BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION In the Matter of Determining the Proper Classification of: UNITED & INFORMED CITIZEN ADVOCATES NETWORK ) ) ) ) ) ) ) DOCKET NO. UT-971515 TESTIMONY OF JOSEPH T. THAYER U S WEST COMMUNICATIONS, INC. March 30, 1998 Exhibit ___ (JTT-T) Testimony of Joseph T. Thayer Docket No. UT-971515 Page 1 Q. PLEASE STATE YOUR NAME AND TITLE. A. My name is Joseph T. Thayer. I am a Product Manager employed by U S WEST Communications, Inc. (USWC). I am involved with this complaint due to responsibilities from a previous assignment as a Product Manager. Q. HAVE YOU EVER TESTIFIED BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION (“WUTC”) BEFORE? A. No. Q. WHAT IS YOUR UNDERSTANDING OF THE NATURE OF THIS PROCEEDING? A. I believe that the WUTC initiated this proceeding on its own motion to determine whether United & Informed Citizens Advocate Network (“U&I CAN”) is conducting business as a telecommunications carrier subject to regulation by the WUTC. Q. ARE YOU AWARE OF ANY PRIOR PROCEEDINGS BEFORE THE WUTC INVOLVING U&I CAN? A. Yes. In Docket No. UT-960659, U&I CAN filed a formal complaint against U S WEST for allegedly and improperly discontinuing a service provided by U S WEST. In Docket No. UT-960659, I provided an affidavit wherein I set forth facts which established that U&I CAN was bridging Extended Area Service regions in an unauthorized manner. In that proceeding, I was also deposed by an attorney representing U&I CAN. Q. WHAT IS THE NATURE OF YOUR TESTIMONY IN THIS DOCKET? A. I will again describe the facts that support my contention that U&I CAN is bridging Extended Area Service areas in an unauthorized manner and that its call transfer service was appropriately disabled by U S WEST. I will also describe my actions to disable their lines to prevent the bridging. This testimony is substantially the same as the facts set forth in my affidavit filed in Docket No. UT-960659, a copy of which is attached hereto as Exhibit ___ (JTT-1). My testimony is also consistent with the testimony given in my deposition, the transcript of which is attached hereto as Exhibit ___ (JTT-2). I am offering it again to assist the WUTC in properly classifying U&I CAN.. Q. WHEN AND HOW DID YOU FIRST BECOME AWARE OF U&I CAN? A. In October 1995, I became aware of U&I CAN through one of their competitors who had recently lost business. This competitor, Digitel, was in business legitimately, and complained about U&I CAN’s business practices to his IXC Account Executive, Ed Wiggins. Mr. Wiggins forwarded the information to me. Q. AS FAR AS YOU KNOW, WAS THE WASHINGTON UTILITY AND TRANSPORTATION COMMISSION (WUTC) AWARE OF U&I CAN? A. Yes, according to the competitor of U&I CAN with whom I spoke, the competitor alerted Tani Thurston at the Washington Utility and Transportation Commission (WUTC). U S WEST provided U&I CAN’s address to Ms. Thurston and she sent a letter to U&I CAN asking for a written description of U&I CAN’s business, e.g., the services it offers, its geographical location, etc. U&I CAN responded that because they are a “private membership organization” that provides, among other services, a “private telecommunications system,” they are exempt from oversight by the WUTC. I believe that the full text of both the WUTC letter and the U&I CAN response were published in the U&I CAN newsletter at one time. A copy of this newsletter was included as an exhibit to my deposition testimony. Q. PLEASE DESCRIBE WHAT AN EAS BRIDGER IS. A. Certainly. First, however, one must understand what an EAS area is. An EAS area is a region in which all calls placed from a location in that region to another location in that region are non-toll, i.e., the call does not incur access and/or toll charges. Phone calls placed in an EAS to a location outside an EAS, however, incur access and/or toll charges. Accordingly, in order to complete a call outside the EAS, a subscriber must first dial a “1” or a “0.” An EAS bridger is one who illegally uses a combination of customized call management services and his or her own equipment to complete calls between two overlapping EAS regions without incurring access and/or toll charges. Thus, he or she has effectively built a “bridge” between EAS regions to avoid toll charges. Q. WHAT EFFECT DO EAS BRIDGERS HAVE UPON U S WEST? A. Obviously, EAS bridgers deprive U S WEST of a legitimate and substantial source of revenue. Through the improper use of a combination of services and devices, an EAS bridger, in effect, can create an unconscionably large free-calling area without paying the appropriate charges. A bridger, in effect, steals revenues to which U S WEST is legally entitled. Q. HOW MUCH REVENUE DO EAS BRIDGERS DEPRIVE U S WEST? A. Unfortunately, U S WEST cannot determine this for certain. EAS bridgers, such as U&I CAN, cannot be readily identified. Accordingly, the number of bridgers cannot be determined. Regionwide, U S WEST believes that it is deprived of millions of dollars in revenue annually. U S WEST has attempted to gather information from U&I CAN in this docket to determine the access and/or toll charges currently owed by U&I CAN. U&I CAN has simply ignored this request. Q. HOW DID YOU DETERMINE THAT U&I CAN WAS AN EAS BRIDGER? A. To determine whether U&I CAN did, indeed, bridge EAS areas, I decided to subscribe to the service and test their network. Q. HOW