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HomeMy WebLinkAbouttelecom.pdf2003 ANNUAL REPORTPage 45 IDAHO PUBLIC UTILITIES COMMISSION IDAHO PUBLIC UTILITIES COMMISSION Page 462003 ANNUAL REPORT Telecommunication Utilities Under IPUC Rate Jurisdiction Albion Telephone Corp (ATC) P.O.Box 98 Albion, Idaho 83311-0098 208/675-5335 Cambridge Telephone Company P.O.Box 86 Cambridge, Idaho 83610-0086 208/257-3314 CenturyTel of Idaho, Inc. P.O.Box 1007 Salmon, Idaho 83467 208/756-3300 CenturyTel of the Gem State, Inc. P.O.Box 9901 805 Broadway Vancouver, Washington 98668 360/905-5800 111 A Street Cheney, Washington 99114 509/235-3170 Frontier, A Citizens Communications Company 4 Triad Center, Suite 220 Salt Lake City, Utah 84180 801/321-6602 P.O.Box 926 201 Lenora Street McCall, Idaho 83638 208/634-6150 Inland Telephone Company 103 South Second Street P.O.Box 171 Roslyn, Washington 98941 509/649-2211 Fremont Telecom, Inc. 110 E. Main Street St. Anthony, Idaho 83445 208/624-7300 Midvale Telephone Exchange, Inc. P.O.Box 7 Midvale, Idaho 83645-0007 208/355-2211 Verizon Northwest, Inc. 17933 N.W. Evergreen Parkway P.O.Box 1100 Beaverton, Oregon 97075 503/629-2281 208/765-4351 (Coeur d’Alene) 800/483-4100 (Moscow) 208/263-0557, Ext. 204 (Sandpoint) Oregon-Idaho Utilities, Inc. P.O.Box 190310 Rincon Station San Francisco, California 94119-0310 415/597-7811 714 Main Street P.O.Box 1406 Caldwell, Idaho 83605 208/454-7800 Pine Telephone System, Inc. P.O.Box 706 Halfway, Oregon 97834 541/742-2201 Potlatch Telephone Company P.O.Box 138 702 E. Main Street Kendrick, Idaho 83537-0138 208/835-2211 Rockland Telephone Company, Inc. P.O.Box 269 147 W. 4th Avenue Rockland, Idaho 83271 208/548-2345 Rural Telephone Company 704 W. Madison Avenue Glenns Ferry, Idaho 83623 208/366-2614 Silver Star Telephone Company, Inc. P.O.Box 226 Freedom, Wyoming 83120 307/883-2411 Troy Telephone Company P.O.Box 138 702 E. Main Street Kendrick, Idaho 83837-0138 208/835-2211 Teton Telecom Communications P.O.Box 900 Driggs, Idaho 83422 208/354-3300 Qwest Communications North and South Idaho P.O.Box 7888 (83723) 999 Main Street Boise, Idaho 83702 800/244-1111 2003 ANNUAL REPORTPage 47 IDAHO PUBLIC UTILITIES COMMISSION Idaho Telecommunications Competitive Local Exchange Carrier Certificates Approved in FY03 15 Total Approved (as of 7/1/03) 58 A list of companies issued certificates to provide basic local exchange service is available at www.puc.state.id.us/ FILEROOM/ UTILITIES.pdf Interconnection Agreements Agreements or Amendments Approved in FY02 67 Developing Competition Competition may finally be emerging in Idaho, as the number of custom- ers selecting a competitive carrier started to increase significantly at the close of this fiscal year. It has now been more than seven years since the passage of the federal Telecommunications Act of 1996 made it legal for competition to de- velop for local exchange services, but making competition legal did not make it happen immediately. After an initial stage of optimism, competitive activity in Idaho stalled, caught in the general economic downturn that nearly dealt the competitive telecommunications sector a deadly blow. However, in the closing months of the year, the number of Qwest customers selecting an alternative provider increased significantly, possibly signaling the start of a competitive future, at least for some parts of Idaho. Although regulatory barriers to competition in Idaho have been elimi- nated, many Idaho consumers still do not have a choice, and those who do have choices are not enjoying the full advantages of competition envisioned by Congress. Market forces, and not legal or regulatory barriers, are the primary factors leading to the slow progress of competition in Idaho. The Idaho Public Utilities Commission approved 15 more applications for Certificates of Public Convenience and Necessity to provide competitive local exchange service during the year covered by this report, and had granted a total of 58 companies with certificates by June 30, 2002. However, only a handful of these competi- tive local exchange companies (CLECs) had made the market decision to actually provide service to Idaho customers. In the year covered by this report, the commission also approved more than 65 interconnection agreements and amendments to previous agreements between incumbent telephone companies and competitors, including those providing wireless or paging