VIII. Comments on Draft Decision
The draft decision of ALJ Jacqueline Reed in this matter was mailed to the parties in accordance with Pub. Util. Code § 311(g)(1) and Rule 77.7 of the Commission's Rules of Practice and Procedure. Comments were filed on August 12, 2002, and reply comments on August 19, 2002. We have reviewed the comments, and taken them into account, as appropriate, in finalizing this order.
In conjunction with their comments on the DD, a number of parties420 who had not filed appearances in this proceeding prior to the issuance of the DD sought to intervene. At this juncture, we do not find it appropriate to grant these post-submission and post-issuance requests, some of which seek to introduce new evidence. However, we shall place all such comments in the Correspondence file for this docket. Therefore, the various motions for post-submission and post-issuance intervention are denied.
The alternate draft decision of Commissioner Geoffrey Brown was mailed to the parties in accordance with Pub. Util. Code § 311(g)(1) and Rule 77.7 of the Commission's Rules of Practice and Procedure. Comments were filed on September 12, 2002, and reply comments on September 17, 2002. Parties filing comments on the Brown Alternate Decision included AT&T, Greenlining/LIF jointly, TURN/ORA jointly, PAC-West/Working Assets/XO jointly, Pacific and Worlcom. The parties' comments have been reflected, as appropriate, in the final decision adopted by the Commission.
1. Pacific seeks FCC approval to enter the California interLATA market under 47 U.S.C. § 271(c)(1)(A), which requires it to show the presence of a facilities-based competitor.
2. On March 11, 2002, ORA filed identical motions in this docket and the docket considering the review of the regulatory framework under which Pacific operates, the New Regulatory Framework (NRF), seeking to lift the suspension on Pacific's sharing mechanism under NRF, and urging the Commission to "suspend processing" Pacific's application for Section 271 approval as an apparent sanction for behavior of Pacific's in the NRF Review proceeding that it deemed anticompetitive, dilatory and defiant.
3. The CPUC has approved, pursuant to § 252 of TA96, 166 binding interconnection agreements between Pacific and unaffiliated competing providers of telephone exchange service.
4. In 1998, CPUC staff tabulated business and residence data for six facilities-based competitors and found they served about 60,000 access lines in California.
5. In its July 1999 compliance filing, Pacific asserted that based on the number of resold lines and facilities-based E911 listings, CLECs had won over 819,000 access lines in its California service areas.
6. In 2001, Pacific identified 47 California facilities-based carriers providing service: forty-one provide local voice service, while the remaining facilities-based carriers appear to provide data or Digital Subscriber Line (DSL) services that, at their option, may be deployed for voice grade service.
7. We concur with staff's earlier assessment, and find that Pacific has met the requirements for providing service to a facilities-based competitor.
8. D.98-12-069 directed Pacific to demonstrate compliance with technical requirements covering seven topics under Checklist Item 1.
9. Pacific has 13 performance measurements with sub-measures that specifically assess performance for the ordering, provisioning and maintenance of interconnection trunks (##2, 5, 7, 8, 11, 12, 13, 14, 16, 19, 20, 21 and 23).
10. Measures 24 and 25 demonstrate the quality of CLEC interconnection to Pacific's network, gauged in terms of blocking levels on both common transport and Pacific-controlled interconnection trunks.
11. Pacific met the performance standard for Measure 24 (the percentage of common transport trunk groups experiencing blocking) in each of the 12 months preceding its June 2001 filing.
12. Similarly, Measure 25, which evaluates blocking levels on Pacific-controlled CLEC interconnection trunks, indicates that Pacific has met the parity standard and that no blockage has occurred over the past eleven months.
13. Pacific met or surpassed the applicable performance standards for 95% of the provisioning performance measurements from February through April 2001, missing only four of 78 opportunities.
14. The competitors continued to report provisioning problems; however, the performance results failed to support the reputed problems.
15. Pacific and the competitors appear to have not yet developed performance measures to accurately assess some of these problems. Thus, the provisioning problems are difficult to evaluate.
16. Validly reserved space should not be relinquished for a building expansion contingency.
17. Pacific's provision of floor plans at the time of space denial should enable carriers to more expeditiously determine alternative spaces.
18. Based on the performance results, Pacific is timely managing requests for collocation space and installing collocation arrangements.
19. The record shows that Pacific currently is offering physical and virtual collocation at interim prices subject to true-up, pending our final determination on permanent rates, terms and conditions in the OANAD proceeding.
20. Pacific's response regarding the daily limit on trunking installations is reasonable; however, we expect Pacific to further follow the lead of its corporate siblings and work vigilantly to relieve any developing blockages through cooperative planning with AT&T and other affected CLECs.
21. Limiting CLECs to twelve IP addresses is a discrete network management matter, which does not pose a significant competitive barrier.
22. AT&T's claim that it was forced to designate trunk termination at its switch location, rather than the facility termination location, appears an isolated problem, and Pacific's response appears reasonable.
23. It is appropriate that Pacific move the contested issue of establishing where a CLEC switch is within the LATA, but outside Pacific's service area (Accessible Letter CLECC01-127) into the technical collaborative group.
24. Pacific provides collocation and trunking consistent with the requirements of §§ 251(c)(2) and 252(d)(1); that is, at any technically feasible point, at least equal in quality to that provided to itself, and at reasonable nondiscriminatory rates.
25. D.98-12-069 identified five key issues within Checklist Item 2, and directed Pacific to show compliance: (1) general access to UNEs; (2) UNE combinations; (3) intellectual property concerns; (4) nondiscriminatory access to OSS, and (5) pricing.
26. In 2001, interested parties focused most intensely on nondiscriminatory access to OSS and pricing.
27. On June 17, 2002, XO, Tri-M Communications Inc., d/b/a TMC Communications (TMC), and Anew Telecommunications Corporation d/b/a Call America (Call America) filed a motion in this proceeding for "leave to submit additional briefing and for a limited modification of the current prohibition on ex parte communications."
28. Regarding UNE combinations, our review of Pacific's ICAs, specifically those with AT&T and Level 3, indicate that the terms and conditions associated with Pacific's agreement to assemble new EEL combinations are more generous than the terms required under the UNE Remand Order, which addressed only existing combinations of loop and transport.
29. In 1998, we directed Pacific to submit its OSS test plan (the Master Test Plan or MTP) in this docket for review and comment.
30. Pacific filed its proposed MTP in January 1999.
31. In August 1999, following comments from TD staff and the interested parties as well as a two-week industry-wide collaborative workshop, the CPUC issued a finalized MTP setting up the test requirements and the need to have outside consultants assist in the test of the Pacific systems.
32. We supervised an evaluation of Pacific's OSS, including the interfacing process which allows CLECs to compete with Pacific in providing local telephone service.
33. These OSS include those that the FCC has determined are necessary for the mechanized CLEC interfaces for pre-ordering, ordering, provisioning, maintenance and repair and billing capabilities essential for CLECs to provide local service in Pacific's service areas.
34. The evaluation tested whether Pacific's OSS provides the CLECs parity or nondiscriminatory access with a meaningful opportunity to compete.
35. After issuance of the finalized MTP, the CPUC issued Requests for Proposals for teams to perform in the three significant roles of the OSS test: the TAM, TA, and TG.
36. The CPUC awarded contracts for the positions of TA and TAM to CGE&Y, and awarded the contract for TG to GXS.
37. The MTP provided the list of services to be tested.
38. CGE&Y generated the test cases and test scripts from the MTP and made necessary modifications.
39. CGE&Y also supervised the TG execution of the test cases and test scripts that they had created, and validated that the generated bills were correct.
40. CGE&Y formed a statistical team to trace and maintain performance measurement statistics based on the test effort.
41. Analysis of the test statistics determined the results of the test and compliance under § 271.
42. To execute the tests for the CPUC, GXS assumed the role of four Pseudo-CLECs and established the requisite manual and automated interconnections with Pacific for pre-ordering and ordering of various retail UNE products.
43. GXS designed and built the technical interface applications and established the processing infrastructure, including communication links and platforms to support the Pseudo-CLEC interconnection.
44. Pacific's OSS Test assessed the results of: 1) Functionality Testing, 2) Capacity Testing and 3) Performance Measurement Analysis.
45. The Functionality test's objective was to assess Pacific's readiness and capability to provide the CLECs with access to Pacific's OSS in order to perform pre-ordering, ordering, provisioning, maintenance and repair activities to customer accounts.
46. The Functionality test focused on the ability of the CLECs to access Pacific's OSS, perform pre-order queries, issue orders and receive responses back from Pacific.
47. A total of 2,975 LSRs were recorded as issued, out of which 2,615 completions were received.
48. M&R testing was performed to evaluate the performance of the two different electronic means of issuing trouble reports that Pacific provides to its CLEC customers: Pacific Bell Service Manager and the Electronic Bonding interface.
49. Pacific provides CLECs with several options for identifying and reporting customer service troubles and requesting and obtaining maintenance.
