ORDER NO. 97-289

ENTERED AUG 01 1997

This is an electronic copy.

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

UM 817

DISPOSITION: COMMUNITY OF INTEREST FOUND

On September 19, 1996, customers in the Haines telephone exchange filed a petition with the Commission requesting extended area service (EAS) to the North Powder and LaGrande exchanges. A map of the exchanges is attached to this order as Appendix A.

On December 4, 1996, 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 April 22, 1997, Michael Grant, an Administrative Law Judge (ALJ), issued a Proposed Order adopting Staff’s findings and recommending that the Haines petition for EAS to the North Powder and LaGrande 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 June 24, 1997, Ruth Crowley, an ALJ, held a hearing on this matter in Haines, Oregon. Notice of the hearing was served to all parties and was published twice in the Baker City Herald. Approximately nine people attending the hearing in support of the petition. Some of the attendees noted that their neighbors had wanted to attend but had to take advantage of the dry weather to get their haying done. They asked for and received permission to submit letters from other residents in support of the petition. The Commission received 31 letters from residents of the area 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 Haines telephone exchange lies in Baker County. The North Powder and LaGrande telephone exchanges lie in Union County. The petitioning exchange, Haines, consists of approximately 441 access lines and currently has EAS with the Baker City exchange. The North Powder exchange lies north of the Haines exchange and has approximately 352 access lines. North Powder currently has EAS with the LaGrande exchange. LaGrande has approximately 8,939 access lines and currently has EAS with the Cove, Elgin, Imbler, North Powder, and Union exchanges. Haines is served by Cascade Utilities, Inc.; North Powder is served by Pacific Telecom, Inc.; and LaGrande is served by GTE Northwest Incorporated. North Powder lies about eight miles north of Haines; LaGrande is about 15 miles north of North Powder.

Haines is a small rural community with little or no centralized business. Exchange residents seek essential goods and services in the neighboring communities, particularly in Baker City and LaGrande. Neighboring communities, including North Powder and LaGrande, also offer employment opportunities for Haines exchange residents. Many Haines children attend school in North Powder, and North Powder and Haines share a Little League team. Farmers and ranchers in the Haines exchange do business with the Crop Production Services branch in North Powder and with the Oregon Department of Fish and Wildlife branch in North Powder, as well as with the Forest Service office in LaGrande.

Schools

Residents of the Haines exchange are served by a K-12 school in North Powder. The North Powder school has about 50 students from Haines. As North Powder students, the children from Haines participate in school sports and extracurricular activities in North Powder as well. Moreover, the towns of North Powder and Haines combine their school sports. The North Powder school also employs several people from Haines.

Government and Jurisdictional Issues

Haines is located in Baker County. North Powder and LaGrande are located in Union County.

Federal offices are located in LaGrande. When ranchers consult the U.S. Forest Service, they are likely to be referred to LaGrande.

Haines ranchers do business with the Oregon Department of Fish and Wildlife, North Powder area manager, and consequently place many calls to North Powder. They also do a lot of business with the Crop Production Services branch location in North Powder.

Medical and Dental Services

Residents of Haines rely on medical providers in LaGrande and Baker City. Both cities have hospitals, but residents of Haines tend to use the LaGrande facilities more than the Baker City facilities. LaGrande offers a large group of medical specialists.

Employment

Residents of Haines and North Powder frequently work in the other community. Among the North Powder businesses that hire Haines residents are the North Powder Cafe, the North Powder lumber mill, Orr Excavating Company, the North Powder School, and the U.S. Post Office. About a quarter of the North Powder Cafe’s employees live in Haines, for instance. The North Powder postmaster lives in Haines, and the Haines postmaster lives in North Powder.

Haines businesses that hire people from North Powder include the Sel Rite General Store, the Haines Steak House, the Haines grade school, the U.S. Post Office, and the Anthony Lakes Ski Resort. That resort has a Haines number, but the main office has a LaGrande number.

Haines also has quite a few residents who work in LaGrande.

Business and Commercial Dependence or Interdependence

Many Haines residents rely on North Powder and LaGrande for business services. People shop at the large stores in LaGrande because they are less expensive than the smaller stores and offer more variety and better quality. People from Haines also shop for groceries in LaGrande, for the same reasons.

Farmers and ranchers rely on LaGrande businesses for their farming and equipment needs. The major tractor dealers are located there, as well as sources for chemical spray and fertilizer. There are more businesses in LaGrande on which farmers and ranchers rely than in Baker City. North Powder also has a fertilizer plant on which Haines farmers rely.

Two contractors in the area do more business in LaGrande than in Baker City.

Toll Avoidance

Most Haines residents engage in a variety of toll avoidance or minimization practices. Some parents have 1-800 numbers so their children can call them from school. Others simply avoid making calls that are long distance, despite the convenience such calling would represent.

OPINION

Issue

For the reasons shown in Appendix B, the Commission Staff determined that the Haines exchange petitioners failed to meet the calling volume and customer distribution requirements for the proposed Haines/North Powder and Haines/LaGrande 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 or exchanges. 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 Haines petitioners have established, through demographic and other evidence, that a community of interest exists with the North Powder and LaGrande exchanges. The evidence presented at hearing and by letter after the hearing establishes a sufficient degree of dependence by the Haines exchange residents on the North Powder and LaGrande areas.

The Haines area is a rural ranching and agricultural community that offers little in the way of businesses or professional services for its residents. North Powder and Haines are closely interdependent in terms of schools and employment. Many Haines residents work in North Powder and vice versa. Haines and North Powder share Little League and school activities and many Haines children attend school at the K-12 school in North Powder.

Haines, like North Powder, looks to LaGrande for professional and government services as well as for agricultural equipment and supplies and retail and grocery shopping.

Many Haines residents engage in toll avoidance or minimization activities. Many residents forego making calls, even when it would be convenient. Others subscribe to 1-800 numbers and the like to minimize toll bills. These activities account for the fact that the Haines calling pattern data failed the Commission’s objective criteria for a community of interest, despite the strong demographic showing of dependence.

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

ORDER

IT IS ORDERED that:

1. The Haines telephone exchange has established a community of interest with both the North Powder and the LaGrande telephone exchanges, based on demographic, economic, financial, and other evidence.

2. 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 Haines 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 to a court pursuant to ORS 756.580.