Appendix G: Payments Generated by Estimated Failure Rates

Pacific Bell

Pacific Bell					Monthly Cap		$45,838,260
	Base	Failure Type
Example	$38	Ordinary	Chronic	Extended	Tier II		Estimated	Target
						Note 1	Total payment	Total payment
A	Failure rate	0.99%	0.0%	0.0%	0.0%		0.00%	0.00%
	$ per failure	$38	$188	$376	$1,411
	N	4243	4243	4243	367
	Payment	$0	$0	$0	$0	1.5%	$0	$0
B	Failure rate	4.0%	0.80%	0.160%	0.8000%		0.17%	0.75%
	$ per failure	$152	$760	$1,520	$5,700
	N	4243	4243	4243	367
	Payment	$25,797	$25,797	$10,319	$16,735	6.0%	$78,649	$343,787
C	Failure rate	7.0%	0.3%	0.02%	0.45%		0.25%	2.20%
	$ per failure	$266	$1,330	$2,660	$9,975
	N	4243	4243	4243	367
	Payment	$79,005	$16,930	$2,257	$16,474	10.5%	$114,665	$1,008,442
D	Failure rate	7.85%	2.12%	1.25%	6.00%		1.39%	2.71%
	$ per failure	$298	$1,492	$2,983	$11,186
	N	4243	4243	4243	367
	Payment	$99,356	$134,163	$158,211	$246,321	11.8%	$638,051	$1,242,217
E	Failure rate	14.0%	5.0%	3.0%	7.5%		4.60%	8.00%
	$ per failure	$532	$2,660	$5,320	$19,950
	N	4243	4243	4243	367
	Payment	$316,019	$564,319	$677,183	$549,124	21.0%	$2,106,644	$3,667,061
F	Failure rate	14.0%	7.5%	4.5%	11.3%		6.55%	8.00%
	$ per failure	$532	$2,660	$5,320	$19,950
	N	4243	4243	4243	367
	Payment	$316,019	$846,479	$1,015,774	$823,686	21.0%	$3,001,957	$3,667,061
G	Failure rate	23.0%	11.0%	8.0%	16.5%		17.11%	24.40%
	$ per failure	$874	$4,370	$8,740	$32,775
	N	4243	4243	4243	367
	Payment	$852,928	$2,039,610	$2,966,706	$1,984,690	34.5%	$7,843,934	$11,184,535
H	Failure rate	23.0%	16.5%	12.0%	24.8%		24.74%	24.40%
	$ per failure	$874	$4,370	$8,740	$32,775
	N	4243	4243	4243	367
	Payment	$852,928	$3,059,415	$4,450,058	$2,977,035	34.5%	$11,339,437	$11,184,535

Pacific Bell - continued					Monthly Cap		$45,838,260
	Base	Failure Type
Example	$38	Ordinary	Chronic	Extended	Tier II		Estimated	Target
						Note 1	Total payment	Total payment
I	Failure rate	38.0%	21.0%	14.0%	31.5%		51.48%	66.40%
	$ per failure	$1,444	$7,220	$14,440	$54,150
	N	4243	4243	4243	367
	Payment	$2,328,219	$6,433,237	$8,577,649	$6,260,011	57.0%	$23,599,115	$30,436,605
J	Failure rate	38.0%	31.5%	21.0%	47.3%		74.69%	66.40%
	$ per failure	$1,444	$7,220	$14,440	$54,150
	N	4243	4243	4243	367
	Payment	$2,328,219	$9,649,855	$12,866,473	$9,390,016	57.0%	$34,234,563	$30,436,605
K	Failure rate	50.0%	29.0%	19.7%	38.0%		90.62%	100.00%
	$ per failure	$1,900	$9,500	$19,000	$71,250
	N	4243	4243	4243	367
	Payment	$4,030,850	$11,689,465	$15,881,549	$9,936,525	75.0%	$41,538,389	$45,838,260
L	Failure rate	50.0%	31.5%	21.0%	47.3%		100.38%	100.00%
	$ per failure	$1,900	$9,500	$19,000	$71,250
	N	4243	4243	4243	367
	Payment	$4,030,850	$12,697,178	$16,929,570	$12,355,284	75.0%	$46,012,882	$45,838,260

Note: The shaded areas contain estimates based on Pacific Bell's simulations. The non-shaded areas are estimates based on historical data, and reflect a higher incidence of repeated failures than the simulations. Example D was estimated from Pacific's actual performance results for March, 2001.

