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Questions - Southern Oregon EAS Process
1.  What body makes the final decision regarding an expanded local calling (toll-free) area? Does that decision making body have the ability to set boundaries? If so, what standards are used to establish boundaries?
The PUC will make the final decision regarding establishment of an EAS region, as required by state law. However, the PUC will not establish a region unless it is convinced that affected customers desire a region after a thorough investigation and review of its findings.
The PUC does have the authority to establish region boundaries. There are no firm criteria for establishing region boundaries. Boundaries will be set after carefully considering the wishes of affected citizens through a public process, as described in the previous answer.
2.  Will communities have choices in alternate rate structuring, an/or will people or communities have the ability to "cherry pick" their service areas.
Customers in each exchange will have a choice between a flat EAS rate specifically designed to cover the cost of their EAS service or a measured EAS rate.
Customers and exchanges will not have the ability to "cherry pick" their extended areas. All exchanges will either be in, or not in, forming a uniform region. This is the current situation in the Portland EAS Region. That is, all exchanges in the region have access to the same exchanges.
Allowing customers or exchanges to choose their own extended areas would make an already complex set of calculations even more complex. In order to see this, consider a situation where one exchange has requested EAS to one other exchange. In this situation, the PUC must analyze calling patterns between the two exchanges to determine the EAS costs that must be picked up by customers in the two exchanges. Unless the two exchanges are the same size, and have identical calling patterns, each exchange will have a distinct flat rate. In addition, the PUC must consider the likelihood that more calls will be made, and calls will be longer in duration, once flat rate EAS is established.
The analysis just described is substantially more complex for an EAS region. The PUC has determined that a uniform Southern Oregon Region involving 18 exchanges would require 306 analyses of the type described in the previous paragraph. If exchanges are allowed to "cherry pick" the exchanges they have access to through EAS, thousands of analyses would need to be performed to make certain that every exchange would pay its fair share of EAS costs. If individuals are allowed to "cherry pick," millions of analyses would need to be performed, assuming that data at the individual customer level could be obtained. If such analyses were not performed the result would be massive cost shifting among customers.
The two preceding paragraphs explain, in general terms, why an EAS region must have a uniform calling area.
Even without a region in Southern Oregon, customers desiring EAS to only particular exchanges may follow the established PUC process for adding individual EAS- routes, which is distinct from the process for creating an EAS region. The Commission has already approved 69 individual EAS routes in Southern Oregon. Nearly 1,700 EAS routes have been authorized in Oregon.
3.  Are there provisions for low-income individuals whose cost of average usage would increase beyond a certain point?
No. However, if an EAS region is established, all customers will have the option of choosing a measured rate (i.e., paying by minutes of use), as an alternative to a flat EAS rate. The current PUC policy is that a measured rate may not exceed $.08 per minute. The rate is often substantially less. Accordingly, customers choosing the measured EAS rate option can control their costs simply by limiting calls to the extended calling area. Under the measured EAS option they are charged only for calls they initiate whereas customers choosing a flat rate are charged a fee regardless of calling activity.
4.   Should an EAS region be established and rates determined, is there a trial period during which it could be determined that the information from the rate survey was accurate, and that the change to an extended EAS rate was indeed revenue neutral? If so, would or could rates be adjusted at that point, and would communities have a say in that, and could they opt out at that point?
No, if an EAS region is created, there will not be a trial period. The issue of verifying rate neutrality is one that the Commission has faced in the past. Such an attempt was initially made in the Portland EAS Region. That experience convinced the PUC of two things. First, any attempt at verification is extremely complex. Second, literal verification is impossible because one would need to know what the long distance calling pattern would have been if EAS had not been established. Such information is unknowable. In the end, the verification analysis is itself an estimate.
Once an EAS region is established, individual communities would not be able to opt out of the region. If opting out were permitted, costs would have to be shifted to the remaining communities, and new rates calculated. This cost shifting would likely lead to new requests to opt out of the region. Such a scenario is not workable.
Given its experience in establishing nearly 1,700 EAS routes, the PUC is confident that it can design revenue neutral EAS rates. In addition, statewide EAS costs for a company are scrutinized each time new EAS routes are established for the company anywhere in Oregon.
The PUC is very concerned that customers understand and endorse the rates they would face if an EAS region is created. Taking steps to achieve this outcome is the only practical alternative to trial periods and opt out procedures.
For a period of six (6) months, customers may switch between an EAS flat rate or EAS measured rate without incurring a service order charge from the telephone company. This is done so that customers may be able to determine which EAS rate plan is best suited for their calling needs. Six months after the effective date of a new EAS deployment, customers would be charged a service order charge for switching between flat rate and measured rate EAS.
5.  Is there a cap on the potential increase in the base rate?
There will not be a cap for flat rates, but a cap of $.08 per minute will exist for measured rates. Rates for the region will be presented to customers through a public process before a region is established. If the PUC believes that the proposed flat rates are widely unacceptable, it will not approve creation of the region. If a region is created, customers would always have the option of paying a measured EAS rate, rather than a flat rate.
6.   Who or what is the smallest "bargaining unit" in this EAS process - an individual, an organization or business, or each city or county?
The PUC process will permit individual customers to have input. Government or business entities are also very welcome to participate. To the extent larger entities can speak for individual customers, their participation is desirable.
7.   What will be the rates for the Southern Oregon EAS Region ?
This question cannot be answered until boundaries for the region are established and revenue-neutral rates are calculated. Rates will vary significantly between exchanges. As a point of reference, flat residential EAS rates in the Portland EAS Region exchanges vary from $2.02 a month to $21.35 a month. Monthly flat business EAS rates vary from $3.03 to $28.40. Measured rates vary from $.02 (Qwest´s off-peak rate) to $.08 per minute. In general, flat rates are higher in exchanges with relatively few customers or for customers of telephone companies with a relatively small customer base. The higher rates shown above occur primarily because total EAS costs, which tend to be roughly equal among exchanges, must be recovered from a smaller number of customers.
8.  When will the PUC authorize the Southern Oregon EAS Region?
The PUC and the four telecommunications companies involved estimate that will take about a year to complete the rate work and explain the results to affected citizens. The rate work will begin when EAS region boundaries are established. The Commission believes it is important that customers clearly understand the pros and cons of establishing a new EAS region, and the rates they would pay. This understanding will be accomplished through a series of public hearings in Southern Oregon. At the end of the public process for explaining what EAS rates would be, the Commission will decide whether to create an EAS region. The Commission will not create the region if it does not detect widespread acceptance of the EAS rates.
If the Commission concludes that creation of a new EAS region is in the public interest, it will issue an order authorizing the region. From that point, it might take up to six months to implement the order. The reason for the delay is that the telecommunications companies would need time to construct the new facilities described above. Without these new facilities, customers would encounter "fast busy" signals when attempting to use the new EAS service.