ORDER NO. 95-1228

ENTERED NOV 22 1995  

THIS IS AN ELECTRONIC COPY

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

UM 744

DISPOSITION: COMMUNITY OF INTEREST FOUND

BETWEEN CAMP SHERMAN AND BEND;

NO COMMUNITY OF INTEREST FOUND

BETWEEN CAMP SHERMAN AND REDMOND.

On February 28, 1995, customers in the Camp Sherman telephone exchange filed a petition with the Commission requesting extended area service (EAS). The petition requested EAS between the Camp Sherman exchange and the Bend and Redmond telephone exchanges. A map of the affected exchanges is attached as Appendix A.

On April 17, 1995, the Commission staff (staff) filed testimony for Phase I, Community of Interest Determination. Based on a review of telephone usage information for the period from September 1994 to February 1995, staff concluded that the proposed Camp Sherman/Bend and Camp Sherman/Redmond interexchange routes did not satisfy the Commission’s objective community of interest criteria. Staff's testimony is summarized in Appendix B, attached to this order and incorporated by reference.

On August 28, 1995, Michael Grant, an Administrative Law Judge (ALJ) with the Commission, issued a Proposed Order recommending that the EAS petition be dismissed based on staff’s findings. Petitioners subsequently requested an opportunity to establish, through demographic, economic, financial, or other evidence, that a community of interest exists between the two telephone exchanges. In its request, petitioners noted that the Camp Sherman exchange is an area dominated by recreational homes and estimated that only half of the homes were occupied during the September-February measurement period. Petitioners argued that an April-September measurement period for telephone usage would satisfy the Commission’s objective community of interest criteria.

Based on petitioners’ claim, ALJ Grant directed staff to obtain and review summer telephone usage data. A review of calling pattern data for the period of April 1994 through September 1994, however, did not alter staff’s previous conclusion, based on winter calling data, that the interexchange routes between the Camp Sherman exchange and the Bend and Redmond exchanges failed to meet the community of interest criteria set forth in Orders No. 89-815 and 92-1136. Staff’s supplemental testimony is summarized in Appendix C and incorporated by reference.

On October 26, 1995, ALJ Grant held a hearing on this matter in Black Butte, Oregon. Approximately 60 people appeared in support of the petition. Based on a preponderance of the evidence submitted, the Commission makes the following:

FINDINGS OF FACT

Geography and Demography

The Camp Sherman, Bend and Redmond telephone exchanges lie in central Oregon in Deschutes and Jefferson counties. The petitioning exchange, Camp Sherman, consists of approximately 1,500 access lines and currently has EAS to the Sisters exchange. The Bend exchange lies southeast of Camp Sherman and consists of approximately 38,000 access lines. It currently has EAS to the Redmond and Sisters exchanges. The Redmond exchange lies east of Camp Sherman and consists of approximately 11,500 access lines. It has EAS to the Bend and Sisters exchanges. The Camp Sherman, Bend, and Redmond exchanges are served by U S WEST Communications.

The Camp Sherman exchange, which includes Black Butte Ranch, is a small tourist and recreational community that offers no professional and few commercial services to its local residents. Only two small convenience stores, two restaurants, and seasonal resort facilities are currently located within the local calling area. Exchange residents, therefore, seek essential goods and services in neighboring communities. The city of Sisters, located approximately 20 miles from the Camp Sherman area, is the closest town that provides some of these services. Sisters, however, is also a tourist area and offers only three automobile repair shops, two accounting and law offices, two branch medical offices, two dentists, one grocery store, two hardware stores, and a few retail businesses and restaurants.

Because of the limited offerings within the local calling area and in the city of Sisters, Camp Sherman exchange residents primarily rely on the Bend exchange to obtain essential services to meet their basic needs. The city of Bend is located approximately 42 miles from Camp Sherman and is directly accessed on U.S. Route 20. It offers banking, insurance, veterinarian, and other professional services, as well as business supplies, automobile repair, hardware and building supplies, gasoline stations, sporting goods supplies, numerous retail stores, and other fundamental services. It also offers numerous entertainment activities, including a large number of restaurants, several movie theaters, and museums.

