BEFORE THE WASHINGTON UTILITIES AND TRANSPORTATION COMMISSION



In the Matter of the

Policy Statement Regarding Suspension of Action on New Requests For Extended 
Area Service Pursuant to WAC 480-120-400 through 435 Temporarily While the 
Commission Conducts a Rulemaking Proceeding to Seek Improved Means to Redefine 
Local Calling Areas and to Provide for More Flexible Interexchange Call Pricing.	
	 DOCKET NO. UT-970545
	
	
	 COMMENTS OF PUBLIC COUNSEL
	 RE PROPOSED RULE (CR-102)
	
	


 Public Counsel offers the following comments on the Commission’s proposed rule 
defining minimum local calling areas, pursuant to the CR-102 of June 3, 1998.
 For the most part, Public Counsel relies on its previous comments filed during 
the CR 101 phase.  The current proposed rule contains improvements which 
address a number of the concerns we had addressed.   These comments address 
specific items, as requested by the Notice of Proposed Rulemaking.
 Cost Recovery.  Public Counsel recommends that the Commission amend the rule 
to preserve the current method of cost recovery laid out in existing  WAC 
480-120-420.  That rule provides, in summary, that costs are first recovered 
from subscribers who benefit from new EAS service, next from earnings, if 
appropriate, and only then, if necessary from all of the company’s local 
exchange rates.  WAC 480-120-420(2).  The proposed rule appears to depart from 
this approach, providing instead for an “automatic” increase in all local rates 
of up to 25 cents as the chief method of cost recovery after a company showing 
of costs.  This is inequitable for two reasons.  First, this will result in 
many customers experiencing a rate increase with no additional increase in 
service.  Second, the current rule takes away the Commission’s ability to look 
at company earnings as a possible method of recovery after a company showing of 
costs.  A general local rate increase should only occur as a last resort, after 
the Commission has determined that a company’s earnings level requires such an 
increase.  In addition to incorporating the existing recovery structure, the 
amended rule should retain the “caps” contained in the proposal.   It is not 
clear why Staff is recommending this departure from the approach in the 
existing rule.  While the proposed rule does not specify how a general local 
rate EAS additive would appear on the bill, the proposed approach is 
particularly problematical when local customers are beginning to see surcharges 
and line items for a whole range of items ranging from USF to number 
portability charges, all of which have the effect of driving up local rates 
with no concurrent benefits for local customers. 
 Waiver.  Public Counsel reiterates the recommendation contained in our May 11, 
1998, comments that the rule include a provision allowing customers, as well as 
local exchange companies, to petition for waiver.  Section 2(b) of the proposed 
rule provides for “waiver,” i.e., approval of an area not including one of the 
communities listed in section 2(a), but only upon company petition.  Customers 
should also be afforded the same right.  The sole purpose of the local calling 
area rule is to meet customers’ calling needs.  Customers  and communities are 
at least as well situated as local exchange companies to determine the level of 
need for local calling.   Particularly given the rule’s inclusion of specific 
named communities, a practical but unavoidably arbitrary approach, a “safety 
valve” allowing customers to petition should be added.  Section 2(b) should be 
amended to read:
The commission may approve a local calling area that does not include any of 
the exchanges listed above if the local exchange company demonstrates that the 
local calling area is adequate to meet the requirements of subsection (1) of 
this section.  The commission may approve a local calling area that does not 
include any of the exchanges listed above if it receives a petition from a 
local government or reasonably representative group of customers in an exchange 
to be benefited, upon a demonstration that the local calling area is adequate 
to meet the requirements of subsection (1) of this section.
 
 Thank you for your consideration of these comments.
 Respectfully submitted, 
 DATED:  June 26, 1998.

       CHRISTINE O. GREGOIRE
       Attorney General


       Simon J. ffitch
       Assistant Attorney General
       Public Counsel