Exhibit No.: 1.0 Issue: Application for Designation as an Eligible Telecommunications Carrier Witness: Thomas Walsh Sponsoring Party: Illinois Valley Cellular RSA 2-I Partnership Type of Exhibit: Pre-filed Direct Testimony Docket No.: 04-0454 Date Testimony Prepared: October 27, 2004
ILLINOIS VALLEY CELLULAR RSA 2-I PARTNERSHIP
ICC DOCKET NO. 04-0454
PRE-FILED DIRECT TESTIMONY
OF
THOMAS WALSH
October 27, 2004
1 PRE-FILED DIRECT TESTIMONY
2 OF
3 THOMAS WALSH
4 APPLICATION OF ILLINOIS VALLEY CELLULAR RSA 2-I 5 PARTNERSHIP 6 7 DOCKET NO. 04-0454 8 9 Q. Please state your name and business address.
10 A. Thomas Walsh. 200 Riverfront Drive, Marseilles, Illinois 61341.
11 Q. By whom are you employed and in what capacity?
12 A. Since September of 1992, I have been employed as the General Manager of
13 Marseilles Cellular, Inc., the Network and Operating Partner for Illinois Valley
14 Cellular RSA 2-I Partnership (“IVC”). Under the terms of the Agreement
15 Establishing Illinois Valley Cellular RSA 2-I Partnership (“Partnership
16 Agreement”), one of the Partners is designated as the Network Partner with
17 responsibilities for the construction and operation of the Network and one of the
18 Partners is designated as the Operating Partner for purposes of conducting the day
19 to day operations of the Partnership. A copy of the Partnership Agreement is
20 appended hereto as Exhibit 1.1. Marseilles Cellular, Inc. has been designated as
21 both the Network and the Operating Partner for IVC since 1991. In my capacity
22 as General Manager for Marseilles Cellular, Inc., I am responsible for the overall
23 management of the IVC wireless service.
24 Q. Please describe your education. Direct Testimony of IVC RSA 2-I Exhibit 1.0 Thomas Walsh 25 A. I have a Bachelors of Science degree in Business from Northern Illinois
26 University, Dekalb, IL.
27 Q. In your capacity as General Manager for IVC, are you involved with any
28 professional associations?
29 A. Yes. IVC is a member of the Cellular Telecommunications and Internet
30 Association (“CTIA”) and the Rural Cellular Association (“RCA”). I serve on the
31 RCA Board of Directors as that Association’s Secretary and Treasurer. I also
32 chair the RCA Government and Regulatory Committee which is involved with
33 legislative and regulatory issues as they relate to the rural wireless industry. In
34 that capacity I regularly visit with members of Congress and Federal
35 Communications Commission (“FCC”) Officials to discuss the impact of
36 telecommunications legislative and regulatory initiatives on rural wireless carriers
37 and the rural communities they serve.
38 Q. What is the purpose of your testimony in this proceeding?
39 A. I am testifying in support of IVC’s Application For Designation As An Eligible
40 Telecommunications Carrier for Purposes of Receiving Federal Universal Service
41 Support Pursuant To §214(e)(2) of The Telecommunications Act of 1996
42 (“Application”) in this docket. My testimony will address four aspects of the
43 Application: (a) the IVC service offerings; (b) rate and service plans offered by
44 IVC to subscribers; (c) the requirements imposed upon ETC by Section
45 54.201(d)(2) of the FCC’s Rules to advertise, using media of general distribution,
46 the availability of and charges for the core services that are supported by federal
2 Direct Testimony of IVC RSA 2-I Exhibit 1.0 Thomas Walsh 47 universal service mechanisms, as set forth in Section 54.101(a) of the FCC’s Rules;
48 and (d) public interest considerations.
49 Q. Is IVC a certificated Telecommunications Carrier in the state of Illinois?
50 A. Yes. IVC holds a Certificate of Service Authority from the Illinois Commerce
51 Commission which was issued on September 11, 1990 in ICC Docket 90-0285.
52 Q. What type of telecommunications service does IVC provide and where?
53 A. IVC is licensed by the FCC to provide Commercial Mobile Radio Service
54 (“CMRS”) to the public as a wireless cellular service provider in a portion of
55 Illinois RSA No. 2. A copy of the IVC FCC license is appended hereto as Exhibit
56 1.2. IVC has submitted Pre-filed Direct testimony of Michael K. Kurtis which I
57 have reviewed. Mr. Kurtis has provided testimony providing some background
58 information on the formation of IVC as well as describing IVC’s FCC-licensed
59 service area.
