FINDINGS

1. Pacific, in AL 20469, requests authority to apply the same retail exchange and toll service billing surcharge/surcredit billing adjustments to its corresponding resale exchange and toll service rates to reflect an exact 17% discount as mandated by D.96-03-020 and D.97-04-090.

2. OP 62 of D.94-09-065 authorized Pacific to implement the 1995 price cap rate adjustments through the billing surcharge/surcredit mechanism.

3. D.96-03-020 ordered Pacific to make available certain retail services to CLECs for resale at a 17% discount for business services and 10% for residential access services. Subsequently, D.97-04-090 changed the discount for residential access services from 10% to 17%.

4. Pacific has three different billing surcharge/surcredit billing adjustments applicable to access, exchange, and toll services in Rule 2.1.33, Rule 33 - Billing Surcharges of Tariff Schedule Cal. P.U.C. No. A2, General Regulations.

5. Currently, Pacific is erroneously applying the access billing surcharge/surcredit billing adjustment to its entire resale tariff, Schedule Cal. P.U.C. 175-T, even though services offered for resale include not only intraLATA access services, but also exchange and toll services.

6. Even though Pacific's resale rates for exchange and toll services are required to be set at 17% below its retail rates, resale prices could, in fact, be either more or less than the mandated 17% discount if the resale exchange and toll service rates are adjusted by only the access billing surcharge/surcredit mechanism.

7. In 1999 Pacific exceeded the 5% threshold specified in OP 62 of D.94-09-065.

8. OP 4 of Resolution T-16265, dated January 20, 1999 (AL No. 19761), directed Pacific, among other things, to revise its tariffs to reflect the cumulative net change in revenues from price cap factors through the use of its Rule 33 billing surcharge/surcredit billing adjustment mechanism by July 1, 1999.

9. AL No. 20400, filed July 1, 1999, and which became effective November 1, 1999, made the required rate reductions in Pacific's entire retail tariff rates namely, 5.009%, 5.179%, and 5.421%, on its exchange, toll, and access services, respectively.

10. Pacific has discovered that its existing resale exchange and toll rates do not equate to exactly 17% off the corresponding retail rates. Pacific's current exchange and toll resale rates were adjusted by the 5.421% access billing surcredit instead of 5.009% and 5.179%, respectively.

11. In order to restore an exact 17% discount off Pacific's retail exchange and toll services rates, TD recommends that the company correct its current resale exchange and toll services tariff rates adopted with AL No. 20400.

12. Pacific proposes that the surcharge/surcredit billing adjustments be implemented effective June 1, 2001 in order to provide the company sufficient time to reprogram its billing system.

13. TD believes that Pacific's request in AL No. 20469 to apply the same retail exchange and toll service surcharge/surcredit billing adjustments to its corresponding resale exchange and toll service rates to reflect an exact 17% discount as mandated by D.96-03-020 and D.97-04-090 is appropriate and reasonable.

14. In order for the corrected resale rates to become effective on June 1, 2001, which is the same date that AL No. 20469 will be implemented, Pacific has indicated to TD staff that it intends to make an AL filing in April 2001. This filing would include the corrected resale exchange and toll services tariff rates.

THEREFORE, IT IS ORDERED that:

1. Pacific's request in AL No. 20469 to apply the same retail exchange and toll service surcharge/surcredit billing adjustments to its corresponding resale exchange and toll service rates to reflect an exact 17% discount as mandated by D.96-03-020 and D.97-04-090 is approved.

2. Pacific shall correct its existing resale exchange and toll tariff rates, which were adopted with AL No. 20400 in Tariff Schedule Cal. P.U.C. 175-T, Section 18, to restore the mandated 17% discount. The AL must be filed in time to become effective on June 1, 2001, which is the same date that AL No. 20469 shall be implemented.

I hereby certify that the Public Utilities Commission, at its regular meeting on January 4, 2001, adopted this Resolution. The following Commissioners approved it:

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