Decision No. R98-16
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF COLORADO
DOCKET NO. 97K-342T
IN THE MATTER OF ADVICE LETTER NO. 2663 REGARDING U S WEST COMMUNICATIONS' VERIFIED APPLICATION PER RULE 57.
Mailed Date: January 9, 1998
Appearances:
A. This docket is one produced by the consolidation of two other dockets. Docket No. 97A-243T was an application by U S WEST Communications, Inc. ("U S WEST"), to discontinue the offering of local area data service ("LADS") to new customers. As part of that application, U S WEST proposed to make LADS available to current customers until June 1, 2002 under certain terms and conditions. Docket No. 97A-243T was filed on May 30, 1997.
B. On May 30, 1997, U S WEST filed Advice Letter No. 2663. On June 20, 1997, U S West filed Advice Letter No. 2263 (Amended). The purpose of those filings was to implement the changes to LADS as set forth in the application. By Decision No. C97-687, July 11, 1997, the effective date of the tariffs filed under Advice Letter No. 2663 (Amended), which superseded Advice Letter No. 2663, was suspended for 120 days n1, and Docket No. 978-289T was opened.
C. By Decision No. R97-809-I, August 14, 1997, the application docket (Docket No. 97A-243T) and the suspension docket (Docket No. 97S-289T) were consolidated into this proceeding.
D. Interventions were filed by ICG Telecom Group, Inc.; Boardwatch Magazine, Inc.; MCI Telecommunications Corporation ("MCI"); Carl Oppedahl; and Staff.
E. A scheduling conference was held on October 28, 1997. While settlement negotiations did take place, the matter ultimately did not settle and came to be heard on December 18, 1997. At the outset of the hearing, public comment was received from two individuals. The matter then proceeded to hearing. During the course of the hearing, Exhibits A, Al, B, Bl through B4, C, Cl, D, Dl through D9, and E were identified, offered, and admitted. Exhibit G was identified and offered, but ruling on its admissibility was deferred. By oral ruling December 19 1997, the undersigned Administrative Law Judge ("ALJ") admitted Exhibit G.
F. At the conclusion of U S WEST's case-in-chief, MCI moved to dismiss the application and to permanently suspend the proposed tariff sheets for failure of U S WEST to carry its burden. The motion was joined in by several other parties, and ruling on the motion was reserved. At the conclusion of the hearing the ALJ authorized the parties to file posthearing statements of position no later than January 2, 1998. Timely statements were filed by MCI, Staff, and U S WEST.
G. In accordance with § 40-6-109, C.R.S., the undersigned now transmits to the Commission the record and exhibits in this proceeding along with a written recommended decision.
A. LADS is a two-point private line circuit within one wire center. It is comprised of two unloaded copper loops to the customer locations, connected at the central office, with an overall distance limitation of six miles, three miles in each direction. The current tariff charge for two loops is $23.96 per month. Since LADS is provided over unloaded copper, it can be used for data transmission. The LADS tariff does not describe or limit applications of LADS in a manner which would preclude high speed data transmission.
B. The number of customers utilizing LADS has gone up and: down over the last few years. Currently there are approximately 80 customers using approximately 250 LADS circuits. Interest in LADS circuits has blossomed recently, partly due to the development of various digital subscriber line ("DSL") technologies. These new DSL technologies permit high speed transmission of data over lines such as LADS and are of interest to individuals who have high speed transmission needs such as Internet service providers. Other customers such as schools and government agencies use LADS for data transmission with less sophisticated technologies.
C. LADS has no remote test capabilities and requires dispatching technicians to test and isolate problems.
D. Crosstalk is a term originally used to describe a phenomenon in voice telephony when parties to a conversation could hear conversation in the background. In the data environment, crosstalk occurs when the transmission of a data signal on one circuit interferes with the signal being transmitted on another circuit. Crosstalk is an inherent problem with copper cable. LADS has no precautions against crosstalk built into the service such as shielding. However, the possibility of crosstalk varies with different technologies, and some DSL technologies are more likely to induce crosstalk than other DSL technologies. U S WEST has not documented any casesof crosstalk with its LADS customers.
