STATE OF CALIFORNIA Arnold Schwarzenegger, Governor
PUBLIC UTILITIES COMMISSION
505 VAN NESS AVENUE
SAN FRANCISCO, CA 94102-3298
March 02, 2004 Agenda ID#3293
Alternate to Agenda ID# 2976
Ratesetting
TO: PARTIES OF RECORD IN APPLICATION 01-02-012
Enclosed is the Proposed Alternate Decision of Commissioner Brown to the Proposed Decision of Administrative Law Judge (ALJ) Galvin previously mailed to you.
When the Commission acts on the draft or alternate decision, it may adopt all or part of it as written, amend or modify it, or set aside and prepare its own decision. Only when the Commission acts does the decision become binding on the parties.
Public Utilities Code Section 311(e) requires that an alternate to a draft decision be served on all parties, and be subject to public review and comment prior to a vote of the Commission. Rule 77.6(d) provides that comments on the alternate draft decision be filed at least seven days before the Commission meeting.
Comments on the alternate decision must be filed and served March 9, 2004. Reply comments are due March 12, 2004.
Pursuant to Rule 77.3 comments shall not exceed 15 pages. Finally, comments must be served separately on the ALJ and the assigned Commissioner, and for that purpose I suggest hand delivery, overnight mail, or other expeditious method of service.
/s/ ANGELA K. MINKIN
Angela K. Minkin, Chief
Administrative Law Judge
AKM:vfw
Attachment
COM/GFB/RW1/vfw ALTERNATE DRAFT Agenda ID #3293 Alternate to Agenda ID #2976
Ratesetting
Decision PROPOSED ALTERNATE DECISION OF COMMISSIONER BROWN
(Mailed 3/02/2004)
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
In the Matter of the Application of Verizon California Inc. (U 1002 C), a Corporation, for Authority to Re-Categorize Inside Wire Maintenance Plans and Billable Repair Service from Category II to Category III Service Offerings. |
Application 01-02-012 (February 7, 2001) |
Sullivan Sottile & Taketa LLP, by Timothy B. Sottile,
Attorney at Law, and Richard A. Chapkis, Attorney at
Law, for Verizon California, Inc., applicant.
James Anthony, Attorney at Law, for The Utility Reform
Network, interested party.
Laura J. Tudisco, Attorney at Law, for The Office of
Ratepayer Advocates.
TABLE OF CONTENTS
Title Page
OPINION 2
I. Summary 2
II. Jurisdiction 3
III. Prehearing Conference and Scope of Proceeding 3
IV. Pending Motions 4
V. Background 5
VI. Creation of Separate BRS Tariff Schedules for Business and Residential Customers 6
VII. Ratemaking Treatment of BRS and IWMP 7
VIII. Recategorization Request and Market Definition 7
IX. Market Power as the Central Issue 11
A. Ease of Market Entry and Exit 14
B. Supply Elasticity 20
C. Demand Elasticity 24
1. Business End-Users 25
2. Residential End-users 26
D. Conclusion 32
X. Ceiling Rates 32
XI. Comments on Proposed Decision 35
XII. Assignment of Proceeding 35
Findings of Fact 36
Conclusions of Law 41
ORDER 43
APPENDIX A - Billable Repair Services
APPENDIX B - Inside Wire Maintenance Repair Services
I. Summary
Verizon California Inc. (Verizon) offers two service options for repairing simple inside wire. Billable Repair Service (BRS) provides to customers on a time sensitive, as-needed basis, Verizon repair technicians. The Inside Wire Maintenance Plan (IWMP) service provides to customers the same repair technicians, with charges limited to a flat monthly fee.
Verizon filed Application 01-02-012, on February 7, 2002, requesting re-categorization of its inside wire repair services, from Category II, to Category III, and to raise certain ceiling rates. In their application Verizon argues that the essentially identical services offered by Pacific and Verizon are currently placed in different service categories. In this decision we find that inside wire repair services are fully competitive in Verizon's service territory.
We grant Verizon's request to re-categorize its Residential and Business BRS, and its Residential, Landlord, Business and CentraNet IWMP service offerings from Category II to Category III. Verizon's request to increase the first weekday hour, or less, of its Business BRS ceiling rate from $85.00 to $100.00 is granted. Verizon's request to increase the ceiling rates for its Residential, and Landlord IWMP services from $0.95 to $1.75, and Business and CentraNet IWMP services, from $1.95 to $2.50, is also granted with the added provision that Verizon notify BRS and IWMP service customers of their inside wire repair options. We further grant Verizon's request to bifurcate its BRS tariff schedule into a separate business BRS tariff schedule and separate residential BRS tariff schedule. All revenues and expenses associated with simple inside wire services shall continue to be treated above the line for intrastate ratemaking purposes.
In this decision we additionally cap Verizon's residential IWMP rate, and require that when an SNI has not been installed, Verizon will not charge for a premise visit, nor for identifying the location of a problem. The decision also requires Verizon during each premise visit to ensure that an SNI is installed.
