you.
7 A. Certainly.
8 Q. On your Exhibit 19, you shaded in the amounts
9 that you said were wireless was within $10 of a wireline
10 price?
11 A. That's correct.
12 Q. Is this your personal judgment of what you
13 believe competitively priced means?
14 A. I selected $10 as being in a reasonable range and
15 that is my decision, knowing that, in fact, when the customer
16 looks at a wireless versus wireline decision, they're likely to
17 consider all the attributes of a service such as mobility, so
18 it's in a reasonable range.
19 Q. In your judgment?
20 A. In my judgment.
21 Q. Somebody might look at it and say it's 30 percent
22 more than the lowest cell phone I can get, and they might think
23 that 30 percent more is a bit high?
24 A. We're dealing with averages in this comparison,
25 unfortunately, and with what averages yield for us. Each
502

HEDRICK COURT REPORTING TEITZEL (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 customer is going to make a decision based on his or her own
2 unique situation.
3 Q. And I guess it's the Commission's other job to
4 make the judgment of competitively priced for everyone?
5 A. Right. I think it's important to keep in mind as
6 you look at this chart that there are options, in fact, that
Page 29
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7 are showing as being lower than Qwest wireline rates depending
8 on the usage level. Looking at Qwest flat-rate usage, for
9 example, you look at another example, U.S. Cellular average
10 usage is showing $4.40 differential in average use of
11 residential customer. So the ranges of prices and alternatives
12 are varied. The customer is going to pick a plan that fits
13 their usage level best.
14 Q. Do you think customers generally have a realistic
15 assessment of their leval of usage?
16 A. That's a reasonable question. I believe from my
17 study of wireless for this case and others is that customers
18 will pick a plan that they believe will suit their usage
19 patterns best and then live with that plan for a little while
20 and see if, in fact, it does not. If it does not, they will
21 shift to another plan that does cover usage needs. It's based
22 on experience.
23 Q. And then I noticed in your Exhibit 20, for
24 example, on page 2, where for the average customer, the price
25 of the wireline and the wireless service seem pretty close.
503

HEDRICK COURT REPORTING TEITZEL (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 And then you added on something called average business feature
2 revenue per line?
3 A. Correct.
4 Q. I guess that's kind of the same lines that the
5 question Commissioner Hansen just asked: Aren't those rates
6 within the discretion of Qwest as to what they charge, and if
7 this is the charge that's putting them in a position of being
8 higher priced, they could -- they have the opportunity to do
9 something about that, don't they?
10 A. Well, Qwest certainly does have discretion on
Page 30
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11 pricing of its business features, and for purposes of this
12 comparison, I was illustrating the fact that, as I said
13 earlier, most customers do purchase features, at least one
14 feature, and this happens to be the average feature revenue per
15 line.
16 Q. Right.
17 A. The fact is that most wireless plans include some
18 features, so as a customer, the average customer decides
19 whether they're going to buy wireless or wireline, they're
20 normally going to look at their feature bill as well.
21 Q. And Qwest has the total flexibility for
22 businesses with more than five lines to include features for a
23 monthly price, don't they?
24 A. I think that would be true.
25 Q. They could offer a package that's similar?
504

HEDRICK COURT REPORTING TEITZEL (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 A. And I think, in fact, we do offer packages such
2 as Custom Choice, for example.
3 If I could just take one more moment, I'd like to
4 point out also that the differentials are very close if you
5 look at the flat-rated business usage customer in this
6 comparison. Before you take features into account, the rates
7 are virtually identical; they're within 59 cents. Taking
8 features into account, the differential would show that in this
9 comparison, wireless is a little bit less.
10 Q. And it's within Qwest's purview to make it be no
11 difference if they just change the price of their features.
12 A. I would certainly grant you that is Qwest's
13 discretion.
14 Q. The price of those features are not regulated?
Page 31
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15 A. That's true. That is correct.
16 COMMISSIONER SMITH: Thanks, Mr. Chairman.
17 COMMISSIONER KJELLANDER: Any further questions
18 from members of the Commission?
19 If not, we're ready for redirect.
20 MR. SHERR: Thank you, Mr. Chairman.
21
22 REDIRECT EXAMINATION
23
24 BY MR. SHERR:
25 Q. Good afternoon again, Mr. Teitzel.
505

HEDRICK COURT REPORTING TEITZEL (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 A. Good afternoon, sir.
2 COMMISSIONER SMITH: Oh, one other question.
3 COMMISSIONER KJELLANDER: Oh, before you move
4 forward, I sense there may be one more question.
5 COMMISSIONER SMITH: I found one more. Sorry.
6 MR. SHERR: I'm not going to object.
7 COMMISSIONER SMITH: Before you get started.
8 That's very wise.
9
10 EXAMINATION
11
12 BY COMMISSIONER SMITH:
13 Q. On page 25 of your direct testimony, there's an
14 interesting anecdote about customers who saved because instead
15 of buying a pickup every year they buy trucks that last five or
16 six years.
17 You aren't trying to imply that savings on
18 customer pickup trucks is part of what the Commission should
Page 32
60403V~3.txt
19 consider when it thinks about competitively priced, are you?
20 A. Not at all, Commissioner.
21 Q. Okay.
22 A. I was simply pointing out the fact that this is
23 another dynamic market, there's a lot of change happening, a
24 lot of change in perception, and here's something else that a
25 certain subset of users -- farmers, specifically -- have
506

HEDRICK COURT REPORTING TEITZEL (Com)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 found.
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
Page 33
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23
24
25
507

HEDRICK COURT REPORTING TEITZEL (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 A. is a pretty good byproduct for using wireless
2 service.
3 Q. But as far as our consideration of what
4 competitively priced means, that's -- people -- we don't have
5 to go out and talk to people about what they paid for their
6 pickup trucks?
7 A. I didn't mean to contrast pickup trucks and
8 wireless service. It's just an additional benefit that farmers
9 have.
10 Q. Thank you.
11 A. Certainly.
12 COMMISSIONER KJELLANDER: We're now ready for the
13 redirect.
14 MR. SHERR: Thank you.
15
16 REDIRECT EXAMINATION
17
18 BY MR. SHERR:
19 Q. Mr. Teitzel, Mr. Stutzman asked you about Edge
20 Wireless, a series of questions. If you could look at
21 Exhibit 19 and let me know when you're there?
22 A. I have that.
23 Q. Okay. He asked you a series of questions about
24 how Qwest -- or, how you calculated these cost figures in
25 Exhibit 19, these cost differential figures. Do you recall
508

Page 34
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HEDRICK COURT REPORTING TEITZEL (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 that?
2 A. Yes, I do.
3 Q. Looking at Exhibit 19, is it the case that the
4 Edge Wireless figures, at least for the Qwest flat-rated
5 residential price comparison, show the greatest differentials
6 of any carrier listed here?
7 A. It is the highest differential on this page, that
8 is correct.
9 Q. In response to a question asked by
10 Commissioner Hansen, do customers have an option for flat-rated
11 service from wireless carriers?
12 A. There are two carriers that provide service in
13 Southern Idaho -- specifically, Cricket and ClearTalk -- and
14 they do offer a package of usage for a fixed fee. So it's a
15 very predictable fixed fee per month, which covers, by the way,
16 inbound and outbound usage.
17 Q. Thank you. In response to another question from
18 Commissioner Hansen, I believe you were asked about whether --
19 and I'm definitely paraphrasing here -- but whether wireless
20 was appropriate for I think the example of little old ladies
21 was given. The concern that Commissioner Hansen was
22 expressing, does that mean that the Commission must regulate
23 prices to protect, in this example, little old ladies?
24 A. I do recall that question, and I believe
25 Mr. Souba addressed this earlier today also; but the thought
509

