ORDER NO. 97-086

ENTERED MAR 5 1997

this is an electronic copy.

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

CP 201

DISPOSITION: APPLICATION GRANTED

Note: By issuing this certificate, the Commission makes no endorsement or certification regarding the certificate holder’s rates or service.

The Application

On July 26, 1996, Ameritel Corporation (applicant) filed with the Commission an application for certification to provide telecommunications service in Oregon as a competitive provider. Applicant seeks authority to provide local exchange switched telecommunications service in areas coextensive with local exchanges of U S WEST Communications, Inc. (USWC), GTE Northwest, Inc. (GTE), PTI Communications (PTI), and Sprint/United, that is, United Telephone Company of the Northwest, Inc., (United).

The local exchanges of USWC encompassed by the application are listed in Appendix A to this order. The local exchanges of GTE encompassed by the application are listed in Appendix B to this order. The local exchanges of PTI encompassed by the application are listed in Appendix C to this order. The local exchanges of United encompassed by the application are listed in Appendix D to this order. Applicant will operate as a reseller of residential dial tone (local exchange) service only. Applicant states that all its resold lines will be subject to toll restriction and billed number screening services. This order will grant authority only for resale of residential local exchange service and only with toll restriction and billed number screening in place as stated in the application. Applicant made a similar application to this Commission under the name Sterling International Funding, Inc., which application was docketed CP 213.

The Commission served notice of the application on the Commission’s telecommunications mailing list on August 12, 1996. The Commission received a protest from the Commission staff. USWC, GTE, PTI and United did not file protests; however, all four will be considered parties to this proceeding.

On January 8, 1997, an Administrative Law Judge (ALJ) with the Commission issued a ruling that adopted procedures for the processing of this docket. The ALJ set forth a procedural schedule.

On January 17 , 1997, the Commission Staff (Staff) distributed a proposed order for review by the parties. USWC and applicant filed exceptions. On February 12, 1996, Staff filed a reply, which included revisions to the proposed order.

Exceptions

In response to all but two of the exceptions raised by USWC and applicant, Staff agreed to modify its proposed order to address the parties’ respective concerns. Staff disagreed, however, with two exceptions that we will address at this time.

First, USWC recommends additional conditions be imposed on applicant’s authority. It states that third party dial tone providers like applicant should be subject to additional consumer protections to ensure the Commission with the ability to review such providers’ rates, charges, and collection practices. We disagree. As Staff points out, the Commission previously declined to impose additional consumer protection requirements on competitive providers in Order No. 96-021 at 24. There is no basis to impose such requirements on applicant and other similar providers at this time. Furthermore, applicant is a party to docket UM 775, an investigation of toll restriction and billed number screening services. If we conclude in that investigation that additional protections should be imposed on third party dial tone providers, applicant will be required to abide by such conditions and requirements.

Second, applicant objects to Staff’s proposed language limiting its authority to resell residential local exchange service only with toll restriction and billed number screening be removed. We disagree. As Staff notes, Ameritel’s application unambiguously stated that, "[t]he service to be provided is local exchange dial tone only. All resold lines will be subject to the LEC’s toll restriction and screening services." We will not grant broader authority to an applicant than that described in its application. To do so would circumvent the protest rights of other competitive providers required by ORS 759.020 and OAR 860-032-0005. If applicant desires broader authority, it may file an application to amend its certificate.

The Commission has reviewed the proposed order, exceptions, reply, and the record in this matter. Based on a preponderance of the evidence, the Commission makes the following:

FINDINGS AND CONCLUSIONS

Applicable Law

Applications to provide telecommunications service and for classification as a competitive telecommunications services provider are filed pursuant to ORS 759.020. ORS 759.020 provides that:

(1) No person [or] corporation * * * shall provide intrastate telecommunications service on a for-hire basis without a certificate of authority issued by the commission under this section.

* * * * *

(5) The commission may classify a successful applicant for a certificate as a * * * competitive telecommunications services provider. If the commission finds that a successful applicant for a certificate has demonstrated that its customers or those proposed to become customers have reasonably available alternatives, the commission shall classify the applicant as a competitive telecommunications services provider[.] For purposes of this section, in determining whether there are reasonably available alternatives, the commission shall consider:

(a) The extent to which services are available from alternative providers in the relevant market.

(b) The extent to which services of alternative providers are functionally equivalent or substitutable at comparable rates, terms, and conditions.

(c) Existing economic or regulatory barriers to entry.

(d) Any other factors deemed relevant by the commission.

Applications to provide local exchange (intraexchange) telecommunications services are reviewed pursuant to ORS 759.050, the "competitive zone law." Under ORS 759.050(2)(a), the Commission may:

certify one or more persons, including another telecommunications utility, to provide local exchange telecommunications service within the local exchange telecom-munications service area of a certified telecommunications utility, if the commission determines that such authorization would be in the public interest. For the purpose of determining whether such authorization would be in the public interest, the commission shall consider:

(A) The effect on rates for local exchange telecommunications service customers both within and outside the competitive zone.

