1. What is EAS?
2. Advantages and Disadvantages of EAS
EAS is a replacement for long distance (toll) service. EAS allows telephone customers in one local calling area (known as an exchange) to call one or more nearby exchanges without incurring long distance charges. Instead of paying long distance charges, customers are given a choice between a flat monthly EAS rate and a measured EAS rate (i.e., a per minute rate) within the extended area. In some cases, rates for local service are also increased. Long distance charges cease within the extended area. In sum, an EAS calling area is a toll-free calling area.
The Public Utility Commission (PUC or Commission), at the request of customers, has approved over 2,008 EAS routes in Oregon.
3. Individual EAS routes
EAS gives customers greater calling access to neighboring communities. This access can be quite important in smaller exchanges, where local residents are often forced to rely on goods and services found in other exchanges. EAS can also help address the problem of outdated exchange boundaries. Original exchange boundaries may no longer correspond to community calling patterns. EAS helps eliminate this problem by eliminating the "toll barrier" between exchanges that are really part of one community.
EAS is not a free service, however. Per-minute long distance charges are replaced with a flat or measured EAS rate, with most customers opting for a flat rate. Consequently, with the deployment of a new EAS route, large long distance charges formerly faced by a small number of customers are replaced with smaller EAS charges to many customers. In a few cases, local rate increases are also needed to make sure EAS charges are not too high. Thus, when establishing EAS, the PUC is careful to make sure the cost shifting among customers inherent in new EAS deployments is understood and generally accepted by affected customers.
A flat rate EAS option is helpful for individuals who use the internet. Without EAS there is the risk of running up high telephone bills if your Internet Service Provider (ISP) does not have a local telephone number. If it is not local you may run up long distance charges that could become substantial if you are on line for lengthy periods of time. If it is within your EAS calling area it is covered in the flat monthly fee.
4. EAS Regions
The process for creating individual EAS routes was established by the PUC in 1989. This process begins with the receipt of a petition from customers living in the exchange who desire creation of a new EAS route.
Responding to the petition, the PUC determines whether a "community of interest" exists between the petitioning exchange and the other requested exchanges. A community of interest exists where there is a social, economic, or political interdependence between two areas, or where there is a heavy dependence by one area on another area for services and facilities necessary to meet many of its basic needs. For example, a community without a hospital is likely to have a community of interest with a nearby community that has one.
If the PUC concludes that a community of interest exists between two exchanges, the next step is to determine relevant costs and what the flat and measured rates for the new EAS route would be, and whether a local rate increase would be required. Great care is taken in carrying out this rate work because the creation of a new EAS route shifts costs from high-volume to low-volume telephone users, creating the possibility of inequity among customers. In addition, PUC policy is that new EAS routes be revenue neutral to affected telecommunications companies. This means that connecting telephone companies do not profit by EAS expansions. It also means that they are not expected to incur financial losses from EAS expansions. In order to achieve this outcome, the PUC staff must carefully analyze historic long distance data, and must take into account that more calls will likely be made and that calls will likely become longer in duration when a new EAS route is established. A large amount of data from the companies is required for the PUC cost and rate analyses.
Once the rate analysis is completed, the information is presented to the affected customers at a public hearing. New EAS routes are not established if a significant number of customers from the petitioning exchange are not willing to pay the new EAS rates. In most cases, customer approval is secured, but occasionally customers decide against creation of the new EAS route because the required rates are higher than customers are willing to pay. It is also important to remember that if customers are unhappy with an EAS flat rate, the customer may avoid this monthly charge if they opt instead for a measured EAS rate, which will be charged only if the customer calls the extended calling area.
Oregon has two toll-free calling regions. The first was established in the Portland region. The Portland Region includes parts of three counties and 32 exchanges. Changes to the Portland EAS region affect 10 telecommunications companies. In late 2004, Southern Oregon customers in Jackson, Josephine and part of Douglas counties gained toll-free access.
In general, the process for creating a region is the same as creating a new individual EAS route. The first step is to determine that a widespread desire for a new EAS region exists. In the case of Southern Oregon, the PUC received enough inquiries and comments to determine that an investigation concerning creation of a new region was warranted.
Establishing boundaries for a new EAS region is a challenging task. A process that considers the wishes of customers in all affected exchanges is essential. The time necessary to establish boundaries will depend on the number of exchanges included for study, how long it takes to agree on proposed boundaries, and whether requests for boundary changes are made later in the process.
Once proposed boundaries for a new region are established, the PUC and affected companies work together to analyze historic telephone usage data. They also consider the need for additional telecommunications facilities because of the likelihood of higher calling volumes if an EAS region is created. Failure to examine this likelihood can lead to frequent "fast busy" signals for customers using the new EAS service. The required analyses, which must be performed to ensure that EAS rates are revenue neutral, will be more time-consuming than the analyses for an individual EAS route because as in the case of the Southern Oregon region there were 18 exchanges and more than 300 individual routes in the Southern that had to be evaluated.
5. Order No. 08-408
Rates for extended area service (EAS) are capped at pre-plan rates. Qwest will not be required to establish any new or expanded EAS routes as long as it operates under the price plan.