BEFORE THE
PUBLIC SERVICE COMMISSION OF UTAH
In the Matter of:
The Application of Bresnan Broadband of DOCKET NO. 07-2476-01
Utah, LLC for a Certificate of Public
Convenience and Necessity to Operate as a
Competitive Local Exchange Carrier in
Utah
DIRECT TESTIMONY
OF
BRUCE TODD
ON BEHALF OF
UBTA-UBET COMMUNICATIONS, INC.
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Q:
PLEASE STATE YOUR NAME AND ADDRESS.
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A:
Bruce Todd and I live in Roosevelt, Utah.
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Q:
BY WHOM ARE YOU EMPLOYED AND IN WHAT CAPACITY?
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A:
I am currently employed by UBTA-UBET Communications, Inc. (“UBTA-UBET”) as
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General Manager/CEO.
Q:
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ARE YOU AUTHORIZED TO TESTIFY ON BEHALF OF UBTA-UBET IN THIS
PROCEEDING?
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A:
Yes.
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Q:
PLEASE DESCRIBE YOUR EXPERIENCE IN THE TELEPHONE BUSINESS.
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A:
I have been in the telecommunications business for 21 years, with 11 years as General
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Manager/CEO of UBTA-UBET and its predecessor, Uintah Basin Telecommunications
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Association, Inc.
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Q:
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PLEASE STATE THE NATURE OF YOUR TESTIMONY IN THIS
PROCEEDING.
A:
My testimony addresses UBTA-UBET’s position on. My testimony address certain
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financial, operational and managerial factors which we believe the Public Service
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Commission of Utah (the “Commission”) should consider in determining whether it is in
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the public interest to grant the Application for a Certificate of Public Convenience and
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Necessity (the “Application”) filed by Bresnan Broadband of Utah, LLC (“Bresnan”).
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Q:
HAVE OTHERS BEEN AUTHORIZED TO TESTIFY ON BEHALF OF UBTAUBET IN THIS PROCEEDING?
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A:
Yes. Ray Hendershot of GVNW Consulting, Inc., will file direct testimony on behalf of
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UBTA-UBET covering certain policy considerations given the company-specific impacts
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which would result from the approval of the Application by the Commission.
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Q:
PLEASE DESCRIBE UBTA-UBET.
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A:
UBTA-UBET holds a Certificate of Convenience and Necessity from the Public Service
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Commission of Utah (the “Commission”) to provide telephone services in the exchanges
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of Lapoint (247), Altamont (454), Fruitland (548), Flattop (646), Neola (353), Randlett
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(545), and Tabiona (848), Duchesne (738), Roosevelt (722, 725) and Vernal (781, 789).
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The Lapoint exchange is located in Uintah County. The Altamont and Tabiona
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exchanges are located in Duchesne County. The Neola, Randlett and Flattop exchanges
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are located in both Duchesne and Uintah Counties and the Fruitland exchange is located
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in both Duchesne and Wasatch Counties. The Duchesne exchange is located in Duchesne
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County. The Roosevelt exchange is located in both Duchesne and Uintah Counties. The
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Vernal exchange is located in Uintah County.
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Q:
Q:
PLEASE PROVIDE A BRIEF HISTORY OF UBTA-UBET.
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A:
UBTA-UBET is a company the was formed by merger and consolidation of Uintah Basin
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Telecommunications Association, Inc. (“UBTA”), and UBET Telecom, Inc. (“UBET”),
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in order to unify the communities in Uintah, Wasatch and Duchesne counties that are a
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part of the Uintah Basin. The first step in unifying the communities was the acquisition
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by UBET Telecom of the Vernal, Roosevelt and Duchesne exchanges. Prior to the
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acquisition of those exchanges the subscribers of Qwest in those exchanges did not
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receive and, given the antiquated technologies available to them, could not have received
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the services provided by the new technologies which the UBTA subscribers enjoyed.
