20020801_223.pdf

TO:
FROM:
DATE:
RE:
DECISION MEMORANDUM
COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
JEAN JEWELL
RON LAW
LOU ANN WESTERFIELD
TONY A CLARK
DON HOWELL
DAVE SCHUNKE
RANDY LOBB
JOE CUSICK
WAYNE HART
LYNN ANDERSON
BEV BARKER
GENE FADNESS
WORKING FILE
WELDON STUTZMAN
JULY 29, 2002
CASE NO. QCC-02-
APPLICATION FOR A CERTIFICATE OF PUBLIC CONVENIENCE AND
NECESSITY FOR QWEST COMMUNICATIONS CORPORATION
On April 24, 2002, Qwest Communications Corporation (QCC) filed an Application
for a Certificate of Public Convenience and Necessity to provide basic local exchange service
within the State of Idaho. QCC is a wholly-owned subsidiary of Qwest Service Corporation
which also owns Qwest Corporation. Qwest Corporation is an incumbent local exchange carrier
in Idaho and a Bell Operating Company as defined by the 1996 Telecommunications Act. QCC
intends to provide intra and interLATA toll service upon approval from the Federal
Communications Commission pursuant to 47 U.c. ~ 271 and ~ 272. Section 272 requires a
Bill Operating Company, which includes Qwest Corporation, to provide interLATA services
through an affiliate separate from the Bell Operating Company. QCC also intends to provide
local exchange service and vertical features to business and residential customers in the service
area of Qwest Corporation and Verizon Northwest, Inc. using both its own facilities and resold
DECISION MEMORANDUM
service or unbundled network elements. QCC's local telecommunication services would be
subject to the Commission s jurisdiction pursuant to Title 62, Idaho Code.
On June 10, 2002, the Commission issued a Notice of Application and Notice of
Modified Procedure to process QCC's Application. During the comment period, written
comments were filed only by the Commission Staff.Staff determined that QCC met the
Commission s requirements for approval of a CPCN, but raised concerns regarding two issues.
Staff is concerned that customers may not understand the distinction between the regulated basic
local service provided by Qwest Corporation and the relatively unregulated basic local service
provided by QCC if those services are marketed by the same entity. In reply comments, QCC
asserts joint marketing by QCC and Qwest Corporation is expressly permitted by Section 272 of
the Telecommunications Act.
Section 272 states that "the joint marketing and sale of services permitted under this
subsection shall not be considered to violate the nondiscrimination provisions of subsection (c).
This language does not limit the authority of the Commission to impose conditions on the
marketing of telecommunications services by companies under the jurisdiction of the
Commission. The Commission has received hundreds of complaints regarding Qwest's joint
marketing and billing of wireless and DSL services. These complaints indicate that Qwest has
not adequately clarified to customers the relationship between Qwest Corporation and other
Qwest entities for which Qwest Corporation is conducting joint marketing and billing. The
potential for confusion is even greater when the products are essentially identical, as they are
between QCC and Qwest Corporation. Staff recommends that the order approving the
application of QCC to provide basic local exchange service instruct the Company to inform
customers about the distinction between products offered by Qwest Corporation and QCc.
Staff also expressed concerns about the financial capability of QCC, given the
current financial problems ofthe parent company, Qwest Communications.
In a related matter, Staff noted that QCC submitted an Application to withdraw the
CPCN the Commission previously issued to LCI International Telecom Corp. (LCI). LCI
longer exists, and Staff recommends the Commission approve the withdrawal of the CPCN
issued to LCI.
DECISION MEMORANDUM
Staff recommends the Commission issue an order approving the Application of QCC
for a Certificate of Public Convenience and Necessity to provide basic local exchange service
within the State ofIdaho.
Commission Decision
Should the Commission approve the Application of QCC for a Certificate of Public
Convenience and Necessity to provide basic local telecommunication service in the state
Idaho?
Weldon Stutzman
vldIM:QCCTO201
DECISION MEMORANDUM