ORDER NO. 96-067

ENTERED MAR 7 1996

THIS IS AN ELECTRONIC COPY

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

UT 126

UM 790

DISPOSITION: FILING REJECTED; PETITION DOCKETED

Introduction

On February 5, 1996, U S WEST Communications, Inc., (U S WEST) submitted Transmittal No. 96-007-PL, a price list filing related to its centrex-type services. In the filing, U S WEST proposes to: (1) prohibit new customers from subscribing to Centrex Plus and/or Centraflex System 2; (2) restrict the growth of existing Centrex Plus resellers to 20 new business locations per year during the duration of their term contracts; and (3) restrict the growth in the number of Centrex Plus station lines of existing customers during the duration of their term contracts. U S WEST’s justification for the filing states, in its entirety:

Our evaluation of the environment and the marketplace has lead us to take this action. With the opening of competition in the local telephone market, U S WEST must align its service offering and prices for today’s new competitive climate.

On February 12, 1996, the Commission Staff (Staff) submitted a report recommending that the Commission reject the price list filing for three primary reasons. First, Staff asserts that the filing violates the terms of Order No. 94-1055, in which the Commission approved a stipulation relating to the resale of Centrex Plus. In that stipulation, the parties--including U S WEST--agreed that resellers could purchase unlimited numbers of additional Centrex Plus lines. Second, Staff argues that the filing is in violation of OAR 860-32-020(2), Abandonment of Service, because it precludes services from being offered to new customers without proper notice. Finally, Staff notes that Centrex Plus is used by resellers. Because the filing attempts to limit the growth of these resellers who compete with U S WEST, Staff asserts that it is blatantly anti-competitive.

Enhanced TeleManagement, Inc. (ETI), Shared Communication Services, Inc. (SCS), and MFS Intelenet of Oregon, Inc., (MFS) also filed separate comments in opposition to U S WEST’s filing. All three parties agree with Staff that the filing violates the stipulated agreement approved in Order No. 94-1055. Among other things, they also argue that U S WEST’s actions are inconsistent with the recently enacted Federal Telecommunications Act, which prohibits local exchange companies from imposing unreasonable or discriminatory limitations on the resale of telecommunications services.

Petition to Amend

On February 19, 1996, U S WEST filed a petition to amend Order No. 94-1055. U S WEST asserts that the terms and conditions under which centrex-type services are offered have significantly changed as a result of the passage of the Federal Telecommunications Act. U S WEST requests that Order No. 94-1055 be set aside or amended to allow the company to revise its price list filings for its Centrex Plus and other centrex-type services

Disposition

U S WEST’s price list filing and petition to amend came before the Commission at its February 20, 1996, public meeting. After consideration, the Commission adopts Staff’s recommendation and rejects U S WEST’s price list filing pursuant to ORS 759.195(1). The Commission finds that the filing is an unlawful attempt to unilaterally abrogate the terms of the stipulation approved in Order No. 94-1055. That order indicates that the parties intended the stipulation to remain in effect at least until the issuance of an order in UM 351. The Commission will issue an order in that docket this spring.

The Commission also finds that the filing is inconsistent with ongoing efforts to open Oregon’s telecommunications markets to competition. U S WEST’s proposal eliminates the opportunity for new resellers to purchase centrex-type products and limits the growth of its current competitors. Moreover, the Commission finds that the filing may violate administrative rules on abandonment of service. Based on these findings, the Commission concludes that U S WEST’s price filing is not in the public interest.

The Commission also adopts Staff’s recommendation to consider U S WEST’s petition to amend Order No. 94-1055 as a separate matter. The Commission has docketed the petition as UM 790 for further investigation. The petition, however, does not contain a certificate of service indicating that it had been served on the other parties to Order No. 94-1055. See OAR 860-13-070. Accordingly, the Commission will not address the petition until it is properly served and the parties are allowed the opportunity to file a response pursuant to OAR 860-13-050(3)(a).

To clarify the scope of UM 790, the Commission notes that U S  WEST makes two requests in the petition to amend. First, it asks the Commission to set aside or amend Order No. 94-1055 to the extent necessary to allow the company’s February 5, 1996 price list filing. Second, apparently as an alternative request, it asks the Commission to find that the February 5, 1996 price list filing is consistent with the terms of the stipulation approved in Order No. 94-1055. As noted above, the Commission has rejected the price filing because it is inconsistent with the stipulation approved in Order No. 94-1055, thereby resolving the issue of consistency. Accordingly, the purpose of UM 790 is to investigate whether significant changes in the telecommunications market have occurred since the stipulation was adopted, as alleged by U S WEST in the petition to amend, that are sufficient to justify an amendment of Order No. 94-1055.

ORDER

IT IS ORDERED that:

Transmittal No. 96-007-PL, filed by U S WEST Communications, Inc., is rejected pursuant to ORS 759.195(1).

The company shall continue to offer Centrex Plus and Centraflex System 2 service pursuant to prices, terms, and conditions currently set forth in existing price lists.

The petition to amend Order No. 94-1055, filed by U S WEST Communications, Inc., is docketed as UM 790.

Made, entered, and effective _____________________________.