ORDER NO. 99-069

ENTERED FEB 16 1999

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

OF OREGON

CP 564

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 30, 1998, Bend Cable Data Services LLC ("BCDS") (applicant), filed with the Commission an application for certification to provide telecommunications service in Oregon as a competitive provider. Applicant seeks authority to provide local exchange (intraexchange) telecommunications service in areas coextensive with seven local exchanges of U S WEST Communications, Inc. (USWC). Applicant also seeks authority to provide interexchange telecommunications service statewide in Oregon.

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

Applicant proposes to provide intraexchange (local exchange) non-switched private line service (dedicated transmission service). Applicant will not provide local switched (dial tone) service. Applicant also proposes to provide interexchange non-switched private line service (dedicated transmission service). Applicant will operate as a reseller and as a facilities based provider of telecommunications service. Applicant may also purchase unbundled network elements (building blocks) from other certified carriers.

Operator services are not part of dedicated transmission service. Applicant will not 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 on November 12, 1998. The Commission did not receive any protests. However, USWC will be considered a party to this proceeding.

On December 18, 1998, an Administrative Law Judge (ALJ) with the Commission issued a ruling that adopted procedures for processing this docket. The ALJ set forth a procedural schedule. On January 8, 1999, 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 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 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 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 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:

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.

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, USWC, provides the same or similar local exchange service in the local service area requested by applicant. AT&T, MCI, USWC and other carriers provide the same or similar interexchange service throughout Oregon. 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 made conditions of this certificate of authority. In addition:

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

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

3. 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.

4. Applicant shall comply with universal service requirements as determined 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 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 15. Based on review of those findings, as well as information contained in the application, the Commission concludes it is in the public interest to grant the application of Bend Cable Data Services LLC, to provide intraexchange dedicated transmission service as a competitive telecommunications provider in the exchanges listed in Appendix A. Further, it is in the public interest to grant the application to provide interexchange dedicated transmission service statewide.

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

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, USWC is granted pricing flexibility in the exchanges listed in Appendix A for dedicated transmission service.

ORDER

IT IS ORDERED that:

1. The application of Bend Cable Data Services LLC ("BCDS") to provide local exchange (intraexchange), non-switched private line telecommunications service (dedicated transmission service) and interexchange dedicated transmission service, 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 intraexchange service in the exchanges listed in Appendix A. Applicant is designated as a competitive telecommunications provider for interexchange service statewide in Oregon.

3. The local exchanges of USWC listed in Appendix A are designated as competitive zones for dedicated transmission service.

4. USWC shall receive pricing flexibility for local exchange dedicated transmission service as set forth in this order.

5. 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 pursuant to ORS 756.580.

APPENDIX A

CP 564

EXCHANGES OF U S WEST COMMUNICATIONS, INC.

ENCOMPASSED BY THE APPLICATION

Bend

Culver

Lapine

Madras

Prineville

Redmond

Sisters