BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION In the Matter of the Application and Petition of CENTURYTEL LONG DISTANCE, INC., For Registration as a Telecommunications Company and Classification as a Competitive Telecommunications Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) ) ) ) ) ) ) ) ) ) DOCKET UT-981623 ORDER AUTHORIZING REGISTRATION AND GRANTING PETITION FOR COMPETITIVE CLASSIFICATION AND APPROVING PRICE LIST By petition filed December 30, 1998, in Docket UT-981623, CenturyTel Long Distance, Inc., (CenturyTel), seeks registration as a telecommunications company, classification as a competitive telecommunications company, and approval of its proposed price list pursuant to RCW 80.36.350 and 80.36.320. CenturyTel proposes to register with the Commission as a telecommunications company to offer resold direct dialed long distance, inbound 800/888, travel card, and debit card services to the public. In support of its petition, CenturyTel alleges inter alia that its services compete with other interexchange carriers’ telecommunication services. CenturyTel states that customers have readily available, equivalent, alternatives and that there are no captive customers of the company’s services. CenturyTel is a Louisiana corporation, headquartered in Monroe, Louisiana, and is a wholly owned subsidiary of Century Telephone Enterprises, Inc. Rates, terms, and conditions set forth in the proposed price list are structured similarly to rates filed by other interexchange carriers for calls placed in the relevant market. CenturyTel has provided information showing that it meets the requirements of RCW 80.36.350. The nature of the debit card service implies that CenturyTel will collect advance payments from customers. Pursuant to statutes and rules governing registration applications and advance payment proposals, CenturyTel has proposed a satisfactory bond agreement for protection of those advance payments. Initially, the bond agreement will be for $50,000 and will increase proportionally as the customer base increases. If CenturyTel ceases operations, it will provide the insurer and the Commission lists of outstanding account numbers and balances within 48 hours. CenturyTel will limit the maximum denomination of each debit card purchased by residential customers to not more than $50 and debit cards purchased by business customers to not more than $200. Within 15 days after March 31, 1999, and quarterly thereafter, CenturyTel will be required to submit to the Commission a report containing the following information specific to its State of Washington operations: (a) total outstanding debit card balance at the beginning of the reporting period (b) dollar amount of debit cards sold during the reporting period (c) depleted usage of debit cards during the reporting period and (d) total outstanding debit card balance at the end of the DOCKET UT-981623 PAGE 1 reporting period. Statements shall continue to be filed within 15 days after each 3-month period thereafter until Commission staff informs applicant such reports are no longer required. Based upon this information, CenturyTel will adjust the amount of the bond to assure compliance with WAC 480-121-040. In addition, Commission staff may request current company financial information. After one year’s administration of the bond agreement, the reporting requirement may be modified to a semi-annual level if the company has maintained adequate levels in the bond agreement during the previous 12-month period. CenturyTel will state an unconditional money back guarantee on the debit card or on supplemental material that will be provided at the time the debit card is purchased with a statement warning customers to safeguard their cards. If CenturyTel goes out of business, it will provide refund information on the company’s “800" phone number for its customers. CenturyTel will provide a free call detail report to customers upon request. The company filed written testimony in support of competitive classification, which accompanied its petition. In conjunction with classification, the company is seeking waiver of the requirements of various provisions of chapter 80.36 RCW and chapter 480-120 WAC. The company is also seeking waiver of: RCW 80.04.300 Budgets to be filed by companies--Supplementary budgets RCW 80.04.310 Commission’s control over expenditures RCW 80.04.320 Budget rules RCW 80.04.330 Effect of unauthorized expenditure--Emergencies RCW 80.04.360 Earnings in excess of reasonable rate--Consideration in fixing rates RCW 80.04.460 Investigation of accidents RCW 80.04.520 Lease of