ORDER NO. 99-030

ENTERED Jan 22 1999

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

OF OREGON

CP 544

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 October 5, 1998, U S WEST Communications, Inc. (applicant), filed with the Commission an application for certification to provide telecommunications service in Oregon as a competitive provider. Applicant seeks to provide intraexchange (local exchange) telecommunications service in areas coextensive with local exchange of Beaver Creek Cooperative Telephone (Beaver Creek). Applicant also requests authority to provide, as a competitive provider, interexchange toll service and interexchange private line service (i.e., nonswitched or dedicated transmission service) in the same exchange. The local exchange of Beaver Creek is listed in Appendix A to this order.

Applicant is a telecommunications utility. Pursuant to ORS 759.025, applicant currently has authority as a telecommunications utility to provide switched and private line local exchange service in 64 exchanges. Applicant also has authority, as a utility, to provide switched (long distance toll) and private line interexchange, intraLATA telecommunications service statewide. See Order No. 86-1237, docket UM 70. Applicant has authority to provide, as a competitive provider, intraexchange switched and nonswitched private line service, (dedicated transmission service) in Oregon in all GTE Northwest Incorporated (GTE), and United Telephone Company of the Northwest dba Sprint (United) exchanges. See Order No. 98-225, docket CP 413.

Applicant, USWC, is currently the largest telecommunications utility operating in Oregon. Further, applicant is currently the Primary Toll Carrier (PTC) in its own exchanges and throughout the state, except for the local exchanges of GTE and United. A PTC is the default toll carrier for intraLATA telecommunications. Applicant will operate as a reseller and as a facilities based provider of telecommunications service.

Applicant will provide operator services. A statement of compliance with Commission rules and with state law, including ORS 759.690 and OAR 860-032-0005 (regarding operator services), was included in the application.

The Commission served notice of the application on the Commission’s telecommunications mailing list October 12, 1998. The Commission did not receive any protests. However, Beaver Creek will be considered a party to this proceeding.

On November 23, 1998, 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 14, 1998, the Commission Staff (Staff) distributed a proposed order for review by the parties. No exceptions to the proposed order were filed.

The Commission has reviewed the proposed order, the exceptions, and the record in this matter. Based on a preponderance of the evidence, the Commission makes the following:

Applicable Law

Applications to provide telecommunications service and for classification as a competitive telecommunications service 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 service 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 telecom-munications 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:

Upon 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 ORS 759.180 to ORS 759.190 [notice, hearing and tariff suspension procedures], 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 call aggregators include in each 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 service provider. Applicant’s customers or those proposed to become customers have reasonably available alternatives. The incumbent telecommunications company, Beaver Creek, provides the same or similar local exchange services in the local service area requested by applicant. Subscribers to applicant’s services can buy comparable services at comparable rates from other vendors. Economic and regulatory barriers to entry are relatively low.

Applicant is classified as a competitive telecommunications services provider for the services it offers pursuant to this order. The Commission recognizes that Applicant also operates as telecommunications utility in certain exchanges in this state. With respect to services Applicant offers as a competitive provider pursuant to this order, Applicant is not required to file rate schedules under ORS 759.175 or charge the rates that Applicant files with the Commission as a telecommunications utility.

 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 made conditions of this certificate of authority.

The Commission first applied the competitive zone law, ORS 759.050, in dockets CP 1, CP 14, and CP 15. After full evidentiary hearings and consideration of the public interest criteria set forth in ORS 759.050(2)(a), the Commission designated three competitive providers of switched local exchange services as alternate exchange carriers (AECs or competitive local exchange carriers (CLECs)) in the Portland metropolitan area. See Order No. 96-021. The Commission subsequently applied those findings and conclusions to dockets CP 132, CP 139, and CP 149, and certified two CLECs to provide switched local exchange services in areas located throughout the state.

The Commission takes official notice of the record in dockets CP 1, CP 14, and CP 15. In Order No. 96-021, the Commission established conditions applicable to CLEC certificates. Since applicant, U S WEST Communications, Inc., proposes to offer switched local exchange services, it seeks certification as a CLEC. Pursuant to ORS 759.050(2)(c) and Order No. 96-021, applicant as a CLEC shall comply with the following conditions:

1. Applicant shall terminate all intrastate traffic originating on the networks of other telecommunications service providers that have been issued a certificate of authority by the Commission.

2. Whenever applicant terminates intrastate long distance traffic directly or indirectly from interexchange carriers or from its own toll network to its end user customers, applicant shall contribute to the Oregon Customer Access Fund (OCAF), or its equivalent, in accordance with provisions of the Oregon Customer Access Plan (OCAP) or any successor plan approved by the Commission. Applicant shall contribute using rates approved by the Commission on intrastate terminating carrier common line access minutes, or on any other basis determined by the Commission. Applicant may not participate in (i.e., receive money from) pooling arrangements established under the OCAP or any successor plan unless authorized by the Commission.

