ELECTRONICALLY FILED October
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Legal Department 180 South Clinton Avenue Rochester, NY 14646-0700 www.frontier.com Tel: 585-777-7270 Fax: 585-263-9986 [email protected] ELECTRONICALLY FILED October 14, 2011 Honorable Jaclyn A. Brilling Acting Secretary New York Public Service Commission Three Empire State Plaza Albany, NY 12223-1350 RE: Case 11-C- ; Petition of Frontier Communications for Declaratory Ruling Dear Secretary Brilling: Please find attached for filing, in multiple emailed parts, the Petition of Frontier Communications for Declaratory Ruling and supporting exhibits. Because this Petition turns on company-specific issues related to the calculation of Frontier's service standard metrics, we tentatively propose the issuance a new docket number rather than the inclusion of the Petition in the Commission's ongoing docket dealing with Hurricane Irene and Tropical Storm Lee, Case 11-M-0481. Respectfully submitted, Gregg C. Sayre Associate General Counsel – Northeastern Region GCS:hmj STATE OF NEW YORK PUBLIC SERVICE COMMISSION ) Petition of the Frontier Communications Companies for a ) Declaratory Ruling that Section 603.1(c) of the ) Commission’s Regulations Requires Restatement of the ) Case 11-C-____ Companies’ Customer Trouble Report Rate Metrics ) ) PETITION OF FRONTIER COMMUNICATIONS FOR DECLARATORY RULING Kenneth Mason Gregg C. Sayre VP- Government & Regulatory Affairs Associate General Counsel Frontier Communications Frontier Communications 180 South Clinton Avenue 180 South Clinton Avenue Rochester, New York 14646-0500 Rochester, New York 14646-0700 (585) 777-5645 (585) 777-7270 [email protected] [email protected] Craig Miller Manager, Government & Regulatory Affairs Frontier Communications 137 Harrison St. Gloversville, New York 12078 (518) 773-7371 [email protected] DATE: October 14, 2011 STATE OF NEW YORK PUBLIC SERVICE COMMISSION ) Petition of the Frontier Communications Companies for a ) Declaratory Ruling that Section 603.1(c) of the ) Commission’s Regulations Requires Restatement of the ) Case 11-C-____ Companies’ Customer Trouble Report Rate Metrics ) ) PETITION OF FRONTIER COMMUNICATIONS FOR DECLARATORY RULING Pursuant to 16 N.Y.C.R.R. § 8.1(a), the Frontier Communications companies providing service in New York State as incumbent local exchange carriers1 ("Frontier") hereby respectfully petition the Commission for a declaratory ruling that § 603.1(c) of the Commission’s Regulations requires restatement of Frontier’s Customer Trouble Report Rate (“CTRR”) metrics for the months of May, June, August and September 2011. In support of this Petition Frontier respectfully states as follows: I. Frontier’s Service Standard Requirements. On October 17, 2008, the Commission adopted a Joint Stipulation and Agreement in Case 08-C-1140, In the Matter of Frontier Telephone of Rochester, Inc.’s Petition Seeking Termination of Remaining Open Market Plan Provisions. The Joint Stipulation requires measurement of Frontier’s statewide CTRR results 1 Frontier Telephone of Rochester, Inc., Ogden Telephone Company, Citizens Telecommunications Company of New York, Inc., Frontier Communications of New York, Inc., Frontier Communications of Sylvan Lake, Inc., Frontier Communications of AuSable Valley, Inc. and Frontier Communications of Seneca-Gorham, Inc. on a rolling 12-month average basis, and contains serious penalties if the rolling average drops below a threshold amount of 90% of all offices achieving a CTRR level of 3.3 or fewer trouble reports per hundred access lines. The penalties include substantial rebates to customers, the set-aside of $15 million into a fund for service quality and infrastructure protection, and the suspension of dividends if the 90% threshold is not met for three consecutive months. Frontier is not currently in a penalty situation. Despite an unprecedented string of storms from April through September 2011 as discussed below, Frontier has managed to keep its results above the penalty level. The 12-month rolling average of CTRR results through September 2011 is 90.36%, close to but still above the target level of 90%. However, because of the mechanics of the rolling average, without relief from the Commission Frontier could fall below the threshold if for any reason, such as another weather disaster, the CTRR results are worse over the next six months than they were in the preceding year. Accordingly, Frontier is requesting the Commission to recognize the impact of the extraordinary weather conditions that Frontier has experienced thus far in 2011. II. Unprecedented Recurring Storms in April through September 2011. During the months of April, May and June, tornadoes, rainfall and flooding occurred in many areas of New York State, culminating in a disaster declaration by