DE 98-086
KEARSARGE TELEPHONE COMPANY
PETITION TO EXPAND THE BOSCAWEN (796) EXCHANGE
Order Granting Opportunity to Poll Citizens
O R D E R N O. 23,039
October 7, 1998
I. PROCEDURAL HISTORY
On May 18, 1998, the New Hampshire Public Utilities
Commission (Commission) received a petition from Kenneth R.
Marshall signed by approximately 100 Boscawen customers
(Petitioners) requesting expansion of the 796 local calling area,
also known as Extended Area Services (EAS), to include Concord.
On July 31, 1998, the Commission issued an Order of
Notice scheduling a hearing for August 20, 1998. The Order of
Notice indicated that EAS petitions are subject to a standard
established by Order No. 22,204 issued June 18, 1996 which
includes consideration of community of interest, the effect on
telecommunications competition within New Hampshire, and
consistency with state and federal law.
On August 20, 1998, the Commission heard comments from
members of the public. The Commission accepted written comments
until August 27, 1998.
II. POSITION OF THE PETITIONERS
A number of Boscawen residents submitted comments, both
written and oral, in support of expanding the Boscawen Exchange
to include Concord. In addition, the Commission received a
number of letters from Boscawen residents who did not attend the
hearing. The primary argument put forth is that a community of
interest exists between Boscawen and Concord. The commenters
supported their argument with information about the percentage of
Boscawen residents who work in Concord, the lack of toll-free
access to state agencies, the use of Concord medical and
educational facilities, Boscawen's inclusion in the Concord
telephone directory, and the inability to call a major business
center without incurring a toll charge. In addition, the
petitioners stated that expanding the local calling area would
enhance the economic future of Boscawen. The commenters also
pointed to other area exchanges that have much larger calling
areas, including a community of interest that extends to
noncontiguous municipalities. Several commenters pointed out
that lower Boscawen residents in the Penacook Exchange (753) can
call Concord toll-free and that upper Boscawen should be treated
equally.
III. COMMISSION ANALYSIS
This petition is before us for analysis in light of our
prior decisions regarding expansion of EAS, the
Telecommunications Act of 1996 (TAct) and the actual changes in
telecommunications markets in New Hampshire.
Our orders in DE 97-046, DE 97-038 and DE 97-075,
recounted the lengthy EAS investigation which resulted in our
refusal to impose a statewide change to EAS, finding instead that
increased competition in the toll market as a result of intraLATA
presubscription and other changes mandated by the TAct would
effectively reduce toll charges by creative offerings of
competing carriers. Order No. 20,107 (April 15, 1996). By Order
No. 22,204, issued June 18, 1996, we also found that carriers and
communities retained the right to petition for EAS expansion and
articulated the standard for assessing an EAS petition. The
standard applies a community of interest approach as defined in
FCC Docket No. 96-45, In the Matter of Federal-State Joint Board
on Universal Service, Report and Order, FCC 97-157, released May
8, 1997 and hereinafter referred to as the Universal Service
Order. In the FCC's opinion, a calling area which reflects the
community of interest is one which "allows subscribers to call
hospitals, schools and other essential services without incurring
a toll charge." Further elaborating on the issue of
affordability, the FCC states in its Universal Service order that
"...affordability is affected by the amount of toll charges a
consumer incurs to contact essential service providers such as
hospitals, schools, and government offices that are located
outside of the consumers local calling area...".
We use the FCC definitions to facilitate examination of
the Boscawen petition. From the comments made by customers in
the Boscawen Exchange at the public hearing on August 20, 1998,
the exchange does not appear to encompass their community of
interest. We are convinced that Concord is the community of
interest for at least a sizeable group of residents of Boscawen
for the purposes of meeting their medical, educational, and
business needs. We will therefore grant the petitioners' request
to poll their fellow residents on the issue of expanding EAS for
the 796 exchange to include Concord. No reciprocal ballot of
Concord customers is necessary because expansion of the Concord
EAS to include Boscawen will not result in a rate group change.
In order to reflect fair and accurate costs of the proposed
expansion, the poll of Boscawen residents will not occur until
after the local exchange carrier, Kearsarge Telephone Company
(Kearsarge) has provided us with projections of revenue loss and
costs associated with the addition of Concord to the calling
area. We will order Kearsarge to provide the information 30 days
from the date of this order. We will also require Bell Atlantic
to provide information within 30 days regarding toll and toll
access revenues. On the basis of this information we will
determine, for the polling question, an increase that balances
the interests of Boscawen customers and Kearsarge.
As in our decisions in DE 97-038, DE 97-046, DE 97-075
and DE 97-193, in order to insure the maximum effective response
by customers, the polling ballot will be designed, distributed,
and tabulated by the Commission. The ballot question shall
include a statement of the increased rate necessitated by the
expanded calling area. The poll shall be considered valid if
ballots are returned by 25% or more of the customer base. The
outcome of a valid poll will be determined by a simple majority
of the returned ballots.
Based upon the foregoing, it is hereby
ORDERED, that within 30 days from the date of this
order, Kearsarge shall provide the following information:
1. Originating and terminating minutes of use (MOU);
2. Access revenue;
3. Billing and collection revenue;
4. Intrastate impact resulting from federal changes;
5. Number of residence and business access lines over which the
proposed increase would be collected;
6. Cost of other changes necessary;
7. Other factors which Kearsarge believes should be considered
in the cost calculation;
8. Current terms and conditions of EAS agreements with Bell
Atlantic;
9. Terms and conditions of billing and collection agreements with Bell Atlantic;
10. Terms and conditions of anticipated EAS agreements with Bell
Atlantic related to the Boscawen-Concord route;
11. A recommendation as to the appropriate charge for the proposed expanded EAS;
and it is;
FURTHER ORDERED, that within 30 days from the date of
this order, Bell Atlantic shall provide to the Commission the
following information;
1. Current toll revenue based on current toll MOU; and
2. Current access revenue based on current access MOU.
and it is;
FURTHER ORDERED, that a vote on the EAS issue shall be
conducted as described above for expansion of the Boscawen
exchange to include the Concord exchange; and it is
FURTHER ORDERED, that Kearsarge Telephone Company shall
provide the Commission with a list of Boscawen Exchange
customers, names, addresses and telephone numbers, and to the
extent technically possible, in mailing label or PC format by
November 5, 1998.
By order of the Public Utilities Commission of New
Hampshire this seventh day of October, 1998.
Douglas L. Patch Bruce B. Ellsworth Susan S. Geiger
Chairman Commissioner Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary