Control Number: 38388 Addendum Startpage

Control Number: 38388

Item Number: 103

Addendum StartPage : 0 SOAH DOCKET NO. 473-10-5444 PUC DOCKET NO. 38388

APPLICATION OF T-MOBILE WEST § CORPORATION FOR DESIGNATION § AS AN ELIGIBLE § BEFORE THE STATE OFFICE TECOMMUNICATIONS CARRIER § OF (NON-RURAL) PURSUANT TO 47 § ADMINISTRATIVE HEARINGS U.S.C. §214(e) AND P.U.C. § SUBSTANTIVE RULE 26.418 §

cli DIALTONESERVICES, L.P.'S REPLY BRIEF p-•: • ^,, ^.. ^^

May 13, 2011

SOAH DOCKET NO. 473-10-5444 1 of 28 DialToneServices, L.P.'s Docket No. 38388 Redacted Reply Brief (o3 SOAH DOCKET NO. 473-10-5444 PUC DOCKET NO. 38388

APPLICATION OF T-MOBILE WEST § CORPORATION FOR DESIGNATION § AS AN ELIGIBLE § BEFORE THE STATE OFFICE TECOMMUNICATIONS CARRIER § OF (NON-RURAL) PURSUANT TO 47 U.S.C. § ADMINISTRATIVE HEARINGS §214(e) AND P.U.C. SUBSTANTIVE § RULE 26.418 §

DIALTONESERVICES, L.P.'S REPLY BRIEF

TABLE OF CONTENTS 1. SUMMARY OF POSITION ...... 4

H. LEGAL FRAMEWORK FOR USF AND ETC DESIGNATION ...... 6

III. PROCEDURAL HISTORY ...... 7

IV. DOES T-MOBILE'S APPLICATION FOR ETC DESIGNATION IN NON- RURAL ILEC STUDY AREAS SATISFY THE APPLICABLE REQUIREMENTS OF 47 C.F.R. § 54.201, 47 U.S.C. § 214(E), P.U.C. SUBST. R. 26.412 AND P.U.C. SUBST. R 26.418? (PRELIMINARY ORDER ISSUE 1) ..... 7

V. HAS T-MOBILE'S APPLICATION PROVIDED SUFFICIENTLY DETAILED SERVICE AREA MAPS SUCH THAT ANY PERSON MAY ASCERTAIN WHETHER A CUSTOMER FALLS WITHIN T-MOBILE'S REQUESTED ETC SERVICE AREA? (PRELIMINARY ORDER ISSUE 2) ...... 12

VI. DOES T-MOBILE'S APPLICATION ADEQUATELY DEMONSTRATE AN ABILITY AND UNCONDITIONAL WILLINGNESS TO SERVE END USERS THROUGHOUT ITS REQUESTED ETC SERVICE AREA, CONSISTENT WITH THE COMMISSION'S PRECEDENT IN PRIOR ETC APPLICATIONS BY WIRELESS CARRIERS, INCLUDING THE COMMISSION'S DECISIONS IN THE DOBSON CELLULAR AND NEXTEL PARTNERS CASES? (PRELIMINARY ORDER ISSUE 3) ...... 17

VII. IS T-MOBILE LICENSED BY THE FCC TO PROVIDE SERVICE IN ALL THE PROPOSED NON-RURAL ILEC STUDY AREAS FOR WHICH IT IS SEEKING ETC DESIGNATION AND DOES T-MOBILE'S CURRENT FCC

SOAH DOCKET NO. 473-10-5444 2 of 28 DialToneServices, L.P.'s Docket No. 38388 Redacted Reply Brief LICENSED NETWORK PROVIDE SUFFICIENT COVERAGE (WITH SUFFICIENT CALL QUALITY) THROUGHOUT THE REQUESTED ETC SERVICE AREA? (PRELIMINARY ORDER ISSUE 4) ...... 19

VIII. HAS T-MOBILE'S APPLICATION ADEQUATELY DEMONSTRATED THAT ANY FEDERAL HIGH COST SUPPORT IT MIGHT RECEIVE AS AN ETC WILL BE USED TO IMPROVE SIGNAL QUALITY, COVERAGE, OR CAPACITY, OR OTHERWISE BE USED TO FURTHER THE PROVISION OF SUPPORTED SERVICES IN THE SERVICE AREA? (PRELIMINARY ORDER ISSUE 5) ...... 22

IX. DOES T-MOBILE'S APPLICATION DEMONSTRATE THAT T-MOBILE WILL COMPLY WITH PUBLIC UTILITY REGULATORY ACT (PURA) § 55.015 AND THE TEXAS LIFELINE RULE, P.U.C. SUBST. R. 26.412, INCLUDING LIFELINE DISCOUNTS ON ALL BUNDLES AND/OR PACKAGES OF SERVICES THAT T-MOBILE OFFERS TO ALL OF ITS CUSTOMERS? (PRELIMINARY ORDER ISSUE 6) ...... 24

X. IS THE MARCH 21, 2011 ANNOUNCEMENT THAT AT&T HAS ENTERED INTO AN AGREEMENT WITH DEUTSCHE TELEKOM TO ACQUIRE T- MOBILE USA RELEVANT TO THIS APPLICATION, AND IF SO, IN WHAT WAY? ...... 24

XI. CONCLUSION ...... 26

SOAH DOCKET NO. 473-10-5444 3 of 28 DialToneServices, L.P.'s Docket No. 38388 Redacted Reply Brief SOAH DOCKET NO. 473-10-5444 PUC DOCKET NO. 38388

DIALTONESERVICES LP'S REPLY BRIEF

On April 21, 2011, the parties filed their Initial Briefs in this matter. DialToneServices

LP ("DTS") opposes the certification of T-Mobile West Corporation ("T-Mobile") to be an

"Eligible Telecommunications Carrier" ("ETC") for non-rural areas in Texas. Thus, this Reply

Brief will focus on errors and misstatements contained in T-Mobile's Initial Brief. Failure to

comment upon a portion of T-Mobile's Brief should not be construed to be agreement with any

statement within that Brief.

