Agenda Date: March 14, 2001 Item Numbers: 2L, 2M, 2N, 2O Docket: UT-000222 Company Name: Qwest Corporation Docket: UT-000441 Company Name: AT&T Communications of the Pacific Northwest, Inc. Docket: UT-000442 Company Name: TCG Seattle Docket: UT-000443 Company Name: TCG Oregon Staff: Tani Thurston, Consumer Program Specialist Vicki Elliott, Assistant Director, Consumer Affairs Recommendation: Deny the petitions to extend the waiver of WAC 480-120-139(5) as it pertains to preferred carrier freezes for local exchange service. Discussion: On February 15, 2001 and March 7, 2001 Qwest Corporation (Qwest) and AT&T Communications of the Pacific Northwest, Inc. along with AT&T Local Services on behalf of TCG Seattle and TCG Oregon (collectively "AT&T") respectively filed petitions to extend their waivers of WAC 480-120-139(5) pertaining to offering a preferred carrier freeze to local exchange customers. Specifically, Qwest is requesting an extension of a U S WEST Communications, Inc., (USWC) petition which the Commission approved on March 10, 2000, in Docket No. UT-000222. AT&T is requesting an extension of its petition which the Commission approved on April 26, 2000 in Docket Nos. UT-000441, UT-000442 and UT-000443. In these petitions the companies requested a waiver of the implementation of the preferred carrier freeze for local exchange customers. A preferred carrier freeze prevents a change in a customer's preferred carrier selection without the customer's authorization. The companies stated they were not able to provide this service to its local exchange customers because they did not have the guidelines and technology in place to implement local carrier freezes in a consistent and cost-effective manner. The Commission granted a waiver for both petitions until March 10, 2001. Qwest contends there is additional work required to complete the mechanized process to implement preferred carrier freezes. Without this extension, Qwest would have to initiate a manual process that "flags" a customer's account to reflect a local carrier freeze on the account. This process requires a service representative to manually check the customer's record against billing account databases before the account is transferred to another local exchange carrier. AT&T contends that its implementation of local exchange freezes is dependent upon the development of processes in the industry as well as refining its internal processes. Qwest and AT&T are requesting an extension of their waivers until September 1, 2001, to complete the work necessary to implement an industry-wide, mechanized system. In reviewing the company's request, Staff considered a number of factors, including the current amount of competitive local exchange offerings in our state, the number of complaints filed with Consumer Affairs for local exchange slamming and the amount of time the companies have had to implement these changes. Competitive local exchange companies appear to be actively soliciting residential customers to switch their local exchange services. Since September 2000 Consumer Affairs has received over 150 complaints from consumers regarding local exchange competitors. These complaints include AT&T's offerings of local service for residential customers. Approximately twenty of the 150 complaints were from customers stating their local exchange service was switched to another carrier without their authorization. Finally, Staff notes the companies have had fifteen months from the date this rule was adopted to implement these changes. Staff believes the companies have had sufficient time to develop the processes and technology necessary to place a freeze on a customer's local exchange account. Qwest is the largest local exchange provider in this state and AT&T competitively offers residential local service. Staff believes any delay in placing a freeze on customers' accounts will increasingly jeopardize the customers' local service. Therefore, Staff recommends the Commission deny Qwest and AT&T's requests for an extension of their waivers of WAC 480-120-139(5) as it pertains to preferred carrier freezes for local exchange service.