60 Q. Do you recall that Mr. Kurtis testified as to the services that are supported by
61 Federal universal service support mechanisms under Section 54.101(a) of the
62 FCC=s Rules?
63 A. Yes.
64 Q. I am going to ask you to explain IVC’s service offerings as they relate to each
65 of the requirements identified by Mr. Kurtis. First, does IVC offer Voice-
66 Grade Access to the Public Switched Network?
67 A. Yes. As an existing cellular service provider in Illinois, IVC provides voice-grade
68 access to the public switched network. Through interconnection with incumbent
69 local exchange carriers, IVC is able to originate and terminate telephone service for
3 Direct Testimony of IVC RSA 2-I Exhibit 1.0 Thomas Walsh 70 all of its subscribers. All customers of IVC are able to make and receive calls on
71 the public switched network within the specified bandwidth identified by Mr.
72 Kurtis.
73 Q. Does IVC offer Local Usage?
74 A. IVC=s service includes local usage that allows customers to originate and terminate
75 calls within the local calling area without incurring toll charges. The service allows
76 for a bundle of local calling minutes for a flat-rated monthly charge. IVC currently
77 offers several service options that include varying amounts of local usage in
78 monthly service plans. As Mr. Kurtis has testified, to date the FCC has not
79 quantified any minimum amount of local usage required to be included in a
80 universal service offering, but has initiated a separate proceeding to address this
81 issue. IVC will comply with any and all minimum local usage requirements
82 adopted by the FCC.
83 Q. Does IVC offer the Functional Equivalent of Touch-Tone (ADTMF@) Signaling?
84 A. IVC currently uses out-of-band digital signaling and in-band multi-frequency
85 signaling that is functionally equivalent to DTMF signaling.
86 Q. Does IVC offer Single Party Service?
87 A. Yes, IVC provides a dedicated message path for the length of all customer calls.
88 Q. Does IVC offer Access to Emergency Service?
89 A. Yes. IVC customers can reach an emergency dispatch, or public safety answering
90 point (APSAP@), by dialing A911.@ IVC then routes the call to the appropriate PSAP.
91 Enhanced 911 (AE911@), which includes the capability of providing both automatic
92 numbering information (AANI@) and automatic location information (AALI@), is
4 Direct Testimony of IVC RSA 2-I Exhibit 1.0 Thomas Walsh 93 required only if a public emergency service provider makes arrangements with the
94 local provider for delivery of such information. In the wireless context, provision
95 of location information is broken down into two phases; Phase I involves providing
96 the PSAP with the location of the cell from which the 911 call originated and Phase
97 II provides the location of the originating subscriber phone to within an FCC-
98 specified accuracy. IVC’s network is capable of providing Phase I and Phase II
99 E911 services, as a function of the capabilities of each PSAP throughout the IVC
100 service area.
101 Q. Does IVC offer Access to Operator Services?
102 A. Yes. IVC currently offers its subscribers access to operator services for the
103 placement and billing of telephone calls, including collect calls, calling card calls,
104 credit card calls, person-to-person calls, and third party calls, as well as obtaining
105 related information, throughout its designated ETC service area.
106 Q. Does IVC offer Access to interexchange service?
107 A. IVC has direct interconnection to multiple access tandems for delivering traffic to
108 all offices subtending those tandems as well as direct interconnection to local
109 exchange carrier end offices where traffic levels so justify. In addition, IVC
110 provides indirect access to one or more interexchange carriers (AIXC@), for access to
111 any other exchanges.
112 Q. Does IVC offer Access to Directory Assistance?
113 A. Yes. IVC provides all of its customers with access to information contained in
114 directory listings by dialing A411@ or A555-1212.@
115 Q. Does IVC offer Toll Limitation for Qualifying Low-Income Customers?
5 Direct Testimony of IVC RSA 2-I Exhibit 1.0 Thomas Walsh 116 A. IVC does not currently offer Lifeline or Link Up services. However, the IVC
117 network is capable of providing Toll Blocking services. Currently, IVC provides
118 Toll Blocking services for international calls. IVC will utilize the same Toll
119 Blocking technology to provide toll limitation for qualifying low-income
120 customers, at no charge, as part of its universal service offerings for Lifeline and
121 Link Up customers.
122 Q. How will IVC advertise that it is offering the core services that are supported
123 by federal universal service mechanisms as set forth in Section 54.101(a) of
124 the FCC’s Rules?
125 A. Upon grant of its Application, IVC will advertise to the public in its ETC
126 designated area that it is offering the core universal support services and the charges
127 for those services. IVC already advertises its rates and services in several media of
128 general distribution throughout its FCC-licensed service area. For example, IVC
129 advertisements appear once a week, in the News Tribune (LaSalle, IL), Ottawa
130 Daily Times (Ottawa, IL), Bureau County Republican (Princeton, IL), Mendota
131 Reporter (Mendota, IL) Walnut Leader (Walnut, IL) and the Tonica News (Tonica,
132 IL). These are all local-based newspapers of general circulation in the area where
133 IVC seeks ETC designation. In addition, IVC runs both 30 and 60 second
134 commercials on local radio stations in the proposed ETC service area. Those
135 stations are WLPO/WAJK (Oglesby, IL), WCMY/WRXX (Ottawa, IL), WZOE
136 (Princeton, IL), WMKB (Mendota, IL), and WGLC (Mendota, IL). IVC also
137 advertises by including printed inserts with its monthly invoices to subscribers.
