ORDER NO. 98-232

ENTERED JUN 12 1998

This is an electronic copy.

BEFORE THE PUBLIC UTILITY COMMISSION

OF OREGON

UD 6

DISPOSITION: PETITION GRANTED

Background. On March 27, 1998, U S WEST Communications, Inc., (USWC) filed a petition to price list certain packaged services pursuant to ORS 759.030(6). By letter dated May 19, 1998, USWC requested that the effective date of the filing be extended to June 3, 1998.

The services USWC wishes to price list are:

The Real Deal

Call Manager Connection

Custom Choice.

These services are packaged services made up of components that are individually tariffed. Call Manager Connection is a business service; the other services are residential services.

Applicable Law. ORS 759.030 provides, in relevant part:

(6) If the commission determines that a product or service offered by a telecommunications utility as part of local exchange telecommunications services can be demonstrated by the utility to be subject to competition, or if a product or service is not an essential product or service, the commission may authorize the utility to file a price list, which shall contain the description, terms, conditions and prices of such services or products.

At its June 2, 1998, public meeting, the Commission considered Staff’s recommendation on the filing. Staff recommended that the Commission suspend the operation of this filing for up to five months from June 3, 1998, to investigate the appropriateness of the filing.

Staff’s Recommendation. Staff contended that these services may be nonessential services and therefore subject to price listing under ORS 759.030(6). They do not appear on the list of 21 essential services in OAR 860-032-0100, although that list relates to ORS 759.195 rather than ORS 759.030.

Staff pointed out that the three services that USWC is petitioning to price list are combinations of popular custom calling features that may be added to essential access line services. It is impossible for a customer to obtain an access line from one provider and the features from another provider. Staff argued that the Commission should order an investigation of the connection, if any, between service quality and the appropriateness of price listing nonessential services. Staff also argued that the Commission must determine which of the services covered by the petition are nonessential before it acts on the petition. Finally, Staff expressed concern about whether sufficient consumer protections exist in the proposal to warrant Commission approval under ORS 759.030.

Staff recommended that the Commission suspend operation of USWC’s petition to price list certain packaged services for up to five months from June 3, 1998, and direct Staff to investigate the appropriateness of the petition and the general price listing of nonessential services under current circumstances.

USWC’s Position. USWC argued that the packaged services covered by its petition are by definition nonessential services, because they are composed of elements that are individually tariffed and which may be purchased individually. USWC represented that the price of the packaged services will never exceed the current tariffed price of the individual services.

Commission Decision. In reaching its decision, the Commission clarified its assumption that price listing the packaged services does not mean price listing the individual services, nor does it have any precedential value as to whether the individual services composing the package should be price listed. Moreover, this Commission decision does not predetermine the more general question of whether nonessential services should be price listed.

Conclusion. The Commission voted to allow USWC’s petition to go into effect on June 3, 1998, and directed Staff to address the issue of essential versus nonessential services and the impact of that statutory distinction on services, the competitive market, and customers in the universal service docket, UM 731, or through another appropriate procedure. If Staff wishes, it may recommend other ways of addressing the issue of the essential/nonessential services distinction.

ORDER

IT IS ORDERED that:

U S WEST Communications, Inc.’s petition to price list its three packaged services, effective June 3, 1998, is granted.

The issue of essential/nonessential services and the impact of the distinction between them in ORS 759.030(6) shall be taken up in UM 731 unless an alternative way of addressing the issue is approved.

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.