DE 98-042
                         Bell Atlantic
Petition to Include Derry and Salem in the Local Calling Area of
              East Hampstead (Plaistow Exchange) 
  Order Establishing Customer Polling Schedule to Consider the
      Addition of Derry and Salem to the Plaistow Exchange
                    O R D E R  N O.  23,186
                         April 5, 1999
       On March 20, 1998, the New Hampshire Public Utilities
     Commission (Commission) received a letter from State Senator
     Richard Russman urging the Commission to expand the Plaistow
     local calling area to include Derry and Salem.  On April 1, 1998,
     the Commission received a petition from Karen Solomonides and
     Cheryl Giaquinta, signed by 250 residents of the Plaistow (382
     and 378) exchange, requesting that the local calling area be
     expanded to include Derry and Salem.  The petition explained that
     central and western Hampstead are located in the Hampstead
     exchange (329 & 362), which includes Derry and Salem in the local
     calling area, while East Hampstead is located in the Plaistow
     exchange which does not include Derry and Salem in the local
     calling area.  The petition also requested an evening hearing in
     the town of Hampstead.
            On July 20, 1998, the Commission issued an Order of
     Notice scheduling an evening hearing for August 4, 1998.  The
     Order of Notice indicated that EAS petitions are subject to a
     standard established by Order No. 22,204 (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 4, 1998, the Commission held a duly noticed
     hearing for the public at the Hampstead Town Hall.  The
     Commission heard comments from members of the public and from the
     New England Telephone & Telegraph Company d/b/a Bell Atlantic and
     hereinafter referred to as Bell Atlantic.  The Commission
     accepted comments submitted in writing or by electronic mail
     after the hearing.
       On October 7, 1998, the Commission issued Order No.
     23,038 finding that the Plaistow exchange does not appear to
     encompass the East Hampstead community of interest.  The order
     stated that the Commission was convinced that the petitioners had
     established the existence of a community of interest between the
     customers of East Hampstead and the towns of Derry and Salem. 
     The Commission further determined that those customers residing
     in the East Hampstead portion of the Plaistow exchange should be
     afforded the same local calling opportunities as those citizens
     residing in the western and central portions of Hampstead. 
     However, the Commission was not convinced that it was necessary
     or appropriate to poll the entire Plaistow exchange on the
     question of whether the entire exchange should be augmented to
     include Salem and Derry.  Accordingly, the Commission ordered
     Bell Atlantic to provide the following information so that the
     Commission could adopt an appropriate plan for resolving this
              1.   the cost (per customer) of rewiring the affected
            East Hampstead lines from the Plaistow central
            office to the Hampstead central office;
              2.   the cost (per customer) of developing a billing
            solution that would treat the East Hampstead
            customers as if they were in the Hampstead
              3.   a proposal for a new optional calling plan to
            solve the problem and any costs/rates that would
            be associated with it; and,
              4.   any other option that Bell Atlantic believes would
            be appropriate to address the issues discussed
            On November 13, 1998, Bell Atlantic filed a written
     response to the Commission order relative to the four topics
     noted above.  On January 8, 1999, the Consumer Affairs Department
     received a response to Bell Atlantic's November 13, 1998 filing
     from the petitioners, Karen Solomonides and Cheryl Giaquinta.  
       We have reviewed the Bell Atlantic filing and the
     petitioner's response.  We will address each of the four
     possibilities below.
     1. Rewire East Hampstead Customers to the Hampstead Exchange
       Bell Atlantic estimated the cost of rewiring the East
     Hampstead lines to the Hampstead exchange would be $505 per
     customer.  We calculate that if this cost were paid over five
     years in 60 monthly payments, the monthly surcharge would be
     $10.18 per East Hampstead customer.
       Bell Atlantic stated that all East Hampstead customers,
     once rewired to the Hampstead exchange, would pay Rate Group E,
     the same as all other Hampstead exchange customers.  This would
     result in an approximate $1.28 increase in the basic monthly rate
     for unlimited residence service in addition to the rewiring costs
     noted above.  East Hampstead customers rewired from the Plaistow
     exchange to the Hampstead exchange would be required to change
     their telephone number and would no longer have local calling to
     Kingston and the South Hampton locality.  If a ballot was
     conducted and the rewiring option was favored by over 50 percent
     of the voters, opposing customers would still be forced to change
     their phone number and pay for the rewiring.  New customers who
     build or buy homes or businesses in East Hampstead after the poll
     would be required to pay the surcharge, notwithstanding the fact
     that they had not participated in the rewiring balloting.
       The Petitioners' January 8, 1999 response stated that 
     they believed the $505 charge made this solution prohibitive for
     residential customers.  However, they were not aware of the
     $10.18 monthly surcharge option.
     2.  Billing Solution
       Although Bell Atlantic did not satisfy the Commission's
     request to develop the cost per customer of a billing solution
     that treats East Hampstead customers as if they were located in
     the Hampstead exchange, we are sufficiently convinced that this
     option is not viable for several reasons.  
       First, as Bell Atlantic pointed out, a non-standard
     billing arrangement creates problems similar to those identified
     in docket DE 96-090 with respect to municipal calling service
     (MCS).  Like MCS, such a billing arrangement would require a
     special code associated with the telephone numbers of each of the
     East Hampstead customers in the Plaistow exchange and customers
     in the Derry and Salem exchanges.  Calls from East Hampstead to
     Derry and Salem and calls from Derry and Salem to East Hampstead
     would continue to be routed over the toll network.  The billing
     arrangement would delete charges for these calls which would be
     identified by the special code.