services. These agreements specify the terms and conditions for connecting one company’s system to the others so that calls may transfer seamlessly from one company to the next. They also include the terms and conditions under which an incumbent will sell its services, or the individual network elements that CLEC’s may use to provide competitive services without duplicating the existing facilities. The Idaho Telecommunications Act of 1988 allowed telephone compa- nies to elect modified regulation for all but basic local exchange service to customers with five or fewer lines at one location. U S WEST chose partial deregulation under Title 62 for its territory in southern Idaho, beginning April 1, 1989. All telecommunications companies that only provide long distance ser- vices also come under the provisions of Title 62. These companies set their own prices and file price lists with the commissioners for informal purposes. IDAHO PUBLIC UTILITIES COMMISSION Page 482003 ANNUAL REPORT Approximately 400 long distance companies have price lists on file with the commission, although the number actually providing service to Idaho customers is estimated to be only a fraction of that. After years of increasing growth in the number of price lists on file, this number remained relatively stable the past three years. The general economic downturn and the acute downturn in the technical sector was visible here with the number of new filings matched by the number of price lists withdrawn due to mergers, bankruptcies and decisions to cease operations in Idaho. Services provided by the new CLECs are not rate-regulated, but, in accordance with the provisions of Title 62, are subject to the commission’s rules. Telecommunications companies not providing basic local service, such as a long distance company, are also not subject to rate-setting authority of Title 61, but must comply with Title 62 rules. Upon complaint, the commission may hold hearings and order changes if the public interest is adversely affected, and may resolve disputes between companies. Title 62 regulations require that price lists be filed with the commission. Commission staff reviewed more than 450 price lists or revisions to price lists during the year. While the commission does not review the actual prices in the price lists, staff checks the terms and conditions of the price list for compliance with applicable commission rules. The commission retains the authority to review the quality, availability, terms and conditions of service offered by economically deregulated Title 62 companies. Until the commission determines that incumbent local exchange compa- nies (ILEC) face effective competition throughout an exchange, basic local exchange service provided by an ILEC to residential and small business cus- tomers remains under the commission’s Title 61 rate-setting authority. Qwest sought price deregulation of its seven largest exchanges, claiming competition from wireless providers met the criteria for effective competition (See QWE-T- 02-25.). More than 75 tariff revisions for price regulated services were reviewed and approved by the commission during this year. Most of these involved the introduction of new vertical or advanced services or adjustments to prices or fees made necessary by orders of the Federal Communications Commission or IPUC orders. Approximately 400 companies had Title 62 price lists on file with the Commission at the end of June, 2002. 2003 ANNUAL REPORTPage 49 IDAHO PUBLIC UTILITIES COMMISSION Local exchange companies In addition to the North Idaho service area of Qwest which remains fully regulated and subject to the provisions of Title 61, there are 16 other local exchange companies whose services are still fully regulated by the commission. Qwest’s Southern Idaho operating company is by far the largest local exchange company, with more than 67 percent of the customer lines (approximately 500,000) in the state. Verizon is a distant second, with nearly 130,000 access lines (about 18 percent). The Qwest North service area is the third largest, with 36,000, or 5 percent. Frontier, formerly known as Citizens, is Idaho’s third largest local exchange carrier with more than 20,000 access lines (3 percent). Fourteen other regulated telecommunications companies also serve Idaho residents, as well as six mutual or cooperative companies. These 20 companies serve the remaining 7 percent. Teton Communications