August 21, 1998 Ms. Carole J. Washburn Executive Secretary Washington Utilities and Transportation Commission 1300 S. Evergreen Park Drive S. W. P. O. Box 47250 Olympia, Washington 98504-7250 Attention: Vicki Elliott and Suzanne Stillwell Re: Docket No. UT-970301 Rulemaking for Pay Phone and Operator Services Providers Dear Ms. Washburn: On July 8, 1998, the Commission directed the Secretary to file a CR-102, Notice of Proposed Rulemaking with the Code Reviser, along with the Small Business Economic Impact Statement to begin the process of amending provisions in WAC 480-120 regarding Pay Phones and Operator Services Providers. On August 17, 1998 the Commission requested final written comments on the draft of proposed changes by September 18, 1998. U S WEST appreciates the opportunity to comment on the draft rules prior to formal adoption by the Commission. U S WEST agrees with the Commission that consumers should receive clear information concerning the use of pay phones, however the proposed rules contain provisions that exceed this objective, which are also burdensome and costly to implement. While the marketplace may demand many of the provisions included in the proposed rules, many other provisions will be unacceptable to the marketplace and will result in the elimination of existing pay phones. The Commission should refrain from adopting rules that interfere with the intent of the FCC and Congress in the deregulation of pay phones or that disadvantage incumbent local exchange companies in a competitive market. The current proposal does both. The Commission should also postpone adoption of any new pay phone rules until it is clear a market need exists. No record has been created or introduced by staff that suggests that customers are in need of the new provisions introduced in this draft rule. Staff itself states that the proposed rule disclosure requirements include “information essential for consumers to make appropriate choices about the use of a pay phone”. However, staff has not identified their basis upon which it can be assumed that absent these new provisions, customers will make inappropriate choices. U S WEST believes that the problems customers face, are not due to the use of the pay phone instrument itself or the disclosure of information about the pay phone. Rather, the problems consumers face are with services provided by non-traditional telecommunications providers, specifically alternative operator services providers, from a variety of telephones, not just pay phones. These customer problems will not be corrected by the proposed rule language in this docket. Finally, U S WEST noted in its prior comments in this docket, that several of the Commission’s proposed rules are in conflict with Section 276 of Act, as well as the FCC Orders in Docket No. 96-128. The latest update of the Commission’s proposed rules, continues to include sections and language that are inconsistent with the federal deregulation of pay phones. These inconsistencies create a significant dilemma for the Company, specifically, with regard to the operational capabilities of pay phone instruments. U S WEST does not agree with Staff that such rule language is necessary for “consumer protection” and respectfully requests the Commission eliminate such language. The plain intent of Congress in deregulating the pay phone industry was to allow market forces to set rates and regulate service quality. See 47 U.S.C. 276; Report and Order, CC Docket No. 96-128, released September, 20, 1996, paragraphs 11-15, 61 and 163. The proposed rules interfere with this process. I. PROPOSED RULE LANGUAGE THAT INTERFERES WITH THE INTENT OF THE DEREGULATION OF PAYPHONES AND DISADVANTAGES INCUMBENT LOCAL EXCHANGE CARRIERS A. WAC 480-120-138 Pay phone Service Providers (PSPs), (5) Operation and functionality (f) {Number of digits dialed restriction}, (g) {specified functionality}, (h){two-way requirement} and (6) Restrictions The proposed rule language that prohibits the restriction of the number of digits allowed to be dialed (f) or that requires single function (g) or two-way pay phones (h) is inconsistent with operational capabilities desired by the marketplace. Pay phone location providers desire pay phone restrictions to eliminate unlawful activity at their place of business. The decision to implement such restrictions is a business decision between the pay phone service provider and the location provider and such restrictions are often limited to a specified time of day. Commission rules prohibiting such restrictions are unenforceable and simply result in an incumbent local exchange carrier’s pay phone being removed and replaced by another provider’s pay phone, whom the Commission does not regulate. The Commission should support this location provider market need and eliminate its prohibition against a current location provider practice. B. WAC 480-120-138 Pay phone Service Providers (PSPs), (5) Operation and functionality (h) {restriction against charges for incoming calls} The FCC’s Pay phone Orders clearly established the right of the pay phone service provider to be compensated for each and every completed call at their pay phones. The FCC noted the following in paragraph 64 in the Report and Order (FCC 96-388). “Because PSPs may block incoming calls, they are able to restrict use of their pay phones if they are concerned about a lack of compensation.” The Commission’s proposed rule language clearly is in conflict with the FCC’s Order and should be eliminated. C. WAC 480-120-138 Pay phone Service Providers (PSPs),(8) Malfunctions and rule violations Any malfunction of the pay phone instrument is a malfunction of deregulated CPE, which is no longer under the jurisdiction of the WUTC. II. PROPOSED RULE LANGUAGE THAT CREATES UNNECESSARY AND BURDENSOME COSTS A. WAC 480-120-138 Pay phone Service Providers (PSPs), (4) Disclosure – What must be posted, (j) (Posting of the WUTC compliance number for consumer complaints about service from the pay phone) and WAC 480-120-141 Operator service providers (OSPs), (2) Disclosure,(a)(3) The requirement to post the WUTC compliance number for consumer complaints, should a consumer, “have a complaint about service from this pay phone…” is not an existing rule requirement and suggests that the Commission will continue to have oversight over pay phone instruments when in fact pay phone instruments are no longer subject to the Commission’s jurisdiction. This rule revision would require replacement