1. SUMMARY OF POSITION

T-Mobile claims that it has presented a "compelling application" to the Public Utility

Commission ("Commission") for ETC certification in the non-rural wire centers of GTE- SW

Verizon TX, GTE-SW d/b/a Verizon SW Inc. - Tx (Contel) and Southwestern Bell - TX.' In

fact, T-Mobile's application is materially deficient and is no more than a fill-in-the-blank

approach to seeking designation as an ETC. Instead the record establishes that T-Mobile should

not be granted ETC status in the non-rural areas of Texas:

• T-Mobile Lacks Facilities In Many Non-Rural Areas and Is Therefore Dependent On Unnamed "Partners" To Provide Service - T-Mobile claims that it will provide service "throughout" its ETC service area, "using its own facilities or a combination of its

' T-Mobile Initial Brief at 3

SOAH DOCKET NO. 473-10-5444 4 of 28 DialToneServices, L.P.'s Docket No. 38388 Redacted Reply Brief own facilities and resale."2 The evidence does not sustain this statement. As discussed below, T-Mobile has multiple counties in which it shows little to no coverage from its own facilities. With regard to resale, T-Mobile's own testimony states, "T-Mobile does not resell the services of another carrier, but is a full services facilities-based carrier."3 Judging from the maps T-Mobile filed in this case, it will be dependent in numerous counties on the facilities of an unnamed "partner." T-Mobile cannot show that it will provide service "throughout" its requested service areas or with "sufficient call quality." T-Mobile strives to avoid these requirements by saying they are preempted, but T-Mobile places far too much weight on the preemption order.

• T-Mobile's Maps Are Insufficient for "Any Person" to Determine Requested Coverage - T-Mobile claims that it has filed "extraordinarily detailed" service maps, from which "any person" can determine if they fall within a requested ETC area.4 Ironically, T-Mobile points to confidential maps5 as proving that "any person" can determine where T-Mobile plans to offer service. T-Mobile should not be allowed to use "confidential" maps (that only a few may review) in order to show that it complies with a requirement that requires "any" person to be able to determine possible coverage. Furthermore, T-Mobile's maps - whether publicly-available or confidential - are confusing and frequently lack the kind of landmarks that would allow consumer to determine the scope of T-Mobile's request.

• T-Mobile Cannot Cure Its Lack of Coverage By Use of the Dobson Cellular Steps - T-Mobile claims that it has shown that it has the ability to serve customers "throughout" its service territory "consistent with Commission precedent."6 However, the Commission precedent on which it apparently relies - the Dobson order7 - was designed to cover "small patches" of territory,8 not multiple counties.

• T-Mobile's "Service Improvement Plan" is Inadequate - T-Mobile does not discuss its "Service Improvement Plan" ("SIP") within its "Summary of Position," but does say

2 Id. 3 T-Mobile Exh. 1, Direct Testimony of Daniel Piekarczyk at 8/ 8-9 (emphasis added). 4 T-Mobile Initial Brief at 3. 5 Id. at 23 (emphasis in original). 6 Idd, at 3. 7 Application Of Dobson Cellular S'ystems, Inc. For Designation As An Eligible Telecommunications Carrier (Etc) Pursuant To 47 U.S.C. 241(E) And P. U. C. Subst. R. 26.418, PUC Docket No. 29144, Order, FoF 50 (Feb. 2, 2005) ("Dobson Cellular - Rural"). g Id. at FoF 55.

SOAH DOCKET NO. 473-10-5444 5 of 28 DialToneServices, L.P.'s Docket No. 38388 Redacted Reply Brief high-cost funds "will be used"9 to improve service. However, the SIP submitted by T- Mobile (and the supplements and additions to that SIP) does not constitute the type of specific plans that are required for approval as an ETC.

The Pending Merger of AT&T and T-Mobile Changes the Impact of this Application on Texas - T-Mobile describes the newly-announced acquisition by AT&T of T-Mobile as "irrelevant" and concerns about the impact of the acquisition on the funds that would be available to Texas through the FUSF as "speculative." 10 To the contrary, the acquisition will change numerous key aspects of T-Mobile's application. To take but one example, it strains credulity to believe that AT&T would have exactly the same build-out plan as T-Mobile. It would make no business sense for AT&T to duplicate its own facilities. Furthermore, there is a real danger that the merger could occur in such a way as to wind up cutting FUSF funds for remaining ETC carriers in Texas, without gAy corresponding benefit to Texas customers residing in high-cost areas. There is no need to rush this application. The Commission should take a "wait and see" approach until the effects of the acquisition can be completely evaluated.

T-Mobile's application is flawed, and should be denied by the Commission irrespective of the AT&T/T-Mobile transaction. But in light of AT&T's announced acquisition of T-Mobile, the prudent path for the Commission is at a minimum to dismiss the current application.

H. LEGAL FRAMEWORK FOR USF AND ETC DESIGNATION

T-Mobile's brief spends some ten pages" laying out its theory of the law underlying its application. Much of the discussion deals with law that is not in dispute in this case. Rather than first discuss the law and then discuss the facts, DTS discusses T-Mobile's errors of law in the context of whether T-Mobile has met the various requirements established by the FCC and the

Commission.