Ave. Residential Rate = $24.10 Ave. Business Rate = $42.00 CenturyTel of Idaho Ave. Residential Rate = $21.75 + $3.50 rural adder Ave. Business Rate =$39.77 + $3.50 rural adder CenturyTel of the Gem State Ave. Residential Rate = $24.10 + $3.50 rural adder Average Business Rate = $39.77 + $3.50 rural adder Potlatch Telephone Company Ave. Residential Rate = $12.17 Ave. Business Rate = $18.20 IDAHO PUBLIC UTILITIES COMMISSION Page 502003 ANNUAL REPORT Telecommunications Case Reviews QWEST PETITION FOR DEREGULATION DENIED Case No. QWE-T-02-25, Order No. 29360 The Idaho Public Utilities Commission denied a petition by Qwest Corporation to deregulate pricing of local telephone rates in seven urban areas in southern Idaho. Had the commission granted the petition, Qwest would have been able to increase or decrease basic local exchange rates in those seven areas without commission approval. The Idaho Telecommunications Act says the commission shall cease regulating basic local exchange rates when the incumbent telephone corporation – in this case, Qwest – can show that effective competition exists for local calling. Qwest maintained that a number of cellular (wireless) telephone provid- ers in the Boise, Nampa, Meridian, Caldwell, Twin Falls, Pocatello and Idaho Falls areas offer effective competition to Qwest’s landline service. “The commission was not persuaded by Qwest’s evidence that cellular service effectively competes for local service customers of Qwest’s wireline service,” the commission said. “On the evidence presented to us, we cannot find that cell phones are functionally equivalent and competitively priced to Qwest’s local service.” Qwest cited the results of a Federal Communications Commission study indicating that 3 to 5 percent of wireline customers nationwide are replac- ing their landline phone with a wireless phone. But Qwest did not show that those numbers apply to Qwest exchanges here, the commission said. Even if they did apply to Idaho, “substitution rates of 3 to 5 percent do not demon- strate that cell phone service effectively completes with wireline service.” The commission said its conclusion is similar to one reached by the FCC in its Aug. 21 Triennial Review Order which said, “Neither wireless nor cable has blossomed into a full substitute for wireline telephony.” The commission said it also had a public interest concern regarding the potential for Qwest rate increases. “Nowhere in the record does Qwest con- tend it is considering lowering its basic local service rates as the result of competitive pressure it currently faces from cellular service.” In a motion to re-open the record after the official case record had closed, Qwest volunteered to forego rate increases through 2004 and then limit its rate increases to $6.60 per month for residential customers and $9.49 per month for small-business customers through 2007. “The public interest is served if basic service rates are deregulated only when effective competitive forces exist to protect customers from monopoly pricing,” the commission said. “In that environment, it would not be necessary for Qwest to volunteer to limit increases in its local service rates.” Commissioners cited exhibits in the case that show wireless plans are Midvale Telephone Exchange Ave. Residential Rate = $22.48 Ave. Business Rate = $40.91 Qwest South Ave. Residential Rate = $17.15 Ave. Business Rate = $32.02 U S WEST North Ave. Residential Rate = $15.51 Ave. Business Rate = $29.38 Fremont Telcom Company Ave. Residential Rate = $24.10 Ave. Business Rate = $42.00 2003 ANNUAL REPORTPage 51 IDAHO PUBLIC UTILITIES COMMISSION priced from $3.95 per month to $58.67 per month higher than Qwest’s basic local service. Those cell phone prices do not include the $1.50 per month for directory listing or fees for 911 service and number portability, all of which will soon appear on cell phone service bills. The commission agreed with intervening parties in the case who main- tained that cellular service is not yet “functionally equivalent” to wireline technol- ogy, as is required by state statute. For example, cell phones are not yet equipped to handle multiple extensions as would be required at a small business or “roll over” features that allow an incoming call on any of several local lines serving a small business. Further, cell phones cannot provide facsimile capabili- ties and only very limited Internet functions with research