       In DE 96-090 we ordered intraLATA presubscription to
     allow customers to preselect an in-state long distance provider
     that could be either the same or different from their
     out-of-state long distance provider.  Initially, we ordered that
     MCS remain intact and gave the parties 90 days to determine a way
     to implement this requirement.  After 120 days, we received
     compelling evidence that mandating MCS would create several
     competitive drawbacks and we therefore removed the mandate.  A
     non-standard billing arrangement for East Hampstead customers
     would create the same problems.  Because toll charges would be
     deleted from customer bills through Bell Atlantic's billing
     system, but would continue to be routed through the toll network,
     East Hampstead, Derry and Salem customers who select an in-state
     toll provider other than Bell Atlantic would most likely be
     charged toll for calls between East Hampstead and Derry and
     Salem.  Eventually we decided in Docket DE 96-090 to allow
     competitors the choice to create a data base that would allow
     them to remove toll charges for municipal calls from customer
     bills.  Competitors argued that this would be excessively
     expensive, and if required, would prevent them from entering the
     market.  No competitor elected to create and maintain such a data
       In the alternative, we required competitors to advise
     potential MCS-eligible customers clearly and unambiguously, that
     the particular competitive toll provider was unable to provide
     MCS, if that was the case.  Despite this mandate, we continue to
     receive complaints from customers who were unaware that MCS calls
     provided by Bell Atlantic were local but became toll calls if the
     customer selected an alternative toll provider.  
       Second, we believe if we require Bell Atlantic to use a
     non-standard billing arrangement for East Hampstead, Derry and
     Salem customers, such customers will be less likely to select a
     toll provider or local provider other than Bell Atlantic because
     they would have to resume toll charges to Derry and Salem or
     parts of Plaistow (the East Hampstead customers).  This would
     create an anti-competitive effect in both the in-state toll
     market and the facilities-based local exchange market that we are
     not willing to require.  
            Finally, it has been our experience that MCS has often
     been inaccurate and has caused customer confusion.  A
     non-standard billing arrangement requires diligent maintenance. 
     Due to the complexities involved with people moving in and out of
     East Hampstead, requiring a daily update to the records for calls
     from East Hampstead customers and calls to East Hampstead
     customers from Derry and Salem customers, we are concerned that
     mistakes will occur which will further aggravate customers. 
       In their response, the petitioners argued that Bell
     Atlantic did not satisfy the requirement to develop a cost per
     customer for implementing a non-standard billing arrangement. 
     Further, they argued that Bell Atlantic was making a computer
     programming issue more complicated than it actually is. For the
     reasons stated above, despite the lack of cost per customer
     information, we believe the billing option is not a reasonable
     solution given the complicated programming and other issues it
     3.  Optional Toll Calling Plans
       Bell Atlantic stated in its response that it plans to
     introduce a flat rate toll calling plan in 1999, which would
     offer local service and unlimited in-state toll for $50 to $60 a
     month.  The petitioners point out that any optional toll calling
     plan fails to offer East Hampstead customers the same local
     calling as other Hampstead customers.  We agree with the
     petitioners and find that because East Hampstead customers would
     have to pay more than Hampstead customers in order to call Derry
     and Salem this option is not satisfactory.
     4.  Additional Options
       As an additional option, Bell Atlantic suggested that
     we require a poll of the entire Plaistow exchange to determine if
     the local calling area should be expanded to include Derry and
     Salem.  The petitioners argue that there is little community of
     interest between the majority of Plaistow customers and Derry and
       After considering the options above, we believe a poll
     of customers in the Plaistow exchange has merit.  Customers in
     the Plaistow exchange may be willing to pay approximately $1.28
     a month to gain the ability to call Derry and Salem toll free.  
     If that is the case, East Hampstead customers will not be
     required to change their phone number and will not have to pay
     the rewiring surcharge but will nonetheless gain calling parity
     with the rest of Hampstead.  Therefore, we will direct the
     balloting of customers in the entire Plaistow exchange to
     determine if customers are willing to pay rates associated with
     Rate Group E to add Derry and Salem to the local calling area,
     according to the following schedule:
            Ballot sent by Commission.... May 24, 1999
            Ballots returned by...........June 14, 1999       
            Ballots tabulated by..........June 28, 1999
       The poll shall be considered conclusive if ballots are
     returned by 25% or more of the customer base.  The outcome of a
     conclusive vote will be determined by a simple majority of the
     returned ballots.  
       If the poll is conclusive, and the simple majority of
     Plaistow customers reject the addition of Derry and Salem, we
     will evaluate other options, including the possibility of
     balloting the East Hampstead customers to determine whether the
     majority of customers are willing to change their phone number,
     pay the $10.18 monthly surcharge for five years to rewire to the
     Hampstead exchange, and pay the $1.28 per month rate group
       Based upon the foregoing, it is hereby
       ORDERED, that a ballot be conducted of Plaistow
     customers to determine if they are willing to add the Derry and
     Salem exchanges to the Plaistow local calling area based on the
     local rate increase listed on the ballot; and it is      
       FURTHER ORDERED, that Bell Atlantic provide mailing
     labels for Plaistow Exchange customers by May 10, 1999; and it is
       FURTHER ORDERED, that in the event the ballot of the
     entire Plaistow exchange results in no change to the local
     calling area, the Commission will evaluate other options as noted
     above; and it is
       FURTHER ORDERED, that Bell Atlantic provide mailing
     labels of the East Hampstead customers in the Plaistow exchange
     to staff within 10 days of such a request.
       By order of the Public Utilities Commission of New
     Hampshire this fifth day of April, 1999.
           Douglas L. Patch       Susan S. Geiger     Nancy Brockway
               Chairman           Commissioner          Commissioner
     Attested by:
     Thomas B. Getz
     Executive Director and Secretary