PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON

Transcription

1 PUBLIC SERVICE COMMISSION OF WEST VIRGINIA CHARLESTON At a session of the PUBLIC SERVICE COMMISSION OF WEST VIRGINIA in the City of Charleston on the 5" day of August CASE NO T-P CITIZENS TELECOMMUNICATIONS COMPANY OF WEST VIRGINIA INC., DBA FRONTIER COMMUNICATIONS OF WEST VIRGINIA, a public utility, Petition to rate deregulate certain workably competitive telecommunications services. COMMISSION ORDER The Commission approves a stipulation regarding rate deregulation of certain telecommunications services provided by Citizens Telecoinmunications Company of West Virginia Inc., dba Frontier Communications of West Virginia (Frontier). BACKGROUND On March 18, 2014, Frontier petitioned for the Coinmission to determine that certain telecommunications services are workably competitive in its service territory and cease rate regulation of those services. Frontier requested rate deregulation of (i) business local exchange services, (ii) intrastate long distance, (iii) national directory assistance, (iv) residential speed dialing service, (v) private line service and (vi) digital data and ISDN services. Frontier asserted that these services are currently rate deregulated in adjacent service territory acquired after purchase of the former Verizon West Virginia Inc. &, Frontier Communications Corporation, et al., Case No T-PC (Commission Order, May 13, 2010). Frontier noted that the telecommunications industry has substantially changed in recent years, leaving Frontier and its affiliates serving a minority of West Virginia telecommunications lines. Frontier also cited examples of the competition it faces for the services it seeks to deregulate. On April 16, 2014, Frontier filed an amendment to its Petition. It also substituted an exhibit page on April 17,2014. On April 17, 2014, Commission Staff filed an initial memorandum stating that it would review the services Frontier requested that the Commission declare workably competitive in its territory and issue a recommendation.

2 The Commission subsequently directed Staff to file a substantive recommendation on or before May 1, April 23,2014 Commission Order. On May I, 2014, Staff filed a final memorandum concluding that a portion of the services Frontier seeks to rate deregulate are workably competitive. It expressed concern, however, regarding the current level of competition in Frontier territory for business local exchange services. Therefore, Staff recommended that the Coinmission call this matter for an evidentiary hearing with notice to affected parties and the public. On May 8, 2014, the Commission established a procedural schedule and called this matter for an evidentiary hearing on July 1-2, The Commission also directed Frontier to publish a notice of its petition. On June 12, 2014, Frontier filed affidavits attesting to publication of a filing notice in its territory. On June 13, 2014, the parties filed direct testimony including two witnesses on behalf of Frontier and one witness on behalf of Staff. On June 23, 2014, Staff and Frontier filed rebuttal testimony consistent with their positions. Frontier subsequently amended Exhibit BJG-4. On June 26, 2014, Frontier filed a list of hearing witnesses consistent with the May 8,2014 Commission Order. On July 1, 2014, the parties appeared for an evidentiary hearing and announced a settlement that they expected to reduce to writing and file with the Commission. The Commission admitted the prefiled testimony into evidence and directed the parties to file their stipulation on or before July 15, Transcript of the July I, 2014 Commission Hearing. On July 15, 2014, the parties jointly requested that the Commission adopt a stipulation reflecting their agreement regarding the Frontier request to deregulate certain telecommunications services. The agreeinent is attached as Joint Exhibit One. Joint Exhibit One recommends that the Commission rate deregulate the six services Frontier requested with certain modifications.' The modifications include Frontier (i) excluding Channel Services Series 1000 through 3000 from the rate deregulated Private Line Services, (ii) pricing local business exchange services on a statewide basis for three years and (iii) capping local exchange business services at current rates. Frontier will retain the pricing flexibility currently allowed under its Incentive Regulation Plan (IRP) to offer promotions or rate reductions. Frontier also agreed to file and update a price list for the rate deregulated services removed from its current tariffs. It will file the price lists and future updates as closed entries in this proceeding. ' The deregulated services will become Category IV services under the current IRP previously approved by the Commission. 2

