20110418Vol II Technical Hearing.pdf

OR I GINAL
.'BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE APPLICATION
OF TRACFONE WIRELESS, INC., FOR
DESIGNATION AS AN ELIGIBLE
TELECOMMUNICATIONS CARRIER
CASE NO.
TFW-T-09-01
TECHNICAL HEARING
HEARING BEFORE
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COMMISSIONER MARSHA H. SMITH (Presiding)
COMMISSIONER JIM D. KEMPTON
COMMISSIONER MACK A. REDFORD
:i:r--..o.:(".
PLACE:Commission Hearing Room
472 West Washington Street
Boise, Idaho
DATE:March 31, 2011
VOLUME II - Pages 211 - 361
~_.r-~POST OFFICE BOX 578
BOISE, IDAHO 83701
208-336-9208.HEDRICK
COURT REPORTING
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1 APPEARANCES
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3 For the Staff:NEIL PRICE, Esq.
Deputy Attorney General
472 West Washington
Boise, Idaho 83702
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For TracFone:GREENBERG TRAURIG, LLP
by MITCHELL F. BRECHER, Esq.
2101 L Street Northwest,
Suite 1000
Washington, DC 20037
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McDEVITT & MILLER, LLP
by DEAN J. MILLER, Esq.
420 West Bannock Street
Boise, Idaho 83702
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CTC Telecom:
RICHARDSON & 0' LEARY
by MOLLY O'LEARY, Esq.
Post Office Box 7218
Boise, Idaho 83707
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For Intervenor
Idaho Telecom Alliance:
GIVENS PURSLEY, LLP
CYNTHIA A. MELILLO, Esq.
Post Office Box 2720
Boise, Idaho 8370115
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HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
APPEARANCES
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1 I N D E X
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WITNESS$ ¡PAGEEXAMINATION BY
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Daniel L. Trampush
(Intervenors)211
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299
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Sworn
Ms. 0' Leary (Direct)
Prefiled Direct
Mr. Brecher (Cross)Ms. Melillo (Redirect)
Commissioner Smith
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7 Grace Seaman
(Staff)Mr. Price (Direct)
Prefiled Direct
Ms. 0' Leary (Cross)
Mr. Miller (Cross)
Commissioner Kempton
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351
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Jose Fuentes
(TracFone-cont. )
353Commissioner Kempton
12 EXHIBITS
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14 NUMBER PAGE
15 For the Intervenors:
16 201.2009 Lifeline Participation Rates byState Premarked
Admitted 360
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202.Idaho DHW Facts Figures Trends
2010-2011, 2 pgs
Premarked
Admitted 36018
19 203.FCC 11-32 Notice of Proposed Rulemaking, Premarked
WC Docket No. 11-42, CC Docket 96-45, Admitted 360
WC Docket No. 03-109, 139 pgs
204.TracFone information, 33 pgs Premarked
Admitted 360
205.2/1/11 Memorandum, USAC to TracFone,
21 pgs
10/10 US GAO Report GAO-11-11,
Telecommunications, 74 pgs
Premarked
Admitted 360
Premarked
Admitted 360
206.
207 - 212 Admitted 360
HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
INDEX
EXHIBITS
.I For TracFone:
2 1 -I6 Admitted 360
3 17.FCC 08-100 Order,CC Docket No.96-45,Marked 25715 pgs Admitted 3604
18.Affidavit Marked 2795Withdrawn281
6 18.Lifeline and Link-Up Baseline Marked 285Information,2 pgs Admitted 3607
8 For the Staff:
9 10L.FCC DA-10-753 Order,CC Docket PremarkedNo.96-45,4 pgs Admitted 360IO
102.5/21/10 Letter,Nancolas to IPUC Premarked11Admitted 360
12 103 Admitted 360.13
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HEDRICK COURT REPORTING EXHIBITSP.O.BOX 578,BOISE,ID 83701
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1 BOISE, IDAHO, THURSDAY, MARCH 31, 2011
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4 COMMISSIONER SMITH: I think we're ready for the
5 witness of the Intervenors, so is Ms. O'Leary doing this? Then
6 you're welcome to call your witness, please.
7 MS. O'LEARY: Yes, I am going to call
8 Mr. Trampush.
9 Mr. Trampush, if you would please take the stand
10 and be sworn in by the Commission regarding the testimony you
11 are going to present here today.
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13 DANIEL L. TRAMPUSH,
14 produced as a witness at the instance of the Intervenors, being
15 first duly sworn, was examined and testified as follows:
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17 COMMISSIONER REDFORD: Could you, Ms. O'Leary,
18 wi th the indulgence of the Chair, could you spell his name
19 again, please?
20 MS. 0' LEARY: Yes. It is Daniel T., and the last
21 name is spelled Trampush, T-R-A-M-P-U-S-H.
22 COMMISSIONER REDFORD: Thank you very much.
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HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
TRAPUSH (Di)
Intervenors
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1 DIRECT EXAMINATION
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3 BY MS. O'LEARY:
4 Q.Mr. Trampush, are you the same Daniel Trampush
5 who caused direct testimony to be filed in this case before the
6 Commission?
7 A.Yes, I am.
8 Q.Okay. And did that testimony include
9 Exhibits 201 through 206?
10 A.They did.
11 Q.Thank you. And, Mr. Trampush, were those
12 exhibits that we just referred to, 201 and 206, were they
13 prepared under your supervision?
14 A.Yes, they were.
15 Q.Do you have any corrections or additions to make
16 to your testimony or to your exhibits?
17 A.I have one -- two typographical errors I need to
18 correct on my direct testimony.
19 On page 12, line 23, the sentence states: Using
CTC Wireless'it says "$24.10" monthly plan. That should be
21 "$29.95."
22 And then on the top of page 13, that number is
23 going to change from, on line 1, from "10.60" to "16.45."
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Q.Thank you, Mr. Trampush. Does that conclude your
corrections and additions to your testimony?
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HEDRICK COURT REPORTING
P. o. BOX 578, BOISE, ID 83701
TRAMPUSH (Di)Intervenors
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1 A.Yes, it does.
2 MS. 0' LEARY: If I may approach the court
3 reporter, Madam Chairman, what we have provided for her is the
4 actual numbered exhibits. We just thought it might be easier
5 for her records to have the numbers. Unfortunately, when
6 Mr. Trampush' s testimony was filed, it did not have the actual
7 numbers attached to each of those. So it's Exhibits 201
8 through 206, just with a cover sheet so it's easy for her to
9 follow.
10 Q.BY MS. 0' LEARY: Mr. Trampush, with those
11 corrections and additions that we've just covered, if I were to
12 ask you the same questions today that were asked of you in that
13 prefiled testimony, would your answers be the same?
14 A.Yes, they would.
15 Q.Okay. Thank you.
16 MS. O'LEARY: With that, Madam Chairman, I would
17 move that the prefiled testimony of Mr. Trampush be spread upon
18 the record in this matter as if read in full, and that the
19 Exhibits 201 through 206 be identified for the record.
20 COMMISSIONER SMITH: If there's no objection, it
21 is so ordered.
22 MR. BRECHER: No objection.
23 MR. PRICE: No objection.
24 (The following prefiled direct testimony
25 of Mr. Trampush is spread upon the record.)
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HEDRICK COURT REPORTING
P. o. BOX 578, BOISE, ID 83701
TRAMPUSH (Di)
Intervenors
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Q.WHAT IS YOUR NAME AND OCCUPATION?
My name is Daniel L. Trampush. I am currntly employed by Moss' Adams
LLP, and my tite is Direcor, Telemmunications Consultng Services.
Q.PLEASE SUMMARIZE YOUR CURRENT EMPLOYMENT AND
EDUCATIONAL BACKGROUND.
Moss Adams is an accunting and business advisory firm that has been in
business for over 90 years. The firm has 20 practice offces throughout the
west coast and is the tenth largest public accunting firm in the United
States. i graduated from Central Washington Universit in 1970 with a
Bachelor of Arts degree in Business Administration.
PLEASE DESCRIBE YOUR PRIOR BUSINESS EXPERIENCE.
i have been actively involved in the telecommunications industry for the
vast majori of my fort-year professional career. Upon graduating from
college in 1970, I joined the firm of Ernst & Ernst (now Ernst & Young). I
was employed by the firm for twenty-seven years, the last seventeen of
which I was a partner. During my time at Ernst & Young, I worked on a
variety of telecommunications accounting and regulatory issues, some of
which were national in scope. I left the firm in 1997 and became Senior
Vice President and Chief Financial Offcer of GST Telecommunications,
Inc, a publicly traded Competitive Local Exchange Carrier. My
responsibilties at GST included finance, accounting, and investor
relations. My focus at Moss Adams is similar to that at Ernst & Young.
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Idaho Telecom Allance and CTC Telecom, Inc.214
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1 That is, I work in the firm's Telecom niche practice providing consulting
2 services to rural telecmmunications carriers.
3 Q. WHAT IS THE PURPOSE OF YOUR TESTIMONY?
4 A. This direct testimony is being filed in support of Idaho Telecom Alliance
5 ("ITA") and CTC Telem, Inc.'s petitions to intervene in the above-
6 captioned matter. My testimony wil show that TracFone Wireless, Inc.'s
7 First Amended Application for Designation as an Eligible
8 Telecommunications Carrer ("ETC") ("TracFone's Application" or
9 "Application") and supporting documents do not meet the requirements for
10 ETC designation in Idaho and is not in the public interest. The federal
11 requirements are set forth in Section 214 of the Communications Act of
12 1996, as amended, 47 U.S.C. § 214 ("Communications Act") and in the
13 rules of the Federal Communications Commission ("FCC"). The Idaho
14 ETC designation requirements are set forth in the Appendix to the Idaho
15 Public Utilty Commission ("PUC") Order No. 29841, in Case No. WST - T-
16 05-1, In the Matter of the Application of WWC Holding Co., Inc., DBA
17 Cellular-One, Seeking Designation as an Eligible Telecommunications
18 Carner That May Receive Federal Universal Service Support (August 4,
19 2005) ("Idaho ETC Requirements Order").
20 Q. HOW DOES TRACFONE'S APPLICATION FAIL TO MEET THE
21 APPLICABLE REQUIREMENTS FOR ETC DESIGNATION?
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The federal ETC designation requirements are contained in 47 U.S.C.A.
§ 214(e)(1) and (e)(2), and 47 C.F.R. §§ 54.201(d) and 54.202. As
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1 TracFone has made clear throughout its Application and supporting
2 materials, TracFone has received a waiver of the facilits-ase
3 requirement of Seon 214(e)(1)(A) and 47 C.F.R § 54.201 (i). FCC
4 Order, In the Matter of Federal-State Joint Board on Universal Service,
5 Petition of TracFone Wireless, Inc. for Forbearance from 47 U.S.C.
6 § 214(e)(1)(A) and 47 C.F.R § 54.201(i), 20 F.C.C.R. § 15095 (2005) (the
7 "TracFone Forbearance Order"). Although Section 214(e)(2) provides that
8 a state commission shall approve an applicant's request for designation as
9 an ETC if the applicant meets all of the requirements set forth in Seion
10 214(e)(1), the FCC has given the state commissions discretion in the
11 designation of an ETC applicant in an area served by a rural telephone
12 company. Accrding to Section 214(e)(2), such designation must be
13 based on a specifc finding by this Commission that such designation is in
14 the public interest. As this testimony wil make clear, designation of
15 TracFone as an ETC in areas served by rural telephone companies in
16 Idaho is not in the public interest.
17 Q. ARE THERE LIMITATIONS TO THE APPLICABILITY OF THE
18 TRACFONEFORBEARANCE ORDER ON THE IDAHO PUBLIC
19 UTILITIES COMMISSION'S AUTHORITY TO DETERMINE WHETHER
20 TRACFONE MEETS THE PUBLIC INTEREST REQUIREMENTS FOR
21 DESIGNATION AS AN ETC IN AREAS SERVED BY RURAL
22 TELEPHONE COMPANIES?
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A.Yes. TracFone makes much "ado" about the FCC's waiver of the falit
base requirement of Secon 214(e)(1)(A) and 47 C.F.R § 54.201(i) as
set fort in the TracFone Forbarance Order. However, the FCC's grant
of forbearance from the facilties-base requirement did not automatcally
establish TracFone as an ETC anywhere. Designation of TracFone as an
ETC in federal default states was to be addresse in subsequent orders.
TracFone Forbarance Order at 1, N. 4. Thus, the designation of
TracFone as an ETC in non-federal default states would be left for those
states to determine whether TracFone meets the specifc state
requirements. Moreover, the TracFone Forbearance Order did not
address the specifc question of whether it is in the public interest to
designate a non-facilities-based carrier as an ETC in areas served by rural
telephone companies in the state of Idaho. That is the question now
before this Commission.
15 Q. WHAT ARE THE SPECIFIC REQUIREMENTS THAT AN ETC
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APPLICANT MUST MEET TO BE DESIGNATED AN ETC IN AN AREA
SERVED BY A RURAL TELEPHONE COMPANY?
A.This Commission's designation of an ETC applicant in an area served by
a rural telephone company is discretionary and must be based on a
specifc finding that such a designation is in the public interest. 47 U.S.C.
§ 214(e)(2).
22 Q. WHAT IS THE "PUBLIC INTEREST" STANDARD AS THAT TERM IS
23 USED IN SECTION 214(e)(2) AND BY THIS COMMISSION?
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A.The public interest standard, as that term has been interpreted under
Section 214(e)(2), is essentially a cost-benefit analyis. The Commission
must determine whether the potential public harm of granting an applicant
ETC designation in an area served by a rural telephone company
outweighs the public benefi claimed by the applicant.
Q.HOW IMPORTANT ARE IDAHO OR SERVICE-AREA SPECIFIC
CONCERNS IN CONDUCTING A PUBLIC INTEREST ANALYSIS
UNDER SECTION 214(e)(2)1
In the Idaho ETC Requirements Order, this Commission specifcally noted
the importance of a state "consider(ingl local factors and develop(ingl
state-specific policies regarding universal service support." Idaho ETC
Requirements Order at 3. In addition, this Commission noted that the
value of increased competition alone is not enough to tip the scales in
favor of an applicant seeking ETC designation in an area served by a rural
telephone company. PUC Order No. 29541, in Case No. GNR-T-03-8, In
the Matter of the Petition of IA T Communications, Inc. DBA NTCH-Idaho.
Inc. or Clear Talk for Designation as an Eligible Telecommunications
Carner and Case No. GNR-T-03-16, In the Matter of the Application of
NPCR. Inc. DBA Nextel Partners seeking Designation as an Eligible
Telecommunications Carner, (July 23,2004) (the "Clear Talk Order"), at 6
(quoting FCC Order, In the Matter of Federal-State Joint Board of
Universal Service, Virginia Cellular, LLC, Petition for Designation as an
Eligible Telecmmunications Carrer in the Commonwealth of Virginia,
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19 F.C.C.R. 1563, 1574 (Jan. 22, 2004)). Rather, such factrs as the
impact of multiple designations on the Universal service Fund, the unique
advantages and disadvantages of the applicant's service offring,
commitments made by the applicant regarding qualit of service and the
applicant's abilty to provide the service throughout the designated service
area should be considered. Id.
Q. ARE PUBLIC INTERESTTHEREANYADDITIONAL
CONSIDERATIONS?
A.Yes. Where an applicant like TracFone is seeking designation below the
study area-level of a rural telephone company, this Commission has held
that the public interest inquiry requires "a cream skimming" analysis to
ensure that an applicant is not seeking to provide service to a
disproportionate number of low-cost customers, thereby leaving the
higher-cost customers for its competitors to serve, especially those who
have carrier-of-Iast resort obligations. Idaho ETC Requirements Order at
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DOES TRACFONE CLAIM THAT DESIGNATION OF IT AS AN ETC
WOULD SERVE THE PUBLIC INTEREST?
A.Yes. Among other things, TracFone asserts that the public interest
benefits of designating TracFone as an ETC include larger locl callng
areas, the convenience and security afforded by mobile telephone service,
the opportunity for customers to control their costs by purchasing in
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advance only the volumes of service which they nee and the availabilty
of E911 Services. TracFone Application at 19.
3 Q. WHAT IS YOUR REACTION TO TRACFONE'S CLAIM ON PAGE 19 OF
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ITS APPLICATION THAT ITS LIFELINE SERVICE WILL PROVIDE
LARGER LOCAL CALLING AREAS?
A.While it may be tre that, as copared to wireline carrers, wireless
carrers often provide their customers with larger locl callng areas,
TracFone's claim ignores the fact that it does not provide a larger locl
callng area than the existing ETC-designated wireless carriers. To the
contrary, as a non-facilities-based reseller, TracFone contributes nothing
to the expansion of callng areas in Idaho.
Q.HOW SHOULD THE COMMISSION EVALUATE TRACFONE'S CLAIM
AT PAGE 19 OF ITS APPLICATION THAT "THE CONVENIENCE AND
SECURITY AFFORDED BY MOBILE TELEPHONE SERVICE" IS A
UNIQUE PUBLIC INTEREST BENEFIT OF ITS LIFELINE SERVICE
OFFERING?
A.There are very real challenges to providing wireless service in many
portions of rural Idaho due to mountainous terrain and other geographic
features. For many potential Lifeline customers, mobile service would not
be a "more convenient and secure" option than wireline service if Lifeline
is to be their sole telecmmunications service. In fact, on page 8 of
Exhibit 12 to TracFone's Application (Safelink Wireless Terms and
Conditions of Service), TracFone states "If you are in an area where your
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1 SAFELINK WIRELESS phone is searching for a wireless signal or there is
2 no wireless signal or wireless servic, it is highly probable that a call to
3 911 wil not go through. Do not rely solely on your SAFELINK WIRELESS
4 in an emergency situation. In an emergency, locate the nearest land line
5 phone and call for help." Thus, even TracFone makes clear that a policy
6 that encourages such customers to forego supported wireline service in
7 favor of wireless service may not be in the public interest in rural Idaho.
8 Q. ANOTHER PUBLIC INTEREST BENEFIT CLAIMED BY TRACFONE AT
9 PAGE 19 OF ITS APPLICATION IS THAT ITS CUSTOMERS CAN
10 CONTROL THEIR COSTS BY PURCHASING IN ADVANCE ONLY THE
11 VOLUMES OF SERVICE WHICH THEY NEED AND CAN SUPPLEMENT
12 THOSE QUANTITIES ON AN "AS NEEDED" BASIS. IS THIS SERVICE
13 MODEL UNIQUE TO TRACFONE?
14 No. Syringa Wireless, LLC, CTC Telecom (d/b/a CTC Wireless) and GoldA.
15 Star Communications, LLC (d/b/a Silver Star Wireless) offer pay-as-you-
16 go plans, monthly plans and even weekly plans in connection with their
17 ETC wireless service offerings. It is my understanding that Lifeline
18 subscribers can obtain Lifeline support for any plan offered. Some
19 examples include Syringa Wireless' unlimited local callng plan for $30.00
20 per month. Gold Star Communications offers up to 250 minutes for a fee
21 of $25.00, which includes voice mail and caller 10. CTC Wireless offrs a
22 monthly service plan for $24.10. None of these plans requires a long-term
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1 contract, deposit or credit chec.These plans are on file wih th
2 Commission in the ETC's annual re-certifcatin documentation.
3 Q. TRACFONE POINTS TO THE AVAILABILITY OF MOBILE ACCESS TO
4 911 SERVICE AS A UNIQUE PUBLIC INTEREST BENEFIT OF ITS
5 PROPOSED LIFELINE SERVICE. DO OTHER WIRELESS ETCs
6 PROVIDE MOBILE ACCESS TO 911 SERVICE?
7 A. Yes.
8 Q. DO IDAHO'S RURAL ILECs AND CURRENT ETC WIRELESS
9 CARRIERS CONTRIBUTE TO THE SUPPORT OF 911 SERVICES IN
10 IDAHO?
11 A. Yes.
12 Q. DOES TRACFONE CONTRIBUTE TO THE SUPPORT OF 911
13 SERVICES IN IDAHO?
14 A. No.
15 Q. WHY NOT?
16 A. According to TracFone's response to Commission Staff Request for
17 Production No. 25, TracFone believes that the Idaho Emergency
18 Communications Act ("IECA") does not apply to TracFone.
19 Q. IS THAT A CORRECT READING OF THE IECA?
20 I am not a lawyer so I cannot render a legal opinion. Nevertheless,A.
21 according to TracFone's response to Commission Staff Request for
22 Production No. 25, the Idaho legislature amended Idaho Code Secion 31-
4813 in 2007 to clarif that while the IECA does not apply to prepaid23
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1 callng cards, pre-paid wireless service with a service address or place of
2 primary use wihin Idaho is not considere a "prepaid callng card" as that
3 term is use in the statute. I.C. § 31-4813. In it response to th
4 Commission Staffs prouction request, TracFone acknowedges that it is
5 a pre-paid wireless service whose Idaho customers have a service
6 address or place of primary use wihin Idaho. Therefore, accrding to the
7 plain language of Idaho Code Secion 31-4813, as clarifed by the 2007
8 Legislature, the exemption afforded pre-paid callng cards does not apply
9 to TracFone.
10 IF TRACFONE DOES NOT QUALIFY FOR AN EXEMPTION FROM THEQ.
11 IECA PURSUANT TO THE 2007 AMENDMENT, THEN WHY DOESN'T
12 TRACFONE COLLECT AND REMIT THE STATUTORILY MANDATED
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FEES?
A.According to TracFone's response to the Commission Staffs Request for
15 Production No. 25, TracFone maintains that the IECA does not apply to it
16 because it has no current system in place to collect such fee on a monthly
17 ba~s.
18 Q. IS THIS "TRACFONE EXEMPTION" CODIFIED IN IDAHO LAW?
19 A. Not that I am aware of.
20 Q. TRACFONE STATES IN ITS APPLICATION THAT ITS LIFELINE
21 OFFERINGS WILL DIFFER FROM OTHER IDAHO ETCS' LIFELINE
OFFERINGS DUE TO THE CONVENIENCE AND PORTABILITY OF
WIRELESS SERVICES. IS THIS FEATURE UNIQUE TO TRACFONE?
