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January 17 2003
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999 Main Street, 11th Floor
Boise, Idaho 83702
Qwest,
Jean Jewell
Secretary
Idaho Public Utilities Commission
P. O. Box 83720
Boise, ID 83720-0074
RE: QWEST SUPPLEMENTAL COMMENTS ON TECH III PROPOSAL
Dear Jean
Qwest filed its Technology Plus Phase III (Tech III) proposal with the Commission on
12-30-02. This letter responds to questions raised in the Commission decision meeting
held on 1-13-03 relating to certain aspects of the Tech III project. Specifically, I will
provide additional detail regarding a) benefits to customers from Tech III, b) differences
between regular maintenance work and Tech III, c) the challenge of spending Revenue
Sharing monies on Title 61 enhancements and d) identification of the scope of replacing
all Anaconda carrier systems in southern Idaho.
1. Benefits to Customers from Tech III
The proposal identifies four specific areas for investment in the Qwest local exchange
network in southern Idaho. The key customer impact of all ofthese improvements is to
increase service quality and reliability through the elimination of a) customer service
problems related to damaged cable and b) older analog Anaconda carrier systems which
are subject to a greater level of failure and which cannot handle signaling levels
necessary to deliver advanced features. Customers who are served by lead sheathed and
older air core cables are more likely to experience service interruptions or service-
affecting conditions. For instance, when it rains, damage to these facilities caused by
weather or rodents over the years allows moisture to enter the cable sheath causing
service interruption. High winds and extreme heat also have adverse effects upon this
older technology as heat expansion or wind movement cause a disruption in the electrical
connectivity of the cable wires. While customers served via these older systems receive
good basic telephone service, they also tend to experience a higher incidence of impaired
servIce.
Thus, a significant and meaningful customer benefit for those directly impacted
customers will be the cutover of their service to newer generation cable that will increase
the reliability of their telephone service. This also benefits other customers who place in-
coming calls to these customers. Improved cable plant also benefits CLEC service
providers who may be leasing cable pairs from Qwest to serve their end user customers.
In essence, improving cable plant improves the overall reliability and performance ofthe
network for all customers.
Another direct benefit to customers is the financial benefit realized by the matching of the
revenue sharing monies by an additional Qwest investment of an equal amount. The
Commission is able to double the scope of network improvements through this matching
approach. In addition, the Company has agreed to eliminate from its rate base the
investment of the Commission-sponsored $4 million which eliminates any future
financial recovery of these funds from customers. Customers will realize actual, long-
term benefit from revenue sharing funds in the form of improved service quality without
any risk of having to pay higher rates associated with this investment.
Finally, the Tech III proposal brings a more rapid delivery ofthese benefits to customers
than would business-as-usual network cable maintenance (to be discussed in the next
section). If a section of cable is experiencing service problems, it is being repaired by
field cable maintenance personnel until the problems become so severe that cable
replacement is justified. The work being proposed in the Tech III program significantly
advances the date for replacement of the identified cable sections in advance of the
timeframe required to replace these cable under normal maintenance routines.
2. The Tech III Project goes Beyond Normal Maintenance Procedures by More Rapidly
Improving Network Reliability
There are distinct differences between Qwest's cable maintenance activities and the Tech
III proposal. In responding to a customer trouble report, the focus of the field technician
is on getting the customer back in service as rapidly as possible - that is repairing the
service, as opposed to replacing the cable.
Qwest is faced with the same decisions regarding its capital investment as are other
capital-intensive businesses. For Qwest, that decision involves when to repair cable plant
and when to replace it. Aerial lead cable can continue to provide reasonable service
despite having experienced some damage over time. Obviously, when the cost of
repairing a cable, or the degree of service deterioration to customers, becomes so great
that continued repair becomes imprudent, Qwest takes the necessary steps to engineer
and install a replacement facility. Qwest takes pride in its commitment to service and
will not allow a service-affecting network problem to go unattended. By the same token
if a cable can be repaired quickly and efficiently while still providing good customer
service, Qwest will follow prudent business practices in maintaining its cabling despite
the age of the facility.
The Tech III program goes well beyond simple cable maintenance and repair routines.