HEDRICK COURT REPORTING TEITZEL (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 would be that in terms of protecting customers from price
2 increases or certainly unreasonable price increases, Qwest
3 honestly could not single out one specific class of customer --
Page 35
60403V~3.txt
4 using your example, Commissioner, a little old lady that may
5 not be aware of options -- because if a price is adjusted or
6 increased, it's going to encourage customers to shift and a lot
7 of customers to shift to an alternative. So the fact that many
8 customers have choices -- all may not be aware but many do --
9 will be price constrained on Qwest's ability to raise rates.
10 In other words, if we raise rates, a large majority of
11 customers are going to shift to a competitor, and we're
12 concerned about that.
13 Q. Thank you. Moving on to a couple of questions I
14 believe Commissioner Smith was asking you about Qwest's ability
15 to control the price of packages, do you recall that, and
16 features?
17 A. I do.
18 Q. Are you aware of what price changes Qwest has
19 made in Idaho for packages like Custom Choice?
20 A. I'm aware the prices have changed. I don't
21 recall the details. Maybe I'd be guessing.
22 Q. Is there another witness in this case that might
23 be more appropriately asked those questions?
24 A. I believe Mr. Schmit could answer the question,
25 being the state president.
510

HEDRICK COURT REPORTING TEITZEL (Di)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 Q. Thank you. Just a moment ago, Commissioner Smith
2 I believe said that the Commission's job is to decide what is
3 competitively priced for everyone. Again, I'm paraphrasing.
4 Has Qwest offered any tools in this case, not
5 necessarily from your testimony but any tools, for the
6 Commission to help the Commission understand what customers
7 think regarding whether wireless and wireline phones are
Page 36
60403V~3.txt
8 competitively priced?
9 A. Yes, I believe that Dr. Lincoln discussed at some
10 length his study, his research that's specific to Idaho, that
11 talked about whether customers view wireless as being a
12 reasonable price alternative. And I believe that should be
13 considered, and strongly considered in this preceding.
14 Q. Thank you.
15 MR. SHERR: I have no further questions at this
16 time.
17 COMMISSIONER KJELLANDER: Okay. Thank you.
18 Appreciate your testimony.
19 THE WITNESS: Thank you, sir.
20 (The witness left the stand.)
21 COMMISSIONER KJELLANDER: And I believe we're
22 ready for your final witness.
23 MS. HOBSON: Qwest calls Jim Schmit.
24
25
511

HEDRICK COURT REPORTING SCHMIT (Di-Reb)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 JAMES M. SCHMIT,
2 produced as a rebuttal witness at the instance of Qwest
3 Corporation, being first duly sworn, was examined and testified
4 as follows:
5
6 DIRECT EXAMINATION
7
8 BY MS. HOBSON:
9 Q. Would you please state your name for the record
10 and give us your business address?
11 A. My name is Jim Schmit. My business address is
Page 37
60403V~3.txt
12 999 Main Street, here in Boise.
13 Q. And where are you employed and in what
14 capacity?
15 A. I am employed by Qwest Communications in the
16 capacity of Idaho state president.
17 Q. And in your role as Idaho state president, did
18 you prepare and cause to have filed certain rebuttal testimony
19 in this proceedings dated April 21, 2003?
20 A. Yes, I did.
21 Q. Do you have any changes or corrections to make to
22 that testimony at this time?
23 A. No, I do not.
24 Q. That testimony was not accompanied by any
25 exhibits. Is that correct?
512

HEDRICK COURT REPORTING SCHMIT (Di-Reb)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 A. That is correct.
2 Q. If I were to ask you the same questions that are
3 contained in your prefiled testimony today now that you have
4 been sworn, would your answers be the same?
5 A. Yes, they would.
6 MS. HOBSON: Mr. Chairman, I would move that
7 Mr. Schmit's rebuttal testimony be spread upon the record, and
8 tender Mr. Schmit for cross-examination.
9 COMMISSIONER KJELLANDER: Thank you. Without
10 objection --
11 MR. STUTZMAN: Mr. Chairman, I would like to pose
12 an objection. Staff filed a Motion to Strike earlier regarding
13 Mr. Schmit's testimony, and I would like to renew that Motion.
14 Starting at the bottom of page 3 of his testimony through most
15 of page 6 and part of page 7, Mr. Schmit purports to testify
Page 38
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16 from his own memory what people said that showed up at
17 workshops, at the informal workshops that the Staff organized.
18 There's nothing in writing from the workshops, there are no
19 written statements that were made, there's no way to verify or
20 confirm Mr. Schmit's testimony or his recollection of what
21 people said, and it just simply is the worst sort of hearsay
22 evidence. So I would like to renew the Motion to Strike that
23 portion of Mr. Schmit's testimony.
24 COMMISSIONER KJELLANDER: Ms. Hobson.
25 MS. HOBSON: Thank you, Mr. Chairman. First of
513

HEDRICK COURT REPORTING SCHMIT (Di-Reb)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 all, I'd like to note that I believe Staff's Motion is
2 inappropriate in view of the fact that parties subsequent to
3 that Motion Stipulated -- or, Qwest Stipulated to give Staff
4 additional time to respond to the various issues that they have
5 raised as to one of those issues. It's my understanding that
6 this issue was behind us.
7 Having said that, Mr. Schmit did attend and is
8 providing his own personal recollections of what occurred at
9 those hearings. They were not closed. Staff was also present
10 at those hearings. If Mr. Schmit has a misrecollection, he can
11 certainly be cross-examined on that.
12 Finally, I would point out that this is no
13 different than testimony that we are about to hear from Staff
14 in which Staff reports is hearsay conversations with various
15 young adults and their perceptions of cell service.
16 So, again, I think hearsay may go to the weight,
17 but Mr. Schmit is a firsthand witness at those workshops, and I
18 believe his testimony should be admitted.
19 COMMISSIONER KJELLANDER: I think that the
Page 39
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20 approach from the Commission will be to go ahead and allow
21 testimony into the record, recognizing that in its time and
22 place, the Commissioners will be able to place the appropriate
23 weight on that testimony.
24 MS. HOBSON: Thank you.
25 COMMISSIONER KJELLANDER: So let's please
514

HEDRICK COURT REPORTING SCHMIT (Di-Reb)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 proceed.
2 MS. HOBSON: Mr. Schmit is available for cross.
3 COMMISSIONER KJELLANDER: No, not yet. Is there
4 further objection to spreading the testimony across the record?
5 Hearing none, now he's available. Thank you.
6 (The following prefiled rebuttal testimony
7 of Mr. Schmit is spread upon the record.)
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
Page 40
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24
25
515

HEDRICK COURT REPORTING SCHMIT (Di-Reb)
P. O. BOX 578, BOISE, ID 83701 Qwest

1 (The following proceedings were had in
2 open hearing.)
3 MR. STUTZMAN: I have no questions.
4 COMMISSIONER KJELLANDER: Mr. Gannon.
5 MR. GANNON: I have no questions.
6 COMMISSIONER KJELLANDER: Any from the
7 Commission? Commissioner Smith.
8
9 EXAMINATION
10
11 BY COMMISSIONER SMITH:
12 Q. Yes, Mr. Schmit, just one. Today we received a
13 comment from the Idaho Association of Realtors, Inc., which
14 actually stated something that kind of vaguely I think came up
15 before in the comments by others. In one of their sentences,
16 it says: We understand that Qwest has committed to provide DSL
17 in ten additional communities if you approve their Application
18 in this case.
19 So I guess could you clarify for me, what is
20 Qwest's commitment to invest in DSL and is it tied to this
21 case?
22 A. Certainly. We did commit in my rebuttal
23 testimony that if the Commission were to approve this
24 Application, we would deploy DSL to ten additional communities
25 within three years after that Decision.
532

Page 41
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HEDRICK COURT REPORTING SCHMIT (Com-Reb)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 If I could go on to add to that, we have
2 committed already this year to deploy DSL I believe in six
3 communities, so these ten would be in addition to that.
4 Frankly, I view it as part of my job to
5 understand what organizations like the Idaho Association of
6 Realtors need and what their interest in our services is, and
7 quite frankly, when I visit with organizations like that and
8 others who have supported this Application, I hear from them
9 regularly that what they need us doing in this state is not
10 keeping basic telephone service rates exactly where they are
11 today. On the other hand, what they need is Qwest investing in
12 infrastructure, providing technology and new services that
13 their constituents or their communities can benefit from, and
14 they want us providing jobs here. Those are the kind of things
15 that we can do to enhance the greater good of the state of
16 Idaho.
17 So when I analyze what we bring before this
18 Commission and how that impacts Idaho, I don't just look at
19 simply the impact on the rate structure, but the broader
20 benefits of economic benefit and additional deployment of DSL.
21 So as part of our commitment, we agreed we would go for ten
22 additional communities.
23 Now, I would add to that the fact that I view it
24 as my job to bring investment to Idaho, and part of the
25 decision-making process that we look at in where we bring
533

