ORDER NO. 98-004

ENTERED JAN 06 1998

This is an electronic copy. Appendices may not be included.

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

CP 369

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 September 11, 1997, North Santiam Communications, (applicant) filed with the Commission an application for certification to provide telecommunications service in Oregon as a competitive provider. Applicant seeks statewide authority to provide long distance telecommunications services (interexchange toll), including 1+ dialed toll, 800 services, and calling cards. Applicant will provide services using resale agreements with underlying certified providers. Applicant will use owned, leased, and resold facilities. Applicant will either own its own switching and recording equipment or will obtain switching and recording functions through interconnection agreements.

Applicant will contract with other certified providers to provide operator services. A statement of compliance with Order No. 90-096 and ORS 759.690 was included in the application.

Applicant is an affiliate of Stayton Cooperative Telephone Company (Stayton Telephone) and People’s Telephone Company (People’s Telephone). Stayton Telephone is a cooperative. People’s Telephone is a telecommunication utility. Stayton Telephone owns all of the stock of People’s Telephone. Applicant is a wholly owned affiliate of Stayton Telephone.

Stayton Telephone and People’s Telephone are certified by the Commission pursuant to ORS 759.025. Stayton is certified as a local exchange service provider in the Stayton exchange. People’s Telephone is certified as a local exchange service provider in the Lyons exchange. Applicant has authority as a competitive provider of local exchange telecommunications services in areas coextensive with one U S WEST Communications exchange (Jefferson) and four GTE Northwest exchanges (Aumsville/Turner, Detroit, Mill City, and Silverton). See Order No. 97-426, docket CP 361.

The Commission served notice of the application on the Commission’s telecommunications mailing list on October 13, 1997. The Commission did not receive any protests.

On November 13, 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 December 4, 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 telecommunications 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 nameplate 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 services provider. Applicant’s customers or those proposed to become customers have reasonably available alternatives. Applicant will face competition from a variety of carriers including AT&T, MCI, and Sprint. 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

In recognition of applicant’s affiliation with Stayton Telephone and People’s Telephone, and the potential for Stayton Telephone and People’s Telephone to favor applicant over other competitive toll providers, applicant shall comply with the following conditions. Applicant shall not enter into arrangements with its affiliates, Stayton Telephone and People’s Telephone, that discriminate between, or provide preferential treatment for, applicant over other competitive interexchange carriers in regards to rates, terms or conditions for:

The provision of access to the local exchange networks of Stayton Telephone and People’s Telephone;

The provision of customer billing, collection, verification and credit card information, and related services; and

The provision of other products and services such as shared or joint use of facilities and equipment; customer dialing codes; maintenance, testing and repair services; market promotions and advertised services; network information; and customer and market information.

ORDER

IT IS ORDERED that the application of North Santiam Communications to provide interexchange telecommunications services described in the application is granted with conditions described in this order.

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.