Appendix G: Payments Generated by Estimated Failure Rates

For Pacific Bell

Adjusted base amount = $38

Monthly cap =

$45,838,260

Failure Category

Total payment

Example

Description

Category A

Category B

Category C

Simulated

Target

Ordinary

Chronic

Extended

Ordinary

Chronic

Extended

Ordinary

Chronic

or Historical

Amount

A

Parity

Failure rate

4.01%

0.30%

0.06%

1.68%

0.20%

0.00%

3.42%

0.85%

Simulation

Payment

$35,576

$11,121

$3,341

$1,406

$287

$0

$9,141

$60,872

$367,623

B

Historical

Failure rate

5.70%

1.73%

1.08%

7.06%

3.53%

2.35%

8.12%

4.18%

Nov '01

Payment

$59,798

$92,876

$112,031

$11,859

$29,647

$39,529

$102,320

$448,061

$650,903

C

Historical

Failure rate

7.97%

3.22%

2.48%

2.25%

2.25%

0.00%

10.80%

6.20%

Mar '01

Payment

$116,111

$249,752

$395,198

$1,393

$6,966

$0

$226,086

$995,506

$1,275,220

D

Non-parity

Failure rate

10.11%

5.22%

4.61%

7.05%

5.85%

5.13%

9.18%

6.51%

Simulation

Payment

$178,376

$439,710

$751,754

$9,667

$38,773

$65,861

$176,997

$1,661,138

$1,883,952

E

Non-parity

Failure rate

15.18%

9.68%

8.88%

11.82%

10.62%

9.77%

15.75%

13.39%

Simulation

Payment

$352,811

$1,114,041

$1,997,104

$26,061

$115,965

$212,808

$639,052

$4,457,842

$4,240,956

F

Non-parity

Failure rate

22.37%

16.46%

15.50%

18.34%

18.06%

17.22%

22.72%

20.63%

Simulation

Payment

$719,708

$2,656,752

$4,908,029

$61,293

$304,695

$577,521

$1,406,332

$10,634,330

$10,375,949

G

Non-parity

Failure rate

29.26%

22.78%

21.65%

24.16%

24.21%

23.57%

30.50%

28.59%

Simulation

Payment

$1,220,402

$4,803,115

$8,992,381

$105,590

$536,801

$1,036,777

$2,604,917

$19,299,983

$19,219,066

H

Non-parity

Failure rate

38.29%

30.96%

29.57%

33.60%

33.93%

33.33%

41.86%

40.52%

Simulation

Payment

$2,052,256

$8,436,822

$15,922,232

$203,779

$1,045,452

$2,032,125

$5,040,521

$34,733,187

$30,808,811

I

Non-parity

Failure rate

44.44%

36.25%

34.65%

35.80%

35.62%

34.92%

47.78%

46.32%

Simulation

Payment

$2,759,356

$11,486,989

$21,690,603

$232,035

$1,165,842

$2,269,365

$6,562,019

$46,166,209

$38,702,160

Performance incentives plan projected on historical data - for analysis purposes

Ordinary

Tier I

Tier II

Month

failure

Category A payments

Category B payments

Category C

Total

rate

Ordinary

Chronic

Extended

Ordinary

Chronic

Extended

payment

Jan-00

8.99%

$151,627

$370,001

$511,935

$65,778

$137,037

$164,444

$274,393

$1,675,215

Feb-00

7.09%

$102,696

$211,792

$325,482

$19,942

$56,977

$85,465

$183,557

$985,911

Mar-00

6.09%

$68,691

$143,206

$206,966

$24,847

$46,588

$93,176

$145,918

$729,393

Apr-00

6.95%

$103,861

$159,408

$243,703

$39,759

$19,880

$39,759

$145,421

$751,790

May-00

6.78%

$86,850

$143,628

$184,168

$22,805

$14,253

$28,506

$85,592

$565,801

Jun-00

7.61%

$105,781