9 T-Mobile Initial Brief at 4. 10 Id " T-Mobile Initial Brief at 4 - 14.

SOAH DOCKET NO. 473-10-5444 6 of 28 DialToneServices, L.P.'s Redacted Reply Brief Docket No. 38388 III. PROCEDURAL HISTORY

DTS does not take issue with most of T-Mobile's statement of procedural history. Since there is a discussion of the protective order in this Brief, DTS would recommend that the summary of procedural history note that T-Mobile requested a protective order in this docket on

July 26, 2010 and the ALJ issued an order granting that request on August 4, 2010. Under the protective order, only a limited number of people have access to "confidential" information.

DTS would add that on May 3, 2011, the Commission issued an order rejecting DTS'

Appeal of the ALJ's Bench Order, but ruling:

Furthermore, the Commission will have the opportunity to consider the substantive arguments raised by DialToneServices in their motion when these dockets return to the Commission for final determination following the issuance of a proposal for decision by the ALJ.12

DTS interprets this Order as encouraging the ALJ to "consider the substantive

arguments" relating to the impacts of AT&T's acquisition of T-Mobile when preparing a

proposal for decision in this case.

T-Mobile recognizes that it must show that it can provide service "throughout" the ETC

service area and use its own facilities or a combination of own facilities and resale in order to

meet the requirements of the issue set out in Issues No. 1 of the Preliminary Order,13 but defers

12 "Order Denying Appeal of ALJ's March 22, 2011 Bench Order" at 1.

13 T-Mobile Initial Brief at 18.

SOAH DOCKET NO. 473-10-5444 7 of 28 DialToneServices, L.P.'s Docket No. 38388 Redacted Reply Brief discussion of these issues to later in its Brief.14 These issues are too critical to be lost in the minutia of T-Mobile's application.

In its Initial Brief, DTS pointed out that T-Mobile lacked cell towers in a number of counties.15 Upon more careful examination of T-Mobile's application, the situation is even worse than originally reported in DTS' Initial Brief. There are many counties in which T-Mobile shows little to no service or no cell towers: * * * BEGIN CONFIDENTIAL

CONFIDENTIAL MAP REDACTED

14 Id. at 22. 15 DTS Initial Brief at 13 - 14.

SOAH DOCKET NO. 473-10-5444 8 of 28 DialToneServices, L.P.'s Redacted Reply Brief Docket No. 38388 END CONFIDENTIAL * * * There is no way to know, based on the record now before the Commission, exactly how much area T-Mobile seeks to serve in non-rural areas. * * * BEGIN CONFIDENTIAL -

END CONFIDENTIAL * * *

T-Mobile is seeking to be certified as an ETC in counties where it is totally dependent upon its "partner," lacks coverage at all, or has no cell tower of its own. The area covered by those counties would cover several of Texas' sister states. It seems a difficult proposition that T-

Mobile should be certified as an ETC to what in many other States of the Union would be the entire state, despite the fact that it lacks facilities within the state or an ability to provide service

on its own. But that is analogous to what T-Mobile's application does.

Federal lawl7 and the Commission's ruleslg require a carrier seeking ETC status to show

that it can "Offer the services ... using either its own facilities or a combination of its own

facilities and resale of another carrier's services." In other words, a carrier cannot get ETC status

for areas in which it relies exclusively on the facilities of another carrier. However, T-Mobile

seeks to do exactly that - and not for a small area. T-Mobile is seeking to rely on its unknown

and unnamed "partners" for an enormous number of square miles.

T-Mobile argues that it is not required to follow Federal law, Texas regulations or Texas

T-Mobile policy because the FCC has preempted all requirements for it to have facilities.

(CONFIDENTIAL). 16 Vol. 1 Tr. at 65/23 - 66/4 (Piekarczyk); 66/5-14 (Hooper); 66/17-19 (Thomas); 66/20 - 22. Note that DTS does not believe the quote from the transcript at this cite is confidential, but the quote DTS provides is in the confidential portion of the transcript and DTS is respecting that designation out of an abundance of caution. 17 47 U.S.C. 54.202(d)(i). 18 P.U.C. SUBST. R. 26.418(g)(1)(B)(i).

SOAH DOCKET NO. 473-10-5444 9 of 28 DialToneServices, L.P.'s Redacted Reply Brief Docket No. 38388 repeats this argument several times in its Initial Brief.19 T-Mobile's preemption argument is critical to its case since it is aware that it does not provide adequate service throughout the territories for which it seeks certification. T-Mobile provided an exhibit listing coverage data for each requested wire center, listing the population density and the level of T-Mobile coverage.20

Of the wire centers listed, T- Mobile had ****BEGIN CONFIDENTIAL

END

CONFIDENTIAL**** In other words, T-Mobile acknowledges it cannot meet the

requirements to provide service "throughout" its requested service area using its own facilities

with sufficient call quality.

T-Mobile places too much emphasis on the FCC preemption order. The FCC was

seeking to determine the meaning of "throughout" with regard to the service territory for which

ETC designation was sought. Could a new applicant be required to provide service to "pockets"

where there were no customers or facilities?21 The FCC reasonably concluded that the

requirement to provide service "throughout" a territory did not include such pockets. In contrast

to the situation in the Western Wireless order, T-Mobile is not just avoiding "pockets" where

there are no facilities - it is seeking to avoid the equivalent of several states' worth of territory.

Furthermore, the FCC did not say that a carrier could claim that it would build facilities

"someday."

