Parties' Responses to Rhythms' Motion

Pacific filed its Response to Rhythms' Motion on July 3, 2001. Pacific asserts that Rhythms' argument misses the point of Pacific's witness Scholl's testimony. The scope of this HFPL pricing proceeding is not only to determine the appropriate price for HFPL, but also whether any positive price for the HFPL should be offset by a reduction in other rates paid by end users. The referenced portions of Scholl's testimony are not to be used to assist the Commission in determining a price for the HFPL. Instead, those portions are designed to assist in determining that a positive price for HFPL will not cause Pacific to over-recover (or even fully recover) its loop costs. Consequently, the testimony is directly relevant to the "double recovery" phase of this proceeding, and should not be stricken.

Verizon, in its June 25, 2001 Response to Rhythms' Motion, indicates that Collins' testimony is within the scope of this proceeding. As Rhythms' counsel stated at the May 2, 2001 PHC, this phase is to determine "on a permanent basis what the monthly loop recurring price should be, if any, for the HFPL." Directly relevant to that issue is the cost basis for such a rate. Collins' testimony specifically addresses this issue, and is thus entirely relevant to this proceeding. Whether or not Collins' approach is consistent with the pricing standards adopted by this Commission and the FCC is appropriately addressed in the context of each party's case, not in a motion to strike.

TURN filed its Response in opposition to Rhythms' Motion on July 2, 2001. TURN asserts that Roycroft's testimony is well within the articulated scope of this phase of the proceeding. The sub-phase is intended to set permanent HFPL prices. Roycroft is an economist who has used publicly available data approved by the FCC-not the results of a cost study "re-examining the underlying loop costs" as Rhythms suggests-to recommend final prices for the HFPL.

The ALJ also indicated at the PHC that this first sub-phase would also include testimony regarding the policy question of whether there should be a monthly recurring price for fiber-fed DLC loops. At the same time, the ALJ further indicated that the pricing question of how much that price (if any) should be would be reserved to the second sub-phase (non-costing and NGDLC interim pricing phase). Roycroft's direct testimony addresses this policy issue using Pacific's Project Pronto for discussion. The pages of testimony that Rhythms wants to strike are entirely concerned with the complexities of how NGDLC technology impacts this policy issue. Even the example given on page 41 lines 5-8 which mentions cost impacts, does not make a pricing recommendation--it simply makes a point about distribution plant.

To the extent that Roycroft's testimony offers economically-reasoned, cost-based final prices for the copper-fed HFPL, it is arguably within the scope of this sub-phase. Roycroft's testimony regarding the policy question of non-zero pricing for the fiber-fed loop is also clearly within the scope.