II. Procedural Background

A. Verizon's June 15, 2004 Letter

All complainants except ACN, and all intervenors except Fones4All, have valid interconnection agreements with Verizon. Pursuant to those agreements, Verizon currently provides complainants with unbundled Local Switching and Common Transport network elements. These two network elements are part of the unbundled network elements platform (UNE-P) by which complainants and intervenors provide local service to many California consumers in Verizon's service territory.

These consolidated complaints arise from a June 15, 2004 Verizon letter to complainants and intervenors which stated that, beginning September 17, 2004, Verizon would convert its Class 5 circuit switches to packet switches in two of its five central offices. In so doing, Verizon would eliminate complainants' and intervenors' access to the Local Switching and Common Transport UNEs. Verizon has stated it can serve complainants and intervenors' customers through a resale platform, as opposed to the UNE-P.

B. The Consolidated Complaints

The three complaints filed in August and September 2004 were consolidated by a September 21, 2004 Administrative Law Judge (ALJ) Ruling because of common issues of law and fact. All three complaints allege that Verizon intends to eliminate the ability of other CLECs to purchase unbundled Local Switching and Common Transport network elements, alone and in combination with other network elements. The complaints also contend that Verizon's anticipated actions violate Verizon's interconnection agreements with complainants, as well as federal and state law.

C. The Order Maintaining the Status Quo

On August 19, 2004, AT&T filed, together with its complaint, an Emergency Motion for Order Maintaining the Status Quo Pending Resolution of the Complaint. On September 15, 2004, the Assigned Commissioner and ALJ granted AT&T's motion. (September 15 Ruling Maintaining the Status Quo.) The September 15 Ruling Maintaining the Status Quo, still in effect, made clear that it does not prohibit Verizon from deploying its new packet switches, nor does the ruling require Verizon to unbundle and provide the advance service capabilities of its packet switches to AT&T. The ruling only requires Verizon to continue to provide AT&T access to unbundled Local Switching and Common Transport network elements under the terms of AT&T's interconnection agreement, which addresses functionality, and not specific hardware of the switch providing the Local Switching and Common Transport network elements.

The September 15 Ruling also maintains the status quo by extending the restraint to Verizon's performance under its California interconnection agreements with substantially similar access provision. It does so in order to maintain a level playing field and treat Verizon's interconnection agreements with all similarly situated California CLECs in the same way.

D. September 17, 2004 Hearing and Decision Confirming September 15 Ruling

On September 16, 2004, Verizon filed a notice regarding compliance with the September 15 Ruling. In that notice, Verizon clearly informed the Commission for the first time that it was unable at that time to deploy the packet switches and continue to provide AT&T the access required by the ruling due to the lack of operational support system capabilities currently in place. Therefore, even though the September 15 Ruling did not prohibit Verizon from deploying its packet switch, Verizon stated it would not deploy packet switches in California while the ruling remained in place.

In light of the new information, the Assigned Commissioner and ALJ convened an emergency hearing on September 17, 2004 so that AT&T and Verizon could offer witnesses on the issue of the parties' respective harms, with a particular focus on end-user customers. The testimony at the hearing demonstrated that if the status quo were maintained, the current service to both AT&T and Verizon customers should not be disrupted.

On September 23, 2004, the Commission issued an interim order, Decision (D.) 04-09-056, which clarified and confirmed the September 15 Ruling. On that same day, the Commission issued D.04-09-057 which denied Verizon's appeal as to the categorization of this case and affirmed the categorization as "adjudicatory," as previously determined in the Instructions to Answer mailed to Verizon on August 24, 2004.

E. Subsequent Events

On October 21, 2004, the Assigned Commissioner and ALJ issued a Scoping Memo setting dates for the parties to file cross motions for summary judgment and reserving a hearing date if necessary. The following complainants or intervenors filed cross motions for summary judgment: AT&T; Telescape, Wholesale Airtime and nii; ACN; Call America and Navigator; and Verizon. MCI did not file a motion for summary judgment but opposed Verizon's summary judgment motion.

On December 20, 2004, the parties completed briefing on the cross motions for summary judgment. MCI alleged that hearings were necessary on four issues. The ALJ made no determination on the outcome of the cross motions but set hearings on the two issues set forth below in order to have a complete record so that the Commission could resolve the matter as soon as possible. The issues addressed in hearings were:

· What is the capability of the Nortel switch as deployed by Verizon with respect to performing the circuit switching function? Is the Nortel switch able to be modified to perform the circuit switching function and if so, what is the extent of the necessary modifications?

· From a technical perspective, is it feasible for Verizon to leave in place its existing circuit switch and also deploy the new Nortel switch?

Hearings were held on Friday, January 21 and Monday, January 24, 2005. Following the hearing and subsequent briefing, the FCC released the Triennial Review Remand Order. The parties in the instant case had the opportunity to address the effect, if any, this recent FCC order has on this case. The briefing was complete on March 7, 2005, on which date the cases were submitted.

We make our determination on the entire record, which includes the motions for summary judgment as well as the hearing transcript and post-hearing briefs. Complainants have the burden of proof in these complaint cases. The standard of proof is by a preponderance of the evidence. (See Office of Ratepayer Advocates v. Pacific Bell Telephone Company, D.01-08-067, 2001 Cal PUC LEXIS 517*8.)⁵