3 The Commission received one public protest to the Frontier proposal. DISCUSSION The Commission has reviewed the testimony filed by the parties in this matter, examined Joint Exhibit One and considered the oral testimony presented at the evidentiary hearing. The testimony presented at the evidentiary hearing supports the Frontier request that the Commission rate deregulate the services it requested. As shown in the testimony from Mr. Gregg, Frontier faces increasing competition from cable companies, wireless providers and competitive carriers for the services listed in Joint Exhibit One. Thus, the Commission concludes that for the Frontier services listed in Joint Exhibit One, there is (i) ease of market entry, (ii) the presence of competitors and (iii) the availability of like or substitute services that demonstrate workable competition and support rate deregulation of those services. W.Va. Code $24-2-3c. Further, the Commission believes that the conditions listed in Joint Exhibit One including statewide pricing and a price cap for three years for local business exchange services will prevent adverse impacts for business customers in rural Frontier areas. Therefore, the Commission adopts the settlement of this matter in Joint Exhibit One and will rate deregulate the Frontier services listed therein. Frontier will file revised tariffs reflecting changes adopted in this proceeding within thirty days of the entry of this Order. FINDINGS OF FACT 1. Frontier requested that the Commission determine that certain telecommunications services are workably competitive and cease rate regulation of those services in its territory. Frontier Application. 2. Frontier and Staff presented a stipulation urging the Commission to rate deregulate the services Frontier requested subject to Frontier (i) pricing business local exchange services on a statewide basis for three years and (ii) capping business local exchange prices at current levels for three years. Joint Exhibit One. 3. One or more competitors have entered without difficulty into most Frontier exchanges and offer like or similar services to those Frontier seeks to rate deregulate. Ex. BLG-D, EX. BJG-R. CONCLUSIONS OF LAW 1. The Frontier telecommunications services listed in Joint Exhibit One are subject to workable competition. W.Va. Code c. 3

4 2. The conditions set forth in Joint Exhibit One will prcvent an adverse impact on adequate, economical and reliable local telephone service in Frontier exchanges. Id. 3. The settlement contained in Joint Exhibit One is a reasonable resolution of the contested matters in this proceeding. ORDER IT IS THEREFORE ORDERED that the stipulation contained in Joint Exhibit One is adopted in resolution of all issues presented in this matter. IT IS FURTHER ORDERED that pursuant to W.Va. Code c, the Coinmission rate deregulates the Frontier services set forth in Joint Exhibit One subject to the conditions contained therein. IT IS FURTHER ORDERED that Frontier file revised tariffs reflecting the changes approved in this Order within thirty days of the entry thereof. IT IS FURTHER ORDERED that on entry of this Order, this matter is removed froin the open docket of Commission cases. IT IS FURTHER ORDERED that the Executive Secretary of the Commission serve a copy of this Order by electronic service on all parties of record who have filed an e-service agreement, by United States First Class Mail on all parties of record who have not filed an e-service agreement, and on Staff by hand delivery. A True Copy, Teste. Ingrid Ferrell Exec.utive Secretary MJMilrm cb.docx 4

5 Joint Exhibit One PUBLIC SERVICE COMMISSION OF WEST VIRGJNIA CHARLESTON CASE NO T-P CITIZENS TELECOMMUNICATIONS COMPANY OF WEST VIRGINIA INC. dba FRONTIER COMMUNICATIONS OF WEST VIRGINIA Petition to Rate Deregulate Certain Workably Competitive Telecommunications Services. JOINT STIPULATION OF COMMISSION STAFF AND CITIZENS TELECOMMUNICATIONS COMPANY OF WEST VIRGINA DBA FRONTIER COMMUNICATIONS OF WEST VIRGINIA Pursuant to Rule 13.4 of the Commission s Rules of Practice and Procedure, Citizens Telecommunications Company of West Virginia dba Frontier Communications of West Virginia ( Frontier/Citizens ) and the Staff of the Public Service Commission of West Virginia ( Staff) (collectively, the Parties ) do hereby enter into this Joint Stipulation. The Parties submit this Joint Stipulation as a full and complete settlement of their differences regarding the services for which Frontier/Citizens sought rate deregulation in this proceeding. Pursuant to this Joint Stipulation, the Parties agree as follows: 1. On March 18, 2014, Frontier/Citizens filed a Petition with the Commission pursuant to the provisions of E? Vu. Code c, asking that the Commission cease regulating FrontierKitizens s rates for the following telecommunications services on the grounds that such services are subject to workable competition: (1) local exchange business services (individual lines, PBX trunks and Centrex access lines), together with associated vertical services; (2) Long Distance Service, including Wide Area Telephone Service ( WATT); (3) I