utility facilities RCW 80.36.100 Tariff schedules to be filed and open to public RCW 80.36.110 Tariff changes--Statutory notice--Exception Chapter 80.08 RCW Securities (except RCW 80.08.140) Chapter 80.12 RCW Transfers of Property Chapter 80.16 RCW Affiliated interests Chapter 480-80 WAC Tariffs Chapter 480-140 WAC Budgets Chapter 480-143 WAC Transfers of Property Chapter 480-146 WAC Securities and affiliated interests WAC 480-120-026 Tariffs WAC 480-120-031 Accounting WAC 480-120-032 Accounting-Political information and political education activities WAC 480-120-036 Finance--Securities, affiliated interest, transfer of property WAC 480-120-046 Services offered WAC 480-120-131 Reports of accidents Rules invoked include those within chapters 480-09 and 480-120 WAC, specifically WAC 480-09-520 and WAC 480-120-022, WAC 480-120-023, WAC 480-120-024, and WAC 480-120-025. Statutes invoked include RCW 80.36.145, 80.36.320, and RCW 80.36.350. The ultimate issues are whether CenturyTel should be registered as a telecommunications company, classified as a competitive telecommunications company, its proposed price list should be approved, and the extent to which it should be relieved of regulatory requirements to which it would otherwise be subject. FINDINGS OF FACT 1. CenturyTel filed an application for registration as a telecommunications company and a petition for classification as a competitive telecommunications company pursuant to the provisions of RCW 80.36.350 and 80.36.320, to provide resold direct dialed long distance, inbound 800/888, travel card, and debit card services to the public. 2. As to form, the application and petition filed herein, meets the requirements of RCW 80.36.350 and 80.36.320, and the Commission’s rules and regulations. 3. The registration of CenturyTel as a telecommunications company is not inconsistent with the public interest. 4. In this proceeding, the Commission in no way endorses the financial viability of applicant nor the investment quality of any securities it may issue. 5. Alternative providers of service to that of CenturyTel include, but are not limited to, AT&T Communications, Inc., U S WEST Communications, Inc., MCI Communications Corporation, and Sprint Communications Company. All services are fully available from alternative providers in the relevant market. 6. The relevant market is the state of Washington. 7. CenturyTel has no captive customer base. 8. The services offered are subject to effective competition. 9. CenturyTel should be permitted to provide services under its proposed price list. 10. CenturyTel requested waivers of certain laws and rules relating to telecommunications services. The laws and rules for which waivers should be granted are listed on Appendix A, incorporated by this reference and made a part of this Order. CONCLUSIONS OF LAW 1. The Washington Utilities and Transportation Commission has jurisdiction over the subject matter of this classification proceeding and the parties. 2. CenturyTel should be registered as a telecommunications company pursuant to RCW 80.36.350 and classified as a competitive telecommunications company pursuant to RCW 80.36.320(1). 3. CenturyTel should be permitted to provide services under price lists pursuant to RCW 80.36.320 (2). These services will not include alternate operator services as defined in WAC 480-120-141. 4. CenturyTel should be granted waiver of the laws and rules listed in Appendix A; waiver of laws and rules requested that are not included in Appendix A should be denied. O R D E R THE COMMISSION ORDERS: 1. After the effective date of this Order and subject to any conditions imposed, the application of CenturyTel Long Distance, Inc., requesting an Order authorizing registration as a telecommunications company to provide service to the public in this state is approved. 2. The petition of CenturyTel Long Distance, Inc., for classification as a competitive telecommunications company is approved; waiver of the laws and rules listed in the attached Appendix A is granted. 3. The proposed price list of CenturyTel Long Distance, Inc., for rates and services, is approved. 4. Registration of CenturyTel Long Distance, Inc., as a telecommuni-cations company shall not be construed as an endorsement of financial viability nor of the investment quality of any securities it may issue. 5. As a telecommunications company providing service to the public in this state, CenturyTel Long Distance, Inc., is subject to the jurisdiction of this Commission under the provisions of Title 80 RCW and all rules and regulations adopted by the Commission. 