ALJ/DOT/jva DRAFT Agenda ID #4421

4/7/2005 Item 47

Decision DRAFT DECISION OF ALJ DUDA (Mailed 3/29/2005)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Request for Arbitration of XO California, Inc. of an Amendment to an Interconnection Agreement with SBC California pursuant to Section 252(b) of the Communications Act of 1934, as amended.

Application 04-05-002 (Filed May 3, 2004)

OPINION MODIFYING AND CONFIRMING THE ASSIGNED COMMISSIONER'S AND ARBITRATOR'S RULING
REQUIRING SBC CALIFORNIA TO MAINTAIN THE STATUS QUO

PENDING THE OUTCOME OF THIS ARBITRATION

I. Summary

This order modifies and confirms the March 10, 2005 Assigned Commissioner's and Arbitrator's Ruling (Joint Ruling) which granted the motion for an emergency order to restrict SBC California (SBC) from rejecting orders for certain unbundled network elements (UNEs), as filed on March 3, 2005 and described below. The Joint Ruling is confirmed in that SBC shall continue to honor its obligations under its interconnection agreement with XO California Inc. (XO) for 60 days from the date of the Joint Ruling, or May 9, 2005, for all transport, high capacity loops, dark fiber, and unbundled local switching UNE orders relating to existing customers, including requests for moves, adds and changes. The Joint Ruling is modified to remove SBC's obligation to process such UNE orders for new customers.

On March 3, 2005, XO filed a motion in this arbitration in response to an announcement by SBC that, beginning on March 11, 2005, it would reject all new orders for certain UNEs and would also stop processing request for moves, adds, and changes for XO's existing customers served by these UNEs. SBC bases these actions on its interpretation of the Federal Communication Commission's (FCC) recently issued Triennial Review Remand Order (TRRO),¹ released February 4, 2005.

Specifically, XO seeks a Commission order temporarily restricting SBC from rejecting orders for UNEs related to transport, high capacity loops, dark fiber and unbundled local switching (including UNE-Platform, or "UNE-P") pending compliance with the change of law provisions in the existing interconnection agreement (ICA) between SBC and XO and the completion of this arbitration proceeding. XO claims that it will be unable to place new orders for these UNEs in California after March 10, 2005, or change orders to serve its existing customer base, unless this Commission takes affirmative action to prohibit SBC from rejecting such UNE orders during the pendancy of its compliance with the change-of-law provisions in its existing interconnection agreement with SBC. Unless such Commission action is taken, XO claims that it will sustain immediate and irreparable injury because it will be unable to fill service requests for existing and new customers.

As summarized in the Joint Ruling, SBC was provided the opportunity to fully brief issues pertinent to a ruling on the motion. SBC filed a response to XO's motion on March 7, 2005.

The Assigned Commissioner and Arbitrator issued their Joint Ruling on March 10, 2005 granting XO's motion and directing SBC to continue honoring obligations for both new and existing customers under its interconnection agreement with XO for 60 days from the date of the Joint Ruling while parties proceed to negotiate amendments to their interconnection agreement to conform to the TRRO.

On March 11, 2005, the Assigned Commissioners in the Local Competition Rulemaking (R.95-04-043) and in an arbitration (Application 04-03-014) between Verizon and various competitive local exchange carriers (CLECs) issued separate rulings on motions very similar to XO's, but relating primarily to the provision of the UNE-Platform (UNE-P). In contrast to the Joint Ruling on XO's motion that directed SBC to continue to process XO's UNE orders for new and existing customers for 60 days, the Assigned Commissioner Rulings (ACRs) in the local competition rulemaking and the Verizon arbitration did not require SBC or Verizon to process orders to serve new customers. The Local Competition and Verizon Arbitration ACRs were confirmed by the Commission in D.05-03-027 and D.05-03-028.