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1 No. There are at least four other wireles providers that provide LifelineA.
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service in Idaho's Rural Study Areas, including Syrnga Wireless, CTC
Telecm d/b/a CTC Wireless, Goldstar Communications, LLC d/b/a Silvr
Star Wireless, and Inland Cellular.
Q.HOW DO THESE OTHER LIFELINE SERVICE OFFERINGS COMPARE
TO TRACFONE'S SAFELINK WIRELESS PLANS?
A.TracFone claims that other wireless providers reuire long-term contract
8 commitments that can be a problem for low-income subscribers. As
9 stated previously, the above-listed providers have a variety of flxible,
10 temporary plans in which Lifeline-qualifed subscribers can participate,
11 including month-to-month plans with no long-term contracts or service
12 commitmnts. In addition, the above-listed providers often waive the
13 activation fees for initiating service to low-income subscribers. Thus, after
14 the waiver of activation fees and the $13.50 monthly Lifeline discount from
15 the Lifeline program, the monthly charges are fairly minimaL. In addition,
16 there are no service disconnect fees or early termination fees as TracFone
17 claims in its Application.
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Q.CAN YOU GIVE THE COMMISSION SOME SPECIFIC EXMPLES OF
THE CURRENTLY AVAILABLE PLANS FROM EXISTING WIRELESS
ETCs AND THE RELATED COSTS?
21 Using Syringa Wireless' $30.00 monthly plan as an example, with no
activation fee and a $13.50 Lifeline subsidy, a Lifeline subscriber is paying
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23 only $16.50 per month plus tax. Using CTC Wireless' $24.10 monthly
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plan as another example, a Lifeline subscriber wil pay only $10.60 per
month once the Lifeline discount is applied. In additon, where customers
do enter into longer term cotract, the existing wireless ETC proviers
subsidize the purchase of the customets handset. Moreover, beuse all
of the above-reference wireless providers veri qualifing subscbers in
the same manner as wireline ETCs, there is no risk of duplicate subsidie.
Q.HAS TRACFONE DEMONSTRATED ANY UNIQUE ADVANTAGES OF
ITS PROPOSED SERVICE OFFERINGS OVER THOSE OF EXISTING
ETC DESIGNATED PROVIDERS IN IDAHO'S RURAL STUDY AREAS?
No. The only unique feature of TracFone's propose service is a "fee"
handset and free minutes, yet TracFone has failed to provide any
verifiable information regarding the actual cost of the allegedly fre
handsets or how TracFone allocates the cost of the handsets in it
Safelink business modeL. Thus, it is impossible for the Commission to
determine whether this handset is simply a loss leader for TracFone that
ultimately more than pays for itself in the form of customers who end up
paying as much if not more for Lifeline supported wireless service from
TracFone as they would for Lifeline-supported service from an existing
rural ILEC or wireless ETC provider.
SO, IS TRACFONE'S PROPOSED SERVICE IN IDAHO'S RURAL
STUDY AREAS REALLY NECESSARY?
No. Idaho consumers currently have accss to a full range of wireline and
wireless Lifeline services. The coverage area offered by TracFone is no
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1 larger than that offered by its Underling Carrers and is not coxtensive
with the service areas of existing wireless ETCs which are investing in
deploying state-of-the-art wireless infrastrctre throughout Idaho.s rural
areas. TracFone doe not intend to invest in the service areas or increase
coverage areas by the addition of any new facilities. In fact, TracFone
neither owns nor operates any telecommunications facilites in Idaho.
Q.DOES TRACFONE ADVANCE ANY OTHER PUBLIC INTEREST
ARGUMENTS IN FAVOR OF ITS APPLICATION?
A.
Q.
A few others.
CAN YOU ADDRESS THOSE FOR THE COMMISSION?
A.TracFone asserts that designation of it as an ETC for Lifeline purpos
only wil "provide an incentive to the incumbent LECs serving those
portons of the state to improve their existing networks in order to remain
14 competitive, resulting in improved services to consumers." TracFone
15 Application at 20. TracFone has failed to specify why it believes this wil
16 happen or to provide any explanation or examples as to how this incentive
17 wil work.
18 Q. ANYTHING ELSE?
19 A. TracFone argues that its Lifeline services are needed in Idaho to increase
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Idaho's statewide Lifeline participation rate. TracFone Application at 23.
Q.WHAT ARE THE CURRENT LIFELINE PARTICIPATION RATES IN
IDAHO?
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The information provided on the Universal Service AdministrativeA.
Company ("USAC") website show participation rates for Idaho in 2009
betwn 20 and 50 percent, similar to at least half the states in the United
States. A map showing 2009 Lifeline Partcipation Rates by State is
attached hereto as Exhibit 201. Many of those states show wi
participation rates between 20 and 50 percent are states in which
TracFone has already been designated an ETC to provide its Lifline
services.
9 Q. WHAT'S THE TAKE AWAY FROM THE STATISTICS YOU'VE JUST
10 PROVIDED?
11 A.If Idaho already has the same Lifeline participation rates as other states in
12 which TracFone has already been providing Lifeline services, then
13 contrary to TracFone's asserton, it is not the sine qua non for increasing
14 Lifeline participation rates in Idaho. In fact, TracFone states that tw of
15 the designated wireless ETCs in Idaho, Syringa Wireless, LLC and
16 Cleartalk, served approximately 1,600 Lifeline customers in 2008. Using
17 TracFone's analysis, that number increased to 1,725 in 2009. Through
18 the third quarter of 2010, the number of customers served by Syringa
19 Wireless increases to 2550. That represents approximately a 59 percent
20 increase in Lifeline customers served by Syringa Wireless, LLC in less
21 than two years. In addition to the wireless Lifeline customers, at the end of
22 2010, there were over 20,000 households receiving Lifeline benefits for
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1 wireline service. Idaho Departnt of Health & Welfare, Fact Figures
2 Trends 2010-2011, at 79, attched hereto as Exhibit 202.
3 Q. DO THE USAC STATISTICS MEAN THAT HALF ,OF THE LOW-INCOME
4 RESIDENTS OF IDAHO ARE GOING WITHOUT TELEPHONE
5 SERVICE?
6 No. It is importnt to understand that thes percentages relate to theA.
7 percent of eligible customers receiving Lifeline support through the
8 Universal Service Fund. These percentages are different than telephone
9 penetration rates. For example, ¡nits recently released Notice of Propos
10 Rule Making regarding the Low Income Support component of the
11 Universal Service Fund, the FCC observed that 90% of low income
12 households nationally have telephone service, compared to an overall
13 penetration rate of 96%. FCC, In the Matter of Lieline and Unk Up Reform
14 and Modernization, 2011 WL 773475 (Mar. 3, 2011) at 11 ("Lifeline
15 NPRM"). The Lifeline NPRM is attached hereto as Exhibit 203. What this
16 means is simply that all people eligible to receive a subsidy are not taking
17 advantage of the program. TracFone's sole purpose is to seek out those
18 that are not taking advantage of the program and to offer them an
19 additional way to do so, using a "free" handset as a loss-leader
20 enticement.
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Q.IF THE PUBLIC INTEREST ANALYSIS THAT THIS COMMISSION
MUST UNDERTAKE IS ONE OF WEIGHING THE ALLEGED BENEFITS
OF DESIGNATING TRACFONE AS AN ETC FOR LIFELINE
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PURPOSES ONLY AGAINST THE POTENTIAL RISKS, WHAT ARE
THE RISKS THE COMMISSION SHOULD CONSIDER?
By providing services only in areas served by it "Underlying Carrrs"
(AT&T, Verion and T-Mobile) and not committing to provide any
improvements to the existing netwrks or facilities, there is signifcant
potential for cream-skimming by TracFone.The Act requires that
companies seeking an ETC designation must provide the services
supported by universl support mechanisms "throughout the service area
for which the designation is recived." 47 U.S.C. § 214(e). The Act
further provides, "In the case of an area served by a rural telephone
company, 'service area' means such company's 'study area.''' 47 U.S.C. §
214(e)(5). When comparing the coverage area maps of the Underlying
Carriers with the Idaho rural telephone companies' service area maps on
file with the Commission, it is not clear that the Applicant can meet this
fundamental requirement for ETC designation in most, if not all, of the
affected rural telephone companies' service areas. Specifcally, it does
not appear that Applicant wil provide coverage in the entirety of the study
areas of Cambridge Telephone Company, Custer Telephone Cooperative,
Inc., Midvale Telephone Exchange, Incorporated, and Rural Telephone
Company. Whether it provides service throughout the entirety of any
other ILEC service area cannot be determined without further
investigation.
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Q.IS THE CREAM-SKIMMING ANALYSIS APPLICABLE WHERE AN
APPLICANT IS SEEKING ETC DESIGNATION FOR L1FEUNE
SUPPORT ONLY?
A.While crem-skimming is generally considered a factor in connecon wi
the receipt of high-cst support, it is also applicable in the discussion of
the public interest as it relates to a non-facilities-based applicant. Wit
each customer that switches service from the incumbent LECs to
TracFone, that is a customer who no longer contributes to the Universl
Service Fund, assuming that customer purchases interstate services.
This creates an upward pressure on the fund or requires increases in
contributions of those who do contribute to the fund in order to fund the
improvements to reach rural Idaho. This is definitely not a positive factor
in any public interest analysis considering that the areas in question are
already well-served by both wireline and wireless carriers that offer Lifeline
service.
TRACFONE DESCRIBES ITS LIFELINE SERVICE AS A "FREE"
SERVICE. IS IT A FREE SERVICE?
Well, we've all heard the saying, "There's no such thing as a free lunch."
The end-user customer may perceive the service to be "free", however,
the support used to provide that service is far from free from the
perspective of the consumers and businesses that use interstate
communications services and are assessed the USF contribution factor.
For example, the FCC, in its recently released Low Income Support
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NPRM, noted that the contrbution burden for LifelinelLinkup was
approximately $0.95 per household per month. Lifeline NPRM, at 16.
3 Q. ARE THERE OTHER IDAHO-SPECIFIC ETC REQUIREMENTS THAT
4 TRACFONE HAS FAILED TO MEET?
5 A.Yes. TracFone has not deonstrted its abilty to remain functional in
6 emergencies. In fact, TracFone claims this requirement is not applicable
7 because it is a reseller of services and it owns no cell sites, microwave
8 hubs or swiches. Thus, rather than stating it cannot meet the requirement
9 to remain functional in emergencies, TracFone simply maintains that the
10 requirement is not applicable.
11 Q. iS THAT AN ACCEPTABLE EXCUSE FOR NOT COMPLYING WITH
12 THIS COMMISSION'S ETC REQUIREMENTS ORDER?
13 A.No. TracFone could enter into agreements with other wireless providers
14 to re-route traffc in the event of a non-functioning cell site, microwave hub
15 or switch. If it cannot meet this requirement, then clearly there is no public
16 interest benefit in providing a service that may not be functional when it is
17 needed most.
18 Q.IDAHO APPLICANTS MUST CERTIFY THAT THEY WILL COMPLY
19 WITH APPLICABLE SERVICE QUALITY STANDARDS AND
20 CONSUMER PROTECTION RULES. TRACFONE ASSERTS THAT IT
21 IS ABLE TO MEET EACH OF THE CTIA CONSUMER CODE
22 PROVISIONS. AS A RESELLER OF SERVICES, IS THAT TRUE?
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A.No. If you read TracFone's Direc Testimony carefully, you will see that
what TracFone really says is that it meets each such provisio that it
believes is applicable to it. For instance, TracFone assert in several
places that it does not nee to offer a trial period for new service or a riht
to terminate service in response to contract changes because TracFone
services are purchase on a prepaid basis. As such, a customer may
cancel any time it chooses with no early termination fees or penalties.
What TracFone fails to state is that if such customer desires to terminate
its service prior to using all of its pre-paid minutes, such customer does
not reive a refund for any minutes already purchased. Thus, there is
really not a "free" trial period.
Q.ANY OTHER CONCERNS REGARDING CUSTOMER SERVICE?
Yes. All TracFone customer service access is via toll-free telephone
number to a call center located outside of the United States. There is no
local offce and no local customer service representative.
CAN'T TRACFONE STILL PROVIDE ACCESS TO CUSTOMER
SERVICE EVEN IF IT IS ONLY BY TELEPHONE TO A CALL CENTER
IN COLUMBIA, THE PHILIPPINES, GUYANA, BELIZE OR
GUATEMALA?
Perhaps call centers can provide access to customer service no matter
where such call centers are located, if in fact, the call center is readily
available and the customer's concerns are adequately addresse.
Nevertheless, a quick search of the internet shows a high percentage of
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1 negative comments regarding TracFone's customer service. Customer
2 Service Scoreboard, TracFone Customer Service Ratings and Comments,
3 available at htt://w.customerservicescorbard.comIracFone (last
4 accss March 16, 2011), and Complaints Board, Safelink Wireless
5 Complaints htt://w.complaintsboard.comlyavailableat
6 company/Safelink-Wireless-a170970.html (last accsse March 17, 2011),
7 attached hereto as Exhibit 204. Wait times are often close to an hour and
8 problems are often unresolved even after several attempts to contact
9 customer service. TracFone simply asserts that it promptly responds to
10 consumer inquiries and complaints but has provided no evidence in
11 support of that claim.
12 Q. SO, IF TRACFONE'S PROPOSED SERVICE IS NOT UNIQUE, IS NOT A
13 SECURE AND CONVENIENT REPLACEMENT FOR LOW INCOME
14 CUSTOMERS' SUPPORTED WIRELINE SERVICE, IS NOT RELIABLE
15 IN THE EVENT OF AN EMERGENCY, AND TRACFONE IS NOT
16 COMPLYING WITH IDAHO LAW REGARDING THE COLLECTION AND
17 REMITTANCE OF USER FEES TO SUPPORT 911 SERVICES, ARE
18 THERE ANY PUBLIC INTEREST FACTORS THAT WEIGH IN
19 TRACFONE'S FAVOR?
20 A. When you peel away all of the arguments that TracFone advances in
21 support of its claim that the benefits associated with its proposed service
22 outweigh the risks, all that remains is TracFone's assertion that
23 designation as an Idaho ETC would serve the public interest because it
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1 will promote competiion, espeially in the rural areas. TracFone
2 Application at 18.
3 Q. IS INCREASED COMPETITION ALONE A SUFFICIENT ENOUGH
4 PUBLIC INTEREST FACTOR TO OUTWEIGH THE RISKS OF
5 DESIGNATING TRACFONE AS AN ETC IN IDAHO'S RURA AREAS?
6 No. The Commission has clearl stated that "the value of incraseA.
7 competition, by itself, is not suffcient to satisfy the public interest test in
8 rural areas." See Clear Talk Order at 6 (quoting Virginia Cellular, 19
9 F.C.C.R. at 1574). In fact, the Commission has denied prior ETC
10 applications becuse the applicants failed to carr out their burden of
11 demonstrating that their applications for areas Served by rural telephone
12 companies were in the public interest because those applications place
13 too much emphasis on competition. See Clear Talk Order and Order No.
14 30212, in Case No. Inc-T-06-02, In the Matter of the Petition of Inland
15 Cellular Telephone Company for Designation as an Eligible
16 Telecommunications Carner Under 47 U.S.C. § 214(e)(2) (December 28,
17 2006) ("Inland Cellular Ordet').
18 Q. IN RESPONSE TO THE COMMISION STAFF'S REQUEST FOR
19 PRODUCTION NO.9, TRACFONE DESCRIBED ITS SELF.
20 CERTIFICATION PROCUEDRES. ARE TRACFONE'S CURRENT
21 PROCEDURES FOR SELF-CERTIFICATION OF QUALIFYING
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LIFELINE CUSTOMERS SUFFICIENT TO PREVENT WASTE, FRAUD
AND ABUSE?
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Presently, applicants for TracFone Lifeline servic apply on-line and
certify under penalt of perjury that they receive the Lifeline supprt only
from TracFone or that if they receive it from some other provider, the
applicant will discontinue that subsidized service. The applicant is
required to re-crtif annually. So, once the applicant self-certifes, they
receive support for a year, assuming they don't use the service for 60
days and are de-rtifte. Applicants for Lifeline support from other Idaho
ETCs must be certifed through the Idaho Departent of Healt and
Welfare. Once the requirements are met, the Departent or its agents
notifes the applicable telephone company that such subscriber qualifes
for Lifeline support. The Departent of Health and Welfre sends a list of
qualified applicants to the provider in the area where such applicant
resides.This list is sent quarterly with the names of the
applicants/subscribers who are qualified to receive the benefit each
month. After the list is recived and the recipient's name is veried, only
then does the provider receive the Lifeline subsidy. At any time the
applicant/subscriber is no longer qualified to receive the support, the
discount is not given and the ETC is not provided the funding from the
Universal Service Fund. A recent audit of TracFone's low-income support
is demonstrative of the failure of the self-certifcation procss.
At footnote 79 of the Lifeline NPRM, the FCC references USAC,
Independent Auditor's Report on TracFone Wireless, Inc. 's Compliance
with Low Income Support Mechanism Rules (USAC Audit NO.
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L/2009BEOO) ("USAC Audit"). Th USAC Audit is public information and
is attched as Exibit 205. While the USAC auditors concluded that
TracFone was compliant wih the rules, the audit found that TracFone was
reiving Lifeline support for 111,682 lines where AT&T, Verizon, and
Embarq were also reciving support. USAC Audit Report at page 5. The
monetary impact of this finding was estimated at approximately $1.1
millon, or an error rate of 10%. It should be noted that this finding was the
result of only two sample months (June, 2009 and January, 2010) and
focused only on two study areas in Florida and Tennessee. At page 6 of
the USAC Audit Report, USAC states 'While TracFone appears to have a
process in place to notif subscribers that they may only obtain low-
income discounts from only one carrier, this process has not ben
effective in preventing TracFone from providing low-income discounts and
claiming a subscriber on the Form 497 where that same subscriber has
also obtained low-income discounts from another carrier." While USAC
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went on to note that it was unable to determine which carrier improperly
claimed the subscribers on the Form 497, this finding clearly demonstrates
18 that the self-certifcation process is not effecive and results in duplicate
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support being provided for the same customers, thus wasting scarce USF
resources. Duplication of support is one of the many key issues addressed
in the Lifeline NPRM.
22 It is not clear in TracFone's Application, Direct Testimony and/or discovery
23 responses whether TracFone wil use its self-certifcation process or
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whether it will comply with Idaho's certifcation procss. TracFone has
recnized the Idaho procss in it discovery responses, (see resse to
Staff Request for Productn No. 29), but TracFone assrt in it
Application that it will petiton the Commission for waiver of any rule that
impose certifcation and verication requirements that difer from the FCC
requirements.
7 Q. PLEASE COMMENT ON THE STATEMENT ON PG.18 OF
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TRACFONE'S APPLICATION WHERE THE COMPANY CLAIMS THAT
ITS DESIGNATION AS AN ETC WILL CAUSE NO GROWTH IN THE
HIGH COST PORTIONS OF THE USF.
A.As it is narrowly stated, it is true that designating TracFone as an ETC for
low income support only wil not cause the high cost portion of the USF to
increase. Nevertheless, the effects of TracFone's eligibility on the low
income portion of the fund have been signifcant and growth in the low
income fund has contributed significantly to the overall growth in the USF.
As noted in the United States Government Accountabilty Offce, Report to
Congressional Requesters, Telecommunications - Improved Management
Can Enhance FCC Decision Making for the Universal Service Fund Low
Income Proram (October 2010) ("GAO Report"), low income support
payments increased from $823 milion in 2008 to $1.025 bilion in 2009, a
25 percent increase. GAO Report at 14. The GAO Report is attached
hereto as Exhibit 206. The GAO Report also notes that USAC estimates
that 2010 low income support payments wil increase an additional 36
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percent to $1.4 bilion and acknowledges that the low income program is
the fastest growng universal service support program. /d. The GAO
Report goes on to state that during 2009, TracFone recived $189.7
millon in low income support payments and more than 90 percet of the
increase in disbursments from 2008 to 2009 (Id. at 16).
IS GROWTH IN THE FUND UNDESIRABLE?
i am not suggesting that growt in the fund itself is bad. In fact, it may
demonstrate that the proram is reaching more of those in nee.
However, when some of this growth is attributable to duplication, then
proceures such as those identifed in the Lifeline NPRM nee to be
implemented to prevent furter waste, fraud and abuse.
YOU HAVE MENTIONED THE LIFELINE NPRM SEVERAL TIMES IN
YOUR TESTIMONY. WHAT IS THE PURPOSE OF THE LIFELINE
NPRM?
The purpose of the Lifeline NPRM is to assist the FCC in making informed
decisions that wil improve the effciency and effeciveness of the current
program and extend support to promote broadband services. In doing so,
the FCC is determining how to ensure universal service funds are
primarily benefiting consumers, rather than the carriers that serve those
consumers. (Ufeline NPRM at 77-78).
Q.WHAT ARE THE IMPLICATIONS OF THE LIFELINE NPRM FOR THIS
PROCEEDING?
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A.Another important question being addressed is whether the
reimbursment mecanism should be different for wireless and wireline
providers based on their potentially diferent costs (Lifeline NPRM at 78).
The Lifeline NPRM explicitly notes that Lifeline support was never
intended to provide a profi. Id. at 7. In this procing, because of
TracFone's refusal to respond to data requests, we are not in a position to
answer this question in the affrmative.
Q.TRACFONE HAS REFUSED TO REPLY TO VARIOUS DATA
REQUESTS FROM ITA AND CTC REGARDING TRACFONE'S
BUSINESS MODEL AND COSTS OF DOING BUSINESS. WHY DO
YOU BELIEVE THIS INFORMATION IS IMPORTANT FOR THIS
COMMISSION TO CONSIDER IN THIS PROCEEDING.
A.Without knowing TracFone's cost structure it is impossible to say what
amount of free minutes should be used to reasonably match the low
income support TracFone wil receive. While wireless carriers are not rate
regulated, I believe it is important for the Commission to know how much
of the low income support is actually used for the cost of minutes, that
benefit customers, versus the amount retained by TracFone as profit.