19 T-Mobile Initial Brief at 8- 10, 27-29, and 31-32. 20 T-Mobile Exh. 7a, Rebuttal Testimony of Gene DeJordy, Confidential Exhibit GD-2. 21 In the Matter of the Federal- State Joint Board on Universal Service; Western Wireless Corporation Petition for Preemption of an Order of the South Dakota Public Utilities Commission, FCC 00-248 Declaratory Ruling at fn. 31 (Aug. 10, 2000). ("Western Wireless').

SOAH DOCKET NO. 473-10-5444 10 of 28 DialToneServices, L.P.'s Docket No. 38388 Redacted Reply Brief We caution that a demonstration of the capability and commitment to provide service must encompass something more than a vague assertion of intent on the part of a carrier to provide service. The carrier must reasonably demonstrate to the state commission its ability and willingness to provide service upon designation.22 In other words, if a carrier does not have sufficient facilities at time of certification, it must have real and concrete plans as to how it will have such facilities. As will be discussed later in this brief, T-Mobile has not provided concrete build-out plans. T-Mobile's promises amount to nothing more than "vague assertions of intent."

T-Mobile's reliance on Western Wireless also ignores recent developments at the FCC.

Western Wireless was issued in 2000, at a time when the FCC was seeking to encourage new

entrants to provide universal service. However, the FCC is now re-thinking this approach and

may go to a system in which a single lowest bidder gets designation as an ETC for an area. The

FCC has determined that its prior policies resulted in several unintended consequences:

In many areas of the country, USF provides more support than necessary to achieve our goals, subsidizes a competitor to a voice and broadband provider that is offering service without government assistance, or supports several voice networks in a single area.23

T-Mobile's application demonstrates that the FCC is right to be concerned about the

current state of FUSF funding. To the extent that T-Mobile is seeking service for areas already

served by its "partner," it is providing duplicate service. Some carriers, like DTS, already

provide voice service in many parts of Texas, so T-Mobile would become one of "several" voice

networks in a single area. In sum, if the Western Wireless facts were presented to the FCC

today, the FCC might reach a totally different conclusion.

22 Id. at ¶ 24. (emphasis added). 23 In the Matter of Connect Am. Fund A Nat '1 Broadband Plan for Our Future Establishing Just & Reasonable Rates for Local Exch. Carriers High-Cost Universal Serv. Support Developing an Unified Intercarrier Comp. Regime Fed-State Joint Bd on Universal Serv. Lifeline & Link-Up, WC10-90, 2011 WL 466775 (F.C.C. Feb. 9, 2011),

SOAH DOCKET NO. 473-10-5444 11 of 28 DialToneServices, L.P.'s Docket No. 38388 Redacted Reply Brief T-Mobile seeks to avoid the requirement to use its own facilities and provide adequate service "throughout" its service territory by reliance on the six-step process provided by 47

C.F.R. § 54.202.24 This Commission authorized a carrier to use the six-step process in a second

Dobson case.25 DTS respectfully submits that the six-step process is not intended to address the gaps in service the size of several states. For example, in Dobson, this Commission authorized the use of the six-step process to cover "small patches" in one county.26

Therefore, the Commission should determine that T-Mobile: (a) does not have its own

facilities on which its provision of service can be based; (b) cannot rely on service provided by

its unknown and unnamed "partners"; (c) cannot provide service "throughout" the requested

service territories and (d) cannot provide sufficient coverage (with sufficient call quality) for its

requested service territory. At the very least, the Commission should deny T-Mobile's request

with regard to every county in which T-Mobile shows little to no coverage or in which it lacks

even a single cell tower.

T-Mobile has not met the requirement of providing "sufficiently detailed" maps. T-

Mobile claims that it has filed "extraordinarily detailed" service maps, from which "any person"

can determine if they fall within a requested ETC area.27 Ironically, T-Mobile points to

24 T-Mobile Initial Brief at 39 - 40. 25 Application Of Dobson Cellular Systems, Inc. For Designation As An Eligible Telecommunications Carrier (Etc) Pursuant To 47 U.S.C. 241(E) And P. U. C. Subst. R 26.418, PUC Docket No. 29144, Order, FoF 50 (Feb. 2, 2005) ("Dobson Cellular - Rural"). 26 Id. at FoF 55. 27 T-Mobile Initial Brief at 3.

SOAH DOCKET NO. 473-10-5444 12 of 28 DialToneServices, L.P.'s Docket No. 38388 Redacted Reply Brief confidential maps28 as proving that "any person" can determine where T-Mobile plans to offer service.

Under the Protective Order issued in this docket, "Confidential" materials are included within the ambit of "Protected Materials." Only a limited group of persons can view "Protected

Materials" under the Protective Order:

5. Persons Permitted Access to Protected Materials. Except as otherwise provided in this Protective Order, a Reviewing Party may access Protected Materials only through its "Reviewing Representatives" who have signed the Protective Order Certification Form (see Attachment A). Reviewing Representatives of a Reviewing Party are limited to its counsel of record in this proceeding and associated attorneys, paralegals, economists, statisticians, accountants, consultants, or other persons employed or retained by the Reviewing Party and directly engaged in this proceeding. At the request of the PUC Commissioners, copies of Protected Materials may be produced by Commission Staff. The Commissioners and their staff shall be informed of the existence and coverage of this Protective Order and shall observe the restrictions of the Protective Order.29

Thus, if an ordinary person wanted to view the confidential maps filed by T-Mobile, such

person would have to intervene and hire "Reviewing Representatives." Even then, the

"Reviewing Representative" could not share the contents of the confidential material with the

individual intervenor.30 Thus, "any" person cannot view the confidential maps provided by T-

Mobile.

