October 3, 2002

The Michigan Public Service Commission today approved Ace Telephone Company of Michigan’s application to expand its local calling area and authorized the company to increase its basic local exchange rates for its residential customers by $4.50 per telephone line per month and its rates for its business customers by $5.50 per telephone line per month.

The Commission concluded that the proposed expansion of the local calling area is in the public interest.  The Commission found, based on evidence and public comment, that local calling is presently limited in area, that the community of interest surrounding Ace’s licensed service area supports the expansion, that present restrictions compare unfavorably to the calling areas provided by a nearby local telephone provider, and that a substantial segment of its customers supports the expansion or would benefit from it.  The Commis­sion received comments from hundreds of customers, the vast majority of which supported the expanded local calling request.

On July 23, 2002, Ace filed an application seeking authority to expand its local calling area for its customers as follows:  the Buckley Exchange to include the Copemish-Thompsonville, Kingsley, Manton, and Traverse City exchanges; the Copemish-Thompsonville Exchange to include the Bear Lake, Beulah, Buckley, Interlochen, Kaleva, Kingsley, Lake Ann, and Mesick exchanges; the Hoxeyville Exchange to include the Brethren, Cadillac, Dublin, Harrietta, Irons, Luther, Tustin, and Wellston exchanges; the Mesick Exchange to include the Cadillac, Copemish-Thompsonville, Harietta, Kaleva, and Manton exchanges; and the South Boardman Exchange to include the Fife Lake, Kingsley, Lake City, Manistee River, Moores­town, Traverse City and Wiliamsburg exchanges.  Telephone exchanges are geographic boundaries that define a customer’s local calling area.  Currently, Ace customers incur toll charges for calls placed to these exchanges.

The 2000 amendments to the Michigan Telecommunications Act required providers with more than 250,000 access lines to offer local calling to adjacent exchanges, but The Telecommunications Association of Michigan obtained an exemption for providers with less than 250,000 lines.  Subsequently, a few of the exempt providers, including Ace Telephone Company, have implemented expanded local calling areas.  In most cases, these expansions are accompanied by rate increases to cover lost toll revenues and costs to provide the services.

Ace, headquartered in Mesick, Michigan, provides telephone service to about 6,100 access lines.

The MPSC is an agency within the Department of Consumer and Industry Services.

Case No. U-13489