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Part of the unifying process was to provide the subscribers in the Vernal, Roosevelt and
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Duchesne exchanges with a comparable level of services enjoyed by their counterparts in
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the UBTA exchanges. Prior to the acquisition of the Qwest exchanges, Qwest had done
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little, if anything, to introduce digital technologies, fiber optic facilities and broadband
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capabilities to the subscribers in those exchanges. By acquiring the Qwest exchanges,
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UBTA and UBET Telecom were able to introduce to the Vernal, Roosevelt and
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Duchesne subscribers the new technologies which they were previously denied.
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The second step in unifying the Uintah Basin was the implementation of Basin-
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wide EAS which provides all subscribers with toll-free calling to any other location
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within the Uintah Basin. The Basin-wide EAS has resulted in unifying the residents of
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Uintah and Duchesne counties from community, church, school, economic and social
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perspectives.
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The final step in unifying the Uintah Basin was the merger of UBTA and UBET
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Telecom in January 2006, so that the subscribers in the UBET Telecom exchanges were
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treated in the same manner as those in the UBTA exchanges–with the opportunity for
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equal participation in the patronage distributions and voting in the governance of the
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cooperative. With the merger, the subscribers of UBET Telecom can become members
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of the cooperative and be entitled to the same benefits and privileges that were previously
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only enjoyed by UBTA subscribers.
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Q:
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HOW HAS THE UNIFICATION OF THE COMMUNITIES BENEFITTED THE
RESIDENTS OF THE UINTAH BASIN?
A:
The Uintah Basin presents a somewhat unique situation in the State of Utah -- both
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geographically and demographically. Uintah and Duchesne Counties are isolated and
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located approximately 3 hours driving time from the Wasatch Front. As such, the
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commercial, social, religious and educational activities of the residents are focused within
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the Uintah Basin. While the majority of the population of Uintah and Duchesne Counties
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are located within three cities -- Vernal, Roosevelt, and Duchesne -- there are a number
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of outlying rural communities which make up an important part of the fabric of life in the
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Uintah Basin. Historically, Vernal, Roosevelt and Duchesne were served by Mountain
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Bell/US WEST/ Qwest and, more recently, by UBET Telecom. The outlying rural
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communities were served by UBTA. With the merger, UBTA-UBET is able to assist the
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urban and rural areas of the counties to combine their efforts and resources in attracting,
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developing and maintaining the commercial and industrial base so that its residents have
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employment opportunities now and in the future. This was, and continues to be, critical
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to the development of the Uintah Basin, including the deployment of new technologies,
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increased reliability of services through UBTA-UBET, and UBTA-UBET’s ability to
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provide the same level of services to everyone within its service area.
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Q:
WHAT ARE THE FACTORS THAT YOU BELIEVE THAT THE COMMISSION
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NEEDS TO CONSIDER IN ITS DETERMINATION AS TO WHETHER TO
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GRANT THE APPLICATION?
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A:
The overriding consideration before the Commission is whether the granting of the
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Application would be in the public interest. In so doing, the Commission should
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consider, first and foremost, the welfare of the telecommunications subscribers in the
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Vernal exchange as well as the Uintah Basin and the State of Utah, including the impact
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on the development of a telecommunications infrastructure that provides for the
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continued availability of technologically-advanced services for subscribers in all of the
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areas served by UBTA-UBET in the Vernal exchange as well as the Uintah Basin
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generally.
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Q:
HOW COULD THE GRANT OF THE APPLICATION IMPACT THE
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SUBSCRIBERS IN THE VERNAL EXCHANGE, THE UINTAH BASIN AND
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THE STATE OF UTAH GENERALLY?