50. Pacific appears to be providing CLECs the same choices it has for pursuing a mechanized or manual approach to dealing with customers' M&R problems, since the means that CLECs have to open trouble tickets, perform a Mechanized Loop Test, check the status of an open trouble ticket, and check trouble history, are exactly those that are available to Pacific's retail operations.
51. In the spring of 1999, Pacific publicized and conducted joint meetings with resale and facilities-based CLECs about their M&R needs.
52. More recently, Pacific has been conducting broader and ongoing collaborative "User Forum" meetings where CLECs and Pacific deal with CLEC issues that can include M&R problems.
53. Reviewing data collected for the seven months from January through July 2001 shows there is a very solid parity trend in the case of 50 of the 85 (or about 59% of the) viable M&R submeasures.
54. The data appeared to show continuing CLEC failures in Resale Business POTS submeasures for PM 20 in May and July (for "dispatched") and in May and June (for "not dispatched'), for PM 21 in March through July (for "dispatched") and in June (for "not dispatched"), for PM 22 in May and July, and for PM 23 in June 2001.
55. Pacific has satisfied the specific OSS M&R related checklist requirements we set out for it in Appendix B to D.98-12-069.
56. The OSS test has shown that the M&R systems have basic functionality.
57. Still, month-to-month OSS M&R performance parity appears to be being achieved in the majority of instances, and seems to be growing.
58. We have incentives in place to help ensure that Pacific will not backslide in its effort to ensure this condition continues for the future.
59. The End-User Test was to generate usage and create billing from specified telephone lines at multiple test sites.
60. Overall, the EUT demonstrated that telephone calls could be made to generate usage and billing, and Pacific was able to provide dial tone, features, and services for each Pseudo-CLEC customer and telephone line used in the EUT.
61. The primary purpose of Bill Validation was to verify that Pacific, through CABS, was able to supply the CLECs with accurate and timely electronic and hard copy bills pursuant to the MTP.
62. Unless Pacific provides CLECs with OSS billing functionality comparable to the billing functionality that it provides for its own retail operations, these competitors' ability to operate effectively in the local telephone service market is significantly impaired.
63. Our record review indicates that through its "User Forums" with CLECs, where general issues, including billing issues, are raised and resolved, Pacific is demonstrating a clear commitment to maintain a process consistent with the CPUC directive to make collaborative efforts to identify (and resolve) any billing issues as they arise.
64. Pacific has properly complied with the CPUC directive to consolidate bill rounds.
65. Pacific has generally made the appropriate effort to resolve single bill-single tariff issues with CLECs as we directed in D.98-12-069.
66. The latest seven months of data, from January through July 2001, showed that there was a very solid parity trend in the case of 17 of the 29 (or about 59% of the) billing submeasures.
67. When the billing PM data were viewed over a three month time frame, and "parity" was redefined to mean that the CLEC aggregate performance showed sustained equivalence with Pacific performance over this period, the situation improved rather dramatically to 83% parity (24 of 29 submeasures in parity).
68. Overall, the CLEC aggregate billing PM data substantiate the conclusion that CLECs as a group are obtaining adequate OSS billing access.
69. The data also show that virtually all of the billing performance failures for CLECs in the aggregate that WorldCom points to in its August 2001 comments have been eliminated.
70. The numbers of PM submeasures in which CLECs in aggregate appeared to be failing to consistently achieve month-to-month OSS billing parity were relatively few at the end of July 2001 - only five of the 29 monitored.
71. The Capacity Test assessed whether the relevant Pacific OSS systems had sufficient capacity to handle the workload volumes required to support CLEC pre-order and ordering activities.
72. The total number of queries used in the Pre-order test was 42,762 of which 22% (9,299) were processed through the Verigate system and 78% (33,463) were processed through the application-to-application DataGate interface.
73. The mix of pre-order queries was established from a base of 7,340 LSRs that were used to test Pacific's order systems.
74. In general, CGE&Y and GXS found that the pre-orders transmitted to Pacific's system were processed and reported satisfactorily.
75. The pre-order test performance measures for Pacific were within the benchmarks required by the JPSA service levels.
76. For all query types, the average interval times were below the JPSA benchmarks set.
77. In sum, the order test count reconciliation did not identify any major count discrepancies between GXS and Pacific.
78. Orders transmitted to Pacific's order systems through the LEX and EDI interfaces were processed and reported satisfactorily.
79. CGE&Y and GXS found the order test performance measures for Pacific at capacity order volumes of 173% over their existing production baseline to be within the benchmarks required by the JPSA service levels.
80. Based on a trend analysis of Pacific's historical production volumes and a predicted ability of maintaining an approximate 1,000 orders/hour order rate, Pacific's systems have the capacity available to support production volumes for the next ten months.
81. The OSS Test report observed that Pacific kept a detailed eye on both volumetrics and responsiveness of its OSS.
82. Pacific uses its Change Management process to notify the CLECs of software enhancements.
83. An integral part of the CM process is the software implementation, which is performed in St. Louis, Missouri and San Ramon, California
84. OSS changes occur due to modifications requested by CLECs, system upgrades, and regulatory changes.
85. The OSS Test Report indicated that the CM process is quite solid and works well as defined for Pacific.
86. The Change Management Process for California was filed with the Commission as a JSA, and approved in D.99-11-026.
87. The CMP covers both application-to-application and GUI interfaces.
88. Pacific has incorporated a process called "versioning" into the CMP since mid-August 2000.
89. Under versioning, two consecutive versions of its software for EDI ordering and for EDI and CORBA pre-ordering interfaces (the current and previous versions of each) are up and running at all times so that a CLEC need not switch to the newer interface version immediately in instances where the timing of such an action would disrupt their use of the OSS.
90. Pacific's CMP interface test environment is adequate.
91. A comparison of the 13-state CMP contained in Pacific's August 2001 filing with the 8-state version in place during the OSS Test reveals that this latest version is a more thoroughly articulated document than the one we approved in November 1999.
92. Pacific appears to have responded to CMP issues raised by parties in this proceeding in a way that refutes or mitigates an adverse allegation, or the CLEC concern raised has been remedied as a result of the CMP's evolution.
93. While we agree the lack of comprehensive UNE-P over EDI interface testing during the functionality phase of the OSS test was a shortcoming in the test, we believe the combined LEX portion of the functionality phase, as well as the EDI UNE-P portion in the capacity phase offer us a reasonable substitute enabling us to examine how Pacific's system will handle UNE-P orders submitted through the EDI OSS interface.
94. The CLECs' utilization of their own facilities to serve their customers does not excuse fully testing UNE-P over EDI during the functionality phase of the OSS test.
95. In D.00-12-029, we denied seven CLECs' request to expand the testing of DS-1 loops because we expected that the data showing Pacific's commercial DS-1 volumes would inform us whether or not Pacific was providing DS-1 loops to the CLECs on a nondiscriminatory basis.
96. In December 2000, Pacific's existing commercial DS-1 volumes were an inadequate indicator of how its OSS system was processing and provisioning those orders.
97. In December 2000, CLECs were submitting DS-1 orders to Pacific through CESAR, a semi-mechanized ordering interface retired at the end of 2000, while LEX and EDI, the focal ordering interfaces of the OSS test, processed little to no CLECs' DS-1 orders.
98. In the second half of 2001, both Pacific's LEX and EDI interfaces began receiving DS-1 orders in volumes sufficient enough to enable assessment of the DS-1 loop order processing quality.
99. Pacific's Fourth Quarter 2001 DS-1 related performance measurement results indicate overall that, with the exception of PMs 5 and 16, Pacific is providing parity DS-1 services to the CLECs; performance had improved in both February and March 2002.
100. Pacific failed PM 16 (Percentage of troubles in 30 days of new orders) two out of three months in the Los Angeles and Bay Area regions during the Fourth Quarter of 2001.
101. Performance improved in the Los Angeles region in January and February 2002, yet slipped below parity in March 2002.
102. Results for the Bay Area region showed Pacific's performance consistently below parity for the six-month period: from October 2001 to March 2002.
103. While the PM 16 results are troubling, because problems with a new order will most probably affect a CLEC's reputation no matter whom is at fault, we note that the results are poorest in one measure in the Bay Area region and find Pacific's overall DS-1 performance results to be acceptable.
104. Under § 6.3.5.3 of the MTP, "[p]rovisioning is considered complete once a Service Order Completion is received by the CLEC," and CGE&Y's evaluation concluded with the receipt of a SOC response from Pacific's OSS.
105. A review of the MTP and the underlying documentation confirm that pre-order/ordering integration was not part of the requirements of the MTP.
106. We are satisfied that GXS was able to demonstrate that pre-order/ordering integration can be reasonably accomplished by an efficient CLEC.
107. While GXS did not accomplish pre-order/ordering integration using the same methodologi(es) that the commenters either selected or preferred, the methodology it chose is just as valid and probative.
108. Receipt of an order Firm Order Confirmation within the Performance Measure # 2 benchmark of 20 minutes, absent errors from the time of LSR issuance until the time of FOC receipt, indicated that the mechanized LSR had flowed through without human intervention.