6 - National Directory Assistance service ( National DA ); (4) Residential Speed Dialing; (5) Private Line Service; and (6) Integrated Digital Network Service ( ISDN ) and Digital Data Service ( DDS ). On April 16, 2014, Frontier/Citizens amended its filing to limit its request reiated to Private Line Services to eliminate references to Channel Services Series 1000 through The Parties agree that for purposes of this Settlement, the following terms shall have the specified meanings: a. Urban Exchanges shall mean Frontier/CitiZens Bluefield, Charles Town, Moorefield, Princeton and Shepherdstown exchanges. b. Rural Exchanges shall mean all Frontier/Citizens exchanges not included in subsection 2.a. above. 3. The Parties agree, and recommend that the Commission determine, that the following services, together with their associated vertical services, are workably competitive pursuant to the provisions of W. Va. Code c, and therefore should be classified as Category IV (workably competitive) services under the terms of FrontierKitizens Incentive Regulation Plan ( IRP ): (1) PBX trunks and Centrex access lines; (2) Long Distance Service, including WATS; (3) National Directory Assistance; (4) Residential Speed Dialing; (5) Private Line Service (Digital Data Services only); and (6) ISDN and DDS. These services shall continue to be subject to any pricing floor imposed by anti-trust laws. 4. The Parties further agree, and recommend that the Commission determine, that FrontiedCitizens local exchange business services, together with their associated vertical 2

7 services, are workably competitive pursuant to the provisions of K Vu. Code ~, and therefore should be classified as Category 1V (workably competitive) services under the terms of Frontier/Citizens Incentive Regulation Plan ( IRP ), subject to the following conditions: a. For a period of three (3) years (ending September 30, 2017), FrontiedCitkens will offer prices for local exchange business services, and their associated vertical services, on a statewide basis only. In other words, if rates for local exchange business services, or their associated vertical services, are changed, or if local exchange business service plans, including plans bundling local service and vertical services, are restructured, the resulting prices in Frontier/Citizens Rural Exchanges will not be higher than prices for the same services in Frontier/Citizens Urban Exchanges. b. For a period of three (3) years (ending September 30, 2017), FrontiedCitizens will not raise the prices for local exchange business services, and their associated vertical services, above their currently tariffed rates. c. The above provisions do not prohibit or limit any existing pricing flexibility under Frontier s tariffs and IRF, including but not necessarily limited to Frontier/Citizens existing ability, as provided for in accordance with its tariffs and in the IRP, to continue to offer promotions or to reduce any rate in specific exchanges or to specific customers when necessary to respond to competition. 5. The Parties agree that following approval of this Joint Stipulation by the Commission, Frontier/Citizens will file a list showing the prices of deregulated services which have been removed &om Frontier/Citizens tariffs. The initial price list will be filed at the same time as tariffs are revised to remove the prices of deregulated services. Subsequent price lists 3

8 will be filed within twenty (20) days of any change in the prices of deregulated services. All price lists will be filed as closed entries in this proceeding. 6. The Parties acknowledge that this Joint Stipulation represents a negotiated compromise ofopposing views, and that each provision of the Joint Stipulation is an integral part of the whole. If this Joint Stipulation is not accepted in full by the Commission as the full and complete resolution to this proceeding and the issues addressed in this proceeding, each Party reserves the tight to oppose any part of this Joint Stipulation, including any part which the Commission has accepted without modification. 7. The Parties agree to cooperate in good faith to secure the Commission s approval ofthis Joint Stipulation in its entirety as representing a negotiated compromise that is reasonable, appropriate, and in the public interest. 4

9 CITIZENS TELECOMMUNICATION COMPANY OF WEST VIRGINIA DBA FRONTIER COMMUNICATIONS OF WEST VIRGINIA Associate General Counsel - Southeast Region Frontier Communications 1500 MacCorkle Avenue, S.E. Charleston, West Virginia (304) Joseuh.Starsick@FTR.com STAFF OF THE PUBLIC SERVICE COMMISSION OF WEST VIRGINIA - 3 -%A Lisa L. Wansley (WV State B&554) Staff Attorney Public Service Commission of West Virginia 201 Brooks Street Charleston, West Virginia (304) LWansley(i?,vsc.state.wv.us 5