PUBLIC DOCUMENT. November 19, 2010

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1 November 19, 2010 Burl W. Haar Executive Secretary Minnesota Public Utilities Commission 121 7th Place East, Suite 350 St. Paul, Minnesota RE: PUBLIC Comments of the Minnesota Department of Commerce Docket No. P442/M Dear Dr. Haar: Attached are the PUBLIC comments of the Department of Commerce in the following matter: In the Matter of the proposal of AT&T Communications of the Midwest, Inc. to discontinue the provision of local service in the cities of Brainerd, Chaska, Detroit Lakes, Fergus Falls, Luverne, Marshall, Montgomery, Wabasha, Warroad, and Waseca. The petition was filed on October 8, 2010 by: Wauneta Browne Regional Vice President AT&T Communications of the Midwest, Inc West 146 th Street Olathe, KS The Department recommends approval of the petition, and is available to answer any questions the Commission may have. Sincerely, /s/ DIANE DIETZ Rate Analyst DD/jl Attachment

2 BEFORE THE MINNESOTA PUBLIC UTILITIES COMMISSION PUBLIC COMMENTS OF THE MINNESOTA DEPARTMENT OF COMMERCE DOCKET NO. P442/M I. BACKGROUND On September 25, 1997, the Commission approved the proposal of AT&T Communications of the Midwest, Inc. (AT&T) to introduce Digital Link Service in Docket No. P442/M Digital Link Service is a local exchange service designed for business customers. AT&T s Digital Link Service (ADL) permits outward local calling capability from a customer s premises utilizing direct outward dialing over customer provided dedicated digital facilities, such as a T1.5 connection. ADL service is only available to business customers who subscribe to one or more of AT&T s intrastate long distance services, which are provided under AT&T s Customer Network Service Tariff. Direct outward dialing is the capability to dial directly from an extension of a PBX without having to go through an operator or attendant. ADL was AT&T s first local service offering to be provided in Minnesota. The service amounted to a measured local service and was provisioned using capacity available on AT&T facilities, which were previously dedicated to providing long distance service. Because of the limitations of the service, including the lack of the ability to handle incoming calls, ADL customers were required to agree to continue to subscribe to a local service access line in addition to ADL Service. ADL customers are responsible for programming their customer premise equipment (CPE) to route 911 calls. In addition to approving the introduction of ADL Service in the September 25, 1997 Order, the Commission granted AT&T a one year variance, until July 29, 2000, from the basic local service requirements in Minn. Rules pts and in provisioning ADL Service. The variance was necessary, because ADL Service was not capable of providing two way service as required under Minn. Rules pt and was not provisioned to match the flat-rate calling area of the underlying carrier as required by Minn. Rules pt Also, ADL Service was not capable of providing 911 access.

3 Page 2 On December 11, 1998, AT&T submitted a tariff filing, which revised its ADL Service offering to include inbound calling, main listed number and directory listings capability in Docket No. P442/M On August 15, 2000, the Commission granted AT&T s request, in Docket No. P442/M , for a variance until December 31, 2001 to provide 911 and E911 services in exchanges in which the Company provided ADL Service. On January 17, 2002, the Commission granted another time extension and variance to AT&T, in Docket No. P442/M-02-76, as it pertained to the provision of 911 and E911 services for ADL Service. The variance was extended until December 31, During the 4 th quarter of 2004, AT&T completed its switch upgrade which it believed enabled it to provide 911 and E911 service to all ADL customers residing in eligible Digital Link areas in Minnesota. 1 On October 8, 2010, AT&T submitted the current petition to discontinue the provision of local service in the following cities on December 15, 2010: Brainerd, Chaska, Detroit Lakes, Fergus Falls, Luverne, Marshall, Montgomery, Wabasha, Warroad, and Waseca. The affected customers were notified of the proposed disconnection on October 7, The October 7, 2010 notice included the following statement: Local service in Minnesota must be capable of providing access to 911 services. AT&T Digital Link ( ADL ) local voice service is only capable of providing access to 911 services in some areas of the state. AT&T has conducted a recent audit of ADL service revealing that the service being provided at the location shown above is not capable of access 911 services. Therefore the ADL service at that location must be disconnected as soon as feasible. The notice emphasized that it is critical that [the ADL subscriber] continue to use other local services to obtain access to 911 emergency services at 1 Under Section of AT&T s Local Exchange Tariff, AT&T Digital Link Local Service is not available in all areas of the state. It is only available where both of the following criteria are met: 1) The Customer's business telephone service location is located in one of the following Minnesota counties: Anoka, Benton, Carlton, Carver, Chisago, Dakota, Dodge, Freeborn, Goodhue, Hennepin, Isanti, Mower, Olmsted, Ramsey, Rice, Scott, Sherburne, St. Louis, Stearns, Steele, Washington, Winona or Wright; and 2) Where Service is provided out of one of the following rate centers: Albert Lea, Austin, Bryon, Cambridge, Cannon Falls, Chisholm, Cloquet, Cook, Dodge Center, Duluth, Faribault, Hibbing, Kenyon, Lindstrom, North Branch, Osseo, Owatonna, Rochester, St. Cloud, St. Joseph, Stillwater, Twin Cities, Winona or Wyoming. AT&T Digital Link is only available at locations where Customers subscribe to one or more of the following intrastate services provided under this Company's Custom Network Service Tariff: Software Defined Network Service, AT&T Business Network-UniPlan Service - Dedicated Access, AT&T Business Network-UniPlan Basic Service Option, AT&T Business Network-UniPlan FlatRate Pricing Option, AT&T Business Network-UniPlan OneRate Pricing Option, AT&T Business Network-UniPlan OneRate Pricing Option II, State Calling Service, AT&T Virtual Telecommunications Network Service (VTNS), AT&T CustomNet Service - Dedicated Access, AT&T College Connect Calling Service, AT&T Business Network Service, ACC Business, and AT&T SDN OneNet Service.