19 Q. ANYTHING ELSE?
20 A. At a tactical level, the FCC is addressing a myriad of issues such as
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avoiding duplicate payments by eliminating self - certification proceures,
defining "household", specifying de-enrollment procedures for inactive and
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1 ineligible customers, and examining the benefis of wireless versus the
2 growt in the fund.
3 Although no one can predict the outcoe of the FCC's deliberations, what
4 is certin is that there will be signifcant changes to the Lifeline program.
5 Because of these potential changes, it may be in Idaho consumers' bet
6 interest for this Commission to defer a decision in this case until the issues
7 in the Lifeline NPRM are resolved. Customer confusion could reult from
8 changes in support levels, modifications to existing service offerings,
9 changes to eligibilty proceures, etc.
10 Q. ASSUMING ARGUENDO THAT THE COMMISSION DECIDES IT IS IN
11 THE PUBLIC INTEREST TO GRANT ETC STATUS TO A NON-
12 FACILITIES BASED ETC APPLICANT SUCH AS TRACFONE, CAN
13 THE COMMISSION ADDRESS THE ISSUES ENUNCIATED IN THE
14 LIFELINE/LINKUP NPRM TO AVOID EXACERBATING THE
15 PROBLEM?
16 If the Commission does decide to grant TracFone ETC status in Idaho, IA.
17 believe there are a number of conditions and reporting requirements which
18 should be implemented.
19 Q. WHAT ARE SOME OF THOSE CONDITIONS AND REPORTING
20 REQUIREMENTS?
21 Within 30 days of conditional approval of its ETC application in Idaho andA.
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prior to offering Lifeline services, TracFone should be required to make a
compliance filing for approval by the Commission containing the following:
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a.TracFone's Lifeline rate plans, terms and conditons. The
rates, terms and conditions should include all provisions that apply to the
Lifeline services offered by TracFone in Idaho, and detailed Idaho-pec
procures explaining how customers can partcipate in a particular
Lifeline plan.
b.TracFone's proposed language to be use in all advertsing
of Lifeline services in Idaho, including on it websites. The language
should include information directing customers to contact the Commission
or some other appropriate Idaho state agency for complaints regarding
any Lifeline service issues.
c.TracFone's Lifeline Customer Application Form for Idaho.
Certification by TracFone that it wil be fully compliant with alld.
applicable federal and Idaho statutes and regulations upon initiation of its
Lifeline service offering, including FULL compliance with the Idaho
Emergency Communications Act.
WHAT SHOULD HAPPEN WITH THIS INFORMATION ONCE
PROVIDED?
Commission Staff should review TracFone's compliance filing and
recommend to the Commission whether it should be approved or rejeced.
TracFone should not offer Lifeline services unless and until the
Commission has approved its compliance filing.
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Q.IF THE COMMISSION WERE TO APPROVE TRACFONE'S
COMPLIANCE FILING, SHOULD THERE BE ANY ONGOING
REPORTING REQUIREMENTS?
A.TracFone should be required to file with the Commission any future
5 changes to its rates, terms, or conditions at least ten (10) days prior to the
6 effective date of the change.
7 The jnformation on TracFone's rates, terms and conditions should be
8 provided in a welcome package sent to Lifeline customers after enrollment
9 in TracFone's Lifeline program, as well as at TracFone's offcial Lifeline
10 website(s) for Idaho.
11 Q. WHAT ABOUT CONCERNS REGARDING THE RECEIPT OF LIFELINE
12 SUPPORT FOR HANDSETS THAT ARE NO LONGER ACTIVATED?
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TracFone should be required to deactivate a SafeLink Wireless account ifA.
the customer has no usage for 60 consecutive days. TracFone should be
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required to send such customers written notice by mail about the potential
deactivation and provide detailed information on ways to avoid unwanted
deactivation.
18 Q. WHAT ABOUT DEACTIVATED CUSTOMERS THAT HAVE
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ACCUMULATED UNUSED MINUTES?
A.The customer should have a 30-day grace period from the deactivation
date to reactivate the SafeLink Wireless account and restore the minutes
accrued during the 60-day non-usage period and the 30-day grace period.
23 Q. ANY ADDITIONAL REPORTING REQUIREMENTS?
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A.On a quarterly basis, TracFone should provide the number of Lifeline
customers by service plan (68 minute plan, 125 minute plan, 250 minute
plan) that it enrolled each month of the reportng quarter. TracFone
should also report the number of deactivated Lifeline customers each
month by service plan and the reasons for deactivation (e.g., no usae for
60 consecutive days, annual verication unsuccful, or voluntary exit).
Quarterly reports should be filed wi the Commission no later than 30
days after the end of each quarter.
Q.ANYTHING ELSE?
TracFone should be required to respond within 30 days to Commission
Staffs information requests on TracFone's Lifeline operations, including
but not limited to Lifeline customers' usage patterns and Lifeline customer
records. TracFone should also be required to collect and maintain
necessary records and documentation to ensure its compliance with the
applicable FCC and Commission requirements, including existing
requirements and any future modifications.The records and
documentation should be provided to Commission Staff upon request.
TracFone should cooperate with the Commission and the Department of
Health and Welfare ("DHW") to work out a procedure to verify TracFone
Lifeline customers' eligibilty. TracFone should then report these
procedures to this Commission prior to offering Lifeline service. Staff
should have at least thirt (30) days to review these procedures and
advise the Commission as to the workability.
Trampush, Di - 31
Idaho Telecm Allance and CTC Telecom, Inc.
243
.1
2
3
4
5
6
7
8
9
10
11
12.13
14
15
16
17
18
19
20
21
22
23.
Q.
A.
Q.
A.
Q.
A.
TracFone should also be required to file wih the Commission its coplete
Lifeline customer recrds for the prior calendar year. The customer
records should be subjec to review by the Commission and DHW. The
records should have all the necssary information and be in a format that
is readily searchable.
WHAT IF THE COMMISSION OR THE DEPARTMENT OF HEALTH AND
WELFARE ("DHW") WERE TO DISCOVER AN ELIGIBILITY
DISCREPANCY OR OTHER PROBLEM WITH THE DATA PROVIDED
BY TRACFONE?
After the Commission and/or DHW notifies TracFone of the results of the
review, TracFone should be required to take appropriate measures to
either correct the customer records or stop providing services to ineligible
customers and report the resolution to both agencies within 30 days of the
notice.
ANYTHING ELSE?
TracFone should be required to provide. the Commission a copy of its
annual Lifeline Verification survey results that it files with the USAC by
August 31 of each year.
WHAT ABOUT CUSTOMER SERVICE ISSUES?
TracFone should be required to file an annual report with the Commission
on the number of complaints, categorized by the different nature of
complaints, that it received from Idaho Lifeline customers during the prior
calendar year (e.g., biling disputes and service quality complaints). This
Trampush, Oi - 32
Idaho Telecom Allance and CTC Telecom, Inc.
244
.
.
.
,
10
11
12
13
14
15
16
17
18
19
20
21
22
23
1
2
3 Q.
4
5
6
A.
7
8
9
Q.
A.
Q.
A.
report should include complaints filed with TracFone, the Commission and
the FCC.
AND WHAT IF TRACFONE WERE TO FAIL TO COMPLY WITH ANY OF
THESE REPORTING REQURIEMENTS AND CONDITIONS?
The Commission should reserve the right to revoke TracFone's ETC
designation if TracFone fails to comply with any of these conditions.
Receipt of USF support for the provision of Lifeline service is a priilege,
not a right. TracFone should be required to demonstrate to the
commission that it takes its responsibility seriously.
PLEASE SUMMARIZE YOUR TESTIMONY.
The facts in this case indicate that TracFone cannot meet all of the Idaho-
specific requirements for ETC designation. Furthermore, even if TracFone
does meet the minimum threshold requirements, TracFone's application is
not in the public interest and should be denied, especially in any study
area served by a rural telephone company. Alternatively, if the
Commission determines the Application to be in the public interest, the
Commission should consider conditional designation of ETC status for all
non-facilities based ETC applicants.
DOES THIS CONCLUDE YOUR TESTIMONY AS OF MARCH 18, 2011?
Yes.
Trampush, Di - 33
Idaho Telecom Allance and CTC Telecom, Inc.245
.
.
1 (The following proceedings were had in
2 open hear ing . )
3 MS. 0' LEARY: Now, Madam Chairman, our expert,
4 Mr. Trampush, is available for cross-examination.
5 COMMISSIONER SMITH: Thank you.
6 Mr. Price, do you have any questions?
7 MR. PRICE: No questions for this witness.
8 COMMISSIONER SMITH: Thank you.
9 MR. BRECHER: My turn?
10 COMMISSIONER SMITH: It's your turn.
11
12 CROSS-EXAMINATION
13
14 BY MR. BRECHER:
15 Q.Good afternoon, Mr. Trampush.
16 A.Good afternoon.
17 Q.Now, you indicate that you have worked in
18 telecommunications for most of the last past 40 years with
19 Ernst & Ernst, and GST, and now Moss and Adams (sic). Could
20 you briefly summarize your telecom experience at Ernst &
21 Ernst?
22 A.I was with Ernst from 1970 to 1997, started out
23 as a staffperson doing cost separation studies. Got involved
24 in a myriad of other regulatory issues including depreciation.25 studies, continuing with property record studies, operator time
246
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.
.
1 studies, et cetèra, et cetera.
2 I worked with a variety of start-up competitive
3 carrier customers when the long distance competition wars
4 started.
5 I was involved in developing business plans for
6 wireless carriers when wireless was first initiated.
7 I also did work in the cable television sector
8 when cable television was reregulated by Congress and the FCC
9 assumed jurisdiction.
10 Did work for the FCC, NECA, literally hundreds of
11 companies.
12 Q.Okay. Now, at GST, what years were you at GST?
13 A.1997 to 2000.
14 Q.And what were your responsibilities at GST?
15 A.I was chief financial officer, so I was
16 responsible for finance, accounting, investor relations.
17 Q.Did your responsibilities at GST include advising
18 on regulatory matters?
19 A.I was involved in those, yes.
20 Q.At what level were you involved?
21 A.Reviewing Interconnection Agreements, among other
22 things.
23
24.25
Q.Did you participate in the FCC proceedings?
A.On?
Q.Did you participate in the FCC proceedings?
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.
.
1 A.With who, GST?
2 Q.GST.
3 A.No, I did not.
4 Q.So you never filed comments or anything like
5 that?
6 A. With GST, no; with Ernst, yes.
7 Q. Now, at Moss and Adams -- which is your current
8 employer. Is that correct?
9 A. It's Moss Adams.
10 Q.I said, "Moss and Adams." Moss Adams.
11 A.Moss Adams, no "and."
12 Q .I'll scratch the ampersand.
13 Have you consulted on telecom matters?
14 A.Yes.
15 Q.And could you describe the nature of your work
16 with Moss Adams?
17 A.It's been largely similar to what I've done at --
18 what I did at Ernst & Young: I've testified in State
19 Commission proceedings; I've written comments to the FCC on
20 various federal dockets; I've done merger and acquisition work,
21 financial forecasts. Off the top of my head, that's
22
23
Q.Who are your clients at Moss Adams?
A.I've done work with ITA here in Idaho, Silver
24 Star -- trying to think -- Davis Wright Tremaine law firm in.25 DC. Basically, it's one proj ect for a client and then another
248
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.
.
1 proj ect for another client.
2 Q.You state that you've testified before state
3 Utili ty Commissions in the past?
4 A.I have.
5 Q.Which Commissions have you testified before?
6 A.Alaska, Idaho, and California, although that
7 was -- those were en banc hearings.
8 Q.That was, pardon me?
9 A.They were en banc hearings where there was issues
10 the Commission wanted to address, so I appeared before that
11 Commission as well.
12 Q.While at Moss Adams, have you participated in any
13 FCC proceedings?
14 A.Yes.
15 Q.Which ones?
16 A.The revisions to universal service.
17 Q.Well, there have been quite a few universal
18 service proceedings at the FCC. Can you be more specific?
19 A.Your question was general. I can give you an
20 answer, I'm sorry.
21
22
Q.I'd accept follow-ups.
A.I wrote comments for ITA in the USF proceeding
23 vis-a-vis our thoughts on where it was going.
24.25
Q.Have you participated in any of the FCC Lifeline
proceedings?
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.1 A.No, I have not.
2 Q.Have you published any publications?
Not recently, no.
But you have in the past?
I've done presentations.
Publications and journals, scholarly journals?
No. No.
Okay. Now, I notice that your testimony
9 contained a number of exhibits. One exhibit I did not see was
3 A.
10 a curriculum vitae. Was that an oversight on your part?
4 Q.
I wasn't asked to provide it. I've got my
12 background in my testimony..
5 A.
Now, I also notice that in your testimony, I came
14 across a number of statements that appeared, to me, as being
6 Q.
15 legal conclusions. Are you the member of a Bar of any state?
20
21
22
23
24.25
7 A.
No, I'm not.
Are you the graduate of an accredited law
No, I'm not.
Do you have any formal legal training?
No.
Page -- I believe it's page 8 of your
excuse me, Exhibit 3 to your testimony.
COMMISSIONER SMITH: That would be 203.
BY MR. BRECHER: This is a little difficult
250
8 Q.
11 A.
13 Q.
16 A.
17 Q.
18 school?
19 A.
Q.
A.
Q.
testimony
Q.
HEDRICK COURT REPORTING
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TRAPUSH (X)Intervenors
.
.
20
21
22
1 COMMISSIONER SMITH: That would be Exhibit 203.
2 MR. PRICE: So after the third blue page. Is
3 that accurate?
4 COMMISSIONER SMITH: Because there was no Notice
5 of Parties, this party did not have an assigned set of exhibit
6 numbers. So at the beginning of today, I said that their
7 attachments we would label as exhibits and they have the 200
8 series, so it's 201 through 206.
9 MR. PRICE: Okay.
10 COMMISSIONER SMITH: It was a long time ago.
11 Q.BY MR. BRECHER: Let's move on. You are
12 testifying on behalf of two clients in this proceeding, are you
13 not?
14 A.That's correct.
15 Q.The Idaho Telecom Alliance and CTS (sic) Telecom.
16 Is that correct?
17 A.That's correct.
18 Q.How much are you being paid for your testimony?
19 A.My standard hourly rates plus expenses.
Q.Which is?
A.Three hundred fifty an hour.
Q.Is that amount being divided evenly between the
23 Intervenors?
24.25
A.I don't know. I just bill and they divide it.
Q.Now, some of your Intervenor clients are
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TRAMPUSH (X)
Intervenors
.
.
1 incumbent local exchange carriers, are they not?
2 A.That's correct.
3 Q.Do you know whether your fees will be included in
4 those companies' rate bases?
5 A.Not offhand, no. Excuse me. No, they won't.
6 Q.They will not?
7 A.No.
8 Q.So your fees will be paid by the companies'
9 shareholders, not by its ratepayers?
10 A.No. You asked me if it would be included in the
11 rate base. I said, No.
12 Q. Well, if they're not going to be included in the
13 rate base, then they will not be paid by the companies'
14 ratepayers. Is that correct?
15 A.That wasn't your question. They would be
16 included in expenses, not rate base.
17 Q.So --
18 A.Would they be reimbursable? I don't know.
19 Q.Turning to your testimony, page 3 of exhibit
20 and I apologize if I don't recall the exhibit number for sure.
21 Page 3, lines 22 and 23.
22 A.Which -- could you just give me an idea of what
23 it is?
24.25
Q.Page 3 of your testimony?
A.Oh, my testimony. Okay.
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.
.
20
21
22
1 Q.Have it in front of you?
2 A.Yeah, I do.
3 Q.Okay. You state at line 22 and 23 that the
4 federal requirements for ETC designation are contained at
5 47 usc 214 (e) (1) and (2), and 47 CFR 54-201 through 202. Do
6 you see that?
7 A.Yes, I do.
8 Q.What does Section 214 (e) (1) require?
9 A.I'd have to look at the Code exactly. I can't go
10 from memory.
11 Q.Don't know off the top of your head?
12 A.No.
13 Q.What about Section 214 (e) (2) ?
14 A.I believe those are the requirements to meet the
15 providing legal service, multifrequency dial tone, et cetera,
16 et cetera; but again, subj ect to check, I need to look at the
17 Rules.
18 Q.What does 54.201 require?
19 A.I'd have to look at the Rules.
Q.Let's move on. Now, on page 4, line 2, of your
testimony excuse me, page 4, line 2, and page 5, line 1
it's a carryover -- you state -- now, this is your word that
23 TracFone makes much ado about the FCC' s waiver of the
24 facilities-based requirement..25 Could you refer me to anyplace in the ETC
253
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TRAPUSH (X)Intervenors
.
.
.
1 Application or anywhere else -- perhaps testimony -- where
2 TracFone has ever claimed to have received a waiver of Section
3 214(e) (1) (A)?
4 You've lost me. I'm on page 4 of my testimony.A.
5 Q.Yes.
6 A.Line 2, which says: TracFone has received a
7 waiver of the facilities-based requirement.
8 Q.Yes.
9 A.Then you said page 5?
10 Q.Well, I apologize. That was --
11 A.I'm confused.
12 Q.Let's forget about page 5. Page 4, line 2, you
13 testify -- well, your testimony speaks for itself.
14 Could you refer me to anyplace in TracFone i s ETC
15 Application or anywhere else -- testimony, anyplace -- where
16 TracFone has asserted that i t received a waiver of Section
17 214(e)(I)(A)?
18 A.Actually, it was a forbearance Order, so --
19 And you would conclude -- you would concede orQ.
20 agree, I assume, that there is a difference between a waiver
21 and forbearance?
22 A.I'm not a lawyer, but, yes, I would.
23 and IQ.Now, page 5 of your testimony, you refer
24 believe it's line 6 -- you use the term "federal default
25 states. " And you might want to take a moment to read the
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TRAMPUSH (X)
Intervenors
.
.
20
21
22
1 sentence so you understand the context of your testimony.
2 A.Yes.
3 Q.Okay. What is a "federal default state"?
4 A.Those are states where the State Commission
5 doesn't have authority to designate an ETC by law, and,
6 therefore, that authority rests with or defaults to the FCC.
7 Q.Now, you had an attachment to your testimony and
8 i believe that it was the third exhibit to your testimony,
9 the -- unfortunately, these exhibits aren't numbered, but it
10 was the third one.
11 COMMISSIONER SMITH: So the exhibits have been
12 numbered. That would be 203.
13 MR. BRECHER: The testimony is Exhibit 203.
14 COMMISSIONER SMITH: No.
15 MR. BRECHER: Oh, I apologize.
16 Q.BY MR. BRECHER: Exhibit 203. I'd like you to
17 look at page 8 of that document, Paragraph 19. Take a moment
18 to familiarize yourself with it.
19 MS. MELILLO: I'm sorry, did you say 19 or 18?
COMMISSIONER SMITH: Nineteen.
MS. MELILLO: Thank you.
Q.BY MR. BRECHER: And how does the FCC define
23 "federal default states"?
24.25
A.You're on is it Paragraph 19?
Q.Yes, it is, Paragraph 19.
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TRAPUSH (X)
Intervenors
.
.
20
1 A.They define it as: States that do not maintain
2 their own low-income programs are known as federal default
3 states.
4 Q.So it really has nothing to do with whether a
5 state designates ETCs or not.Right?
A.Apparently,based on this NPRM,no.
Q.And how many federal default states are there?
A.The Notice here says there are ten.
Q.Is Idaho among them?
A.No.
Q.SO just to be clear,you are not testifying that
this is a federal default state?
6
7
8
9
10
11
12
13 No, I'm not, apparently, based on this reading.A.
14 Q.Now, on page 7 of your testimony, line 11, you
15 state that the Public Utility Commission requires a
16 cream-skimming analysis. Do you see that reference?
17 A.I do.
18 Would you explain to me, sir, your understandingQ.
19 of a cream-skimming analysis?
A.It's a situation where it would arise where an
21 ETC would basically capture customers that are low-cost
22 customers in relatively high-density areas, leaving the
23 high-cost customers remaining behind for the carrier of last
24 resort. So it's basically cherry picking: Picking off the.25 customers in the high-density areas and leaving the incumbent
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TRAMPUSH (X)Intervenors
.
.
1 with what's left.
2 Q.And isn't it correct that the FCC has established
3 a cream-skimming requirement in the context of ETCs that are
4 requesting high-cost support to build out networks that compete
5 wi th portions of rural telephone companies' service areas?
6 A.They do require that, yes.
7 Q.Are you aware of any FCC Decision or Order that
8 imposed a cream-skimming analysis requirement on reseller ETCs
9 whose purpose was only for Lifeline support?
10 A.Not to my knowledge.
11 Q.I'd like to show you a document. Bear with me.
12 MR. BRECHER: I'd like this marked for
13 identification as
14 COMMISSIONER SMITH: Exhibi t 17.
15 MR. BRECHER: -- Exhibit 17. Thank you, Chairman
16 Smith.
17 (TracFone Exhibit No. 17 was marked for
18 identification. )
19 Q.BY MR. BRECHER: The document that I've shown
20 you -- the document that I've shown you, Mr. Trampush, is an
21 April 11, 2008, Order from the FCC. Have you ever seen this
22 Order before?
23
24.25
A.Yes, I have.
Q.Are you familiar with it?
A.I've read it.
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TRAMPUSH (X)
Intervenors
.
.
22
1 Q.I direct your attention to Footnote 17 on page 8
2 of that Order, and I'd like you to read into the record
3 COMMISSIONER SMITH: You didn't really mean
4 "footnote," did you? You meant "paragraph."
5 MR. BRECHER: No, I meant Footnote 47.
6 COMMISSIONER SMITH: Oh, Footnote 47.
7 THE WITNESS: Oh, 47.
8 Q.BY MR. BRECHER: Forty-seven on page 8 of the
9 Order.
10 MS. MELILLO: Page 8. Okay.
11 Q.BY MR. BRECHER: Now, it is at the end of
12 Paragraph No. 16. Would you read into the record that
13 footnote, and in the interest of time I would have no obj ection
14 if you only read the last sentence.
