BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION In the Matter of the Application and Petition of BG ENTERPRISES, INC., d/b/a GRIZZLY TELEPHONE For Registration as a Telecommunications Company and Classification as a Competitive Telecommunications Company. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ) ) ) ) ) ) ) ) ) ) ) DOCKET UT-991612 ORDER AUTHORIZING REGISTRATION AND GRANTING PETITION FOR COMPETITIVE CLASSIFICATION AND APPROVING PRICE LIST BACKGROUND By petition filed October 25, 1999, in Docket UT-991612, BG Enterprises, Inc., d/b/a Grizzly Telephone (BG) 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. BG requested an extension of time from the Commission by letter dated November 9, 1999 to finalize its application and petition. The application for registration, competitive classification petition, and initial price list were brought before the Commission at its regularly scheduled open public meeting of November 30, 1999. DISCUSSION BG proposes to register with the Commission as a telecommunications company to offer the services specified in Exhibit A of its application, and proposes to furnish prepaid local dial tone service. Services specified in Exhibit A but not included in its initial price list may not be offered until applicant amends its price list to include the description of service with rates and charges. In support of its petition, BG asserts that its services compete with other local exchange carriers’ telecommunications services. BG states that customers have readily available, equivalent alternatives and that there are no captive customers of the company’s services. BG is a Montana corporation, headquartered in Missoula, Montana, and is owned by Linda Gordon. Rates, terms, and conditions set forth in the proposed price list are structured similarly to rates filed by other local exchange carriers for services in the relevant market. BG has provided information showing that it meets the requirements of RCW 80.36.350. Pursuant to statutes and rules governing registration applications and advance payment proposals, BG has proposed a satisfactory bond agreement for protection of those advance payments. Initially, the bond agreement will be for $1,000 and will increase proportionally as the outstanding amount of advance payments increases. BG will notify the Commission at least 30 days prior to terminating its operations, and provide the insurer and the Commission notice in writing and within 24 hours of ceasing its operations with its list of all outstanding account numbers and customer balances. Within 15 days after December 31, 1999, and each calendar quarter thereafter, BG will be required to submit to the Commission a report containing the information specific to its state of Washington operations.DOCKET UT-991612 PAGE 1 Statements shall continue to be filed within 15 days after each 3-month period thereafter until the applicant is notified in writing by the Commission that such reports are no longer required. Based upon this information, BG will adjust the amount of the bond to assure compliance with WAC 480-120-058. 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, upon request by BG and authorization by the Commission, if the company demonstrates that it has maintained adequate levels in the bond agreement during the previous 12-month period. Applicant does not propose to provide alternate operator services. In conjunction with classification, the company is 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 interests, transfer of property WAC 480-120-046 Services offered WAC 480-120-131 Reports of accidents Rules invoked include WAC 480-120-022, WAC 480-120-023, WAC 480-120-024, and WAC 480-120-025. Statutes invoked include RCW 80.36.320, and RCW 80.36.350. The ultimate issues are whether BG should be registered as a telecommunications company, whether it should be classified as a competitive telecommunications company, whether 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. Based on the entire record and the file in this matter, the Commission makes the following findings of fact and conclusions of law. FINDINGS OF FACT 1. BG 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 the services specified in Exhibit A of its application. 2. As to form, the application and petition meet the requirements of RCW 80.36.350 and 80.36.320, and comply with the Commission’s rules and regulations. 3. The registration of BG 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 BG include, but are not limited to, U S WEST Communications, Inc., GTE Northwest Incorporated, MCIWorldCom, Inc., 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. BG has no captive customer base. 8. The services offered are subject to effective competition. 9. BG should be permitted to provide services under its proposed price list. 10. BG 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 BG. 2. BG 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. BG should be permitted to provide services under price lists promulgated under RCW 80.36.320 (2). These services shall not include alternate operator services. 4. BG should be granted waivers of the laws and rules listed in Appendix A. ORDER THE COMMISSION ORDERS: 1. After the effective date of this Order and subject to any conditions imposed, the application of BG Enterprises, Inc., d/b/a Grizzly Telephone requesting an order authorizing registration as a telecommunications company to provide service to the public in this state is approved. 2. The petition of BG Enterprises, Inc., d/b/a Grizzly Telephone, 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 BG Enterprises, Inc., d/b/a Grizzly Telephone, for rates and services is approved. 4. Registration of BG Enterprises, Inc., d/b/a Grizzly Telephone, as a telecommunications 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, BG Enterprises, Inc., d/b/a Grizzly Telephone, 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. BG Enterprises, Inc., d/b/a Grizzly Telephone, is authorized to offer rates and services pursuant to the 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 is not required. To comply with the statutory notice requirement, BG Enterprises, Inc., d/b/a Grizzly Telephone, may publish notice of price reductions or changes in terms and conditions of service that do not have rate impact by a display advertisement in such newspaper(s) as are geographically situated to be circulated over the company's service area. 7. BG Enterprises, Inc., d/b/a Grizzly Telephone, is not authorized to provide alternate operator services. 8. The bond agreement in the amount of $1,000 filed by BG Enterprises, Inc., d/b/a Grizzly Telephone, is sufficient to initiate operations. BG Enterprises, Inc., d/b/a Grizzly Telephone, shall adjust the amount of the bond to assure compliance with WAC 480-120-058. As part of the bond agreement and in the event the company ceases operations, BG Enterprises, Inc., d/b/a Grizzly Telephone, shall provide notice, in writing and within 24 hours, to the insurer and the Commission to include a list of outstanding account numbers and balances. 9. Within 15 days after December 31, 1999, and each calendar quarter thereafter, BG Enterprises, Inc., d/b/a Grizzly Telephone shall submit to the Commission a report containing the information specific to its state of Washington operations: a. The total number of Washington customers; b. The amount of advance payment dollars collected during the reporting period; and c. The amount of advance payment dollars currently being held by the company. Statements shall continue to be filed within 15 days after each 3-month period thereafter until the applicant is notified in writing by the Commission that such reports are no longer required. Based upon this information, BG Enterprises, Inc., d/b/a Grizzly Telephone will adjust the amount of the bond to assure compliance with WAC 480-120-058. 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, upon request by BG Enterprises, Inc., d/b/a Grizzly Telephone and authorization by the Commission, if the company demonstrates that it has maintained adequate levels in the bond agreement during the previous 12-month period. 10. 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 30th day of November, 1999. WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION CAROLE J. WASHBURN, Secretary DOCKET UT-991612 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 interests, transfer of property WAC 480-120-046 Services offered WAC 480-120-131 Reports of accidents