4 Page 3 their location. The notice also stated that the following services will be impacted if they are routed over existing Digital Link facilities: Outbound local calling Customer premise equipment will need to be reprogrammed to re-route outbound local calls over the ADL customer s non-at&t local facilities. Outbound calls made to toll-free numbers Customer premise equipment will need to be re-programmed to re-route originating toll-free traffic over non-at&t local facilities. Calling party number sent for outbound caller identification service Those customers with AT&T ISDN PRI facilities, should determine if their calling party number can be sent using their customer premise equipment. Inbound local calls (direct inward dialing) to customer s location ADL telephone numbers will be disconnected and inbound calls will not complete unless the ADL customer changes his or her local service. The ADL customer should work with his or her local service provider to request a migration of the inbound telephone numbers. Customer premise equipment may also need to be re-programmed to re-route inbound local calls. [TRADE SECRET DATA HAS BEEN EXCISED]. AT&T informed the Department that, as of the October 8, 2010 petitioning date, there were [TRADE SECRET DATA HAS BEEN EXCISED] ADL business customers at [TRADE SECRET DATA HAS BEEN EXCISED] different locations who were ineligible to continue to receive ADL service under the tariff. As of October 14, 2010, [TRADE SECRET DATA HAS BEEN EXCISED] of those customers have submitted orders to discontinue ADL service at [TRADE SECRET DATA HAS BEEN EXCISED] locations, leaving [TRADE SECRET DATA HAS BEEN EXCISED] ADL customers at [TRADE SECRET DATA HAS BEEN EXCISED] locations that will be affected by this filing. These remaining ADL customers all have AT&T sales representatives who are assigned to their accounts and who continue to work with the affected customers to encourage them to place orders to transition to another service prior to the December 15, 2010 proposed disconnection date and/or reprogram their customer premise equipment to route local calls to other existing local exchange facilities. AT&T does not offer business local exchange service in the affected locations, but has provided the affected customers with a listing of the alternative local service providers operating in their area. [TRADE SECRET DATA HAS BEEN EXCISED]. On December 15, 2010, ADL customers who have outbound only service and who have not taken action to change their local service to another carrier or to modify their CPE to direct outbound local calls to another trunk group, will continue to be able to place outbound local calls over their existing T1.5 connections, but the local calls will be billed at intrastate toll rates. Customers who have both inbound and outbound ADL service, and who does not take action by

