STATE OF IOWA DEPARTMENT OF COMMERCE UTILITIES BOARD GREAT LAKES COMMUNICATION CORPORATION S MOTION TO CLOSE DOCKET AND FOR OTHER RELATED RELIEF
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1 STATE OF IOWA DEPARTMENT OF COMMERCE UTILITIES BOARD IN RE: GREAT LAKES COMMUNICATION CORP. DOCKET NO. SPU (TCU-05-6) GREAT LAKES COMMUNICATION CORPORATION S MOTION TO CLOSE DOCKET AND FOR OTHER RELATED RELIEF Great Lakes Communication Corporation ( GLCC or Great Lakes ), by counsel, respectfully moves for the Board to close the above-captioned docket and for other related relief. Because GLCC has fulfilled the requirements set forth by the Board to demonstrate that it is providing adequate telephone service in its certificated exchanges, the Board should proceed to close this docket and suspend GLCC s monthly reporting requirements. In so doing, the Board should deny Qwest Communications Company, LLC s ( Qwest ) pending motion to revoke GLCC s certificate, release a portion of the pending escrow account insofar as it relates to amounts being held as potential damages for Sprint Communications Company, LP ( Sprint ), approve an intrastate access tariff for GLCC, and allow GLCC to provide competitive phone services in the Spencer exchange. BACKGROUND A detailed narrative of the events leading to this proceeding is set forth in GLCC s Post- Hearing brief filed on November 21, 2011 and is incorporated by reference herein. Of particular relevance to this Motion, the Board commenced this Show Cause Proceeding on June 6, See In re: Great Lakes Commc ns Corp., Docket No. SPU , Order Initiating Show Cause Proceeding (IUB, June 6, 2011) ( Show Cause Order ).
2 Great Lakes filed its initial response to the Show Cause Order on July 11, Interveners Qwest, 3 Sprint, 4 and AT&T Communications of the Midwest, Inc. ( AT&T ) 5 filed their prepared testimony on August 31, Great Lakes filed rebuttal testimony on September 12, A hearing was held before the Board on October 19, 2011 (the Hearing ). Post-hearing briefs 7 and reply briefs 8 were filed by Great Lakes and the other parties in the proceeding. 2 See In re: Great Lakes Commc ns Corp., Docket No. SPU , Great Lakes Communication Corp. s Response to Order Initiating Show Cause Proceeding (IUB, July 11, 2011). 3 See In re: Great Lakes Commc ns Corp., Docket No. SPU , Qwest Communications Company, Direct Testimony of William R. Easton (IUB, Aug. 31, 2011). 4 See In re: Great Lakes Commc ns Corp., Docket No. SPU , Sprint Communications Company, L.P., Direct Testimony of James R. Burt (IUB, Aug. 31, 2011). 5 See In re: Great Lakes Commc ns Corp., Docket No. SPU , Prepared Testimony of Lawrence J. Bax on Behalf of AT&T Communications of the Midwest, Inc. (IUB, Aug. 31, 2011). 6 See In re: Great Lakes Commc ns Corp., Docket No. SPU , Prepared Rebuttal Testimony of Joshua D. Nelson on Behalf of Great Lakes Communication Corp. (IUB, Sept. 12, 2011). 7 See In re: Great Lakes Commc ns Corp., Docket No. SPU , Great Lakes Communication Corporation s Post-Hearing Brief (IUB, Nov. 21, 2011); In re: Great Lakes Commc ns Corp., Docket No. SPU , Post Hearing Brief of Sprint Communications Company, L.P. (IUB, Nov. 21, 2011); In re: Great Lakes Commc ns Corp., Docket No. SPU , Qwest s Initial Post-Hearing Brief (IUB, Nov. 21, 2011); In re: Great Lakes Commc ns Corp., Docket No. SPU , Initial Brief of the Office of Consumer Advocate (IUB, Nov. 21, 2011); In re: Great Lakes Commc ns Corp., Docket No. SPU , AT&T s Initial Brief (IUB, Nov. 21, 2011). 8 See In re: Great Lakes Commc ns Corp., Docket No. SPU , Great Lakes Communication Corporation s Post-Hearing Reply Brief (IUB, Dec. 5, 2011); In re: Great Lakes Commc ns Corp., Docket No. SPU , Reply Brief of Sprint Communications Company, L.P. (IUB, Dec. 12, 2011); In re: Great Lakes Commc ns Corp., Docket No. SPU , Qwest s Post-Hearing Reply Brief (IUB, Dec. 12, 2011); In re: Great Lakes Commc ns Corp., Docket No. SPU , Reply Brief of the Office of Consumer Advocate (IUB, Dec. 12, 2011); In re: Great Lakes Commc ns Corp., Docket No. SPU , AT&T s Reply Brief (IUB, Dec. 12, 2011). 2