15 A.In addition, we need not perform a cream-skimming
16 analysis because TracFone is seeking to be eligible for
17 Lifeline support only.
18 Q.Doesn't that statement from the FCC spell out
19 that a cream-skimming analysis is not required in the case of a
20 nonfacilities-based ETC who's only seeking Lifeline
21 authority?
A.As it relates to the FCC's jurisdiction over the
23 states that they ruled on, yes. As it relates to Idaho, I
24 don't think so..25 Q.Now, you testify about -- there's been a lot of
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Intervenors
.
.
1 discussion about local calling areas, and who has a bigger
2 local calling area and who doesn It. What is your understanding
3 of the term "local calling area"?
4 A.It's where the customer can originate a call
5 wi thout being -- without incurring a toll charge.
6 Q.Would you agree with me that another way to say
7 it would be the geographic area wi thin which a customer can
8 originate a call without occurring additional charges? Are we
9 saying the same thing, or close to it?
10 A.Maybe close.
11 Q.I'll take your definition. That's fine.
12 Now, at page 8, lines 6 and 7 of your testimony,
13 you acknowledge the fact that wireless carriers often provide
14 larger local calling areas than wireline carriers.
15 Are you aware of any wireline ETC in the state of
16 Idaho which provides its Lifeline customers with a larger local
17 calling area than does TracFone Wireless?
18 A.No, I think I acknowledge that they don't.
19 Q.Are you aware of any wireless ETC in the state of
20 Idaho which provides its Lifeline customers with a larger local
21 calling area than TracFone Wireless?
22
23
24.25
A.Not larger,no.
Q.Not larger.
A.The same as,but not larger.
Q.Any as large?
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TRAMPUSH (X)
Intervenors
.
.
20
1 A.Pardon?
2 Q.Any as large?
3 A.As large, yes.
4 Q.So it's your testimony that there are other
5 wireless ETCs that provide their customers with as large a
6 geographic area within which to originate calls with no
7 addi tional charges?
8 A.That's correct.
9 Q.Are you aware that TracFone' s customers are
10 allowed to place calls from any location in the United States
11 without incurring additional charges?
12 A.Yes, I believe that's Mr. Fuentes' testimony.
13 Q.And they're allowed to receive calls wherever
14 they are in the United States without additional charges. Is
15 that correct?
16 A.That's my understanding.
17 Q.Are you aware that TracFone does not charge
18 customers for roaming?
19 A.That's according to Mr. Fuentes' testimony, yes.
Q.So if -- indulge me in a hypothetical. If a
21 Lifeline customer of TracFone who lives in Boise, Idaho, makes
22 a call from Boise to Chicago, there would be no additional
23 charges. Correct?
24 A. Other than the minutes they're using..25 Q.If that TracFone or Lifeline customer who lives
260
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.
.
24.25
1 in Boise, Idaho, made a call from Chicago, there would be no
2 additional charges?
3 A.Same answer.
4 Q.Now, still on page 8, turning to lines 17 and 18,
5 you indicate in your testimony that wireless service in
6 portions of Idaho face challenges due to -- and I believe your
7 words are "mountainous terrain and other geographic features."
8 Do you see that testimony?
9 A.Yes, I do.
10 Q.And you then state that for many Lifeline
11 customers, mobile service would not be a more convenient and
12 secure option.
13 These mountainous -- this mountainous terrain to
14 which you refer, wouldn't that mountainous train -- excuse me,
15 terrain -- present the same coverage challenges to all wireless
16 ETCs?
17 A.Not necessarily. There are some that are built
18 out where the maj or carriers are. It's a challenge to
19 everyone, of course.
20 Q.Now, it's already in the record in this
21 proceeding that TracFone uses the networks of AT&T, Verizon
22 Wireless, and T-Mobile.
23 A.I acknowledge that.
Q.The three largest wireless providers in the
United States.
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Intervenors
.
.
20
21
1 A.That's correct.
2 Q.Do you have any reason to believe that those
3 companies have not adequately built out their -- or, have not
4 adequately built out their coverage areas in mountainous areas
5 of Chicago of Idaho?
6 A.I'm aware there's maj or gaps in the central part
7 of the state, the southwestern part of the state, where there
8 isn't any coverage by those providers. It's dead space for
9 those three, per your own map.
10 Q.I guess the question I'm asking is doesn't that
11 mountainous terrain present coverage challenges for every
12 wireless carrier?
13 A.Hypothetically, yes.
14 Q.Turning to page 9 of your testimony, you describe
15 several of the other ETC Lifeline plans; and we already heard
16 some testimony about this earlier today but I'd like to discuss
17 a few of those with you.
18 You refer to a company called Gold Star, Gold
19 Star Communications. I trust you're familiar with it.
A.Yes.
Q.And you testify that Gold Star offers -- and
22 these are your words -- "up to 250 minutes for $25"?
23
24.25
A.That's correct.
Q.What does "up to" mean?
A.It's 250 minutes. They don't have to use all of
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TRAMPUSH (X)Intervenors
.
.
1 the 250, but you can use up to 250 for $25.
2 Q. And there is no limitation, that's any kind of
3 minutes, you can call Pocatello, you can call Chicago?
4 A.That's a nationwide plan, from my understanding.
5 Q.No roaming charges?
6 A.No, not unless you go off network.
7 Q.Could you explain that? What if you go off
8 network? What constitutes "off network"?
9 A. Well, if you're a Gold Star customer or a CTC
10 Wireless customer and you're in New York, you can make a call
11 without being charged. That's the way it works.
12 If that CDMA network happened to go down and you
13 got rotated over to an emergency backup network, then,
14 potentially, roaming would occur.
15 But on a normal, daily basis, no, they aren't
16 charged for roaming. It's a nationwide calling plan just like
17 TracFone' s.
18 Q.But you just testified that if you go off
19 network, you are charged?
20 A.If that network goes down. If I'm in New York
21 and I'm a CTC customer and I want to make a call to Boise, I
22 dial the number -- it's a nationwide plan, just like
23
24.25
TracFone's there's no extra charge.
Q.Have you heard any testimony in this case that
would indicate that TracFone ever imposes roaming charges,
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.
.
19
20
21
1 including when a network goes down?
2 A. I'm not here testifying for TracFone, so I don't
3 know.
4 Q.I understand that. I asked you if you'd heard
5 any testimony in this proceeding.
6 A.Not to my knowledge.
7 Q.Now, let's take that Gold Star plan we talked
8 about a moment ago, up to 250 minutes for $25. If that
9 customer -- if that plan was offered to Lifeline customers,
10 there would be a $13.50 discount?
11 A.Yes.
12 Q.$10 from the feds, another 3.50 from the --
13 A.State.
14 Q.-- state funds.
15 Now, I don't have much of a quantitative
16 background so indulge me, but I think that would reduce the $25
17 charge down to about 11 and a half dollars, would it not?
18 A.It would.
Q.I'm right?
A.You guessed right, yes.
Q.Now, if the customer got the full 250 minutes,
22 there was no networks going down and no roaming charges, the
23 customer would be required to pay $11.50 a month and it would
24 get 250 minutes. Correct?.25 A.Mathematically, that's correct, yes.
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.
20
1 Q. Now, if the customer did not get the full 250
2 minutes let's say because some of the calls were subject to
3 roaming charges, the price disparity -- the price would be even
4 greater. Is that correct?
5 A. I can't assume that, no, because under what
6 circumstances would they be roaming unless the whole network
7 was down?
8 Q.Well, you just testified if the network goes down
9 and calls were rerouted on another network, there would be a
10 roaming charge?
11 A.Yes, for emergency purposes, yeah.
12 Q.Does Gold Star provide free handsets to its
13 Lifeline customers?
14 A.That, I do not recall. I do know that CTC does.
15 Q.It does provide free handsets?
16 A.Yes.
17 Q.Do you know how much Gold Star charges for its
18 handsets?
19 A.I don't recall.
Q.Now, page 12 of your testimony, you make a
21 statement that intrigued me. You say that -- I'm at line 12
22 and 13 -- providers often waive the activation fees for
23 ini tiating service to low-income subscribers.
24 Do you see that testimony?.25 A.Yes, I do.
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.
1 Q.How often is "often"?
2 A.Qui te often to get the customer signed up. A
3 percentage, I don't know.
4 Q.Does Gold Star often waive its activation fees?
5 A.That's my understanding, yes.
6 Q.Does Gold Star seek Link-Up support from the
7 Uni versal Service Fund, do you know?
8 A.I don't recall. I don't believe so, but I don't
9 recall for sure.
10 Q.But how about the ITA companies, the rural
11 telephone companies, do they waive their connection charges?
12 A.I don't know off the top of my head. I don't
13 believe they could. They could get Link-Up assistance, but I
14 think as a matter of tariff, they have to charge an activation
15 fee.
16 Q.Are you aware of the fact that TracFone Wireless
17 never charges an activation or connection fee?
18
19
A.That's in the testimony, yes.
Q.Are you aware of the fact -- are you aware of the
20 fact that TracFone has never taken or accepted Link-Up support
21 from the Universal Service Fund?
22
23
A.That i S my understanding.
Q.Now, still on page 12 at line 21, you describe a
24 Syringa -- I hope I'm pronouncing that correctly -- Wireless.25 $30 monthly plan. What do you know about that plan?
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1 A. I've reviewed their brochure, I understand it,
2 and I talked to the Syringa people.
3 Q.Is a customer required to sign a term contract?
4 A.No, it's pay as you go.
5 Q.But explain what you mean by "pay as you go."
6 A.Month to month, no contract.
7 Q.Do you pay in advance or in arrears?
8 A.I believe it's in advance.
9 Q.How many minutes does the Syringa customer
10 receive for $30?
11 A.As I recall, that's unlimited local.
12 Q.Pardon me?
13 A.I believe that's unlimited local.
14 Q.Unlimi ted local. And the local calling area
15 is?
16 A.Is their wireless coverage area.
17 Q.Which is about how large, if you know?
18 A.It's a map. You could look it up on the
19 Internet, just like you could AT&T and Verizon.
20
21
22
Q.Statewide?
A.No, middle of the state.
Q.Now, let's take that $30 plan that provides
23 unlimited local service. With the Lifeline discount, that $30
24 plan would cost about 16.50. Is that correct?.25 A.That's correct.
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.1 Q.And those would be all local minutes?
2 A.As I recall. I don i t have the brochure with me.
3 It may be that half of those have to be on net, half can be
4 off. I'm not sure.
5 Q.Well, what if the customer were using that
6 service from a service area in the middle of the state to call
.
20
21
22
23
24.25
7 Chicago?
8 A.There likely would be a toll charge on that.
What if they were calling Coeur d' Alene?
I don't know if that's in the coverage area or
What about Boise?
I don't think so. I think that would be in the
It is in the coverage area?
I think so.
Is that your testimony or you think so?
I would have to look at a map. I can't confirm
Is there an activation charge associated with
Again, they would waive that quite often.
They would waive it quite often?
There is an activation charge, I believe, of $10.
Some customers pay it, some don't?
268
9 Q.
10 A.
11 not.
12 Q.
13 A.
14 coverage area.
15 Q.
16 A.
17 Q.
A.
that.
Q.
that plan?
A.
Q.
A.
Q.
18
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.
1 A.Yeah, depending on the customer.
2 Q.What do you mean, "depending on the customer"?
3 Blond-haired customers pay it, brown-haired don't?
4 A.If you need it to attract the customer and the
5 customer is trying to decide do they really want to get it or
6 not, they will waive it.
7 Q.So let me see if I understand this correctly. If
8 Ms. Seaman, hypothetically speaking --
9 A.Yes.
10 Q.-- signed up for the plan --
11 A.Right.
12 Q.-- and you asked her to pay $10 --
13 A.Right.
14 Q.-- or your client asked her to pay $10 and she
15 did, and I want to sign up for the plan and I told you I don't
16 want to pay $10
17 A.Right.
18 Q.-- would you say, Don't pay it? Is that the way
19 it works?
20 A.Actually, I'd give it to her and I'd give it to
21 you, but that is the way it works.
22
23
24.25
Q.So it's kind of up to the Company?
A.It is. It's a negotiated arrangement, yes.
Q.Is roaming allowed under that plan without
addi tional charges?
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20
21
1 A.I don't recall.
2 Q.Now, at page 13 moving right along here
3 lines 10 to 14, you testified that TracFone has provided no
4 information regarding the cost of its free handsets.
5 Has TracFone indicated anywhere that any portion
6 of the handset costs would be supported by the federal
7 Uni versal Service Fund?
8 A.They have asserted that they pay for it out of
9 their own pocket, based on Mr. Fuentes' testimony.
10 Q.Do you doubt that?
11 A.I don't have the information to say "yes" or "no"
12 to that.
13 Q.So you do not take the Company, you do not take
14 TracFone, at its word when it says it's paying for it out of
15 its own pocket?
16 A.No, I don't.
17 Q.You do not?
18 A.No, I do not.
19 Q.Do you think they're lying?
A.I don't know. I don't have the facts.
Q.What information would you need to believe that
22 the Company was paying out of its pocket for the handsets?
23 A.I'd like to see the business plans and the
24 forecasts, and not just the handsets but the cost of the.25 minutes, because $10 of federal money is being flowed to
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.
24.25
1 TracFone for Lifeline support. How does this Commission know
2 that that customer is getting $10 of value for that $10 that we
3 all are paying as interstate users? So it's the whole issue of
4 if TracFone is getting $10 from USAC, from the feds, and their
5 costs are $3, there's a $7 margin here. And that information,
6 to me, is important for this Commission to know as to whether
7 or not it's in the public interest.
8 Q.Let's pursue that a little bit. We've already
9 testified and you haven't contradicted me that the amount of
10 usage that TracFone provides its Lifeline customers is equal to
11 or greater than that provided by other ETCs in the state of
12 Ohio. Have we not?
13 A.I'm not in Ohio; I'm in Idaho.
14 Q.In Idaho. I apologize.
15 A.Could you rephrase the question, repeat the
16 question?
17 Q.We have already discussed the fact that the
18 amount of usage that TracFone delivers to its Lifeline
19 customers or would deliver to its Lifeline customers in the
20 state of Idaho, were it designated as an ETC, would be equal to
21 or greater than that available from any other ETC in the state
22 of Idaho?
23 A.I don't believe so, no.
Q.We have not agreed to that?
A.No. TracFone' s offering a 68-minute plan,
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.
1 125-minute plan.
2 Q. It's also offering a 250 plan?
3 A.Yeah, but they're not all 250.
4 Q.But is there any customer that is Lifeline
5 eligible that did not opt into the 250 plan?
6 A.I don't understand the question.
7 Q.Okay. Is the 250-minute plan available to all
8 qualified Lifeline customers?
9 A.Whose plan?
10 Q.TracFone' s.
11 A.Yes, it is available. That plan is available to
12 TracFone customers.
13 Q.So any TracFone customer --
14 A.Right.
15 Q.who qualifies for Lifeline could opt into the
16 250-minute plan?
17 A.That's correct.
18 Q.And you're a smart guy, you've been in this
19 telecom business for a long time. If customers have a choice
20 of a 68-minute plan or 125-minute plan or a 250-minute plan,
21 which plan do you think most of the customers would select?
22
23
24.25
A.I have no idea.
Q.No idea?
A.Depends on their needs.
Q.Understood. Well, since we've agreed that any
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.
.
.
1 Lifeline customer of TracFone' s in Idaho could select the
2 250-minute plan and you haven't indicated that any Lifeline
3 customer in -- of any other ETC in the state of Idaho would
4 could receive from another ETC a plan that provides more total
5 calling minutes at no charge --
6 Have we not agreed to that?
7 A.I don't understand what you're saying. Could you
8 repeat it or rephrase it?
9 Q.Would you agree, sir, that all ETCs operating in
10 the state receive about the same amount of Lifeline support
11 from the Universal Service Fund?
12 A.I would agree to that, yes.
13 Q.Okay. So -- and if TracFone receives $ 10 from
14 the federal Universal Service Fund and CTC Wireless receives
15 $10 and Syringa receives $10 and so on and so on, they're all
16 getting the same amount. Okay. With me so far?
17 A.Agreed. Agreed.
18 Q.TracFone has said on the record that its
19 customers may receive 250 minutes for calling anyplace. Nobody
20 has disputed that.
21 Does any other ETC that gets support from the
22 Uni versal Service Fund provide a service that provides more
23 than 250 minutes for calling anyplace in the state of Idaho
24 any other ETC in the state of Idaho?
25 A.Not without reviewing all the rate plans, I don't
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.
.
1 know.
2 Q.Are you aware of any?
3 A.I'm not aware of any, no, nationwide plans.
4 Local, yes.
5 Q.So if no ETC -- if you i re not aware of any ETC in
6 the state of Idaho that is delivering more free usage and
7 you've already testified or acknowledged in your
8 cross-examination responses that all the ETCs receive about the
9 same amount of support from the federal Universal Service Fund,
10 how could TracFone provide the same or better -- not better --
11 as much or more minutes as the other ETCs?
12 A.Well, for a variety of reasons: One, they don't
13 have carrier of last resort obligations if they're a wireline.
14 And for the wireless carriers, they're facilities based and
15 they're growing their networks and they're investing in their
16 networks and expanding their networks, and TracFone' s basically
17 reselling.
18 Q.So it's your testimony that TracFone can offer
19 more minutes because it's a reseller?
20 A.No, that's not my testimony. What we don't know
21 is what TracFone i s costs are and what value is being passed
22 through to the customer of these $10.
23 The current ETCs in Idaho, the customer gets a
24 bill, there's a credit on the bill for the Lifeline support,
25 and then that amount is hypothetically 11.50.
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Intervenors
.
.
1 With TracFone, it's a black box: We don't know.
2 We know TracFone will offer 250 minutes; we don't know what the
3 cost of that offering is.
4 Q.But we do know what the cost of the handset is.
5 The cost of the handset to the customer is zero.
6 A.That's what you say. I don't know that.
7 Q.Now, you have indicated in response to my last
8 question that you have questions about whether or not TracFone
9 is really bearing the cost of those handsets. I don't want to
10 mischaracterize your testimony, so if I got it wrong, please
11 correct me.
12 A.That's true.
13 Q.Are you aware of the fact that unlike you, ETC
14 designating authorities in no fewer than 36 jurisdictions have
15 accepted without question that TracFone bears the cost of those
16 handsets?
17 A.I'm not aware of that.
18 Q.Would it surprise you to know that 36 ETC
19 designating authorities have concluded that TracFone bears the
20 cost of those handsets?
21
22
23
24.25
A.I don't know that answer.
Q.That wasn't my question.
A.Well, repeat the question.
Q.Would it surprise you to know that 36 designating
authorities have concluded that Trac- -- have accepted the fact
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.
1 that TracFone bears the cost of those handsets?
2 A. Based on your testimony, no.
3 Q.I don't testify.
4 A.You are now, but -- excuse me.
5 Q.No, I'm asking questions.
6 Now, you say in your testimony -- I believe it's
7 page 13, line 15 -- that the handsets that TracFone provides
8 might be a loss leader. What do you mean by "loss leader"?
9 A.Wi th that I mean you entice the customer by
10 gi ving them the free handset , giving them their, quotes, free
11 minutes, but then you upsell them on the back end to get much
12 more minutes at ten cents or 20 cents or whatever you're
13 charging.
14 Q.Do you have any reason to believe that TracFone
15 is upselling anything?
16 A.I have no information on that.
17 Q.Would you accept, subj ect to check, that TracFone
18 has data that fewer than three percent of its customers buy
19 addi tional minutes in any month?
20 A.If you would provide that data, I would be glad
21 to look at it, yes.
22 Q.Turn to page 10 of line 20 of your testimony, and
23 you state that you are not a lawyer and you cannot render a
24 legal opinion; and then on page 11, lines 6 to 9, you state,.25 and I quote, According to the plain language of Idaho Code
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Intervenors
.
.
19
1 31-4813 as clarified by the 2007 Legislature, the exemption
2 afforded prepaid calling cards does not apply to TracFone.
3 Isn't that a legal opinion?
4 A.It's my opinion as an expert witness. I'm not a
5 lawyer, as I said. It's qualified by the fact that I said I'm
6 not a lawyer.
7 Q.Okay. Have you ever reviewed Idaho Code Section
8 31-4813?
9 A.Yes, I did read the Code.
10 Q.What does it say?
11 A.I didn't memorize it. There's thousands of pages
12 in this proceeding. But it's pretty plain, to me, what it
13 says: That prepaid calling -- prepaid plans are not exempt,
14 it's not a prepaid calling card service is what it says.
15 That's the plain language, as a layman.
16 Q.Are you familiar with Idaho Code Section
17 31-4804?
18 A.I believe I read that also.
Q.Are you aware that Idaho Code Section 31-4804
20 provides that 911 fees may be listed as separate items on
21 customers' monthly bills?
22
23
A.That sounds familiar.
Q.Are you aware of the fact that TracFone does not
24 render monthly bills?.25 A.Based on Mr. Fuentes' testimony, that's what I
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Intervenors
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.
1 understand.
2 Q.Do you question the accuracy of that?
3 A.No.
4 Q.Would you have any advice as to how TracFone
5 could list 911 fees on bills for its prepaid services when
6 there are no bills?
7 A.Sure: By generating a bill.
8 Q.Why would a company generate a bill for a service
9 that i s already been paid for?
10 A.It would seem, to me, you've got two choices:
11 You generate -- you know the customer's name and address. You
12 generate the bill,you bill the customer for the fee.If you
don't want to do that,then pay the money out of your own
pocket.Those are the two options,to me.
Q.So the two options are send a bill,not for the
service that's already been paid for,but for the 911 fee?
13
14
15
16
17 A.That's the Company's election I would think. I
18 mean, it depends upon how it would work out. But, I mean, you
19 know the customer's name, you know the customer's address.
20 That's how customers -- you've got a phone number. You know,
21 that's how you can bill them. That's how everyone else bills.
22 Q.I just want to make sure of your testimony, and
23 your testimony is there are two ways to comply: Either bill
24 the customer for the fee or pay it out of pocket?.25 A.Those are the two that come to mind.
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.
1 Q.Do you have any other suggestions?
2 A.Well, I haven't thought it through. It's not my
3 problem, it's yours.