of all existing pay phone instruction cards which is an unnecessary and costly exercise. The FCC already requires posting of its complaint division address for customer complaints specific to alternative operator services providers. The other types of pay phone services that are most likely to generate complaints are “out of service” conditions, lost coins and calls not completed which should be addressed and resolved by the provider directly. Because these issues fall outside of the scope of the Commission’s jurisdiction, the Commission truly will not be able to help the customer with these conditions. Posting of the Commission’s number would only serve to mislead the customer - therefore the Commission should eliminate this rule provision. B. WAC 480-120-141 Operator service providers (OSPs), (2) Disclosure,(b) Verbal Disclosure of rates, and (4) Branding U S WEST stands by its prior comments on these items. Specifically, U S WEST requests that the WUTC delay the implementation of this proposed rule language until FCC Docket No. 92-77 is finalized since it addresses the verbal disclosure of rates and branding on a national basis. The proposed FCC requirements necessitate deployment of technology not currently available; if each state adds additional requirements, deployment may be further delayed. Implementation of the FCC disclosure and branding requirements will take approximately 15 months to implement in Washington, once a final decision is made. On June 30, 1998, the FCC stayed its rule until 60 days after the release of a Commission reconsideration order addressing these issues. Additionally, the proposed rule language continues to require the rate quoted for the call to include any applicable surcharge. As previously stated, this requirement would be impossible to comply with unless the operator provider who imposes the surcharge is also the provider of the toll service. This has been a subject of significant discussion in the FCC docket and this Commission should clearly postpone adoption of this rule language until the FCC issues its final order. C. WAC 480-120-141 Operator service providers (OSPs), (6) Operational capabilities, (d) {dialing instructions}. The Commission should eliminate this rule provision. U S WEST operators do not currently have dialing instructions for customers who wish to “reoriginate” a call to another carrier. Customers are transferred to U S WEST’s directory assistance to obtain a telephone number for their preferred carrier, and the carrier provides the customer with dialing instructions. If the customer knows the carrier’s telephone number, U S WEST will transfer the customer to that number for no charge when the carrier has an 800 number, which is typically the case. OSP’s should not be required to incur the additional expense associated with increased call handling time nor should they be required to perform a directory assistance function at no charge. Customers should be instructed by their preferred carrier as to how the customer can reach such a carrier in those instances when a different carrier is the prescribed provider. If OSP’s are required to perform this function for all carriers, carriers will rely upon this regulatory requirement and forego their own instructional responsibilities. Clearly this would not be in the best interest of all consumers. This rule language should be eliminated. III. PROPOSED RULE LANGUAGE THAT NEEDS CLARIFICATION OR THAT SHOULD BE ELIMINATED BECAUSE IT IS UNLAWFUL A. WAC 480-120-138 Pay phone Service Providers (PSPs), (5) Operation and functionality This proposed rule language should be clarified so that it is clear what Commission objective is at issue. The proposed rules should not define access arrangements or specify pay phone access line (PAL) services . The objective of this rule provision appears to be the need for each pay phone to provide dial tone and access to emergency services regardless of technology or service utilized. The proposed rule language could be misinterpreted to suggest that a pay phone provider could exercise tariff arbitrage and buy services other than those specified by the carrier. This should clearly not be suggested and is beyond the scope of this proceeding. The rule provision should be rewritten as follows: “(c) A PSP must ensure that each pay phone provides dial tone and access to emergency service.” B. WAC 480-120-141 Operator service providers (OSPs), (6) Operational capabilities, (b) {adequate facility requirement} and (c) {operator service standards} As previously stated, an OSP cannot force an interexchange carrier (IXC) to purchase sufficient facilities to ensure that no customer is blocked from accessing their preferred IXC, as is required in proposed rule (6)(b). The IXC is responsible for the proper provisioning of trunking to their OSP and therefore as previously stated, only the IXC can be held responsible for alleviating blockage caused by its own facilities. Existing Commission rules concerning Network Performance Standards - WAC 480-120-515 (2) Interoffice facilities (b), currently require each local exchange carrier to provide “service to an interexchange carrier … at the grade of service ordered and specified by the interexchange carrier.” Clearly, the Commission understands that each carrier must be allowed to configure its network as it chooses. This proposed rule suggests that the OSP has authority to dictate what only the IXC can correct and that the OSP can determine what causes a blockage condition. This is simply not enforceable nor is it lawful. The Commission should eliminate this proposed rule language. The proposed rule language in (c) is ambiguous and not measurable and should also be eliminated. IV. CONCLUSION U S WEST respectfully requests the Commission refrain from issuing new rules until it is clear that additional rules are necessary. Pay phone and operator services are not jurisdictional specific and the FCC has already instituted a number of rules that address the proposals set forth in these proposed rules. Experience has shown that market forces are sufficient to ensure service quality and customer satisfaction. The pay phone market has been deregulated in Iowa since 1985 and consumers have not experienced significant or objectionable change as a result of deregulation. The competitive pay phone market has proven that consumer interests are not ignored. I can be reached at 206-345-4726 with any questions you may have. Sincerely, Theresa Jensen