3 On March 30, 2012, the Board released its order in the Show Cause Proceeding. 9 The Board concluded, inter alia, that GLCC failed to provide adequate telephone service in the exchanges where it is authorized to provide service pursuant to Iowa Code The Board s order required GLCC to (a) provide full-featured local exchange service in the Lake Park and Milford, Iowa, exchanges within six months; (b) engage in aggressive marketing of competitively-priced comparable services to the offerings of the incumbent local exchange carrier in each exchange; (c) file monthly reports regarding its plans and progress; (d) demonstrate the managerial ability to provide adequate local exchange service in the Lake Park and Milford exchanges... by submitting the plan described Ordering Clause No. 3(a) and by executing it in a timely and successful manner; (e) establish [ ] a reasonable mechanism for parents to block access by minors to adult content conference calling services offered by Great Lakes conference calling companies; and (f) establish an escrow account with an independent financial institution. 11 The Final Order also rejected the proposed tariff filed by Great Lakes on November 19, 2009 in Docket TF , which would have authorized GLCC to serve the Spencer, Iowa exchange. 12 Since the Final Order was released, GLCC has undertaken each of the tasks required by the Board to fulfill its commitment to providing competitive local exchange services in Lake Park and Milford. GLCC filed its Business, Marketing and Regulatory Compliance Plan as contemplated by the Final Order on April 30, It included a detailed plan for providing 9 In re: Great Lakes Commc ns Corp., Docket No. SPU , Final Order (IUB, Mar. 30, 2012) (the Final Order ) Id., Ordering Clause No. 1. Id., Ordering Clauses No Id., Ordering Clause No. 7. 3
4 local exchange service in the Lake Park and Milford exchanges, a timeline showing the steps Great Lakes needs to complete in order to provide local exchange service in the Lake Park and Milford exchanges, and a detailed description of any personnel needs or vendors from whom services will be required. 13 Since then, GLCC has updated the Board regarding its progress on a monthly basis. 14 GLCC successfully met the Board s requirements that it demonstrate to the Board that it has the technological ability to provide service in a reasonable portion of the Lake Park and Milford exchanges within four months 15 and demonstrate to the Board that it is providing local exchange service in the Lake Park and Milford exchanges to unrelated end user customers within six months. 16 Indeed, as of its most recent report, filed on March 29, 2013, GLCC demonstrated that its retail IGL TeleConnect brand name was serving 221 customers. 17 Of those, 52 customers procured IGL TeleConnect s local exchange service. 18 Consistent with the Board s Final Order, GLCC identified Farmers Trust and Savings Bank of Spencer, Iowa as an independent financial institution with which to create an escrow account and worked with the Board s staff to draft a suitable escrow agreement. 19 That escrow Id., Order Clause No. 3(a). See In re: Great Lakes Commc ns Corp., Docket No. SPU , Monthly Status Update Reports filed on May 30, 2012, June 29, 2012, July 30, 2012, August 30, 2012, September 28, 2012, November 2, 2012, November 30, 2012, January 2, 2013, January 30, 2013, February 28, 2013, and March 29, Final Order, Ordering Clause No. 3(c) Id., Ordering Clause No. 3(e). See In re: Great Lakes Commc ns Corp., Docket No. SPU , March 2013 Monthly Status Report, 3 (IUB, Mar. 29, 2013). As noted in the monthly reports, GLCC reports all of its customers, including those that have procured only internet service and thus are not local exchange customers, in an effort to keep the board fully apprised of its efforts. A breakdown of each customer type is included in the monthly reports Id. See Affidavit of Joshua D. Nelson, 4 ( Nelson Aff. ) (attached hereto as Exhibit A). 4
