ORDER NO. 97-284

ENTERED AUG 01 1997

This is an electronic copy.

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

UM 832

DISPOSITION: COMMUNITY OF INTEREST FOUND

On January 10, 1997, customers in the North Umpqua telephone exchange filed a petition with the Commission requesting extended area service (EAS) to the Glide and Roseburg telephone exchanges. A map of the exchanges is attached to this order as Appendix A.

On April 21, 1997, the Commission Staff (Staff) filed testimony in this proceeding for the Phase I, Community of Interest Determination. Based on a review of geographic and telephone usage information, Staff concluded that the requested interexchange routes did not satisfy the objective community of interest criteria set forth in Order Nos. 89-815 and 92-1136. Staff’s testimony is summarized in Appendix B, attached to this order and incorporated by reference.

On June 12, 1997, Michael Grant, an Administrative Law Judge (ALJ), issued a Proposed Order adopting Staff’s findings and recommending that the North Umpqua petition for EAS to the Glide and Roseburg exchanges be dismissed. Petitioners subsequently requested an opportunity to establish, through demographic, economic, financial, or other evidence that a community of interest exists between the three exchanges.

On July 8, 1997, ALJ Grant held a hearing on this matter in Toketee, Oregon. Notice of the hearing was served to all parties, and was published twice in the News-Review newspaper. Approximately 75 people attended the hearing in support of the petition. Based on the evidence submitted in this matter, the Commission makes the following:

FINDINGS OF FACT

Geography and Demography

The North Umpqua, Glide, and Roseburg telephone exchanges lie in Douglas County along the scenic North Umpqua River. The petitioning exchange, North Umpqua, consists of almost 150 access lines and currently has no EAS with any other exchange. The Glide exchange lies west of the North Umpqua exchange and consists of approximately 1,400 access lines. It currently has EAS to the Roseburg exchange. The Roseburg exchange lies west of Glide and consists of over 26,000 access lines. It has EAS to the Camas Valley, Elkton, Oakland, Yoncalla, and Glide exchanges. The North Umpqua and Glide exchanges are served by PTI Communications (PTI), while the Roseburg exchange is served by U S WEST Communications.

The North Umpqua exchange serves an isolated area within the Umpqua National Forest. Most exchange residents live in Toketee, a small residential community located on federal land leased by Pacific Power and the Forest Service to provide housing for their employees. There are no stores or businesses in Toketee, however. In fact, the North Umpqua exchange has only one small market at Dry Creek, located approximately 12 miles west of Toketee. Exchange residents, therefore, seek essential goods and services in neighboring communities.

The city of Glide, located approximately 40 miles from Toketee, is the closest town that offers some of these services. A recent survey of exchange residents revealed that North Umpqua exchange residents rely on the Glide exchange to meet many of their basic needs. Glide offers several grocery stores, a hardware outlet, recreational equipment services, packaging services, restaurants, and other small businesses.

Exchange residents also rely on the Roseburg exchange for these services. The city of Roseburg, located approximately 60 miles from Toketee, is a relatively large metropolitan area that offers a wide variety of professional, commercial, and consumer services.

Schools

The North Umpqua exchange is served by an elementary school located in Toketee. Older students, however, attend junior high and high schools located outside the local calling area in Glide. Many of these students participate in sporting and other extracurricular activities in the neighboring exchange.

Government and Jurisdictional Issues

The North Umpqua, Glide, and Roseburg exchanges are served by the county government in Roseburg.

The North Umpqua exchange is served by a post office in Glide.

Medical, Dental, and Emergency Services

No medical or dental provider is located within the North Umpqua calling area. As a result, exchange residents rely on Glide and Roseburg for such services. Glide offers a medical clinic. Roseburg offers a wide variety of medical and dental services, as well as a hospital, pharmacy, and other related services.

The North Umpqua exchange is also served by a fire department located in Glide.

Employment

Most residents of the North Umpqua exchange work at the Toketee Ranger Station, at the Toketee Elementary School, or at Pacific Power’s generating facilities at Toketee Reservoir. Many Glide residents also work for the Forest Service and Pacific Power and commute to the Toketee Compound.

Toll Avoidance

Most North Umpqua exchange residents engage in a variety of toll avoidance practices. Almost all of the 75 residents who attended the hearing try to reduce their long distance charges by using alternative toll carriers. In addition, many often avoid toll calls by combining a trip with their telephone activities.

Many of the larger phone users also have direct phone lines to Roseburg and Glide. These users include the Forest Service, Pacific Power, and the Steamboat Inn.

OPINION

Issue

For the reasons shown in Appendix B, the Commission Staff determined that the North Umpqua exchange petitioners failed to meet the calling volume and customer distribution requirements for the proposed North Umpqua/Glide and North Umpqua/Roseburg interexchange routes. The question presented in this proceeding, therefore, is whether the petitioners have established, through demographic, economic and other evidence, that a community of interest exists between those exchanges.

Applicable Law

In Phase I of an EAS investigation, the Commission determines whether there is a "community of interest" between the petitioning exchange and the target exchange(s). The Commission has 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 North Umpqua petitioners have established, through demographic and other evidence, that a community of interest exists with the Glide and Roseburg telephone exchanges. The evidence presented at hearing establishes a sufficient degree of dependence by the North Umpqua exchange residents on the Glide and Roseburg areas.

As indicated above, most residents in the North Umpqua exchange live at the Toketee Ranger Station Compound, a residential area provided for employees of the Forest Service and Pacific Power. While all residents are assured of employment, the area does not provide any basic goods and services for the community. Glide, located some 40 miles from Toketee, is the closest city to provide some of the services necessary to meet the basic needs of North Umpqua exchange residents. These include grocery stores, hardware supplies, primary medical care facilities, a post office, and other consumer services. The North Umpqua exchange residents also rely on the Glide exchange for the schooling of its junior high and high school aged children.

The North Umpqua petitioners also established that an overwhelming majority of customers engage in a variety of toll avoidance activities. Many residents simply save calls and make them in the Glide exchange. Almost all residents dial around their primary toll carrier and use the services of other carriers. In addition, the primary employers in the exchange all have foreign access lines to the Glide exchange. Had these calls been capable of measurement and been included in Staff’s analysis, it is most likely that the North Umpqua customers would have satisfied the Commission’s objective criteria for a community of interest. Indeed, the petitioners satisfied the calling volume criterion with the Glide exchange, and failed the customer distribution criterion by a little more than six percent.

In summary, the North Umpqua petitioners’ demographic evidence showed strong ties to the Glide and Roseburg exchanges. The Commission concludes that such evidence persuasively establishes that a community of interest exists between the North Umpqua, Glide, and Roseburg exchanges. The EAS petition should proceed to Phase II (tariff analysis).

ORDER

IT IS ORDERED that:

The North Umpqua telephone exchange has established a community of interest with the both the Glide and Roseburg telephone exchanges.

This completes Phase I of this docket. The petition is now ready to enter Phase II, the rate and cost phase of this proceeding. For Phase II, the North Umpqua 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 15, 1997.

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.