4 Q.Do you know whether CTC Telecom offers prepaid
5 wireless services?
6 A.They do.
7 Q.How do you know that?
8 A.Discussions with Mr. Jerry Piper.
9 Q.I want to show you another document if I could.
10 COMMISSIONER SMITH: We'll mark this as 18.
11 (TracFone Exhibit No. 18 was marked for
12 identification. )
13 Q.BY MR. BRECHER: I'm showing you, Mr. Trampush,
14 an Affidavit that was prepared by Debra McGuire Mercer, who is
15 a colleague of mine in the Greenberg Traurig law firm. Take a
16 moment to read the Affidavit.
17 A.I've read it.
18 Q.You read it?
19 MR. PRICE: Madam Chair, I'm going to have to
20 obj ect. I know this isn't our witness right now, but if this
21 was prepared in preparation for this proceeding, it seems like
22 Counsel is trying to back-door some witness testimony by way of
23 his associate at the law firm. I don't think that's
24 appropriate..25 MR. BRECHER: Well, my case isn't going to rise
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.
.
20
1 or fallon this, so I'm not going to go on much further. What
2 it is is an Affidavit of one of my associates.
3 COMMISSIONER SMITH: I can see what it is.
4 MS. MELILLO: Obj ection.
5 COMMISSIONER SMITH: The objection is that it's
6 not appropriate to be presented at this time in this forum, so
7 your--
8 MR. BRECHER: Okay. So I take it that means the
9 objection is sustained.
10 COMMISSIONER SMITH: No, I'm waiting for your
11 response.
12 MR. BRECHER: Oh, you're waiting for my response.
13 Well, we have testimony that a company that's been an active
14 participant in this proceeding offers prepaid wireless
15 services--
16 COMMISSIONER SMITH: Yes, and that testimony
17 MR. BRECHER: -- and I wanted to find out as part
18 of the preparation for this case how that Company might deal
19 wi th some of the issues that have been challenges to my client.
COMMISSIONER SMITH: Right. But that testimony
21 was filed on March 18th.
22
23
MR. BRECHER: Yeah, but --
COMMISSIONER SMITH: And then your witness filed
24 rebuttal on March 23rd. So if you wanted to respond to what.25 you saw in testimony that was filed on the 18th, it should have
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Intervenors
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.
20
1 been in your rebuttal that was filed on the 23rd.
2 MR. BRECHER: I understand that. And, again, I'm
3 not going to belabor the point, but in preparing for the
4 hearing, I wanted to make sure that
5 COMMISSIONER SMITH: Well, we'll just say that
6 this exhibit will not be admitted.
7 MR. BRECHER: So the objection has been
8 sustained.
9 COMMISSIONER SMITH: It is.
10 MR. BRECHER: Then I' 1 1 move on.
11 COMMISSIONER SMITH: Thank you.
12 (Whereupon, the document marked as
13 TracFone Exhibit 18 was withdrawn.)
14 Q.BY MR. BRECHER: Do you know whether -- and
15 you've already testified that CTC Wireless provides prepaid
16 wireless services. CTC Telecom, excuse me.
17 A.Lifeline, that's my understanding, yes.
18 Q.The question wasn't Lifeline specific.
19 A.Lifeline prepaid is my understanding, yes.
Q.I asked whether CTC offers prepaid wireless
21 services.
22
23
24.25
A.That's my understanding, yes.
Q.Not Lifeline specific?
A.I just said, "Yes."
Q.Okay. Does Syringa Wireless offer prepaid
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.
1 wireless?
2 A.Yes, I believe theirs is called Pay As You Go.
3 Q.Does Gold Star offer prepaid wireless services?
4 A.That, I don't recall without looking at records.
5 Q.So you don't know about Gold Star, but you do
6 know about CTC and Syringa?
7 A.That's my understanding, yes.
8 Q.Do you know for a fact whether either -- any of
9 those companies collects and remits 911 fees from its prepaid
10 service customers?
11 A.No, I've not checked that, no.
12 Q.Never inquired?
13 A.No.
14 Q.Page 14 of your testimony, you state -- and again
15 I quote, Mr. Trampush TracFone does not intend to invest in
16 the service areas or otherwise increase coverage areas by the
17 addi tion of any new facilities.
18 Do I get your testimony right?
19
20
A.What line are you on?
Q.Page 14. I apologize, I should give you the
21 line. It is line 4 and 5.
22
23
24.25
A.I'm there.
Q.Take your time.
A.No, I'm there.
Q.Why would a reseller invest in new facilities?
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.
1 A. If the person they're reselling doesn't have
2 coverage and they wanted to offer service in that area, they
3 could. They could do a variety of things: They could buy
4 another company.
5 Q.Is there any stated FCC -- excuse me, stated ETC
6 requirement under federal or Idaho law that requires facilities
7 investment in a state as a required criterion of ETC
8 designation?
9 A.The companies have to provide the facilities
10 on -- either through their own or through a combination of
11 their own in resale, other than the FCC forbearance Order.
12 That's a requirement.
13 Q.But is there a specific state investment
14 cri teria?
15 A.I'm not sure what you mean by "criteria." They
1 6 have to submit capital plans for two years.
17 Q.Well, your testimony is that the Company does not
18 intend to invest. And my question is given the forbearance
19 Order, is there an applicable requirement that TracFone invest
20 in this state?
21
22
A.That depends on how this Commission --
Q.I'm not asking you if it's a good thing. It
23 might be a great thing.
24.25
A.I'm just telling you that depends on how this
Commission rules with respect to the forbearance Order. That's
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.
.
20
1 beyond my scope of my testimony.
2 Q. Now, let's turn to page 15 of your testimony,
3 lines 1 through 8, taking up a new topic here. And you
4 indicate according to the Universal Service Administrative
5 Company, that Idaho's Lifeline participation rate is somewhere
6 between 20 and 50 percent. Is that your testimony?
7 A.That's correct.
8 Q.Isn't that a fairly wide range?
9 A.I suppose.
10 Q.Well, is it your opinion that the actual Lifeline
11 participation rate in Ohio is closer to 20 percent or 50
12 percent?
13 A.As I said earlier, I'm not in Ohio; I'm in Idaho.
14 Q.I apologize.
15 A.You're confusing me.
16 Q.Okay, let's back up. Is it your opinion that the
17 Lifeline participation rate in the state of Idaho is closer to
18 20 percent or closer to 50 percent, the two ends of the USAC
19 range?
A.There's no data to indicate which end it's on,
21 that I'm aware of.
22
23
24.25
Q.So you have no opinion?
A.No.
Q.Are you aware of any data which provides a more
specific Lifeline participation rate?
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.
1 A.Not to my knowledge, no.
2 Q.Well, I'm going to show you one document, and I'd
3 like this one marked for identification as, I guess,
4 Exhibi t 18.
5 COMMISSIONER SMITH: Nineteen. Or, 18. You're
6 right.
7 (TracFone Exhibit No. 18 was marked for
8 identification. )
9 Q.BY MR.BRECHER:Again,take a moment to
familiarize yourself with the document.
A.Okay,I'm familiar with it.
Q.Could you explain what this document is?
A.Well,it's your document,but it appears to be
sourced Report and Order and Further Notice of Proposed
10
11
12
13
14
15 Rulemaking, FCC, baseline Lifeline subscription information,
16 year 2002.
17 Q.Yes, this is a chart from a Federal
18 Communications Commission Report and Order from the year 2004.
19 Direct your attention to the second page of that report, and it
20 lists the states. You with me?
21
22
A.Yes, so far.
Q.And they're in alphabetical order from Alabama
23 down to Wyoming. And if you scroll down to Idaho, in the far,
24 right-hand column captioned Percentage of Households That Took.25 Lifeline in the Year 2002, what is the number there?
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20
1 A.22.1 percent.
2 Q.Would you agree that 22.1 percent is closer to
3 20 percent than it is to 50 percent?
4 A.Mathematically, it is closer to 20 percent, yes.
5 COMMISSIONER SMITH: We would just have the
6 record reflect that this is page 15 of the report, although it
7 is page 2 of Exhibit 18.
8 Q.BY MR. BRECHER: Now, also looking at this
9 report, the same line, the Idaho line, in the third column, the
10 middle column -- so I can either say three from the right or
11 three from the left, it will get us to the same place -- it
12 gives -- the column is captioned Households That Would Qualify
13 for Lifeline under Existing Rules, and what is the number
14 there?
15 A.125,089.
16 Q.Okay. So according to that report, in 2002,
17 there were 125,089 households in Idaho that were eligible for
18 Lifeline. Is that correct?
19 A. That's what the table indicates.
Q.Okay. And look at the next two far, right-hand
21 column, the column that's captioned Households That Took
22 Lifeline in 2002. How many Idaho households took Lifeline in
23 2002?
24.25
A.27,660.
Q.Okay. And that's where that 22.1 percent
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1 participation rate came from. Correct?
2 A. Based on the table, yes.
3 Q.Okay. Would you agree then that in 2002,
4 Lifeline enrollment in Idaho was at the lower end of the
5 20 percent to 50 percent range?
6 A.In 2002, yes.
7 Q.Do you have any reason to believe that Lifeline
8 enrollment is significantly greater today in Idaho than it was
9 in 2002?
10 A.I don't have any basis for that. I don't know
11 how many eligible customers there are, so that's one of the
12 data points that's missing to make that determination.
13 Q.But we do know that the participation rate is
14 somewheres between 20 and 50 percent. Stated another way, the
15 nonparticipation rate would be somewheres between 50 and 80
16 percent. Is that correct?
17 A. That's correct.
18 Q. You're familiar with other public benefits
19 programs for needy people, are you not?
20 A.Generally.
21 Q.Generally. If 80 percent of the schoolchildren
22 in the state of Idaho that qualified for free lunches under the
23 National School Free Lunch Program were not receiving those
24 lunches, would that be a sign that the program was working as
25 intended?
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20
1 A.I don't know. I assume not.
2 Q.What about SNAP? Do you know what SNAP is?
3 A.No.
4 Q.Well, it stands for Supplemental Nutrition
5 Assistance, used to be called food stamps back in the old
6 days?
7 A.Okay.
8 Q.If 50 to 80 percent of Idahoans who qualified for
9 food stamps weren't getting the benefit of food stamps, would
10 the program be deemed to be working as intended?
11 A.I don't know.
12 COMMISSIONER SMITH: You know, Mr. Brecher, it
13 seems, to me, that the answers to these questions are in the
14 eye of the beholder.
15 MR. BRECHER: I'll move on.
16 COMMISSIONER SMITH: And really irrelevant.
17 MR. BRECHER: Okay, I'll move on. I don't want
18 to belabor the point.
19 COMMISSIONER SMITH: Thank you.
Q.BY MR. BRECHER: Now, you had an exhibit attached
21 to your testimony, I believe it's Exhibit No. 202, and it was a
22 page from a report of the Idaho Department of Health and
23 Welfare. If you want to turn to that, that would be fine.
24 A. Yes..25 Q.And it indicates that over 20,000 Idaho
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19
20
21
22
23
1 households received Lifeline benefits in 2010-2011. Is that
2 not what that report says?
3 A.It shows 20,000 something, yes.
4 Q.20,060 -- I don't remember the number, but it's
5 20,000 something.
6 COMMISSIONER SMITH: Is there a question?
7 MR. BRECHER: Yeah, I want to give the witness a
8 chance to find the reference.
9 THE WITNESS: Okay, I think I --
10 Q.BY MR. BRECHER: What is the exact number?
11 A.For which, for 2010?
12 Q.Yes.
13 A.What number are you looking for?
14 Q.The number of Idaho residents that receive
15 Lifeline benefits in 2010-2011.
16 A.20,026.
17 Q.2,026 (sic)?
18 A.Right.
Q.Okay.
A.That's landline.
Q.It does not include wireless?
A.If you look at USAC data, it's about 27,000.
Q.Okay. So, are you saying that according to USAC
24 data, the total number of Lifeline customers in Idaho, landline.25 and wireless, is about what it was in 2002?
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20
1 A. I'm saying it's around I think it's 20,000 some
2 odd in latest USAC data, which is consistent with the 2002
3 data. What we don't know is how many are eligible.
4 Q.That's true. Now, I think I read someplace that
5 the -- there was a bit of a recession starting in about 2008,
6 2009. Did that affect Idaho?
7 A.I don't know.
8 Q.You don't know if Idaho was spared?
9 A.I haven't studied the macroeconomic conditions of
10 Idaho.
11 Q.Well, is it your sense that Idaho was somehow
12 spared the economic conditions that affected the rest of the
13 country?
14 A.I don't have an opinion one way or the other.
15 Q.Do you have any opinions on whether the economic
16 conditions would have made it likely or unlikely that the
17 number of eligible Lifeline participants would have
18 increased?
19 A.I don't know.
Q.So it's your testimony that you don't know that
21 the economic events of 2008-2009 would have had any impact on
22 Idaho Lifeline participation eligibility?
23
24.25
A.I have not studied the data, no.
Q.Okay. Page 18 of your testimony
COMMISSIONER SMITH: Mr. Brecher, I'm trying to
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1 determine a good time for a break.
2 Mr. BRECHER: It's always a good time for a
3 break, and this is as good as any. I don't have too much more.
4 If you want to take a break now, that would be fine.
5 COMMISSIONER SMITH: All right. We're going to
6 break until 3: 45.
7 (Recess.)
8 COMMISSIONER SMITH: All right, if we're ready,
9 we'll go back on the record. Mr. Brecher, back to you.
10 MR. BRECHER: Okay. Going to try to eliminate a
11 few things and try to move through this a little more quickly.
12 Q.BY MR. BRECHER: Mr. Trampush, at page 19 and 20
13 of your testimony, you talk about the CTIA Code. And you
14 assert in your testimony that TracFone does not comply with the
15 provision of the CTIA Code regarding the terms required to
16 terminate service during a trial period without termination
17 fees or penal ties.
18 You then state that TracFone does not provide a
19 refund for minutes already purchased.
20 Do I have your testimony right?
21
22
23
24.25
A.That's my understanding, yes.
Q.Have you ever read the CTIA Code?
A.Yes.
Q.Is that really what it says, to the best of your
recollection?
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20
21
22
23
24.25
1 A.To my recollection, yes.
2 Q.Could you refer me to a portion of the Code, the
3 CTIA Code, that requires any carrier to refund minutes already
4 purchased?
5 A.It won't specifically state that.
6 Q.The answer to my question is "no"?
7 A.No.
8 Q.Now, page 20, line 13, you address the subj ect of
9 customer service, and you state in your testimony that TracFone
10 does not maintain a local office or customer service
11 representati ve in the state of Idaho.
12 Is there -- are you aware of any requirement that
13 ETCs in Idaho maintain customer service presences in Ohio -- in
14 Idaho?
15 A.No, I am not.
16 Q.There is no such rule, as far as you know?
17 A.No.
18 Q.Does AT&T Mobility have a local customer service
19 center in Idaho?
A.I don't know.
Q.Does Verizon Wireless?
A.I don't know.
Q.Does T-Mobile have one?
A.I don't know.
Q.Do you know whether CTC Telecom, Syringa, and
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20
1 Gold Star have customer service presences in the state of
2 Idaho?
3 A.I believe they do. There's local
4 representatives.
5 Q.That answer customer service calls?
6 A.Yes.
7 Q.And during what hours are those service centers
8 staffed?
9 A.I don't know their hours.
10 Q.Are they 24/7?
11 A.I don't know their hours, I said.
12 Q.Now, in your testimony -- and I wish I had a -- I
13 guess it's on page 23 and 24 -- you discuss the issue of
14 customer eligibility certification.
15 Are you aware of any federal or state tribunal
16 that has ever concluded that TracFone is in violation of any
17 requirement governing customer eligibility certification
18 verification?
19 A.Not to my knowledge.
Q.Has USAC -- and by "USAC," I mean the Universal
21 Service Administrative Company -- ever concluded in any audit
22 that TracFone has violated any Lifeline enrollment
23 requirements?
24.25
A.No FCC Rules were violated, as USAC noted.
Q.In fact, I believe in page 24, lines 2 and 3 of
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20
1 your testimony, you acknowledge that USAC auditors concluded
2 that TracFone was compliant with the Rules?
3 A.That's correct, yes. That's what my testimony
4 states.
5 Q.Now, if by your own admission, your own
6 acknowledgment, TracFone is compliant with the Rules governing
7 certification and verification of customer eligibility, would
8 you not agree that whatever problems exist regarding enrollment
9 of unqualified persons in Lifeline would be problems with the
10 Rules, not with TracFone' s compliance with the Rules?
11 A.I acknowledge there are significant Rule
12 problems, yes, vis-a-vis duplicate payments --
13 Yeah, I'm aware that there's issues relative to
14 duplicate payments or duplicate enrollments.
15 Q.Are you aware that the FCC, in its Notice of
16 Proposed Rulemaking on Lifeline reform -- I believe that's
17 attached to your testimony -- has proposed significant changes
18 to those Rules?
19 A.That's my understanding, yes.
Q.Now, based on your testimony on the subj ect of
21 enrollment certification verification, one would conclude that
22 your clients seem to have rather strong opinions about the
23 current Lifeline certification Rules. Is that a fair
24 statement?.25 A.I have my opinions. I don't know what theirs
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19
1 are.
2 Q.Do you know whether either of your clients CTC or
3 ITA have plans to participate in the FCC proceeding and share
4 those views?
5 A.We're in discussions on that, yes.
6 Q.But no decision has been made?
7 A.No. I think comments are due the 21st of April.
8 Q.Page 25, you are asked a question about growth of
9 the high cost fund; and your answer, page 25, lines 11, through
10 page 26, line 5, seems to be directed only at the growth in the
11 low-income portion of the Universal Service Fund. So let me
12 get this -- let me see if I can get this as clear as I can on
13 the record.
14 Mr. Trampush, is it your position that
15 designation of TracFone as an ETC in the state of Idaho will
16 have any impact on the high-cost portion of the Universal
17 Service Fund?
18 A.I think I said in my testimony that it will not.
Q.Page 28, lines 5 and 7, you state -- I quote
20 It may be in Idaho consumers' best interests for this
21 Commission to defer a Decision in this case until the issues in
22 the FCC Lifeline proceeding are resolved.
23 Did I capture your testimony accurately?
24.25
A.You read it correctly, yes.
Q.I understand why such delay might be in your
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20
21
22
1 clients' best interest, but I want to pursue with you how it
2 would be in the Idaho consumers' best interest.
3 A.Well, the whole process as we know it based on
4 the NPRM has substantial issues surrounding it, and there's
5 mul ti tude of issues that are enunciated there: Duplication of
6 payments, eligibility, growth in the fund, capping the fund,
7 questions revolving around should wireless carriers be paid the
8 same amounts as wireline carriers. There's many, many issues.
9 And the Commission basically is making -- is in a position here
10 where they have to make a decision in the middle of all this
11 flux.
12 Q.I didn't ask the question yet, but I appreciate
13 your observations anyway.
14 A.I'm sure you do.
15 Q.As we've already discussed, according to data
16 that's in the record now, Idaho has about 125,000
17 Lifeline-eligible low-income households?
18 A.I don't agree with that.
19 Q.You don't.
A.I do not agree with that.
Q.You don't believe that number?
A.I believe the number for 2002. I don't believe
23 it for now.
24.25
Q.What do you think it is now?
A.I have no idea. There's no evidence in the
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20
21
22
1 record what it is.
Q.Do you think it's lower?
A.I have no idea,I just said.
Q.Okay.Well,what is your best guess?
A.I don't guess when I testify.
Q.You must have some idea.
A.I don't guess when I testify.
Q.But we do know that there are about somewhere
2
3
4
5
6
7
8
9 between 20,000 and 27,000 enrolled Lifeline customers in Idaho
10 today?
11 A.Approximately, 27,000.
12 Q.20,000 landline and I assume 27,000 wireless?
13 A.No, 27,000 total.
14 Q.Total?
15 A.Total.
16 Q.But that 20,000 figure -- 20,000, whatever it
17 was, 69, from the State report attached to your testimony, you
18 explained to me was limited to landline customers?
19 A.That's correct.
Q.Landline Lifeline customers?
A.Correct.
Q.It did not include any of CTC' s or Syringa
23 Wireless's or Gold Star's wireless Lifeline customers?
24.25
A.Right. Correct.
Q.Now, TracFone has indicated in its Application
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.
.
1 that it is prepared upon being designated as an ETC in this
2 state to make available its Lifeline service to however many
3 eligible, qualified Lifeline households there are. There's one
4 statistic that says 125,000. You quarrel with that, but I'm
5 not going to debate that.
6 A.I'm not quarreling with it; I just don't know the
7 answer.
8 Q.I understand. I understand.
9 Please explain to me if you would, bearing in
10 mind that the Federal Communications Commission is, as we
11 speak, engaged in a proceeding to address the issues that
12 you've articulated, please explain to me why it would be in
13 those qualified low-income Idahoans' best interest to delay the
14 availabili ty of a Lifeline program that provides them with free
15 phones and free service.
16 A. It's really directed at the Commission's
17 Decision: Do you make the Decision now or do you wait until
18 you get clarity on what these Rules are going to be and how you
19 fix some of the significant problems we're facing right now,
20 which have been documented by USAC.
21 Q.In the remainder of your testimony, Mr. Trampush,
22 you set forth a series of conditions that you would recommend
23 being imposed on TracFone as a condition of approval of its ETC
24 Application.
25 And I don't know if you've read Mr. Fuentes'
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1 rebuttal testimony; I trust that you have. He has indicated
2 TracFone would abide by those conditions.
3 Gi ven the fact that TracFone is not going to
4 dispute those conditions, I'm not going to waste your time or
5 the Commission's time and ask you any questions about it.
6 Thank you for your patience, appreciate it.
7 A.You're welcome.
8 COMMISSIONER SMITH: Do we have questions from
9 the Commissioners?
10 COMMISSIONER REDFORD: No.
11 COMMISSIONER KEMPTON: No.
12 COMMISSIONER SMITH: Nor I.
13 Do we have redirect?
14 MS. O'LEARY: Yes.
15 MS. MELILLO: Yes, Madam Chair. These aren't all
16 questions.