DID YOU BECOME A SUBSCRIBER? A To subscribe to the service, U&I CAN requires a sponsor. I located a former subscriber to Digitel who had joined U&I CAN. With his permission, I used his name and became a member. When I called to enroll, I was provided an access number, 48701. A letter soon followed, dated October 23, 1995, which confirmed my enrollment. Q. HOW MUCH DID YOU HAVE TO PAY U&I CAN TO USE THEIR SERVICES AND FACILITIES? A. I had to pay an $8.00 initiation fee, as well as $8.00 per month. The monthly fee allowed me to access U&I CAN’s services and facilities 30 times per month. Q. DID YOU ACTUALLY TEST THE SERVICE PROVIDED BY U&I CAN? A. Yes, I did. Q. WILL YOU PLEASE DESCRIBE THE PROCESS? A. Yes. On November 15, 1995, I tested the service as follows: From my home in Shoreline, telephone number 542-9589, I dialed 529-8799, a residence in Federal Way. I received a message, “We’re sorry. You must first dial a “1” or “0” and the area code when calling this number. Please hang up and try your call again.” From my home in Shoreline, I then called 441-5200. U&I CAN provided this number to me when I joined. When I received a series of three tones, I entered my access number; I received another tone, then dialed the same number above, 529-8799. I received a final series of tones, then the called party answered. The call was completed. I tested the service three more times by phoning Federal Way with three different local access numbers. All of the calls were completed in a manner similar to that described above. The local access numbers I tested were 441-5331, 670-0309, and 774-7260. Each of these access numbers were provided to me by U&I CAN. Accordingly, by using U&I CAN’s services and facilities, I was able to place four calls from my home in Shoreline to Federal Way, without dialing “1” or “0” and without incurring toll or access charges. Q. HOW DID YOU DETERMINE WHO SUBSCRIBED TO THE TELEPHONE NUMBERS YOU TESTED? A. I asked a clerk to research the customer records of the access numbers provided to me by U&I CAN to determine the names, addresses, and services subscribed to by each of the subscribers to each of these numbers. Q. WHAT ELSE DID THE RESEARCH PROVIDE? A. From the customer service records, I determined that the customers assigned each of these access numbers did subscribe to features that would allow transferring of calls, when coupled with the use of certain computer equipment. Q. DID YOU HAVE ADDITIONAL EVIDENCE TO INDICATE U&I CAN WAS BRIDGING EAS AREAS? A. Yes. I also requested U S WEST’s Feature Group A to be established on the main access lines provided to me by U&I CAN to track usage on the lines. The usage on these numbers is indicative of bridging. For example, 4,024 calls during a twenty-six day period were recorded for one of the numbers. This would equal 154 calls/day if a residence or 251 calls/day if it were a business. These numbers are extraordinarily high, leading one to believe that EAS bridging was occurring. Q. WHEN DID YOU DISABLE U&I CAN’S ABILITY TO BRIDGE EAS AREAS? A. On January 5, 1996 the transfer feature was disabled on each line after I gave direction to the business office to do so. Q. DID THAT ACTION TAKE CARE OF THE BRIDGING BY U&I CAN? A. No. During mid-February, I was told by that same competitor of U&I CAN that they were back in service. On February 19, I had someone check the customer records of the lines they advertised for use. Transfer features had, indeed, been re-installed on the lines. Evidently, someone representing U&I CAN had called the USWC business office and requested the features to be put back on. The business office inadvertently restored the service despite instructions not to do so. Q. WHEN, IF EVER, DID YOU HAVE THE LINES DISABLED AGAIN? A. On February 20, 1996, I gave direction to the business office to disable the lines, in the same fashion as before. For some reasons, my instructions were ignored. On March 11, I gave direction again to submit the service orders to disable the lines. These orders were subsequently fulfilled on March 13, 1996, as explained below. Q. WHEN AND HOW DID YOU INFORM U&I CAN? A. As a courtesy, I called Bill Loveless of U&I CAN to indicate what I found out: that I had discovered that he was back in business; and that I had given direction to disable the lines again. I stated that I had no objection to his service, however, he must subscribe to the appropriate underlying services from the Access Tariff. I offered to have a IXC Marketing person work with him. Mr. Loveless said he was going to talk to the WUTC, asked if I would delay the orders until the next day when he said he would get back to me. I agreed to postpone the orders a day. I went to the business office and was successful in delaying the orders to disable the call transfer function. Q. WHAT HAPPENED NEXT? A. On March 13, 1996, I had heard nothing from anyone concerning this issue, so I kept to plan and gave direction to disable the transfer features on the lines this morning. I received verbal confirmation from U S WEST’s business office about 11:00 a.m. that the orders were fulfilled and that the transfer features were disabled. Q. IS IT YOUR UNDERSTANDING THAT U&I CAN IS STILL EAS BRIDGING DESPITE YOUR EFFORTS? A. Unfortunately, yes. Q. DOES THIS CONCLUDE YOUR TESTIMONY? A. Yes. Please note that the exhibits were not provided electronically.