features. Much of the case dealt with two different interpretations Section 62- 622(3) of Idaho Code. Qwest maintained the Legislature intended to allow for deregulation if competition for basic voice service exists within an area and that functions other than voice service, such as facsimile or Internet technology, were irrelevant to the case. However, the commission, citing legislative intent language, ruled that “actual competition means more than the mere presence of a competitor” and needs to be “substantive and meaningful,” offering service functions similar enough to wireline that customers are willing and able to switch to a cellular service as a substitute to basic local service. The commission acknowledged Qwest exhibits that show an increase in cell phone customers and a small decrease in the number of local service lines in six of the seven exchanges. However, Qwest presented no evidence to show a correlation between the two, the commission said. “Qwest candidly admitted it ‘never attempted to provide a precise loss of lines attributable to wireless competition,’ ” the commission said. A PUC staff witness testified that while Qwest lost 14,000 access lines since 2000, it gained 13,000 high-speed Internet (DSL) lines, indicating a large number of customers who converted second phone lines with DSL lines. Revenues from DSL lines are considerably higher than from a voice grade line, according to commission staff. The order also denies a motion made by Qwest on Aug. 14 to re-open the case record, which had been closed on July 11. Qwest’s motion sought to fundamentally change the case from a price deregulation case to a pilot project with price caps in the seven urban exchanges. Public workshops and hearing regarding Qwest’s original application were held in Pocatello, Twin Falls and Boise. The commission received written comments from 38 customers and two organizations. Three customers sup- ported Qwest’s proposal and the two organizations, the Twin Falls Chamber of Commerce and the Boise Metro Chamber of Commerce, also expressed support. Most customers opposing Qwest’s petition cited affordable rates, especially for senior citizens and low-income customers who want basic tele- phone service without the extras that come with “packages” offered by Qwest Direct Communications Ave. Residential Rate = $24.10 Ave. Business Rate = $42.00 ATC (Albion Telephone Company) Residential = $24.10 Business = $42.00 Cambridge Telephone Company Ave. Residential Rate = $24.10 Ave. Business Rate = $42.00 Ave. Residential Rate = $24.10 Ave. Business Rate = $42.00 IDAHO PUBLIC UTILITIES COMMISSION Page 522003 ANNUAL REPORT and wireless companies. Copies of the commission’s order as well as other documents related to the case are available on the commission’s Web site at www.puc.state.id.us. Click on “File Room,” and then on, “Telecommunication Cases,” and scroll down to Case No. QWE-T-02-25. TOLL RESTRICTION SETTLEMENT APPROVED Case No. QWE-T-03-15, Order No. 29337 September 26, 2003 The Idaho Public Utilities Commission accepted a settlement between the Qwest Corporation and commission staff that increases the rate for toll restriction service, but moves the service under commission regulation and removes installation fees for residential customers. Toll restriction prohibits access to long distance carriers on any line on which it is installed. Qwest has more than 38,000 toll restriction customers in Idaho. A typical toll restriction customer would be a parent with a teen line who doesn’t want long-distance calls made from that line. Other toll restriction customers include those who are low income or those who have had trouble making long-distance payments in the past but want to retain a phone line for local calls only. The settlement promotes universal service by allowing low- income customers or customers with difficulties making past payments to obtain local calling service without having to make a deposit. The order, effective Oct. 1, means that toll restriction will no longer be deregulated. As a deregulated service, Qwest would have been able to increase or decrease fees for the service without commission approval. As part of the settlement, the monthly fee for residential customers who want toll restriction increases from 25 cents to 75 cents. For business lines, the monthly fee increases from $1 to $2. Low-income customers who qualify under the state’s Lifeline