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PA Bulletin, Doc. No. 03-688



Clarification Order

[33 Pa.B. 1904]

Public Meeting held
March 21, 2003

Commissioners Present: Glen R. Thomas, Chairperson; Robert K. Bloom, Vice Chairperson; Aaron Wilson, Jr., dissenting statement follows; Terrance J. Fitzpatrick; Kim Pizzingrilli

Petition of Rural Incumbent Local Exchange Carriers for Clarification and Modification of Commission Order entered January 15, 2003; Doc. No. P-00971177

Petition of Armstrong Telecommunications, Inc. for Reconsideration and Modification of Commission Order entered January 15, 2003

Clarification Order

By the Commission:

   The current matter before this Commission consists of two petitions for reconsideration, modification and clarification of the Commission's Order entered January 15, 2003, at this docket (January 15 Order), in which the Commission denied the request for relief brought by two groups of rural incumbent local exchange carriers (Rural ILECs), under section 251(f)(2) of the Telecommunications Act of 1996 (TA-96), 47 U.S.C.A. §§ 101, et seq. The Rural ILECs sought and were denied an additional 36-month suspension of interconnection obligations under section 251(b)(1) and (c) of TA-96, beyond the 5-year total suspension they had initially been granted by the Commission.

   We grant reconsideration of our January 15 Order for the limited purpose of clarifying certain issues raised by the Rural ILECs with respect to the burden of proof and the ''undue economic burden'' test in a proceeding under section 251 of TA-96 challenging the continued rural exemption. We deny reconsideration sought by Armstrong Telecommunications, Inc. (Armstrong) and reaffirm our holding that Citizen's Communication, Inc., is entitled to the continuation of its rural exemption, unless challenged by a bona fide request for interconnection.

Rural ILECs Petition for Clarification

   (1)  Burden of proof in section 251 proceeding challenging the rural exemption.

   The Rural ILECs maintain, and we agree, that nothing in our order should disturb the traditional burden of proof in a proceeding challenging the rural exemption. In a section 251(f)(1)(B) challenge to the rural exemption the ultimate burden of proof rests with the competitor seeking to defeat the exemption. Nothing in our January 15 Order was intended to disturb this. The statements in our January 15 Order of concern to the rural carriers merely recognized that the Rural ILECs will have the opportunity, if necessary, to present evidence to refute any challenge to their continued rural exemption.

   (2)  Proof sufficient to establish ''undue economic burden.''

   The Rural ILECs maintain, and again we agree, that our January 15 Order should not and does not disturb the evidence properly considered to establish an ''undue economic burden'' upon a rural carrier by competitive entry. The test in section 251(f)(1)(B) is total economic burden on ILEC, and is not meant to exclude consideration of the economic burden ''typically associated with competitive entry.''

   The language in our January 15 Order, to which the Rural ILECs refer, pointed out that we were unpersuaded by the speculative nature of the petitioners' allegations of economic harm, and was intended only to point out that adverse impact on Rural ILEC so speculative and unsupported is not sufficient to warrant further suspension under section 251(f)(2). We stated that ''the Rural ILECs asserted basis for the suspension is speculative and offers no quantifiable proof or firm evidence, other than supposition, that harm would result if the suspensions are lifted.'' January 15 Order at p.11. By this order we clarify that ''undue economic harm'' is to be determined based on consideration of the entire economic burden born by the Rural ILEC.

   (3)  Use of the phrase ''competitive advantage.''

   The Rural ILECs also urge that the use of the phrase ''competitive advantage'' in our January 15 Order so misconstrues the intent of the steps taken by this Commission, to reduce competitive IXC rates and make up revenue losses from monopoly local service rates and USF fund, as to warrant clarification. We disagree. The steps taken clearly do amount to a competitive advantage to ILECs in the interexchange (or toll) services markets. That the competitive advantage was given for the purpose of ''leveling the playing field,'' does not negate the effect of ''competitive advantage'' to which our January 15 Order referred. In any event, the reference to ''competitive advantage enjoyed by the rural ILECs'' was not operative to our decision in the matter. To the contrary, our decision turned on the insufficiency of the evidence offered to support the request for an additional 36-month extension of the suspension from interconnection obligations.

Armstrong Petition for Reconsideration

   We next consider the request for reconsideration filed by Armstrong. Once again Armstrong raises a question regarding the continued exemption of Citizens Telephone Company of Kecksburg (Citizens), given this Commission's decision in Applications of Armstrong Communications, Inc.; Petitions of Citizens Telephone Company of Kecksburg for Suspension and Streamlined form of Regulation, Doc. Nos. A-310583F0002, A-310583F0004, P-00971229, Order entered April 28, 1999 (Armstrong/Citizens). As we noted in our January 15 Order at p. 2 fn. 1, this Commission has already considered the issue now raised by Armstrong in its petition for reconsideration when the Commission considered and rejected Armstrong's comments offered in opposition to the Citizen petition. See, Comments of Armstrong, p. 3.

   As we noted, Armstrong commented that Citizens' request for joinder should be denied because Citizen's standing rural exemption was terminated by our order in Armstrong/Citizens. However, we concluded that TA-96 intends that the exemption stand unless a bona fide request for interconnection is received and a contemporaneous offer of proof supports the termination of the exemption. We also noted that TA-96 grants this Commission authority to modify or suspend the interconnection obligations of a rural ILEC at any time. In exercise of this authority, we concluded that Citizens, like the other petitioners, shall continue to be entitled to the exemption, unless and until challenged by bona fide request for interconnection. If a bona fide request for interconnection is made to Citizens, we found that our decision in Armstrong/Citizens will be relevant to termination of the exemption. However, Citizens will be afforded the opportunity to show a change in circumstances.

