2 BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION

Transcription

1 1 1 STATE OF MICHIGAN 2 BEFORE THE MICHIGAN PUBLIC SERVICE COMMISSION 3 In the matter of the application of TALK AMERICA, LLC for a temporary Case No. U and permanent license to provide basic local exchange services in Volume No. 1 5 the State of Michigan. / 6 EVIDENTIARY HEARING 7 Proceedings held in the above-entitled matter 8 before Sharon L. Feldman, J.D., Administrative Law Judge 9 with MAHS, at the Michigan Public Service Commission, West Saginaw Highway, Lake Superior Room, Lansing, 11 Michigan, on Wednesday, May 10, 2017, at 9:06 a.m. 12 APPEARANCES: 13 PETER D. CRONK, J.D. 14 Plunkett Cooney 325 Eat Grand River Avenue, Suite East Lansing, Michigan On behalf of Talk America, LLC 17 MONICA M. STEPHENS, MEREDITH R. BEIDLER, 18 Assistant Attorneys General 7109 West Saginaw Highway, Floor 3 19 Lansing, Michigan On behalf of Michigan Public Service Commission Staff REPORTED BY: Lori Anne Penn (CSR-1315)

2 2 1 I N D E X 2 WITNESS: PAGE 3 DAN DEEM 4 Testimony Bound In E X H I B I T S 11 NUMBER DESCRIPTION MRKD OFRD RECD 12 A-1 Certificate of Formation A-2 Authority to Transact Business A-3 Biographies of Key Personnel A-4 Financial Statements A-5 Proposed Tariff

3 3 1 Lansing, Michigan 2 Wednesday, May 10, At 9:06 a.m (Hearing commenced pursuant to due notice.) 6 (Documents marked for identification by the Court 7 Reporter as Exhibit Nos. A-1 through A-5.) 8 JUDGE FELDMAN: All right. On the 9 record. Good morning. We are opening a record in 10 Michigan Public Service Commission Case No. U-18347, 11 entitled In the matter of the application of Talk 12 America, LLC for a temporary and permanent license to 13 provide basic local exchange services in the State of 14 Michigan. This is the time and place designated by the 15 Commission for an evidentiary hearing. 16 For the record, my name is Sharon 17 Feldman, I've been assigned to be the presiding officer. 18 Can I ask the counsel present to place 19 their appearances on the record, please, beginning with 20 Mr. Cronk. 21 MR. CRONK: Peter Cronk from Plunkett 22 Cooney for Talk America, LLC. 23 JUDGE FELDMAN: Thank you. And 24 Ms. Stephens. 25 MS. STEPHENS: Monica Stephens on behalf

4 4 1 of Staff. 2 JUDGE FELDMAN: Thank you. And 3 Ms. Beidler. 4 MS. BEIDLER: Meredith Beidler on behalf 5 of Staff. 6 JUDGE FELDMAN: Thank you. 7 Before we go any further, Mr. Cronk, let 8 me ask you to address whether the Company was able to 9 comply with the Executive Secretary's instructions 10 regarding notice of this proceeding, and I believe you 11 mentioned before we went on the record that there was 12 some concern regarding notice. 13 MR. CRONK: Right. The notice was 14 delivered on April 21, 2017, and published as set forth 15 in the exhibit on the list and then obviously all 16 the various counties throughout the State of Michigan 17 were mailed the notice. The only issue we had in the 18 notice was that the notice referred to the date the 19 application was submitted and the date the application or the amended application was submitted, and there was 21 just a typographical error on the date the amended 22 application was submitted; it was submitted to the 23 Commission on March 23, and I believe the notice said 24 March 27. I don't think that notice affects what we're 25 doing here today because the notice did say today was the