109. During the Capacity phase of the OSS test, CGE&Y recorded tens of thousands of flow-through orders.
110. Using the 20-minute response time for FOC flow-though, it is highly unlikely that there was any significant unperceived manual intervention of orders passing through Pacific's OSS system.
111. After reviewing the Test Report and MTP, we find that some aspects of the back-end process testing was beyond the scope of the OSS test; therefore, there is no need to retest this area.
112. The Final Report shows that CGE&Y validated that the end user calls appeared on the Daily Usage File in a timely manner.
113. While the MTP required that CGE&Y review two billing cycles, it validated all bills for October 1999 through August 2000.
114. The Final Report also notes that CGE&Y validated recurring and non-recurring charges, and tracked the timeliness of the usage as well as the receipt of both hardcopy and electronic wholesale bills.
115. CGE&Y utilized the statistical method adopted after discussions with the CLECs and Pacific at the start of the OSS test process.
116. The MTP required only that the statistical analysis of the performance measurement data be "consistent with the business rules, method of calculation and measurable standards as defined by the Amended JPSA."
117. The Final Report was issued approximately a month before we adopted, in D.01-01-037, the statistical methodology (or "performance criteria") that is in place now.
118. All parties were familiar with the methodology adopted and used by CGE&Y in the Final Report.
119. The MTP provides for the aggregation of performance data to ensure sufficient sample sizes.
120. The MTP did not require CGE&Y to perform full data validation; instead, it describes specific tasks the TAM was to complete as part of the validation, and CGE&Y completed them.
121. There was no violation of the MTP regarding data validation.
122. The issue of revalidating the business rules used to exclude data from performance measurement was also an issue in the Performance Measurement Phase of the OSS OI I (R.97-10-016/I.97-10-017).
123. In the OSS OI I, the Assigned Commissioner determined that PriceWaterhouseCoopers had validated the business rules in question in accordance with the joint Pacific-CLEC audit plan.
124. The initial MTP authorized the TAM to clarify several crucial components of the OSS test that were not sufficiently detailed.
125. The initial MTP also directed the TAM to vary what was necessary in order to meet the goals of the test.
126. CGE&Y completed the details of the test cases and filled in the technical particulars of the test plan as part of its earliest duties here.
127. There is no MTP and/or CPUC requirement that this test be performed based on the New York test.
128. CGE&Y and GXS did not detect any violation of the test's blindness requirement through Pacific OSS Test and Account Management Teams releasing inappropriate information to other Pacific resources processing the test orders.
129. CLECs actively participated in workshops during the planning of the MTP.
130. The CLECs also participated in weekly informal sessions with CGE&Y.
131. CLECs were given ample opportunity to alert the CGE&Y to objectives of the test that were important to them, and to provide information that would assist it.
132. The CLECs actively participated in the testing process through their service on the Test's Technical Advisory Board (the "TAB"), which met regularly and addressed the majority of substantive issues.
133. CLECs also met in informal sessions with CGE&Y and/or GXS, outside the presence of Pacific representatives, to offer comments and recommendations on various aspects of the testing process and methodologies.
134. It appears that the CLECs were part of many, though not all, aspects of the testing process.
135. The MTP did not require root-cause analysis; rather, it obligated CGE&Y only to identify compliance exceptions.
136. The pre-validation conducted by CGE&Y was to determine that test participant data was adequate and reliable; it was not a substitute for pre-ordering.
137. CGE&Y's test scripts to GXS represented the data a CLEC Customer Service Representative would gather from its customers.
138. GXS always evaluated the test scripts provided by CGE&Y through the pre-ordering functionality.
139. GXS rejected scripts and sent them back to CGE&Y when the test script data: 1) was not valid; 2) did not match the pre-ordering evaluation; or 3) caused errors in the LSR.
140. One of the recurring themes of competitors' comments in this proceeding has been that Pacific fails to resolve the OSS/LSC related CLEC operational problems it causes, and that these unresolved problems represent true obstacles to competition in the local telephone market.
141. To address these comments, the CPUC convened all-party hearings on April 4, 5, and 12, 2001 to allow the CLECs the opportunity to appear and formally present systemic operational issues on the record.
142. These hearings also were designed to allow Pacific an opportunity to show how effectively it can remedy such problems.
143. Over the course of the hearings, it became clear that there is - and post-
§ 271 will continue to be - a need to rely on some systematic, well-documented processes to resolve both operational problems experienced only by individual CLECs, and more pervasive ones experienced by several competitors simultaneously.
144. It also became evident that there are evolving processes already in place that can be used to deal with both of these categories of operational problems.
145. The April hearings allowed us to take a "snapshot" of a point in time where the operational problems then existing were documented, and thus establish a baseline from which to monitor Pacific's problem resolving processes.
146. We can now gauge both how effective they function, and how willingly, quickly, and effectively Pacific is inclined to work toward CLEC problem resolution.
147. After the all-party hearings concluded, the Assigned Commissioner issued a ruling that set forth the process to be followed to monitor the further efforts of parties in resolving the identified problems.
148. The Commissioner's ruling directed Pacific to: 1) update the TD staff's June 21 matrix each month to reflect the current resolution status of each operational issue listed, and 2) distribute that update to TD staff and CLECs for review and comment.
149. Pacific commenced the updating process on July 2, 2001.
150. The subject range of the group of 68 issues was broad; only a couple of the issues were being pursued to resolution using the CLEC User Forum process.
151. While CLECs continue to allege that LSC personnel too often fail to properly process service orders, the root cause of any such improper processing activities does not appear to be related to the major areas of concern identified in the December 1998 decision; namely, the possibility of inadequately trained LSC staff or deficient Pacific training processes.
152. We regard the fact that about 40% of the issues identified by CLECs at the April hearings were resolved quickly after being brought to Pacific's attention as a positive sign that Pacific has some degree of resolve to serve CLECs as wholesale business clients.
153. That only two of the 68 operational issues identified at the hearings have been brought before the CLEC User Forum for resolution may be a reasonable situation because only ten of the 68 (about 15%) were ones raised by more than a single CLEC.
154. Pacific's consolidation of issues on the operational matrix results in the statistics appearing to show Pacific making better than actual monthly progress in responding to the concerns of its wholesale customers, and it clouds true issue resolution.
155. During the past year of monitoring the status of these operational issues, we have been disappointed with Pacific's response to CLEC input.
156. Earlier on in the resolution process, Pacific was acknowledging and reflecting input from CLECs, but then began disregarding that input.
157. Only once it became clear that its "deaf ear" concerned the CPUC did Pacific again begin making a reasonable effort to document such input in the matrix.
158. Even discounting the number of issues truly resolved, the record still shows that Pacific has made meaningful and steady quantitative progress in this area during the last six months.
159. The Issues Matrix was an important tool in helping us to track how Pacific addresses operational problems; however, it was meant to be -- and was-- diagnostic and static.
160. In September 2001, Pac-West, AT&T, New Edge and Sprint moved to have TD staff designated final editor of future matrix updates.
161. We believe that the parties would benefit from the crafting of a workable expedited dispute process for operational problems, and the parties seem closer to developing one than at any time in the past few years.
162. At this point, the Issues Matrix has served its purpose.
163. In late 1999, we issued D.99-11-050, which set prices for UNEs offered by Pacific.
164. We acknowledged that the Total Element Long Run Incremental (TELRIC) costs that we adopted in 1998 and used to set the UNE prices were "based largely on data that had not been updated since 1994,"and noted "there is evidence that some of these costs may be changing rapidly."
165. Consequently, we established a process in the order that invited carriers with interconnection agreements with Pacific to annually nominate up to two UNEs for consideration of their costs by the CPUC.
166. In February 2001, the CPUC received four separate requests to nominate UNEs for cost reexamination, filed by AT&T, WorldCom, Telephone Connection Local Services, and Pacific; we granted two of the requests to look at switching and unbundled loops.
167. On August 20, 2001, AT&T and WorldCom filed a Motion for Interim Relief, in the UNE Relook proceedings, asking that Pacific be ordered to offer UNE prices for unbundled switching and unbundled loops at proposed interim rates.
168. In October, Pacific filed a Notice of Discounted Switching Prices in this proceeding, and offered a 20 percent discount of its "UNE-P" rates, which is approximately a 44 percent reduction of Pacific's switching rates.
169. The proposal further provided that the rates would not be available until thirty days after the CPUC approved Pacific's § 271 request. It offered the reduced rates for one year unless the FCC approves its 271 application, at which point the discount is extended for an additional year.
170. In D.00-09-074, the CPUC established interim rates for DSL-capable loops.
171. In the Pacific-AT&T arbitration, D.99-11-050, the CPUC established interim prices for optical level dedicated transport rate elements.
172. In D.02-05-042, we set interim rates for unbundled loops and unbundled local and tandem switching.
173. For unbundled loops, we adopted an interim discount of 15.1% from Pacific's then-loop price for the basic (2-wire) loop, resulting in an interim loop rate of $9.93.
174. We applied this discount to the deaveraged loop rates adopted in
D.02-02-047.
175. For unbundled switching, we applied a 69% discount to then-local switching rates and a 79% reduction to then-tandem switching rates.