HEDRICK COURT REPORTING SCHMIT (Com-Reb)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 investment has to do with the fact that we compete with 13
2 other states for that limited tackle.
3 There are a number of things that I can't impact
Page 42
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4 in this state. I can't impact the size of the state, the
5 geography, the low-density population. But, theoretically,
6 there are a couple of things that we can impact, and those
7 would be the business climate, or in this case the regulatory
8 climate. To the extent the regulatory climate is progressive
9 and provides incentives for us to invest, that has a benefit to
10 organizations like the Idaho Association of Realtors, who
11 recognize that our collective constituents are demanding
12 services like DSL.
13 Q. And I think that's very interesting, and I also
14 think that's your job, and I think you and your predecessors
15 have done a very good job bringing investment to Idaho. I
16 guess what concerns me is regardless of how progressive the
17 regulatory climate may be or Commissioners may view themselves,
18 if the evidence in the case presented is found by the
19 Commission not to be sufficient to meet the statutory test as
20 we interpret it, then I don't see that the needs and interests
21 of the customers have changed at all, and I don't see that
22 progressiveness of the regulatory climate is impaired, and so I
23 guess it just concerns me that these kinds of representations
24 are being made, because the public I think has a very limited
25 understanding of the evidentiary process used by the Commission
534

HEDRICK COURT REPORTING SCHMIT (Com-Reb)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 in its decision-making and deliberations, and so that kind of
2 stuff just worries me.
3 A. May I respond?
4 Q. Certainly.
5 A. I absolutely agree that the fundamental test is
6 do we meet the statutory requirements. In this case, is
7 cellular service functionally equivalent, competitively priced,
Page 43
60403V~3.txt
8 reasonably available alternative to basic local exchange
9 service. That is the test.
10 Beyond that, I also understand that this
11 Commission has to consider the public interest. That agreement
12 or that commitment was made both to address the public interest
13 test and specific issues that had been brought up by Staff in
14 the Burley case, frankly, about Qwest's willingness to make
15 commitments for deployment of advanced services, and, frankly,
16 what I hear from people I talk to around the state of what
17 we can do to help them.
18 So I fundamentally agree that the first test is
19 those statutory requirements. Beyond that, I believe this
20 helps improve the public benefits or enhances the public
21 benefits and assists the Commission in finding approval of this
22 Application in the public interest.
23
24
25
535

HEDRICK COURT REPORTING SCHMIT (Com-Reb)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 EXAMINATION
2
3 BY COMMISSIONER KJELLANDER:
4 Q. Well, I didn't think I had any questions, but now
5 I do. I can't let this pass:
6 So the 14 states that you operate in, which
7 states have a better regulatory climate? Would we be including
8 Minnesota and Arizona, just as a case in point?
9 COMMISSIONER SMITH: Uh-oh.
10 THE WITNESS: I need to think how to respond to
Page 44
60403V~3.txt
11 that. Let me respond to it this way:
12 Yes, it includes all 13 other states. And Idaho
13 has had a history of a good regulatory climate. Let's keep in
14 mind, virtually everything we offer in this state except this
15 last piece of basic local exchange service has been deregulated
16 from a pricing standpoint for 13 years. We have a great
17 regulatory environment here. So when I go to Denver and I
18 compete with my counterparts in those 13 other states for
19 limited Qwest resources, whether those be jobs or investment,
20 at this point, we get noticed. We brought 300 jobs to the
21 state within the last year while overall as a company we were
22 downsizing about 15,000. That doesn't happen by accident. The
23 business climate and regulatory climate has an impact on that.
24 Now, having said that, I don't believe now is the
25 time to be complacent. We have had a long history of working
536

HEDRICK COURT REPORTING SCHMIT (Com-Reb)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 with the Commission in this state for progressive improvement
2 in the regulatory structure and investment of technology, but
3 something has happened in the last five years where I believe
4 we've fallen behind. The state to the south of us -- Utah --
5 just recently issued a press release they now have DSL employed
6 by Qwest in every single community that we provide service in.
7 And I believe the state to the west of us -- Oregon -- is now
8 at or close to the same situation.
9 So the number one thing I hear from the Governor
10 on down to legislative leaders to community leaders to business
11 leaders that they want us doing in the state, and that is
12 investing in broadband technology, we've now fallen behind. So
13 I don't think this is the time to be satisfied with the status
14 quo. I view this as an opportunity to take another incremental
Page 45
60403V~3.txt
15 step towards moving the regulatory environment to what's
16 consistent with the current competitive environment.
17 Q. Mr. Schmit, the Company's position really is that
18 the whole data issue as it relates to local exchange service
19 really is off the table and irrelevant when we look at Statute;
20 yet, what you're proposing to sweeten the pot is nothing more
21 than an enhanced data service, and somehow we're supposed to
22 consider that in light of our desire or our willingness to now
23 price deregulate local basic exchange service. And I guess I'm
24 trying to just reconcile why it is that we shouldn't be looking
25 at data with basic local exchange service as it relates to the
537

HEDRICK COURT REPORTING SCHMIT (Com-Reb)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 public interest, yet now automatically we need to be looking at
2 the unregulated enhanced data service on the other side in
3 order to grant price deregulation as part of this
4 pot-sweetening deal that you reference. I'm having some
5 difficulty in trying to reconcile that.
6 A. It's a complicated issue. If we are to offer
7 anything in terms of additional incremental investment, which
8 Staff has suggested in the Burley case was important for the
9 Commission to consider, and I think even Mr. Gannon's clients,
10 several of them have indicated their interest and need for
11 broadband service, if we are to offer incremental investment,
12 by definition the only thing we have to offer is something
13 other than basic local exchange service. We have basic local
14 exchange service everywhere that we provide service. So, the
15 only thing we can bring to the table is something other than
16 that.
17 On the general issue of the data issue, my
18 lawyer -- I get nervous here, but you understand what our
Page 46
60403V~3.txt
19 position is. Now, I believe the Statute is clear on that
20 position. You, as Commissioners, also have to take a practical
21 approach to this Decision, and the way I look at it is fairly
22 simple, maybe too simple, but we have a market for let's call
23 them access lines in Idaho. Right now by the latest contact,
24 there are something over 600,000 wireless access lines. There
25 are something in the neighborhood of 700 -- to 750,000 wireless
538

HEDRICK COURT REPORTING SCHMIT (Com-Reb)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 lines. There's a total market there of access lines of about
2 1.3 million, give or take. By my calculation, that means the
3 wired companies have about 55 percent of that access line
4 market. Now, wireless companies have about 45 percent of that
5 access line market.
6 Now, we all know that both technologies of access
7 lines will provide basic local exchange service. There's been
8 a lot of discussion today about the fact that either of those
9 technologies has other attributes associated with it that might
10 ultimately impact the consumers' decision on which one to buy.
11 But we know very clearly from a scientific, statistically-valid
12 study done by Dr. Lincoln that a vast number of customers
13 believe they can substitute one for the other.
14 I understand from Commissioner Hansen's line of
15 questioning that he has some concern with the elderly folks.
16 Frankly, I've had several discussions with Clyde Dailey, who's
17 the executive director for AARP in Idaho, to try to understand
18 those concerns and address those concerns. That's part of the
19 reason why we've committed not to increase rates for 18 months.
20 This isn't about rate increases, but the fact
21 that there may be some customers at that end of the spectrum
22 that for whatever reason might not change the wireless,
Page 47
60403V~3.txt
23 frankly, they will benefit from the fact that at this other end
24 of the spectrum there are whether it's 30 percent or 50 percent
25 or 60 percent that would change. That is our future. I can't
539

HEDRICK COURT REPORTING SCHMIT (Com-Reb)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 afford to lose 30 or 45 or 60 percent of our market. We've got
2 to target our products and our pricing to make them attractive
3 to that end of the market, and those that might not otherwise
4 change will get the benefit of the fact that we have two
5 competing, competitive services.
6 Q. Mr. Schmit, you mentioned Utah. Is basic local
7 exchange service price deregulated in Utah?
8 A. I believe they have some competitive zone type
9 pricing in Utah, but I'm not familiar with the specific
10 details, and I believe that's -- competitive zone pricing will
11 include some basic exchange service.
12 Q. Okay. I was just curious. And did you mention
13 the other state where there's a lot of investment in DSL is
14 Oregon?
15 A. Yes, sir.
16 Q. And are they price deregulated for basic local
17 exchange?
18 A. No, they're not.
19 Q. So as we look forward, not knowing what the
20 outcome would be one way or the other in this case, the future
21 of DSL doesn't hinge on whether or not you're price deregulated
22 in a specific state. Is that what makes someone look more or
23 less progressive in the eyes of the Company?
24 A. No.
25 Q. Okay. Thank you.
540
Page 48
60403V~3.txt

