BEFORE THE ARKANSAS PUBLIC SERVICE COMMISSION

Transcription

1 BEFORE THE ARKANSAS PUBLIC SERVICE COMMISSION Jut iz Ii A H '0 - f!.id A* IN THE MATTER OF THE JOINT APPLICATION OF ) GTE SOUTHWEST INCORPORATED, GTE 1 ARKANSAS INCORPORATED AND GTE MIDWEST ) INCORPORATED FOR AUTHORITY TO SELL AND ) FOR CENTURYTEL OF NORTHWEST ARKANSAS, ) LLC,AND CENTURYTEL OF CENTRAL ARKANSAS, ) LLC 'TO ACQUIRE CERTAIN ASSETS AND FOR ) DOCKET NO. -0-U RELINQUISHMENT OF CERTAIN RIGHTS UNDER ) CERTIFICATES OF PUBLIC CONVENIENCE AND ) NECESSITY 1 IN THE MATTER OF THE APPLICATION OF CENTURYTEL OF CENTRAL ARKANSAS, LLC FOR ) THE ISSUANCE OF A CERTIFICATE OF PUBLIC ) CONVENIENCE AND NECESSITY AUTHORIZING IT) TO PROVIDE LOCAL EXCHANGE ) TELECOMMUNICATIONS SERVICE ) 1 DOCKET NO. --U IN THE MATTER OF THE APPLICATION OF ) CENTURYTEL OF NORTHWEST ARKANSAS, LLC ) FOR THE ISSUANCE OF A CERTIFICATE OF ) PUBLIC CONVENIENCE AND NECESSITY ) DOCKET NO. -7-U AUTHORIZING TO PROVIDE LOCAL EXCHANGE ) TELECOMMUNICATIONS SERVICE 1 IN THE MATTER OF THOSE ELEMENTS OF THE ) INTRASTATE ACCESS CHARGE MAINTAINED AT ) PARITY WITH INTERSTATE ACCESS 1 DOCKET NO U SUPPLEMENTAL DIRECT TESTIMONY OF MARION R. SCOTT ON BEHALF OF CENTURYTEL OF NORTHWEST ARKANSAS, LLC AND CENTURYTEL OF CENTRAL ARKANSAS, LLC July, 00

2 Please state your name and business address. My name is Marion R. Scott. My business address is 1 W. Main, Jackscinville, Arkansas By whom are you employed and in what capacity? I am employed by CenturyTel Service Group, Inc., a wholly owned subsidiary of 8 CenturyTel, Inc., as General Manager. Please describe your work history. I have been employed in telephony for over 0 years and have worked in or supervised all facets of operations and engineering. I have held the positions of Division Operations Manager, Supervising Engineer, Vice President of Operations and 1 General Manager, among others Please describe your educational background. I attended East Oregon University and obtained a BS Degree majoring in buslliess and psychology. I have additional education from Michigan State Univers ty and the University of Kansas as well as numerous seminars related to 0 telecommunications engineering and advanced telecommunications strategic planning. 1 What is the purpose of your testimony in this proceeding? In the Commission s consolidated orders issued on May, 00, in Docket 1

3 7 8 Nos. -0-U, --U, -7-U and 8-10-U, one issue that the Commission desired to have addressed was whether the application of the parity orders negates the Commission s overall public interest findings in its orders approving CenturyTel of Northwest Arkansas, LLC and CenturyTel of Central Arkansas, LLC ( CenturyTel ) acquisiition of the GTE facilities, and the granting of CCNs to CenturyTel to operate such facilities. My testimony is intended to provide further, and updated, support and proof as to why the acquisition and the granting of the CCNs are in the overall public interest. My testimony will supplement and update the previous testimony filed by Ms. Susan W. Smith, on behalf of CenturyTel, in the earlier proceedings and address the previous findings of the Commission. What were the findings of the Commission in the earlier proceedings? Based upon the evidence presented, the Commission found, among other things, that CenturyTel has a history of providing telecommunications service in rural areas similar to that which it purchased from GTE pursuant to Docket No. -0-U. The Clommission also found that the public interest was served by the customers continuing to have telephone service at the same rates after the acquisition; by CenturyTel making improvements to customer service; by the expansion of CLASS services; by expanding deployment of SS7 functionality; by the expansion of voice mail and access to Internet services; by the continued employment of the GTE employees and the expansion of the number of employees.

