DE 98-048 Public Interest Payphones Investigation Pursuant to Section 276(b)(2) of the Telecommunications Act of 1996 Order Approving Definition of Public Interest Payphones and Directing Establishment of Petition Process O R D E R N O. 23,077 December 7, 1998 APPEARANCES: Victor D. Del Vecchio, Esq. for Bell Atlantic; William Stafford and Christian Rand for Granite State Telephone, Inc.; Beth Osler for Merrimack Telephone Company and Contoocook Valley Telephone Company; Stephen Nelson for Dunbarton Telephone Company, Inc.; Linda Griebsh for the New Hampshire Coalition Against Domestic Violence; New Hampshire Legal Assistance by Alan Linder, Esq. for Save Our Homes Organization; James A. Sanborn for Union Telephone Company; Kenneth Traum and William Homeyer for the Office of the Consumer Advocate on behalf of residential ratepayers; and E. Barclay Jackson, Esq. for the Staff of the New Hampshire Public Utilities Commission. I. PROCEDURAL HISTORY The New Hampshire Public Utilities Commission opened this docket on April 10, 1998 pursuant to the Congressional mandate of Section 276(b)(2) of the Telecommunications Act of 1996 requiring each state to investigate whether public interest payphones (PIPs) should be maintained and, if so, to insure that such public interest payphones are funded fairly and equitably. At the duly noticed prehearing conference on May 5, 1998, the Parties and Staff summarized their positions and the Commission conducted informal discussion on the issues. By Order No. 22,940, (May 18,1998), the Commission granted intervenor status to Union Telephone Company (Union), the New England Public Communications Council, Inc. (NEPCC), New Hampshire Legal Assistance on behalf of the Save Our Homes Organization (SOHO), Bretton Woods Telephone Company, Inc., Contoocook Valley Telephone Company, Inc., Dunbarton Telephone Company, Inc., Merrimack County Telephone Company, Wilton Telephone Company, Inc., Hollis Telephone Company, Inc., Granite State Telephone Company, Inc., Northland Telephone Company of Maine, Inc., and Dixville Telephone Company. New England Telephone and Telegraph Company (Bell Atlantic) was recognized as a mandatory party to the docket and the Office of the Consumer Advocate (OCA) is a statutorily recognized intervenor. Order No. 22,940 provided additional time, until June 5, 1998, for other interested parties to intervene. The following parties filed for intervention by June 5, 1998: the New Hampshire Coalition Against Domestic and Sexual Violence, the New Hampshire Coalition for the Homeless, Chichester Telephone Company, Meriden Telephone Company, and Kearsarge Telephone Company. Order No. 22,940 also established a procedural schedule comprised of several rounds of written comments, technical discussion sessions and settlement discussions. As a result of the technical sessions and settlement discussions, Staff and most of the Parties reached agreement as to a definition of a PIP. On September 23, 1998, the Commission heard evidence regarding the agreed upon definition and on recommendations as to whether the Commission should take further action at this time to institute a PIP program. On October 5, 1998, Bell Atlantic filed, as a supplement to Exhibit 18, an order issued by the Vermont Department of Public Service regarding PIPs. II. POSITIONS OF THE PARTIES AND STAFF A. Definition of Public Interest Payphone Staff and all but two of the Parties agreed that the Commission should adopt a particular definition of public interest payphone. The proposed definition contains eight criteria and is reported below. Neither SOHO nor the New England Public Communications Council supported the proposed definition. The NHPCC did not object to the proposed definition but suggested that the Commission should not finalize the definition until after December 1999 when the competitive payphone market will have developed more fully. SOHO concurred with parts of the definition but objected to others, as discussed below. The following definition is proposed by Staff, Bell Atlantic, Bretton Woods Telephone Company, Chichester Telephone Company, Contoocook Valley Telephone Company, Dunbarton Telephone Company, Meriden Telephone Company, Merrimack County Telephone Company, Wilton Telephone Company, Hollis Telephone Company, Granite State Telephone Company, the NHCADSV, the New Hampshire Coalition for the Homeless, and the OCA. A PIP is one which meets all of the following criteria: 1. The payphone fulfills a public welfare, health or safety policy objective. 2. It is a single payphone at the location address, such that payphones which are part of a bank of phones will not be considered public interest payphones, and has no other payphone located within 750 feet, as measured along the route of ordinary pedestrian travel, which is physically accessible during the operating hours of the facility where the phone is located. 