(B) The effect on competition in the local exchange telecommunications service area.

(C) The effect on access by customers to high quality innovative telecom-munications service in the local exchange telecommunications service area.

(D) Any other facts the commission considers relevant.

Under ORS 759.050(2)(b), the Commission shall:

[u]pon certification of a telecommunications provider under paragraph (a) of this subsection, establish a competitive zone defined by the services to be provided by the telecommunications provider and the geographic area to be served by the telecommunications provider.

Under ORS 759.050(2)(c), the Commission may:

impose reasonable conditions upon the authority of [the applicant] to provide competitive zone service within the competitive zone * * * at the time of certification of a telecommunications provider, or thereafter.

Subsection (5)(a) of ORS 759.050 provides that:

unless the commission determines that it is not in the public interest at the time a competitive zone is created, upon designation of a competitive zone, price changes, service variations, and modifications of competitive zone services offered by a telecommunications utility in the zone shall not be subject to [the notice, hearing and tariff suspension procedures in] ORS 759.180 to ORS 759.190, and at the telecommunications utility’s discretion, such changes may be made effective upon filing with the commission.

OAR 860-32-015(1) authorizes the Commission to suspend or cancel the certificate if the Commission finds that (a) the holder made misrepresentations when it filed the application, or (b) the applicant fails to comply with the terms and conditions of the certificate.

Designation as a Competitive Provider

Applicant has met the requirements for classification as a competitive telecommunications services provider. Applicant’s customers or those proposed to become customers have reasonably available alternatives. The incumbent telecommunications utilities, USWC, GTE, PTI, and United, provide the same or similar local exchange services in the service area requested by applicant. Subscribers to applicant’s services can buy comparable services at comparable rates from other vendors. Economic and regulatory barriers to entry are relatively low.

Conditions of the Certificate

The Commission first applied the competitive zone law, ORS 759.050, in dockets CP 1, CP 14, and CP 15. After full evidentiary hearings and consideration of the public interest criteria set forth in ORS 759.050(2)(a), the Commission designated three competitive providers of switched local exchange services as alternate exchange carriers (AECs) in the Portland metropolitan area. See Order No. 96-021. The Commission subsequently applied those findings and conclusions to dockets CP 132, CP 139 and CP 149, and certified two AECs to provide switched local exchange services in areas located throughout the state.

The Commission takes official notice of the record in dockets CP 1, CP 14, and CP 15. In Order No. 96-021, the Commission established conditions applicable to AEC certificates. Since applicant, Ameritel Corporation, proposes to offer switched local exchange services, applicant seeks certification as an AEC. Pursuant to ORS 759.050(2)(c) and Order No. 96-021, applicant as an AEC shall comply with the following conditions:

1. Applicant shall terminate all intrastate traffic originating on the networks of other telecommunications services providers that have been issued a certificate of authority by the Commission.

2. Whenever applicant terminates intrastate long distance traffic directly or indirectly from interexchange carriers or from its own toll network to its end user customers, applicant shall contribute to the Oregon Customer Access Fund (OCAF), or its equivalent, in accordance with provisions of the Oregon Customer Access Plan (OCAP) or any successor plan approved by the Commission. Applicant shall contribute using rates approved by the Commission on intrastate terminating carrier common line access minutes, or on any other basis determined by the Commission. Applicant may not participate in (i.e., receive money from) pooling arrangements established under the OCAP or any successor plan unless authorized by the Commission.

3. Applicant shall comply with the Oregon Exchange Carrier Association’s (OECA) informational and operational needs as specified by the OCAP or any successor plan approved by the Commission.

4. Applicant shall offer E-911 service. Applicant has primary responsibility to work with the E-911 agencies to make certain that all users of their services have access to the emergency system. Applicant will deliver or arrange to have delivered to the correct 911 Controlling Office its customers’ voice and dialable Automatic Number Identification (ANI) telephone numbers so the lead 911 telecommunications services provider can deliver the 911 call to the correct Public Safety Answering Point (PSAP). Applicant agrees to work with each 911 district and lead 911 telecommunications services provider to develop database comparison procedures to match applicant’s customer addresses to the 911 district’s Master Street Address Guide in order to obtain the correct Emergency Service Number ("ESN") for each address. Applicant agrees to provide the lead 911 telecommunications services provider with daily updates of new customers, moves, and changes with the corresponding correct ESN for each.

5. Applicant shall not take any action that impairs the ability of other certified telecommunications services providers to meet service standards specified by the Commission.

6. At the request of the Commission, applicant shall conduct and submit to the Commission traffic studies regarding traffic exchanged with telecommunications services providers and other entities designated by the Commission.