Some Camp Sherman exchange residents also rely on the Redmond exchange for essential services. The city of Redmond is located approximately 40 miles east of Camp Sherman and is directly accessed on State Route 126. Redmond does not offer the wide range and variety of services available within Bend, but does offer many services not available in Sisters or the local calling area.

Schools

The Camp Sherman recreational area has its own elementary school. Other exchange residents, especially those who live at Black Butte Ranch, attend schools in the Sisters School District. Some children take part in the Deschutes County home-school program, which is directed through offices in Bend.

The Sisters School District employs 116 teachers, almost half of whom live within the Bend telephone exchange. The District relies on services provided by the Deschutes Educational Service District, which is located in Bend. Several Camp Sherman exchange residents attend classes at the Deschutes Community College in Bend.

A large portion of Camp Sherman exchange residents subscribe to various on-line services to access the internet. To connect with these services, local residents are required to make a long-distance call to Bend, where the nearest internet node is located.

Government

The Camp Sherman exchange lies in both Deschutes and Jefferson counties. The southern portion of the exchange, including Black Butte Ranch, lies in Deschutes County and is served by county and state offices located in Bend. All government offices, including the Children Services Division, District Attorney, Employment Division, Public Health Services, the District and Circuit Courts, Building Inspectors, Division of Motor Vehicles, Land Use Planners, and Sheriff’s Department are located outside the local calling area in Bend.

The northern portion of the Camp Sherman exchange is located in Jefferson County and served by the county government in Madras.

Medical and Dental Services

The Camp Sherman calling area offers no medical and dental providers. Some exchange residents seek primary medical and dental care in Sisters, where two doctors and dentists practice. Most residents, however, seek primary, as well as specialized medical and dental care in Bend, where a greater number of physicians and dentists practice. Some residents seek these services in Redmond. Both Bend and Redmond offer a hospital. The Deschutes County Public Health Department is located in Bend.

Emergency Services

A local police and fire department is available within the Camp Sherman exchange. Those services, however, are dispatched through the Bend 911 office. The local ambulance service works in cooperation with the St. Charles Medical Center in Bend, where it transports all of its patients.

Commuting Patterns

Due to the lack of centralized businesses, many Camp Sherman exchange residents commute outside the local calling area to work in neighboring cities. Many residents work in county and state government offices or at many businesses located in Bend and Redmond.

Business Dependence

The resort businesses in the Camp Sherman exchange heavily rely on vendors located in Bend in conducting their operations. For example, Black Butte Ranch relies on Bend for approximately 75 percent of its service needs, including legal services, primary and emergency medical care, workers’ compensation insurance, contractors, paving services, automotive supplies and repair, banking services, waste disposal, computer parts and repair, and county government services. Black Butte Ranch relies on the Redmond exchange for printing and food services, as well as recycling.

Toll Avoidance

Many Camp Sherman exchange residents engage in a variety of toll avoidance practices. Residents often avoid toll calls by combining a trip to Bend or Redmond with their telephone activities. Commuters simply save calls and make them while they are at work or visiting the neighboring calling areas. Other residents have obtained direct calling lines or use alternative carriers to avoid high toll charges.

Vacation Homes

A large number of homes within the Camp Sherman exchange are vacation or secondary homes. Of the 1,150 home sites at Black Butte Ranch, approximately 800 (70 percent) are owned by seasonal residents. Similarly, approximately 50 percent of the homes in the Camp Sherman area are owned by part-time residents. Because the owners of the vacation homes may not make as many phone calls to Bend and Redmond, the calling averages used in the objective test may be lower than an average of permanent residents.

Results of the Objective Criteria Test

U S WEST provided calling pattern data for the Camp Sherman, Bend, and Redmond telephone exchanges. Staff reviewed the data and, based on calling data from April to September 1994, determined that the Camp Sherman/Bend interexchange route satisfied two of the three objective community of interest criteria. The two exchanges are contiguous and a maximum average of 4.24 toll calls per access line were placed between the exchanges. However, only 37.97 percent of a required 50 percent of Camp Sherman exchange residents made at least two or more toll calls to the Bend exchange.

Staff concluded that the Camp Sherman/Redmond interexchange route satisfied only one of the three objective criteria. The exchanges are contiguous. However, a maximum average of only 1.21 of a required 4 toll calls per month were placed between the exchanges and only 17.77 of a required 50 percent of Camp Sherman exchange residents made at least two or more toll calls to the Redmond exchange.

