ALJ/JAR/tcg DRAFT H-7
Agenda ID #910
9/19/02
Decision DRAFT DECISION OF ALJ REED (Mailed 7/23/02)
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Rulemaking on the Commission's Own Motion to Govern Open Access to Bottleneck Services and Establish a Framework for Network Architecture Development of Dominant Carrier Networks. |
Rulemaking (R.) 93-04-003 (Filed April, 1993) |
|
Investigation on the Commission's Own Motion into Open Access and Network Architecture Development of Dominant Carrier Networks. |
Investigation (I.) 93-04-002 (Filed April, 1993) |
|
Order Instituting Rulemaking on the Commission's Own Motion Into Competition for Local Exchange Service. |
R.95-04-043 (Filed April, 1995) |
|
Order Instituting Investigation on the Commission's Own Motion Into Competition for Local Exchange Service. |
I.95-04-044 (Filed April, 1995) |
DECISION GRANTING PACIFIC BELL TELEPHONE COMPANY'S
RENEWED MOTION FOR AN ORDER THAT IT HAS SUBSTANTIALLY SATISFIED THE REQUIREMENTS OF THE 14-POINT CHECKLIST IN § 271
OF THE TELECOMMUNICATIONS ACT OF 1996 AND DENYING
THAT IT HAS SATISFIED § 709.2 OF THE PUBLIC UTILITIES CODE
DECISION 2
I. Summary 2
II. Background 4
III. Pacific Compliance With §271(c)(1)(A): Presence of Facilities-Based Competition 8
IV. Pacific Compliance With § 271(c)(2)(B): The Competitive Checklist 10
A. Checklist Item 1-- Interconnection 10
1. Legal Standard 10
2. Proceeding Record 11
a) Pacific's Position 11
(1) Facilities-Based CLECs 12
(2) Collocation 12
(3) Interconnection Trunking 15
(4) Performance Data Results 15
b) Interested Parties' Positions 21
(1) Collocation 21
(2) Interconnection Trunking 23
3. Discussion 25
B. Checklist Item 2-Unbundled Network Elements 29
1. Legal Standard 30
2. Proceeding Record 34
a) Pacific's Position 34
(1) General Access to UNEs 34
(2) UNE Combinations 34
(3) Intellectual Property 35
(a) Discussion 36
(4) Nondiscriminatory Access to OSS 38
(a) OSS Test 38
(b) OSS Test Report Comments 80
(c) Local Service Center (LSC)/OSS -April 2001
Operational Hearings 101
(5) Pricing 111
C. Checklist Item 3-- Poles, Ducts, Conduits and Rights-of-Way 123
1. Legal Standard 123
2. Proceeding Record 126
D. Checklist Item 4 -- Unbundled Local Loops 128
1. Legal Standard 128
2. Proceeding Record 130
a) Facility Availability and Quality 130
(1) Pacific's Position 131
(2) Interested Parties' Positions 132
(a) Discussion 134
b) Loop Installation Issues 138
(1) Pacific's Position 138
(2) Interested Parties' Positions 139
(a) Discussion 143
c) Advanced Services 147
(1) Pacific's Position 147
(2) Interested Parties' Positions 149
(a) Discussion 151
d) Integrated Digital Loop Carrier (IDLC) 154
(1) Discussion 154
e) ANSI Standards and Spectrum Management 155
(1) Discussion 156
f) Spectral Interference 156
(1) Discussion 157
E. Checklist Item 5 -- Unbundled Local Transport 157
1. Legal Standard 157
2. Proceeding Record 158
3. Discussion 162
F. Checklist Item 6 -- Unbundled Local Switching 164
1. Legal Standard 164
2. Proceeding Record 165
3. Discussion 172
G. Checklist Item 7 -- 911, E911, Directory Assistance Services,
and Operator Call Completion Services 174
1. Legal Standard 174
a) TA96 and FCC Orders 174
(1) 911 and E911 174
(2) Directory Assistance/Operator Services 175
b) California Application of Legal Standards 176
2. Proceeding Record 177
3. Discussion 180
H. Checklist Item 8 - White Pages Directory Listings 181
1. Legal Standard 181
2. Proceeding Record 183
a) Pacific's Position 183
(1) Performance Measure Results 184
b) Interested Parties' Positions 184
c) CGE&Y Assessment 185
3. Discussion 186
I. Checklist Item 9-- Access to Telephone Numbers 188
1. Legal Standard 188
2. Proceeding Record 189
3. Discussion 190
J. Checklist Item 10 -- Access to Databases and Associated Signaling 192
1. Legal Standard 192
2. Proceeding Record 194
3. Discussion 195
K. Checklist Item 11-Number Portability 197
1. Legal Standard 197
2. Proceeding Record 199
3. Discussion 203
L. Checklist Item 12-- Local Dialing Parity 206
1. Legal Standard 206
2. Proceeding Record 207
3. Discussion 208
M. Checklist Item 13-Reciprocal Compensation 209
1. Legal Standard 209
2. Proceeding Record 211
a) Pacific's Position 211
3. Interested Parties' Positions 212
4. Discussion 212
N. Checklist 14-Resale 214
1. Legal Standard 214
2. Proceeding Record 215
3. Discussion 220
V. CPUC Performance Incentives Plan 226
A. Performance measurement and standards 228
B. Performance Assessment 231
C. Performance incentives 233
VI. California Public Utilities Code Section 709.2 245
A. Background 245
B. Summary of Positions 247
C. Open Access to Exchanges 248
1. Does the record support the determination that all competitors
have fair, nondiscriminatory, and mutually open access to
exchanges currently subject to the modified final judgment,
including fair unbundling of exchange facilities, as prescribed
in the commission's Open Access and Network Architecture Development Proceeding (I.93-04-003 and R.93-04-003)?