176. Pacific's discount switching proposal is far from TELRIC compliant, is fraught with mathematical errors, and is substantially inadequate in view of the record in the UNE Reexamination proceeding.
177. On August 6, 2002, the U.S. District Court for the Northern District of California remanded this Commission's calculation of the total direct cost of providing UNEs in an Order on Cross-Motions for Summary Judgment in AT&T Communications of California Inc. et al., v. Pacific Bell Telephone Company, et al., No. C01-02517 (CW).
178. We are addressing the Court's remand in A.01-02-024/A.01-02-035/A.02-02-031, and the appropriate actions that we take in compliance with the Court's order do not alter our findings here.
179. We have made interim adjustments where we have found the most significant disparities, and will move steadfastly to adopt permanent rates.
180. Pacific has demonstrated that it provides nondiscriminatory access to unbundled network elements, at just and reasonable rates, terms, and conditions.
181. We adopted staff's recommendation in D.98-12-069, and held that Pacific had demonstrated compliance with Checklist Item 3.
182. Our review of the record indicates that Pacific continues to provide access to the necessary maps and records; uses a neutral method to assign spare capacity among competitors; and treats its access applicants comparably.
183. Our review of the performance results for the months June, July, and August 2001, indicates that Pacific failed to meet the parity requirements for the pre-ordering qualification (K1023) process for xDSL loops.
184. These results show that the CLECs pre-ordering process for xDSL loops qualification took approximately twice the amount of time that it took ASI to perform the same functions.
185. The results of two other associated measures, however, indicated that CLECs' performance had generally exceeded the parity or benchmark standard.
186. Pacific has met the fundamental technical requirements for XDSL loop qualification.
187. A parity comparison with ASI serves as the measurable standard for DSL loop qualification.
188. Our analysis of the evidence indicates that ASI uses the same loop qualification processes as the CLECs.
189. The performance results, covering the months of June, July and August 2001, reveal that Pacific has largely met or exceeded the parity requirements for DSL loop qualification.
190. It is apparent that actual loop make-up information in Verigate would eliminate manual intervention and enhance efficiency in the loop qualification process.
191. Pacific has established the LOC process, directed in Appendix B of D.98-12-069, to resolve and track problems associated with the initial loop installations.
192. The performance reports for the months of June, July, and August 2001 indicate that Pacific completed a substantial percentage of coordinated hot cut loop orders within a reasonable time interval.
193. The quantitative data indicates that Pacific is provisioning hot cuts for unbundled voice grade loops to the CLECs in a timely fashion.
194. The performance reports for repeat troubles provided for the months of March, April and May 2001 confirm that Pacific uses the same hot cut processes for itself and for the CLECs' service conversions for voice grade loops.
195. Pacific's UNE-P provisioning performance results assessment is persuasive because it is most consistent with our analysis of the overall performance results for provisioning, including 5.5 dB and 8 dB loops.
196. California has the greatest number of high-speed internet access lines of any state and accounts for nearly a fifth of all high-speed internet access lines in the nation.
197. California's high-speed Internet access lines serve more than a million residential and business customers.
198. Pacific is providing the CLECs nondiscriminatory access to its OSS and other network systems for loop qualification, pre-ordering, and ordering of DSL services.
199. The CLECs' reported more cases of repeat troubles after service repairs than ASI did.
200. Our analysis of the results of "Frequency of Repeat Troubles in 30 Day Period" indicates that it may be significantly influenced by the magnitude of the underlying commercial volume.
201. Overall, Pacific's provisioning of xDSL is more than satisfactory; however, we do not believe that competition in the advanced services market, particularly xDSL services, has developed in California at this time.
202. While California has the greatest number of high-speed Internet access lines in the nation, equaling nearly a fifth of all such lines, Pacific and its affiliate, ASI, own more than 80% of these lines.
203. In D.00-09-074, we directed Pacific to provide the CLECs xDSL services over IDLC under the same terms, conditions, and prices as it provides to itself and its affiliates.
204. At present, there is no specific performance measure assessing the quality of Pacific's service over IDLC.
205. We find no evidence that Pacific has imposed additional conflicting standards for xDSL services, or has disregarded national and international ones.
206. The performance results for order reject notices for XDSL satisfy the parity and benchmark requirements.
207. In 1998, we set forth four technical requirements for Pacific to demonstrate compliance with in its Checklist Item 5 showing.
208. Pacific has shown that CLECs are able to obtain meet-point unbundled transport, and it has also detailed when a CLEC must amend its ICA by negotiated terms or proposed language.
209. While we have not yet reviewed the higher-level optical transport rates, the protests and challenges in the record are largely speculative, and are not supported by any costing analysis.
210. Since Pacific separately identifies UNE access traffic from all other access traffic by sending it in a detached distinctly identified file, it appears that WorldCom should be able to differentiate UNE access traffic from other access traffic in the files that Pacific provides.
211. ORA's claim that Pacific has failed to produce accurate and timely bills for the transport UNE, go to the adequacy of the performance measures, not Pacific's ability to bill for the transport UNE.
212. We have addressed Z-Tel's shared transport complaint in another proceeding, and Pacific has committed in its ICA with AT&T to permit the use of shared transport to route intraLATA toll traffic where AT&T purchases unbundled switching and customized routing Option C.
213. Pacific has demonstrated that it has made unbundled local transport available to CLECs in a nondiscriminatory manner.
214. Review of the monthly reports filed with the CPUC's Telecommunications Division over the period April - September 1999 on the progress on the Advanced Intelligence Network test indicates that WorldCom did not actively pursue its AIN proposal and never supplied Pacific with trigger information necessary to develop a test.
215. Pacific has participated in cooperative tests on the technical feasibility of particular custom routing options.
216. Most recently, WorldCom has acknowledged that there are technical problems relating to the routing of OS traffic in Nortel switches, and it and Pacific are working on the solution.
217. Analysis of November 2001 through January 2002 UNE-P performance results for Measures 7,11 and 19 through 23 shows continuing improvement in Measures 7, 11, 20 and 22, but persistent problems in the maintenance related Measures 19 (Trouble Report Rate), 21 (Average Time to Restore), and 23 (Repeat Troubles).
218. In general, Pacific's Measure 7 performance has been consistent, and does not appear to be substantially worse than the service it gives to its own retail analog.
219. The instances where Pacific failed to meet the parity standard for switching were neither numerous nor severe.
220. There were no reports of UNE-P chronic failures under Measure 11. On the other hand, Pacific continued to report failures for the basic UNE-P product under several maintenance Measures, with the only apparent mitigating factor being relatively low CLEC volumes for Measures 21 and 23.
221. Pacific has demonstrated that it has made unbundled switching available to CLECs in a nondiscriminatory manner.
222. For Checklist Item 7, we directed Pacific, among other things, to work collaboratively with its competitors, to resolve a number of related access issues; to implement a functional flow through mechanism; to integrate E911order entry, and to implement an automated reject and jeopardy system.
223. CGE&Y noted that while the E911 gateway was part of the OSS test in a limited number of transactions, the CLECs had shown no interest in using the E911 gateway.
224. As a matter of efficiency and practicality, the CLECs seem to prefer to let Pacific perform the update via the Local Service Request. In fact, at testing time, no CLEC ordering UNE ports was performing updates via the gateway.
225. TG reported during the test that once it achieved system access through the gateway, entering transactions were easy.
226. Based on performance results, the TAM concluded that Pacific accurately updates the E911 database.
227. Pacific has complied with our directive for clear guidelines that address the discrepancy between addresses that pass Service Order Retrieval and Distribution (SORD) but not E911.
228. Pacific has well documented its training opportunities for the use of the interface, and the CLECs appear to be using ELI.
229. Pacific has also developed adequate standards for peer-to-peer interface for the entry of E911 data.
230. Pacific has demonstrated the accuracy and integrity of its 911/E911 database.
231. Pacific has also shown that it provides nondiscriminatory access to the directory listings in its directory assistance databases and to the operator services supplied by Pacific.
232. Based on the verified accuracy of the directory listings, and the positive performance reflected from Performance Measures 37 and 38, CGE&Y reported that Pacific accurately and efficiently performed Directory Listings in the OSS Test.
233. Our review of the ICAs that Pacific has entered into with its competitors indicates that Pacific has a specific legal obligation to provide white pages listings to their customers.
234. Pacific addressed the technical directives of D.98-12-069 in its 1999 and 2000 Appendix B compliance submissions.
235. CLECs either could not substantiate the earlier listings problems cited or could not refute Pacific's contention that the problems were carrier-caused input errors.
236. The April 2001 operational problems, while troubling, do not appear to be systemic.
237. CGY&E positively evaluated Pacific's performance regarding directory listings during the OSS Test.
238. Pacific has documented that the white pages directory listings that it provides for its competitors' are comparable in appearance to the listings of Pacific customers.
239. Pacific has documented that via several gateways it has established a mechanism for providing CLECs with the ability to confirm the accuracy of their customers' entries prior to publication in the directory.