HEDRICK COURT REPORTING SCHMIT (Com-Reb)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 A. Could I expand on that just a bit?
2 Q. Sure.
3 A. I have to look at our particular circumstances
4 here in Idaho. How Oregon got to where it is or Utah got to
5 where they are is dependent on a lot of factors, including the
6 existing State Statute, level of competition, that sort of
7 thing. As I look at our particular situation, what we're
8 trying to get the Commission to recognize the competitive
9 environment that we're in, the one thing I consistently hear,
10 as I mentioned, from community leaders across the state is they
11 want us investing more in broadband. What this Decision by the
12 Commission in our favor would enable us to do is to commit ten
13 additional communities. Once that commitment is made, my job
14 is to start working on the next ten.
15 On the other hand, if the Commission makes the
16 Decision not in our favor in this case, I'm still going to work
17 on the next ten, but this would enable us to lock in and then
18 move on and know that investment is committed to Idaho.
19 COMMISSIONER KJELLANDER: Thank you.
20 Any further questions from members of the
21 Commission?
22 If not, then we're ready for redirect.
23 MS. HOBSON: No redirect.
24 COMMISSIONER KJELLANDER: Thank you,
25 Mr. Schmit.
541

HEDRICK COURT REPORTING SCHMIT (Com-Reb)
P. O. BOX 578, BOISE, ID 83701 Qwest
 1 THE WITNESS: Thank you.
2 (The witness left the stand.)
Page 49
60403V~3.txt
3 COMMISSIONER KJELLANDER: And that -- does that
4 conclude your case?
5 MS. HOBSON: That does conclude Qwest's witnesses
6 at this time. I would move the admission of any of our
7 exhibits that have not previously been admitted, if there are
8 any such.
9 And then, with the Commission's indulgence, if
10 Mr. Gannon's clients are going to go next, we would like just a
11 very short break to get some cross exhibits marked prior to
12 them taking the stand.
13 COMMISSIONER KJELLANDER: That would be fine.
14 Without objection, first of all, we'll make sure that all the
15 exhibits are admitted without objection, and so they are so
16 far.
17 And then why don't we take about till the top of
18 the hour. Would that give you enough time?
19 MS. HOBSON: Yes, I think so. Thank you.
20 COMMISSIONER KJELLANDER: We'll go to the top of
21 the hour, and we'll go off the record until then.
22 (Recess.)
23 (Qwest Exhibit Nos. 28 through 34 were
24 marked for identification.)
25
542

HEDRICK COURT REPORTING NEAL (Di)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 COMMISSIONER KJELLANDER: And we're back on
2 record. And before we left, we were prepared to move forward
3 with Mr. Gannon and try to get through some of his witnesses
4 yet this afternoon. It's the Commission's intent to go to
5 roughly five-ish for this evening.
6 MR. GANNON: Okay. Thank you, Mr. Chairman.
Page 50
60403V~3.txt
7 Would call Gary Neal.
8
9 GARY NEAL,
10 produced as a witness at the instance of the Intervenor, being
11 first duly sworn, was examined and testified as follows:
12
13 DIRECT EXAMINATION
14
15 BY MR. GANNON:
16 Q. Mr. Neal, have you filed prepared testimony in
17 this case?
18 A. I have.
19 Q. And have you reviewed this prepared testimony
20 prior to taking the stand today?
21 A. Yes.
22 Q. Did you have any changes or corrections you wish
23 to make?
24 A. I do.
25 Q. And would you tell us what those changes or
543

HEDRICK COURT REPORTING NEAL (Di)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 corrections are?
2 A. I will.
3 On page 1, lines 21 through 22, I state that I
4 spent time comparing prices and assessing our needs in
5 connection with the purchase of this system.
6 In reviewing that response, I think it's
7 technically accurate but perhaps is somewhat misleading, in
8 that my partner did most of the research comparing prices,
9 after which I spent time with him looking at those issues and
10 deciding ultimately that the system we were looking at was
Page 51
60403V~3.txt
11 reasonable.
12 Q. Are there any other changes or corrections?
13 A. No.
14 Q. As I understand it, Ms. Hobson is going to
15 introduce your Interrogatories into evidence, Interrogatory
16 Answers into evidence. Did you have any changes or corrections
17 to those Answers?
18 A. I have no changes or corrections. I do have a
19 supplement I think to Interrogatory Response No. 2.
20 Q. And what is that?
21 A. It states: Are you aware that there are multiple
22 competing telephone companies, and then parenthesis, known as
23 competitive local exchange carriers or CLECs, parenthesis,
24 registered in Idaho that can provide residential and
25 small-business telephone service to Neal and Uhl, PLLC?
544

HEDRICK COURT REPORTING NEAL (Di)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 I objected, then I went on to state that, in
2 fact, I didn't know that. However, subsequently, I have been
3 contacted by one of these local exchange carriers at my place
4 of employment through a cold call and was able to chat a little
5 bit, so I do have more knowledge than when I started this
6 process.
7 Q. And what carrier was that?
8 A. You know, I'm a little vague on that
9 recollection. I think it was McLeod.
10 Q. Okay.
11 A. But I'm not 100 percent certain on that.
12 Q. Now, just with regard to your direct testimony,
13 if you were asked the questions contained in that testimony
14 today, as if sworn, would your answers all be the same to those
Page 52
60403V~3.txt
15 questions?
16 A. They would.
17 Q. And do you have exhibits in conjunction with your
18 testimony?
19 A. I do.
20 Q. Did you prepare or acquire those two exhibits?
21 A. These are the exhibits attached to the direct
22 testimony?
23 Q. Correct.
24 A. Yes, I have.
25 Q. And what exhibit numbers -- please state the
545

HEDRICK COURT REPORTING NEAL (Di)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 exhibit numbers for each exhibit and tell us what they contain.
2 A. Yes. Exhibit No. 202 consists of five pages that
3 have been copied from an Idaho State Bar publication entitled
4 The Advocate. It's the directory and reference guide for the
5 State Bar.
6 Q. And then the second exhibit is?
7 A. Second exhibit is Exhibit No. 303 (sic), which
8 consists of a Q-west (sic) account summary or bill relating to
9 my personal residence that I had when I lived on the Bench.
10 Q. Is that Exhibit 203?
11 A. Yes.
12 Q. Okay.
13 MR. GANNON: We would offer these -- the
14 testimony of Gary Neal and the exhibits, and ask that they be
15 spread on the record.
16 COMMISSIONER KJELLANDER: Without objection,
17 spread the direct testimony of Mr. Neal across the record as if
18 read, and also to admit Exhibits 201, 202, and 203.
Page 53
60403V~3.txt
19 (The following prefiled direct testimony
20 of Mr. Neal is spread upon the record.)
21
22
23
24
25
546

HEDRICK COURT REPORTING NEAL (Di)
P. O. BOX 578, BOISE, ID 83701 Intervenor

1 (The following proceedings were had in
2 open hearing.)
3 (Intervenor Exhibit Nos. 201 through 203,
4 having been premarked for identification, were admitted into
5 evidence.)
6 MR. GANNON: And also, Mr. Chair, we had the
7 surrebuttal testimony of Mr. Neal, but in view in Mr. Teitzel's
8 testimony regarding Ascendent I don't think it's necessary, so
9 we can withdraw that.
10 COMMISSIONER KJELLANDER: Okay, thank you. So
11 it's your intent now to tender this witness for cross?
12 MR. GANNON: Correct.
13 COMMISSIONER KJELLANDER: Mr. Stutzman.
14 MR. STUTZMAN: No questions.
15 COMMISSIONER KJELLANDER: Ms. Hobson.
16 MS. HOBSON: Thank you, Mr. Chairman.
17
18 CROSS-EXAMINATION
19
20 BY MS. HOBSON:
21 Q. Good afternoon, Mr. Neal.
22 A. Good afternoon.
Page 54
60403V~3.txt
23 Q. Mr. Neal, I understand that you are an Intervenor
24 in this case. Is that correct?
25 A. That's correct.
555