$183,612

$218,378

$29,541

$16,412

$32,824

$162,967

$749,515

Jul-00

6.52%

$89,749

$184,078

$214,484

$36,782

$36,782

$36,782

$194,128

$792,784

Aug-00

7.46%

$111,958

$206,621

$262,339

$40,333

$36,667

$73,333

$249,658

$980,908

Sep-00

7.33%

$99,138

$188,544

$267,541

$12,135

$20,225

$20,225

$240,169

$847,976

Oct-00

8.03%

$120,338

$238,883

$335,306

$40,787

$37,079

$37,079

$355,132

$1,164,604

Nov-00

9.70%

$159,892

$200,867

$296,576

$21,802

$27,253

$27,253

$389,060

$1,122,703

Dec-00

8.89%

$142,976

$248,613

$340,759

$22,756

$0

$0

$233,184

$988,288

Jan-01

8.53%

$134,922

$260,442

$319,208

$22,505

$28,132

$0

$252,159

$1,017,368

Feb-01

7.90%

$105,096

$212,279

$295,834

$8,889

$17,778

$0

$240,000

$879,876

Mar-01

7.97%

$116,111

$249,752

$395,198

$1,393

$6,966

$0

$226,086

$995,507

Apr-01

7.72%

$110,051

$172,226

$266,707

$21,565

$26,957

$26,957

$224,888

$849,350

May-01

6.66%

$73,288

$95,264

$137,160

$4,848

$12,121

$12,121

$111,000

$445,803

Jun-01

5.93%

$68,554

$44,530

$67,245

$3,176

$10,588

$0

$85,814

$279,908

Jul-01

5.46%

$61,563

$73,522

$44,098

$3,034

$10,112

$0

$97,380

$289,710

Aug-01

5.88%

$60,002

$86,307

$42,361

$21,091

$26,364

$52,727

$125,063

$413,914

Sep-01

5.86%

$62,844

$83,445

$93,289

$1,379

$3,448

$6,897

$80,137

$331,440

Oct-01

5.09%

$50,499

$101,185

$116,941

$15,966

$34,213

$45,618

$89,231

$453,653

Nov-01

5.70%

$59,798

$92,876

$112,031

$11,859

$29,647

$39,529

$102,320

$448,061


For Pacific Bell			Adjusted base amount = $38						Monthly cap =		$45,838,260
			Failure Category								Total payment
Example	Description		Category A			Category B			Category C		Simulated	Target
			Ordinary	Chronic	Extended	Ordinary	Chronic	Extended	Ordinary	Chronic	or Historical	Amount

A	Parity	Failure rate	4.01%	0.30%	0.06%	1.68%	0.20%	0.00%	3.42%	0.85%
	Simulation	Payment	$35,576	$11,121	$3,341	$1,406	$287	$0		$9,141	$60,872	$367,623


B	Historical	Failure rate	5.70%	1.73%	1.08%	7.06%	3.53%	2.35%	8.12%	4.18%
	Nov '01	Payment	$59,798	$92,876	$112,031	$11,859	$29,647	$39,529		$102,320	$448,061	$650,903


C	Historical	Failure rate	7.97%	3.22%	2.48%	2.25%	2.25%	0.00%	10.80%	6.20%
	Mar '01	Payment	$116,111	$249,752	$395,198	$1,393	$6,966	$0		$226,086	$995,506	$1,275,220


D	Non-parity	Failure rate	10.11%	5.22%	4.61%	7.05%	5.85%	5.13%	9.18%	6.51%
	Simulation	Payment	$178,376	$439,710	$751,754	$9,667	$38,773	$65,861		$176,997	$1,661,138	$1,883,952


E	Non-parity	Failure rate	15.18%	9.68%	8.88%	11.82%	10.62%	9.77%	15.75%	13.39%
	Simulation	Payment	$352,811	$1,114,041	$1,997,104	$26,061	$115,965	$212,808		$639,052	$4,457,842	$4,240,956


F	Non-parity	Failure rate	22.37%	16.46%	15.50%	18.34%	18.06%	17.22%	22.72%	20.63%
	Simulation	Payment	$719,708	$2,656,752	$4,908,029	$61,293	$304,695	$577,521		$1,406,332	$10,634,330	$10,375,949


