ORDER NO. 98-385

ENTERED SEP 24 1998

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

OF OREGON

UM 899

DISPOSITION: PETITION DISMISSED; DOCKET CLOSED

Introduction

On March 30, 1998, the customers of the Meacham telephone exchange filed a request for extended area service (EAS) to the Pendleton telephone exchange. After a review of calling pattern data, the Commission Staff concluded that a community of interest existed between the exchanges. On June 24, 1998, Michael Grant, an Administrative Law Judge (ALJ), issued a ruling adopting Staff’s findings and indicating that the docket should proceed to the consolidated Phase II proceeding for rate and tariff analysis.

In preparation for Phase II proceedings, the Helix Telephone Company (Helix), which serves the Meacham exchange, began to evaluate the cost of deploying EAS. Helix calculated that the costs—primarily lost access revenues from toll—would exceed $17,000 annually. Helix also determined that the EAS rate additive to recover those costs would be very high. In order to provide customers a measured EAS option at a rate lower than the average toll charge of $0.154 per minute, Helix calculated that it would be required to charge residential customers desiring unlimited calling a flat rate of $142 per month.

On July 6, 1998, Helix filed a letter with the Commission requesting that additional procedures be developed to determine whether Meacham exchange customers wished to reconsider their EAS petition in favor of retaining the existing toll service. Helix noted that Meacham customers currently benefit from the toll averaging of the rates of U S WEST Communications, Inc. Because of this averaging, Meacham residents pay $.17 for the initial minute and $.15 for each subsequent minute on daytime calls to Pendleton. Meacham customers also receive a 25 percent discount for evening calling, and a 50 percent discount for night and weekend calling. Furthermore, customers can subscribe to a U S WEST Toll-Pac service, which reduces these rates by approximately an additional 30 percent.

In August 1998, the Commission mailed informational surveys to all customers of the Meacham exchange to determine continued support for the EAS petition at the projected rates. To help further explain the EAS costs and customer choices, ALJ Grant held an evening public comment hearing in Meacham on August 25, 1998. Lance Ball, a member of the Commission Staff, appeared and provided additional information and answered customer questions. Jim Stringer of GVNW Inc./Management appeared on behalf of Helix.

Survey Results

Of the 101 ballots that were mailed to the customers of the Meacham exchange, 28 were returned. Only one of those customers indicated continued support for the EAS petition. The other 27 customers responding asked that the Commission close the investigation for EAS between Meacham and Pendleton.

Based upon the survey results, the Commission concludes that this docket should be closed on the ground that there is inadequate customer support for EAS between Meacham and Pendleton at the projected costs.

ORDER

IT IS ORDERED that the petition for extended area service between the Meacham and Pendleton telephone exchanges is dismissed. Docket UM 899 is closed.

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.