HEDRICK COURT REPORTING NEAL (X)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 Q. And there are several other people that filed
2 prefiled testimony in this case on behalf of the Intervenors,
3 but as I understand it, the only actual Intervenors that filed
4 prefiled testimony are Carol Moyer and Sharon Herrick. Is that
5 your understanding as well?
6 A. I'm not 100 percent certain on that. It's my
7 understanding that there are additional witnesses that are
8 going to be called today. I'm not sure I understand your
9 question.
10 Q. Did you review the other prefiled testimonies
11 that were filed by other folks on behalf of the Intervenors
12 Meierotto?
13 A. I have not.
14 Q. Okay. Sharon Herrick is your employee. Is that
15 right?
16 A. Yes.
17 Q. Now, you, in your law firm, you are a
18 small-business customer of Qwest. Is that correct?
19 A. That's correct.
20 Q. Let me say, Mr. Neal, that although we are going
21 to explore today whether or not you had some alternatives to
22 that service, it's certainly not Qwest's intention to dissuade
23 you from continuing to be a customer.
24 Let's first look at what has previously been
25 marked as Exhibit 28. Do you recognize that document?
556
Page 55
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HEDRICK COURT REPORTING NEAL (X)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 A. I do.
2 Q. This is the Interrogatory Responses that were
3 prepared in response to questions that were put specifically to
4 you. Is that correct?
5 A. That's correct.
6 Q. And I believe that you indicated you had some
7 additional information, but otherwise, you don't have any
8 changes you want to make to those Answers?
9 A. No.
10 Q. Okay.
11 MS. HOBSON: Qwest would move that its Exhibit
12 No. 28 be admitted.
13 COMMISSIONER KJELLANDER: And without
14 objection --
15 MR. GANNON: We had one matter there that we
16 wanted to raise, Mr. Chairman.
17 COMMISSIONER KJELLANDER: This would be the
18 time.
19 MR. GANNON: We did have objection to two or
20 three of the Interrogatories. We've stated those objections to
21 those Interrogatories in that they really were dealing with
22 issues beyond the scope of the Application or the Petition in
23 this case, and then we went ahead and answered the questions
24 anyway so as not to be obstructionist or whatever. But we
25 do -- I'm not sure how the Commission would want to handle
557

HEDRICK COURT REPORTING NEAL (X)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 this, but we do have those objections. Specifically, we got
2 into cable -- I believe cable access and CLECs and there was
Page 56
60403V~3.txt
3 one other area.
4 COMMISSIONER KJELLANDER: So then just for
5 purposes of the record, you wanted to raise that you had
6 objected to those and still responded to the Interrogatories?
7 MR. GANNON: Yes, and we think that those issues
8 are beyond the scope of this particular proceeding because
9 we're dealing with basically cell versus -- land line versus
10 wireless.
11 COMMISSIONER KJELLANDER: And the Commission will
12 duly note that. Thank you.
13 Ms. Hobson.
14 MS. HOBSON: Thank you.
15 (Qwest Exhibit No. 28 was admitted into
16 evidence.)
17 Q. BY MS. HOBSON: In Response to Interrogatory
18 No. 4, you indicated that your law firm was aware that it could
19 obtain services from a competitive local exchange carrier, but
20 that you chose Qwest because of customer issues with a
21 competitive company. Is that right?
22 Did I get the wrong Interrogatory? I'm sorry.
23 A. You're specifically referring to my Response to
24 Interrogatory No. 4.
25 Q. I'm afraid that's not right. I'm sorry, I have
558

HEDRICK COURT REPORTING NEAL (X)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 the wrong question written down.
2 Well, let me ask you a question then. You were
3 aware that you can obtain services from a competitive local
4 exchange carrier, but you chose not to do so because you had
5 issues with the competitive carrier. Is that correct?
6 A. Actually, I don't think that is correct. If you
Page 57
60403V~3.txt
7 look at my Response to Interrogatory No. 2 wherein you ask me
8 whether I was aware of the multiple competing telephone
9 companies, I said, No..
10 In fact, I did not know that Neal and Uhl, PLLC,
11 could be provided residential telephone service by any
12 provider. I did say that there may be a CLEC that can provide
13 business service.
14 I modified that though to say that subsequent to
15 answering that, I am now aware that that exists, but I haven't
16 had an opportunity to make a decision as to whether to replace
17 Qwest with one of those alternative services at this point. I
18 just haven't done it.
19 Q. When you were contacted by this alternative
20 carrier, they discussed with you alternatives to the actual
21 lines that serve your business. Isn't that correct?
22 A. Actually, what I usually do when I get caught in
23 a cold call from somebody trying to sell me something is I ask
24 them if they have any written materials and would they forward
25 those to me. That gets rid of most of them.
559

HEDRICK COURT REPORTING NEAL (X)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 In this case, I do believe that I received a fax
2 and I just simply stuck it in my partner's box and let him
3 review it first, and then if he has any bites on it, then I'll
4 take a closer look at it.
5 Q. So you don't know what it was that McLeod may or
6 may not have been offering?
7 A. No, I do think I had a very brief conversation
8 wherein I recognized it as an alternative.
9 Q. To the --
10 A. To the Qwest service.
Page 58
60403V~3.txt
11 Q. To the Qwest service?
12 A. Yeah, I believe that's true now. I just had no
13 idea of that when I was filling these out the first time.
14 Q. Okay. Looking at your testimony on page 1 at
15 line 20, you indicated there on lines 19 and 20, you indicated
16 there that you replaced an older system with a new one and that
17 it cost about $3,245. Is that correct?
18 A. That's correct, yes.
19 Q. Now, what was that money spent for? What did you
20 receive for $3,245?
21 A. Well, I believe it was the key system that one of
22 your earlier witnesses had talked about. It was a series of
23 phones, essentially, that had a number of features, and instead
24 of the buttons going across the top that was described by one
25 of your earlier witnesses, mine go vertically. So, basically,
560

HEDRICK COURT REPORTING NEAL (X)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 I have phones for every attorney and my staff, and we have a
2 couple extra phones: One in the conference room and one in the
3 break room.
4 Q. So -- so those are actual phone sets?
5 A. Phone sets.
6 Q. Is that right?
7 A. That's correct.
8 Q. Are you aware whether or not those phone sets
9 could be obtained -- similar products could be obtained from
10 other providers than the one you purchased?
11 A. I'm certain they can be.
12 Q. That's competitive equipment, as far as you
13 know?
14 A. Yes, that is my hope, for what we paid for that
Page 59
60403V~3.txt
15 system.
16 Q. What company actually did supply that equipment
17 to you?
18 A. I don't recollect that. Again, that's something
19 that my partner brought to me. He talked to me about the
20 various prices and I said, That's fine, and I moved on to doing
21 something else.
22 Q. So is it fair to say that your partner is
23 actually the person that is most knowledgeable about what your
24 system is and how it operates?
25 A. I think that in regard to the provider, that's
561

HEDRICK COURT REPORTING NEAL (X)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 correct. I think maybe some of the issues, it's fair to say we
2 know the same.
3 Q. Is your partner the person that is most expert on
4 how the system is configured?
5 A. I'm not sure any of us are an expert on how it's
6 configured. There are always bugs with a system. There are
7 bugs with the older system, there are bugs with this system.
8 It's the same with our computer network: We always have
9 glitches and it's hard to track them all down. But he -- he --
10 I refer to him as the high forehead guy and I'm the low
11 forehead guy. So if a line needs physically moved, it's me
12 doing that. If there's some technical expertise needed, he
13 usually does that.
14 Q. When you say you physically move a line, you're
15 talking about the wire that's on your side of the network in
16 your office building?
17 A. That's correct.
18 Q. Okay. How many attorneys do you have in your
Page 60
60403V~3.txt
19 office?
20 A. We have two associates, and then there's Holger
21 and I are partners.
22 Q. So there are four attorneys?
23 A. Four total.
24 Q. And how many staff people?
25 A. We have six staff people.
562