G	Non-parity	Failure rate	29.26%	22.78%	21.65%	24.16%	24.21%	23.57%	30.50%	28.59%
	Simulation	Payment	$1,220,402	$4,803,115	$8,992,381	$105,590	$536,801	$1,036,777		$2,604,917	$19,299,983	$19,219,066


H	Non-parity	Failure rate	38.29%	30.96%	29.57%	33.60%	33.93%	33.33%	41.86%	40.52%
	Simulation	Payment	$2,052,256	$8,436,822	$15,922,232	$203,779	$1,045,452	$2,032,125		$5,040,521	$34,733,187	$30,808,811


I	Non-parity	Failure rate	44.44%	36.25%	34.65%	35.80%	35.62%	34.92%	47.78%	46.32%
	Simulation	Payment	$2,759,356	$11,486,989	$21,690,603	$232,035	$1,165,842	$2,269,365		$6,562,019	$46,166,209	$38,702,160


Performance incentives plan projected on historical data - for analysis purposes
	Ordinary	Tier I						Tier II
Month	failure	Category A payments			Category B payments			Category C	Total
	rate	Ordinary	Chronic	Extended	Ordinary	Chronic	Extended	payment
Jan-00	8.99%	$151,627	$370,001	$511,935	$65,778	$137,037	$164,444	$274,393	$1,675,215
Feb-00	7.09%	$102,696	$211,792	$325,482	$19,942	$56,977	$85,465	$183,557	$985,911
Mar-00	6.09%	$68,691	$143,206	$206,966	$24,847	$46,588	$93,176	$145,918	$729,393
Apr-00	6.95%	$103,861	$159,408	$243,703	$39,759	$19,880	$39,759	$145,421	$751,790
May-00	6.78%	$86,850	$143,628	$184,168	$22,805	$14,253	$28,506	$85,592	$565,801
Jun-00	7.61%	$105,781	$183,612	$218,378	$29,541	$16,412	$32,824	$162,967	$749,515
Jul-00	6.52%	$89,749	$184,078	$214,484	$36,782	$36,782	$36,782	$194,128	$792,784
Aug-00	7.46%	$111,958	$206,621	$262,339	$40,333	$36,667	$73,333	$249,658	$980,908
Sep-00	7.33%	$99,138	$188,544	$267,541	$12,135	$20,225	$20,225	$240,169	$847,976
Oct-00	8.03%	$120,338	$238,883	$335,306	$40,787	$37,079	$37,079	$355,132	$1,164,604
Nov-00	9.70%	$159,892	$200,867	$296,576	$21,802	$27,253	$27,253	$389,060	$1,122,703
Dec-00	8.89%	$142,976	$248,613	$340,759	$22,756	$0	$0	$233,184	$988,288
Jan-01	8.53%	$134,922	$260,442	$319,208	$22,505	$28,132	$0	$252,159	$1,017,368
Feb-01	7.90%	$105,096	$212,279	$295,834	$8,889	$17,778	$0	$240,000	$879,876
Mar-01	7.97%	$116,111	$249,752	$395,198	$1,393	$6,966	$0	$226,086	$995,507
Apr-01	7.72%	$110,051	$172,226	$266,707	$21,565	$26,957	$26,957	$224,888	$849,350
May-01	6.66%	$73,288	$95,264	$137,160	$4,848	$12,121	$12,121	$111,000	$445,803
Jun-01	5.93%	$68,554	$44,530	$67,245	$3,176	$10,588	$0	$85,814	$279,908
Jul-01	5.46%	$61,563	$73,522	$44,098	$3,034	$10,112	$0	$97,380	$289,710
Aug-01	5.88%	$60,002	$86,307	$42,361	$21,091	$26,364	$52,727	$125,063	$413,914
Sep-01	5.86%	$62,844	$83,445	$93,289	$1,379	$3,448	$6,897	$80,137	$331,440
Oct-01	5.09%	$50,499	$101,185	$116,941	$15,966	$34,213	$45,618	$89,231	$453,653
Nov-01	5.70%	$59,798	$92,876	$112,031	$11,859	$29,647	$39,529	$102,320	$448,061