5 5 1 date and time for the hearing, but I thought I'd just 2 clarify that for the record. 3 JUDGE FELDMAN: And it referenced the 4 appropriate docket number? 5 MR. CRONK: Correct. 6 JUDGE FELDMAN: All right. And did Staff 7 have any concerns with that date? 8 MS. STEPHENS: No, your Honor. 9 JUDGE FELDMAN: All right. Then I don't 10 believe that that's any material defect. 11 Having addressed the notice, it's my 12 understanding, Mr. Cronk, that you are prepared to make 13 an evidentiary presentation this morning, and that the 14 Staff has agreed that Mr. Deem does not need to be 15 present to testify, that his testimony can just be bound 16 into the record? 17 MR. CRONK: Correct. 18 JUDGE FELDMAN: All right. So you may 19 proceed when you are ready. 20 MR. CRONK: Right. I'll be brief. Our 21 application for Talk America, LLC, for a temporary and 22 permanent license to provide basic local exchange service 23 in the State of Michigan, we applied for the license on 24 March 17, 2017, we amended our application on March 23, As I stated earlier, notice was delivered on

6 6 1 April 21, 2017, pursuant to the rules. There's been no 2 interventions filed in this matter, and I checked the 3 docket this morning, still haven't seen any 4 interventions. And I'd ask for the testimony to be bound 5 into the record for Mr. Deem, and then mark the exhibits 6 to be submitted to the Commission. 7 JUDGE FELDMAN: All right. So let me ask 8 first if there's any objection to binding into the 9 transcript the prefiled testimony of Dan Deem, which was 10 originally marked as Exhibit E to the amended 11 application? 12 MS. STEPHENS: No objection, your Honor. 13 JUDGE FELDMAN: All right. Then the 14 prefiled Direct Testimony of Dan Deem will be bound into 15 the record. 16 (Testimony bound in.)

7 7 EXHIBIT E Q. PLEASE STATE YOUR NAME, TITLE, BUSINESS ADDRESS AND TELEPHONE NUMBER. A. My name is Dan Deem. I am Senior Vice President Customer Care Operations of Talk America, LLC ( TA ). My business address is 4001 N. Rodney Parham Rd., Little Rock, AR I can be reached by telephone at (501) Q. PLEASE DESCRIBE YOUR EDUCATIONAL BACKGROUND AND PROFESSIONAL EXPERIENCE. A. I have a degree in Management from the Malone College out of Canton, Ohio. I have over 30 years of telecommunications experience starting out in the finance organization of Alltel Wireline during my career I have held a number of finance roles, process improvements and procures and a variety of call center management responsibilities. After working in the wireless industry for a number of years I returned to Windstream and have been an employee of Windstream Holdings, Inc. for a year and half. My current responsibilities involve managing over 700 employees in our customer care centers, financial services, back office center, and call center support organization. Q. WHAT IS THE PURPOSE OF YOUR TESTIMONY IN THIS PROCEEDING?

8 8 A. The purpose of my testimony is to describe the basic local exchange services that TA proposes to offer in Michigan and to review issues related to its request for a license and authority to provide such services. My testimony specifically relates to TA s managerial, financial, and technical competence to provide the telecommunications services for which authority is requested, and its compliance with the rules and policies of this Commission. Q. PLEASE DESCRIBE THE AUTHORITY THAT PETITIONER SEEKS FROM THE COMMISSION. A. Applicant requests the granting of a temporary and permanent license to provide basic local exchange service throughout the State of Michigan pursuant to Section 301(2) of the MTA. MCL (2). Section 301(2) states, pending the determination of an application for a license the Commission without notice and hearing may issue a temporary license for a period not to exceed one year. Q. HAS PETITIONER BEEN AUTHORIZED TO PROVIDE SUCH SERVICE IN ANY OTHER JURISDICTIONS? A. TA is currently certificated or is registered to provider telecommunications services in Alabama, Arizona, Colorado, Connecticut, Delaware, Florida, Georgia, Hawaii, Illinois, Indiana, Kentucky, Louisiana, Minnesota, Missouri, Montana, Nevada, New Hampshire, North Carolina, Oregon, Pennsylvania, South Carolina, Tennessee, Texas, Washington, and Wisconsin, to provide intrastate and interstate telecommunications services. Q. PLEASE DESCRIBE THE CORPORATE STRUCTURE OF PETITIONER.

