ORDER NO. 97-001

ENTERED JAN 03 1997

This is an electronic copy.

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

UM 785

DISPOSITION: APPLICATION FOR REHEARING DENIED

In Order No. 96-229, the Commission found that the Bly petitioners had failed to establish a community of interest with either the Bonanza or Klamath Falls telephone exchanges. Based on that finding, the Commission dismissed the petition for extended area service (EAS) between those exchanges.

On November 4, 1996, petitioners filed a request for reconsideration of the Commission’s order. Petitioners contend that a new hearing is necessary to review additional evidence and to revisit Commission procedures.

Applicable Law

Under OAR 860-014-0095(3), the Commission may grant an application for rehearing if an applicant shows that there is:

(a) New evidence which is essential to the decision and which was unavailable and not reasonably discoverable prior to the issuance of the order;

(b) A change in the law or agency policy since the date the order was issued, relating to a matter essential to the decision;

(c) An error of law or fact in the order which is essential to the decision; or

(d) Good cause for further examination of a matter essential to the decision.

Discussion and Disposition

Petitioners argue that we should grant a rehearing for four primary reasons. First, petitioners contend that the Commission’s community of interest requirements discriminate against small communities like Bly. Petitioners contend that the policy should be reviewed and updated.

The Commission adopted its community of interest criteria after extensive investigation and consideration of comments from telecommunication providers, industry experts, citizen groups, and members of the public. Those standards have allowed many small communities, including Blue River, Elkton, Wamic, Jewell, Gilchrist, and Yoncalla, to establish a community of interest with distant population centers that provide essential goods and services. The failure of the Bly exchange to similarly establish a community of interest with Klamath Falls does not, in our opinion, warrant a revision of those procedures at this time. We have noted the problems faced by rural exchanges and will continue to further examine and pursue policies to lower the costs of rural customer’s access to essential services and the public switched network.

Petitioners next contend that the local exchange boundaries in Klamath County appear to be antiquated and should be changed. Petitioners argue that the present boundaries limit access to the Internet and restricts communications between friends and families.

In our generic investigation into EAS, we acknowledged that many local exchange boundaries no longer bear any relationship to community boundaries due to growth and settlement patterns. See Order No. 89-815 at 8. Modifying local exchange boundaries, however, presents many difficulties, from both a technical and regulatory standpoint. To avoid such problems, the Commission adopted an EAS process to, in effect, realign exchange boundaries based on a community of interest between exchanges. We have concluded that the Bly petitioners failed to establish a community of interest with the Bonanza and Klamath Falls exchanges. Petitioners’ request to now modify the exchange boundaries is beyond the scope of this docket.

Petitioners also contend that the limited local calling area in Bly makes the area less appealing to business who might otherwise relocate there. Petitioners state that EAS to Klamath Falls would expand local business opportunities.

Economic development is a legitimate business concern. This Commission has long recognized, however, that our primary role is to protect all utility customers, not to create economic development incentives for local businesses. See Order No. 95-047 at 5. For this reason, we do not consider prospective economic development as a factor supporting the implementation of EAS.

Finally, petitioners contend that, in reviewing the calling pattern data, we erred in failing to consider calls made to and from the Bonanza School via a 700 number line. Had the Commission considered such calls, petitioners believe that the Bly exchange would have met the calling requirements under the objective community of interest criteria.

We are aware that the number of calls placed between two telephone exchanges may be higher than what is represented by direct dialed toll. This additional volume may include Foreign Exchange and Feature Group "A" lines, as well as calls made via cellular telephones. Most of this additional volume, however, cannot be accurately measured. For that reason, we adopted objective community of interest criteria that were appropriate for direct dial toll. As previously stated, the calling pattern data for the Bly exchange failed those criteria.

Conclusion

In Order No. 96-229, we thoroughly reviewed the factual record and carefully weighed the many factors bearing on the existence of a community of interest. We concluded that the demographic and other evidence presented in this matter did not make a sufficiently strong showing to establish a community of interest between the Bly, Bonanza, and Klamath Falls exchanges to warrant EAS conversion. After our review of petitioners’ application for rehearing, we are not persuaded that we should revisit our decision at this time.

ORDER

IT IS ORDERED that the application for reconsideration of Order No. 96-229, filed by the Bly EAS petitioners, is denied.

Made, entered, and effective ________________________.

A party may appeal this order to a court pursuant to ORS 756.580.