ORDER NO. 97-354

ENTERED SEP 10 1997

This is an electronic copy.

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

CP 342

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 June 11, 1997, West Coast Net, Inc. (applicant), filed with the Commission an application for certification to provide telecommunications service in Oregon as a competitive provider. Applicant seeks authority to provide point-to-point, private line (i.e., dedicated, non-circuit switched) intraexchange telecommunications service within areas coextensive with several local exchanges of United Telephone Company of the Northwest, dba Sprint (United). The Commission refers to the requested service as dedicated transmission service. Applicant also seeks authority to provide interexchange dedicated transmission service between the same local exchanges of United.

The local exchanges of United encompassed by the application are listed in Appendix A to this order.

Applicant will provide only dedicated transmission service, both intraexchange and interexchange. Applicant will be a reseller of those services as well as a facilities-based provider. The services for which applicant requests authority are within the definition of dedicated transmission service set forth in Order No. 93-1850, docket UM 381. Dedicated transmission services inherently do not include operator services.

The Commission served notice of the application on the Commission’s telecommunications mailing list on June 12, 1997. The Commission did not receive any protests. However, United was considered a party to this proceeding.

On July 18, 1997, an Administrative Law Judge (ALJ) with the Commission issued a ruling that adopted procedures for the processing of this docket. The ALJ also set forth a procedural schedule.

On August 8, 1997, the Commission Staff (Staff) distributed a proposed order for review by the parties. No party filed exceptions to the proposed order.

The Commission has reviewed the proposed order 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 telecommunications 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.

ORS 759.690 and OAR 860-032-0005 establish certain requirements providers of operator services must meet. Included are the following conditions:

The certificate holder involved in the provision of operator services shall:

1. Notify all callers at the beginning of the call of the telecommunications provider's name and allow a sufficient delay period to permit a caller to terminate the call or advise the operator to transfer the call to the customer's preferred carrier.

2. Disclose rate and service information to the caller when requested.

3. Not transfer a call to another operator service provider without the caller's notification and consent.

4. Not screen calls and prevent or "block" the completion of calls which would allow the caller to reach an operator service company different from the certificate holder. In addition, the certificate holder shall, through contract provisions with its reseller clients, prohibit the reseller from blocking a caller's access to his or her operator service company of choice.

5. When entering into operator service contracts or arrangements with clients who in turn resell or provide telephone service to the general public include in that contract provisions for public notification . A sticker or name plate identifying the name of the certificate holder shall be attached to, or in close proximity to, each telephone that has public access.

OAR 860-032-0015(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 service provider. Applicant’s customers or those proposed to become customers have reasonably available alternatives. The incumbent telecommunications utility, United, provides the same or similar local exchange dedicated telecommunications service in the service area requested by applicant. AT&T, MCI, Sprint, and United provide the same or similar interexchange dedicated telecommunications service in the area requested by the applicant for interexchange service. 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

As part of the application, the applicant agreed to, or acknowledged, several conditions listed in the application. Those conditions are adopted and are made conditions of this certificate of authority. In addition, applicant shall not take any action that impairs the ability of other certified telecommunications service providers to meet service standards specified by the Commission.

Public Interest

In docket UM 381, Order No. 93-1850, the Commission considered the public interest aspects of local exchange competition for dedicated transmission service similar to that described in the application before us now. In dockets CP 1, CP 14, and CP 15, Order No. 96-021, the Commission made several public interest findings regarding local exchange competition in general.

The Commission’s Findings of Fact and Opinion in docket UM 381, Order No. 93-1850 at page 4 - 6, and the Commission’s Findings and Decisions in dockets CP 1, CP 14, and CP 14, Order No. 96-021 at pages 6-21, entered pursuant to ORS 759.050(2)(a)(A) - (C), are adopted. The Commission takes official notice of the record in dockets UM 381, CP 1, CP 14, and CP 15. 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 West Coast Net, Inc., to provide intraexchange dedicated telecommunications service as a competitive telecommunica-tions provider in the exchanges listed in Appendix  A. Further, it is in the public interest to grant the application of West Coast Net, Inc., to provide the interexchange dedicated telecommunications service described in the application between the exchanges listed in Appendix A.

Competitive Zones

The exchanges listed in Appendix A to this order are designated competitive zones for dedicated transmission service pursuant to ORS 759.050(2)(b).

Pricing Flexibility

In Order No. 93-1850, docket UM 381, the Commission granted pricing flexibility for dedicated transmission service at the time the Commission granted the certificate of authority. Applicant seeks authority to provide dedicated transmission service. Accordingly, United is granted pricing flexibility for dedicated transmission service in the exchanges listed in Appendix A.

ORDER

IT IS ORDERED that:

1. The application of West Coast Net, Inc., to provide the intraexchange and interexchange dedicated telecommunications service described in the application is granted with conditions described in this order.

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

3. Applicant may provide intraexchange dedicated transmission service within the exchanges listed in Appendix A. Applicant may provide interexchange dedicated transmission service between all the exchanges listed in Appendix A.

4. The local exchanges of United listed in Appendix A are designated competitive zones for dedicated transmission service.

5. United shall receive pricing flexibility for dedicated transmission service for the exchanges listed in Appendix A.

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 342

EXCHANGES OF UNITED TELEPHONE OF THE NORTHWEST

ENCOMPASSED BY THE APPLICATION

Bay City

Beaver

Carlton

Cloverdale

Garibaldi

Grand Ronde

Lincoln City

Rockaway

Sheridan

Tillamook

Willamina