Moreover, even if such a person were to obtain access to such maps, that person would

have a hard time determining whether he or she was within or without of T-Mobile's requested

service territory. Ordinary persons (albeit, somewhat sophisticated ones) can go to the

Commission web site and view the unprotected maps filed with T-Mobile's application.

28 Id at 23 (emphasis in original). 29 Protective Order at 6. 3o Protective Order ¶ 22.

SOAH DOCKET NO. 473-10-5444 13 of 28 DialToneServices, L.P.'s Reply Brief Docket No. 38388 Redacted However, those maps are not helpful. T-Mobile is seeking to serve non-rural exchanges

"MCLNTXML" and "SHRKTXSR" in Collingsworth County. For example, below is the publicly available map for Collingsworth County:

Co ilingsworth County

_ Legend 7-1 YYIerGnlwlamdwry CMA LJeama! Spsr.hum Covaraqa /lro[- ^ Q WuMP boundwry •Mobffer J •t-MO6ts a+^.mh nr •^..+ m •ow.ra.^m..a..w`.Mwrr.m ^ w.ev^wwu

As can be seen, this map is a confusing grouping of lines, none of which clearly indicate

the territory T-Mobile seeks to serve in Collingsworth County. The codes on the map - called

CLLI codes31 - are of no use to anyone not in the telephone industry.

Compare this map to a more common map of Collingsworth County:

31 Common Language Location Identifier Code, pronounced "silly" code.

SOAH DOCKET NO. 473-10-5444 14 of 28 DialToneServices, L.P.'s Docket No. 38388 Redacted Reply Brief fi

The contrast is stark. This map shows highways, county roads, airports and landmarks like rivers. It would be possible for someone who is familiar with Collingsworth County to find his or her home or business with a reasonable degree of accuracy.

T-Mobile's "Confidential" maps, an example of which is shown below, would not assist the hypothetical "any" person who was attempting to determine T-Mobile's requested coverage:

SOAH DOCKET NO. 473-10-5444 15 of 28 DialToneServices, L.P.'s Docket No. 38388 Redacted Reply Brief * * * BEGIN CONFIDENTIAL

CONFIDENTIAL MAP REDACTED

END CONFIDENTIAL * * *

If the hypothetical customer lived in Dodson - is he or she covered by T-Mobile's request? What about customers in the far northwest portion of the county? T-Mobile's maps are not "sufficiently detailed service area maps such that any person may ascertain whether a customer falls within T-Mobile's requested ETC service area."

SOAH DOCKET NO. 473-10-5444 16 of 28 DialToneServices, L.P.'s Docket No. 38388 Redacted Reply Brief VI. DOES T-MOBILE'S APPLICATION ADEQUATELY DEMONSTRATE AN ABILITY AND UNCONDITIONAL WILLINGNESS TO SERVE END USERS THROUGHOUT ITS REQUESTED ETC SERVICE AREA, CONSISTENT WITH THE COMMISSION'S PRECEDENT IN PRIOR ETC APPLICATIONS BY WIRELESS CARRIERS, INCLUDING THE COMMISSION'S DECISIONS IN THE DOBSON CELLULAR AND NEXTEL PARTNERS CASES? (PRELIMINARY ORDER ISSUE 3)

T-Mobile does not have an "ability" to serve end users "throughout" its requested ETC service area. The colored T-Mobile map of Collingsworth County is instructive. The portion marked with green hash marks is an area in which T-Mobile depends upon its "partners" for service. The purple shaded areas are areas in which T-Mobile claims to have some signal strength, with the lighter purple indicating lower strength signals. The cream-colored areas are areas in which neither T-Mobile nor its partners provide service. Collingsworth County covers about 926 square miles. * * * BEGIN CONFIDENTIAL

END

CONFIDENTIAL * * * In a rural area, a cell tower can cover 3 to 15 miles.32 Thus, no area in

Collingsworth County that is more than 15 miles away from a T-Mobile cell tower is served by

T-Mobile.

T-Mobile spends most of its initial brief explaining why it is not really required to have an "ability" to serve end users "throughout" its requested service territory.33 DTS has already discussed those arguments above and will not repeat them here. However, it is worth noting that

T-Mobile could have limited its application so that it actually had a cell tower in every county for which it sought ETC designation. It could have had "patches" of those counties in which it did not serve, in which case it would have been entitled to consideration under the Dobson-Rural

32 Vol. 1 Tr.98/9-14. 33 T-Mobile Initial Brief at 27 - 29.

SOAH DOCKET NO. 473-10-5444 17 of 28 DialToneServices, L.P.'s Docket No. 38388 Redacted Reply Brief six-step process to cover those patches. It did not do so. Instead, its management decided to apply for a huge swath of Texas where it had no towers and was dependent upon its partners.

This Commission should not encourage T-Mobile's strategy. It is beyond human capacity for T-Mobile to accomplish the equivalent of a multi-state roll out of facilities in a short period of time. T-Mobile will advertise services to potential customers in Collingsworth County

and many other counties - and not have the ability to then promptly provide those services.

Those early would-be customers will get what amounts to an "IOU" - a promise to go through

the six-step Dobson-Rural process. They will be told that this Commission authorized those

"IOUs." It is safe to predict that thwarted customers will complain to this Commission.

