ORDER NO. 96-261

ENTERED OCT 08 1996

This is an electronic copy.

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

UM 789

DISPOSITION: COMMUNITY OF INTEREST FOUND

On February 21, 1996, customers in the Prospect telephone exchange filed a petition with the Commission requesting extended area service (EAS) along the following interexchange routes: Prospect/Shady Cove, Prospect/White City, and Prospect/Medford. A map of the exchanges is attached to this order as Appendix A.

In investigating an EAS request, the Commission first determines whether a "community of interest" exists between the telephone exchanges to warrant the elimination of toll calling. To determine a community of interest, the Commission has adopted three objective criteria that rely on readily available geographic and telephone usage information. These criteria require that: (1) the petitioning exchange and target exchange(s) have contiguous exchange boundaries; (2) an average of four toll calls per access line per month be placed between the contiguous exchanges; and (3) more than 50 percent of customers in the petitioning exchange make at least two toll calls per month to the target exchange(s). See Order Nos. 89-815 and

92-1136. If the customers in the subject exchanges do not meet either or both of the latter two objective criteria listed above, they may request the opportunity to show that a community of interest exists by evidence presented at a hearing.

On June 20, 1996, the Commission’s Staff (Staff) filed testimony for the objective portion of the Phase I, Community of Interest determination. Based on a review of geographic and telephone usage information supplied by the local exchange telephone companies that serve the subject exchanges, Staff concluded that the proposed interexchange routes did not satisfy the Commission’s objective community of interest criteria set forth in Order Nos. 89-815 and

92-1136.

On July 5, 1996, a Proposed Order was issued 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 three telephone exchanges.

On September 4, 1996, Administrative Law Judge Lowell Bergen held a hearing on this matter in Prospect, Oregon. Based on a preponderance of the evidence submitted, the Commission makes the following:

FINDINGS OF FACT

Geography and Demography

The Prospect, Shady Cove, White City, and Medford telephone exchanges are located in southern Oregon in Jackson County. Customers in the petitioning exchange, Prospect, and the Shady Cove and White City exchanges, are served by United Telephone of the Northwest. Customers in the Medford exchange are served by U S WEST Communications, Inc. There are approximately 490 access lines in the Prospect exchange; 2,166 access lines in the Shady Cove exchange; 8,565 access lines in the White City exchange; and 37,326 access lines in the Medford exchange.

The city of Prospect at one time flourished with seven lumber mills. It is now a small community that cannot support the professional and commercial facilities needed to meet the basic needs of its residents. As a result, area residents rely heavily on neighboring communities to obtain essential services. Shady Cove, located approximately 23 miles southwest of Prospect, is the closest town that offers some essential services. The services offered are limited, however, so most Prospect residents rely on White City, Eagle Point (which is in the White City exchange), and Medford for goods and services.

Local telephone service for citizens of Prospect includes only the area in and around Prospect. Calls to Shady Cove and all other areas incur toll charges. There is no bank in Prospect. There is one hotel/motel in Prospect, and guests sometimes complain that calls to other communities incur toll charges. Other businesses in the Prospect area complain that potential customers in Shady Cove, White City, and Medford are reluctant to call them because of toll charges. They also point out that the isolated location of Prospect requires that suppliers and vendors be contacted by telephone to find, compare, and obtain the commodities they need. Repair of products also usually requires contact with businesses in those communities.

School and Library

The Prospect area is served by a school for students from kindergarten through high school. However, many students attend school in Eagle Point, especially special needs children. The two school districts also exchange personnel. A few Prospect students attend school in Medford. The school in Prospect is in an isolated rural area, so school administrators and teachers call people at other schools to obtain information, to schedule athletic and other events, and to obtain supplies. The school incurs toll charges of approximately $100 per month for calls to Shady Cove, White City, and Eagle Point, and $450 per month for toll calls to Medford.

There is a small library in Prospect, and it is open during limited hours three days a week. The library is affiliated with the library in Medford, and requested books are transported to Prospect from Medford, and then returned. Toll calls are made to Medford to request books.

Government

Residents in the Prospect exchange are served by county and state government offices in Medford. As a result, local businesses and citizens must make long distance calls to contact county personnel, including building inspectors, surveyors, and health service officials. Law enforcement for the Prospect area originates from Medford. The Fire Chief for Prospect is located in Shady Cove.

Medical and Dental Services

There are no medical, dental, or veterinary providers in the Prospect calling area. There is a medical clinic in Shady Cove, with two doctors and several nurse practitioners. There also are paramedics, a chiropractor, a dentist, and a pharmacy in Shady Cove. There are additional, limited medical facilities in White City and Eagle Point. Eagle Point also has a veteran’s hospital. Specialized medical services are available in Medford. Prospect residents call medical facilities in Shady Cove, White City, Eagle Point, Central Point (in the White City exchange) and Medford. Of course, those calls increase their total medical care costs.