Tech III replaces entire sections of the most deteriorated cable. The typical Tech III
cable replacement job will involve replacement of a minimum of 300 feet, and more
typically 1000 foot sections, of cable plant which is beyond the capacity of routine repair
work. The Tech III work will be engineered, a cable job print will be prepared and a
piece of modern cabling will be installed to replace the deteriorating section of plant.
Finally, the new cable plant will be entered into Qwest engineering records which
facilitates faster identification and response to potential future cable troubles. None
these tasks are associated with a simple, individual, cable repair dispatch associated with
a single customer repair report. Tech III is a more orchestrated, holistic approach to
modernizing the basic network in a fashion which benefits all users, including possible
CLEC service providers, who rely on the network. Tech III advances this work more
rapidly and with greater network integrity than would otherwise occur under "one-at-a-
time" service repair activity.
This leads to a far more difficult question, that is, when would the identified sections of
cable be replaced through Qwest's regular cable replacement budget. Qwest replaces
cable that has failed on an ongoing basis and will continue this work during the pendency
of the Tech III project. However, the size of the cable replacement budget can fluctuate
on an annual basis and, in the current capital-constrained telecom environment, this
budget will not allow the scope of cable replacement offered under Tech III.
Recognizing today s limited budget, the Company s commitment to increase its Idaho
investment to include matching Tech III funding underscores its commitment to
providing Idahoans with a modern network infrastructure.
The replacement of the Anaconda analog carrier systems goes beyond maintenance in
that all systems will be eliminated in southern Idaho through the Tech III program. These
older systems continue to operate in the network and would not be scheduled for
replacement unless growth beyond the capacity of the existing Anaconda systems
required their replacement. Further detail will follow in section 4 of this letter.
3. The Challenge of Spending Revenue Sharing Monies on Title 61 Enhancements
It is worth mentioning that identifying Title 61 projects for use of the residual Revenue
Sharing monies is not a simple prospect. There is a narrow window to identify
improvements which benefit the POTS (plain old telephone service) customer and their
basic local exchange service. Qwest believes Tech III represents a good balanced use of
Revenue Sharing funds in that it improves the network for basic local exchange service
and is willing to leverage this benefit by matching the Commission s investment. The
resulting combined investment benefits everyone (including competitors) who make calls
to or receive calls from the POTS network in southern Idaho.
4. Identification of the Scope of Replacing all Anaconda Carrier Systems in Southern
Idaho
The Anaconda analog carrier replacement aspect of the Tech III proposal lends itself to
rather simple identification and broad gauge replacement cost analysis even though detail
engineering has not been done to date. Attachment A to this letter identifies the six
remaining Anaconda carrier systems in Qwest's southern Idaho network. The combined
anticipated cost for their replacement is $629 500. While these systems continue to
deliver a basic level of adequate telephone service, the customers served by them can
expect improved service from their replacement.
Qwest hopes these additional clarifications will trigger the Commission to formally open
a Tech III docket to be considered for processing under modified procedure. The
Company wishes to begin detail engineering and ordering of new facilities under the
program as soon as possible. The proposal would signal the final chapter for a number of
significant improvements to Idaho s telecommunications network funded by the Revenue
Sharing Plan.
Finally, capital and expense budgets ultimately translate to needing people to do the work
associated with those budgets. This proposal will allow Qwest to retain several
employees who will be focused on completion of the project over the next three years.
Qwest urges the Commission to move this application forward.
Sincerely,
() () . -
John Souba
Regulatory Affairs Mgr.
Attachment
January 14 2003
IDAHO ANACONDA REPLACEMENTS
I. Indian Cove/Brueau Glenns Ferry
# of systems
# of customers
2. Grindstone Butte
# of systems
# of customers
3. Kelly Canyon
# of systems
# of customers
4. Reynold's Creek
# of systems
# of customers
5. Rising River
# of systems
# of customers
6. Moonstone
, - #
of systems
# of customers
Glenns Ferry
Ririe
Melba
Blackfoot
Shoshone
Total Cost for all 6 locations= $629 500
Assumptions: replace Anaconda with new carrier, place cable only to the closest
grouping of subscribers for relief in conjunction with the carrier replacement and not to
rebuild the entire route.