6 Direct Testimony of IVC RSA 2-I Exhibit 1.0 Thomas Walsh 138 In addition to these standard forms of advertising, IVC has committed to
139 take further steps to disseminate information to potential Lifeline and Link Up
140 customers by distributing additional consumer information regarding these services
141 in locations where qualified, unserved consumers are likely to find such information
142 useful, such as unemployment and welfare offices within the designated ETC
143 service area.
144 Q. What rate and service plans are currently offered by IVC?
145 A. The rate and service plans that IVC currently offers are described in Exhibit 1.3
146 hereto. Upon grant of its Application, IVC intends to continue offering a wide
147 selection of calling plans. In addition, however, IVC will offer a Lifeline service
148 in accordance with Section 54.401 of the FCC’s Rules. Lifeline services would
149 be available to qualifying low-income consumers in IVC’s service area. A
150 Lifeline customer would be able to pick any existing IVC service plan and deduct
151 the local exchange service discount of $1.75 per month as well as the federal line
152 charge discount of $6.50 per month from IVC’s standard monthly rates. In
153 addition, IVC intends to offer two additional Lifeline-only plans.
154 Q. Would you please describe the proposed Lifeline-only plans IVC intends to
155 offer?
156 A. The first plan is intended to provide a low-cost service option comparable in price
157 to that offered by the incumbent local exchange carrier (“ILEC”) but with the
158 added advantage of limited mobility. This Plan would offer unlimited local calling
159 and mobility in the area served by the subscriber’s home cell site at a fixed
7 Direct Testimony of IVC RSA 2-I Exhibit 1.0 Thomas Walsh 160 monthly price of $9.70 per month.1/ The subscriber’s outbound local calling area
161 would correspond to its traditional LEC calling area for that subscriber’s address.
162 With the advantage of limited mobility, calls could be originated by the IVC
163 Lifeline subscriber to any numbers within that ILEC exchange from any location
164 within the subscriber’s home cell site serving area, not just the subscriber’s home.
165 Similarly, the Lifeline customer would receive inbound calls, wherever they
166 originate from, throughout the geographic area served by its home cell site. The
167 area served by a home cell site or cells would be defined to include coverage from
168 all IVC cell sites necessary to encompass the callers entire corresponding LEC
169 exchange area.
170 The second IVC Lifeline Plan would allow for local calling and mobility
171 throughout the entire service area for which IVC is designated as an ETC, for a
172 flat $13.70 per month charge.2/ Since the IVC ETC designated service area would
173 be the IVC subscriber’s local calling area, even toll restricted Lifeline subscribers
174 would enjoy service area wide mobility and local calling, assuming grant of the
175 IVC ETC Application as filed. This would afford Lifeline customers a local
176 calling scope extending to a geographic area encompassing multiple telephone
177 exchanges served by all of the LEC wire centers for which ETC designation is
178 being sought. While these Lifeline plans would not allow roaming into other
179 cellular networks to place and receive routine calls, both plans would allow
1/ The $9.70 rate reflects the net monthly rate to a Lifeline customer after applying the local exchange service discount of $1.75 and the federal line charge discount of $6.50.
2/ The $13.70 rate reflects the net monthly rate to a Lifeline customer after applying the local exchange service discount of $1.75 and the federal line charge discount of $6.50.
8 Direct Testimony of IVC RSA 2-I Exhibit 1.0 Thomas Walsh 180 ubiquitous access to 911 for the IVC Lifeline subscribers even in a roaming
181 situation. IVC is unable to provide either of these Lifeline plans without ETC
182 support.
183 Q. Will IVC participate in Link Up Services?
184 A. Yes. IVC will offer discounts of 50% off of the $30 activation fee to Link Up
185 eligible subscribers. In addition, IVC will offer Link Up eligible subscribers a
186 deferred schedule for payment of the charges assessed for commencing service,
187 for which the consumer will not pay interest. The interest charges not assessed to
188 the consumer shall be for connection charges of up to $200.00 that are deferred
189 for a period not to exceed one year. This deferred payment plan would include
190 the reduced activation fee as well as the cost of the subscriber handset.
