BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION

In the Matter of the Petition of  )
      )  DOCKET UT-990259
U S WEST COMMUNICATIONS, INC )
      )  ORDER GRANTING       )  PETITION  
or Competitive Classification of its  )
Directory Assistance Services.  )
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . )

INTRODUCTION

  On March 3, 1999, U S WEST Communications, Inc. (“USWC”), filed its petition 
for competitive classification of its directory assistance services pursuant to 
RCW 80.36.330 and WAC 480-120-022.

  On April 23, 1999, USWC filed an amendment to its petition.  In its letter, 
USWC requests price-listing of only those directory assistance services that 
are currently billed.  Non-billed directory assistance services include the 
existing one free call allowance per month for residential direct dialed calls 
to directory assistance service, free directory assistance service to persons 
incapable of using a published telephone directory because of a physical or 
functional disability, and calls that originate from hospitals.

  In a written memorandum presented by staff at the Commission’s open meeting 
conducted on April 28, 1999, staff recommends that the Commission grant 
competitive classification to USWC’s directory assistance services.

COMMISSION DISCUSSION AND DECISION

  Pursuant to RCW 80.36.330 the Commission is authorized to classify a 
telecommunications service provided by a telecommunications company as a 
“competitive telecommunications service” if it finds that the service is 
“subject to effective competition.”  The statute defines “effective 
competition” to mean that “customers of the service have reasonably available 
alternatives and that the service is not provided to a significant captive 
customer base.”

 In determining whether a particular service is a competitive service, the 
Commission shall consider, among other factors, the following:

 (1) the number and size of alternative providers of services;

 (2) the extent to which services are available from alternative providers in 
the relevant market;

 (3) the ability of alternative providers to make functionally equivalent or 
substitute services readily available at competitive rates, terms, and 
conditions; and

 (4) other indicators of market power, which may include market share, growth 
in market share, ease of entry, and the affiliation of providers of services.

Once a service is classified as a competitive telecommunications service, the 
Commission may reclassify any such service if reclassification will protect the 
public interest.

I. Effective Competition

  USWC submitted a list of telecommunications companies that provide directory 
assistance services in the state of Washington which it postulates as a 
meaningful indicator of the number and size of alternative service providers. 
Specifically, USWC submitted a list of 70 providers of directory assistance 
services. Many of these alternative service providers are of sufficient size to 
be capable of offering similar directory assistance services.   

  In its petition, USWC states that USWC does not currently have a captive 
customer base for directory assistance services.  Alternatives to USWC’s 
directory assistance services currently exist in the form of direct access from 
the customer’s chosen long-distance provider and “dial around” access to other 
providers of directory assistance.  USWC submitted evidence of its own 
decreasing volume of calls for directory assistance.  With ease of entry into 
the market and functionally equivalent or substitute services readily available 
in the marketplace, USWC’s directory assistance services are subject to 
effective competition.

II.  Other Issues

 1. Notice of Price List Changes

  Staff recommended that the notice period for the first price increase be 
extended to thirty days and that a message appear on at least two consecutive 
bills informing customers of the increase and that alternative services exist.  
The extended notice will give all customers an opportunity to enhance their 
awareness of directory assistance and inform customers that future increases 
may take effect upon ten days’ notice.  USWC did not object.  The statute 
permits the Commission to specify the required notice, and the Commission will 
require the additional notice for the first increase USWC might initiate.  For 
any subsequent increase, the Commission will prescribe the same notice 
requirement as has appeared in all orders granting competitive service or 
competitive company classifications. 

 
 2. Review of Competitive Service Classification

  The Commission has the authority to undertake a review of competitive 
classifications pursuant to RCW 80.36.330(7) in order to protect the public 
interest.

 3.  Prices Sufficient to Cover Cost and Prevent Cross-Subsidy

  The current rates for USWC’s directory assistance services were supported by 
cost studies demonstrating that they are above the costs of providing the 
services.  The initial price lists filed pursuant to competitive classification 
of these services should mirror the current tariffed rates.  Thereafter, any 
rate changes must continue to cover costs.


 4. Non-billed Directory Assistance Services

  USWC has not requested any change in the treatment of non-billed directory 
assistance services which will continue to be part of its local service tariff. 
Non-billed directory assistance services include the existing one free call 
allowance per month for residential direct-dialed calls to directory assistance 
service, free directory assistance service to persons incapable of using a 
published telephone directory because of a physical or functional disability, 
and calls that originate from hospitals.

III.  Conclusion

  Based upon the entire record in this matter, the Commission makes the 
following findings of fact and conclusions of law.


FINDINGS OF FACT

  1. The Washington Utilities and Transportation Commission is an agency of the 
state of Washington, vested by statute with authority to regulate rates, rules, 
regulations, practices, accounts, securities, and transfers of public service 
companies, including telecommunications companies.

  2. U S WEST Communications, Inc., is registered as a telecommunications 
company providing service within the state of Washington as a public service 
company.

  3. On March 3, 1999, USWC filed a petition requesting competitive 
classification of its directory assistance services pursuant to RCW 80.36.330 
and WAC 480-120-022.

  4. On April 23, 1999, USWC filed an amendment to its petition requesting 
price-listing of only those directory assistance services that are currently 
billed.  Non-billed directory assistance services include one free call 
allowance per month for residential direct dialed calls to directory assistance 
service, free directory assistance service to person incapable of using a 
published telephone directory because of a physical or functional disability, 
and free directory assistance service to calls that originate from hospitals.

  5.   The relevant product market is the directory assistance services market 
in the state of Washington.

  6. There are reasonably available alternative providers of the 
telecommunications services to those USWC offers in the relevant market.

  7. There are no regulatory barriers to entry into the relevant market, and 
entry presently is occurring.

  8. The directory assistance services offered by USWC are subject to effective 
competition.

  9. USWC’s prices for this service are subject to the cost standard and other 
conditions described fully in the text of this Order until otherwise ordered by 
the Commission.


CONCLUSIONS OF LAW

  1. USWC’s directory assistance services meet the requirements of RCW 
80.36.330.  The Commission should grant the petition of USWC.

  2. USWC should be permitted to offer USWC’s billed directory assistance 
services under price list.


ORDER

  THE COMMISSION ORDERS:

  1. The amended petition of U S WEST Communications, Inc., for an order 
granting competitive classification of its directory assistance services is 
granted.

  2. U S WEST Communications, Inc.’s prices for directory assistance services 
are subject to the cost standard described fully in the text of this Order 
until otherwise ordered by the Commission.

  3. U S WEST Communications, Inc., is authorized to offer directory assistance 
services under price list, the format of which is subject to prior approval by 
the Commission, to be effective after ten days’ notice to the Commission and to 
customers.  The notice period for the first price increase initiated by U S 
WEST Communications, Inc., is extended to thirty days and a message must appear 
on at least two consecutive bills informing customers of the increase and that 
alternative services exist.  In the event of a price reduction or a change in 
terms or conditions which do not have a rate impact, personal notice to 
customers is not required.  Although the Commission does not have authority to 
waive this notice requirement, petitioner does have the option to publish 
notice of price reductions by a display advertisement in such newspaper or 
newspapers as are geographically situated so as to be circulated over the 
company’s service area.

  4. U S WEST Communications, Inc., shall within 30 days file revisions 
removing its billed directory assistance services from its tariff and offering 
it under a price list.

  DATED at Olympia, Washington, and effective this 29TH day of April, 1999.

  WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION


     

      MARILYN SHOWALTER, Chairwoman




      RICHARD HEMSTAD, Commissioner