5 Page 4 the December 15, 2010 disconnection date, will find that their outbound local calls are rated at intrastate toll rates and their inbound and they may find that they risk losing their telephone numbers and the ability for anyone to reach them on those numbers if they do not port their telephone numbers to another local carrier prior to disconnection. [TRADE SECRET DATA HAS BEEN EXCISED]. II. STATEMENT OF ISSUES 1. Should the Commission permit AT&T Communications of the Midwest, Inc. to discontinue the provision of local service in the cities of Brainerd, Chaska, Detroit Lakes, Fergus Falls, Luverne, Marshall, Montgomery, Wabasha, Warroad, and Waseca? III. STATEMENT OF LAW Minn. Rule provides requirements for the provision of basic local telephone service as follows (in relevant part): Subpart 1. Required services. A local service provider (LSP) shall provide, as part of its local service offering, the following to all customers within its service area: A. single party voice-grade service and touch-tone capability; B. 911 or enhanced 911 access; C. 1 + intralata and interlata presubscription and code-specific equal access to interexchange carriers subscribing to its switched access service; D. access to directory assistance, directory listings, and operator services; E. toll and information service-blocking capability without recurring monthly charges F. one white pages directory per year for each local calling area, which may include more than one local calling area, except where an offer is made and explicitly refused by the customer; G. a white pages and directory assistance listing, or, upon customer request, a private listing that allows the customer to have an unlisted or unpublished telephone number; H. call-tracing capability according to chapter 7813; I. blocking capability J. telecommunications relay service capability or access necessary to comply with state and federal regulations. Subp. 2. Separate flat rate service offering. At a minimum, each LSP shall offer the services identified in subpart 1 as a separate tariff or price list offering on a flat rate basis. An LSP may also offer basic local service on a measured rate basis or in combination with other services. An

6 Page 5 LSP may impose separate charges for the services set forth in subpart 1 only to the extent permitted by applicable laws, rules, and commission orders. Subp. 3. Service area obligations: all LSPs. An LSP shall provide its local services on a nondiscriminatory basis, consistent with its certificate under part or , to all customers who request service and whose premises fall within the carrier's service area boundaries or, for an interim period, to all requesting customers whose premises fall within the operational areas of the local service provider's service area under part , subpart 4, or , subpart 4. The obligation to provide resale services does not extend beyond the service capability of the underlying carrier whose service is being resold. The obligation to provide facilities-based services does not require an LSP that is not an eligible telecommunications carrier (ETC) to build out its facilities to customers not abutting its facilities or to serve a customer if the local service provider cannot reasonably obtain access to the point of demarcation on the customer's premises. Subp. 6. Limitation on exit. An LSP shall not withdraw from a service area unless another LSP certified for that area will be able to provide basic local service to the exiting local service provider's customers immediately upon the date the exiting provider discontinues service. An LSP shall not withdraw from its service area until at least 60 days after it has given written notice to the commission, department, Office of Attorney General-Residential Utilities Division (OAG- RUD), and its customers. The notice must identify the other LSPs available to its customers. Minn. Stat provides that the telephone assistance plan must be statewide and apply to local service providers that provide local exchange service in Minnesota. Minn. Rule , Subp. 8. defines basic local service. Basic local service means the services required under part and any other services or terms determined by the commission to be integral to the basic communications, health, privacy, or safety needs of customers. Minn. Rule , Subp. 33. defines local service. Local service means dial tone, access to the public switched network, and any related services provided in conjunction with dial tone and access, including services that may be required under part Local service does not include local niche service. Minn.Stat , Subd. 1 permits the Commission to investigate any matter relating to telephone service Commission investigation. Whenever the commission believes that a service is inadequate or cannot be obtained or that an investigation of any matter relating to any telephone service should for any reason be made, it may on its own motion investigate the service or matter with or without notice, except that the commission shall give notice to a telephone company before it investigates the level of rates charged by the company.

7 Page 6 IV. ANALYSIS A. DISCONTINUANCE OF LOCAL SERVICE TO CUSTOMERS IN THE CITIES OF BRAINERD, CHASKA, DETROIT LAKES, FERGUS FALLS, LUVERNE, MARSHALL, MONTGOMERY, WABASHA, WARROAD AND WASECA. In Minnesota, AT&T currently has only [TRADE SECRET DATA HAS BEEN EXCISED] ADL business customers at [TRADE SECRET DATA HAS BEEN EXCISED] locations that will be affected by the proposed discontinuance of ADL service in 10 cities. Every affected ADL customer will receive at least 60 days written notice of the impending discontinuance of ADL service. Included with the written notice was a list of alternate local service providers. A copy of the notice sent to customers affected by the proposed discontinuance was attached to the October 8, 2010 filing made by AT&T. The notice of service discontinuance is being supplemented by personal contact made by AT&T sales representatives with affected customers. Under AT&T s existing tariff, the affected customers are not eligible to be receiving ADL service. The Department has no objections to AT&T s proposal to discontinue the provision of ADL service to the 10 affected cities. AT&T has taken steps to ease the transition by communicating with the affected customers and informing them of their options. These affected customers are currently required, under their service agreements, to maintain individual local business lines and may select an alternate local carrier who has long term plans to serve the business market and who has the policies and procedures in place for serving the unique needs of business customers. In the event that any of the remaining affected customers fails to reprogram their CPE and to switch to another local carrier by the discontinuance date, the customer will continue to be able to place outbound calls though the calls will be rated as long distance calls. On December 15, 2010, the affected ADL customers will not suddenly lose access to 911, because they do not currently have 911 access unless they have programmed their CPE to route 911 calls through their individual local business lines. The ability to place 911 calls is an essential telecommunications function, which is defined as a basic local service requirement under Minn. Rules pt A local service provider who cannot ensure that a customer has ready 911 access without requiring that a customer obtain an alternate local access line and/or reprogram its CPE should not be providing local service to that customer. With the current petition, AT&T clearly recognizes the importance of ensuring that all its local customers have 911 access. The Department believes that AT&T has made adequate plans for notifying the affected ADL customers of the proposed service disconnection and assisting them in making alternative local service arrangements. Each of the affected ADL customers has an AT&T sales representative who is specially assigned to his or her account and, as a result of this arrangement, AT&T is able to provide personalized service to the affected customers. [TRADE SECRET DATA HAS BEEN EXCISED].