(§ 709.2(c)(1)) 248
2. Discussion 250
D. No Anticompetitive Behavior 251
1. Does the record support the determination that there is no anticompetitive behavior by the local exchange telephone
corporation, including unfair use of subscriber information
or unfair use of customer contacts generated by the local
exchange telephone corporation's provision of local exchange
telephone service? (§ 709.2(c)(2)) 251
2. Discussion 253
E. No improper cross subsidization 256
1. Does the record support the determination there is no
improper cross-subsidization of intrastate interexchange telecommunications service by requiring separate accounting
records to allocate costs for the provision of intrastate
interexchange telecommunications service and examining
the methodology of allocating those costs? (§ 709.2(c)(3)) 256
2. Discussion 258
F. No Substantial Possibility of Harm From Pacific's Entry 261
1. Does the Record Support the Determination that there is No
Substantial Possibility of Harm from Pacific's Entry into the
Long Distance Market? (§ 709.2(c)(4)) 261
2. Discussion 263
VII. Conclusion 271
VIII. Comments on Draft Decision 272
Findings of Fact 273
Conclusions of Law 309
ORDER 321
Appendix I - 271 Compliance Requirements Multiple Checklist Items
(Appendix B to D.98-12-069)
Appendix II - Pacific Bell Unbundled Network Element Recurring Prices
as of 7/15/02
Appendix III - California OSS Performance Measures
Appendix IV - April 2002 Performance Incentives Plan Results
Appendix V - List of Appearances
DECISION GRANTING PACIFIC BELL TELEPHONE COMPANY'S
RENEWED MOTION FOR AN ORDER THAT IT HAS SUBSTANTIALLY SATISFIED THE REQUIREMENTS OF THE 14-POINT CHECKLIST IN § 271
OF THE TELECOMMUNICATIONS ACT OF 1996 AND DENYING
THAT IT HAS SATISFIED § 709.2 OF THE PUBLIC UTILITIES CODE
I. Summary
Today, we conclude the California chapter of Pacific Bell's (Pacific) six-year journey to long distance authorization. The length of the journey has been as much about the hard work, determination and collaboration of Pacific, the competitive local exchange carriers, interested parties, our staff, and the public, as it has been about accurately assessing compliance with the 14-point checklist in Section 271 of the Telecommunications Act of 1996 in the nation's most populous state. We grant Pacific's renewed motion by this order that assesses its compliance with the 14-point checklist.
We hold that Pacific has successfully passed the independent third-party test of its Operations Support System (OSS). We acknowledge the strong performance results Pacific has achieved across numerous service categories, and make slight modifications to the Performance Incentive Plan that we established. In addition, we determine that Pacific has continued to demonstrate compliance with Access to Rights of Way, Access to Telephone Numbers, Dialing Parity, and Reciprocal Compensation, the four checklist items that we held that it satisfied in Decision (D.) 98-12-069. We also determine that Pacific has satisfied eight additional checklist items as well as the technical compliance requirements set forth in our 1998 decision's Appendix B Roadmap. Those checklist items are: Interconnection, Nondiscriminatory Access to Unbundled Network Elements, Unbundled Loops, Local Transport, Unbundled Switching, Access to 911, E911, Directory Assistance and Operator Call Completion Services, White Pages, and Access to Databases.
Before we verify to the Federal Communications Commission (FCC) Pacific's compliance with Number Portability, Checklist Item 11, we direct Pacific to implement and verify a mechanized enhancement to the Number Portability Administration Center (NPAC) check Pacific has committed to implementation of the enhancement by the end of September 2002. Mechanization of the NPAC check is crucial for competitors as well as customers: it will mechanically delay a Pacific disconnect before a New Service Provider has completed its installation work. The continuing delay of this process presents a critical barrier to entry for the competitive local exchange carriers (CLECs). We do not find that Pacific has complied with the requirements for Resale, Checklist Item 14. Instead, we find that Pacific has erected unreasonable barriers to entry in California's Digital Subscriber Line market both by not complying with its resale obligation with respect to its advanced services pursuant to § 251(c)(4)(A) and by offering restrictive conditions in the SBC Advanced Solutions Inc. (ASI)-CLEC agreements in contravention of § 251(c)(4)(B).
We also deny today Pacific's motion for an order that it has satisfied the requirements of California Public Utilities (Pub. Util.) Code § 709.2. While we make the determination that all competitors have fair, nondiscriminatory, and mutually open access to exchanges, the record does not support our making the determinations that Pacific has manifested no anticompetitive behavior, has established no improper cross-subsidization, or poses no substantial possibility of harm to the competitive intrastate interexchange telecommunications markets. We direct Pacific to submit to us a report on the feasibility of structurally separating the company into wholesale and retail entities. Further, we direct the Telecommunications Division no later than five months from the effective date of this order to submit to prepare for consideration on our meeting agenda an Order Instituting Investigation on the selection and appointment of a competitively neutral third-party Preferred Interexchange Carrier (PIC) administrator for California. Finally, persuaded by Pacific's legal arguments that federal law does not support even a narrow and focused constraint on joint marketing, we shall closely monitor Pacific's compliance with the federal equal access law as it jointly markets the services of its long distance affiliate.
Our findings under Section 709.2 reflect the considerations that California law requires us to weigh and balance. While Pacific largely satisfies the technical requirements of Section 271, in accordance with Section 709.2 we cannot state unequivocally that we find Pacific's imminent entry into the long distance market in California will primarily enhance the public interest. Local telephone competition in California exists in the technical and quantitative data; but it has yet to find its way into the residences of the majority of California's ratepayers. This decision acknowledges the distance Pacific has traveled in order to reach its goal of long distance authorization; and concurrently, it continues to pave the way towards actual and vibrant local competition in California.