6. CenturyTel Long Distance, Inc., is authorized to offer rates and services pursuant to price list in the format prescribed by the Commission; the price list approved in this proceeding, and subsequent changes to that price list, become effective only after ten days notice to the Commission and to customers. In the event of a price list reduction or of a change in terms and conditions which do not have rate impact, personal notice to customers will not be required. Although the Commission does not have authority to waive the statutory notice requirement, CenturyTel Long Distance, Inc., will have the option to publish notice of price reductions or changes in terms and conditions of service which do not have rate impact by a display advertise- ment in such newspaper(s) as are geographically situated to be circulated over the company's service area. 7. The services offered by CenturyTel Long Distance, Inc., are not to include alternate operator services as defined in WAC 480-120-141. 8. CenturyTel Long Distance, Inc., filed with the Commission a satisfactory bond agreement in the amount of $50,000. As part of the bond agreement and in the event the company ceases operations, CenturyTel Long Distance, Inc., will within 48 hours provide to the insurer and the Commission lists of outstanding account numbers and balances. 9. CenturyTel Long Distance, Inc., will limit the maximum denomina-tion of each debit card to be purchased to $50 for residential and $200 for business customers. 10. Within 15 days after March 31, 1999, and quarterly thereafter, CenturyTel Long Distance, Inc., will submit to the Commission a report containing the following information specific to State of Washington operations: (a) total outstanding debit card balance at the beginning of the reporting period (b) dollar amount of debit cards sold during the reporting period (c) depleted usage of debit cards during the reporting period and (d) total outstanding debit card balance at the end of the reporting period. Statements shall continue to be filed within 15 days after each 3-month period thereafter until Commission staff informs applicant such reports are no longer required. Based upon this information, CenturyTel Long Distance, Inc., will adjust the amount of the bond to assure compliance with WAC 480-121-040 and notify the Commission of that adjustment in its next quarterly report. In addition, Commission staff may request current company financial information. After one year’s administration of the bond agreement, the reporting requirement may be modified to a semi-annual level if the company has maintained adequate levels in the bond agreement during the previous 12-month period. 11. CenturyTel Long Distance, Inc., will state an unconditional money back guarantee on the debit card or on supplemental material that will be provided at the time the debit card is purchased with a statement warning customers to safeguard their cards. 12. In the event the company ceases operations, CenturyTel Long Distance, Inc., will provide refund information on the company’s “800" phone number for its customers for a minimum of six months. 13. CenturyTel Long Distance, Inc., will provide a free call detail report to customers upon request. 14. The Commission retains jurisdiction over the subject matter and the parties to effectuate the terms of this Order. DATED at Olympia, Washington, and effective this 27th day of January 1999. WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION CAROLE J. WASHBURN, Secretary DOCKET UT-981623 APPENDIX A RCW 80.04.300 Budgets to be filed by companies--Supplementary budgets RCW 80.04.310 Commission’s control over expenditures RCW 80.04.320 Budget rules RCW 80.04.330 Effect of unauthorized expenditure--Emergencies RCW 80.04.360 Earnings in excess of reasonable rate--Consideration in fixing rates RCW 80.04.460 Investigation of accidents RCW 80.04.520 Lease of utility facilities RCW 80.36.100 Tariff schedules to be filed and open to public RCW 80.36.110 Tariff changes--Statutory notice--Exception Chapter 80.08 RCW Securities (except RCW 80.08.140, State not obligated) Chapter 80.12 RCW Transfers of Property Chapter 80.16 RCW Affiliated interests Chapter 480-80 WAC Tariffs Chapter 480-140 WAC Budgets Chapter 480-143 WAC Transfers of Property Chapter 480-146 WAC Securities and affiliated interests WAC 480-120-026 Tariffs WAC 480-120-031 Accounting WAC 480-120-032 Accounting-Political information and political education activities WAC 480-120-036 Finance--Securities, affiliated interest, transfer of property WAC 480-120-046 Services offered WAC 480-120-131 Reports of accidents