9 9 A. TA is a Delaware limited liability company formed on January 31, 2015, and is an indirect subsidiary of Windstream Holdings, Inc. A copy of TA s incorporation documents were provided to the Commission with the Application as Exhibit A. Q. IS PETITIONER LEGALLY AUTHORIZED TO DO BUSINESS IN MICHIGAN? A. Yes. TA is authorized to transact business in the State of Michigan. Q. PLEASE ADDRESS PETITIONER S MANAGERIAL AND TECHNICAL QUALIFICATIONS. A. Applicant has the technical and financial ability to provide the proposed services. Applicant will be managed and operated by capable, experienced executives and employees who possess extensive managerial, financial, and technical experience in the telecommunications industry. Resumes of the key personnel that will be managing Applicant were provided to the Commission with the Application as Exhibit C. The officers and directors of TA are Anthony W. Thomas, President and Chief Executive Officer, Bob Gunderman, Chief Financial Officer, and Jeffery W. Small, Executive Vice President of Engineering. These individuals have both highly effective management skills and considerable telecommunications expertise. The biographies of these key executives are submitted as evidence that Applicant possesses the managerial qualifications required for the provision of telecommunications services on behalf of Applicant. Q. PLEASE DESCRIBE PETITIONER S FINANCIAL QUALIFICATIONS. A. TA has included as Exhibit D with its Applications the financial statements of its public parent company Windstream Holdings, Inc. As shown in the information provided, TA is financially qualified to operate within Michigan.

10 10 Q. PLEASE DESCRIBE THE TYPES OF SERVICES THAT PETITIONER WILL OFFER IN MICHIGAN A. TA proposes to provide wireline local telecommunications service specifically, local exchange service (including, among other things, access to emergency services, access to operator services, alternative operator services, access to service, access to directory assistance, toll limitation for qualifying low-income consumers, and any other ancillary functionalities that TA must provide pursuant to applicable statutes and regulations). TA s network will consist of leased facilities provided by other carriers. Under the requested authority, TA will not engage in any construction of buildings, towers, conduits, poles, or trenches. TA will focus on service packages, marketing strategies and designing customer service standards catered to the residential, small business, and enterprise CLEC customer segment. Q. WHAT FACILITIES WILL PETITIONER USE TO PROVIDE ITS PROPOSED LOCAL EXCHANGE SERVICES? A. TA plans on using the existing local exchange boundaries and established local calling scope of the incumbent local exchange in the Michigan service territories of Michigan Bell Telephone Company d/b/a AT&T Michigan, Frontier North, Inc, and Frontier Midstates, Inc. Q. DOES PETITIONER AGREE TO ABIDE BY ALL RULES, REGULATIONS, POLICIES AND ORDERS OF THIS COMMISSION, AND THE LAWS OF THE STATE OF MICHIGAN, IN ITS PROVISION OF TELECOMMUNICATIONS SERVICE?

11 11 A. Yes. TA agrees to abide by all rules and regulations that are deemed to be applicable to TA. Q. HOW ARE CUSTOMER INQUIRIES/DISPUTES HANDLED? A. Customers with billing questions or complaints may also reach TA at its toll free number (800) In the event of a billing dispute, TA will perform a review of the disputed billing amount and promptly attempt to reach a settlement to the mutual satisfaction of all parties. Following a full investigation to determine whether or not the charges may have been fraudulent or improper, TA may adjust the disputed bill. Q. PLEASE PROVIDE THE CONTACT TO THE CUSTOMER SERVICE DIVISION FOR COMPLAINT RESOLUTION. A. TA s contact to the customer service division for complaint resolution is Andrea Curtis, who may be reached in writing at 1720 Galleria Boulevard, Charlotte, NC 28270, by phone at (877) or via at windstream.executive.complaints@windstream.com. Q. HOW WILL TA BILL FOR ITS SERVICES? A. TA will bill its customers directly. Q. HOW WILL TA GUARD AGAINST SLAMMING? A. TA will prevent unauthorized switching of customers by obtaining a signed letter of authorization ( LOA ) or similar authorization from all new customers. TA will comply with Michigan law and Federal Communications Commission ( FCC ) regulations regarding how carriers may change a customer s Primary Interexchange Carrier.