E. U S WEST is required to sell to competitive local exchange carriers ("CLECs") unbundled loops. Two unbundled loops with no load coils which were connected at the same wire center with a distance of less than three miles in each direction could provide essentially the same service as LADS. However, the connection of unbundled loops at the wire center would probably be through the voice switch whereas LADS is not a switched service. Voice switches vary in their ability [to] pass high speed data. The cost to a CLEC of two unbundled loops is approximately $40 per month.
F. U S WEST offers a number of private line services ranging from very low speed to very high speed. However, no other private line services offer the data transmission capability of LADS at a price anywhere near LADS.
A. This Commission's rules set forth no standards or criteria which U S WEST must establish or meet in order to discontinue service such as LADS. However, the Colorado Statutes do provide standards to evaluate this request. Section 40-15-302(3), C.R.S., incorporates the standard set forth in § 40-15-206(1), C.R.S., concerning the discontinuation of service. Section 40-15- 206(l), C.R.S., states that a provider shall continue to provide a service such as LADS unless the Commission determines that an alternative provider offers or provides functionally equivalent service to the customers. "Functionally equivalent" is defined in 40-15-102(9), C.R.S., as follows:
Functionally equivalent refers to services or product which perform the same or similar tasks or functions to obtain substantially the same result at reasonably comparable prices.
B. The issue in this proceeding then is whether or not U S WEST has met the statutory criteria which would allow it to discontinue LADS. For the reasons set forth below the ALJ finds and concludes that U S W ST has not met this statutory standard.
C. U S WEST primarily suggests that since it offers unbundled loops to CLECs, a CLEC is able to provide functionally equivalent service. This argument must fail on several grounds. First, there is no evidence in this record that any CLEC is offering or providing unbundled loops in a fashion that would duplicate LADS. Second, since LADS is currently offered in many rural areas of the state, U S WEST's argument must fail because there are no CLECs providing service in the rural parts of the staten2. Finally, even if two unbundled loops were configured by a CLEC and offered, the price is not reasonably comparable. Using unbundled loops would be at least 60 percent more expensive, depending upon how much a CLEC added to the price being charged to it by U S WEST.
D. U S WEST' s other argument is that it itself offers services which are functionally equivalent to LADS. However, this argument must also be rejected. Low speed private lines which are priced at or below LADS levels do not perform the same functions nor produce the same results that LADS provides. High speed private line connections such as a T1 line, are not priced reasonably comparably to LADS; they are significantly higher. Thus U S WEST has failed to establish that it offers functionally equivalent service to LADS.
E. U S WEST and the other parties to this proceeding raise a myriad of other arguments such as policy arguments as to whether or not this application should be granted. However, this decision is based on the narrow statutory criteria set forth above. As such it is found and concluded that U S WEST has failed to carry its burden in meeting that statutory standard, and the Motion to Dismiss the Application and Permanently Suspend the Tariffs made by MCI at the conclusion of U S WEST'S case in chief should be granted.
F. The tariffs were suspended for an additional 90 days by Decision No. R97-1278-I, November 26, 1997. In order to ensure that the Commission has sufficient time to consider any exceptions filed in this matter before the expiration of the 90 days, it is necessary to shorten the response time to any exceptions filed to seven days. It is also unlikely that any extension of time of greater than a few days could be allowed for the preparation of a transcript.
A. U S WEST has failed to establish that any provider offers or provides functionally equivalent service to LADS.
B. The motion to dismiss the Application and permanently suspend the tariff sheets filed under Advice Letter No. 2663 should be granted.
C. In accordance with § 40-6-109, C. R. S., it is recommended that the Commission enter the following order.
A. The Commission Orders That:
(SEAL)
THE PUBLIC UTILITIES COMMISSION OF THE STATE OF COLORADO
KEN F. KIRKPATRICK
Administrative Law judge
ATTEST: A TRUE COPY
Bruce N. Smith
Director
Footnotes
This page is <http://www.panix.com/~oppedahl/lads/r9816.sht>. Page revised January 12, 1998.