Verizon

Verizon					Monthly Cap		$13,843,500
	Base	Failure Type
Example	$23	Ordinary	Chronic	Extended	Tier II		Estimated	Target
						Note 1	Total payment	Total payment
A	Failure rate	0.99%	0.0%	0.0%	0.0%		0.00%	0.00%
	$ per failure	$23	$114	$228	$854
	N	2169	2169	2169	150
	Payment	$0	$0	$0	$0	1.5%	$0	$0
B	Failure rate	4.0%	0.8%	0.16%	0.8%		0.17%	0.75%
	$ per failure	$92	$460	$920	$3,450
	N	2169	2169	2169	150
	Payment	$7,982	$7,982	$3,193	$4,140	6.0%	$23,297	$103,826
C	Failure rate	7.0%	0.3%	0.02%	0.45%		0.25%	2.20%
	$ per failure	$161	$805	$1,610	$6,038
	N	2169	2169	2169	150
	Payment	$24,445	$5,238	$698	$4,075	10.5%	$34,456	$304,557
D	Failure rate	13.00%	6.00%	3.00%	10.00%		4.63%	7.00%
	$ per failure	$299	$1,495	$2,990	$11,213
	N	2169	2169	2169	150
	Payment	$84,309	$194,559	$194,559	$168,188	19.5%	$641,615	$969,049
E	Failure rate	14.0%	5.0%	3.0%	7.5%		4.46%	8.00%
	$ per failure	$322	$1,610	$3,220	$12,075
	N	2169	2169	2169	150
	Payment	$97,779	$174,605	$209,525	$135,844	21.0%	$617,752	$1,107,480
F	Failure rate	14.0%	7.5%	4.5%	11.3%		6.34%	8.00%
	$ per failure	$322	$1,610	$3,220	$12,075
	N	2169	2169	2169	150
	Payment	$97,779	$261,907	$314,288	$203,766	21.0%	$877,739	$1,107,480
G	Failure rate	23.0%	11.0%	8.0%	16.5%		14.04%	24.40%
	$ per failure	$529	$2,645	$5,290	$19,838
	N	2169	2169	2169	40
	Payment	$263,902	$631,071	$917,921	$130,928	34.5%	$1,943,821	$3,377,814
H	Failure rate	23.0%	16.5%	12.0%	24.8%		24.01%	24.40%
	$ per failure	$529	$2,645	$5,290	$19,838
	N	2169	2169	2169	150
	Payment	$263,902	$946,606	$1,376,881	$736,467	34.5%	$3,323,856	$3,377,814

Verizon					Monthly Cap		$13,843,500
	Base	Failure Type
Example	$23	Ordinary	Chronic	Extended	Tier II		Estimated	Target
						Note 1	Total payment	Total payment
I	Failure rate	38.0%	21.0%	14.0%	31.5%		49.94%	66.40%
	$ per failure	$874	$4,370	$8,740	$32,775
	N	2169	2169	2169	150
	Payment	$720,368	$1,990,491	$2,653,988	$1,548,619	57.0%	$6,913,467	$9,192,084
J	Failure rate	38.0%	31.5%	21.0%	47.3%		72.31%	66.40%
	$ per failure	$874	$4,370	$8,740	$32,775
	N	2169	2169	2169	150
	Payment	$720,368	$2,985,737	$3,980,983	$2,322,928	57.0%	$10,010,016	$9,192,084
K	Failure rate	50.0%	29.0%	19.7%	38.0%		88.39%	100.00%
	$ per failure	$1,150	$5,750	$11,500	$43,125
	N	2169	2169	2169	150
	Payment	$1,247,175	$3,616,808	$4,913,870	$2,458,125	75.0%	$12,235,977	$13,843,500
L	Failure rate	50.0%	31.5%	21.0%	47.3%		97.30%	100.00%
	$ per failure	$1,150	$5,750	$11,500	$43,125
	N	2169	2169	2169	150
	Payment	$1,247,175	$3,928,601	$5,238,135	$3,056,484	75.0%	$13,470,396	$13,843,500

Note: The shaded areas contain estimates of Verizon's performance based on Pacific Bell's simulations. The non-shaded areas are estimates based on historical data, and reflect a higher incidence of repeated failures than the simulations. Example D was estimated from Verizon's actual performance results for December, 2000