20040419_808.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
CO MMISSI 0 NER SMITH
CO MMISSI 0 NER HANSEN
COMMISSION SECRETARYLEGAL
WORKING FILE
FROM:CAROLEE HALL AND WAYNE HART
DATE:APRIL 13, 2004
RE:Q WES T CO MPE TITIVE RESPONSE TARIFFS, AD VI CE NOS. 04-02- N
AND 04-01-
On March 31 , 2004, Qwest filed tariff advices for both North and South Idaho introducing
promotional programs for both new and existing customers. The offerings would be included as
tariffed items, and available until cancelled. Qwest requested an effective date of May 3 2004.
The promotions for new customers would allow a sales representative to offer a
potential new basic local exchange customer either: 1) a waiver of nomecurring fees, 2) a
waiver of as much as two months recurring charges, 3) a waiver of an amount up to the total of
both nomecurring charges and two months recurring charges, or 4) merchandise, gift
certificates or other benefits with a retail value not to exceed the value of option three. The
Company may condition its offer on the residential customer remaining with the Company for
a minimum period of time, which time period is not specified in the tariff. If the customer
terminates early, he would be billed all the charges waived under the program. Business
customers would be required to remain with the Company for a period of one year.
Sales representatives would be allowed to offer an existing local exchange customer
seeking to disconnect any service either: 1) a waiver of an amount up to the nomecurring
charges, 2) a waiver up to one month of the recurring rate, 3) a waiver of an amount up to the
total of both nomecurring charges and one months recurring charges, or 4) merchandise or
other benefits with a retail value not to exceed the value of option three. Waivers would be
provided in the form of credits on the bill. Customers would be limited to receiving the
waivers only one time per product.
DECISION MEMORANDUM - 1 -APRIL 13 2004
One other provision of the Tariff Advice allows the Company to discontinue the offer
with only 14 days notice.
STAFF ANALYSIS
Staff views this filing as a progressive offering and makes a couple of recommendations
to make the tariff consistent with legal requirements. First, with respect to offering discounts
and one-time credits, the Company must make every effort to ensure that similarly situated
customers are offered similar incentive credits, according to the terms of Idaho Code 9 61-313:
Except as in this act otherwise provided no public utility shall
charge, demand, collect or receive a greater or less or different
compensation from any product or commodity furnished or to be
furnished or for any service rendered or to be rendered, than the
rates, tolls, rentals and charges applicable to such product or
commodity or service as specified in its schedules on file and in
effect at the time nor shall any such public utility refund or remit
directly or indirectly, in any manner or by any device, any portion of
the rates tolls, rentals and charges so specific nor extended to any
corporation or person any form of contract or agreement or any rule
or regulation of any facility or privilege except such as are specified
in such schedules and as are regularly and uniformly extended to all
corporations and persons: provided, that messages by telephone or
cable, subject to the provisions of this act, may be classified by the
utility into day, night, repeated, umepeated, letter, commercial
press, government and such other classes of messages: provided
further, that nothing in this chapter shall be construed to prevent
telephone and cable companies from entering into contract with
common carriers for the exchange of service at rates common to all
common carriers oflike class. (Emphasis added).
DECISION MEMORANDUM - 2-APRIL 13, 2004
Likewise,Idaho Code 9 61-315 states:
No public utility shall, as to rates, charges, service, facilities or in
any other respect, make or grant any preference or advantage to any
corporation or person or subject any corporation or person to any
prejudice or disadvantage. No public utility shall establish or
maintain any umeasonable difference as to rates, charges, service
facilities or in any other respect, either as between localities or as
between classes of service. The commission shall have the power to
determine any question of fact arising under this section. (Emphasis
added.
Staff queried other state commissions regarding this filing and learned that Qwest had
filed similar tariff advices in other states. The Washington Commission received a similar
filing last February and will be meeting and deciding this filing on April 28, 2004. The
Washington staff and Qwest agreed upon a language change that this Staff would like to see
added to the Idaho tariffs. It is as follows:
The Company shall use reasonable business efforts so that similarly
situated customers are offered similar incentive credits in similar
circumstances.
Staff also believes the provision of the Tariff Advices that allows the Company to
terminate the offer with just a 14-day notice does not comport with the provisions of Idaho
Code 9 61-307. That section does not allow changes
, "
to any rate, fare, toll, rental, charge or
classification, or in any rule, regulation or contract relating to or affecting any rate, fare, toll
rental charge, classification or service, or in any privilege or facility except after thirty (30)
days ' notice to the commission and to the public." The 30-day change restriction is also
stated in the Commission s Rules of Procedure, IDAPA 31.01.01.134.02.
Staff notes that the Company has a readily available option to simplify similar tariff
changes in the future, and relieve it of some of the legal requirements for such changes.
Pursuant to Idaho Code 9 62-622(1)(a), Qwest can easily obtain approval of a maximum basic
local exchange rate at the current rate, which would make similar tariff changes controlled by
Section 62-622 (l)(e). That paragraph provides as follows:
DECISION MEMORANDUM - 3 -APRIL 13 2004
After the commission has established maximum basic local
exchange rates, an incumbent telephone corporation may
change its tariffs or price lists reflecting the availability,
price, terms and conditions for a local exchange service
effective not less than ten (10) days after filing with the
commission and giving notice to affected customers.
Changes to tariffs or price lists that are for nomecurring
services and that are quoted directly to the customer when an
order for service is placed, or changes that result in price
reductions or new service offerings, shall be effective
immediately upon filing with the commission and no other
notice shall be required.
STAFF RECOMMENDATION
Staff recommends that the Commission approve these tariff advices with the following
changes to comply with current statutory requirements:
1. That the Company add the language discussed above, which will ensure that
similarly situated customers are offered similar incentive credits in similar
circumstances in accordance with Idaho Code 9 61-313 and 61-315.
2. The Company changes the 14-day termination to 30 days consistent with Idaho
Code 9 61-307 and the Commission s Rules of Procedure IDAPA 31.01.01.134.02.
COMMISSION DECISION
Does the Commission wish to approve these Tariff Advices as submitted with Staffs
recommended changes?
i:udmemos/Qwest competitive response tariff advice 04-02-N and 04-01-
DECISION MEMORANDUM - 4-APRIL 13 , 2004