HEDRICK COURT REPORTING NEAL (X)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 Q. And each of those people has a telephone set in
2 his or her work area. Is that right?
3 A. No, five of the six do. The sixth person is our
4 runner. He uses a -- whatever phone is available, whatever he
5 needs to.
6 Q. And does he also use a wireless phone?
7 A. I believe he has his own cell -- cellular phone,
8 yes.
9 Q. Am I correct that you have a main telephone
10 number and then four lines that operate in rotation behind
11 that?
12 A. Yes. We refer to that as a rollover, and I
13 understand the industry term is something else.
14 Q. Do you have a line that's dedicated to your fax
15 machine?
16 A. No. Typically, I believe that's line four, so
17 it's our hope that most of the time that line is available for
18 faxes.
19 Q. And do you have a line that is dedicated to your
20 DSL service?
21 A. I don't know the answer to that question. It's
22 my understanding that you could still use one line with your
Page 61
60403V~3.txt
23 DSL line, so I'm not sure that -- my thought was that the DSL
24 line did not block phone service. Now, when I think about
25 that, I don't think -- I always think we have four lines
563

HEDRICK COURT REPORTING NEAL (X)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 available regardless of whether we're on the Internet or not,
2 so I don't think that it takes ones of those lines.
3 Q. So it's your belief that you have a total of four
4 lines that serve your firm. Is that right?
5 A. Yes.
6 Q. Okay. Could you be mistaken about that?
7 A. I don't think that I am. I suppose the answer
8 is, yes, I could be mistaken.
9 Q. I just wonder if your partner would maybe have a
10 different perception of that.
11 A. He may, but I think we've got four lines.
12 Q. Okay. Do you have -- you could have more?
13 A. I don't think so.
14 Q. Do you realize, of course, that if you had six
15 lines in your firm, that your service would be price
16 deregulated today?
17 A. I do understand that.
18 MR. GANNON: Object to the question: Foundation.
19 COMMISSIONER KJELLANDER: Would you turn on your
20 microphone?
21 MR. GANNON: Object to that question on the basis
22 of foundation, because it's my understanding that if one of the
23 six lines was a DSL line, that it's not regulated; that if the
24 other five are, would then -- that's where I'm going with that.
25 COMMISSIONER KJELLANDER: Ms. Hobson, are you
564

Page 62
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HEDRICK COURT REPORTING NEAL (X)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 aware of the number of lines there? Is there something you're
2 withholding from us?
3 MS. HOBSON: No, there's certainly nothing I'm
4 withholding from you. I'm just aware that there are often
5 cases where customers are unaware of exactly how their phones
6 are configured so I was probing that, but I will pursue the
7 question of the DSL service if I may.
8 COMMISSIONER KJELLANDER: Okay.
9 Q. BY MS. HOBSON: Mr. Neal, are you -- I believe
10 you indicated to me that you didn't know whether or not the DSL
11 was on a dedicated line, is that right, line by itself? Is
12 that right?
13 A. That's correct. I do have a copy of my bill with
14 me. I note that -- that I do have a monthly service charge for
15 an unregulated line. Perhaps that's a DSL line.
16 Q. And that was going to be my next question. You
17 are aware that DSL service is a deregulated service?
18 A. It would appear to be, yes.
19 Q. You speak about the rollover service, which I
20 believe is also called "hunting" service, in your testimony on
21 page 3. Are you aware that that service is also price
22 deregulated?
23 A. Did I refer to it as "hunting" in my testimony?
24 Q. You refer to it as "rollover."
25 A. Okay. I am aware of that now after having sat
565

HEDRICK COURT REPORTING NEAL (X)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 through some of the testimony this morning.
2 Q. Page 6 of your testimony, you address the
3 question of the public interest, and you state that you believe
Page 63
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4 that deregulation of Qwest would not be in the public interest,
5 in particular because of billing issues. Is that correct?
6 A. The billing issue is one of the personal issues
7 that I had with Qwest, kind of piqued my interest in how things
8 work, I think that's fair to say.
9 Q. And as I understand it, the bill in question that
10 perked your interest in Qwest in billing issues is reflected as
11 Exhibit 203?
12 A. Yes.
13 Q. Are you aware that if Qwest's basic local
14 exchange service were price deregulated, that the -- by the
15 Commission -- that customers could still bring their billing
16 disputes to this Commission?
17 A. That was something that Mr. Schmit had told me
18 earlier, so I believe he was accurate with that.
19 Q. Thank you.
20 MS. HOBSON: That's all I have.
21 COMMISSIONER KJELLANDER: Thank you.
22 Are there questions from members of the
23 Commission?
24 COMMISSIONER SMITH: No.
25 COMMISSIONER KJELLANDER: No.
566

HEDRICK COURT REPORTING CHATTIN (Di)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 Redirect?
2 MR. GANNON: No, Mr. Chair. Thank you.
3 COMMISSIONER KJELLANDER: Thank you. And
4 appreciate your presence and your testimony.
5 THE WITNESS: Thank you. May I be excused?
6 COMMISSIONER KJELLANDER: I think if your
7 attorney would like to request that you be excused for the
Page 64
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8 balance of the hearing, we would certainly entertain such a
9 request.
10 MR. GANNON: May Mr. Neal be excused for the
11 balance of the hearing?
12 COMMISSIONER KJELLANDER: Without objection, you
13 may. Thank you.
14 MR. GANNON: Thank you.
15 (The witness left the stand.)
16 MR. GANNON: Steve Chattin.
17
18 STEVE CHATTIN,
19 produced as a witness at the instance of the Intervenors, being
20 first duly sworn, was examined and testified as follows:
21
22 DIRECT EXAMINATION
23
24 BY MR. GANNON:
25 Q. Please state your full name for the record.
567

HEDRICK COURT REPORTING CHATTIN (Di)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 A. Steve Chattin.
2 Q. And in connection with this hearing, did you
3 prepare direct testimony that's been filed in this case?
4 A. Yes.
5 Q. And have you had a chance to review your direct
6 testimony?
7 A. Yes, I have.
8 Q. Do you have any changes or corrections you want
9 to make to that?
10 A. The only change would be I indicated I had one
11 cell phone, but I have a shared cell phone for -- my wife has
Page 65
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12 one also, so I've got two.
13 Q. And attached to your direct testimony -- excuse
14 me. Do you believe that the -- that the questions and answers
15 that are contained therein are true today?
16 A. Yes.
17 Q. And if I asked you those same questions as are
18 prefiled as if sworn, they would be the same answers?
19 A. Yes.
20 Q. Now, do you have attached to it exhibits?
21 A. The only exhibit was I pulled the MLS roster,
22 which shows all of the members and affiliates and shows all of
23 the phone numbers, and of course it's overwhelmingly land
24 lines.
25 MR. GANNON: And we would offer Mr. Chattin's
568

HEDRICK COURT REPORTING CHATTIN (Di)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 testimony and ask that it be spread upon the record, along with
2 the exhibit.
3 COMMISSIONER KJELLANDER: Without objection then,
4 we would spread the direct testimony of Mr. Chattin across the
5 record as if read, along with Exhibit 208 being admitted.
6 MR. GANNON: Thank you.
7 (The following prefiled direct testimony
8 of Mr. Chattin is spread upon the record.)
9
10
11
12
13
14
15
Page 66
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16
17
18
19
20
21
22
23
24
25
569

HEDRICK COURT REPORTING CHATTIN (Di)
P. O. BOX 578, BOISE, ID 83701 Intervenor

1 (The following proceedings were had in
2 open hearing.)
3 (Intervenor Exhibit No. 208, having been
4 premarked for identification, was admitted into evidence.)
5 MR. GANNON: And we would ready Mr. Chattin for
6 questions.
7 COMMISSIONER KJELLANDER: Thank you. Let's begin
8 with Ms. Hobson.
9 MS. HOBSON: Thank you.
10
11 CROSS-EXAMINATION
12
13 BY MS. HOBSON:
14 Q. Good afternoon, Mr. Chattin.
15 A. Good afternoon, late afternoon.
16 Q. Late afternoon, that's right. I understand that
17 you're testifying in this case because you were contacted by
18 Mr. Gannon and he talked to you about it and asked you if you'd
Page 67
60403V~3.txt
19 be willing to. Is that correct?
20 A. That's right.
21 Q. And you are not named as a designated Intervenor
22 here, are you?
23 A. No.
24 Q. You operate a real estate business from your
25 home, as I understand it?
575