7. For purposes of distinguishing between local and toll calling, applicant shall adhere to local exchange boundaries and Extended Area Service (EAS) routes established by the Commission. Applicant shall not establish an EAS route from a given local exchange beyond the EAS area for that exchange.

8. When applicant is assigned one or more NXX codes, applicant shall limit each of its NXX codes to a single local exchange and shall establish a toll rate center in each exchange that is proximate to the toll rate center established by the telecommunications utility serving the exchange.

9. Applicant shall comply with universal service requirements as determined by the Commission.

10. Unless otherwise provided pursuant to an interconnection agreement adopted by the Commission pursuant to Section 252 of the Telecommunications Act of 1996, applicant shall enter into interconnection agreements with telecommunications utilities for exchange of local and EAS traffic, ancillary services (i.e., directory listings, directory assistance, 911 arrangements, mutual repair referral) and other interconnection matters in accordance with requirements the Commission established in Order No. 96-021 as otherwise modified by the Commission.

The applicant, Ameritel Corporation, is a party to Commission docket UM 775, an investigation of toll restriction and billed number screening services. To the extent the Commission’s order from UM 775 provides conditions or requirements applicable to Ameritel Corporation and other similarly situated entities, applicant will be required to abide by such conditions and requirements as a condition of this certificate.

Public Interest

The Commission’s Findings and Decisions in dockets CP 1, CP 14, and CP 15, Order No. 96-021 at pages 6 - 21, entered pursuant to ORS 759.050(2)(a)(A) - (C), are adopted. Based on a review of those findings, as well as information contained in the application, the Commission concludes that it is in the public interest to grant the application of Ameritel Corporation to provide local exchange telecommunications services as a competitive telecommunications provider.

Competitive Zones

The exchanges listed in Appendices A, B, C, and D to this order are designated competitive zones pursuant to ORS 759.050(2)(b).

Pricing Flexibility

The Commission’s Findings and Decisions in dockets CP 1, CP 14, and CP 15, Order No. 96-021 at pages 82 and 83, entered pursuant to ORS 759.050(5)(a) - (d), are adopted. Accordingly, USWC will gain pricing flexibility in an exchange listed in Appendix A when:

1. Applicant, or an authorized AEC, has received a certificate of authority to provide local exchange service.

2. USWC files a tariff which satisfies the Commission’s requirements regarding the provision of interim number portability, as set forth in Order No. 96-021, and the Commission approves the tariff. Subsequent to Order No. 96-021, USWC satisfied this requirement as set forth in Order No. 96-277.

3. Staff notifies the Commission that a mutual exchange of traffic exists between USWC and an authorized AEC, including but not limited to, applicant. If Staff previously provided the required notice regarding an exchange, no additional notice is required for that exchange.

(a) As used in paragraph 3 above, "mutual exchange of traffic" means a mutual exchange of traffic between USWC and the AEC within each exchange on an exchange-by-exchange basis. For example, if there is a mutual exchange of traffic in the Bend exchange, USWC would get pricing flexibility in the Bend exchange only.

(b) As used in paragraph 3 above, for an AEC who is a reseller (i.e., an AEC does not use its own lines or switches to provide the particular service at issue), a "mutual exchange of traffic" exists when the AEC orders and receives one service, at a wholesale rate, from the LEC for resale pursuant to a certificate granted under ORS 759.050.

Similarly, GTE will gain pricing flexibility in an exchange listed in Appendix B when:

1. Applicant, or an authorized AEC, has received a certificate of authority to provide local exchange service.

2. GTE files a tariff which satisfies the Commission’s requirements regarding the provision of interim number portability, as set forth in Order No. 96-021, and the Commission approves the tariff. Subsequent to Order No. 96-021, GTE satisfied this requirement as set forth in Order No. 96-278.

3. Staff notifies the Commission that a mutual exchange of traffic exists between GTE and an authorized AEC, including but not limited to, applicant. If Staff previously provided the required notice regarding an exchange, no additional notice is required for that exchange. The definitions in paragraphs 3.(a) and 3.(b) above, also apply here.

Similarly, PTI will gain pricing flexibility in an exchange listed in Appendix C when:

1. Applicant, or an authorized AEC, has received a certificate of authority to provide local exchange service.

2. PTI files a tariff which satisfies the Commission’s requirements regarding the provision of interim number portability, as set forth in Order No. 96-021, and the Commission approves the tariff.

3. Staff notifies the Commission that a mutual exchange of traffic exists between PTI and an authorized AEC, including but not limited to, applicant. If Staff previously provided the required notice regarding an exchange, no additional notice is required for that exchange. The definitions in paragraphs 3.(a) and 3.(b) above, also apply here.