5 agreement was finalized and approved by the Board on June 6, 2012 and was funded by GLCC that same day. 20 The escrow account represented funds that would be available to refund intrastate access charges previously paid by Qwest and Sprint. 21 Since that time, GLCC and Sprint have resolved their differences through a settlement approved by the Board. 22 As such, amounts held in escrow that related to Sprint can now be released. As previously relayed to the Board in the monthly status reports, GLCC undertook efforts to create a reasonable mechanism for consumers who desired to block their phones from access the chat-line services provided by GLCC s customers. While these efforts were on-going, Qwest filed a Motion seeking to have GLCC s Certificate of Public Convenience and Necessity Revoked or an order requiring GLCC to cease providing services to chat-line providers. 23 GLCC opposed the Qwest Motion on September 11, GLCC finalized the implementation of its reasonable mechanism to block access to chat-lines on GLCC s network around that same time period by establishing a single, unified number ( ) that parents call to have chat Id. 5. Id Id. 6; see also Qwest Commc ns Corp. v. Superior Tel. Co., Docket No. FCU-07-2, Order Granting Motions to Dismiss (IUB, Jan. 3, 2013). 23 See In re: Great Lakes Commc ns Corp., Docket No. SPU , Qwest s Motion for an Order Revoking Great Lakes s Certificate; Motion for an Order Requiring Disconnection from Adult Content Providers (IUB, Aug. 28, 2012) ( Qwest Motion ). 24 See In re: Great Lakes Commc ns Corp., Docket No. SPU , Great Lakes Communication Corporation s Opposition to Qwest s Motion for an Order Revoking Great Lakes s Certificate; Motion for an Order Requiring Disconnection from Adult Content Providers (IUB, Sept. 11, 2012) ( GLCC Opposition ). 5
6 lines on GLCC s network blocked. 25 GLCC now mandates that all chat-lines on the network provide this telephone number as part of their introductory message to callers. DISCUSSION I. QWEST S MOTION TO REVOKE GLCC S CPCN SHOULD BE DENIED Qwest s Motion seeking the revocation of GLCC s certificate or a directive to GLCC to stop providing service to chat-line customers remains pending in the docket, but should be promptly denied. As described fully in GLCC s Opposition, Qwest s Motion is procedurally defective. The Qwest Motion was filed in this docket after the Board had already issued the Final Order concluding that no revocation would occur in this proceeding. Thus, Qwest s Motion was either an untimely petition for reconsideration or an untimely motion to reopen the record. Moreover, the Qwest Motion was procedurally defective because the Board provided that GLCC would have six months to implement a reasonable blocking mechanism for chat-line services, and that time had not expired when Qwest s Motion was filed. Qwest s Motion also fails and should be denied on the merits or as moot. Despite repeated briefing of the issue by GLCC, Qwest failed to show that a revocation would comport with the First Amendment or that the Board s authority in this area was not preempted by federal law. Further, Qwest s Motion was premised on the affidavit of a witness whose information was out of date and inaccurate at the time of filing. In reality, there was not then and is not now a factual basis to support Qwest s assertion that GLCC failed to implement a reasonable blocking mechanism. Qwest s Motion should thus be denied as moot as GLCC has implemented a reasonable blocking mechanism as described in its monthly reports to the Board. Finally, 25 See In re: Great Lakes Commc ns Corp., Docket No. SPU , September 2012 Monthly Status Report, 6 (IUB, Sept. 28, 2012). 6
7 Qwest s effort to have GLCC s CPCN revoked should be denied on public interest grounds as the citizens of Lake Park and Milford would be poorly served by a decision that reduced, rather than expanded, Qwest s competition in those exchanges. For these reasons, and those set forth more fully in GLCC s Opposition, Qwest s Motion should be promptly denied. II. THE BOARD SHOULD SUSPEND THE REPORTING REQUIREMENTS AND CLOSE THE DOCKET GLCC s monthly status reports have detailed its efforts to comply with the Board s Final Order and also demonstrated that GLCC is successfully marketing its services and attracting traditional end user customers in the Lake Park and Milford exchanges where GLCC is certificated. Since a year has passed since the Board s Final Order and GLCC s submission of its detailed plan, the Board should suspend the reporting requirements and close this docket. The Board s precedent