3. The request for the PIP is not from an applicant who has signed a contract with a payphone provider. This requirement applies to federal, state, or local government agencies that have signed a contract with a payphone provider, as well as private parties. A requested PIP may not be located on property owned or controlled by a party who has a signed contract with a payphone provider unless the property owner agrees to the PIP placement. Agencies or individuals with signed contracts can and should include payphones that fulfill public policy objectives in their payphone contracts. 4. The PIP would not otherwise exist as a result of the operation of the competitive marketplace and a need exists for the payphone. The need for the payphone must be demonstrated by the fact that the payphone has an actual or projected revenue minimum of $30 per month on an average annual basis or, in cases where usage can be measured, has an actual or projected average usage of 3.5 calls per day. Revenue includes all coin and non-coin revenue for local, intra-, and interLATA calls as well as any commissions or per call compensation paid to the payphone provider. 5. The payphone is not a coinless payphone. 6. The payphone accepts incoming phone calls. 7. Unless extraordinary circumstances exist to dictate otherwise, the general public has unrestricted physical access to the payphone 24 hours per day. 8. The agent on whose property the payphone is located receives no compensation from any source whatsoever related to the placement of the payphone nor any revenues generated from the payphone. SOHO objected to criteria 2, 3, and 4. According to SOHO the 750 foot distance, required by No. 2, between a PIP and any other payphone may be too far; No. 3 unreasonably prohibits a municipality from petitioning the Commission for a PIP; and No. 4 unreasonably requires that a PIP location have a projected or actual minimum average number of calls per month. Furthermore, SOHO recommended that the Commission define PIPs as payphones at existing locations as well as future locations in order to preclude any PIP from the risk of removal. SOHO stated that the better policy is for critical payphones to remain in existence rather than be subject to removal and then re-installation after being identified as PIPs. SOHO prefers that existing uneconomic payphones be designated as a PIP and hence avoid the jeopardy of removal. B. Whether Further Action Is Required by the Commission The Parties and Staff disagree as to whether the Commission should take further action on PIPs at this time. 1. Bell Atlantic According to Bell Atlantic, establishing any plans for PIPs at this point in the evolution of the competitive payphone market would be premature because the market is adjusting to changes instituted by FCC rules to promote competition. Bell Atlantic argues that the competitive market may well provide for payphones in areas the current market does not serve. Bell Atlantic recommends that any inquiries the Commission receives should be analyzed by the criteria specified in the stipulation. The analysis should be undertaken by the government agency responsible for the public's safety which owns or controls the property for which a PIP is requested. Only after a request has been analyzed and found to meet the criteria for a PIP, Bell Atlantic argues, should the Commission decide that a PIP program is needed. 2. New England Public Communications Council, Inc. NEPCC generally agrees with Bell Atlantic that the Commission should defer any action on PIPs for a minimum of 16 months while competitive market forces respond to the needs for payphone service in New Hampshire. During that time, NEPCC recommends that the Commission monitor data regarding payphone deployment and complaints and invite comment by specific user groups not being served adequately by the market. 3. Independent Telephone Companies Bretton Woods Telephone Company, Chichester Telephone Company, Contoocook Valley Telephone Company, Dunbarton Telephone Company, Meriden Telephone Company, Merrimack County Telephone Company, Wilton Telephone Company, Hollis Telephone Company, and Granite State Telephone Company, referred to collectively as the Independent Telephone Companies (ICOs) agree with Bell Atlantic that further action is premature at this point. However, the ICOs represented their willingness to join in a program if one is deemed necessary by the Commission. 4. SOHO It was SOHO's position that the evidence adduced at hearing established a need for PIPs in New Hampshire. Based upon testimony by SOHO, the New Hampshire Coalition for the Homeless and the New Hampshire Coalition Against Domestic and Sexual Violence, SOHO recommended that the Commission rule that the need exists and commence a program to provide PIPs. 5. New Hampshire Coalition Against Domestic and Sexual Violence The New Hampshire Coalition Against Domestic and Sexual Violence submitted a list of 38 proposed locations where a payphone would meet the public interest and no payphone currently exists. While these 38 locations have not been investigated in light of the proposed definition, the Coalition advised against waiting for competitive forces to address the problem. The Coalition argued that the need has been demonstrated and that significant lead time will be required to develop the program. Efforts to develop the program can go forward, the Coalition suggested, during the time the market is adjusting to FCC ordered changes. If the market resolves the problem before funds must be raised, so much the better. However, the Coalition doubted that few of the identified 38 locations would be served by the newly competitive market because they are very rural. Therefore, if any of the 38 meet the criteria of the definition, the Coalition expects those locations to need funding. 