Assignment of Proceeding

Michael R. Peevey is the assigned Commissioner and Jacqueline A. Reed is the assigned Administrative Law Judge.

Findings of Fact

1. The current PIP applies a complex set of rules to calculate payments when performance does not meet established parity or benchmark standards.

2. In establishing the PIP, the Commission acknowledged that it should be subject to subsequent review to examine how the incentives plan model is functioning, among other things.

3. AT&T California reviewed both the PMP and PIP and identified specific modifications intended to improve their functioning.

4. On November 27, 2007, AT&T California noticed this proceeding's service list about a December 5 settlement conference "to discuss the possibility of settling certain issues relating to the performance measures (contained in the JPSA) and the associated performance incentives plan."

5. AT&T California held 17 conference calls to discuss its proposed changes to both the PMP and PIP.

6. In August 2008, the Settling Parties jointly filed a motion requesting approval of the modifications to the AT&T California PIP that they had negotiated.

7. The Settling Parties include many of the carriers that are most directly affected by the standards by which AT&T California provisions its OSS.

8. As a result, the proposed settlement reflects a "business-to-business" consensus regarding appropriate wholesale performance incentives for today's telecommunications market.

Conclusions of Law

1. The consensus modifications to the AT&T California PIP attached to this decision, as Appendix A, are reasonable, consistent with the law, and in the public interest.

2. The Settling Parties' Joint Motion for Adoption of Amendments to the Performance Incentive Plan pursuant to D.02-06-006 should be granted, and the consensus modifications to the AT&T California PIP should be approved.

3. This docket should be closed.

4. Future amendments, modifications, and/or changes to the PIP should be sought through an application, in accordance with Pub. Util. Code § 1701.1 and Rule 2.1 of the Rules of Practice and Procedure.

5. For administrative efficiency, this order should be made effective immediately.

ORDER

IT IS ORDERED that:

1. The Joint Motion for Adoption of Amendments to Performance Incentives Plan pursuant to Decision 02-06-006 and Article 12 of the Commission's Rules of Practice and Procedure by Pacific Bell Telephone Company, doing business as AT&T California, Comcast Phone of California, LLC, Covad Communications Company, tw telecom, and U.S. Telepacific Corp. is granted.

2. The consensus modifications to AT&T California's Performance Incentives Plan, attached to this decision as Appendix A, are approved.

3. Future amendments, modifications, and/or changes to the PIP shall be sought through an application, in accordance with Pub. Util. Code § 1701.1 and Rule 2.1 of the Commission's Rules of Practice and Procedure. Parties shall reference Rulemaking (R.) 97-10-016/Investigation (I.) 97-10-017 in the initial paragraph of a new application.

4. R.97-10-016 and I.97-10-017 are closed.

This order is effective today.

Dated December 18, 2008, at San Francisco, California.

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