VII. Issue 2 - UNE Recurring and Nonrecurring Charges

UNEs enable a competitive local exchange carrier to gain access to a local exchange company's loop from a central office to a specific customer premise location without being required to build a duplicative loop.

A. Positions

Roseville seeks to set its UNE recurring and nonrecurring charges based on Pacific's factor-adjusted TELRIC study results. Covad seeks to set Roseville's UNE recurring and nonrecurring charges equivalent to Pacific's system-wide UNE charges.

B. Discussion

Having already concluded that the charges being proposed by Roseville are based on a TELRIC study that reflects forward-looking costs, the issue is whether Roseville's proposed UNE recurring and nonrecurring charges are appropriate for this Agreement.

Roseville's factor-adjusted TELRIC study results effectively compares the differences between Roseville and Pacific's forward-looking cost of providing service. Roseville utilized this approach because of a direct correlation between the costs that these carriers incur and the forward-looking costs the same two carriers will incur. The overall relationship is fairly constant between comparable activities on a forward-looking basis and is reasonable for the pricing of UNEs. That is because a majority of the comparative cost components impacts a majority of primary UNE rate elements.

Roseville's proposed UNE charges reasonably reflect the differences between Roseville and Pacific's forward-looking service territory and operations. Absent a Roseville bottoms-up TELRIC proxy study or a comparable Pacific wire center TELRIC study, the appropriate UNE recurring and nonrecurring charges should be Roseville's proposed charges.