HEDRICK COURT REPORTING CHATTIN (X)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 A. I do.
2 Q. And I think you said just a moment ago that you
3 had a shared cell phone?
4 A. I do. So my wife -- there are two different
5 numbers, but it's the shared plan I guess is what it would be
6 called, with AT&T.
7 Q. So by "shared," what's shared in that kind of a
8 plan is what?
9 A. Well, "shared" means that we get one bill --
10 excuse me -- we get one bill for both phones and we share the
11 same minutes together, so it's just an easier, kind of a
12 convenient, plan.
13 Q. Now, in your testimony, you indicated that DSL is
14 absolutely essential to your work, didn't you?
15 A. Clearly.
16 Q. Are you aware that that is a separate service
17 from your basic wireline service and that it's deregulated?
18 A. You know, I was not aware that it was
19 deregulated, but it's logical, now that I think about it, that
20 it would be, so, yes.
21 Q. How long have you had DSL?
22 A. Probably as soon as it came into my area, so I
Page 68
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23 was with Qwest on it was that five years ago? I'm not sure how
24 long ago that was. I've had it a while.
25 Q. It's amazing how fast we adapt to technological
576

HEDRICK COURT REPORTING CHATTIN (X)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 innovation and find it necessary, isn't it?
2 A. We do, yeah. I use it every day.
3 Q. And, again, if you were not here, Qwest
4 appreciates the fact that you are also a Qwest customer.
5 A. I am.
6 Q. You -- I think I understood in your testimony
7 that you don't have what has been called here a rollover
8 service or hunting service with your real estate office. Is
9 that correct?
10 A. I do not. I mean, I'm a sole broker there and I
11 have voicemail on the land line phone, so -- and I just don't
12 need it.
13 Q. Is that voicemail provided by Qwest?
14 A. By Qwest.
15 Q. Are you aware that's also a deregulated
16 service?
17 A. No, I guess I was not.
18 Q. Price deregulated service.
19 Okay. Do you have any other employees?
20 A. I don't have any employees. I have two agents
21 that work out of their homes also.
22 Q. So when you speak about what you termed rollover
23 service in your testimony, you're talking about larger real
24 estate offices. Is that correct?
25 A. Yes, exactly, right.
577

Page 69
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HEDRICK COURT REPORTING CHATTIN (X)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 Q. In larger real estate offices, would you be
2 surprised to find some of those offices would have six or more
3 wire lines to those locations?
4 A. You know, to be honest with you, I don't know how
5 many lines they have in. I mean, they have like a main -- most
6 of them, even the larger ones, Group One and some of those,
7 have a main -- a main line. I mean, they have different branch
8 offices with different lines, but the Boise office would have a
9 main number and I don't know if they have more -- a fax line,
10 obviously.
11 Q. And do you understand if your colleagues in
12 larger real estate offices do happen to have six or more lines,
13 that their line price is deregulated?
14 A. Yes, I did know that.
15 Q. Do you find that most real estate salespeople use
16 cell phones in their work?
17 A. All. I would say virtually everybody does.
18 Q. Can you tell us why that's the case?
19 A. Well, because when you're away from your own
20 office, we're very mobile, we're out showing property, and if
21 you have a phone, a client doesn't show up for the appointment,
22 you can call him up on your cell phone. You just really need
23 it. They can reach you. Somebody has on offer on their
24 property, they can reach you if you're away from your home.
25 Q. So, of course, prior to the advent of cell
578

HEDRICK COURT REPORTING CHATTIN (X)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 phones, were you in the real estate business?
2 A. Yes. Yes.
3 Q. And would you say that some of the calls that you
Page 70
60403V~3.txt
4 used to make on a wireline before you had cell service are now
5 being made on your cell phone?
6 A. Some are, away from the office. But mainly when
7 I'm in the office, I primarily use the land line. I like
8 the -- it's bigger, it's got a speakerphone. I just primarily
9 use it. But call -- my cell phone is right there too and then
10 incoming calls on a cell will happen at times too. I use them
11 both, but primarily the land line.
12 Q. Do you ever find that you're on your land line
13 and you get a call on your cell phone line?
14 A. Yes. Yes, that's irritating. You've got to
15 screen it and see who it is.
16 Q. Thank you, Mr. Chattin. That's all I had.
17 COMMISSIONER KJELLANDER: Any questions from
18 members of the Commission?
19 MS. HOBSON: Oh, I'm sorry, I did think of
20 something else.
21 Q. BY MS. HOBSON: Mr. Chattin, I think up there on
22 your pedestal there you can find an exhibit that is marked as
23 Exhibit No. 29?
24 A. Here? Yes.
25 Q. There are three up there, but you need to look
579

HEDRICK COURT REPORTING CHATTIN (X)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 for No. 29.
2 A. Got it.
3 Q. Do you recognize that document?
4 A. Yes.
5 Q. These are the Responses that you helped
6 Mr. Gannon prepare in response to questions from Qwest. Is
7 that right?
Page 71
60403V~3.txt
8 A. That's correct.
9 Q. Thank you.
10 MS. HOBSON: Mr. Chairman, I would move the
11 admission of Exhibit 29.
12 COMMISSIONER KJELLANDER: And without objection,
13 we would move to admit Exhibit 29.
14 MR. GANNON: We would note again, Mr. Chair, that
15 we did have two or three objections in the -- in the Answers to
16 Interrogatories as a matter of relevance.
17 COMMISSIONER KJELLANDER: And the Commission will
18 note that. Thank you.
19 (Qwest Exhibit No. 29, having been
20 premarked for identification, was admitted into evidence.)
21 COMMISSIONER KJELLANDER: And is that it?
22 MS. HOBSON: That is all the questions I have.
23 Just for the record, I would note that Qwest is
24 moving the admission of these documents and they speak for
25 themselves. The objections and the answers are contained in
580

HEDRICK COURT REPORTING CHATTIN (X)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 them, so I don't know that we need to continue that discussion.
2 COMMISSIONER KJELLANDER: Okay. Ready now for
3 redirect.
4 MR. GANNON: I don't have any questions.
5 COMMISSIONER KJELLANDER: Thank you.
6 Mr. Stutzman, I apologize. Did we go to you?
7 MR. STUTZMAN: I don't have any questions either.
8 COMMISSIONER KJELLANDER: Okay. I'm sorry to
9 pass you up. Thank you.
10 All right, I believe that will do it for us.
11 THE WITNESS: All right. Thank you.
Page 72
60403V~3.txt
12 COMMISSIONER KJELLANDER: Mr. Gannon, is there
13 anything you would like to request on behalf of this specific
14 witness?
15 MR. GANNON: Thank you for the suggestion,
16 Mr. Chairman. We would ask that the Commission excuse
17 Mr. Chattin's further attendance at the hearing.
18 (The witness left the stand.)
19 COMMISSIONER KJELLANDER: Mr. Gannon, as I
20 recall, you said you had three witnesses that you thought you
21 could get to today, and so I believe we have time to get the
22 third one out.
23 MR. GANNON: Okay. Sharon Herrick is here.
24
25
581

HEDRICK COURT REPORTING HERRICK (Di)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 SHARON HERRICK,
2 produced as a witness at the instance of the Intervenor, being
3 first duly sworn, was examined and testified as follows:
4
5 DIRECT EXAMINATION
6
7 BY MR. GANNON:
8 Q. Please state your full name for the record.
9 A. Sharon Herrick.
10 Q. And in connection with this case, have you
11 prepared direct testimony that has been filed?
12 A. Yes.
13 Q. And did you have any changes or corrections that
14 you wanted to make to that direct testimony?
15 A. I do have one. We do now have two cell phones.
Page 73
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16 My husband has an additional one now that he purchased about a
17 month ago.
18 Q. Do you believe that the questions and that the
19 answers that you've made to the questions contained therein are
20 true today?
21 A. Yes.
22 Q. And if I asked you those questions as if you were
23 sworn, would you have the same answers today?
24 A. Yes.
25 Q. And did you have any exhibits to your
582