17
18 REDIRECT EXAMINATION
19
20 BY MS. MELILLO:
21 Q.Mr. Trampush, I just want to go back to some of
22 the initial testimony and just clarify for the Commission and
23 those here who your client is. Is it the ITA or the underlying
24 ILECs?.25 A.It's ITA.
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.
.
1 Q.So the underlying ILECs will not be paying
2 your
3 A.No, we bill ITA.
4 Q.And regarding the calling areas, we were hearing
5 that a TracFone customer can make calls from New York to Boise,
6 Boise to Chicago, wherever to wherever. Can a TracFone
7 customer make a call to anywhere in the US from Lowman,
8 Idaho?
9 A.No, they cannot.
10 Q.And why is that?
11 A.There's no coverage there by the underlying
12 carriers.
13 Q.Could you tell that from the coverage map?
14 A.Yes, you can.
15 Q.On the issue of the plans, you know, there was a
16 lot of talk about how the TracFone plan is as good as, if not
17 better, than a plan from CTC Wireless or Syringa Wireless, and
18 I'm trying to compare apples to apples that what they're
19 getting is $10 worth of value. So does that $10 worth of
20 value, is that the same thing as $10 worth of support coming
21 from the USF into TracFone' shands?
22
23
24
25
A.No.
Q.Could you explain the difference?
A.TracFone's getting $10. What we don't know --
and we know the customer is getting 250 minutes. We don't know
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Intervenors
.
.
18
19
1 the profit -- we don't regulate profits here, but the support
2 has to be used for its intended purpose under the Rules. We
3 don't know that the entire $10 of support is, in fact, being
4 used for that purpose.
5 Q.How do we know that that $10 worth of support is
6 not going into Jerry Piper's pocket for CTC?
7 A.Because Jerry would credit his customer bill for
8 the $10 and the customer would pay the net, so the customer has
9 got the $10 credit. We don't know that about TracFone.
10 Q.And how do we know that that plan was worth 24.95
11 or 24. 99?
12 A.Well, that's their pricing based on competi ti ve
13 condi tions.
14 Q.Does being in compliance with all of the FCC
15 requirements regarding verification and eligibility necessarily
16 mean that the system isn't broken?
17 A.No. In fact, I would say that it is broken.
Q.Okay.
MR. BRECHER: I'm sorry, could the reporter read
20 back the question? I didn't hear it.
21 (Whereupon, the requested portion of the
22 record was read by the court reporter.)
23 Q.BY MS. MELILLO: When we're looking at the best
24 interest of the public, Mr. Brecher implied that the best.25 interest is those Lifeline -- those potential Lifeline
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20
21
22
23
24.25
1 customers that won't be served if we don't designate them as an
2 ETC.
3 Couldn't we also look at the best interests of
4 the nonLifeline public who pay for that service, and until we
5 get these Rules in place to limit duplication, maybe it is in
6 the best interest of the Idaho public?
7 A.That's the other part of balancing the equation.
8 You've got the consumer here, and they get the service and the
9 credits or not. You've got the public over here; if they're an
10 interstate user, they are paying in an assessment fee to USAC
11 to cover all this money that's going to support the low-income
12 people. So there's a balancing that needs to occur between the
13 low-income recipients and all of those that are paying in to
14 the fund, which is, for low income, is about a billion-three.
15 COMMISSIONER SMITH: So let's just have a
16 reminder that redirect is to clear up things that happened on
17 cross.
18 MS. MELILLO: He did graze through that best
19 interest argument, saying that his customers --
COMMISSIONER SMITH: So just move on.
MS. MELILLO: That's all I have.
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.
.
19
20
21
1 EXAMINATION
2
3 BY COMMISSIONER SMITH:
4 Q.Mr. Trampush, I did have a question.
5 A.Yes, Madam Chairman.
6 Q.I failed to look at my notes.
7 You made a change initially on pages 12 and 13 to
8 the CTC Wireless monthly plans.
9 A.Yes, I did.
10 Q.Would that change also apply on pages 9 and 10?
11 I couldn't tell if those are the same plans. They're on
12 line 22 on page 9 for the 24.10.
13 A.Yes, they would. You've corrected me. Thank
14 you.
15 Q.So the "24.10" --
16 A.Would be "29.95."
17 Q.All right. And on page -- let's see.
18 A.I think that would fix it.
Q.Oh, because it doesn't appear again. Okay.
A.Thank you.
Q.And, finally, in recognition of your long history
22 in the industry, I would just ask: I still have my button that
23 says "SPF to SLU by '92." Do you have yours?
24
25
A.It's in my office at home. I worked on that
matter, in fact.
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Intervenors
.
.
1 MR. BRECHER: Your Honor, mine says "SPF to SLU
2 in '82."
3 COMMISSIONER SMITH: Oh, wow. Well, we're not as
4 old as some others.
5 THE WITNESS: He and I are about the same.
6 COMMISSIONER SMITH: Thank you for your help.
7 THE WITNESS: Thank you.
8 (The witness left the stand.)
9 MR. PRICE: Commission Staff calls Grace Seaman.
10
11 GRACE SEAMN,
12 produced as a witness at the instance of the Staff, being first
13 duly sworn, was examined and testified as follows:
14
15 DIRECT EXAMINATION
16
17 BY MR. PRICE:
18 Q.Could you please state your name and spell your
19 last for the record?
20
21
A.My name is Grace Seaman. Last name, S-E-A-M-A-N.
Q.And by whom are you employed and in what
22 capacity?
23 A.Idaho Public Utilities Commission as a utilities
24 analyst..25 Q.And did you have an opportunity to prepare
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.
.
20
1 wri tten pre filed testimony submitted on March 18th of this
2 year?
3 A.I did.
4 Q.Consisting of 17 pages and including Exhibit
5 Nos. 101 and 102?
6 A.That's correct.
7 Q.Do you have any additions or corrections to that
8 testimony?
9 A.I do.
10 Q.Can you outline those?
11 A.Yes. On page 5, line 9, it should read "with
12 carryover. " The "no" should be stricken out.
13 On line 12, the "no" should also be removed.
14 Q.Do you have any other additions or corrections to
15 make?
16 A.I do not.
17 Q.Okay. And if I were to ask you those same
18 questions today, would your answers still be the same?
19 A.Yes, they would.
MR. PRICE: And at this time, I would move,
21 Madam Chair, for Ms. Seaman's testimony to be spread upon the
22 record as if read.
23 COMMISSIONER SMITH: If there's no objection, it
24 is so ordered, and we will identify the exhibits..25 (The following prefiled direct testimony
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.1 of MS. Seaman is spread upon the record.)
2
3
4
5
6
7
8
9
10
11
12.13
14
15
16
17
18
19
20
21
22
23
24.25
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HEDRICK COURT REPORTING SEAMAN (Di)
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.
1
2
3
4
5
6
7
8
9
10
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12.13
14
15
16
17
is
19
20
21
22
23
24
25.
Q. Please state your name and address for the
record.
A. My name is Grace Seaman. My business address
is 472 West Washington Street, Boise, Idaho.
Q. By whom are you employed and in what capacity?
A. I am employed by the Idaho Public Utilities
Commission (Commission) as a Utili ties Analyst. I
accepted the position with the Telecommunications Section
in June 2004. I am responsible for telecommunications
regulatory activities.
Q. Please give a brief description of your
educational background and experience.
A. I graduated from George Fox University with a
Bachelors of Arts degree in Management and Organization
Leadership in May 1998. I have attended various
regulatory, rates of return, economics, and service
rating programs including the New Mexico State University
"Camp" NARUC.
I worked for Mountain Bell/US WEST for 25 years
in the repair, dispatch, business office and marketing
departments. The last 21 years were spent in the
marketing department, in a variety qf positions that
included sales, service, technical, proj ect management,
and supervisory responsibilities.
Prior to accepting the position with the I PUC ,
CASE NO. TFW-T-09-0103/18/11 307 SEA, G. (Di) 1
STAFF
I was a Site Manager for CDI, a managed service provider,
at the Hewlett Packard main site. I supervised a team
that was responsible for installation and maintenance of
structured cabling, telephone/PBX and VoIP support, and
data network support.
Q. What is the purpose of your testimony?
A. The purpose of my testimony is to explain
Staff's recommendation to deny TracFone Wireless, Inc.' s
(TracFone) Application for Designation as an Eligible
Telecommunications Carrier (ETC) in Case No. TFW-T-09-01.
Q. What is TracFone requesting in this case?
A. TracFone is seeking Commission approval to be
designated as an ETC, which is required before the
Company may offer federal Lifeline support in Idaho.
Q. Does TracFone meet the conditions to receive
ETC designation under Idaho Code?
A. No. Upon review of the information provided in
the Amended Application and TracFone' s responses to
production requests, Staff believes that the Company's
application does not fully meet Idaho's ETC requirements
and, therefore, that TracFone should not be designated as
an eligible telecommunications carrier.
Q. Before discussing TracFone' s First Amended
Application, please explain your findings with TracFone's
initial ETC Application.
CASE NO. TFW-T-09-0103/18/11 308 SEA, G. (Di) 2
STAFF
A. TracFone's initial ETC Application submitted on
October 29, 2009, contained no company contact
information, no agent of service information, and no
certificate of good standing from the Idaho Secretary of
State's Office (On October 7, 2004, the Secretary of
State's Office revoked TracFone's certificate because the
Company failed to file the required annual report.) In
response, on January 15, 2010, Staff submitted a decision
memo to the Commission. In the decision memo, the
Company's failure to submit the required annual report to
the Secretary of State's Office was cited as the reason
for Staff to conclude that an ETC designation was not in
the public interest, nor did the Secretary of State's
revocation elicit confidence that the Company would
comply with similar ETC annual reporting requirements
outlined in Commission Order No. 29841. During the
January 19, 2010 decision meeting, the Commission
approved Staff's recommendation to deny TracFone's ETC
Application and Commission Order No. 30996 was issued on
February 5, 2010.
Q. How did TracFone respond?
A. On March 1, 2010, TracFone responded by
submitting a Petition for. Reconsideration and a First
Amended Application. A new certificate of authority from
the Secretary of State's Office dated January 25, 2010
CASE NO. TFW-T-09-0103/18/11 309 SEAM, G. (Di) 3
STAFF
was attached to the First Amended Application. The
Commission denied the Petition for Reconsideration, but
approved the filing of the First Amended Application and
a new 60-day comment period was established. OnMarch
11, 2010, TracFone witpdrew the Petition for
reconsideration.
Q. In the First Amended Application did the
Company submit significantly new information regarding
its proposed Lifeline service?
A. No. TracFone's Lifeline offering in the First
Amended Application was the same as the plan presented in
the original Application.
Q. Please summarize the Lifeline plan presented in
the First Amended Application.
A. As in the original Application, the First
Amended Application described a Lifeline offering that
consisted of a free 911-compliant handset and 67 free
minutes of usage per month. Lifeline customers could
purchase additional minutes at the rate of $.20 per
minute. In addition, calls to the customer service
center were not excluded from the 67 minutes. When
compared to other TracFone plans available on its
website, these rates appeared to be considerably more
expensive.
Q. After filing the First Amended Application, did
CASE NO. TFW-T-09-0103/18/11 310 SEA, G. (Di) 4
STAFF
TracFone modify the Lifeline usage plan?
A. Yes. TracFone submitted a letter dated August
12, 2010, notifying the Commission that effective August
16, 2010, the Company was expanding the Lifeline offering
in all states. The new offering gave Lifeline customers
a choice of three monthly plans:(1) 250 free minutes
each month, wi th no carryover of unused minutes and
texting available at the rate of one text per minute of
airtime; (2) 125 free minutes each month, with no
carryover of unused minutes and texting available at the
rate of one text per minute of airtime; and (3) 68 free
minutes each month, with no carryover of unused minutes
and texting at a rate of 3 texts per each minute of
airtime, plus international long distance calling to over
60 destinations (later increased to over 100 destinations
in the direct testimony of Jose Fuentes). Lifeline
customers can purchase additional minutes at the rate of
$.10 per minute.
Q. Did this change alter your analysis of
TracFone's Lifeline offering?
A. Yes. I was pleased to see these changes. Wi th
the expansion to three plans with increased number of
minutes per month, Lifeline customers may now choose the
plan that best fits their calling needs.
Q. Did the Company modify the Lifeline plan in
CASE NO. TFW-T-09-0i03/18/11 311 SEAM, G. (Di) 5
STAFF
other areas?
A. Yes. Another improvement that TracFone made to
its Lifeline service was to allow customers to dial 611
(customer service) from the Lifeline phone without having
any minutes deducted from the plans.
Q. Do you know why TracFone increased the monthly
minutes from the originally proposed 67 free minutes? '
A. Mr. Fuentes in his direct testimony states the
reason the Company enhanced the plans was due to
criticism from consumer groups and due to competition
from another prepaid wireless company who had recently
been designated an ETC. This company was offering 200
free minutes per month.
Q. Why is TracFone bringing its ETC designation
before the Idaho Public Utilities Commission?
A. The Idaho Commission has the duty and is
authorized to designate carriers (including wireless
carriers) as ETCs pursuant to the federal
Telecommunications Act of 1996 (the Act) and FCC rules,
and Idaho Code §§ 62-610B and 62-6100.
Q. Does TracFone' s ETC application present any
unprecedented considerations?
A. Yes. TracFone is not a traditional facilities-
based carrier. The Company does not own or operate any
telecommunications facilities in Idaho. Instead, the
CASE NO. TFW-T-09-0103/18/11 312 SEAM, G. (Di) 6
STAFF
Company resells wireless service from AT&T Mobility,
T-Mobile, and Verizon Wireless. The Act restricts ETC
designation to facilities-based carriers only.
Q. How then can TracFone qualify for an ETC
designation in Idaho?
A. In 2005, TracFone petitioned for and received
an FCC forbearance that waives the facilities-based
requirement for the sole purpose of providing federal
Lifeline support.
Q. Please explain why you are recommending denial
of TracFone's Application for ETC designation.
A. Although TracFone's revised usage plans improve
the Company's Application, Staff believes TracFone's ETC
request should, none the less, be denied for the
following reasons: (1) non-payment to the Idaho
Telecommunications Service Assistance Program (ITSAP) as
required by Idaho Code; (2) non-payment to the Idaho
Emergency Services fund or 911; and (3) incomplete
evidence to support that all wire centers in the rural
service areas will be fully served by TracFone.
Q. Is TracFone currently operating in Idaho?
A. Yes. Through retailers such as Shopko and
Walmart, TracFone has been selling its prepaid wireless
service throughout Idaho for twelve years.
Q. Does the Company pay into the Idaho
CASE NO. TFW-T-09-01
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STAFF
Telecommunications Service Assistance Program (ITSAP)
fund based on the service it provides today?
A. No. According to the ITSAP Program
Administrator, TracFone has never submitted an ITSAP
payment.
Q. Is it your understanding that TracFone is
obligated to pay into the ITSAP fund?
A. Yes. Idaho Code § 56-904 (1), states that all
wireline and wireless companies are obligated to collect
the ITSAP surcharge from its customers and remit these
funds to the program Administrator. The only customers
who are not assessed this surcharge are those customers
who are eligible to receive the ITSAP discount. Not
assessing ITSAP-eligible customers, however, does not
excuse TracFone from paying into the ITSAP fund.
Q. Why is TracFone not paying into the ITSAP fund?
A. TracFone asserts that as a prepaid provider, it
does not render bills, and therefore has no ~end user
billings" on which to assess the charges, and thus is not
legally obligated to contribute to the fund. TracFone
also argues that it does not have a direct relationship
with its users and, therefore, the fees should be
collected and remitted by the retailers that sell
TracFone' s prepaid service.
Q. In your opinion, is this a persuasive argument
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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.
with regard to services purchased at a retailer?
A. I am not an attorney and do not purport to
analyze TracFone' s legal argument. However, just looking
at the facts TracFone asserts, its arguments are not
persuasive. TraCFone customers who purchase the wireless
handset from a retailer receive an inoperable handset,
To activate the handset, the customer must call the
TracFone service center, from a payphone or another
working telephone. The TracFone service center assigns a
telephone number and activates the handset purchased from
the retailer. This process clearly indicates that
TracFone has direct contact with the customer. Purchased
prepaid cards are also activated through the TracFone
service center or from the newly activated handset. In
addition, as stated in the TracFone prehearing brief,
customers may also purchase TracFone service directly
through its website (ww.tracfone.com).
Q. What about TracFone's relationship with
Lifeline customers?
A. TracFone's argument is even less persuasive for
its Lifeline customers. Lifeline customers must complete
an eligibility form to enroll in the Lifeline program
through TracFone' s Safelink Wireless. Therefore,
TracFone has a direct relationship with its Lifeline
customers. Safelink Wireless processes Lifeline
CASE NO. TFW-T-09-0103/18/11 315 SEA, G. (Di) 9
STAFF
.
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.
customer's application and applies the Lifeline monthly
credi ts to the individual accounts. If the Company is
capable of performing these tasks, then Staff believes it
should be capable of assessing and remitting the mOnthly
program fees. Furthermore, Staff believes that TracFone
must remit to the fund regardless of whether the ITSAP
fee is col¡ected directly from its customers.
Q. Does TracFone remit fees to the Idaho 911
service fund?
A. No. TracFone does not remit fees into the 911
service fund.
Q. Is it your understanding that TracFone is
obligated to remit payments into the 911 service fund?
A. Yes. Idaho Code § 31-4804(1) states, "the
emergency communications fee provided pursuant to the
provisions of this chapter shall be a uniform amount not
to exceed one dollar ($1.00) per month per access or
interconnected VoIP service line" (emphasis added). In
Idaho Code § 31-4802, the definition of access line in
the case of wireless technology is, "each active
dedicated telephone number shall be considered a single
access line." In addition, FCC Order No. DA 10-753
(Exhibit 101), adopted on May 3, 2010, denied a petition
filed by TracFone requesting rescission of the 911
support imposed in the TracFone ETC Designation Order by
CASE NO. TFW-T-09-0103/1S/11 316 SEA, G. (Di) 10
STAFF
.
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.
the Federal-State Joint Board on Universal Service.
Q. Does the FCC state an opinion regarding
TracFone's efforts to avoid 911 support?
A. Yes. On page 3 of FCC Order No. DA 10-753, the
FCC states that it imposed this condition (the 911
support requirement) in response to both the "unique
circumstances presented by TracFone's petition for
limited ETC designation for Lifeline support" and the
concern that TracFone had engaged in a pattern of
behavior in several states of refusing to support 911
services.
Q. Does the FCC believe that 911 support is a
public interest concern?
A. Yes. On page 4 of Order No. DA 10-753, the FCC
states that its decision "was based on its determination
that compliance with state-level 911/E911 obligations was
relevant to the public-interest assessment of TracFone's
ETC designation request."
Q. Do you have an additional reference to support
your opinion?
A. Yes. On May 21, 2010, Garret Nancolas, the
Chairman of the Idaho Emergency Communications
Commission, wrote a letter to the Commission (Exhibit
102), opposing TracFone's ETC application. In the
letter, the Chairman states that TracFone is obligated to
CASE NO. TFW-T-09-01
03/18/11 317 SEA, G. (Di) 11
STAFF
remit the 911 fees but has not complied with this
requirement.
Q. Is it your opinion that failure to pay into the
911 fund is contrary to the public interest?
A. Yes. The Emergency Communications Act under
Idaho Code § 31-4804 states that "such fee shall be used
exclusively to finance the initiation, maintenance,
operation, enhancement and governance of a consolidated
emergency communications system." If TracFone customers
use this service, but the Company does not pay into the
fund, the financial burden for TracFone's use of the
service is assumed by all the other wireline and wireless
companies that are in compliance. Thus, failure to pay
into the fund is contrary to the public interest.
Q. Has TracFone addressed this issue?
A. Yes. TracFone states in its response to
Staff's Production Request No. 25 that it is not
obligated to collect 911 fees and contribute those
amounts to the fund. Once again, the Company argues that
because it does not render a monthly billing it has no
method of collecting or remitting the fees to the fund.
TracFone believes this responsibility lies with retailers
that sell TracFone prepaid cards.
Q. Do you agree with TracFone?
A. No. As addressed earlier, the service a
CASE NO. TFW-T-09-01
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STAFF
customer purchases from a retailer is not a fully
functioning wireless service. The handset is inoperable
until the customer calls an 800 number to reach a
TracFone service center to activate the service.
Q. Are you aware of a prepaid wireless company
that pays into the 911 funds?
A. Yes, Cricket Wireless has always paid into the
fund.
Q. Are you aware of how other state Commissions
have addressed the issue of TracFone' s support of public
programs?
A. Yes. Recent state Commission decisions
regarding TracFone' s ETC designation were conditional.
Many states that recently granted ETC designation to
TracFone did so with a public funding requirement.
Q. Please describe some of these conditions.
A. For example, the Minnesota Commission granted
TracFone a one-year conditional ETC designation with the
requirement that the Company must collect and remit 911
fees.
Q. Are the conditions imposed by other state
Commissions having the desired effect on TracFone' s
support of 911 services?
A. No. In Ohio, in May 2009, the Public Utilities
Commission granted a one-year conditional ETC designation
CASE NO. TFW-T-09-0103/18/11 319 SEA, G. (Di) 13
STAFF
and ordered TracFone to remit 911 fees. Almost two years
later, the Company has not yet complied . In other
states, such as Florida, Oregon and Minnesota, TracFone
supported legislation to require retailers to collect and
remit the 911 fees. The TracFone legislation was
successful in Florida, but it has taken the Florida
legislation two years to be enacted. In the meantime,
rapidly increasing number of TracFone users (both prepaid
retail and Lifeline) in the state have the benefit of
access to emergency services without contributing funding
to support the agencies providing this public service.
Q. Aside from collection and remittance of fees,
are you aware of any other state Commission requirements
imposed upon TracFone?
A. Yes. Ohio imposed a condition requiring an
annual verification of a sample of Lifeline customers
that requires the Company to supply proof of customer
qualification such as a food stamp card. Florida imposed
a condition requiring TracFone to perform a 60-day
inactivity test every month on its Lifeline customers.