in LTDS Corporation, 215 P.U.R. 4th 110 (IUB, 2002), demonstrates that it is a reasonable time for the Board to reassess whether continued reporting is necessary. Further, the record established in this proceeding through GLCC s monthly reports and two Boardordered inspections demonstrate that GLCC has the technical ability to provide local exchange services throughout the Lake Park and Milford exchanges, is aggressively marketing its service, and has successfully attracted customers. Accordingly, the Board should suspend the monthly reporting requirements and close this docket. III. THE PORTION OF THE ESCROW THAT RELATES TO SPRINT SHOULD BE RELEASED As noted above, GLCC established an escrow account as required by the Final Order. A portion of the funds deposited into that account relate to amounts that would have been refunded to Sprint for previously-paid intrastate access charges. However, in Docket FCU-07-2, the Board 7
8 has approved a settlement between GLCC and Sprint. As a result, GLCC respectfully requests that $56, of the escrowed funds be released to GLCC. 26 IV. AN INTRASTATE ACCESS TARIFF FOR GLCC SHOULD BE APPROVED On March 29, 2012, GLCC proposed an intrastate access tariff that intended to comply with the Board s rules regarding high volume access service (HVAS) traffic. The proposed tariffed rate for all access traffic was $0.007/mou, which no party disputes is at or below GLCC s cost for providing intrastate access service. GLCC provided notice to its interexchange carrier (IXC) customers (i.e., long distance carriers) of its intent to provide HVAS service as provided in 199 IAC 22.14(2) e. Great Lakes proposed an effective date for this tariff of April 30, No IXC sought negotiations regarding GLCC s proposed tariff. Nevertheless, when GLCC filed the tariff, CenturyLink, Sprint, and the Office of Consumer Advocate each sought to have the tariff suspended or rejected. The Board suspended the tariff and established a contested case proceeding in Docket No. TF in part [b]ecause the issues surrounding Great Lakes certificate are not yet settled. 27 Since that time, no further action has been taken regarding the proposed intrastate access tariff. Assuming the Board agrees that GLCC has now demonstrated that is providing adequate local exchange service, and because GLCC has relocated its high volume customers to its certificated exchanges, GLCC believes the arguments that caused the Board to suspend GLCC s tariff modifications are moot. Accordingly, GLCC respectfully urges the Board to avoid further 26 See Nelson Aff., 7 and Exhibit 1 to Nelson Aff. (providing the amount of intrastate access charges paid by Sprint, which represents the amount that should be released to GLCC). 27 In re: Great Lakes Commc ns Corp., Docket No. TF , Order Suspending Tariff and Initiating Contested Case Proceeding, 10 (IUB, Apr. 30, 2012). 8
9 delay and expense by allowing the intrastate access tariff to become effective and close Docket No. TF at the same time as it closes this docket. 28 V. THE BOARD SHOULD APPROVE GLCC S REQUEST TO ADD THE SPENCER EXCHANGE In the Final Order, the Board denied GLCC s request to revise its local exchange tariff to add the Spencer exchange. However, the Board also stated that [w]hen Great Lakes is successfully offering local exchange service in the Lake Park and Milford exchanges, it may apply for authority to offer service in additional exchanges, if it wants to do so at that time. 29 Because GLCC is successfully offering local exchange service in Lake Park and Milford, it requests that the Board approve the proposed tariff modification to GLCC to serve the Spencer exchange. As GLCC s monthly status reports have demonstrated, a number of customers in the Spencer exchange have already opted to switch to GLCC s internet service offerings and GLCC s installed equipment has the technical ability to enable GLCC to provide local exchange services throughout the Spencer exchange. Thus, there is no technological impediment to GLCC providing local exchange service in the Spencer exchange in the same way it does in Lake Park and Milford. As such, with the Board s approval, GLCC is prepared immediately to provide competitive telephone service in Spencer as well. For this reason, GLCC respectfully requests that the Board revisit GLCC s prior tariff modification request and allow it to add the Spencer exchange. 28 If the Board feels that there are any remaining issues about GLCC s proposed intrastate tariff, then GLCC requests the Board proceed to determine a procedural schedule to address and resolve those issues. 29 Final Order at 31. 9