Commuting

Due to the lack of centralized businesses, many residents of Prospect commute outside the local calling area to work in neighboring cities, especially Shady Cove and White City.

Toll Avoidance and Alternative Toll Carriers

Many Prospect residents engage in a variety of toll avoidance practices. A common practice is to call numbers in Medford, Eagle Point, Shady Cove, and White City when they are in any city in those exchanges. There is EAS among the Shady Cove, White City, and Medford exchanges. Commuters simply save calls and make them while they are at work within the Shady Cove, White City, and Medford calling areas.

Some residents use a courier service that provides service between Prospect and Medford, stopping at various intermediate points. The residents send paper messages by the courier to avoid telephone toll charges.

Other residents use two-way radios, pagers, and cellular phones to avoid toll charges. A few low-income residents do not have telephone service at all because local residents can easily be contacted in person and all other calls incur toll charges.

Many Prospect residents make substantial use of alternative toll carriers for their long-distance calls to Shady Cove, White City, Eagle Point, and Medford locations. These calls were not counted in the information provided by United Telephone and U S WEST and used in the objective community of interest portion of this proceeding. Some Prospect residents incur toll charges exceeding $100 per month from those carriers. A few residents incur monthly toll charges as high as $300.

Shopping and Entertainment

There is one general store in Prospect. Its proprietor sells groceries, some clothing, and a few other miscellaneous items. Prospect residents rely on retail and other businesses in Shady Cove, White City, Eagle Point, Medford and other places to find items they want to purchase. Most of their shopping for groceries, clothes, hardware items, as well as major purchases like appliances, furniture, and vehicles, is done in locations in the target exchanges. There are no theater or other entertainment facilities in Prospect, so the residents go to target exchange locations to attend entertainment events as well.

The Internet

There are no providers of Internet access in Prospect. A provider in Medford would like to extend his services to the Prospect area, but the toll charges would make his services prohibitively expensive. Many Prospect residents would like to have Internet access, and would sign up for the service if it were provided on a local-call basis. Local-call Internet access is available to residents of Shady Cove, White City, and Medford.

OPINION

Issue

The question presented in this segment of this proceeding is whether the Prospect petitioners have established, through demographic or other evidence, that a community of interest exists with the Shady Cove and White City 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 Prospect petitioners have established, through demographic and other evidence, that a community of interest exists with the Shady Cove, White City, and Medford exchanges. The evidence presented at hearing establishes a sufficient degree of dependence by the Prospect exchange on the target areas.

Prospect is a small town that offers virtually no business or professional services for its residents. Shady Cove is the closest city offering limited business, professional, and medical services. Because the services available in Shady Cove are inadequate to meet the needs of Prospect residents, they turn to services available in White City, Eagle Point, and Medford. School officials in Prospect and Eagle Point have a close relationship through which they exchange students and personnel, and the Prospect officials rely on the Eagle Point school district for supplies and support. Residents within the Prospect exchange rely heavily on the services available in the Shady Cove, White City, and Medford exchanges for most of their basic needs, such as medical and dental care, banking and insurance services, automobile and truck repair, hardware and building supplies, retail shopping, and other consumer activities. Some Prospect area residents also commute to work in cities in the other three exchanges.

The Prospect petition failed to meet the objective calling volume and customer distribution requirements for calls to locations in the Shady Cove and White City exchanges, but met those requirements for calls to locations in the Medford exchange. Evidence at the hearing revealed that Prospect residents are heavily dependent on the services provided in the other exchanges, and are currently making substantial use of toll service because of that dependence. The demographic evidence submitted in this matter persuasively establishes that a community of interest exists between the Prospect and the target telephone exchanges. The EAS petition should proceed to Phase II (tariff analysis).

ORDER

IT IS ORDERED that:

The Prospect telephone exchange has established a community of interest with the Shady Cove, White City, and Medford telephone exchanges based upon demographic, economic, financial, and other evidence.

 

This completes Phase I of this docket. The petition is now ready to enter Phase II, the rate and cost phase. For Phase II, the Prospect petition will be grouped with other EAS dockets that complete Phase I by August 1, 1997. The serving telephone companies shall file proposed rates and supporting cost information by October 17, 1997.

 

 

Made, entered, and effective ________________________. 

A party may request rehearing or reconsideration of this order pursuant to ORS 756.561. A request for rehearing or reconsideration must be filed with the Commission within 60 days of the date of service of this order. The request must comply with the requirements in OAR

860-014-0095. A copy of any such request must also be served on each party to the proceeding as provided by OAR 860-013-0070(2)(a). A party may appeal this order to a court pursuant to ORS 756.580.

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