OAH Docket No. 12-2500-16769-2

PUC Docket No. P421/AR-05-1081

 

STATE OF MINNESOTA

OFFICE OF ADMINISTRATIVE HEARINGS

 

FOR THE PUBLIC UTILITIES COMMISSION

 

 

In the Matter of a Petition by Qwest Corporation for Approval of its Alternative Form of Regulation Plan

REPORT OF THE
ADMINISTRATIVE LAW JUDGE

 

 

1.               Public hearings in this matter were held in Rochester, Minnesota on October 3, 2005; St. Paul, Minnesota on October 4, 2005; Duluth, Minnesota on October 5, 2005 and Moorhead, Minnesota on October 6, 2005.

 

2.               In Rochester, Joan Peterson, Attorney at Law, appeared for Qwest; Mary McKinley, Assistant Attorney General, appeared on behalf of the office of Attorney General; and Lillian Brion appeared on behalf of the PUC staff.  They all made brief statements.

 

3.               Three members of the public made statements in Rochester.  All had been invited by Qwest to speak at the hearing.[1]  They were Gary Smith, Marge Hamersly and Janis Ray.

 

4.               Mr. Smith is the Executive Vice President of the Rochester Area Economic Development Corporation.  He is of the opinion that Qwest is now facing competition from all the new forms of communication, that Qwest should be free of regulation and free to compete in the marketplace, and that market choices should be left to consumers.  It is his view that there are some regulators who just want to “keep the game going as long as we can.”  He is also of the view that Qwest should not be required to meet higher quality of service standards than other providers.[2]

 

5.               Ms. Hamersly is the Executive Director of the Albert Lea and Freeborn County Chamber of Commerce.  Albert Lea has a population of 18,000 and Freeborn County has a population of 32,000.  She applauded Qwest for its charitable activities in her area.  The Qwest Foundation donated two grants that allowed the Chamber's own foundation to produce videos to assist the area’s growing Hispanic population and to conduct an education program for all citizens about the growing methamphetamine problem in the county.  She knew of no other company that has been as community service oriented as Qwest.  She also noted that the there is considerable communications competition, even in the rural areas of Freeborn County.[3]

 

6.               Ms. Ray is an officer in the Greater Minnesota Health Care Coalition and the Southeast Senior Federation.  She is also co-chair of the Qwest Consumer Advisory Panel.  The panel has existed for more than two decades and provides consumer advice to Qwest.  Its members are seniors and people with disabilities.  The panel meets regularly to review Qwest products and services to ensure that they are accessible and usable by all persons.  For example, the panel has advised Qwest product managers on handset design and readability of caller ID displays.  Their advice has been incorporated into new Qwest products.  When Qwest began opening kiosks at malls, the panel worked with Qwest to train its employees there to understand and address the needs of disabled persons more appropriately.  Ms. Ray feels that Qwest is unusual in its commitment to ensure that its network, products and services are accessible to all.  She hopes that the Public Utilities Commission recognizes the good work Qwest is doing.[4]

 

7.               In St. Paul, Ms. Peterson appeared on behalf of Qwest, Ms. McKinley appeared on behalf of the Office of Attorney General, and Diane Wells, Karen Hammel, and Ganesh Krishnan appeared on behalf of the Department of Commerce.  Lillian Brion appeared on behalf of the PUC.  Ms. Peterson, Ms. McKinley and Ms. Brion made brief statements.

 

8.               Rich Diedrichsen spoke at the St. Paul hearing.  He is a disabled person and a member of the Qwest Consumer Advisory Panel.  He is a lifetime advocate for people with disabilities and, although invited by Qwest, made it clear that he was not being compensated by Qwest to appear.  He stated that Qwest is the only phone company in the state with an active consumer advisory panel to advise them on the needs of people with disabilities, as well as seniors.  In his view, the commitment of Qwest to the input of this panel shows up in all of its products and services.  He gave several examples of Qwest's commitment to providing accessible products:

 

    1. Qwest produced a brochure on disability solutions in many accessible forms.
    2. Qwest made the Qwest website and its disability website fully accessible.
    3. Qwest placed amplified car phones at payphone sites.
    4. Qwest made TTY accessible payphones available at all state rest stops.
    5. Qwest provides frees TTY listings.
    6. Qwest trained kiosk personnel in the use of adaptive devices for persons with disabilities.
    7. Qwest produced an accessible caller ID unit with improved visual and auditory presentations.

Mr. Diedrichsen finds that Qwest makes a very sincere effort to be friendly toward people with disabilities, sensitive to their needs, and dedicated to producing products and services to meet the needs of the disabled and seniors.[5]

 

9.               In Duluth, JoAnn Hanson and Andrew Schriner appeared on behalf of Qwest and Lillian Brion appeared on behalf of the PUC.  Ms. Hanson and Ms. Brion made brief presentations.  Three persons invited by Qwest spoke at the hearing.  They were David Ross, Zane Bail and Kenneth Cusick.