OPINION

Issue

The question presented in this proceeding is whether the Camp Sherman petitioners have established, through demographic or other evidence, that a community of interest exists with the Bend and Redmond telephone exchanges.

Applicable Law

In Phase I of an EAS investigation, the Commission determines whether a community of interest exists between the petitioning exchange and other exchanges listed on an EAS petition. The Commission adopted the following test for community of interest in cases where petitioners rely on demographic evidence:

A community of interest exists where there is social, economic, or political dependence or interdependence between the petitioning and requested exchange(s) sufficient to justify conversion to EAS. In making this determination, the Commission will review the following factors: (1) geographic and demographic information; (2) location of schools; (3) governmental and jurisdictional issues; (4) emergency services; (5) social services; (6) medical and dental providers; (7) employment and commuting patterns; (8) business and commercial dependence or interdependence; (9) transportation patterns; (10) the results of the objective criteria test; and (11) other factors deemed relevant by the Commission. The record need not contain evidence on each factor so long as the Commission can conclude that the record as a whole establishes sufficient interdependence or dependence between

the exchanges. In the Matter of the Consolidated Applications For Expansion of the Portland Extended Area Service Region, Order No. 93-1045 at 12.

 

Resolution

The Commission concludes that the Camp Sherman petitioners have established, through demographic and other evidence, that a community of interest exists with the Bend telephone exchange. The evidence presented at hearing establishes a sufficient degree of dependence by the Camp Sherman exchange residents on the Bend area.

The Camp Sherman area is a tourist community that offers virtually no business or professional services for its residents. Bend is the closest city where a sizable number of businesses and professional services are available. It lies approximately 42 miles from the Camp Sherman area and provides the necessary services to meet the basic needs of Camp Sherman exchange residents. These include educational, governmental, medical other professional services, as well as automotive repair, hardware and building supplies, retail shopping, and recreational activities. A large number of Camp Sherman exchange residents also commute to Bend to work in government offices or at the numerous commercial and business establishments.

The Commission further concludes, however, that the Camp Sherman petitioners failed to establish a sufficient community of interest with the Redmond exchange. Geographically, the city of Redmond lies approximately the same distance as Bend from the Camp Sherman exchange. For that reason, some Camp Sherman residents rely on services located in Redmond to meet their basic needs. The evidence of such reliance, however, was not as strong as it was for Bend. Redmond is smaller and, unlike Bend, is not a county seat. Therefore, the city does not offer the number and range of services found in Bend. Due to these facts, there was less evidence offered of strong community ties between Camp Sherman and Redmond. Most Camp Sherman exchange residents testified to stronger interests with Bend.

This decreased reliance is reflected in the results of the objective criteria test. With regard to the calling volume criterion, telephone usage information provided by U S WEST revealed that an average of 4.24 toll calls per access line per month were placed from the Camp Sherman to the Bend exchange, while only 1.21 toll calls per access line per month were placed to the Redmond exchange. Similarly, while 37.97 percent of Camp Sherman exchange residents placed at least two toll calls per month to the Bend exchange, only 17.77 percent of those same customers made as many calls to the Redmond exchange. In short, the evidence presented failed to show a sufficient degree of dependence by the Camp Sherman exchange residents on the Redmond exchange to warrant the elimination of toll calling. That portion of the petition should be denied.

ORDER

IT IS ORDERED that:

The Camp Sherman telephone exchange has established a community of interest with the Bend telephone exchange based upon demographic, economic, financial, and other evidence. That portion of the petition will proceed to Phase II (tariff analysis). For Phase II, the Bend portion of the Camp Sherman petition will be grouped with other EAS dockets that complete Phase I by August 1. The serving telephone companies shall file proposed rates and supporting cost information by October 15, 1996.

 

The Camp Sherman telephone exchange has failed to establish a community of interest with the Redmond exchange. That portion of the petition is dismissed.

 

 

Made, entered, and effective ________________________.

A party may request rehearing or reconsideration of this order pursuant to ORS 756.561. A party may appeal this order pursuant to ORS 756.580.