BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION



In the Matter of the

Policy Statement Regarding Suspension of Action on New Requests For Extended 
Area Service Pursuant to WAC 480-120-400 through 435 Temporarily While the 
Commission Conducts a Rulemaking Proceeding to Seek Improved Means to Redefine 
Local Calling Areas and to Provide for More Flexible Interexchange Call Pricing.	
	 DOCKET NO. UT-970545
	
	
	 COMMENTS OF PUBLIC COUNSEL
	 PROPOSED RULE: DEFINING  MINIMUM   LOCAL CALLING  AREAS
	

 
 Public Counsel offers the following comments on the Commission=s proposed rule 
defining minimum local calling areas.  These comments address preserving the 
current level of local calling, the tests proposed to define an adequate 
calling area, and the effects of any revision of calling areas on rates and 
competition.
 
I.  PRESERVING CURRENT LEVELS OF CALLING
 The rule does not appear to preserve the level of current local calling.  A 
strict reading of any of the proposed tests would appear to allow a local 
incumbent company to limit basic service to an area that contains a population 
of a minimum size (e.g., 4,000).  Such a standard might be interpreted to allow 
a company to provide basic service to only that portion of the exchange 
containing the minimum population (e.g., less than the entire exchange).  
Currently, all local service must include at least intra-exchange calling 
capability, and all current local calling areas (EAS areas) are larger than a 
single exchange.  Thus the proposed rule could potentially be read to allow a 
decrease in the scope of local calling.
 It is Public Counsel=s position that the current scope of local calling should 
not be reduced under this rulemaking.  Therefore, the rule should be written so 
as to protect service on an intra-exchange basis and to protect the scope of 
current local calling areas.

II.  THE TESTS TO DEFINE ACCESS TO AN ADEQUATE CALLING AREA
 Public Counsel has some concerns with the proposed test that incorporates 
average residential bill revenues.  The link between average bill revenue and 
the adequacy of the local calling area is not clear, especially when the stated 
bill revenues include interstate access charges and vertical features and do 
not include intraLATA toll charges.  Since interstate calling has no bearing on 
local calling (except in very limited circumstances where the local calling 
area borders a state boundary), Public Counsel does not see a reason to include 
these revenues.  Similarly, the inclusion of vertical features, which are by 
their nature discretionary, does not speak to the issue of affordability and 
therefore access to local telephone service.  On the other hand, intraLATA toll 
calls may be the best indicator of the demand for expanded local calling, and 
the failure to include average intraLATA toll charges would seem to omit the 
most likely portion of a bill related to the appropriate calling area.
 Given these shortcomings, Public Counsel would prefer to see a test based on 
access to essential services (as more closely resembling the existing 
standards).  The two proposals that base adequacy on population capture, 
however imperfectly, this notion.  Public Counsel has no recommendation on the 
population size that should be used to determine an adequate local calling area 
at this time, and would prefer to evaluate choices based on an analysis of the 
costs to local exchange companies and consumers, and the effects on the 
available scope of calling areas resulting from a move to either a 4,000 or a 
10,000 person standard, as well as the effect of any new rule on existing EAS.

III.  EFFECTS OF THE PROPOSED RULE ON RATES AND COMPETITION
 Finally, Public Counsel is concerned with the effects of this proposed rule on 
local rates.  Changes to the scope of local calling areas may have an effect on 
toll and access revenues.  We are concerned that such changes be balanced 
against the public interest of providing affordable local service, and have 
some difficulty reconciling the comments found on page 2 of the WUTC Fact Sheet 
on revising local calling areas that suggests that consumers will see no 
increase in their basic monthly service charge with any change to revenue 
requirement that could arise from decreased toll revenues.
 We believe that defining a minimum local calling area is to the benefit of 
consumers, who have a legitimate interest in reaching members of their 
communities without incurring additional charges.  The existence of a 
prescribed minimum calling area offers protection to all consumers and a 
neutral playing field for all competitors seeking to offer local exchange 
service.
 However, we also believe that customers are able to define the services they 
want.  To that end, Public Counsel believes that the Commission should leave 
open the option for companies to offer alternative calling areas to consumers 
that meet the specific needs of that customer, thereby competing not simply on 
price but on product offering as well.  Anecdotal evidence suggests that 
several communities within the state are currently seeking changes to their 
existing calling areas, and such flexibility might allow the companies to 
respond in a timely way without creating adverse effects to other ratepayers.  
See for example, the case illustrated by the attached article on Sprint=s Ohio 
EAS trial.

DATED:  February 9, 1998.

       CHRISTINE O. GREGOIRE
       Attorney General


       Simon J. ffitch
       Assistant Attorney General
       Public Counsel