10 CONCLUSION For the foregoing reasons, and as fully described in the monthly reports, GLCC is successfully providing local exchange services in the Lake Park and Milford exchanges as required by the Board s Final Order. Having demonstrated its technical ability, and its commitment, to provide competitive services in these exchanges, GLCC respectfully requests the following relief: (a) (b) (c) (d) (e) deny Qwest s Motion to revoke GLCC s CPCN; suspend GLCC s monthly reporting requirements and close this docket; release the portion of the escrow funds related to Sprint; approve GLCC s intrastate access tariff; and allow GLCC to provide competitive phone service in the Spencer exchange. Dated: April 30, 2013 Respectfully submitted, /s/ Anthony Osborn Anthony Osborn Goosmann Law Firm, PLC 701 Pierce Street, Suite 401 Sioux City, IA (fax) Jeana@GoosmannLaw.com Anthony@GoosmannLaw.com 10
11 Ross A. Buntrock* G. David Carter* Arent Fox LLP 1717 K Street, NW Washington, DC (fax) buntrock.ross@arentfox.com carter.david@arentfox.com *admitted pro hac vice Counsel for Great Lakes Communication Corp. 11
12 EXHIBIT A
13 STATE OF IOWA DEPARTMENT OF COMMERCE UTILITIES BOARD IN RE: GREAT LAKES COMMUNICATION CORP. DOCKET NO. SPU (TCU-05-6) AFFIDAVIT OF JOSHUA D. NELSON IN SUPPORT OF MOTION TO CLOSE DOCKET AND FOR OTHER RELATED RELIEF I, Joshua D. Nelson, being of full age and duly sworn according to law, do hereby depose and state as follows: 1. My name is Joshua D. Nelson. I am the Chief Executive Officer of Great Lakes Communication Corporation ( GLCC ). 2. GLCC is filing herewith a Motion to Close Docket and for Other Related Relief (the Motion ). This Affidavit is filed in support of the Motion and, in particular, the request that a portion of the escrow funds be released to GLCC. 3. As part of the Board s Final Order in this matter, the Board directed GLCC to establish an escrow account in the amount that I testified had been collected by GLCC for intrastate access charges for calls terminating to conference call providers. The escrow account represented funds that would be available to refund intrastate access charges previously paid by Qwest and Sprint with regard to the matters adjudicated in Qwest Communications Corp. v. Superior Tel. Co., Docket No. FCU Though the Board s Final Order notes that AT&T was a party to FCU-07-2, GLCC had already satisfied its refund obligations to AT&T at the time of the hearing in this matter.
14 4. Consistent with the Board s Final Order in this docket, GLCC identified Farmers Trust and Savings Bank of Spencer, Iowa as an independent financial institution with which to create an escrow account and worked with the Board s staff to draft a suitable escrow agreement. 5. The escrow agreement was finalized and approved by the Board on June 6, The escrow account was funded by GLCC that same day. 6. Since that time, GLCC and Sprint have resolved their differences through a settlement approved by the Board. 2 As such, amounts held in escrow that related to Sprint can now be released. 7. As reflected on the attached Exhibit 1, the amount of intrastate access charges collected by GLCC from Sprint totaled $56, Because Sprint s claim with regard to intrastate access charges has been fully resolved, there is no longer a need for this amount to remain in escrow. 8. Accordingly, on behalf of GLCC, I respectfully request that the Board authorize Farmers Trust and Savings Bank of Spencer, Iowa to release $56, to GLCC. The remaining funds will continue to remain in escrow until such time as the Board resolves Qwest s claim for a refund or the dispute is otherwise resolved. 2 See Qwest Commc ns Corp. v. Superior Tel. Co., Docket No. FCU-07-2, Order Granting Motions to Dismiss (IUB, Jan. 3, 2013). 2
15
16 EXHIBIT 1
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