TracFone is required to call inactive customers to
determine if they are still using the service. If the
customer cannot be reached, TracFone must automatically
disconnect the service. According to the Florida
Commission Staff, thousands of Lifeline customers are
CASE NO. TFW-T-09-0103/1S/11 320 SEA, G. (Di) 14
STAFF
disconnected each month as a result of this requirement.
Q. Why are these requirements necessary?
A. These requirements help eliminate Lifeline
payments for customers who are no longer using TracFone's
service and avoid duplicate claims from Lifeline
customers.
Q. Are duplicate claims an issue?
A. Yes. In a Universal Service Administrative
Company (USAC) audit (USAC Audit No. LI2009BE006)
conducted in Florida and Tennessee during 2010, USAC
found that approximately 10% of TracFone Lifeline
customers were duplicates. For the study month of
January 2010, this represents approximately 40,000
Florida Lifeline customers and approximately 21,000
Tennessee Lifeline customers who had duplicate claims.
In these two states, approximately 61,000 customers, in
one month, were found to have duplicate claims.
Q. Are you aware of any proactive steps initiated
by TracFone to reduce duplicate claims?
A. No, just the opposite. Most steps to reduce
duplicate claims have been imposed on TracFone by state
Commissions or the FCC. I am not aware of any
initiatives introduced by TracFone to "help resolve this
issue. In fact, on April 27, 2009, TracFone filed with
the FCC, a Petition for Modification of Anual
CASE NO. TFW-T-09-0103/1S/11 321 SEA, G. (Di) 15
STAFF
.
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.
Verification Condition. In the petition, TracFonewas
seeking to modify the compliance plan condition that it
require each of its Lifeline customers to self-certify
annually that they are the head of their household and
receive Lifeline-supported service only from TracFone.
TracFone, instead, requested that it be allowed to
contact only a statistically-valid sample of its
customers to comply with this condition. The FCC denied
the petition on January 11, 2011.
Q. Please state your concerns with regard to
TracFone providing Lifeline support in all wire centers
in an ETC service area?
A. In response to the CTC and ITA production
request, TracFone provides a confidential list of wire
centers that it intends to serve. When reviewing the
rural wire centers to determine if the entire ETC service
area will be served, the list shows some wire centers
multiple times and some wire centers that are part of the
service area are not listed. The service list does not
clearly indicate that all rural service areas will be
fully served by TracFone, thus avoiding the possibility
of cream skimming.
Q. Why is cream skimming a concern when TracFone
states in its Application that it seeks ETC designation
solely to provide Lifeline support and that it will not
CASE NO. TFW-T-09-0103/1S/11 322 SEA, G. (Di) 16
STAFF
.
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.
seek high cost funds?
A. Cream skimming is a public interest issue and
the concern is that a company competing with the
incumbent local exchange carriers (ILEC) may attempt to
compete only in the more densely populated and,
therefore, the more profitable areas. This strategy
would leave the more costly areas to be served by the
ILEC. Cream skimming is a public interest concern that
the Commission has evaluated in all ETC Applications for
both rural and non-rural wire centers.
Q. In your opinion, what must TracFone do to be
eligible for an ETC designation?
A. Before TracFone is designated as an ETC, the
Company should:(1) begin remitting payments into the
ITSAP fund; (2) begin remitting payments into the 911
services fund; and (3) provide a complete list of wire
centers (devoid of duplicates) that the Company intends
to serve, thereby demonstrating that TracFone does not
intend to only serve the more populated wire centers.
This will satisfy the cream skimming concern.
Q. Does this conclude your direct testimony in
this proceeding?
A. Yes, it does.
CASE NO. TFW-T-09-0103/18/11 323 SEAM, G. (Di) 17
STAFF
.
.
1 (The following proceedings were had in
2 open hear ing . )
3 MR. PRICE: And I would now submit Ms. Seaman for
4 cross-examination.
5 COMMISSIONER SMITH: Ms. 0' Leary, do you have any
6 questions?
7 MS. 0' LEARY: I do have a couple of -- I do have
8 a couple of questions, Madam Chair.
9
10 CROSS-EXAMINATION
11
12 BY MS. 0' LEARY:
13 Q.Ms. Seaman, in your testimony at page 7, you
14 state that TracFone' s Application should be denied because,
15 among other things, there is incomplete evidence in the record
16 to demonstrate that all wire centers within a rural area will
17 be fully served by TracFone. Is that correct?
18 A.That's correct.
19 Ms. Seaman, later in your testimony, you stateQ.
20 that TracFone' s confidential Response to Intervenors'
21 Production Request No. 1 which purports to identify where
22 TracFone proposes to provide Lifeline service appears to list
23 some rural study area wire centers multiple times, but fails to
24 list all rural study areas' wire centers. Is that correct?.25 A.That's correct.
324
HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
SEAMAN (X)Staff
.
.
1 Q.In its Response to Staff's First Production
2 Request No.2, TracFone provided a colored map it purports to
3 be a map of its underlying carriers' coverage. Is that
4 correct?
5 A.Yes.
6 Q.Ms. Seaman, is it possible for the Staff to
7 determine from that map where the wire centers are located that
8 TracFone is providing service?
9 A.It was not possible for me, no.
10 Q.Okay. Thank you. Ms. Seaman, this uncertainty
11 that results from the lack of identification of wire centers or
12 misidentification of wire centers or provision of a map that
13 doesn't allow us to identify wire centers that are being
14 served, does this uncertainty present any concerns to Staff?
15 A.We have a public interest concern in that ETC
16 designations in the past have looked at the service area to
17 determine if entire service areas were covered, and I could not
18 make that determination.
19 Q.Okay, thank you. And, Ms. Seaman, do you -- are
20 you able to discern from the information that TracFone
21 provided well, scratch that.
22 In addition to the concerns you just mentioned,
23 does TracFone' s apparent lack of ability to precisely identify
24 where it proposes to provide Lifeline service present any issue.25 in terms of TracFone' s ability to accurately claim Lifeline
325
HEDRICK COURT REPORTING
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SEAMAN (X)Staff
.
.
.
1 support from the USF based on ILEC study areas?
2 A.I don't understand your question.
3 Q.I'll ask it again. Does TracFone's.
4 Based on the information that has been provided
5 by TracFone identifying where they say that the wire centers or
6 exchanges, where they are or are not providing service, in
7 addition to the coverage map that we just discussed -- and you
8 have said that it is not possible for this Staff to precisely
9 identify where the service area is that TracFone is requesting.
10 Is that correct?
11 A.That's correct.
12 Q.And it's not possible to determine whether
13 TracFone is requesting to serve an entire rural study area or
14 perhaps a portion of a rural study area?
15 A.That's correct.
16 Q.If this Staff isn't able to determine that from
17 the information that it's provided and this Commission then
18 must certify an ETC to USAC for receipt of Lifeline support,
19 how would this Commission be able to certify that ETC to the
20 Commission in order that the Commission could provide support
21 for an area that TracFone is designated to serve?
22 It's unclear, to me, whether that is an absoluteA.
23 requirement in this case.
24 In other ETC-designated companies, we do certify
25 and annually that they provide the services in the entire
326
HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
SEAMAN (X)Staff
.
.
1 service areas. It's unclear, to me, how that would affect
2 TracFone' s Application.
3 Q.Thank you. I have no further questions.
4 COMMISSIONER SMITH: Mr. Brecher.
5 MR. BRECHER: Mr. Miller is going to take this
6 one.
7 MR. MILLER: I have the unenviable assignment of
8 asking Ms. Seaman a few questions.
9
10 CROSS-EXAMINATION
11
12 BY MR. MILLER:
13 Q.Good afternoon, Ms. Seaman.
14 A.Good afternoon, Mr. Miller.
15 Q.I know it's getting late in the afternoon so I'll
16 try and not belabor this. I thought first maybe I would try
17 and identify what, in your mind, are the remaining significant
18 issues after all of the testimony has now been put in the
19 record.
20 In your initial testimony, you identified a
21 concern about cream skimming. Can I direct your attention to
22 Mr. Fuentes' rebuttal testimony at pages 7 through 8?
23
24.25
A.Yes.
Q.And just let me, without going through the
testimony in detail --
327
HEDRICK COURT REPORTING
P. O. BOX 578, BOISE, ID 83701
SEAMAN (X)Staff
.
.
.
1 I assume you've read that testimony?
2 A.That's correct.
3 Q.All right. Based on what Mr. Fuentes has said
4 there, is it still -- is cream skimming still a Staff concern
5 or do you believe that Mr. Fuentes has adequately addressed
6 that for you?
7 A.Mr. Fuentes has referred to the FCC's Order and
8 Determination regarding cream skimming. Staff is not certain
9 that the FCC got that issue correct. And so I still have
10 concerns regarding cream skimming.
11 Q.And when a carrier does not construct facilities
12 in I guess the classic example is constructing facilities in
13 densely-populated areas and not serving in sparsely-populated
14 areas, and I can understand that in the high-cost context where
15 the subsidy or the support is going for facilities; but when a
16 carrier such as TracFone does not build facilities, only serves
17 on a resalelpresold basis, how could there be a concern about
18 serving in densely-populated areas and ignoring
19 sparsely-populated areas?
20 A.That's not a concern for Staff. That's a Company
21 concern.
22 Q.Let me ask it this way: Based on what you know
23 now, is it Staff's position today that the Application should
24 be denied because of cream skimming concerns?
25 A.Cream skimming or public interest as it refers to
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21
1 the public interest fact is still a concern, and if you were to
2 take each of the -- each of the concerns and separate that one
3 out, I would say, yes , it is still.
4 Q.That you would deny the Application purely based
5 on that concern?
6 A.Yes.
7 Q.The other another topic that was addressed in
8 your initial testimony was duplicate claims. Is that
9 correct?
10 A.Yes.
11 Q.Could I direct your testimony to Mr. Fuentes'
12 testimony at pages 9 through II?
13 A.Specific line?
14 Q.Well, it starts on the top of page 9 on line 1
15 with:
16 Question: What is TracFone' s Response to
17 Ms. Seaman's testimony that duplicate claims are an issue?
18 And then his rather lengthy answer goes through
19 the bottom of page 10.
A.And what do you wish me to do?
Q.I guess first say have you reviewed that
22 testimony?
23
24.25
A.I have.
Q.Based on what Mr. Fuentes has said here without
going through it in detail, and based on the discussion that
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1 you have heard here today on this issue, is it Staff's position
2 that duplicate claims is a matter that is under consideration
3 at the FCC and perhaps other places, and is a matter that
4 should be monitored but is not a ground for denying the
5 Application?
6 A.I agree with that statement.
7 Q.All right. Then, of course, there is the fee
8 issue, which appears to be the -- what is coming down to be the
9 maj or issue in this case. Would you like to characterize it
10 that way?
11 A.Yes.
12 Q.Let me just start with a basic premise, and that
13 is we talk about companies paying fees, either 911 fees or ICAP
14 (sic) fees. Isn't it more correct to say that companies don't
15 really pay fees; what they do is act as a conduit to collect
16 fees from end users and then remit those fees to governmental
17 agencies in the classic context?
18 A.Yes.
19 Q.Yes?
A.I agree with that.
21 I would also like to state though that it's still
22 incumbent upon the Company to remit those fees whether they
23 collect from the customers or not.
24.25
Q.Well, I had hoped not to have to get into this.
I imagine you've familiarized yourself with the
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1 Telecommunications Service Assistance Act -- pardon me, with
2 the Emergency Communications Act?
3 A.Yes.
4 Q.And let me direct your attention to Section
5 31-4804 (4) which provides: Telecommunication provider shall be
6 allowed to list the surcharge as a separate item and shall have
7 no legal action to enforce collection of any charge.
8 A.Excuse me. You are where? 31-4804--
9 Q.Parens four.
10 A.Okay. I may not have that with me.
11 Q.Well, it's a matter that could be discussed in
12 posthearing briefs as to what those operations really are, but
13 I didn't want to let it go unobserved.
14 In the context of the ITAP -- ISTAP --
15 A.ITSAP.
16 Q.-- ITSAP -- thank you -- program, am I correct
17 that Idaho Code Section 56-904 provides that the Commission
18 determines a monthly surcharge on end -- each end user access
19 line?
A.That's correct.
Q.And in the context of the Emergency Service,
22 Section 31-4808 provides that the fees shall be collected on a
23 monthly basis from customers. Is that your understanding?
24.25
A.Are we still on ITSAP?
Q.No, now we're on 911.
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1 A.Okay. Could you repeat that, please?
2 Q.Am I correct that Section 31-4808 provides that
3 the fees shall be collected on a monthly basis from
4 customers?
5 A.Subject to check, that's my understanding.
6 Q.Okay. Now, customers that don't issue monthly
7 bills don't fit neatly into the statutory scheme, do they,
8 where it's assumed that there will be a bill and a monthly
9 remi ttance and monthly pass-back to government? So there's can
10 we say at a minimum, they don't clearly fit within the existing
11 statutory scheme?
12 A.We can, certainly.
13 Q.Okay. That's enough for now. We'll come back to
14 this.
15 Now, when you fill out your personal income tax
16 forms, do you take all the deductions that are legally
17 available to you?
18 MR. PRICE: I object: Relevance.
19 MR. MILLER: If I can have just a slight amount
20 of leeway, I'll actually get to a relevant point.
21 COMMISSIONER SMITH: I think I understand the
22 relevant point, which was taught to me in my corporate tax law
23 course.
24.25
Q.BY MR. MILLER: You don't voluntarily pass up
some deductions just to send more money to government, do
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1 you?
2 A.No.
3 Q.No. Would you agree that it's rational behavior
4 to only pay the fees and taxes to government that are legally
5 required?
6 A.Yes.
7 Q.And would you agree that there can sometimes be
8 good-faith disagreements about how much is owed to
9 government?
10 A.Yes.
11 Q.While I know you don't agree with the TracFone
12 analysis, has TracFone, in its pleadings and papers here, laid
13 out its legal logic with respect to its liability for fees and
14 taxes?
15 A.It's stated its position.
16 Q.When there is an agreement -- when there is a
17 disagreement about liability for fees and taxes, do you think
18 there should be a fair process for resolving that
19 disagreement?
A.If there is a valid disagreement, yes.
In this case, I don't believe they're valid
22 disagreements. I think the Statutes are fairly clear.
23 Q. But -- we'll come back to this, but you're, of
24 course, not a lawyer?.25 A.No.
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1 Q.Do you think that before a agency of government
2 makes a Decision imposing liability on some party, that party
3 ought to have a fair opportunity to present its point of view
4 even if you think it's wrong?
5 A.Yes.
6 Q.Let me direct your attention to Mr. Fuentes'
7 rebuttal testimony again on page -- first on page 3, line 11,
8 and--
9 A.Page 3,line 11 ?
Q.Yes,ma'am.
A.Okay,I've got that.
Q.Would you read the sentence that starts with the
phrase " in such states"and continue through line 1 7?
10
11
12
13
14 A.In such states, TracFone has consistently worked
15 cooperati vely with legislators, regulatory departments, and
16 other stakeholders to resolve such disputes, and has been able
17 to reach agreements for mechanisms which would allow TracFone
18 to be designated as an ETC and to deliver its unique Safe-Link
19 Wireless Lifeline service to low-income households. While
20 TracFone and other stakeholders sought resolution of the issues
21 regarding fee applicability, as discussed below, TracFone is
22 commi tted to doing the same in Idaho.
23 Q.Can I direct your attention now to page 6,
24 line 17?.25 A.Do you wish me to read that?
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1 Q.Let me go back up to line 13. Would you read the
2 question and the answer for the record?
3 A.If this Commission or the Emergency
4 Communications Commission determine that TracFone is subj ect to
5 the ITSAP and 911 fees, would TracFone commence payment of
6 those fees?
7 Answer: TracFone would commence payment of the
8 ITSAP and 911 fees upon receiving a final determination that it
9 is obligated to remit those fees.
10 Q.Has TracFone in its rebuttal testimony offered
11 examples of how these fee liability questions have been
12 addressed in other states?
13 A.Yes.
14 Q.Let me direct your attention to page 4, line 13.
15 And without asking you to read it, does Mr. Fuentes there
16 describe a system that was developed in Maine to address these
17 issues?
18 A.It appears so, yes.
19 MR. MILLER: Members of the Commission, I won't
20 read them or spend any time on them, but attached to the
21 testimony are Exhibits 7 and 8 which are the Maine Orders,
22 which would give you an idea of how it's been accomplished
23 there.
24.25
Q.BY MR. MILLER: Do you have any reason to believe
that the process adopted in Maine has been unsatisfactory in
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1 that state?
2 A.I can't comment.
3 Q.So the answer would be, "No"?
4 A.No.
5 Q.TracFone in this case has suggested that the ETC
6 certification be granted conditionally upon the fee issues
7 being resolved in whatever way the Commission directs them to
8 be resolved. I s that your understanding of TracFone' s
9 recommendation?
10 A.Yes.
11 Q.And I have the feeling you disagree with that
12 recommendation?
13 A.I do disagree.
14 Q.I have the impression that it's your position or
15 feeling that the fee issues should be resolved before the ETC
16 designation is provided?
17 A.That's correct.
18 Q.Let me direct your attention to Mr. Fuentes's
19 direct testimony, page 10, line 13.
A.Page 10, line 13, I'm there.
Q.Yes, sir -- yes, ma' am. And in that passage,
22 Mr. Fuentes is asked to describe the benefits that would result
23 from the offering of TracFone' s products to Idaho customers,
24 and then there is a long answer going into the next page..25 As I read your testimony, I did not see anyplace
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1 that you disagreed with this description of benefits. Am I
2 correct?
3 A.I made no comment about the benefits.
4 Q.But you didn't disagree?
5 A.i did not.
6 Q.So I guess it wouldn't be too big of a step to
7 say that if you didn't disagree with it, these benefits have
8 been established on the record?
9 That's probably an impermissible comment rather
10 than a question.
11 At page 7, 14 through 17 of Mr. Fuentes'
12 testimony would you look at that?
13 A.Page 7 or 14?
14 Q.I'm sorry, 14.
15 A.Which line, please?
16 Q.If you start on line 6, he's asked: What
17 functions will TracFone offer to Lifeline customers?
18 And then he, over a series of pages through
19 page 17, indicates that TracFone will offer all the services
20 required by the Federal Communications Commission and by the
21 Idaho ETC Order.
22 As I read your testimony, I didn't see anyplace
23 you disagreed with that testimony. Is that correct?
24.25
A.That's correct.
Q.So you don't dispute the TracFone assertion that
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1 it will offer all the services it's required to?
2 A.I don't. I do not.
3 Q.So, if the Commission were to follow your
4 recommendation and delay issuance of an ETC designation, what
5 it would mean is that consumers would be denied the benefits
6 identified in Mr. Fuentes' testimony and which you do not
7 dispute; and it would mean that consumers would be denied the
8 services that are described in Mr. Fuentes' testimony and you
9 do not dispute?
10 A.I do not.
11 Q.That's what it would mean?
12 A.Yes.
13 Q.Part of the reason you cite for delaying the
14 availabili ty of these benefits is what you think occurred in
15 the state of Ohio, on page 13 of your -- now we're going, yeah,
16 page 13, I think.
17 A.Page 13, line 24.
18 Q.Pardon me. Now, you didn't provide us, as far as
19 I can tell, with any Orders or papers from the Ohio Commission
20 that would let us see exactly what occurred there. What is the
21 source of your information about the status in Ohio?
22 A.It is their Case No. 97-632-TP-COI, Decision
23 granting the one-year conditional ETC on 5/21/09, so basically
24 from their Web site..25 Q.But you indicate two years later, the Company has
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.1 not complied.
A.
Q.
A.
Q.
did you?
A.
Correct?
Correct.
What's the source of that information?
Staff. Discussion with Staff.
You talked to somebody at the Ohio Commission,
Yes. I don't have their name handy, but I did
8 speak with Staff.
2
3
4
5
6
7
9 Q.So this statement is based on a conversation with
10 somebody at the Ohio Staff whose name you don't have?
.
11 A.That's -- yes, I apologize. I don't have it with
Have you heard in the hearing today the
14 explanation from both Mr. Fuentes and witness Brecher what
12 me.
13 Q.
15 explains the status in Ohio?
16
17
18 Q.
MR. BRECHER: I obj ect .
THE WITNESS: I heard the explanation.
BY MR. MILLER: Before you wrote this testimony,
19 did you ask TracFone for their side of the story?
20 A.I did not.
Has the Ohio Commission revoked TracFone' s ETC
22 status for failure to comply in any way with any of its Rules,
21 Q.
23 to your knowledge?
.24 A.
25 Q.
Not to my knowledge.
Do you lack confidence, Ms. Seaman, in the
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1 ability of this Commission to enforce its Rules and
2 directions?
3 A.I have utmost faith in this Commission to enforce
4 Rules. The question that I have is how TracFone will fight
5 those Decisions and conditions.
6 Q.I think you begrudgingly agreed that before a
7 liabìli ty is imposed on a party, there ought to be a fair
8 process. Correct?
9 A. Correct.
10 Q. And has TracFone in its sworn rebuttal testimony
11 said that after a fair process, it will comply with the
12 determination of that process?
13 A.Yes, TracFone has.
14 Q.All right. And the only reason you have decided
15 to lead to a contrary conclusion is the hearsay statements of a
16 Staffperson in Ohio?
17 MR. PRICE: Objection: Argumentative.
18 COMMISSIONER SMITH: Sustained.
19 MR. MILLER: Withdraw the question.
Q.BY MR. MILLER: Now, there's been some discussion
21 of this Exhibit 102 to your testimony, the letter from
22 Mr. Nancolas. Could you find your way to that? Are you there?
23
24.25
A.Yes, I am.
Q.And for the clarity in the record, who is
Mr. Nancolas?
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21
22
1 A.He is the chairman of the Idaho Emergency
2 Communications Commission.
3 Q.Would you guess that one of Mr. Nancolas' s
4 missions in life is to maximize revenue for 911 services?
5 A.I cannot speak for Mr. Nancolas.
6 Q.Would you guess that Mr. Nancolas' s views are not
7 the views of a neutral third party?