191 Q. Returning to the general IVC service offerings, how will IVC’s provision of
192 the FCC Rule 54.101(a) services differ from the provision of those services by
193 ILECs operating in IVC’s proposed ETC area?
194 A. The local calling area that IVC will offer to subscribers will equal or exceed in
195 size the calling area offered by the local LECs, which will reduce intra-LATA toll
196 charges associated with the service offered by these wireline carriers. Customers
197 of these LECs placing calls to destinations beyond their local calling areas incur
198 toll charges, while IVC customers making similar calls within IVC’s service area
199 will avoid such charges. In addition, many of IVC’s calling plans include bundles
200 of minutes which can be used for placing calls, whether local or domestic toll,
201 without the caller incurring any additional per minute charges or toll charges.
202 IVC’s plans also offer mobility including, in most cases roaming in other markets.
9 Direct Testimony of IVC RSA 2-I Exhibit 1.0 Thomas Walsh 203 Finally, IVC will make available multiple local usage plans that prospective
204 customers can select from as part of its universal service offering.
205 Q. IVC is already providing the services required for ETC designation and has
206 apparently done so for years without USF support. Why would it be in the
207 public interest to now afford USF support to IVC?
208 A. IVC has brought wireless service to many rural parts of its FCC-licensed service
209 area and offers a level of coverage better than its competitors in the market. The
210 cost of providing those services continues to rise. However, in the highly
211 competitive wireless service market of today, it is not enough for IVC to offer
212 better coverage if its service offerings are not competitive with respect to features,
213 functionality and price. Unlike IVC’s competitors that also have licenses in major
214 urban areas, IVC is only licensed to offer commercial mobile radio service
215 (“CMRS”) in a portion of Illinois RSA 2. The higher-cost of providing service in
216 this rural area must be supported solely from revenues derived in this market.
217 Yet, for competitive reasons, IVC has to match the pricing offered by the major
218 nationwide carriers who typically choose to offer quality services only along the
219 major traffic arteries and largest population centers in the rural markets.
220 IVC is also incurring increased costs to meet its obligations to comply
221 with federal mandates such as E911 services. These services are critical to public
222 safety in general but their availability in the rural-most portions of the service area
223 is imperative.
224 As extensive as IVC’s coverage is in this market, there are still significant
225 portions of its FCC-licensed service area that would greatly benefit from
10 Direct Testimony of IVC RSA 2-I Exhibit 1.0 Thomas Walsh 226 enhanced CDMA coverage. These represent some of the most rural portions of its
227 licensed market and are detailed in the Application at Appendix E (Proprietary)
228 and Exhibit 2.4 (Proprietary) of Mr. Kurtis’ testimony. Grant of ETC designation
229 would provide IVC with the resources to expand and enhance its service in these
230 areas. Perhaps even more important, the expansion of IVC’s service into these
231 most rural areas would bring wireless E911 services to those areas.
232 While the LECs have done an outstanding job of bringing 911 and E911 to
233 many rural communities, access to those lifesaving services is limited to the
234 ability of the person in need to reach a wired telephone. In sharp contrast,
235 wireless communication brings the emergency access to the individual. The
236 farmer with a CMRS phone who is injured in the field no longer needs to be able
237 to reach a wired telephone to summon help. Wireless access to emergency
238 services can help to mitigate the unique risks of geographic isolation associated
239 with living in rural communities. Where the local PSAP is capable of processing
240 the data, the IVC network provides locational information for CDMA ALI-
241 capable handsets for all calls placed to 911.
242 Significantly, wireless E911 service is not limited to IVC subscribers.
243 IVC’s wireless E911 service is available to any compatible handset in IVC’s
244 coverage area, whether or not the user is an IVC customer, the customer of a
245 competitor or not even a customer of any service provider. The IVC network
246 routes all 911 calls regardless of the status of the caller. This is even true for a
247 customer whose wireless phone service has been disconnected. If the caller’s
248 handset is not ALI capable, IVC still routes the call to the emergency personnel
11 Direct Testimony of IVC RSA 2-I Exhibit 1.0 Thomas Walsh 249 and provides information with respect to the cell site location from where the call
250 originated and, except with respect to a non-activated cell phone, such a phone
251 that is sold for placing 911 calls only, a call back number.
252 Q. Why doesn’t IVC provide a call-back number for a non-activated phone?
253 A. In order for a cell phone to receive calls, it must be activated with a CMRS
254 carrier. The unactivated phone, by definition, simply does not have a phone
255 number assigned to it by any carrier so there is no phone number for IVC to
256 provide to the PSAP.
257 Q. You testified that the IVC network is capable of providing E911 locational
258 services but that the level of service IVC can provide is a function of the
259 PSAP’s capabilities. Can you elaborate on that?
260 A. Yes. When a wireless phone places a call to 911 on the IVC network, IVC routes
261 that call to the appropriate PSAP based upon the cell site on which that call
262 originates. IVC has coordinated this call routing with the local emergency
263 officials and the Illinois State Police. I should note that IVC routes this call for
264 anyone dialing 911 on the IVC network whether they are an IVC customer, a
265 valid roamer or even a phone that is not otherwise considered to be a valid user of
266 any cellular network.
