X. Reexamination Process
When the Commission set UNE rates for SBC in D.99-11-050, it established a procedure for determining which UNE costs should be reexamined. Specifically, if a carrier believes that a UNE price lower than the one adopted for SBC is justified for a particular UNE, based upon a reduction in the costs for that element of at least 20%, the CLC may nominate that UNE as a candidate for reconsideration. The nomination should be made in an application submitted between February 1 and March 1 of each year and should include a brief summary of the evidence supporting the asserted cost reduction. SBC may also nominate UNEs for reexamination during the same window if it believes a higher price is justified owing to an increase in costs of at least 20%. The Commission stated it would choose no more than two UNEs for annual reexamination. (D.99-11-050, mimeo at 168-9.)
In D.04-09-063, the Commission modified the reexamination process for SBC, noting that the idea of a quick update proceeding had given way to "the reality of modeling difficulties, protracted discovery battles, and various delays." (D.04-09-063, at 246.) The Commission suspended further UNE nominations for SBC until February 2007, citing the benefits of pricing and market stability. (Id.)
It is reasonable to establish a similar procedure for reexamination of Verizon's UNE rates. We herein adopt a procedure for periodic nominations of Verizon's UNEs identical to the one that has been in place for SBC, with the clarification that the first nominations shall not be made before February 2008, and nominations shall be biennial rather than annual. We prefer a biennial review process to an annual one to provide further price stability and less strain on Commission and party resources. Verizon has committed to the FCC as a condition of its merger with MCI that it will not seek any increase in state-approved UNE rates for two years from its merger closing date, except for rates deemed invalid or remanded to a state commission in connection with currently pending appeals.47 Thus, a delay in any UNE reexamination until 2008 matches the timing of this commitment.
When a UNE reexamination is ultimately undertaken, the Commission may wish to consolidate the review of SBC and Verizon UNEs into one proceeding. In order to avoid the delays and pitfalls that have plagued the UNE pricing dockets in general, we find that unless parties nominating a UNE can provide good cause for a modeling change, the Commission's preferred methodology for Verizon UNE pricing updates shall be to consider updated inputs and assumptions to the HM 5.3 model adopted in today's order.
47 Verizon made this commitment in an October 31, 2005 ex parte letter to the FCC regarding its Application for Consent to Transfer Control filed by Verizon Communications, Inc. and MCI Inc., WC Docket No. 05-75.