240. In D.98-12-069, the CPUC found that Pacific had complied with the requirements of Checklist Item 9.
241. No commenters addressed Pacific's June 2001demonstration of compliance with Checklist Item 9.
242. Pacific has demonstrated that it has complied with the current number administration rules, regulations and guidelines established by the various regulatory agencies as well as the industry numbering forums.
243. Based on the currently available service information in the record, Pacific has demonstrated that it provides the CLECs nondiscriminatory access to its databases and associated signaling necessary for call routing and completion, in satisfaction of the requirements of Checklist Item 10.
244. For Checklist Item 11, the CPUC set forth in Appendix B of D.98-12-069 seven detailed requirements for Pacific to satisfy in order to demonstrate its compliance.
245. Our review of the interconnection agreements between Pacific and its competitors indicates that Pacific has assumed specific legal obligations to provide number portability.
246. The LNP process is labor-intensive and requires careful coordination between the carriers.
247. Overall, the record shows that there have been problems, particularly in the use of the Frame Due Time process; however, Pacific has made efforts to isolate the problems and correct them.
248. During the April 2001 hearings on operational issues, AT&T detailed its request for Pacific to modify its Number Portability process and make system changes to institute a mechanized Number Portability Administration Center (NPAC) check so that the Old Service Provider (here Pacific) does not disconnect end-users before the New Service Provider (here AT&T) has completed its installation work.
249. Pacific agreed to this LNP mechanization process, and advised AT&T by letter dated October 5, 2001, that implementation would be complete by September 2002.
250. Mechanization of the NPAC check is crucial.
251. Mechanized enhancement of the NPAC check will mechanically delay a Pacific disconnect if the activation of the NPAC porting request has not been completed by the due date.
252. Pacific's justification for the September 2002 scheduled completion, given that a NPAC feed to its system already exists, does not explain why implementation of a mechanized enhancement to the NPAC check should take almost a year.
253. At present, the CLECs do not have certain knowledge of when Pacific will disconnect certain customers, and cannot maintain the integrity of these end-users' dial tones.
254. In its comments on the DD, Pacific maintains that a mechanized enhancement to the NPAC check has not been required in prior FCC decisions for Section 271 compliance.
255. Pacific noted that it had committed to implement this enhancement by September 30, 2002, and states that it intends to fulfill its commitment.
256. Our review of the interconnection agreements between Pacific and its competitors shows that Pacific has specific legal obligations to provide databases and signaling. These commitments are also in the CLEC Handbook.
257. Since August 31, 1998, it appears that Pacific has successfully implemented and maintained the necessary process improvements for ordering, provisioning, and maintaining database-driven features such as LIDB, CNAM, and Customer Local Area Signaling Services.
258. Pacific has developed and implemented methods and procedures for multiple workgroups to ensure on-time, complete and accurate implementation of these database services.
259. Access to databases at the STP would not cover downloading of the entire database.
260. In D.98-12-069, we found that Pacific had complied with the requirements of Checklist Item 12.
261. Neither in 1998 nor subsequently has any commenter presented evidence that local customers of CLECs either experienced dialing delays or had to dial additional digits to make local calls.
262. Our review of the interconnection agreements between Pacific and its competitors shows that Pacific has specific legal obligations to provide local dialing parity.
263. Accessible Letter CLECC99-030, dated May 5, 1999, and Pacific's presubscription tariff, Schedule Cal. P.U.C. No. 175-T, § 13 effective May 7, 1999, confirms the availability of ILP.
264. In D.98-12-069, the CPUC held that Pacific had satisfied the requirements of Checklist Item 13.
265. Our review of the interconnection agreements between Pacific and its competitors indicates that Pacific has specific legal obligations to provide reciprocal compensation arrangements.
266. In D.98-12-069, we directed Pacific to satisfy seven conditions regarding resale promotional offerings in order to show compliance with the requirements of Checklist Item 14.
267. No party responded to Pacific's July 15, 1999 filing detailing how it had met our compliance conditions for this item.
268. In their August 23, 2001 responses, the CLECs and ORA allege that Pacific is not reselling DSL service at wholesale rates and has obstructed its resale obligation in the provision of DSL services.
269. Our record review shows that Pacific is legally obligated to make retail telecommunications services available for resale in accordance with interconnection agreements and tariff.
270. The record, which includes Pacific's statements and the marketing information from its web site, demonstrates that PBIS' services are designed for, and sold to residential and business end-users.
271. The DSL Transport Services provided to PBIS by ASI, are telecommunications services that enable PBIS to offer its services to end-users.
272. Without the DSL Transport Services provided to PBIS by ASI, PBIS could not reach its end-users.
273. PBIS is not simply an ISP that combines DSL service with its own Internet service.
274. Pacific affiliate PBIS receives DSL services from Pacific affiliate ASI, and those advanced telecommunications services become PBIS' retail services.
275. It is the affiliation between the three -- Pacific, ASI and PBIS -- that effectively creates Pacific's provision of DSL Transport Services at retail.
276. Representing the world's sixth largest economy, with a gross state product of $1.21 trillion, there is significant potential for the growth of advanced services in California.
277. Pacific's DSL market dominance in California is increasing while its competitors' DSL market share is shrinking.
278. In the absence of a discounted DSL market, competition in California will fester in the midst of the Pacific, ASI, and PBIS integration.
279. Beginning with April 2002 performance, Pacific has implemented the CPUC's OSS performance monitoring and enforcement mechanisms, the "PIP" established in D.02-03-023.
280. The FCC has listed five important characteristics for a performance incentives plan: (1) potential liability that provides a meaningful and significant incentive to comply with the designated performance standards; (2) clearly-articulated, pre-determined measures and standards, which encompass a comprehensive range of carrier-to-carrier performance; (3) a reasonable structure that is designed to detect and sanction poor performance when it occurs; (4) a self-executing mechanism that does not leave the door open unreasonably to litigation and appeal; and (5) reasonable assurances that the reported data is accurate.
281. The Commission's PIP has thirty-nine OSS performance measures that cover OSS performance in nine areas: pre-ordering, ordering, provisioning, maintenance, network performance, billing, database updates, collocation, and interfaces.
282. The Commission's PIP performance measures are broken down into sub-measures to track performance separately for different service types, for different regions, and for other service distinctions such as the necessity for fieldwork or line conditioning.
283. In April 2002, 126 CLECs had OSS performance generating performance measure results.
284. In April 2002, 592 OSS performance sub-measures produced testable data, resulting in 5867 CLEC-specific performance results.
285. An independent auditor, PriceWaterhouseCoopers, audited the measurements and the rules established to generate the reported performance data and determined them to be consistent with the rules that define and make the measures operational.
286. Additionally, aided by an external consultant, staff conducted an accuracy check of the data and found problems that were corrected.
287. The parties were unable to agree on a complete set of performance assessment methods and criteria.
288. The Commission constructed the final OSS performance assessment method and established the test criteria in D.01-01-037 and D.02-03-023.
289. The Commission's PIP established two "consecutive failure" definitions: 1) If a sub-measure "fails" three months in a row, it is termed a "chronic failure" and 2) If a sub-measure fails five or six out of six months it is termed an "extended chronic failure."
290. The Commission's PIP incentives are billing credits to CLECs and ratepayers where deficient performance to individual CLECs generates billing credits to those CLECs (Tier I) and deficient performance to the CLEC industry as a whole generates billing credits to the ratepayers (Tier II).
291. In the Commission's PIP, if the amount to be credited to a CLEC exceeds the CLEC's billing, the excess amount is credited to the ratepayers.
292. The FCC has approved several other states' performance incentive plans with the same liability the Commission's PIP provides, thirty-six percent of an ILEC's annual net return from local exchange service.
293. Thirty-six percent of net return from local exchange service equals approximately $601 million for the current year.
294. The Commission's PIP cap applies monthly at one-twelfth of the annual cap amount: approximately $50 million per month.
295. The Commission's PIP total incentive credits are capped at about $16.4 million per month without formal review.
296. The Commission's PIP is self-executing with automated data recording, with automated assessment, and with credits made without further review unless the procedural caps are reached.
297. The Commission's PIP was not scaled to absolute amounts; it was scaled to match specific percentages of deficient performance with specific percentages of net return.
298. The Commission's PIP explicitly requires Pacific to update the incentive cap after new ARMIS data is posted each April.
299. The Commission's PIP did does not explicitly require that the incentive amounts themselves be updated even though they are based on the cap.
300. According to ARMIS data, Pacific's annual net return from local exchange service in California increased by 9.28 percent from 2000 to 2001.
301. Pacific has informally agreed to adjust incentive amounts that are less than the cap to the new ARMIS data each year beginning with May 2002 performance.
302. Pacific implemented our performance incentives plan beginning with performance for the month of April 2002.
303. For April 2002 performance, Pacific's "failure rate" for individual CLEC results in Category A was 6.7 percent.
304. For April 2002 performance, the Commission's PIP generated incentive amounts totaling $673,390, with $532,880 credited to the CLECs and $140,510 credited to the ratepayers.
305. Parties to this proceeding raised concerns that our PIP does not provide sufficiently strong incentives for chronically deficient performance.