267 The FCC, public safety officials and the wireless industry have been
268 working to enhance this basic 911 call routing. The enhanced or “E”911 service
269 was rolled out in two phases. Phase I E911 service provides the PSAP with the
270 location of the cell site on which the call originated as well as the call-back
271 telephone number of the handset used to place the call. Phase II E911 service
12 Direct Testimony of IVC RSA 2-I Exhibit 1.0 Thomas Walsh 272 provides the PSAP with the same information as the Phase I service except that in
273 lieu of providing the location of the cell site on which the call was placed, Phase
274 II service provides the actual location of the handset that placed the call.
275 The IVC network pinpoints the location of the handset by using the
276 satellite-based locating technology (“GPS”) much the way that car-based
277 navigational systems can plot the location of a vehicle. Handsets equipped with
278 GPS receivers transmit information received from the GPS satellites to the IVC
279 network which processes that raw data and calculates the geographic location of
280 the handset. This locational information is then forwarded on to the PSAP.
281 Virtually all handsets currently being sold by IVC and most other CDMA-based
282 service providers nation-wide are GPS-capable.
283 The FCC refers to this technology as “handset-based, network-assisted.”
284 In rural areas, these GPS-based systems appear to be the only current technology
285 that is capable of meeting the FCC’s accuracy requirements for pinpointing the
286 location of the handset. FCC rules require that these types of systems be able to
287 provide locational information accurate to within 150 meters for 95% of the calls
288 and 50 meters for 67% of the calls. The IVC network is capable of meeting these
289 requirements and transmitting the data to the PSAP. However, the PSAP must
290 have the technological capability to receive and process the data that the IVC
291 system is sending.
292 IVC and its affiliates currently provide Phase I E911 service to the
293 following PSAPs: Ford County (including the City of Gibson City) and Iroquois
294 County; Phase II E911 service to the following PSAPs: City of Ottawa in La Salle
13 Direct Testimony of IVC RSA 2-I Exhibit 1.0 Thomas Walsh 295 County, Bureau County (including City of Spring Valley) and Marshall County
296 (PSAP for Marshall, Stark and Putnam Counties) and Basic 911 Service is
297 provided to Livingston County and the cities of Mendota and Streator in La Salle
298 County. In all other areas in La Salle County where no PSAP is assigned to
299 handle emergency calls from an IVC radio tower, IVC has made arrangements to
300 route all such “911” calls to the Illinois State Police. IVC is able to expand its
301 E911 service offerings to include any additional PSAPs in its service area as those
302 PSAPs become E911 Phase I and Phase II capable.
303 Q. If IVC receives USF support, how will this Commission know that the funds
304 are properly being used for provision of qualified services in the ETC
305 designated service area?
306 A. Unlike regional or national carriers, IVC is licensed to provide service only in a
307 portion of Illinois RSA 2. IVC holds no FCC licenses in any urban areas or in
308 any areas outside of the state of Illinois. Accordingly, IVC can only use USF
309 support received from its ETC-designated service area within the proposed ETC
310 designated area within the state of Illinois.
311 In addition, IVC has committed in its Application to follow the annual
312 reporting obligations specified by the FCC in the Virginia Cellular Order to
313 ensure that IVC satisfies its obligations under Section 214 of the Act.
314 Specifically, IVC has committed that upon grant of ETC status, it will: (1)
315 annually submit information to the Commission regarding its progress toward
316 meeting its build-out plans in areas where it is designated as an ETC; (2) annually
317 provide information to the Commission with respect to the number of consumer
14 Direct Testimony of IVC RSA 2-I Exhibit 1.0 Thomas Walsh 318 complaints it receives per 1,000 mobile handsets; and (3) annually submit
319 information regarding how many requests for service from potential customers in
320 its designated area were unfulfilled for the past year. IVC would provide this
321 information as a separate schedule as part of the annual report it submits as a
322 certificated carrier.
323 Q. How will IVC utilize USF support to help make its service offering available
324 to individuals seeking wireless service throughout its designated service
325 area?
326 A. IVC will use available federal high-cost support to finance construction,
327 maintenance and upgrading of facilities serving rural areas for which that support
328 is intended. High cost support is necessary if IVC is to establish the infrastructure
329 required to bring its wireless service to many remote and difficult-to-reach locales
330 within its FCC-licensed service area. IVC anticipates that infrastructure
331 investment will be required if IVC is to compete with the incumbent LECs
332 throughout its proposed ETC area. Provision of high-cost support to IVC will
333 allow it to compete in providing primary telephone service in remote areas of
334 Illinois.
335 Q. Specifically, how will IVC provide service to a potential customer requesting
336 service?
