2. Background

On November 30, 2001, GNAPs filed an application for arbitration of an interconnection agreement with Pacific pursuant to Section 252(b) of the Telecommunications Act of 1996 (Act or TA96). Formal negotiations between the parties commenced on January 19, 2001. As negotiations progressed, Pacific agreed to extend the closing date of the parties' arbitration window, making November 30, 2001 the date the arbitration window closed. Therefore, GNAPs' Petition was timely filed.

GNAPs agreed to negotiate the terms of an ICA based on Pacific's proposed "13-state" ICA. While there was no dispute over the vast majority of terms in the ICA, the parties reached an impasse on 13 key issues. In its petition, GNAPs indicated that it discusses all key unresolved issues in detail, but stated the petition did not identify all of the disputed language in the ICA. GNAPs requested that the Commission resolve the disputed issues on a policy level and affirmatively order the parties to implement contract language embodying this policy decision.

On December 26, 2001, Pacific filed its Response to GNAPs' application. In its Response, Pacific summarized its position on the 13 issues previously raised by GNAPs. Pacific also indicated that GNAPs' proposal that the Commission resolve disputed issues at a policy level is both impractical and contrary to law. Resolution ALJ-181 requires parties to identify the issues for which they request arbitration and propose contractual language to match. In its Response, Pacific presented Pacific's proposed resolution of the 13 issues that were described in the Petition, with Pacific's proposed contractual language.

Similarly, on December 20, 2001, GNAPs filed an application for arbitration of an ICA with Verizon California Inc. f/k/a GTE California Inc. (Verizon) pursuant to Section 252(b) of the Act. GNAPs listed 11 unresolved issues.

Verizon filed a response to GNAPs' petition on January 14, 2002. Verizon responded to the 11 issues GNAPs raised, and added 3 others, for a total of 14 issues. Verizon pointed out, as did Pacific, that GNAPs articulated very narrow issues for arbitration, but proposed significant changes to the ICA, which were not mentioned in the Petition nor supported by testimony.

Conference calls were held on January 7 and January 15, 2002, to discuss the schedule for the case and to address various procedural issues. During the January 7, 2002 conference call, the arbitrator assigned to the proceedings raised the issue of consolidating the two arbitration proceedings since many of the issues to be addressed were common to both. During the January 15, 2002 conference call with GNAPs, Pacific, and Verizon, the arbitrator indicated her intent to consolidate the two arbitration proceedings and revise the hearing schedule.

GNAPs was ordered to make a Supplemental Filing on January 22, 2002. The filing included GNAPs' position on all areas where there was disputed language that was not addressed specifically in GNAPs' initial petitions. GNAPs' Supplemental Filing was not filed with the Commission until
January 23, 2002, and it was accompanied by a motion for acceptance of late filed comments. Pacific and Verizon filed their Supplemental Responses on
February 1, 2002. An ALJ Ruling was issued on January 22, 2002 formally consolidating the two proceedings and affirming the procedural schedule discussed during the January 15, 2002 conference call.

An arbitration hearing was held on February 11, 2002. Concurrent briefs were filed and served on March 8, 2002. On March 28, 2002, Verizon filed a motion to strike portions of the post-hearing brief of GNAPs relating to Issues 6 (dark fiber) and 9 (performance measures). In its motion, Verizon indicated that parties had settled Issues 6 and 9 prior to the arbitration hearing. At the start of the hearing, the parties informed the arbitrator of their settlement of those issues. The Draft Arbitrator's Report (DAR) was filed on April 8, 2002, disposing of the contested issues as set forth below. Comments on the DAR were filed on

April 24, 2002, and the FAR was filed and served on May 15, 2002.

Parties continued their negotiations up until the time of the hearing and resolved some issues in dispute. During the hearing, Pacific reported that only Issues 1-4 were still in dispute. Verizon reported that 12 issues, 1-5, 7-8, and 10-14 were still in dispute. Issues 1-4 are common to both Pacific and Verizon, while issues 5, 7-8, and 10-14 apply only to Verizon.

The most significant issues presented in this arbitration are:

1) Should either party be required to install more than one point of interconnection (POI) per Local Access and Transport Area (LATA)?

2) Should each party be responsible for the costs associated with transporting telecommunications traffic to the single POI?

3) Should the ILECs' local calling area boundaries be imposed on GNAPs or may GNAPs broadly define its own local calling area?

4) Can GNAPs assign to its customers NXX codes that are "homed" in a central office switch outside of the local calling area in which the customer resides?

The GNAPs/Pacific conformed agreement was filed with the Commission on May 22, 2002, and the GNAPs/Verizon conformed agreement, on
May 29, 2002. On May 22, 2002 Pacific filed a statement concerning the outcomes in the FAR. GNAPs served its statement on May 24, 2002. Verizon and GNAPs filed statements on May 29, 2002, regarding whether the Commission should adopt or reject the conformed agreement.