 

10.           Mr. Ross is the President of the Duluth Area Chamber of Commerce.  He spoke in favor of the revised AFOR.  The Duluth Chamber believes customers in the marketplace should determine industry winners and losers, not government regulation.  If there is to be regulation, the Chamber believes it should be consistent and uniform in its application to Qwest and other providers.[6]

 

11.           Ms. Bell works for the Northland Foundation.  She was there to support Qwest because of its ongoing support of the Northland Foundation.  She described Qwest as a key corporate citizen in the area and region that has provided support to the foundation's children and youth initiatives.  For example, for the last 12 years, Qwest has supported the Foundation's annual Kids Plus Conference.  It has also supported the Grandma's Marathon in Duluth.  The Northland Foundation believes it is important that Qwest remain a healthy, competitive and stable company, and so it supports Qwest's revised AFOR plan.[7]

 

12.           Mr. Cusick is an employee of Qwest and vice president of the local CWA in Duluth.  He also spoke of the community service of Qwest and its employees.  They have charity fundraisers and donate to the United Way, Union Gospel Mission, the Lighthouse, the Churches United Ministry, the Salvation Army, and many others seeking donations.  He also noted that in his work in the wholesale division, he was personally aware of the competition Qwest is now facing from CLECs.[8]

 

13.           In Moorhead, JoAnn Hanson appeared on behalf of Qwest, Curtis Nelson appeared on behalf of the Office of Attorney General, and Lillian Brion appeared on behalf of the PUC.  They all gave brief presentations.

 

14.           Leonard Heltemes spoke at the hearing.  He is a retired Qwest employee and feels that the PUC should act in fairness to both Qwest and its competitors because the regulation has been unfair to Qwest for several years.  For example, competitors have been able to offer lower long-distance rates than Qwest in the past.  He believes the same rules should be applied to Qwest as are applied to its competitors.[9]

 

15.           Chester Nettestad also testified.  He is a Qwest construction network technician out of Detroit Lakes, Minnesota.  He is aware of the increased competition among local exchange carriers.  He happens to live in an area served by a local exchange carrier other than Qwest and would like the opportunity to be able to choose Qwest as his local provider.[10]

 

16.           Travis Hunter is also a network technician out of the Detroit Lakes office of Qwest.  In his view, the competition in Detroit Lakes has been unfair to Qwest.  In particular, there have been times when he is installing Qwest service, and the CLEC salespeople will walk in and talk the customers out of taking Qwest service while he is there.  He feels the rules have not been fair to Qwest and have not allowed it to compete on an even basis.[11]

 

17.           Ruth Ulvog asked a number of questions that Ms. Hanson and Mr. Nelson responded to, as did Ms. Brion.  She asked about the meaning of “affordable rates.”  Ms. Hanson discussed the concept and pointed out that Qwest had not increased its rates for some 20 years and that the residential one-party rate is still $13.96 in the outstate area and $14.94 in the metro area.  Ms. Ulvog also expressed concerns about dealing with service personnel located in distant service centers.  Ms. Hanson apologized for any difficulty she may have had, but assured her that the service centers were organized to provide personnel having the talent and skills to deal with service issues and to assure customer satisfaction.  Ms. Ulvog noted some difficulties with area code numbers in the border area near Moorhead, as did another member of the audience.[12]

 

18.           Ms. Ulvog also asked about the meaning of “pricing flexibility.”  Ms. Hanson explained that Qwest was requesting that the plan allow it to make changes in rates for certain services without getting prior approval from the PUC.  Most of those services would be business services or were additional services not required for basic services.  However, with respect to residential rates and business one-party rates, Qwest is not proposing any increases.[13]

 

19.           Six or seven other people attended the hearing in Moorhead, but did not speak.  Several of them spoke with Qwest and agency representatives after the hearing.

 

Dated November 2, 2005

 

                                                            /s/ Steve M. Mihalchick

 

Steve M. Mihalchick

Administrative Law Judge



[1] The fact that speakers at the public hearings were invited by Qwest is important in assessing any bias of the witnesses.  They are entitled to speak, but the Administrative Law Judge and the PUC are entitled as well to know about any factors helpful in evaluating their presentations.  Qwest should have revealed that the speakers had been invited prior to their presentations.

[2] Rochester Transcript (T.) 23-32.

[3] Rochester T. 32-38.

[4] Rochester T. 38-45.

[5] St. Paul T. 28-33.

[6] Duluth T. 12-13.

[7] Duluth T. 13-14.

[8] Duluth T. 15-20.

[9] Moorhead T. 15-17.

[10] Moorhead T. 17-19.

[11] Moorhead T. 19-21.

[12] Moorhead T. 21-31.

[13] Moorhead T. 36-37.