program will not be charged for toll restriction. The settlement also removes the residential installation fee for the service, which was $24 in Qwest’s northern Idaho territory and $13.50 in southern Idaho. For business lines, the installation fee will be $13.50. The settlement was approved on a 2-1 vote by the commission, with Commissioner Marsha Smith dissenting. Smith concurred with the majority that the service should be regulated, but did not agree with the decision to raise the monthly fee. “Although I recognize that the approved rates are low when compared to the rates in other states, I believe that customers should not have to pay to block their access to long-distance carriers,” Smith said. The residential rate is the lowest in the 12 states where Qwest has a toll restriction fee. Ave. Residential Rate = $15.77 Ave. Business Rate = $27.75 Ave. Residential Rate = $18.92 Ave. Business Rate = $36.19 Ave. Residential Rate = $17.50 Ave. Business Rate = $35.10 Inland Telephone Company Ave. Residential Rate = $21.63 Ave. Business Rate = $40.68 2003 ANNUAL REPORTPage 53 IDAHO PUBLIC UTILITIES COMMISSION Idaho’s Universal Service Fund Telephone companies operating in Idaho have been required since July 1988 to contribute to a Universal Service Fund (USF) to ensure that the high costs of small telephone companies do not result in rates that exceed the statewide average by more than 25 percent. These local and long distance companies are permitted to recover their contributions from local and long- distance customers. Local exchange companies may apply for assistance from this fund. They must submit proof to the commission that when they set their local rates at 125 percent of the statewide average, they still do not fully re- cover their cost of providing local service. The commission evaluates the circumstances and determines whether and for what amount the company may receive Universal Service funds. Long distance companies connecting in-state long distance calls in Idaho are required to remit a 0.25 cent ($0.0025) surcharge for each in-state long distance minute. Those companies are also required to submit periodic reports detailing their minutes of in-state toll usage. Local exchange companies are required to remit on a monthly basis 8 cents (residential) and 13 cents (business) for each line served. These rates did not change this fiscal year. Universal Service Fund Facts July 1, 2002 -- June 30, 2003 Residential Business Toll Access Statewide average $17.58 $31.52 $0.0525 125 percent of average $21.98 $39.40 Monthly surcharge rate $0.08/line $0.13/line LD/WATS surcharge rate $0.0025/min Fund Activity Balance 7/01/02 $ 646,286 Collections Disbursements Local Surcharge $902,422 ATC $514,238 Toll Surcharge $752,894 Cambridge $167,381 Total $1,655,316 Direct Comm $110,081 Interest Earned $ 18,901 Fremont $43,161 Inland $362,366 Co. Disbursements$1,898,303 Midvale $221,847 Admin/Amort/ $ 11,600 Rural $316,128 Bank/Brkr Silver Star $163,101 T-Note $255,880 $1,898,303 Balance 6/30/03 $ 666,480 IDAHO PUBLIC UTILITIES COMMISSION Page 542003 ANNUAL REPORT March 26, 2003 FEE TO AID LOW-INCOME IDAHOANS INCREASES Case No. GNR-T-03-12, Order No. 29214 A surcharge on all residential, wireless and business phone lines will increase from 10 cents per line per month to 12 cents effective May 1, 2003. The Idaho Telephone Service Assistance Program (ITSAP), com- monly referred to as a “lifeline” program, provides credits to low income households to assist them to obtain and maintain telephone service. Because the value of telephone service increases as more households have a telephone, a small contribution from all non-participating households is used to fund this program. In response to federal changes to the program, the Idaho Legislature opened the program to all low-income households. The credits include $3.50 per month per household in state funds, plus $3.50 in matching funds from the federal government. In addition, the federally imposed subscriber line charge of $6.50 is waived for ITSAP participants. The combined value of federal and state credits is $13.50 per month per house- hold. The Department of Health and Welfare established and administers application procedures and eligibility determinations. Utilities are provided a list of the telephone numbers for qualifying households and automatically provide qualifying households with the credits. The commission is responsible