President Obama. The rainfall in the Rochester area near the end of April (impacting Frontier’s May results) set an all-time record for the 141 years in which the National Weather Service has collected data. The repeated storms had 3 significant impacts on Frontier’s CTRR, as detailed in the presentation that Frontier made to Chairman Brown, Commissioner Harris and Staff on September 30, 2011, included with this Petition as Attachment A. These storms were followed by Hurricane Irene, making its third United States landfall in New York City on August 28, on a northerly track that caused major damage in upstate New York due to heavy rainfall and flooding. Hurricane Irene was followed in short order by Tropical Storm Lee, which inundated eastern and southern New York State with rain from September 4-9, causing additional extensive flooding. These named storms also led to disaster declarations. Frontier’s service was greatly impacted by all of these storms. An inevitable result of the damage to Frontier’s facilities, including the flooding of several central offices and remote switches, was an unprecedented and dramatic increase in trouble reports made by affected customers to Frontier. See page 22 of Attachment A for a graphical comparison of 2010 and 2011 CTRR levels. See also Attachment B for additional years’ data. III. Frontier’s Restoration Efforts and Costs. Frontier responded quickly and effectively, bringing in workers from other states and laboring around the clock to restore service in dangerous conditions. Reports of conditions in the field from Frontier’s General Managers are included in Attachment A. Frontier has spent more than $6 million in incremental expenses and capital solely to recover from the unprecedented weather conditions described 4 above and in Attachment A. Additional overtime expenses alone were in excess of $1 million. See Attachment A, page 24 for a graphical comparison of overtime hours in 2010 and 2011. IV. Restatement of Frontier’s Customer Trouble Report Rate. § 603.1(c) of the Commission’s Regulations states as follows: The standards set forth herein relate to the quality of service under normal operating conditions. They do not establish a level of performance to be achieved during periods of emergency, catastrophe, natural disaster, severe storm or other events affecting large numbers of consumers nor shall they apply to extraordinary or abnormal conditions of operation, such as those resulting from work stoppage, civil unrest, major transportation disruptions or other events beyond a service provider’s control. The repeated and unprecedented severe weather in 2011 is squarely within these definitions. The storms from April through September qualify multiple times under this language, as “periods of emergency,” “catastrophe,” “natural disaster,” “severe storm,” and “events beyond a service provider’s control.” Frontier therefore requests the Commission to issue a declaratory ruling that this regulation applies to Frontier’s CTRR during the affected months, and that by the terms of this regulation Frontier should restate its CTRR calculations to exclude the affected offices in the affected months. Attachment B includes two tables. The first is a statement of Frontier’s raw CTRR results for the last several years. The current unadjusted rolling 12- month average is 90.36% of offices with a CTRR at or below 3.3. The second table is a restatement of Frontier’s CTRR results excluding the impact of the 5 storms. If it were not for the extraordinary weather, the current rolling 12-month average would be 93.8%. As can be seen from Attachment B, this result is typical of Frontier’s results over the last several years. Without this restatement, it is unclear whether Frontier will have enough headroom to survive a normal level of winter storms, contractor cable cuts and other service-affecting conditions without falling into a penalty situation. With this restatement, Frontier is confident that it will continue to provide the high-quality service that its customers expect and that it will achieve CTRR results well above the penalty threshold. V. Conclusion. The purpose of the penalties for missing the CTRR target in the Joint Stipulation and Agreement is to assure that Frontier makes appropriate efforts to maintain its quality of service under “normal operating conditions.” Such conditions did not apply in the months of April, May, June, August and September 2011. To add significant potential penalties on top of the more than $6 million that Frontier has expended on storm damage restoration would be unreasonable and unfair. It is not within human ability to prevent the kinds of storms that occurred in 2011, and penalizing Frontier for these storms would not in the least prevent such situations from occurring in the future. Frontier