September 17, 1998 Mr. Paul Curl Acting Secretary Washington Utilities and Transportation Commission 1300 S. Evergreen Park Drive, S.W. Olympia, Washington 98504-7250 RE: Universal Service Rulemaking Proceeding; Docket No. UT-980311 Dear Mr. Curl: On behalf of Western Wireless Corporation, I am transmitting for filing by e-mail (to records@wutc.wa.gov) the Comments of Western Wireless Corporation on the Commission’s draft universal service rules. These comments were due to be filed on September 8, but the enclosed filing includes a request for leave to file out of time. I am also sending by overnight delivery an original hard copy of the comments and ten copies, as well as a computer disk with an electronic copy. The electronic version of the document, named “0717727.doc,” is in Microsoft Word 6.0 for Windows format. Please contact me if you have any questions. Respectfully submitted, David L. Sieradzki Counsel for Western Wireless Corporation Enclosures cc: Service List 1 1 Before the WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION In the Matter of ) ) Establishing Universal Service Mechanisms ) Docket No. UT-980311(r) ) WESTERN WIRELESS CORPORATION COMMENTS ON FIRST DRAFT OF UNIVERSAL SERVICE RULES Western Wireless Corporation (“Western Wireless”), by its attorneys, hereby submits its comments on the Commission’s first draft of universal service rules, pursuant to the Rulemaking Notice issued August 21, 1998. We are submitting these comments a week after the deadline of September 8, 1998, and respectfully request leave to file these comments out of time. / Western Wireless has participated actively in this proceeding, and was unable to file these comments in a timely manner due to the press of other business. Western Wireless submits that the Commission would benefit by making a decision on the most complete record possible, and that acceptance of these comments would not adversely affect any party. / Western Wireless provides high-quality, affordable, and reliable cellular telecommunications and personal communications service (“PCS”) to subscribers in both rural/high-cost and higher-density urban areas, including portions of Washington. Western Wireless is confident that it can provide supported universal telecommunications services to residential and business consumers in many rural areas more efficiently than the incumbent local exchange carriers (“ILECs”), giving consumers tremendous value while advancing the public interest. Western Wireless strongly believes that universal service rules must be technologically neutral and competitively neutral, as required by law, / Chapter 337, E.S.S.B. No. 6622, Section 1(1), Laws of 1998. See also Federal-State Joint Board on Universal Service, First Report and Order, 12 FCC Rcd 8776, 8801-06, ¶¶ 46-55 (1997) (“FCC Universal Service Order”) (establishing competitive neutrality and technological neutrality as goals of federal universal service program). / and to a certain extent the Commission’s draft rules achieve these objectives. / See Draft Rule WAC 480-123-02 (including as goals of the program “promoting competition” through a support mechanism that is “competitively neutral and technologically neutral”). / Western Wireless takes this opportunity to comment only on a few rules that appear not to advance these goals. We also concur with the comments of certain other parties who have pointed out other deficiencies in the rules and related problems with this proceeding. / See, e.g., Comments of AirTouch, AT&T/MCI, and US Cellular. / In our view, the most serious problem with the draft rules is their failure to achieve competitive and technological neutrality between wireline and wireless eligible telecommunications carriers (“ETCs”). First, as discussed below, the rules establishing revenue benchmarks for computing support levels (draft WAC 480-123-190, WAC 480-123-360, and WAC 480-123-370) unlawfully treat wireline and non-wireline carriers differently. Second, the rules defining cost benchmarks (WAC 480-123-380 and WAC 480-123-570) should be clarified to ensure technological and competitive neutrality. The Commission Must Use The Same Revenue and Cost Benchmarks for Wireline and Wireless Carriers. In determining the level of support to be provided to ETCs, competitive and technological neutrality require that there be no distinctions between wireline, wireless, and other technologies. Contrary to the draft version of WAC 480-123-190 (Revenue Benchmark) [definitions], WAC 480-123-360 (Revenue Benchmark--Wireline), and WAC 480-123-370 (Revenue Benchmark--Non-Wireline), there must be no distinction between the revenue benchmark used for determining the amount of support provided to carriers in a given geographic area, regardless of the technology those carriers use. Similarly, draft WAC 480-123-380 (Universal Service Support Calculation) states that “the support per line available to an ETC in a high-cost location shall be the commission determined per-line cost,” but does not make it clear that the same per-line cost figure, based on the forward-looking cost of the most efficient technology to serve an area (whether wireline or wireless) will be used for all carriers. / See also draft WAC 480-123-570 (Determination of Costs), which states that the Commission will re-examine the cost of service at least every three years and “will consider affordability and changes in technology,” but does not make it clear that the cost benchmark will be based on the least-cost technology, whether wireline or wireless. It is also unclear, given that draft section’s statement that the cost determination will not commence until 2001, how the Commission intends to determine the forward-looking cost levels used in initiating the program. / These draft rules should be revised to clarify that the Washington intrastate universal service fund will use the same revenue benchmark and the same cost benchmarks for all ETCs operating in each geographic area. The cost benchmarks should be based on the most efficient (i.e., lowest cost) way to serve an area, which may be through wireline technologies in some areas and, significantly, may be through wireless technologies in other areas, particularly rural areas. / Western Wireless is sponsoring a forward-looking wireless cost model, now under development by HAI Consulting, Inc. We are attaching a description of that cost model that we recently presented to the FCC. / Based on that calculation, the intrastate fund should provide the same dollar amount of support per month per supported line to all ETCs in that area. Conclusion In sum, Western Wireless commends the Commission’s outreach efforts to wireless carriers in the state and its ongoing interest in encouraging telecommunications competition on a technology-neutral basis. As evidenced by these comments, Western Wireless plans to continue to work with the Commission to further the goals of competitive and technological neutrality in designing the intrastate universal service rules in order to advance the interests of residential and business consumers in rural and high cost areas. Respectfully submitted, WESTERN WIRELESS CORPORATION By: _____________________________ Gene DeJordy Michele C. Farquhar Executive Director of Regulatory Affairs David L. Sieradzki WESTERN WIRELESS CORPORATION HOGAN & HARTSON, L.L.P. 3650 - 131st Ave. S.E., Suite 400 555 13th Street, N.W. Bellevue, WA 98006 Washington, D.C. 20004 (425) 586-8055 (202) 637-5600 Counsel for Western Wireless Corp. Dated: September 17, 1998