8 A.I don't know.
9 Q.Do you know if Mr. Nancolas is a lawyer,
10 competent to express legal opinions?
11 A. I don't know the background or the education of
12 Mr. Nancolas. I do know that he has attorneys on staff and as
13 part of the Commission.
14 Q.Do you know if this letter was reviewed by a
15 lawyer before it was sent?
16 A.Actually, I do.
17 Q.How do you know that?
18 A.I spoke with her.
Q.And who did you speak with?
A.I spoke with Teresa Baker.
Q.And who is she?
A.She is the Idaho prosecuting attorney, I believe
23 for the county, but I'm not certain.
24.25
Q.But she's not an employee of the Commission?
A.No.
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1 MR. PRICE: She's listed on the letterhead.
2 MR. MILLER: What's that?
3 MR. PRICE: I don't want to testify. I'll
4 allow--
5 COMMISSIONER SMITH: That's right.
6 Q.BY MR. MILLER: She's not a deputy attorney
7 general?
8 A.For the State?
9 Q.For the State.
10 A.I don't believe so, no.
11 Q.All right. So to your knowledge, the letter was
12 not reviewed by the Attorney General's Office?
13 A.I'm not aware that it was.
14 Q.In the second paragraph of Exhibit 102,
15 Mr. Nancolas refers to TracFone' s Response to a Staff
16 Production Request. Do you see that?
17 A.Yes.
18 Q.As I understand it and as I understand the
19 Commission procedures, Discovery Responses are not published on
20 the Commission Web site. Is that your understanding?
21
22
A.Could you repeat that question, please?
Q.As I understand the procedures here at the
23 Commission, Discovery Responses are not published on the
24 Commission Web site. Is that your understanding?.25 A.That's my understanding.
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1 Q.Do you know how it is then that Mr. Nancolas
2 happened to come into possession of this Discovery Response?
3 A.The Discovery -- the Production Request and
4 information was published, I believe, on the Web site after
5 I don't know. I guess I can't answer that.
6 Q.Did Staff give the Production Request to --
7 A.No, Staff did not.
8 Q.Do you know if Mr. Nancolas solicited TracFone' s
9 opinion before he sent that letter?
10 A.Please repeat the question.
11 Q.Do you know if Mr. Nancolas solicited TracFone' s
12 opinion before he sent that letter?
13 A.I don't know. I do know that he advised me that
14 TracFone -- members of TracFone had been in touch with various
15 E911 centers.
16 Q.I'm not sure I quite understood what you've just
17 said.
18 A.It was my understanding that someone from
19 TracFone had contacted various E911 PSAP centers for some
20 certification requirement.
21
22
23
Q.Do you have any idea when or
A.Months before this letter.
Q.But having somehow been in contact with some of
24 these centers is not the same thing as being asked to have an.25 opportuni ty to present legal views before this letter was sent,
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1 is it?
2 A.I don't know what the conversations contained,
3 no.
4 Q.So as far as you know, Mr. Nancolas did not
5 solici t TracFone' s views on this question before he sent that
6 letter?
7 A.I'm not aware.
8 Q.Do you think, as a matter of fairness, a state
9 agency ought to ask for both parties' points of view before it
10 issues some kind of an opinion?
11 A.I can't speak to that.
12 Q.Are you aware of any time the Idaho Public
13 Utilities Commission has failed to ask for both parties' points
14 of view before it issues an Opinion?
15 MR. PRICE: Madam Chair, I'm going to object:
16 This is a public comment posted as a matter of open document,
1 7 it appeared there. We take public comments all the time, as
18 you've mentioned. I don't know where else to go.
19 COMMISSIONER SMITH: Mr. Miller, do you want to
20 respond to the objection?
21 MR. MILLER: I don't.
22 COMMISSIONER SMITH: So we'll just move on.
MR. MILLER: We will.
COMMISSIONER SMITH: Because I think the horse
died.
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1 Q.BY MR. MILLER: Did Staff see a draft of this
2 letter before it was filed with the Commission?
3 A.No, Staff did not.
4 Q.Did Staff conduct any investigation to determine
5 if the factual statements in the letter are accurate?
6 A.No. That was not my responsibility.
7 Q.For example, in the third paragraph, Mr. Nancolas
8 says: TracFone has not attempted to negotiate a process for
9 fee collection.
10 Is that what you understand?
11 A.Where are you, third paragraph?
12 Q.I believe it's the third paragraph.
13 A.Third paragraph says: This letter is also to
14 confirm that TracFone has not made any attempt.
15 If you were told that TracFone representativesQ.
16 have attempted to engage with the Commission to discuss prepaid
17 issues, would you think that might be an overstatement?
18 MR. PRICE: Object: That's a hypothetical. It's
19 beyond me why this is even close to relevant. The letter
20 speaks for itself, it was posted on the Web site, it is what it
21 is.
22 COMMISSIONER SMITH: Mr. Miller, you know, the
23 wi tness has already testified this is not her letter , it's a
24 public comment..25 MR. MILLER: Right.
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.1 COMMISSIONER SMITH: And so that's -- she read
2 it, you read it, I read it.
3 MR. MILLER: I take the point fully. The only
4 thing I'd like to say is that this letter apparently has been
5 given some weight by the Commission.
6
7
COMMISSIONER SMITH: By the Staff.
MR. MILLER: Right. I just want to be sure that
8 the Commission, when it decides what weight to give to the
9 letter, has the benefit of this clever cross-examination.10 (Laughter. )
11 COMMISSIONER SMITH: I understand that you're
12 trying to make your client believe that you're worth what.13 you're charging, Mr. Miller.
14
15 Honor.
16 Q.
MR. BRECHER: We'll stipulate to that, your
BY MR. MILLER: All right, just one more question
18 In Paragraph 4, Mr. Nancolas claims that the
20
21
22
23
24.25
17 on the letter:
19 failure to
that?
A.
Q.
claim?
A.
Q.
pay fees is an unfair business practice. Do you see
Yes, I do.
Does he cite any legal authority to support that
I can't comment.
Well, do you see any legal authority cited there?
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1 COMMISSIONER SMITH: Mr. Miller, you've looked at
2 the letter, we've looked at the letter. It is what it is.
3 MR. MILLER: Right. Okay.
4 BY MR. MILLER: And as long as we're talkingQ.
5 about what's in the public file, there is, of course, a letter
6 from Governor Otter urging the courage for endorsement or
7 approval of the Application. Correct?
8 MR. PRICE: I'm going to object to that because
9 it's beyond the scope of Ms. Seaman's direct.
10 MR. BRECHER: This was a question.
11 MR. PRICE: If it references Governor Otter's
12 letter.
13 COMMISSIONER SMITH: Mr. Miller.
14 MR. MILLER: Well, I just wanted to ask the
15 question of whether the witness thinks it's odd that the
16 Governor would endorse a Application and a subordinate branch
17 or office of government --
18 COMMISSIONER SMITH: I take umbrage of the
19 characterization of the Commission as "subordinate." We are an
20 independent regulatory body.
21 MR. MILLER: No, no, no. You misunderstood.
22 COMMISSIONER SMITH: No, I don't.
23 MR. MILLER: I was referring to the Emergency
24 Communication Commission, not to you.
25 COMMISSIONER SMITH: I believe the letter was
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1 addressed to the Commission secretary.
2 MR. MILLER: It was, and I was just referring to
3 the letter from the Emergency Commission, not this Commission.
4 COMMISSIONER SMITH: Are you finished? Well, let
5 me just state: You are finished.
6 MR. BRECHER: Power of persuasion.
7 MR. MILLER: I thought I had just -- well.
8 COMMISSIONER SMITH: Mr. Miller, you are finished
9 wi th questions on the letter.
10 MR. MILLER: I am.
11 COMMISSIONER SMITH: Correct. Okay, move on to
12 your next stop.
13 Q.BY MR. MILLER: So would you say, just to wrap it
14 up, that the issue of the case really comes down to whether a
15 resolution of the fee issues should precede or follow ETC
16 approval?
17 A. Yes.
18 Q. And the Commission, of course, has to decide that
19 question. And like all questions the Commission has to
20 resolve, there are things that pull the Commission in different
21 directions. Delay of the approval would result in the delay of
22 consumer benefits, I think we have agreed. Correct?
23 Correct. But we have had ITSAP and Lifeline inA.
24 Idaho for years, and TracFone is now
25 Q.And the only reason
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1 COMMISSIONER SMITH: Let the witness finish her
2 response, please.
3 THE WITNESS: And so I think maybe a few more
4 months without TracFone will not be harmful.
5 BY MR. MILLER: On the other hand and IQ.
6 if the Commission lackedunderstand your point of view
7 confidence in its ability to enforce its Orders, that would be
8 a reason for delay. But if the Commission does not lack
9 confidence and if resolving fees first would result in delay of
10 benefits, would you think it would be a rational Decision for
11 the Commission to make to approve subject to subsequent
12 compliance?
13 I don't think I can comment on that. I'm notA.
14 sure what you're trying to testify to.
15 Okay. Just one last question: As I understandQ.
16 it, the Commission Staff has
17 Oh, I did have one other question:
18 Is it the Commission Staff's point of view that a
19 company such as TracFone should pay 911 fees even if it's not
20 legally obligated to?
21 I don't think that's an issue in Idaho, and I'mA.
22 not an attorney and I cannot comment on that.
23 Well, just so we're clear in this area, ifQ.
24 because of the way the law is worded TracFone is not legally
25 obligated under the Statutes to pay 911 fees, is it Staff's
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1 position that it should nonetheless pay 911 fees?
2 A.Is that a hypothetical?
3 Q.No.
4 COMMISSIONER SMITH: No, he's just asking for
5 your opinion.
6 THE WITNESS: If the Statutes do not state that
7 TracFone should not pay 911 fees, then I do not believe that
8 the Commission can -- is that my question? I don't know.
9 COMMISSIONER SMITH: I don't know.
10 THE WITNESS: I i m confused.
11 COMMISSIONER SMITH: If they're not legally
12 required to pay the fees, do you believe they should pay them
13 anyway?
14 THE WITNESS: No.
15 Q.BY MR. MILLER: Very well.
16 COMMISSIONER SMITH: Do I get a cut?
17 (Laughter. )
18 MR. MILLER: You've been very indulgent.
19 two questions:Q.BY MR. MILLER: Just one last
20 As I understand it, the Staff at the Commission
21 has a dual role: Sometimes the Staff acts as advisors to the
22 Commission, and sometimes the Staff acts as an advocate in a
23 contested proceeding at the Commission.
24 Is that your understanding of the Staff role at
25 the Commission?
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1 A.Yes.
2 Q.And would you accept the proposition that when
3 Staff acts as an advocate, that its testimony in a proceeding
4 is not entitled to any greater deference just because it comes
5 from the Staff, but that it's judged on its merits on an equal
6 footing with all other parties?
7 A.Yes.
8 MR. MILLER: That's all.
9 COMMISSIONER SMITH: Thank you, Mr. Miller.
10 Do we have questions from the Commission?
11 COMMISSIONER REDFORD: No.
12 COMMISSIONER KEMPTON: Madam Chair, I have just
13 one question.
14 COMMISSIONER SMITH: You might want to turn on
15 your mic.
16 COMMISSIONER KEMPTON: I should.
17
18 EXAMINATION
19
20 BY COMMISSIONER KEMPTON:
Q.My question basically is in response to
22 Mr. Miller's questions and his previous experience as a member
23 of this Commission and his knowledge of how the Commission
24 works..25 And so, Ms. Seaman, if there is a doubt about a
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1 Commission Decision and the responsibilities of the Commission
2 to reach a fair, just, and reasonable conclusion off -- on the
3 record, what is the final arbitrating authority on that the
4 final Decision authority, I should say -- if the Applicant
5 feels maligned in the course of the Commission's Decision?
6 A.Well, it is my understanding that they can file a
7 Motion.
8 Q.And a Motion for Reconsideration. And that
9 failing, perhaps, then what is the final resolving authority?
10 A.I'm not certain of this, but I believe it's the
11 Idaho Supreme Court.
12 Q.Thank you, Ms. Seaman.
13 COMMISSIONER SMITH: Mr. Price, do you have any
14 redirect?
15 MR. PRICE: Well, I think Staff's arguments and
16 position are pretty clear, that there's no new ground to be
17 plowed, so I have no redirect.
COMMISSIONER SMITH: Very enlightened.
Thank you for your help, Ms. Seaman.
(The witness left the stand.)
COMMISSIONER SMITH: Commissioner Kempton has a
22 couple more questions for witness Fuentes.
23 And you i re still under oath.
24
. 25
MR. FUENTES: Yes, Madam Chair.
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1 JOSE FUENTES,
2 recalled as a witness at the instance of TracFone, being
3 previously duly sworn, was further examined and testified as
4 follows:
5
6 EXAMINATION
7
8 BY COMMISSIONER KEMPTON:
9 Q.Mr. Fuentes, I apologize for actually calling you
10 back at this late hour, but there's been so much talk about the
11 wireless device and the benefits of the no-cost wireless device
12 that I just have to ask a couple of questions.
13 A.Yes, sir.
14 Q.Okay. What kind of warranty goes with the
15 wireless device that's provided?
16 A.I believe it's a -- the same as any other
17 one-year manufacturer's warranty for any defects on the phone,
18 that it will be replaced.
Q.There is a warranty associated with the gift of
20 the wireless device to the customer?
21
22
A.Yes, sir.
Q.And are there provisions if a wireless customer
23 decides to exit the program, is the phone still his or is it
24 returned to the Company?.25 A.That's one of the benefits of the program: If
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1 the customer's circumstances have changed where they no longer
2 want to be a part of the program, the phone and any minutes
3 that are left on the phone is theirs.
4 Q.Okay. And maintenance on the phone, on the
5 wireless device?
6 A."Maintenance" meaning
7 Q.Malfunctioning of the device, customer complaints
8 about the device, the normal thing that happens in customer
9 complaints on cell phones
10 A.Right.
11 -- as this would apply to the wireless device.Q.
12 A.Yes, we would replace the phone.
13 And is the -- at the time that the wirelessQ.
14 device is no longer adequately functional, I don't -- you know,
15 whether it's time of use, whether it's dropped, run over by the
16 car, can the customer then request a second wireless device
17 from TracFone?
18 Yes, they can. At any time, they get a one freeA.
19 phone. So let's say, for example, the customer was out and
20 about and they dropped the phone and the phone just broke and
21 it's -- they have been -- and they have been a customer over a
22 year. All they need to do is contact our 1-800 customer
23 service number, they would identify them as a SafeLink
24 customer, and we would go ahead and reissue them a brand new
25 phone.
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1 Q.Okay. See, I'm easy. I have no further
2 questions.
3 A.No. Thank you very much, Commissioner.
4 Q.Can't stand the redirect.
5 COMMISSIONER SMITH: There is no redirect.
6 Right?
7 MS. O'LEARY: Is that a question?
8 (Laughter. )
9 COMMISSIONER SMITH: Thank you, Mr. Fuentes.
10 THE WITNESS: Thank you, Madam Chair.
11 COMMISSIONER SMITH: Appreciate your being
12 here.
13 THE WITNESS: Thank you, Commissioners.
14 (The witness left the stand.)
15 COMMISSIONER SMITH: I believe that brings us to
16 the end of our proceeding today. Anything else to come before
17 the Commission?
18 MS. 0' LEARY: Madam Chairman, one of the things
19 that we did not discuss earlier in taking up our preliminary
20 matters, nor is it part of the Notice of Technical Hearing, is
21 the matter of filing closing posthearing briefs. Is it the
22 Commission's desire to have the parties provide that closing
23 brief to the Commission prior to making its Decision?
24.25
COMMISSIONER SMITH: My opinion is only if you
believe there are outstanding legal issues that need to be
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1 addressed. I don i t think we need a recap of the factual
2 testimony or cross-examination that was provided today.
3 MS. 0' LEARY: Thank you.
4 COMMISSIONER SMITH: Mr. Brecher.
5 MR. BRECHER: Yes. Chairman Smith, as the
6 counsel for the Applicant which --
7 COMMISSIONER SMITH: Is your mic on?
8 MR. BRECHER: Excuse me. As Counsel for the
9 Applicant who has the burden of proof, burden of persuasion, I
10 think it would be helpful to the Commission and helpful to the
11 parties to be able to kind of articulate the legal issues. I
12 agree with you: You don't need a recitation of the facts in
13 the record; you can read the transcript as well as we can. But
14 to the extent that there are legal issues about the standard,
15 about the applicable state and federal laws, I think it would
16 be appropriate to have a briefing schedule. Ultimately, it's
17 your decision to make, but I think it would be helpful.
18 COMMISSIONER SMITH: And I don't mind that if you
19 have issues you have identified, but I don't think this is a
20 free-for-all. So, if you have identified specific legal issues
21 that you believe the parties should brief and get to us, then
22 I'm all for that, and let's hear what they are.
MR. BRECHER: Well, off the top of my head,
24 obviously, there are legal issues surrounding the applicability
of two laws of the state governing certain fees: 911 fee and
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1 the ITSAP fee.
2 There is a question about the scope, the
3 applicabili ty of the FCC's forbearance authority.
4 COMMISSIONER SMITH: Let's start with number one.
5 Correct me if I'm wrong, but I thought I heard you say that
6 it's not this Commission who gets to decide the applicability
7 of the 911 fees. So, what use would it be to brief that issue
8 to us?
9 MR. BRECHER: Well, I agree with that, except I'm
10 in the minority here. It's pretty clear, to me, that the other
11 parties are of the view that this Commission should decide the
12 911 fee issue.
13 We propose in our rebuttal testimony alternative
14 ways to address that. I haven't detected a lot of support for
15 ei ther of those al ternati ves from the other parties. Believe
16 me, I don't want to write a brief about the 911 fee, I have
1 7 enough other things to do.
18 COMMISSIONER SMITH: But I thought I heard them
19 say that it was a timing issue. They thought the issue ought
20 to be resolved prior to the Commission granting ETC status, not
21 that they think the Commission has the jurisdiction to decide
22 that.
23 MR. BRECHER: Fair enough.
24 COMMISSIONER SMITH: So, I guess, as a question.
25 Don't hear anybody else talking, so I don't know. Mr. Price?
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.1 MR. PRICE: Yes. It's a very fine distinction,
2 and inasmuch as the 911 issue is wrapped up in the public
3 interest standard which is within the Commission's
4 jurisdiction, we haven't made the argument that the Commission
5 does have jurisdiction over the E911 fund, but it's wrapped up
6 inside of that greater public interest standard.
7 And, frankly, I think it's pretty clear what the
8 governing Statutes are here. If we're just going to recite
9 Statute and case law that has been included as exhibits and
10 testimony ad nauseum in this case, I don't know that a
11 posthearing brief would be productive.
12 MR. BRECHER: I'll yield. I will take that off.13 the list.
14 The other issues that I can think of are the
15 applicabili ty of the FCC forbearance Order, Section 10 of the
16 Communications Act.
17 Your Honor, if you think that issue is clear and
18 it's been addressed adequately and there's no need to further
19 brief it, that's fine with me.
20 COMMISSIONER SMITH: Well, Mr. Brecher, I don't
21 want to deny you the opportunity to do something that you
22 believe is necessary to have a complete and fair hearing before
23 the Commission. So, let's do this:
24 Why don't you think about it for a day or two and.25 send the parties and the Commission a communication advising us
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1 whether or not you found issues you think need to be addressed,
2 and if you did, what they are. And then give me your idea of
3 how long you need to address them.
4 MR. BRECHER: That's a fair suggestion.
5 COMMISSIONER SMITH: So let's not do it
6 off-the-cuff when we've been here all day and we're kind of
7 weary.
8 MR. BRECHER: Okay, that's fair.
9 COMMISSIONER SMITH: So when could you have that
10 to me? Today is Thursday.
11 MR. MILLER: Admit the exhibits?
12 COMMISSIONER SMITH: One thing at a time.
13 So, how many days would you like?
14 MR. BRECHER: Well, tomorrow is a travel day for
15 me, and one of the things I would have to do, obviously, is
16 think about it and consult with the client, so middle of next
17 week?
18 COMMISSIONER SMITH: Sure.
19 MR. BRECHER: Is that reasonable?
COMMISSIONER SMITH: I was going to say a week
21 from Monday.
22
23
24.25
MR. BRECHER: That would be even better.
COMMISSIONER SMITH: Okay.
MR. BRECHER: A week from this coming Monday,
which is the 4th?
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1 COMMISSIONER SMITH: Eleventh.
2 MR. BRECHER: April 11th.
3 As a matter of protocol, how would you like us to
4 communicate that? Should it be a letter to the Commission on
5 the record?
6 COMMISSIONER SMITH: It could just be as simple
7 as an e-mail to the Commission secretary and the parties.
8 MR. BRECHER: Fair enough. Thank you.
9 COMMISSIONER SMITH: And, now, is there anything
10 else? Anything else?
11 Now all exhibits previously identified will be
12 admi tted into the record.
13 (All exhibits marked for identification
14 were admitted into evidence.)
15 COMMISSIONER SMITH: Because we' re waiting for
16 this communication, the record will not close until we receive
17 that and determine whether or not some kind of posthearing
18 filings will be requested, and so then we will set a date for
19 the Reply.
20 Thank everybody for your patience and your help
21 today, and most especially Wendy.
22 And we're adjourned.
23 (The hearing concluded at 5:09 p.m.)
24
. 25
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.1
2
3
AUTHENTICATION
4 This is to certify that the foregoing is a
5 true and correct transcript to the best of my ability of the
6 proceedings held in the matter of the Application of TracFone
7 Wireless, Inc., for designation as an eligible
8 telecommunications carrier, Case No. TFW-T-09-01, commencing on
9 Thursday, March 31, 2011, at the Commission Hearing Room, 472
10 West Washington, Boise, Idaho, and the original thereof for the
11 file of the Commission.
12 Accuracy of all prefiled testimony as.13 originally submitted to this Reporter and incorporated herein
14 at the direction of the Commission is the sole responsibility
15 of the submitting parties.
.
16
17
18
19
20
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24
25
N tary Publi
he tate of Idah
residing at eridian, Idaho.
My Commission expires 2-8-2014.
Idaho CSR No. 475
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