Granting T-Mobile's current application will not only harm potential customers in areas

where T-Mobile lacks facilities, it will also harm the carriers who currently do serve such

customers with the assistance of FUSF funds. Every FUSF dollar that goes to T-Mobile is a

dollar that other certified ETCs will not get; the existing level of FUSF monies will be

distributed among one more carrier. Customers could end up with a lose-lose proposition -

leaving their old carrier for T-Mobile, only to be told T-Mobile cannot serve them within a

reasonable period of time and then learning that their old carrier has cut back its services because

of the cutback on FUSF funds.

The simple solution to this problem is to deny T-Mobile's application. Let AT&T review

its combined network. If AT&T has not "voluntarily" frozen its FUSF monies as a condition of

the acquisition, it can come back to this Commission with an application based on the true

"ability" to serve end users "throughout" the requested certified area.

SOAH DOCKET NO. 473-10-5444 18 of 28 DialToneServices, L.P.'s Docket No. 38388 Redacted Reply Brief VII. IS T-MOBILE LICENSED BY THE FCC TO PROVIDE SERVICE IN ALL THE PROPOSED NON-RURAL ILEC STUDY AREAS FOR WHICH IT IS SEEKING ETC DESIGNATION AND DOES T-MOBILE'S CURRENT FCC LICENSED NETWORK PROVIDE SUFFICIENT COVERAGE (WITH SUFFICIENT CALL QUALITY) THROUGHOUT THE REQUESTED ETC SERVICE AREA? (PRELIMINARY ORDER ISSUE 4)

T-Mobile portrays the area of Texas that it will not be providing "sufficient coverage" with "sufficient call quality" as merely being "some coverage gaps."34 As already discussed in this brief (see the statewide map), it is much more than a coverage "gap." There is a swath of multi-state proportions in which T-Mobile provides coverage only through its "partners," with no

indication as to the call quality provided by those partners.

Furthermore, even when the map shows T-Mobile service, that service may be below

acceptable standards. In the color map of Collingsworth County, for example, the two lightest

shades of purple represent signal strength below -84dBm. At these signal strengths, a cell phone

ceases to be a "mobile" phone - a person would have to stand outside a vehicle to use the most

common type of phone:

[I]f a person has a GSM-only phone, if they are in neg 84 coverage, they would need to be outside to receive signal for most ---for the most part. 35

T-Mobile's brief does not claim that it has sufficient call coverage with sufficient call

quality throughout its requested service territory. Instead, it spends multiple pages making a

point it has already tried to make - that it is not really required to have such call coverage, call

quality, or cover its entire requested service area.36 DTS has already explained that T-Mobile is

34 T-Mobile Initial Brief at 31. 3s Vol. 1 Tr. at 225 / 4- 7. 36 T-Mobile Initial Brief at 31 - 33.

SOAH DOCKET NO. 473-10-5444 19 of 28 DialToneServices, L.P.'s Docket No. 38388 Redacted Reply Brief placing too much weight on the FCC's Western Wireless order and is misreading the Dobson -

Rural order, and will not repeat those arguments.

T-Mobile also misreads the Commission's Order in Docket No. 38377, Application of

Telenational Communications, Inc. for Designation as an Eligible Telecommunications Carrier

(ETC) and as an Eligible Telecommunications Provider (ETP). T-Mobile argues that the

Telenational case stands for the proposition that "ubiquitous service at the highest call quality is not required for an ETC designation."37 T-Mobile reaches this conclusion because the

Commission ordered Telenational to file a network plan showing "how signal quality, coverage or capacity will improve due to the receipt of High Cost support."38 There are a number of flaws with T-Mobile's analysis of this case.

First, the Telenational case was a settled case, in which Telenational made commitments in order to obtain agreement for its certification. As is tradition for this Commission, the

Commission Order recited:

Entry of this Order does not indicate that the Commission's endorsement or approval of any principal or methodology that may underlie the agreement. Entry of this Order consistent with the agreement shall not be regarded as binding or precedent as to the appropriateness of any principle underlying the agreement.39

Therefore, it is incorrect for T-Mobile to claim that the Telenational case established any kind of Commission policy with regard to how much service is required before an ETC can be granted.

37 Idd, at 33.

38 Application of Telenational Communications, Inc. for Designation as an Eligible Telecommunications Carrier (ETC) and as an Eligible Telecommunications Provider (ETP), Docket No. 38377, Order at 9 (Apr. 14, 2011). 39 Id, Ordering paragraph 4, at 13.

SOAH DOCKET NO. 473-10-5444 20 of 28 DialToneServices, L.P.'s Docket No. 38388 Redacted Reply Brief Second, the Telenational case involved what amounted to a change-of-name.

Telenational took over the assets of the prior carrier.40 As a result, Telenational already provided service throughout the service area.41 There is no indication in the Order that Telenational had any gaps in coverage or that it had any areas of below-quality coverage. The report it was instructed to file reflects that the Commission wanted to make sure that USF funding was going for its intended purpose - to improve service quality in a rural area. As technology changes, any level of service quality, coverage or capacity can be improved.

Finally, T-Mobile's reading of this case involves a leap in logic. Just because the

Commission recognizes that an existing carrier can improve service quality does not lead to the conclusion that the Commission has recognized that "ubiquitous service at the highest call quality is not required for an ETC designation." This is a logic fallacy known as the

"undistributed middle." By using the words "ubiquitous" and "highest quality," T-Mobile has expressed an extreme. However, T-Mobile is actually arguing that this Commission would certify an ETC carrier who is not providing any service over its own network in many parts of its service area and whose call quality is weak to non-existent in those areas. This is a total misreading of the Telenational order.