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A:
If Bresnan is granted the authority to provide local, wireline services to its customers in
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the Vernal exchange, revenues which UBTA-UBET currently receives in providing such
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services to those customers will be diverted from UBTA-UBET. Inasmuch as UBTA-
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UBET is a rate-of-return regulated telecommunications carrier under federal and state
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law, the loss of those revenues will need to be made up in the form of either increased
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rates to the customers, not only in the Vernal exchange but also the Uintah Basin
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generally, or as additional support from the Universal Service Fund administered by the
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State of Utah (the “USF”). While there will be some reduction in costs associated with
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the migration of customers from UBTA-UBET to Bresnan, those reductions will not
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offset the revenue loss experienced by UBTA-UBET. As such, the burden of the
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competition which Bresnan seeks to introduce will be borne by the remaining customers
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of UBTA-UBET or by subscribers throughout the State of Utah. It is clear from the
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Application that Bresnan does not propose to provide its own facilities-based services to
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all of the Vernal exchange but to only those select areas in which it currently has cable
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plant or to those areas into which it might choose to expand. While Bresnan does
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indicate that it would serve outside of its cable area it would do so only by utilizing the
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facilities of UBTA-UBET. Presumably, Bresnan would only resell services provided by
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UBTA-UBET in those areas outside of its cable plant so that those customers would not
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realize the benefits of the digital voice service which Bresnan touts as a competitive
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alternative. As such, the benefits of competition accrue only to the select group to which
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Bresnan extends its own facilities and the burdens fall on every other subscriber in the
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Uintah Basin as well as the State of Utah.
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Q:
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ARE THERE ANY OTHER IMPACTS ON THE SUBSCRIBERS IN THE
UINTAH BASIN THAT THE COMMISSION SHOULD CONSIDER?
A:
I believe that the Commission should carefully consider the impact of granting the
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Application on the development of technologically enhanced services in the Uintah
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Basin. UBTA-UBET has made a substantial investment in the Vernal area as part of its
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ongoing obligations as the carrier of last resort. It has built, and continues to build,
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significant facilities within the Vernal area. As noted above, when UBTA acquired the
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Vernal exchange from Qwest there were virtually no fiber facilities, broadband service
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availability or any other technologically advances services in the exchange. Today, high-
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speed internet and data services are available to 100% of the subscribers in the Vernal
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exchange through UBTA-UBET’s DSL and other broadband offerings. This has
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occurred only because of the substantial investment that UBTA-UBET has made in the
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Vernal, Roosevelt and Duchesne exchanges over the past six years. If substantial
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revenues are diverted from UBTA-UBET, then the capability to continue to develop and
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deploy enhanced services is compromised. Additionally, as the carrier of last resort,
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UBTA-UBET is obligated to provide service in response to any
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reasonable demand for service, including when competitors
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cease to provide service, and cannot discontinue service
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without regulatory permission. Thus, UBTA-UBET is obligated
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to continue to build facilities even in areas/subdivision
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sough to be served by Bresnan.
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similarly obligated to provide its digital service in
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response to any reasonable demand for service.
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while Bresnan has indicated it is willing to connect any
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customer who reasonably demands it, Bresnan admits it would
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use UBTA-UBET facilities to connect customers who do not
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have current cable facilities.
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pick certain areas in the Vernal exchange for its digital phone service, but will be unable
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to offer its digital services to the exchange area as a whole. I am further concerned that
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by selecting the most economically advantageous areas, Bresnan will erode UBTA-
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Whereas Bresnan is not
In fact,
I am concerned that Bresnan will cherry
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UBET’s revenue stream without a concomitant reduction in UBTA-UBET’s costs. I do
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not believe this would be in the public interest.
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Q:
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IS YOUR INTERVENTION IN THIS MATTER MERELY A WAY TO SEEK
PROTECTION FROM COMPETITION?
A:
No. UBTA-UBET is not opposed to competition, nor is UBTA-UBET looking for
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protection from competition. In fact, UBTA-UBET is already subject to significant
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competition from the wireless and broadband industries.
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Q:
WHAT IS YOUR UNDERSTANDING OF THE ECONOMIC EFFECT OF
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BRESNAN’S CERTIFICATION AS A CLEC ON UBTA-UBET AND/OR THE
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CUSTOMERS IN THE UINTAH BASIN?
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A:
Ray Hendershot will provide the detailed testimony on the cost and economic analysis.
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Q:
Q:
DOES THAT CONCLUDE YOUR TESTIMONY?
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A:
Yes.
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