306. Pacific could treat the incentive credits generated by extended chronic failures as the "cost of doing business."
307. If OSS performance for a particular sub-measure continues to be deficient for longer than six consecutive months, it would be reasonably clear that the amounts were too low, and that an ILEC may be treating the incentive amounts as the "cost of doing business."
308. "Continuing extended chronic failures" are increasingly accurate assessments.
309. Continuing extended chronic failures represent increasing competitive harm. For a continuing extended chronic failure to occur, performance would have to be identified as failing eight or nine months in a nine-month period.
310. The probability of a Type I error, or net critical alpha, decreases as a test requires failures in to more consecutive months.
311. Under parity conditions, with a single-month 0.20 critical alpha, failing five or more times out of six consecutive months has a probability of 0.0016; failing eight or more times out of nine consecutive months has a probability of 0.000019; failing ten or more times out of twelve consecutive months has a probability of 0.0000045; and failing twelve or more times out of fifteen consecutive months has a probability of 0.000001.
312. Continuing extended chronic failures would indicate that Pacific is not providing complete parity OSS performance.
313. California Pub. Util. Code § 709.2, enacted in 1994, requires the CPUC to make four essential determinations prior to "authorizing or directing competition" in the intrastate interLATA market.
314. Apart from the jurisdictional distinction, the key difference between the Pub. Util. Code § 709.2 and § 271 lies in the sector of the telecommunications market each one addresses.
315. Section 271 approaches the accessibility of the local exchange market through satisfaction of the 14-point checklist. It also allows consideration of the public interest assessment of a BOC's entry into the long distance market.
316. Section 709.2 addresses the health of the intrastate interLATA telecommunications, or IEC, market, and assesses the public interest from that perspective.
317. In 1998, in this docket, we indicated that our Section 709.2 assessment would be performed in a separate phase.
318. While the parties in Pacific Bell Communications' (PB Com) 1996 application for a certificate of public convenience and necessity to provide long distance invoked Section 709.2, we made no findings of fact or conclusions of law regarding that section in D.99-02-013.
319. Overall, all competitors have generally fair, nondiscriminatory, and mutually open access to exchanges and interexchange facilities, including fair unbundling of exchange facilities, as prescribed in the CPUC's OANAD proceeding.
320. The parties have presented evidence of recent and past anticompetitive behavior by Pacific and its parent, SBC, in California and elsewhere in the nation.
321. The record does not support the finding that there is no anticompetitive behavior by Pacific Bell.
322. The proposed joint marketing by Pacific and PBLD of PBLD's long distance services was a controversial issue that we ultimately resolved in conformance with the FCC's CPNI and Non-Accounting Safeguards Orders.
323. Time and documentary evidence have better informed our views that joint marketing on inbound calls from Pacific customers strikes an appropriate balance between the opening of the local market and the additional interconnection and unbundling requirements of TA96.
324. Nationally, the RBOCs have proven themselves to be formidable entrants into the long distance market.
325. SBC-LD currently serves over 2.8 million access lines in Texas, Kansas and Oklahoma, three states in its region where it has authority to offer interLATA services; it reached this amount one year after winning 271 approvals.
326. The record before us simply does not support the finding that there is no possibility of improper cross-subsidization anywhere within Pacific's proposal to provide long distance telephone service within California.
327. Our requirements for separate accounting records and for the examination of the cost allocation methodology for the provision of intrastate interexchange telecommunications service, pursuant to our affiliate transaction and cost allocation rules and this order, will be integral in preventing, identifying and eliminating improper cross-subsidization.
328. Pacific painstakingly examined and interpreted PB Com's record and decision, arguing in the alternative that its § 271 showing equally satisfied its burden of proof under Section 709.2; still, Pacific was able to present neither findings, conclusions of law, nor ordering paragraphs to support its case.
329. Particularly with respect to § 709.2(c)(4), Pacific failed to show that there is no substantial possibility of harm to the competitive intrastate interexchange telecommunications market by its long distance entry in California.
330. We are persuaded by the interested parties' showing that a substantial possibility of harm to the intrastate long distance telephone market exists from Pacific's continuing role as the PIC administrator.
331. Pacific failed to offer any assurance that it would perform its LPIC role with any safeguards of neutrality or sensitivity to competitor concerns.
332. The significant advantage afforded Pacific's long distance affiliate by Pacific's ability to market its affiliate's service to several million incoming customer service calls per year from its existing local service customers will unquestionably affect the other interexchange carriers.
333. No other interLATA competitor in California has any similar massive opportunity to address incoming calls from potential interLATA customers.
334. PBLD's potentially swift dominance of the intrastate interexchange telephone market could detrimentally impact competition in that sector, but PBLD's gains to some extent will be moderated by interexchange carrier entry into the local telephone market.
335. While Pacific largely satisfies the technical requirements of § 271, in accordance with § 709.2 we cannot state unequivocally that we find Pacific's imminent entry into the long distance market in California will primarily enhance the public interest.
336. Local telephone competition in California exists in the technical and quantitative data; but it has yet to find its way into the residences of the majority of California's ratepayers. Only time and regulatory vigilance will determine if it ever arrives.
337. We expect that the public interest will be positively served in California by the addition of another experienced, formidable competitor in the intrastate interexchange market.
338. At the same time, we foresee the harm to the public interest if actual competition in California maintains its current anemic pace, and Pacific gains intrastate long distance dominance to match its local influence.
339. A neutral third-party administrator maybe necessary in the new environment.
340. The ALJ in the PB Com proceeding specifically found in the draft decision that very real risks to the competitiveness of the long distance market resulting from unregulated joint marketing activities should be reduced by separation of Pacific and its affiliate's sales forces, but that finding was rejected by the Commission in its final decision.
341. The Commission established sufficient rules that protect consumers from abusive or unwanted sales pitches by separating customer service from marketing, in D.01-09-058.
342. The Tariff Rule 12 distinction of customer service from marketing presents an opportunity for Pacific to track the time its customer service representative spend marketing affiliate long-distance services.
1. We conclude that Pacific satisfies the § 271(c)(1)(A) requirement.
2. This docket cannot and should not be the home of every telecommunications proceeding pending before this Commission. It is appropriate that we address the NRF Review directly in its designated docket, and not in this proceeding.
3. Pacific is legally obligated to provide physical and virtual collocation pursuant to CPUC-approved interconnection agreements, tariff, and FCC rules.
4. Our review of the 1999 compliance filing and responses for Checklist Item 1 indicates that Pacific substantiated its satisfaction of each of the associated procedural and policy requirements of D.98-12-069.
5. We will not resolve in this decision the pending collocation issues.
6. At this time, we find the interim prices to be in compliance with the law, subject to our imminent determination of permanent rates, terms and conditions.
7. Pacific makes trunking available pursuant to CPUC-approved interconnection agreements and FCC rules
8. In the context of appropriate network management, the daily limit on trunking installations appears neither discriminatory nor anti-competitive.
9. Pacific has satisfied the requirements of Checklist Item 1, and we so verify.
10. In general, Pacific provides nondiscriminatory access to a comprehensive set of unbundled network elements at terms and conditions that comply with § 251 and 252 of TA96 and include all the UNEs from the UNE Remand Order.
11. Ruminating about USTA's potential impact upon the competitors and how it will be resolved is neither "necessary" nor "appropriate" in this proceeding.
12. Pacific has complied with our D.98-12-069 technical requirements regarding general access to UNEs, UNE combinations, and UNE intellectual property issues.
13. Pacific's OSS Test was designed in accordance with the established standards for the testing and evaluation of a BOC's OSS set forth by the FCC in previously approved § 271 orders.
14. Whether the sum of the M&R evidence adequately supports a finding that CLECs are being allowed a meaningful opportunity to compete is still an open question.
15. The overall record shows that Pacific has complied with the Commission's directive concerning billing disputes, and that it is making a continuing and concrete effort to maintain a state of compliance.
16. In most instances, the commercial performance data gathered using agreed upon measurement processes verify that the playing field on which the CLECs and Pacific engage in local competition is becoming a reasonably level one with respect to the billing function.
17. Pacific has satisfied all the OSS billing requirements we set out for it in Appendix B to D.98-12-069.
18. Since there is no requirement that the CMP interface test environment be dynamic and simulate the commercial experience's integrated pre-ordering and ordering functionality, Pacific's test environment is adequate.
19. Pacific's CMP allows CLECs in California non-discriminatory access to the OSS.
20. Retesting of the UNE-P through EDI interface is not warranted.
21. Given acceptable commercial performance results for DS-1, there is no need to retest it.
22. CGE&Y has satisfied the requirements and intent of the MTP regarding "LNP only" orders.
23. A limited retesting of Pre-Order/Ordering integration is unnecessary.
24. CGE&Y acted reasonably in its flow-through assessment during the test, and we see no need for retesting this aspect.
25. The existing test results and analysis indicate that Pacific's backend processing is adequate.
26. CGE&Y satisfied the MTP in its analysis of Pacific's billing performance.
27. We cannot fault CGE&Y for not utilizing the statistical methodology we approved a month after the Final Report was issued; rather, we consider CGE&Y's statistical analysis in the Final Report to be in accordance with the MTP.