8 Page 7 B. AT&T S CERTIFICATE OF AUTHORITY TO PROVIDE LOCAL EXCHANGE SERVICE AT&T does not propose to withdraw entirely from the State of Minnesota. AT&T is proposing to continue to provide interstate and intrastate local and long distance service to residential and business customers, and therefore, wishes to retain its certificate of authority to provide local and long distance service issued by the Commission in its July 15, 1996 and December 18, 1996 Orders in Docket No. P442/NA and the October 15, 1985 Order in Docket No. P442, 443, 444, 421, 433/NA (which extended AT&T s authority to provide intralata services. The Department has no objections to AT&T s proposal to maintain its certificate of authority to provide local exchange services. V. COMMISSION OPTIONS Issue 1: Should the Commission permit AT&T Communications of the Midwest, Inc. to cease providing its local service to customers in Brainerd, Chaska, Detroit Lakes, Fergus Falls, Luverne, Marshall, Montgomery, Wabasha, Warroad, and Waseca? A. Allow AT&T to discontinue the provision of local telephone service to customers in the specified cities. B. Deny AT&T s request to discontinue the provision of local telephone service in the specified cities. VI. DEPARTMENT RECOMMENDATION The Department recommends that the Commission adopt alternative 1A. 1A. Allow AT&T to discontinue the provision of local telephone service in the cities of Brainerd, Chaska, Detroit Lakes, Fergus Falls, Luverne, Marshall, Montgomery, Wabasha, Warroad, and Waseca. /jl

9 CERTIFICATE OF SERVICE I, Sharon Ferguson, hereby certify that I have this day, served copies of the following document on the attached list of persons by electronic filing, certified Mail, , or by depositing a true and correct copy thereof properly enveloped with postage paid in the United States Mail at St. Paul, Minnesota. Minnesota Department of Commerce Public Comments Docket No. P442/M Dated this 19 th of November, 2010 /s/sharon Ferguson

10 First Name Last Name Company Name Address Delivery Method View Trade Secret Service List Name Julia Anderson s Office of the Attorney General-DOC 1400 BRM Tower 445 Minnesota St St. Paul, Wauneta Browne TCG Minnesota, Inc West 146th Street Electronic Service Yes OFF_SL_ _ Paper Service No OFF_SL_ _ Olathe, KS Linda Chavez Department of Commerce 85 7th Place E Ste 500 Electronic Service No OFF_SL_ _ Saint Paul, Pete Eggimann PEGGIMANN@- MESB.ORG Metropolitan Emergency Services Board 2099 University Ave W Ste 201 Electronic Service No OFF_SL_ _ St. Paul, Burl W. Haar burl.haar@state.mn.us Public Utilities Commission Suite th Place East St. Paul, Electronic Service Yes OFF_SL_ _ Kathy Krushe kathy.krushe@state.mn.us Department of Public Safety John Lindell agorud.ecf@state.mn.us Office of the Attorney General-RUD Martin Moody mmoody@mn-mesb.org Metro Emergency Services Board 445 Minnesota St Ste 137 St. Paul, BRM Tower 445 Minnesota St St. Paul, University Ave W Ste 201 St Paul, Electronic Service No OFF_SL_ _ Electronic Service Yes OFF_SL_ _ Paper Service No OFF_SL_ _

STATE OF MINNESOTA BEFORE THE PUBLIC UTILITIES COMMISSION

STATE OF MINNESOTA BEFORE THE PUBLIC UTILITIES COMMISSION In the Joint Petition of TCG Minnesota, Inc. ) and Teleport Communications America, LLC. ) Docket No. for Approval for Internal Merger ) I. Introduction