4 What has transpired, with regard to these findings, since CenturyTel took over the operation of the facilities on August 1,000? CenturyTel has made customer service function improvements by having their retail stores in Jacksonville, Cabot and Russellville completed and fully operational. Additicrnally, CenturyTel has put in place nine payment agents throughout the subject servicti? territory for customer convenience. CenturyTel also has an ongoing communications plan that provides customers information, at least monthly, about new 8 offerings or features or special pricing for services. Has CenturyTel s efforts been successful as far as providing telecommunications services to new customers? Yes they have. As of the time of the acquisition, the customer count showed that 1 1 1,8 access lines were in service. Through customer awareness programs and service improvements, the number of access lines served by CenturyTel today has grown to,8. This growth could not have been accomplished without CenturyTel providiing quality service to its customers. 17 What has CenturyTel done with regard to the expansion of CLASS services? 0 At the time of acquisition, the former service provider offered CLASS service to 1 1,07 access lines. Today, CenturyTel offers CLASS service to all of its,8 customers.

5 What has CenturyTel done with regard to the expansion of SS7 capability? At the acquisition date SS7 capability was available to 77,0 access lines. Today, all,8 of CenturyTel s access lines are SS7 capable Has CenturyTel expanded the availability of voice mail service? Yes. Voice mail service was available to,77 access lines at the time of acquisition. Voice mail service is currently available to 7, of CenturyTel s access lines. Has access to additional Internet capacity improved since CenturyTel acquisition? Customers now have local access to Internet service either through dial up or 1 1 through DSL in of exchanges. This is a substantial improvement over access prior to the acquisition Has CenturyTel provided facilities for the provision of DSL service? At the time of acquisition, DSL service was not offered in any of the acquired 0 exchanges. Today, CenturyTel offers DSL service in 8 of the exchanges serving approximately 178,0 access lines. 1 In CenturyTel s initial application, CenturyTel stated that it would hire at

6 least additional employees. Has CenturyTeI increased its work force in its service territory? Yes it has. As of the August 1, 000, take-over date, CenturyTel employed 8 persoris in its service territory. As of June, 00, the total number of positions filled was 7. This is an increase of new employees. With the increase in employees at CenturyTel, what is the amount of payroll dollars flowing into the economy of Arkansas as a result of the acquisition? The employees' budget for the partial year of 000 was $,01,0. In 001, CenturyTel paid employee salaries of $17,788,77 and for the year 00, the budget is in excess of $0,000, Has CenturyTel made improvements to the facilities since the acquisition? Since the acquisition in August of 000, CenturyTel has invested more than $70,000,000 in capital improvements for the facilities. CenturyTel also spent $1,78(,707 in 001 on furniture, equipment and vehicles and is budgeted to spend $,'1,7 in 00. The facilities and equipment acquired was in need of significant repair and/or replacement and CenturyTel has met its commitment to improve the services it provides and the equipment providing the service. 0 1 Was CenturyTel financially able to close these transactions? Yes, CenturyTel financed the transaction with the issuance of debt securities and

7 through the sale of nonstrategic assets. Have these transactions had a negative impact on CenturyTel s financial capacity? No they have not. These properties were acquired during the third quarter of and at that time the parent company s capitalization structure was.7% debt and.% equity. CenturyTel has reduced a substantial portion of the debt related to the acquisition of these properties while at the same time making significant capital investrments in the acquired markets. As of May 1 00, the parent company s capitaliization structure was 7.% debt and.1 % equity. CenturyTel s long term debt ratings are investment grade and our ratings outlook is stable. Does this conclude your testimony? 1 Yes.

8 CERTIFICATE OF SERVICE I, Lawrence E. Chisenhall, Jr., do hereby certify that I have served a copy of the foregoing instrument on the following parties of record via U.S. Mail, postage prepaid, this th day of July, 00. Mac Norton J. Mark Davis Wright, Lindsey & Jennings, LLP 00 W. Capitol Ave., Suite 00 Little Rock, AR 701- Steve Cuffman Cuffman & Phillips 00 W. Capitol Ave., Suite Little Rock, AR 701 Andrew Jones c/o Sprint 810 Ward Parkway, E Kansas City, MO 1 1 Cynthia Barton H. Edward Skinner Southwestern Bell Telephone Company West Capitol, Room 0 Little Rock, AR 70 Stephen Rowell ALLTEL Communications, Inc. and ALLTEL Arkansas, Inc. One Allied Drive P.O. Box 177 Little Rock, AR 70 Kevin Crass R. Christopher Lawson Friday, Eldredge & Clark 00 W. Capitol, Suite 000 Little Rock, AR 701

9 Shawn McMurray Sr. Assistant Attorney General Center Street Suite 00 Little Rock, AR 701 MCI WorldCom, Inc. Stephen F. Morris Sen io r Attorney 701 Brazos, Suite 00 Austin, TX GTE Southwest Incorporated Gerald Shannon Legal 00 GTE Drive Wentzville, MO 8 Sprint Communications Company, LP Sheila Sharp KSOPHE00-C70 0 Spring Parkway Overland Park, KS 1 AT&T Communications of the Southwest Wauneta Browne 1 E. ' Street Room C Kansas City, MO