28. CGE&Y's aggregation of the four pseudo-CLECs' performance data is in accordance with § 6.5.3.1 of the MTP 4.0.
29. CGE&Y did not violate the MTP with respect to data validation but acted in accordance thereof.
30. CGE&Y's assumption, pursuant to the business rules, that Pacific properly excluded certain missed data, was reasonable and satisfied the requirements of the MTP.
31. Based on the relevant test records, CGE&Y appropriately exercised its authority to modify aspects of the MTP, and there is no support for the allegations regarding CGE&Y's analysis.
32. The OSS test did not need to follow KPMG's NY OSS testing approach exactly, and "blindness" was properly maintained during the California test.
33. There is no evidence to support the assertion that significant changes were made to the MTP or that discussions from which the CLECs were excluded regularly took place during the test.
34. There is no evidence that CGE&Y and GXS exceeded their authority in the balance they struck during the testing process between test security and accessibility; therefore, the level of CLEC participation was reasonable.
35. The MTP required Pacific to determine the cause of, and fix, any identified problems during the OSS testing; thus, there is no merit in the allegation that CGE&Y violated the MTP-required "style" of testing.
36. Notwithstanding CGE&Y's pre-validation steps, review of the record as a whole indicates that GXS conducted a reasonable end-to-end test in California.
37. It is reasonable to conclude from the Final Report that Pacific's OSS is commercially available and sufficient to handle reasonable, anticipated commercial volumes.
38. Pacific has satisfied all significant aspects of the LSC and OSS Appendix related checklist directives we established for it in our December 1998 decision.
39. A mutually agreed upon dispute process could focus in on and resolve problems before they became full blown formal complaints, but the parties must decide that they will work together to create it.
40. Since the Issues Matrix was a static and diagnostic tool, it is reasonable to have Pacific submit the final version 30 days after the effective date of this order.
41. It is reasonable to deny as moot the September 2001 motion to designate TD staff final editor of future issues matrices because Pacific will submit its final version 30 days from the effective date of this order.
42. The CPUC has adopted, and shall continue to adopt cost-based, TELRIC compliant UNE rates in California in accordance with TA96 and the rules of the FCC.
43. Through Pacific's complete showing for this item, it has demonstrated that it provides nondiscriminatory access to unbundled network elements, at just and reasonable rates, terms, and conditions.
44. Pacific satisfies the requirements of Checklist Item 2 and we verify its compliance.
45. Pacific has shown that it continues to provide nondiscriminatory access to the poles, ducts, conduits, and ROW that it owns or controls, at just and reasonable rates, terms, and conditions.
46. Pacific continues to satisfy the requirements of Checklist Item 3, and we verify its compliance.
47. Our analysis of the performance measures associated with the ordering and provisioning intervals for voice grade, DS1 and xDSL services indicates that Pacific, though faltering in some months, has largely satisfied the standards.
48. Pacific has satisfied the technical and performance requirements for DSL loop qualification.
49. Since actual loop make-up information in Verigate would eliminate manual intervention and enhance efficiency in the loop qualification process, it is reasonable that Pacific should be directed to expeditiously improve the ratio of the actual loop make-up information in its Verigate, Datagate, EDI, and CORBA systems.
50. Pacific has satisfied the compliance requirements related to resolving and tracking problems associated with the initial loop installations, pursuant to Appendix B of D.98-12-069.
51. Based on the performance data for hot cut provisioning and based on statistical benchmark and parity standards, Pacific has met the compliance requirements for the provisioning of the voice grade loops.
52. The record evidence supports the assertion that Pacific uses the same CHC and FDT processes in serving the CLECs that it uses for itself.
53. The performance results substantiate that Pacific's hot cut quality of service, practices, and performance standards adequately satisfy the compliance requirements for Checklist Item 4.
54. Pacific's UNE-P provisioning performance meets the compliance requirements.
55. A complete analysis of the currently available service information and performance results in the record shows that Pacific provides the CLECs with nondiscriminatory access to its network systems for preordering, ordering, and provisioning of xDSL services.
56. The xDSL services' performance results also show that Pacific is providing adequate customer service groups (i.e., account teams, LSCs, LOCs) to assist and facilitate CLECs for xDSL ordering and provisioning.
57. Our review of five performance measures associated with xDSL provisioning for the months of January through August 2001 revealed that Pacific met or exceeded the parity requirements for the CLECs.
58. Examining the results of Pacific's overall measures for stand-alone and line-shared xDSL services' provisioning, it appears that Pacific is complying with this D.98-12-069 requirement.
59. It is reasonable for Pacific to add to the national and international standards for xDSL services when prudent, consistent with the type of xDSL service provisioned or technology deployed.
60. Our review of the record shows that Pacific has binding legal obligations to provide unbundled local loops pursuant to CPUC-approved interconnection agreements in accordance with § 252 of TA96.
61. Pacific has satisfied the D.98-12-069 technical requirements for unbundled loops.
62. Based on the record evidence, including the overall performance results, Pacific is in compliance with the requirements of Checklist Item 4.
63. Pacific currently provides unbundled local transport in accordance with interconnection agreements and tariff.
64. Pacific has satisfied our D.98-12-069 compliance requirements for unbundled local transport.
65. Pacific satisfies the requirements of Checklist Item 5, and we verify its compliance.
66. Pacific has a legal obligation to provide unbundled local switching pursuant to its interconnection agreements.
67. Since Pacific has indicated that it will negotiate any temporary factor for estimating terminating usage, it has satisfied our requirement in this regard.
68. Until Pacific has implemented the specific type of custom routing requested, it must provide WorldCom with Operator Services and Directory Assistance as UNEs, pursuant to the UNE Remand Order.
69. Weighing all factors, as a legal and practical matter, Pacific has demonstrated that it has made unbundled switching available to CLECs in a nondiscriminatory manner.
70. Pacific satisfies the requirements of Checklist Item 6, and we verify the company's compliance.
71. Pacific has a legal obligation to provide 911, E911, Directory Assistance, and Operator Call Completion pursuant to its tariff and interconnection agreements, approved by the CPUC, and it is complying with that obligation.
72. Pacific satisfies the requirements of Checklist Item 7, and we verify its compliance.
73. The thorough examination of Pacific's 1999 and 2000 Appendix B compliance submissions shows that Pacific has satisfied the technical directives of D.98-12-069.
74. Pacific's 2001 Performance Measure #4 data shows some amount of flow-through for directory service requests; thus, Pacific has met our implementation requirement for this item.
75. Pacific's documentation that the white pages directory listings that it provides for its competitors' are comparable in appearance to the listings of Pacific customers demonstrates that it has satisfied the FCC's requirement that it provide listings that are nondiscriminatory in appearance and integration.
76. Pacific documentation that it has established, via several gateways, a mechanism for providing CLECs with the ability to confirm the accuracy of their customers' entries prior to publication in the directory, satisfies the FCC's requirement that a BOC must provide directory listings with the same accuracy and reliability that it provides to its own customers.
77. Pacific satisfies the requirements of Checklist Item 8, and we verify Pacific's compliance.
78. Prior to the transfer of central office code responsibility to NeuStar, Pacific had a legal obligation to make telephone numbers available on a nondiscriminatory basis pursuant to its interconnection agreements.
79. Following the transfer of responsibility, Pacific remains subject to the FCC's rules requiring compliance with code administration guidelines, as well as the duty under § 251(b)(3) to permit nondiscriminatory access to telephone numbers.
80. Pacific continues to satisfy the requirements of Checklist Item 9, and we so verify.
81. Based on the currently available service information, Pacific demonstrates that it provides the CLECs nondiscriminatory access to its databases and associated signaling necessary for call routing and completion, in satisfaction of the requirements of Checklist Item 10.
82. The FCC's rule on limited access at the STP does not require Pacific to provide CLECs with access to any information contained in the database on a bulk basis.
83. Pacific is in compliance with the requirements of Checklist Item 10, and we so verify.
84. The continuing delay of a mechanized enhancement to the NPAC check presents a critical barrier to entry for the CLECs.
85. Pacific should complete implementation of the mechanized LNP process no later than the date that opening comments are due on the draft of this decision.
86. Pacific has not satisfied the compliance requirements for Checklist Item 11 until it implements and verifies this essential element of local number portability in California, and we will not verify compliance until Pacific does so.
87. Pacific has demonstrated that it continues to provide nondiscriminatory access to such services or information as are necessary to allow a requesting carrier to implement local dialing parity pursuant to TA96.
88. Pacific has satisfied the requirements of Checklist Item 12, and we so verify.
89. Pacific has shown that it continues to have in place reciprocal compensation arrangements in accordance with § 252(d)(2).
90. Pacific has satisfied the requirements of Checklist Item 13, and we so verify.
91. The affiliation between Pacific, ASI and PBIS effectively creates Pacific's provision of DSL Transport Services at retail, and the Second Report and 47 C.F.R. § 51.605(c) do not alter this fact.
