DT 99-036
Bell Atlantic
Special Contract with McLane, Graf, Raulerson & Middleton, P.A.
Order Denying the Special Contract without Prejudice
O R D E R N O. 23,173
March 25, 1999
On December 22, 1998, Bell Atlantic - New Hampshire
(BA-NH) filed with the New Hampshire Public Utilities Commission
(Commission) pursuant to RSA 378:18, a petition seeking approval
for a Centrex Special Contract with McLane, Graf, Raulerson &
Middleton (McLane). See Docket No. DR 98-221. The proposed
Special Contract would provide Centrex line systems comprised of
Analog and Integrated Services Digital Network (ISDN) lines.
Along with the Special Contract, BA-NH filed contract overviews
and cost study details in support of the filing. BA-NH's cost
study avers that the Special Contracts' proposed rates exceed the
incremental costs of the services being provided, pursuant to the
requirements of RSA 378:18-b.
On January 21, 1999, the Commission issued Order No.
23,108 denying without prejudice the request for approval. On
February 26, 1999, Bell Atlantic filed a letter requesting that
the Commission reconsider its treatment of the McLane contract
and a limited number of additional contracts. Along with the
letter, Bell Atlantic refiled the cost study details that were
filed with the original December 22, 1998 petition.
Staff's review of the proposed Special Contract raised
questions as to whether the proposed rates meet the requirement
of RSA 378:18-b. The questions arise in the context of the
current evolution of the telecommunications industry to a
competitive industry after passage of the Telecommunications Act
of 1996 (TAct). BA-NH's filing follows the incremental cost
calculation methodology which was heretofore accepted as
adequate. However, as required by the Federal Communications
Commission (FCC) in implementing the TAct, the Commission must
employ a Total Element Long Run Incremental Cost (TELRIC)
methodology for calculating the costs of unbundled network
elements (UNEs) that BA-NH offers for sale to Competitive Local
Exchange Carriers (CLECs). When the rates under this contract
are compared to the TELRIC prices that Bell Atlantic has sought
our approval of in docket DE 97-171, it is not clear that the
requirements RSA 378:18-b have been met. Furthermore, there are
outstanding concerns that approval of this special contract at
the proposed rates will have the effect of being anti-competitive
and subsidized by other captive ratepayers. Accordingly, we
believe it is appropriate to move ahead with docket DT 99-018 to
explore the issues raised by Bell Atlantic's employment of an
incremental cost methodology for purposes of meeting its
obligation under RSA 378:18-b and using another methodology for
setting wholesale prices charged to competitors.
Bell Atlantic refiled the original cost study details
which Staff raised concerns about in DR 98-221. Nothing in the
current request persuades us to reconsider Order No. 23,108 at
this time. Therefore, we will deny the request to reconsider
approval of this contract. Bell Atlantic may refile the petition
after resolution of docket DT 99-018, our investigation into the
questions outlined above.
Based upon the foregoing, it is hereby
ORDERED, that Bell Atlantic's petition for approval of
the Special Contract is hereby DENIED without prejudice.
By order of the Public Utilities Commission of New
Hampshire this twenty-fifth day of March, 1999.
Douglas L. Patch Susan S. Geiger Nancy Brockway
Chairman Commissioner Commissioner
Attested by:
Thomas B. Getz
Executive Director and Secretary