Regulation and Indiana Utility Regulatory Commission and Residential Real Estate and Property Management and Internet and Development/Redevelopment and Estridge Cos. and Utilities and Technology and Real Estate & Retail

Complaints spark IURC to limit telecom’s service territory

February 17, 2011

The Indiana Utility Regulatory Commission has severely limited a local telecommunications firm’s license to provide services statewide after concluding it violated agency orders.

E.Com Technologies LLC, better known as FirstMile Technologies, is the exclusive telecom provider of the 1,017-resident Centennial subdivision in Westfield, as well as a half-dozen other residential developments in central Indiana.

The company, which also serves commercial customers, was started in the late 1990s by Carmel-based homebuilder The Estridge Cos. E.Com was founded by Estridge President Paul Estridge Jr., and is one of the homebuilder's subsidiaries.

The IURC on Feb. 9 rejected E.Com’s request for the agency to reconsider an order it first issued in October that limited the company’s territory to provide telecom services to only those areas it currently serves.

The IURC further directed E.Com to return to the agency to seek permission for future expansion—an additional step it previously didn’t have to take.

“We think this will slow down the opportunity to offer another choice to customers,” E.Com’s lawyer, Dick Aikman, said. “If the regulatory process doesn’t happen fast enough, we’ll lose that opportunity.”

The IURC issued the initial order against E.Com because it found the company had a history of anti-competitive business practices.

“E.Com is still the only facility-based terrestrial provider in the Centennial development because its competitors never had a reasonable opportunity to build out facilities, enter the market and compete for customers without having to incur a significant cost disadvantage,” the IURC wrote in its order.

The order stems from an IURC investigation it launched in October 2009 after several Centennial homeowners complained about E.Com’s services.

Estridge won industry kudos in the late 1990s for efforts to wire the Centennial development from the start with high-speed Internet connections that most phone carriers weren’t offering at the time.

In the years since, those phone carriers, along with cable television companies, caught up and surpassed the capabilities of FirstMile, said the homeowners. About 170 signed a petition demanding the IURC investigate what they considered a monopoly situation.

Ordinarily, the solution would be for a homeowner to call another provider for service. But that’s not so easy at Centennial, where only FirstMile’s wires, not those of local phone or cable companies, were buried underneath sidewalks and driveways when the development was constructed.

“There has been no evidence offered that AT&T and Verizon were offered access to E.Com’s facilities in the Centennial development prior to the trenches being closed,” the IURC wrote.

Also, IURC accused E.Com of violating its order requiring the company to notify potential homebuyers in Centennial that it is the sole provider of telecom services in the neighborhood.

E.Com told the IURC that Estridge quit notifying potential residents of its exclusive deal in early 2005 when the homebuilder moved its Centennial sales office to the Clay Terrace shopping center in Carmel. In testimony, E.Com said Estridge didn't inform E.Com of that decision.

The roots of the dispute run deeper. In 2000, IURC chided FirstMile for installing its system without state approval. The agency said it hoped in the future that Estridge and other developers would allow open access to other telecom providers when the conduits running through a development were still accessible.

At the time, IURC issued an order attempting to place E.Com in the position of an “incumbent” provider and required it to give other providers access to its facilities. That was done to ensure E.Com was treated the same way as other providers with monopolies in their service territories.

In addition in 2000, IURC gave E.Com approval to offer telecom services statewide.

But the state agency said it made a mistake with that decision upon curtailing its service territory in October.

“As it turns out, the Commission’s faith was misplaced,” it said in the ruling. “Anticompetitive behavior turns out not to be a function of the size of the provider.”

E.Com has filed for the Indiana Court of Appeals to hear the case.

 
 

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