337 A. IVC will provide service to any requesting customer in the service area where it is
338 designated as an ETC. When a potential customer requests service within an area
339 presently served by IVC’s existing network, IVC will immediately provide
340 service using its existing network. If a potential customer requests service within
15 Direct Testimony of IVC RSA 2-I Exhibit 1.0 Thomas Walsh 341 the area in which IVC is designated as an ETC, but where the existing service
342 area does not immediately allow IVC to provide service, IVC will take the
343 following steps to provide service: (1) modify or replace the requesting
344 customer’s equipment to provide service; (2) install a roof-mounted antenna or
345 other equipment to provide service; (3) adjust the nearest cell site to provide
346 service; (4) identify and make any other adjustments that can reasonably be made
347 to the network or customer facilities to provide service; and (5) determine the
348 feasibility of installing an additional cell site, cell extender, or repeater to provide
349 service where all other options fail. If, after following these steps, IVC still
350 cannot provide the requested service, it will notify the requesting party and
351 include that information in an annual report filed with the Commission detailing
352 how many requests for service were unfulfilled for the past year.
353 Q. What impact would ETC designation have on IVC’s ability to expand and
354 improve its network to enable IVC to serve a greater population and increase
355 competitive choice for customers within the ETC designated service area?
356 A. Since its commercial launch, IVC has continuously expanded its coverage
357 footprint to enable it to provide quality service to an increasing geographic area
358 and population. Expansions are planned in response to customer requests and
359 comments, potential subscriber growth and IVC’s desire to fully develop network
360 coverage throughout its FCC-licensed service area. As with all wireless carriers,
361 the initial IVC system was launched with a minimum number of cell sites
362 designed to provide coverage to areas of greatest traffic and population density.
363 In this market IVC began providing commercial service with four cell sites
16 Direct Testimony of IVC RSA 2-I Exhibit 1.0 Thomas Walsh 364 located near Ottawa, Princeton, Ogelsby and Mendota, Illinois. Over the past 12
365 years, IVC has constructed thirteen additional cell sites within its FCC-licensed
366 market boundary and utilizes coverage from an additional cell site located within
367 its proposed ETC service area but licensed to its Affiliate (Illinois Valley Cellular
368 RSA 2-II Partnership) to provide service to a portion of the south-central area of
369 its proposed ETC service area. Appended hereto as Exhibit 1.4 is a map which
370 depicts the locations of each of these eighteen cell sites.
371 As IVC has expanded its service area, each additional cell site was
372 designed to provide service to an area of lower population density and traffic,
373 areas that are higher in cost to serve. Accordingly, the expected return on
374 investment on any such cell sites is longer with each additional expansion cell.
375 As a result, the rate of construction has slowed. In addition, there are areas within
376 the proposed ETC service area where IVC cannot expect to be able to recover the
377 cost of construction and operation of an additional cell sites without USF support.
378 Appended hereto as Exhibit 1.5 (Proprietary) cell sites that IVC would like
379 to construct in the proposed ETC service area. IVC considers this information to
380 be highly confidential. Therefore, Exhibit 1.5 has a public and a proprietary
381 version. The cell sites listed in Table 1 of that Exhibit are those that IVC believes
382 it will eventually be able to build with or without ETC designation. However, the
383 availability of USF support would speed the time in which IVC could afford to
384 deploy these cell sites. In contrast, the cell sites listed in Table 2 are those cell
385 sites that IVC’s projections indicate could not be supported by the level of traffic
386 they would be expected to generate. These sites afford no return on capital
17 Direct Testimony of IVC RSA 2-I Exhibit 1.0 Thomas Walsh 387 investment and the ongoing operational costs. Accordingly, IVC has determined
388 that these cell sites cannot be constructed and operated without USF support.
389 Q. What would be the proposed timeframe for construction of the cell sites
390 listed in Table 1 and Table 2 if ETC designation is granted?
391 A. The level and continued availability of USF funds would dictate the speed with
392 which these sites could be constructed. IVC would hope to be able to accelerate
393 the Table 1 cell sites by one or two quarters and schedule the Table 2 cell sites for
394 deployment beginning in 2006 at a projected rate of one site each year.
395 Q. What is the level of USF support that IVC would expect to receive?
396 A. Under the current USF funding mechanism, IVC would expect to receive
397 $547,601.00 in support annually. The FCC is currently reviewing the mechanism
398 for determining the level of USF support to be provided for competitive ETCs and
399 there is no guaranty that this level of support would continue into the future.
400 Assuming that the level of support remained at this level, based upon current
401 traffic and revenue projections, IVC would plan to be able to deploy one cell site
402 per year from those listed in Table 2 beginning in 2006.
403 Q. If IVC is designated as an ETC, would IVC be willing to undertake carrier of
404 last resort obligations?
