STATE OF CALIFORNIA GRAY DAVIS, Governor

PUBLIC UTILITIES COMMISSION

505 VAN NESS AVENUE

SAN FRANCISCO, CA 94102-3298

July 18, 2003 Agenda ID #2487

Ratesetting

TO: PARTIES OF RECORD IN RULEMAKING 93-04-003 AND
INVESTIGATION 93-04-002

This is the draft decision of Administrative Law Judge (ALJ) Duda. It will not appear on the Commission's agenda for at least 30 days after the date it is mailed. The Commission may act then, or it may postpone action until later.

When the Commission acts on the draft decision, it may adopt all or part of it as written, amend or modify it, or set it aside and prepare its own decision. Only when the Commission acts does the decision become binding on the parties.

Parties to the proceeding may file comments on the draft decision as provided in Article 19 of the Commission's "Rules of Practice and Procedure." These rules are accessible on the Commission's website at http://www.cpuc.ca.gov. Pursuant to Rule 77.3 opening comments shall not exceed 15 pages. Finally, comments must be served separately on the ALJ and the assigned Commissioner, and for that purpose I suggest hand delivery, overnight mail, or other expeditious method of service.

/s/ ANGELA K. MINKIN

Angela K. Minkin, Chief

Administrative Law Judge

ANG:sid

Attachment

ALJ/DOT/sid DRAFT Agenda ID #2487

Ratesetting

Decision DRAFT DECISION OF ALJ DUDA (Mailed 7/18/2003)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Rulemaking on the Commission's Own Motion to Govern Open Access to Bottleneck Services and Establish A Framework for Network Architecture Development of Dominant Carrier Networks.	Rulemaking 93-04-003 (Filed April 7, 1993)
Investigation on the Commission's Own Motion into Open Access and Network Architecture Development of Dominant Carrier Networks.	Investigation 93-04-002 (Filed April 7, 1993) (Verizon UNE Phase)

OPINION GRANTING VERIZON CALIFORNIA'S PETITION

FOR MODIFICATION OF DECISION 03-03-033

REGARDING BILLED SWITCHING FEATURES

I. Verizon's Petition Regarding Billed Switching Features

In Decision (D.) 03-03-033, the Commission set interim rates for a subset of unbundled network elements (UNEs) that Verizon California (Verizon) sells to competitive local exchange carriers. The order set interim rates based on UNE rates recently adopted for Verizon New Jersey, with adjustments based on the Federal Communications Commission's Synthesis Model. The decision left the proceeding open to set final UNE rates for Verizon and noted that the interim rates are subject to adjustment, either up or down, from the effective date of D.03-03-033 until final rates are adopted.

Verizon requests modification of D.03-03-033 regarding the establishment of interim per minute rates for certain switch features.¹ In its petition for modification, Verizon explains that D.03-03-033 ordered Verizon to begin charging usage based rates for "billed features" associated with Verizon New Jersey Centrex switch features. (See D.03-03-033, Appendix A.) According to Verizon, it offers a similar but structurally distinct CentraNet service in California with features that differ from the Verizon New Jersey Centrex features, and that are billed on a flat-rate basis rather than by minute-of-use. Thus, when the Commission set rates in D.03-03-033 based on New Jersey Centrex feature rates, these features do not equate to Verizon's CentraNet offerings in California.² Verizon maintains that its CentraNet rates cannot be converted to a minute-of-use basis without extensive and time-consuming system changes.

Verizon requests that it be allowed to offer its CentraNet features in California at a rate of zero for the interim, subject to true-up once final prices are set at the conclusion of this proceeding.³ In addition, Verizon requests that D.03-03-033 be clarified to state that Verizon is not required to expand its CentraNet offerings in any way to match those offered by Verizon New Jersey, but only to modify the rates for whatever CentraNet features are currently offered in California.

Comments on this petition were filed jointly by Tri-M Communications Inc. d/b/a TMC Communications, Sage Telecom, Inc., and Anew Telecommunications Corp. d/b/a Call America (collectively, the "TMC Parties"). The TMC Parties do not oppose Verizon's request to charge a zero interim rate, subject to true-up, for CentraNet switching features, but they do object to the clarification sought by Verizon. The TMC Parties believe that Verizon is required to provide competitive local carriers, upon request, whatever switching features Verizon is capable of providing. (See TMC Parties' Opposition, 6/11/03, p. 10.) The TMC Parties seek clarification from the Commission that D.03-03-033 requires Verizon to offer Centrex features, as well as any other feature a particular switch is capable of providing.

Verizon opposes this further clarification, arguing that the Commission did not intend to expand or contract Verizon's list of features when it adopted interim rates. Instead, Verizon suggests that Ordering Paragraph 3 of D.03-03-033 be modified to read:

The interim UNE prices set forth in Appendix A of this order shall be effective on the date this order is effective. Verizon shall make all billing adjustments necessary to ensure that this effective date is accurately reflected in bills applicable to these UNEs, except that the rate for any CentraNet switch feature for which a non-zero rate is contained in Appendix A (listed as "billed features") shall be set at zero, subject to true-up. The listing of individual features in Appendix A is not intended to either restrict or expand the availability of CentraNet switch features offered in California. (Verizon's proposed new language is underlined.)