   Thus, as Armstrong's request for reconsideration again raises the same arguments offered in opposition to the underlying petition, which we considered and rejected and no new arguments have been raised, Armstrong fails to meet the standard established in Duick v. Pennsylvania Gas and Water Company, 56 Pa. P.U.C. 533 (December 17, 1982) for granting reconsideration.1

   Accordingly, we conclude that the request of the Rural ILECs for reconsideration/clarification should be granted in part and denied in part and the Armstrong petition for reconsideration should be denied2 ; Therefore,

It Is Ordered That:

   1.  The request of joint Petitioners: Armstrong Telephone Company--North; Armstrong Telephone Company--Pennsylvania; Bentleyville Communications Corp. d/b/a/ The Bentleyville Telephone Company; Buffalo Valley Telephone Company; Conestoga Telephone & Telegraph Company; Denver and Ephrata Telephone & Telegraph Company d/b/a D&E Telephone Company; Hickory Telephone Company; Ironton Telephone Company; Lackawaxen Telephone Company; Laurel Highlands Telephone Company; Marianna & Scenery Hill Telephone Company; The North-Eastern Pennsylvania Telephone Company; North Penn Telephone Company; North Pittsburgh Telephone Company; Palmerton Telephone Company; Pennsylvania Telephone Company; Pymatuning Independent Telephone Company; South Canaan Telephone Company; Venus Telephone Company; Yukon-Waltz Telephone Company; Citizens Telephone Company of Kecksburg; Frontier Communications of Breezewood, Inc.; Frontier Communications of Canton, Inc.; Frontier Communications of Pennsylvania, Inc.; Frontier Communications of Lakewood, Inc.; Frontier Communications of Oswayo River, Inc.; TDS TELECOM/Mahanoy and Mahantango Telephone Company; and TDS TELECOM/Sugar Valley for reconsideration/clarification of the Order entered January 15, 2003, at Docket No. P-00971177 is granted for the limited purpose of clarification consistent with the discussion in this order.

   2.  The petition for reconsideration of Armstrong Telecommunications, Inc. is denied.

   3.  The Secretary serves a copy of this Order upon all parties.

   4.  The Secretary publishes notice of this order in the Pennsylvania Bulletin.


Dissent of Commissioner Aaron Wilson, Jr.

   Today's majority seeks to bolster their decision of January 15, 2003 regarding the Petitioners' request for relief under 251(f)(2).

   The Commission is issuing today's order as a ''clarification'' because we missed the statutory period for granting reconsideration pending further review of the merits. Reconsideration, as opposed to clarification, would have allowed the Commission to reconsider, reexamine, or modify our January 15, 2003 order.

   I dissented from our January 15, 2003 Order, inter alia, because of statements about the Petitioners' failure to meet their burden of proof under Section 251(f) of the Telecommunications Act of 1996. That issue could have been addressed in a reconsideration order. However, our failure to timely preserve our authority to act precludes us from reconsidering the matter further.

   Consequently, today's decision is styled as a ''clarification'' of our January 15, 2003 order even though, in fact, it substantively modifies or bolsters the January 15, 2003 decision. The Commission's January 15, 2003 order stated that ''we find that the Petitioners have failed to sustain the burden of proof warranting continued suspension of interconnection obligations.'' Today's determination states that ''nothing should disturb the traditional burden of proof in a proceeding challenging the rural exemption.'' This change alters our January 15, 2003 conclusion about the Petitioners' putative failure to meet their burden of proof under Section 251(f) in the face of court determinations, cited in my dissent, for the proposition that Petitioners do not have such a burden of proof. The Commission cannot clarify this statement by claiming that nothing disturbs the burden of proof when, in fact, the January 15, 2003 order made pronouncements about the burden of proof.

   Second, today's discussion on ''undue economic burden'' attempts to rectify the earlier dismissal of the Petitioners' claim that costs, such as those associated with entry, may not be quantifiable but that they do constitute a cost that warrants consideration under Section 251(f). The January 15, 2003 order dismissed such cost claims as ''speculative'' in nature. Today's clarification statement about the intent of the January 15, 2003 order effectively bolsters the Commission's position in the event of an appeal. The purpose of a clarification is not to bolster a prior decision but, in fact, to explain that decision. Bolstering a decision is more properly the province of a reconsideration order and not a clarification order.

   Finally, the discussion of ''competitive advantage'' contains a major substantive analysis of the Commission's universal service fund and interexchange carrier rates that is not appropriate in a clarification. Today's clarification, for the first time, makes the novel conclusion that there is a ''competitive advantage'' possessed by the incumbent local exchange carriers (ILECs) in the interexchange (toll) services markets. This is more than a clarification. It constitutes a substantive change in our view on the currently competitive toll markets in Pennsylvania.

   I disagree.

[Pa.B. Doc. No. 03-688. Filed for public inspection April 11, 2003, 9:00 a.m.]


1  Further, the PUC is authorized per section 703(g) of the Public Utility Code, to amend or reverse its own prior order after notice and opportunity to be heard is afforded the parties. In this case, Armstrong received notice of Citizens' petition seeking an extension of the suspension. Armstrong availed itself of the opportunity to be heard in opposition to that petition and did in fact make the same arguments now raised as the basis for reconsideration. Thus, the requirements of 703(g) are satisfied and the Commission was authorized to alter its prior determination.

2  Although the parties have petitioned for review before Commonwealth Court, the PUC retains authority to clarify the January 15 Order as long as no substantive changes are made. Pa. Industrial Coalition v. Pa. PUC, 653 A.2d 1336 (Pa. Cmwlth. 1995)

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