12 12 Q. PLEASE DESCRIBE THE PUBLIC INTEREST BENEFITS ASSOCIATED WITH PETITIONER S PROPOSED OFFERING OF TELECOMMUNICATIONS SERVICES IN MICHIGAN. A. The granting of this Application will promote the public interest, TA s operations will be overseen by a well-qualified management team with substantial telecommunications experience and technical expertise. The entry of TA into the Michigan telecommunications market will enhance competition in the provision of telecommunications services within the State of Michigan. By enhancing competition, TA will bring significant benefits to telecommunications users within the State of Michigan by providing: (a) lower-priced and better-quality service; (b) innovative telecommunications services; (c) efficient use of existing communications resources; and (d) increased diversification in the supply of communications services. TA s proposed intrastate services are designed to meet the telephone needs of subscribers and permit subscribers to realize cost savings in communications services. Accordingly, TA anticipates that its proposed service will provide its subscribers with better quality services and will increase consumer choice through innovative, diversified, and reliable service and equipment offerings. Q. DOES THIS CONCLUDE YOUR TESTIMONY? A. Yes.

13 13 1 JUDGE FELDMAN: And then it's my 2 understanding that there are five exhibits which have now 3 been marked as A-1 through A-5, and that A-1 is the 4 Certificate of Formation, and that was originally Exhibit 5 A to the amended application; that Exhibit A-2 is the 6 Authority to Transact Business that was originally marked 7 as Exhibit B to the amended application; that Exhibit A-3 8 is the Management Bios that were originally marked as 9 Exhibit C to the amended application; Exhibit A-4 are 10 Financial Statements that were originally marked as 11 Exhibit D to the amended application; and Exhibit A-5 is 12 the Proposed Tariff that was originally marked as Exhibit 13 F to the amended application. Did I state that 14 correctly? 15 MR. CRONK: That's perfect. 16 JUDGE FELDMAN: All right. Then let me 17 ask for the record if there are any objections to the 18 admission into evidence of Exhibits A-1 through A-5? 19 MS. STEPHENS: No objection, your Honor. 20 JUDGE FELDMAN: All right. Exhibits A-1 21 through A-5 are admitted. 22 Any further evidence, Mr. Cronk? 23 MR. CRONK: No, your Honor. 24 JUDGE FELDMAN: All right. Then is there 25 anything that Staff wishes to state at this point? I'm

14 14 1 going to ask, if you have nothing, then I'll ask if the 2 parties wish to waive Section 81 of the Administrative 3 Procedures Act. 4 MS. STEPHENS: Nothing additional to add, 5 your Honor. 6 JUDGE FELDMAN: All right. So typically 7 in these cases, so that I can transmit this matter to the 8 Commission, the parties agree to waive Section 81 of the 9 Administrative Procedures Act. Is that what the parties 10 wish to do in this case? 11 MR. CRONK: Yes. 12 MS. STEPHENS: Yes, your Honor. 13 JUDGE FELDMAN: All right. Then I will, 14 on that basis, transmit this matter to the Commission. 15 Is there anything else at all that we 16 need to do before we close the record and adjourn today? 17 MR. CRONK: No, your Honor. 18 MS. STEPHENS: No, your Honor. 19 JUDGE FELDMAN: All right. Thank you 20 very, very much. We are adjourned. 21 (At 9:13 a.m., the hearing concluded.)

15 C E R T I F I C A T E 3 4 I, Lori Anne Penn (CSR-1315), do hereby 5 certify that I reported in stenotype the proceedings had 6 in the above-entitled matter, that being Case No. 7 U-18347, before Sharon L. Feldman, J.D., Administrative 8 Law Judge with Michigan Administrative Hearing System, at 9 the Michigan Public Service Commission, 7109 West Saginaw 10 Highway, Lansing, Michigan, on Wednesday, May 10, 2017; 11 and do further certify that the foregoing transcript 12 constitutes a true and correct transcript of my stenotype 13 notes Lori Anne Penn, CSR Grand River Avenue 20 Farmington, Michigan Dated: 24 25