This Commission has a simple requirement - that carriers seeking ETC certification be able to provide "sufficient" service throughout the service area with sufficient call quality. T-

Mobile cannot meet that test for all of the territories it has requested at this time, since T-Mobile is dependent upon its "partners" and lacks cell towers in many of the requested areas. The

Commission should reject T-Mobile's application.

ao Id., at 1. al FoF 20.

SOAH DOCKET NO. 473-10-5444 21 of 28 DialToneServices, L.P.'s Docket No. 38388 Redacted Reply Brief VIII. HAS T-MOBILE'S APPLICATION ADEQUATELY DEMONSTRATED THAT ANY FEDERAL HIGH COST SUPPORT IT MIGHT RECEIVE AS AN ETC WILL BE USED TO IMPROVE SIGNAL QUALITY, COVERAGE, OR CAPACITY, OR OTHERWISE BE USED TO FURTHER THE PROVISION OF SUPPORTED SERVICES IN THE SERVICE AREA? (PRELIMINARY ORDER ISSUE 5)

T-Mobile acknowledges that it is required to file a five-year improvement plan and even recites the requirements of that plan:

(ii) Submit a five-year plan that describes with specificity proposed improvements or upgrades to the applicant's network on a wire center-by-wire center basis throughout its proposed designated service area. Each applicant shall demonstrate how signal quality, coverage or capacity will improve due to the receipt of high- cost support; the projected start date and completion date for each improvement and the estimated amount of investment for each project that is funded by high- cost support; the specific geographic areas where the improvements will be made; and the estimated population that will be served as a result of the improvements. If an applicant believes that service improvements in a particular wire center are not needed, it must explain its basis for this determination and demonstrate how funding will otherwise be used to further the provision of supported services in that area.42

This is not a difficult rule to decipher. Carriers should produce a plan that shows the specific improvements or upgrades, including the projected start date and completion date for each improvement. For each specific improvement, the plan should show the estimated amount of investment, the area where the improvement will be made and the estimated population that will be served.

T-Mobile did not file a plan that met these requirements. T-Mobile points to its initial filing, Confidential DP-6, its "Service Improvement Plan" or "SIP" 43 However, that filing is merely a spreadsheet that does not specify, on a project-by-project basis, which specific improvements T-Mobile plans to construct in the future. Staff Witness Kayser described this

4' 47 C.F.R. 54.202(a)(1), quoted at T-Mobile Initial Brief at 34-35.

43 T-Mobile Initial Brief at 35.

SOAH DOCKET NO. 473-10-5444 22 of 28 DialToneServices, L.P.'s Docket No. 38388 Redacted Reply Brief filing: "T-Mobile merely allocated the overall five-year capital and operating budget to each wire center based on the population in each wire center."44 T-Mobile witness Piekarczyk testified that the SIP is not a commitment to spend any specific amount of money in Texas. 45

T-Mobile also points to Confidential Exhibit DP-4, which it says "demonstrate that T-

Mobile has an extensive network of switching, cell sites, interconnecting facilities, and coverage in its ETC service area."46 Note the use of the present tense - these are facilities that T-Mobile already has. It is not a set of specific plans for what it will build over the next five years.

T-Mobile then attempts to rely upon Confidential Exhibit DP-8, which shows cell cites constructed in 2010, as well as those planned for 2011 and includes an updated SIP.47 However,

DP-8's specific cell tower plans only go out one year. The updated SIP suffers from the flaws of its predecessor. While dollars are broken out by wire center, it is clear that they do not mean that an investment will actually occur in that wire center. Investments that are deemed to benefit the entire network will mean "that you're going to have almost an allocation down to those folks down there ... .i48 T-Mobile's witness agreed that there "isn't any real correlation" between what is in the SIP and what T-Mobile is doing on the ground in Texas.49 T-Mobile's initial and updated SIP plans lack the detail and the amount of commitment that the Commission should expect in a five-year plan. It is the type of "vague statement of intent" that the FCC warned about in the Western Wireless decision. The Commission should conclude that T-Mobile has not adequately demonstrated that any federal high cost support it might receive as an ETC will be

44 Staff Exh.1, Direct Testimony of Elizabeth Kayser, 13 / 27 -29. 45 Tr.Vol. 1. at81/11-19. 46 T-Mobile Initial Brief at 35. 47 Id. 4$ Vol. 1 Tr. at 149/6-15. 49 Vol. 1 Tr. at 150 / 17 - 24.

SOAH DOCKET NO. 473-10-5444 23 of 28 DialToneServices, L.P.'s Docket No. 38388 Redacted Reply Brief used to improve signal quality, coverage, or capacity, or otherwise be used to further the provision of supported services in the service area. Moreover, AT&T's announced acquisition of

T-Mobile further clouds the value of T-Mobile's SIP plans.

DTS is not addressing this issue in its Reply Brief.

X. IS THE MARCH 21, 2011 ANNOUNCEMENT THAT AT&T HAS ENTERED INTO AN AGREEMENT WITH DEUTSCHE TELEKOM TO ACQUIRE T- MOBILE USA RELEVANT TO THIS APPLICATION, AND IF SO, IN WHAT WAY?

T-Mobile argues that the merger of AT&T with T-Mobile is "not relevant" to the consideration of this application.50 To the contrary, all of the plans, all of the network, and all of the service coverage will change after the acquisition is completed. It is an error for the

Commission to ignore such a major event in the corporate life of an applicant.

