DE 98-086
                        KEARSARGE TELEPHONE COMPANY
                Order Granting Opportunity to Poll Citizens
                          O R D E R  N O. 23,039
                               October 7, 1998
               On May 18, 1998, the New Hampshire Public Utilities
     Commission (Commission) received a petition from Kenneth R.
     Marshall signed by approximately 100 Boscawen customers
     (Petitioners) requesting expansion of the 796 local calling area,
     also known as Extended Area Services (EAS), to include Concord.  
               On July 31, 1998, the Commission issued an Order of
     Notice scheduling a hearing for August 20, 1998.  The Order of
     Notice indicated that EAS petitions are subject to a standard
     established by Order No. 22,204 issued June 18, 1996 which
     includes consideration of community of interest, the effect on
     telecommunications competition within New Hampshire, and
     consistency with state and federal law.
               On August 20, 1998, the Commission heard comments from
     members of the public.  The Commission accepted written comments
     until August 27, 1998.
               A number of Boscawen residents submitted comments, both
     written and oral, in support of expanding the Boscawen Exchange
     to include Concord.  In addition, the Commission received a
     number of letters from Boscawen residents who did not attend the
     hearing.  The primary argument put forth is that a community of
     interest exists between Boscawen and Concord.  The commenters
     supported their argument with information about the percentage of
     Boscawen residents who work in Concord, the lack of toll-free
     access to state agencies, the use of Concord medical and
     educational facilities, Boscawen's inclusion in the Concord
     telephone directory, and the inability to call a major business
     center without incurring a toll charge.  In addition, the
     petitioners stated that expanding the local calling area would
     enhance the economic future of Boscawen.  The commenters also
     pointed to other area exchanges that have much larger calling
     areas, including a community of interest that extends to
     noncontiguous municipalities.  Several commenters pointed out
     that lower Boscawen residents in the Penacook Exchange (753) can
     call Concord toll-free and that upper Boscawen should be treated
               This petition is before us for analysis in light of our
     prior decisions regarding expansion of EAS, the
     Telecommunications Act of 1996 (TAct) and the actual changes in
     telecommunications markets in New Hampshire.
               Our orders in DE 97-046, DE 97-038 and DE 97-075,
     recounted the lengthy EAS investigation which resulted in our
     refusal to impose a statewide change to EAS, finding instead that
     increased competition in the toll market as a result of intraLATA
     presubscription and other changes mandated by the TAct would
     effectively reduce toll charges by creative offerings of
     competing carriers.  Order No. 20,107 (April 15, 1996).  By Order
     No. 22,204, issued June 18, 1996, we also found that carriers and
     communities retained the right to petition for EAS expansion and
     articulated the standard for assessing an EAS petition.  The
     standard applies a community of interest approach as defined in
     FCC Docket No. 96-45, In the Matter of Federal-State Joint Board
     on Universal Service, Report and Order, FCC 97-157, released May
     8, 1997 and hereinafter referred to as the Universal Service
     Order.  In the FCC's opinion, a calling area which reflects the
     community of interest is one which "allows subscribers to call
     hospitals, schools and other essential services without incurring
     a toll charge."  Further elaborating on the issue of
     affordability, the FCC states in its Universal Service order that
     "...affordability is affected by the amount of toll charges a
     consumer incurs to contact essential service providers such as
     hospitals, schools, and government offices that are located
     outside of the consumers local calling area...".
               We use the FCC definitions to facilitate examination of
     the Boscawen petition.  From the comments made by customers in
     the Boscawen Exchange at the public hearing on August 20, 1998,
     the exchange does not appear to encompass their community of
     interest.  We are convinced that Concord is the community of
     interest for at least a sizeable group of residents of Boscawen
     for the purposes of meeting their medical, educational, and
     business needs.  We will therefore grant the petitioners' request
     to poll their fellow residents on the issue of expanding EAS for
     the 796 exchange to include Concord.  No reciprocal ballot of
     Concord customers is necessary because expansion of the Concord
     EAS to include Boscawen will not result in a rate group change. 
          In order to reflect fair and accurate costs of the proposed
     expansion, the poll of Boscawen residents will not occur until
     after the local exchange carrier, Kearsarge Telephone Company
     (Kearsarge) has provided us with projections of revenue loss and
     costs associated with the addition of Concord to the calling
     area.  We will order Kearsarge to provide the information 30 days
     from the date of this order.  We will also require Bell Atlantic 
     to provide information within 30 days regarding toll and toll
     access revenues.  On the basis of this information we will
     determine, for the polling question, an increase that balances
     the interests of Boscawen customers and Kearsarge.
               As in our decisions in DE 97-038, DE 97-046, DE 97-075
     and DE 97-193, in order to insure the maximum effective response
     by customers, the polling ballot will be designed, distributed,
     and tabulated by the Commission.  The ballot question shall
     include a statement of the increased rate necessitated by the
     expanded calling area.  The poll shall be considered valid if
     ballots are returned by 25% or more of the customer base.  The
     outcome of a valid poll will be determined by a simple majority
     of the returned ballots. 
               Based upon the foregoing, it is hereby 
               ORDERED, that within 30 days from the date of this
     order, Kearsarge shall provide the following information:
     1.   Originating and terminating minutes of use (MOU);
     2.   Access revenue;
     3.   Billing and collection revenue;
     4.   Intrastate impact resulting from federal changes;
     5.   Number of residence and business access lines over which the 
          proposed increase would be collected;
     6.   Cost of other changes necessary;
     7.   Other factors which Kearsarge believes should be considered
          in the cost calculation;
     8.   Current terms and conditions of EAS agreements with Bell     
     9.   Terms and conditions of billing and collection agreements   with Bell Atlantic;
     10.  Terms and conditions of anticipated EAS agreements with Bell 
          Atlantic related to the Boscawen-Concord route;
     11.  A recommendation as to the appropriate charge for the       proposed expanded EAS;
     and it is;
               FURTHER ORDERED, that within 30 days from the date of
     this order, Bell Atlantic shall provide to the Commission the
     following information;
     1.   Current toll revenue based on current toll MOU; and
     2.   Current access revenue based on current access MOU.
     and it is;
          FURTHER ORDERED, that a vote on the EAS issue shall be
     conducted as described above for expansion of the Boscawen
     exchange to include the Concord exchange; and it is
               FURTHER ORDERED, that Kearsarge Telephone Company shall
     provide the Commission with a list of Boscawen Exchange
     customers, names, addresses and telephone numbers, and to the
     extent technically possible, in mailing label or PC format by
     November 5, 1998.
               By order of the Public Utilities Commission of New
     Hampshire this seventh day of October, 1998. 
     Douglas L. Patch                      Bruce B. Ellsworth     Susan S. Geiger 
         Chairman                Commissioner         Commissioner
     Attested by:
     Thomas B. Getz
     Executive Director and Secretary