405 A. Yes. In the event that an existing LEC in IVC’s designated ETC service area was
406 to seek to drop its designation upon grant of the designation to IVC, IVC stands
407 ready to undertake carrier of last resort obligations in such areas, using the
408 processes set forth above.
409 Q. What steps has IVC taken to address quality of service concerns?
18 Direct Testimony of IVC RSA 2-I Exhibit 1.0 Thomas Walsh 410 A. As I previously testified, IVC is a member of CTIA and has already adopted the
411 CTIA Consumer Code for Wireless Service. Under the CTIA Consumer Code,
412 wireless carriers agree to: (1) disclose rates and terms of service to customers; (2)
413 make available maps showing where service is generally available; (3) provide
414 contract terms to customers and confirm changes in service; (4) allow a trial
415 period for new service; (5) provide specific disclosures in advertising; (6)
416 separately identify carrier charges from taxes on billing statements; (7) provide
417 customers the right to terminate service for changes to contract terms; (8) provide
418 ready access to customer service; (9) promptly respond to consumer inquiries and
419 complaints received from government agencies; and (10) abide by policies for
420 protection of consumer privacy. A copy of the CTIA Consumer Code is
421 appended hereto as Exhibit 1.6.
422 Q. Is IVC subject to the same quality of service standards that this Commission
423 has established for traditional LECs?
424 A. No. IVC is not. Those standards were developed to address quality of service
425 issues related to the provision of traditional LEC service. For example, in a
426 “wired” environment, dropped calls are not expected to occur since the
427 connection between the subscriber’s telephone and the LEC central office is a
428 physical piece of wire. The subscriber remains in a stationary fixed location for
429 the entire duration of the telephone call. In sharp contrast, wireless services are
430 designed to offer mobility to the subscriber even during a telephone call and even
431 when they are traveling at 50-60 miles an hour along an interstate highway during
432 the call. To accomplish this, rather than using fixed wires to make the phone call,
19 Direct Testimony of IVC RSA 2-I Exhibit 1.0 Thomas Walsh 433 the wireless call is accomplished by use of radio waves propagating through the
434 environment. Changes in environmental conditions effect radio wave
435 propagation. The same quality of service standards related to a service offering
436 where dropped calls are not expected to occur cannot be applied to a wireless
437 environment.
438 In addition, unlike traditional wired networks that provide service only to
439 dedicated subscriber lines that are tied to a dedicated local loop, the wireless
440 network not only provides service to its subscribers from wherever they may be at
441 the time of any particular call, but are also designed to provide service to non-
442 subscribers as they “roam” through the wireless service area. As a result,
443 mobility creates different conditions and different customer care needs.
444 Traditional telephone quality of service requirements were required to
445 protect the consumer in an environment where the service provider has
446 traditionally been a monopoly. A customer receiving inadequate service,
447 especially in rural areas, has traditionally had no alternative service provider. The
448 lack of competition creates an environment where quality of service is
449 appropriately regulated. In contrast, the wireless service environment is not
450 licensed as a monopoly. If one service provider offers inferior service, the
451 customer often has the ability to switch their service provider. As I previously
452 testified, IVC affords its customers a trial period in which they can effectively
453 “test drive” the IVC network. If a customer is not satisfied with the service they
454 actually receive from IVC, they can cancel their contract, without penalty, during
455 the trial period. The advent of local number portability allows the customer to
20 Direct Testimony of IVC RSA 2-I Exhibit 1.0 Thomas Walsh 456 even keep their telephone number as they move from one provider to another,
457 even if the contract is cancelled during the trial period, subject of course to the
458 availability of wireline to wireless local number portability.
459 Q. Can you identify some of the customer care programs IVC has implemented?
460 A. Yes. Since the IVC customers carry their handset with them and place and
461 receive calls throughout the consolidated IVC network, a customer can experience
462 trouble with his or her handset at any given location. (When I refer to the
463 consolidated IVC network, I am talking about the network that Mr. Kurtis
464 discusses that provides wireless services to the areas licensed to IVC and its two
465 affiliates). Collectively, IVC, its affiliates, and their authorized agents, have more
466 than 40 points of presence throughout the area served by the consolidated
467 network. An IVC customer can go to any of these locations and receive
468 assistance if they are encountering problems.
469 When the problem is with the customer’s handset, IVC provides the
470 customer with a free loaner phone that the customer may use until their handset
471 can be repaired or replaced. An IVC customer can drop their phone off for
472 service and pick up the free loaner at any of these 40 locations, including those
473 operated by IVC’s affiliates and their agents. In addition, IVC operates seven
474 service vans that can be dispatched to a customer location to provide repair or
475 replacement service in the field.
476 Issues relating to customer handsets provide an interesting contrast with
477 traditional LEC service providers. Just as with wireless subscribers, most LEC
478 subscribers today own their own telephones. However, I am not aware of any
21 Direct Testimony of IVC RSA 2-I Exhibit 1.0 Thomas Walsh 479 LECs in the IVC service area that even provide service for their customer’s
480 telephones, let alone a free loaner while the customer telephone is being repaired.