6. OCA The OCA recommended that the Commission commence a program to provide PIPs by establishing a method for citizens to petition the Commission. The OCA suggested that the Commission establish an Advisory Group, made up of various social agencies as well as telecommunications carriers, to make the determination whether a location meets the criteria contained in the definition. 7. Staff Staff argued that the Commission needs to take additional steps now to insure that PIPs are maintained in New Hampshire. Specifically, Staff recommended that the Commission perform an investigation of locations for which PIP petitions are filed to see whether those locations qualify as a PIP under the proposed definition of a PIP. At the time any location is found to be qualified, Staff recommended that the Commission implement a PIP program, including funding. In order to avoid a lag period, Staff recommended that the Commission investigate funding mechanisms now. III. COMMISSION ANALYSIS We have considered the evidence presented and appreciate the thoughtful efforts of those involved, especially those social service organizations which devoted time and resources to address this issue. Based on the record, we are convinced that a need exists in New Hampshire to implement a PIP program, as well as to define a PIP. Addressing the definition first, we will adopt with certain modifications the PIP definition contained in the stipulation among the majority of the parties. The definition as proposed requires clarification. References to "payphone" must be changed to "public interest payphone" in certain instances. In addition, we believe the definition would be clearer if it were divided into two parts: one part concerning the characteristics of the payphone itself and one part concerning the characteristics of the location where the payphone is placed. In addition, we believe that the definition should be modified in order to provide the opportunity for a waiver from the payphone characteristics requirements. We believe there should be an opportunity to request a waiver from any of the characteristics requirements, such as the requirement that a telephone take incoming calls, if extraordinary circumstances exist. With this in mind, we direct our Staff to meet with the parties to reorganize and rewrite the definition to meet these concerns. Addressing the need to implement a PIP program, we find that there is a need to establish a process for evaluating individual locations in light of the definition adopted. It is our intent that this process be used to evaluate requests for PIPs that would not otherwise be addressed by the free market situation that exists with payphones in general. We will direct Staff to meet with the parties to establish a process for evaluating individual locations for which petitions may be received by the Commission. We specifically make no finding at this time concerning whether any particular locations qualify for a PIP. As to funding, in the event that it is determined that there are PIP locations that meet the definition, a process will need to be established for developing a funding source for the PIP. After we have had an opportunity to review the revised definition and the proposed process for evaluating petitions, we would entertain suggestions on how to address the funding issue. We are open to suggestions from Staff and the parties on how such suggestions should be presented to the Commission, i.e., through a hearing or merely through written comments. We further find that the qualification process should not include establishing an advisory group to review and recommend disposition of PIP petitions. Such an advisory group would create an unnecessary, possibly duplicative, component in the process. We believe that Staff can adequately perform this function. Based upon the foregoing, it is hereby ORDERED, that the proposed definition of a PIP shall be modified pursuant to our discussion above and then submitted for our approval within 30 days from the date of this order; and it is FURTHER ORDERED, that Staff and the Parties shall meet to formulate the PIP petitioning process and shall submit their recommendation for such process to us for our approval. By order of the Public Utilities Commission of New Hampshire this seventh day of December, 1998. Douglas L. Patch Susan S. Geiger Chairman Commissioner Attested by: Thomas B. Getz Executive Director and Secretary