92. Pacific has erected unreasonable barriers to entry in California's DSL market both by not complying with its resale obligation of its advanced services pursuant to § 251(c)(4)(A) and by offering restrictive conditions in the ASI-CLEC agreements in contravention of § 251(c)(4)(B).
93. To be in full compliance with the requirements of checklist Item 14, Pacific must remove the barriers to entry of the California DSL market and meet its resale obligation of advanced services.
94. Pacific has not satisfied the requirements of Checklist Item 14, and we decline to verify compliance thereof.
95. The Commission should establish a contingency mechanism to fill any performance enforcement gap that may arise between the end of the six-month initial implementation period and the adoption of any necessary revisions.
96. The Commission should continue the current PIP until it is revised.
97. The Commission should add an additional treatment for deficient performance that may continue beyond the initial implementation six-month period.
98. To provide stronger incentives when deficient performance continues past six months for a sub-measure, it will be reasonable to increase the incentive amount for any such sub-measure.
99. To provide incentives to prevent continuous deficient performance we should automatically increase the payments for sub-measures with deficient performance when an "extended chronic failure" continues for that sub-measure.
100. When an extended chronic failure continues three or more months in a row, payments for that failure should be doubled from that required for the extended chronic failure for that month.
101. The increasing incentive amounts should be applied to continuing extended chronic failures for both Tier I and Tier II assessments, applying to Tier II assessments "as if" Tier II had "extended chronic failure" assessments.
102. Every three months thereafter, incentive amounts should be doubled again for continuing extended chronic failures.
103. Since continuing extended chronic failures would indicate that Pacific is not providing parity OSS performance, Pacific should not be eligible for mitigation under § 3.9 of the PIP when continuing extended chronic failures occur.
104. The PIP establishes a potential liability that provides a meaningful and significant incentive to comply with the designated performance standards.
105. The PIP has clearly articulated, pre-determined measures and standards, which encompass a comprehensive range of carrier-to-carrier performance.
106. The PIP has a reasonable structure that is designed to detect and sanction poor performance when it occurs.
107. The PIP is a self-executing mechanism that does not leave the door open unreasonably to litigation and appeal.
108. Third party and staff audits have provided reasonable assurances that the reported data used for the PIP is accurate.
109. The PIP meets the FCC's criteria for an OSS performance monitoring and enforcement mechanism being in the public interest.
110. Heretofore, the CPUC has addressed Section 709.2 only to a limited extent.
111. Specifically analyzing this docket's sizeable record in the § 271 chapters, Pacific has demonstrated that it has provided substantially fair, nondiscriminatory, open access to exchanges, including fair unbundling of exchange facilities.
112. Absent competitively neutral and nondiscriminatory intraLATA LPIC administration, there is a substantial possibility that the intrastate interexchange telecommunications market will be harmed through increasing customer dissatisfaction and carrier conflicts.
113. Pacific's proposed joint marketing plans also pose a substantial possibility of harm to the intrastate long distance telephone market.
114. The preparation of a feasibility study that would set forth the costs of a structural separation plan would be reasonable in light of the record.
115. It is reasonable to investigate the costs and feasibility of selecting a competitively neutral third-party PIC administrator.
116. Tariff Rule 12 marketing restraints applicable to Pacific and its long distance affiliate's joint marketing, and the requirement for Pacific to prepare revised affiliate transaction marketing costs are sufficient to protect customers from unwanted and abusive marketing, and to prevent harm to California's intrastate interexchange telecommunications market due to any marketing cross-subsidy.
117. This order should be effective immediately in accordance with the public interest.
IT IS ORDERED that:
1. The Office of Ratepayer Advocates' March 11, 2002 motion to lift the suspension on Pacific Bell Telephone Company's (Pacific) sharing mechanism under the New Regulatory Framework, and "suspend processing" Pacific's application for Section 271 approval is denied.
2. The June 17, 2002 motion of XO Communications, Tri-M Communications Inc., d/b/a TMC Communications, and Anew Telecommunications Corporation d/b/a Call America for leave to submit additional briefing and for a limited modification of the ex parte ban is denied.
3. Pacific shall submit the final version of the Operational Issues Matrix thirty (30) days after the effective date of this order.
4. The September 2001 motion filed by Pac-West Telecomm, Inc., AT&T Communications of California, Inc., New Edge Network, Inc. and Sprint Communications, L.P. is denied as moot.
5. In accordance with a schedule to be set by the assigned Administrative Law Judge, interested parties in the instant proceeding shall present a joint proposal for review and eventual implementation of a workable expedited dispute process for operational problems arising between Pacific and competitive local exchange carriers.
6. To verify implementation of the mechanized Local Number Portability process, Pacific shall provide this Commission with confirmation including 30 days operational data.
7. The Commission's performance incentives plan ("PIP"), as updated by this decision, shall continue in effect until revised by the Commission.
8. The monetary caps, the base amount, and the parity simulation payment-reduction amount shall be updated for the months of May 2002 through April 2003 based on April 2002 ARMIS data for the year 2001, and shall be adjusted with the same timing and method each year thereafter.
9. Based on April 2002 ARMIS data for the year 2001, the monetary caps, the base amount, and the parity simulation payment-reduction amount shall be increased by 9.28 percent for the months of May 2002 through April 2003.
10. The Commission's PIP for Pacific shall be augmented so that when an extended chronic failure continues three or more months in a row ("continuing extended chronic failure"), incentive amounts for that failure will be doubled from that originally required for the extended chronic failure for that month. Every three months thereafter, incentive amounts shall be doubled again for that continuing extended chronic failures.
11. The continuing extended chronic failure incentive amount increases shall apply to both Tier I and Tier II assessments by applying to Tier II assessments "as if" Tier II had "extended chronic failure" assessments.
12. Incentive credit increases shall continue for continuing extended chronic failures until the most recent six months, viewed alone, would not be identified as an "extended chronic failure." No incentive credits are generated for the single months where performance is not identified as failing.
13. When Pacific has any continuing extended chronic failures it shall not be eligible for mitigation credits under § 3.9 of the PIP.
14. The continuing extended chronic failure credit increases shall be applied to performance in the ninth month of the PIP's implementation, January 2003, and thereafter.
15. Pacific shall file a report or study detailing the costs of separating itself into two parts and divesting the segment covering wholesale network operations six months from the effective date of this decision. Interested parties shall have an opportunity to review the study or report and comment on it, pursuant to the schedule to be set by the assigned Administrative Law Judge.
16. The Telecommunications Division staff under the supervision of its Director shall prepare for consideration on the Commission's meeting agenda, an Order Instituting Investigation to examine the efficacy, feasibility, structural implementation, and selection criteria for selecting a competitively neutral third-party Preferred Interexchange Carrier administrator for California, and the desirability of continuing PIC and LPIC distinctions, no later than five months from the effective date of this order.
17. Pacific shall state the consumer's equal access right to a long distance carrier of their choice prior to identifying its long-distance services and offer the customer the opportunity to select a carrier of their choice. Pacific shall include in its customer service scripts for new service connections the following: "You have many companies to choose from to provide your long distance and local toll service including (Pacific Bell Long distance). If you like, I can read from a list of available carriers and provide their telephone numbers. Who would you like as your long distance and local toll carrier?"
18. Pacific must clearly receive a customer's agreement for long-distance service (PIC) and local toll (LPIC) before assigning a PIC and LPIC.
19. Pacific shall submit within 20 days to the Telecommunications Division for their review and approval revised marketing scripts that comport with Ordering Paragraphs 17-18 of this decision.
20. Pacific shall carefully track the time its customers representatives spend marketing PBLD's services regardless of whether the marketing was successful or not, and to routinely re-examine and report this cost elements in its affiliate transaction report.
21. Pacific shall pay any necessary costs of the audit of the records, in conjunction with staff's efforts to audit them pursuant to Sections 314.5 and 797.
22. Pacific shall track the time its customer service representatives spend marketing PBLD services regardless of whether the marketing was successful or not, and re-examine and report this cost element in its affiliate transaction report each year.
This order is effective today.
Dated September 19, 2002, at San Francisco, California.
HENRY M. DUQUE
CARL W. WOOD
GEOFFREY F. BROWN
MICHAEL R. PEEVEY
Commissioners
I will file a dissent.
/s/ LORETTA M. LYNCH
President
I will file a partial dissent.
/s/ HENRY M. DUQUE
Commissioner
I will file a concurrence.
/s/ MICHAEL R. PEEVEY
Commissioner
Appendix V to R9304003 et al. - List of Appearances
Commissioner Duque's Partial Dissent in R9304003 et al.
420 On August 12, 2002, the California State Conference of the National Association for the Advancement of Colored People, the Community Technology Policy Council, and U.S. TelePacific Corp. moved to intervene and concurrently submitted opening comments on the DD. On August 19, 2002, Teltrex Management Corp. d/b/a as Creative Interconnect Telemanagement and the Communication Workers of Cap America also moved to intervene in conjunction with its submission of Reply Comments on the DD. NeuStar, Inc. and the Commission's Consumer Protection and Safety Branch submitted opening and reply comments, but did not seek to formally intervene.