HEDRICK COURT REPORTING HERRICK (Di)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 testimony?
2 A. There's just one on the copy of the Statesman
3 that's attached to the Interrogatories.
4 Q. Okay.
5 MR. GANNON: Okay. We would offer the testimony
6 of Sharon Herrick and ask that it be spread upon the record.
7 COMMISSIONER KJELLANDER: And without objection,
8 we would spread the direct testimony across the record.
9 (The following prefiled direct testimony
10 of Ms. Herrick is spread upon the record.)
11
12
13
14
15
16
17
18
19
Page 74
60403V~3.txt
20
21
22
23
24
25
583

HEDRICK COURT REPORTING HERRICK (Di)
P. O. BOX 578, BOISE, ID 83701 Intervenor

1 (The following proceedings were had in
2 open hearing.)
3 MR. GANNON: And Sharon Herrick is available for
4 cross-examination.
5 COMMISSIONER KJELLANDER: That's the best way to
6 view most of the articles in that paper.
7 Just a little insider on this side of the
8 Bench.
9 Why don't we start with Mr. Stutzman, since I
10 left you out last time.
11 MR. STUTZMAN: I have no questions, Mr. Chairman.
12 COMMISSIONER KJELLANDER: Okay. Move now to
13 Ms. Hobson.
14 MS. HOBSON: Thank you.
15
16 CROSS-EXAMINATION
17
18 BY MS. HOBSON:
19 Q. Good afternoon, Ms. Herrick.
20 A. Hi.
21 Q. I understand that you are an Intervenor in this
22 case?
Page 75
60403V~3.txt
23 A. Yes.
24 Q. Can you tell us how you became involved in it?
25 A. I was talking with Mr. Gary Neal, who -- I work
587

HEDRICK COURT REPORTING HERRICK (X)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 for him. We were discussing some aspects in the article about
2 the -- in the Idaho Statesman about Qwest, and he said if I
3 wanted to get involved, to contact John Gannon, and so I did,
4 and that's how I became involved.
5 Q. Thank you.
6 MS. HOBSON: The article in the newspaper has
7 come out in the copies that I have backward. Does everybody
8 have that problem?
9 MR. STUTZMAN: I didn't get a copy, so it's hard
10 for me to --
11 MR. GANNON: I don't have that problem.
12 COMMISSIONER SMITH: Got a mirror?
13 MS. HOBSON: Okay.
14 Q. BY MS. HOBSON: It's just a curiosity: What do
15 you do in Mr. Neal's office?
16 A. I'm a legal secretary. I do bankruptcies and I
17 do Motion for Reliefs (sic) and collections.
18 Q. I just wondered if you could explain to us
19 physically how you can do this with a Xerox machine.
20 A. I didn't copy those. Mr. Gannon did, or someone
21 working for him.
22 Q. Okay. Very good.
23 MR. GANNON: I have no explanation either. My
24 copy isn't like that, so --
25 Q. BY MS. HOBSON: That's fine, Ms. Herrick.
588

Page 76
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HEDRICK COURT REPORTING HERRICK (X)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 I understand that you access the Internet using
2 Cable One. Is that correct?
3 A. My household does. I do not.
4 Q. Okay. You have Cable One access to the Internet
5 at your home?
6 A. Yes, my son has it. I have a married son living
7 with me, and also a single one going to school living with
8 me.
9 Q. And you indicated that you have a cell phone?
10 A. Yes.
11 Q. And, now, you've just updated your testimony to
12 indicate that your husband also has one?
13 A. Yes. He just got a cell phone himself.
14 Q. Do any of the children that you've described have
15 their own cell service?
16 A. They all have their own cell phone.
17 Q. So you have basically four cell phones in your
18 household. Is that correct?
19 A. Right.
20 Q. I believe in your testimony you indicated that
21 you spend 20 to $30 a month on long distance services. Is that
22 right?
23 A. That's correct.
24 Q. Every month?
25 A. Yes.
589

HEDRICK COURT REPORTING HERRICK (X)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 Q. Do you use your land line service or your cell
2 service for --
3 A. Land line.
Page 77
60403V~3.txt
4 Q. Do you have a plan that includes cell -- do you
5 have a cell plan that includes long distance calling?
6 A. Yes, we do have the one that my son -- or, my
7 husband just purchased.
8 Q. Okay. Do you expect that you might be shifting
9 some of your long distance calling into that service?
10 A. Right now, a lot of my long distance is to my
11 daughter who lives in-state, and I usually only use a land line
12 with her.
13 Q. Where does she live?
14 A. Pocatello, Idaho.
15 Q. And I understand -- did you have a billing issue
16 with Qwest as well?
17 A. I did, in August or September of 2001.
18 Q. And do you understand that if the Commission
19 grants Qwest's Application here and deregulates basic local
20 exchange service, that the Commission would still handle
21 customer complaints?
22 A. I did not know that until you just mentioned it
23 earlier with one of the other witnesses.
24 Q. Thank you. I believe that's all the questions I
25 have.
590

HEDRICK COURT REPORTING HERRICK (X)
P. O. BOX 578, BOISE, ID 83701 Intervenor
 1 COMMISSIONER KJELLANDER: Thank you, Ms. Hobson.
2 Are there questions from members of the
3 Commission?
4 MS. HOBSON: I'm sorry, again I forget my
5 exhibit.
6 COMMISSIONER KJELLANDER: Okay, this is the last
7 time today we're going to let you do that.
Page 78
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8 MS. HOBSON: Thank you.
9 Q. BY MS. HOBSON: Can you find Exhibit 30 up on the
10 podium there?
11 A. Yeah.
12 Q. Do you recognize that document? I think we've
13 been talking about the attachment to the document, but do you
14 recognize the content of the rest of the document?
15 A. Yes. Yes.
16 Q. These are the Responses that you prepared with
17 Mr. Gannon to Qwest's Discovery. Is that correct?
18 A. That's correct.
19 MS. HOBSON: And I would move the admission of
20 Exhibit 30.
21 COMMISSIONER KJELLANDER: And without objection,
22 other than the objection we've had on the previous two --
23 MR. GANNON: Correct.
24 COMMISSIONER KJELLANDER: -- which the Commission
25 will note, Exhibit No. 30 will be admitted.
591

HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
 1 (Qwest Exhibit No. 30, having been
2 premarked for identification, was admitted into evidence.)
3 COMMISSIONER KJELLANDER: And are there any
4 questions from members of the Commission?
5 Hearing none, redirect.
6 MR. GANNON: Just one question.
7
8 REDIRECT EXAMINATION
9
10 BY MR. GANNON:
11 Q. Ms. Herrick, with regard to the procedure for
Page 79
60403V~3.txt
12 resolving bill disputes, have you asked in your testimony that
13 there be an informal, independent arbitration or a binding
14 procedure instituted by the Commission?
15 A. Did I ask them or --
16 Q. Did you ask for that in your testimony?
17 A. Yes. In the written testimony, I asked that that
18 would be something that would be helpful to most customers.
19 Q. And why is that, can you explain?
20 A. Because I don't -- when I had the disagreement
21 with Qwest, I talked to the Public Utilities Commission. They
22 told me that Qwest had just made an error and I should just
23 basically let it go, so I did, and I ended -- I felt like I
24 ended up paying two months' bills for one month's service.
25 MR. GANNON: No further questions.
592

HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
 1 COMMISSIONER KJELLANDER: Thank you, Mr. Gannon.
2 We've come to the point of the day where it's probably best to
3 break instead of trying to put some witnesses up at this point.
4 It would be the Commission's intent to start up tomorrow
5 morning right around 9:30, and we'll resume with
6 Mr. Gannon's -- I think you have three remaining witnesses.
7 MR. GANNON: Correct.
8 COMMISSIONER KJELLANDER: And then we'll move
9 quickly from there to witnesses on the Deputy Attorney
10 General's list.
11 So with that, we'll go off the record for today,
12 and we actually -- we won't make you stay there all night;
13 we'll dismiss you and if your attorney would request --
14 MR. GANNON: We request that Mrs. Herrick be
15 excused so that she can return to her work.
Page 80
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16 COMMISSIONER KJELLANDER: Thank you. Appreciate
17 your testimony.
18 THE WITNESS: Thank you.
19 (The witness left the stand.)
20 COMMISSIONER KJELLANDER: So with that for today,
21 then we are adjourned for today and we will resume tomorrow at
22 9:30 a.m.
23 (The hearing adjourned at 4:43 p.m.)
24
25
593

HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
Page 81