for maintaining the fund and reimbursing the telephone companies for the cost of providing these credits. Based upon the estimates of the number of households eligible for the credits, the commis- sion established the monthly surcharge paid by all telephone users, including wireless customers, at 12 cents per line effective May 1, 2003. The average number of credit recipients increased by nearly 15% to over 27,500 as of June 30th. The ITSAP surcharge is assessed on residential, business, and wireless users. The gross surcharge revenue is netted against the assistance credits paid to eligible customers and the company’s administrative costs. Gross surcharge revenues collected by telecommunications companies during the year totaled $1,243,775,of which $743,229 (60 percent) was assessed on local exchange services and $500,568 (40 percent) was assessed on wireless/cellular ser- vices. ITSAP Summary Jan, 02 - Dec, 02 Credits Provided Idaho Share = $1,159,039 Federal Match = $ 3,224,169 Total Value of Credits = $4,383,208 Fund Balance As of 12/31/02 = $18,371.13 2003 ANNUAL REPORTPage 55 IDAHO PUBLIC UTILITIES COMMISSION TRS service is available statewide and may be reached by voice by dialing 1-800-377-1363. Contact with a text-telephone operator may be made by dialing 1-800-377-3529. As of October 1, 2001, TRS can be accessed from any phone simply by dialing 711. Questions or comments regarding the use of TRS may be directed from either a text or voice telephone to 1-800-368-6185. Idaho’s Telephone Relay Service Idaho inaugurated telephone relay service (TRS) on Dec. 1, 1992, for the hearing- and speech-impaired. TRS requirements were created by the Federal Communications Commission under Title IV of the Americans with Disabilities Act of 1990. The 1992 Idaho Legislature established the manner in which TRS has been implemented. Under Idaho rules, the Idaho Public Utilities Commission established a seven-member telephone industry committee to help select and advise a TRS administrator. In 1992, the commission appointed Robert Dunbar as its first TRS administrator. This past year, Mr. Dunbar completed the federally required re-certifi- cation process for the Idaho relay. This process is required every five years by the FCC and addresses the operational standards, service offerings and perfor- mance requirements of relay service. In accordance with an FCC requirement, Idaho’s local exchange companies implemented 711 dialing access to TRS service on October 1, 2001. This year, Hamilton Telecommunications inititated internet-based relay service. Hamilton Internet Protocol Relay (HIP Relay) is a 24-hour service that allows individuals who are Deaf, Hard of Hearing or Speech Disabled to use computers and other web devices to connect to HIP Relay via the Internet in order to place a call to any standard telephone user, VCO user or HCO user. At this time, NECA reimburses Hamilton for internet relay communication. A TRS call may be initiated by a text telephone user or a standard phone user. The caller dials 711 or a toll-free number to access the TRS center and reaches a Communications Assistant (CA) who will process the call. The caller gives the CA the number of the person to be called and the CA places the call. The CA will type to the person with the text telephone and speak to the person with the standard phone, relaying what is spoken/typed by each party. “The idea is to allow as close to normal telephone service as possible for hearing- and speech-impaired persons,” according to Dunbar. Callers only pay the cost of the telephone call, as if the call was placed directly between the telephones. Long distance calls are billed based upon the points of origination and termination and many long distance companies bill them on a reduced rate basis. No charge is assessed local calls. TRS service is available statewide and may be reached by voice by dialing 711 or 1-800-377-1363. Contact with a text-telephone operator is made by dialing 1-800-377-3529. Questions or comments regarding the use of TRS may be directed from either a text or voice telephone to 1-800-368-6185. Information on Idaho’s TRS program is also available via the Internet at: www.hamilton.net/relay/id/itrs.htm All Idaho local exchange companies pay 4 cents per access line per month. In-state long distance companies pay $0.0007 per bill minute to support the TRS. The commission did not change this rate in 2003.