T-Mobile makes a bold statement - that T-Mobile West Corporation "would remain the legal entity at closing."51 T-Mobile cannot predict the outcome of the acquisition quite so clearly. First, of course, the structure of the acquisition might change. Second, the acquisition may be accompanied by conditions that would make the "legal entity at closing" irrelevant. The

FCC recently approved a merger and specifically approved the reduction in universal service

50 T-Mobile Initial Brief at 37. si Id

SOAH DOCKET NO. 473-10-5444 24 of 28 DialToneServices, L.P.'s Docket No. 38388 Redacted Reply Brief funding that would accompany the merger. 52 Even if T-Mobile West Corporation remains in existence at closing, AT&T has a history of incorporating its acquired corporations into the

AT&T "brand." It has done so for prior acquisitions such as Cingular,53 BellSouth,54 Dobson

Wireless,55 and Southwestern Bell Telephone.56 Thus, existence at closing would not necessarily mean that the entity holding the ETC will not change.

Put simply, T-Mobile is in no position to bind AT&T to anything. That is the problem.

There is a very real scenario in which all ETCs and their customers in Texas suffer if T-Mobile obtains FUSF monies and then loses its ETC status. T-Mobile cannot pledge to not take the money. T-Mobile cannot bind AT&T to keep it as the "legal entity," holding the ETC

certification. T-Mobile cannot guarantee that this Commission will simply allow T-Mobile to

transfer the ETC certification, contrary to Commission precedent. If T-Mobile loses the

certification, T-Mobile cannot guarantee that the FCC will not take the FUSF money that was

going to T-Mobile in the last month prior to its loss of the certification, annualize it and then

deduct that amount from the amount going to Texas carriers as a whole. T-Mobile cannot

guarantee that the resulting "dilution rate" will not be as significant as the estimate made by Staff

Witness Kayser on the stand.57

52 In The Matter Of Applications Filed By Qwest Communications International Inc. And CenturyTel, Inc. D/B/A Centurylink For Consent To Transfer Control, WC Docket No. 10-110, FCC 11-47, (Adopted: March 18, 2011,Released: March 18, 2011). s3 Vol. 2 Tr. at 403 / 22 - 25. sa Id. at 404 / 1- 4. s5 Id. at 404 / 5- 11. 56 Id. at 404 / 14 - 24. 57 Vol. 2, Tr. at pp. 81 - 82. (CONFIDENTIAL).

SOAH DOCKET NO. 473-10-5444 25 of 28 DialToneServices, L.P.'s Docket No. 38388 Redacted Reply Brief The moment the acquisition was announced, T-Mobile lost control over the ultimate outcome of this docket. To deny this fact is to ignore the reality of corporate mergers and acquisitions in modem America. The acquiring company calls the shots. This Commission should give AT&T the opportunity to review T-Mobile's application and, if allowed to do so, re- file it with up-to-date information based on the capacities of the combined entity. There is no downside in waiting, but a potential for great harm to Texas by precipitous action.

XI. CONCLUSION

T-Mobile is seeking ETC certification for vast areas where it lacks service and lacks facilities. This is contrary to federal law and this Commission's rules. It does not have small

"gaps" in service. It has holes that would swallow some of Texas' sister states. T-Mobile should be required to comply with the law and not be allowed to avoid it by inaccurate claims of

"preemption" or the use of a six-step process that is aimed at fixing small gaps in service.

The maps submitted by T-Mobile do not allow "any" person to determine the limits of T-

Mobile's service request. The publicly-available documents are confusing and lack the level of detail necessary for an interested party to determine the scope of T-Mobile's application. The confidential maps cannot be viewed by anyone who is not an "authorized representative." Even if they were public, they also lack the level of detail that would assist potential customers in determining T-Mobile's exact plans for their area.

T-Mobile's current FCC licensed network does not provide sufficient coverage (with sufficient call quality) throughout the requested ETC service area. T-Mobile seeks to excuse its compliance with this requirement, but it is T-Mobile's management that made the decision to apply for ETC designation in areas beyond the ability of T-Mobile's current facilities to offer

SOAH DOCKET NO. 473-10-5444 26 of 28 DialToneServices, L.P.'s Docket No. 38388 Redacted Reply Brief good call quality. T-Mobile also misunderstands a recent Commission authorization of ETC certification.

T-Mobile's Service Improvement Plans do not meet the requirements for specific projects, on specific schedules, with specific estimates of costs and benefits. The proffered SIPs are ambiguous and do not constitute commitments on behalf of T-Mobile.

T-Mobile's application has been materially impacted by the announced acquisition by

AT&T. There is a significant danger that T-Mobile's approval as an ETC would be short-lived and result in major harm to Texas consumers.

There is no need to rush to approve this application. There are multiple other carriers providing service in non-rural areas. The Commission should deny this application, with permission for the new management to re-file it if they have the desire to do so after the acquisition is completed.

SOAH DOCKET NO. 473-10-5444 27 of 28 DialToneServices, L.P.'s Docket No. 38388 Redacted Reply Brief Respectfully submitted,

HERRERA & BOYLE, PLLC Alfred R. Herrera State Bar No. 09529600 aherrera m,herreraboylelaw.com

Carrie Tournillon State Bar No. 24053062

Felipe Alonso III State Bar No. 24045400

Sean Farrell State Bar No. 24042676

816 Congress Avenue, Suite 1250 Austin, TexAs 78701 (512) 474- 92 (Voice) (512) 474 2 Of (FacsimileX

By: R. Herrera

CERTIFICATE OF SERVICE

I certify that I have served a copy of DialToneServices, L.P.'s Reply Brief upon all parties of record by electronic email, fax and/or first class mail on ' the 13th day of ay 2011.

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SOAH DOCKET NO. 473-10-5444 28 of 28 DialToneServices, L.P.'s Docket No. 38388 Redacted Reply Brief