3. Applicant shall comply with the Oregon Exchange Carrier Association’s (OECA) informational and operational needs as specified by the OCAP or any successor plan approved by the Commission.

4. Applicant shall offer E-911 service. Applicant has primary responsibility to work with the E-911 agencies to make certain that all users of their services have access to the emergency system. Applicant will deliver or arrange to have delivered to the correct 911 Controlling Office its customers’ voice and dialable Automatic Number Identification (ANI) telephone numbers so the lead 911 telecommunications service provider can deliver the 911 call to the correct Public Safety Answering Point (PSAP). Applicant agrees to work with each 911 district and lead 911 telecommunications service provider to develop database comparison procedures to match applicant’s customer addresses to the 911 district’s Master Street Address Guide in order to obtain the correct Emergency Service Number (ESN) for each address. Applicant agrees to provide the lead 911 telecommunications service provider with daily updates of new customers, moves, and changes with the corresponding correct ESN for each.

5. Applicant shall not take any action that impairs the ability of other certified telecommunications service providers to meet service standards specified by the Commission.

6. At the request of the Commission, applicant shall conduct, and submit to the Commission, traffic studies regarding traffic exchanged with telecommunications service providers and other entities designated by the Commission.

7. For purposes of distinguishing between local and toll calling, applicant shall adhere to local exchange boundaries and Extended Area Service (EAS) routes established by the Commission. Further, applicant shall not establish an EAS route from a given local exchange beyond the EAS area for that exchange.

8. When applicant is assigned one or more NXX codes, applicant shall limit each of its NXX codes to a single local exchange and shall establish a toll rate center in each exchange that is proximate to the toll rate center established by the telecommunications utility serving the exchange.

9. Applicant shall comply with universal service requirements as determined by the Commission. 

10.  Unless otherwise provided pursuant to an interconnection agreement adopted by the Commission pursuant to Section 252 of the Telecommunications Act of 1996, applicant shall enter into interconnection agreements with telecommunications utilities for exchange of local and EAS traffic, ancillary services (i.e., directory listings, directory assistance, 911 arrangements, mutual repair referral) and other interconnection matters in accordance with requirements the Commission established in Order No. 96-021 as otherwise modified by the Commission.

11. If applicant provides services to a subscriber who, in turn, resells the services, including operator services, then applicant and the subscriber must comply with ORS 759.690 and OAR 860-032-0005.

Since applicant, USWC, is a telecommunications utility, but will operate as a competitive provider in the Beavercreek exchange, which is listed in Appendix A, applicant will be required to comply with the following conditions:

1. Applicant shall keep separate accounts for its regulated utility services and its competitive provider services. Applicant shall comply with OAR 860-027-0052, regarding allocation of costs and revenues. Further, applicant shall file with the Commission an updated cost allocation manual, as required by OAR 860-027-0052(9).

2. Applicant, USWC, shall continue to act as the Primary Toll Carrier for Beaver Creek’s local exchange customers in the Beavercreek exchange. Applicant shall have authority to provide intraLATA toll services as a competitive provider for customers of any CLEC, including itself, within the Beavercreek exchange. This order will not authorize any change to applicant'’ status outside the Beavercreek exchange.

Public Interest

In Order No. 93-1850, docket UM 381, 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 pages 4 – 6, and the Commission’s Findings and Decisions in dockets CP 1, CP 14, and CP 15, 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 15². 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 U S WEST Communications, Inc., to provide local exchange telecommunications service as a competitive telecommunications provider in the exchange listed in Appendix A. Further, it is in the public interest to grant the application to provide interexchange telecommunications service as a competitive provider in the Beavercreek exchange.

The exchange listed in Appendix A to this order is designated as a competitive zone pursuant to ORS 759.050(2)(b).

Pricing Flexibility

Beaver Creek is a cooperative telephone company. As such, it is generally not regulated by the Commission for local exchange services, and therefore already has pricing flexibility for local exchange service.

ORDER

IT IS ORDERED that:

1. The application of U S WEST Communications, Inc., to provide the local exchange and interexchange telecommunications as described in the application is in the public interest and is granted with conditions described in this order.

2. Applicant is designated as a competitive telecommunications provider for local exchange switched and nonswitched (dedicated transmission) service, and for interexchange, switched (toll) and nonswitched (dedicated) service in the exchange listed in Appendix A.

3. The local exchange of Beaver Creek listed in Appendix A is designated as a competitive zone.

4. Pursuant to ORS 759.050(2)(c), applicant shall comply with Commission imposed universal service requirements as a condition of authority to provide local exchange service.

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 544

EXCHANGES OF BEAVER CREEK COOPERATIVE TELEPHONE

ENCOMPASSED BY THE APPLICATION

 Beavercreek