Similarly, United will gain pricing flexibility in an exchange listed in Appendix D when:

1. Applicant, or an authorized AEC, has received a certificate of authority to provide local exchange service.

2. United files a tariff which satisfies the Commission’s requirements regarding the provision of interim number portability, as set forth in Order No. 96-021, and the Commission approves the tariff.

3. Staff notifies the Commission that a mutual exchange of traffic exists between United and an authorized AEC, including but not limited to, applicant. If Staff previously provided the required notice regarding an exchange, no additional notice is required for that exchange. The definitions in paragraphs 3.(a) and 3.(b) above, also apply here.

ORDER

IT IS ORDERED that:
1. The application of Ameritel Corporation to provide the local exchange telecommunications services described in the application is in the public interest and is granted with conditions described in this order.

2. Applicant is designated as a competitive telecommunications services provider.

3. The local exchanges of USWC listed in Appendix A, those of GTE listed in Appendix B, those of PTI listed in Appendix C, and those of United listed in Appendix D are designated as competitive zones.

4. USWC, GTE, PTI, and United shall receive pricing flexibility on an exchange-by-exchange basis as set forth in this order.

5. Pursuant to ORS 759.050(2)(c), applicant shall comply with Commission imposed universal service requirements as a condition of authority to provide local exchange service.
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 party may appeal this order to a court pursuant to ORS 756.580.

APPENDIX A

CP 201

EXCHANGES OF U S WEST COMMUNICATIONS, INC.

ENCOMPASSED BY THE APPLICATION

Albany

Ashland

Astoria

Athena/Weston

Baker

Bend

Blue River

Burlington

Camp Sherman

Cannon Beach

Central Point

Corvallis

Cottage Grove

Culver

Dallas

Eugene/Springfield

Falls City

Florence

Gold Hill

Grants Pass

Harrisburg

Hermiston

Independence/Monmouth

Jacksonville

Jefferson

Junction City

Klamath Falls

Lake Oswego

Lapine

Leaburg

Lowell

Madras

Mapleton

Marcola

Medford

Milton-Freewater

Newport

North Plains

Oak Grove/Milwaukie

Oakland/Sutherlin

Oakridge

Oregon City

Pendleton

Phoenix/Talent

Portland

Prineville

Rainier

Redmond

Rogue River

Roseburg

St. Helens

Salem

Seaside

Siletz

Sisters

Stanfield

Sumpter

Toledo

Umatilla

Veneta

Walla Walla

Warrenton

Westport

Woodburn/Hubbard

APPENDIX A

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APPENDIX B

CP 201

EXCHANGES OF GTE NORTHWEST, INC.

ENCOMPASSED BY THE APPLICATION

Amity

Aumsville/Turner

Bandon

Beaverton

Brookings

Clatskanie

Coos Bay/North Bend

Coquille

Cove

Dayton

Detroit

Elgin

Enterprise

Forest Grove

Gold Beach

Grand Island

Gresham

Hillsboro

Hoodland

Imbler

Joseph

La Grande

Lakeside

Langlois

Lostine

McMinnville

Mill City

Murphy/Provolt

Myrtle Point

Newberg

Port Orford

Powers

Reedsport

Sandy

Scholls

Sherwood

Silverton

Stafford

Sunnyside

Tigard

Union

Vernonia

Wallowa

Yamhill

APPENDIX B

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APPENDIX C

CP 201

EXCHANGES OF PTI COMMUNICATIONS

ENCOMPASSED BY THE APPLICATION

Aurora

Bly

Boardman

Bonanza

Brownsville

Burns

Camas Valley

Charbonneau

Chemult

Chiloquin

Creswell

Depoe Bay

Drain

Durkee

Echo

Fort Klamath

Fossil

Gilchrist

Gleneden Beach

Glide

Government Camp

Heppner

Huntington

Ione

Jewell

John Day

Knappa

Lakeview

Lebanon

Lexington

Long Creek

Malin

Maupin

Merrill

Mitchell

Monument

North Harney

North Powder

North Umpqua

Paisley

Paulina

Pilot Rock

Pine Grove

Rocky Point

Scappoose

Seneca

Shedd

Silver Lake

South Harney

Sprague River

Spray

Starkey

Sweet Home

Tygh Valley

Ukiah

Wamic

Yoncalla

APPENDIX C

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APPENDIX D

CP 201

EXCHANGES OF UNITED TELEPHONE OF THE NORTHWEST, INC.

ENCOMPASSED BY THE APPLICATION

Arlington

Bay City

Beaver

Butte Falls

Carlton

Cascade Locks

Cloverdale

Crater Lake

Diamond Lake

Fish Lake

Garibaldi

Grand Ronde

Grass Valley

Hood River

Lincoln City

Moro

Mosier

Odell

Pacific City

Parkdale

Prospect

Rockaway

Rufus

Shady Cove

Sheridan

The Dalles

Tillamook

Wasco

White City

Willamina

APPENDIX D

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