481 When the customer needs to visit the LEC, they usually have a single location
482 where they have to go to.
483 IVC staffs its trouble lines with live service operators to give the customer
484 “someone to talk to” during normal business hours. Several of the IVC retail
485 outlets, as well as the IVC agent locations, offer extended service hours including
486 evenings and weekends. In addition to being able to deal with customer
487 activations during these extended hours, the “free loaner” phone program that I
488 previously discussed is available during all business hours, even the evening and
489 weekend hours.
490 Q. What steps has IVC taken to enhance its network reliability?
491 A. The IVC network consists of a mobile switching office, identical in most respects
492 to a traditional LEC end office, and cell sites which can be thought of as
493 somewhat analogous to traditional LEC remote switching offices. The switch that
494 serves the consolidated IVC network is fully redundant. The switch, physically
495 located at the same location as the Marseilles Telephone Company LEC central
496 office, has its own battery back-up plant and is further backed-up with an
497 emergency generator.
498 The IVC cell sites are also redundant and equipped with battery back-up
499 plants capable of operating the cell site under full load for more than 6 hours.
500 These cell sites are also equipped with receptacles and manual transfer switches
501 which enables IVC to take a portable generator to any cell site that experiences an
22 Direct Testimony of IVC RSA 2-I Exhibit 1.0 Thomas Walsh 502 extended power failure and literally “plug-in” a backup generator to recharge the
503 battery plants. The IVC cell sites that also serve as part of the consolidated
504 network microwave “backbone” (used for concentrating and carrying traffic
505 between the various IVC cell sites and the IVC mobile switching office) have
506 dedicated generators and automatic transfer switches.
507 The entire consolidated IVC network is monitored to check for proper
508 operations at all times. The redundant network design allows the system to avoid
509 most customer-affecting service outages since, in the event of a failure, the
510 redundant facilities are designed to automatically take over primary operation and
511 an alarm is sounded at the mobile switching office. During after-hours, the alarm
512 system automatically notifies a remote monitoring center of the outage and the
513 service technicians (which are on call 24 hours per day and 7 days a week) are
514 advised of the outage and the nature and criticality of the failure. The service
515 technician can then remotely access the network and learn of the precise nature
516 and physical location of the outage, thereby enabling the IVC technician to
517 proceed to the proper location with the proper replacement parts to correct the
518 fault. IVC stocks a full complement of spare parts. There are no network
519 components for which IVC does not maintain spare parts. These spare parts are
520 in addition to the redundant hardware that I previously discussed. The redundant
521 hardware is fully installed and in a “hot standby” mode that enables it to take over
522 the handling of traffic automatically in the event of a failure of the primary
523 components and IVC’s spares are sufficient to enable IVC to restore full system
524 functionality.
23 Direct Testimony of IVC RSA 2-I Exhibit 1.0 Thomas Walsh 525 Q. Is IVC capable of supporting local number portability?
526 A. Yes. IVC’s network is presently capable of porting numbers to and from other
527 wireless and ILEC carriers. IVC’s ability to complete number ports with any
528 given carrier is a function of that carrier’s capabilities and not IVC’s. For
529 example, it is my understanding that the Commission has delayed the effective
530 date of the requirement for a number of small ILECs in Illinois to port numbers to
531 a wireless carrier. Accordingly, while IVC’s network is fully capable of porting
532 in the number and fully supporting that number as a wireless subscriber, a
533 consumer would not be able to actually port that number to IVC at this time
534 because the current ILEC hosting that number is not LNP capable.
535 Q. Once LNP between wireless and wireline carriers becomes effective, would
536 the grant or denial of ETC designation have any impact on IVC’s ability to
537 port numbers?
538 A. From a technical standpoint, it would not. As I said, the IVC network is already
539 fully capable of supporting LNP. However, as I previously explained, if IVC is
540 not granted ETC status, IVC will not be in a position to provide Lifeline service.
541 Therefore, once the Commission implements LNP, while an existing LEC
542 Lifeline customer could physically have his or her number ported to IVC, they
543 would not be eligible for Lifeline support as a wireless subscriber. The loss of
544 Lifeline support would, effectively, bar the Lifeline eligible LEC customer from
545 being able to port a number to a wireless service provider.
546 However, if IVC were designated as an ETC, then the Lifeline plans I
547 discussed previously would be available at rates comparable with those paid for
24 Direct Testimony of IVC RSA 2-I Exhibit 1.0 Thomas Walsh 548 current LEC-based service. The result would be a greatly expanded service
549 offering for Lifeline customers.
550 Q. Does that conclude your testimony?
551 A. Yes it does.
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