VIII. Assignment of Proceeding
Michael R. Peevey is the Assigned Commissioner and Dorothy J. Duda is the assigned Administrative Law Judge in this proceeding.
1. In D.04-09-063, the Commission stayed payment of any billing adjustments, or true-up payments, pending the outcome of further proceedings on the potential mitigation and the shared and common cost markup.
2. The following carriers possess cash or cash equivalents at least 10 times the amount of their true-up obligation: SBC-CA, AT&T, MCI, Sprint, MPower, Cox, Covad, Talk America, and XO/Allegiance.
3. The parent company of RCN has filed for bankruptcy and its cash cannot be used to pay RCN's true-up obligation.
4. In D.02-05-042, the Commission directed that true-up payments should include interest at the three-month commercial paper rate.
5. The stay of true-up payments in D.04-09-063 does not apply to contractual true-ups arranged through parties' interconnection agreements.
6. SBC-CA and interconnecting carriers typically resolve billing disputes through terms and conditions in existing interconnection agreements.
7. The Ninth Circuit found that the Commission improperly implemented the methodology calculating the shared and common cost markup, and the issue is remanded to the Commission.
8. AT&T's proposal for a 10% markup is significantly different from positions it has taken in prior proceedings related to the markup.
9. Several filings in this true-up phase contain company-specific information regarding the amounts of the billing adjustments owed by each carrier and information pertaining to SBC-CA's overhead costs.
1. SBC-CA has proposed an objective, cash-based standard for measuring whether individual carriers have the financial ability to pay their true-up obligation.
2. The nine carriers whose true-up obligation is 10% or less than their cash on hand can make their true-up payments immediately and still retain reasonable financial resources.
3. Carriers who do not possess cash 10 times the amount of their true-up debt should pay in 12 equal monthly installments, with interest at the three-month commercial paper rate and subject to penalties for late payments.
4. The stay ordered in D.04-09-063 should be lifted so that the nine carriers identified in this order pay their true-up debts immediately, and all other carriers pay over 12 months.
5. RCN should be excluded from the list of carriers required to pay immediately, and instead allowed to pay its true-up over 12 months, because of the bankruptcy of its parent company.
6. Z-Tel/Trinsic should be allowed to pay its true-up obligation over 12 months based on updated financial information.
7. Credits and debits from the same carrier, or from carriers with common parents, should be determined before the net amount is paid.
8. If carriers have arranged true-up payments regarding DS-1 and DS-3 UNEs, or other UNEs, these payments should proceed according to the terms and conditions of the applicable interconnection agreements.
9. Billing disputes regarding true-up payments should be handled through procedures set forth in interconnection agreements.
10. It is unreasonable to ignore the remand order of the Ninth Circuit regarding the markup and order carriers to continue paying a markup of 21%.
11. True-up payments should include a markup of 21%.
12. The markup should be lowered from 21% to 19% on a going-forward basis to address the Ninth Circuit's remand.
13. When carriers make their true-up payments for the period from May 2002 to September 2004, they should calculate the true-up payments assuming a markup of 21%.
14. The Commission should review the markup percentage in A.04-03-013, on a prospective basis.
15. When faced with a remand, the Commission has the discretion to correct a ratemaking error retroactively, and correction of such an error does not constitute retroactive ratemaking.
16. The Commission should grant the confidentiality requests related to the individual carriers' true-up debts and SBC-CA's shared and common costs.
IT IS ORDERED that:
1. The stay ordered in Decision 04-09-063 of billing adjustments related to the adoption of permanent unbundled network element (UNE) rates for Pacific Bell Telephone Company d/b/a SBC California (SBC-CA) is lifted and the following carriers shall pay their undisputed true-up obligations within 10 days from the effective date of this order: SBC-CA, AT&T Communications of California, Inc. (AT&T), MCI Inc., Sprint, MPower Communications Corp., Cox Communications Inc., Covad Communications Company, Talk America, XO California, Inc. and Allegiance Telecom of California, Inc.
2. All carriers other than those listed in Ordering Paragraph 1 above shall pay their billing adjustments in 12 equal installments, including interest from May 16, 2002 to the date of payment and late payment charges if they fail to make a timely installment payment. The first payment is due 30 days from the date of this order.
3. All disputes arising between carriers related to the amount of their billing adjustments shall be handled through the dispute resolution procedures set forth in their applicable interconnection agreements.
4. All billing adjustments shall be calculated assuming a 21% shared and common cost markup, from the effective date of this order, SBC-CA shall use a 19% shared and common cost markup. See Appendix "A" and Appendix "B" for rates calculated with a 19% shared and common cost markup.
5. The Assigned Administrative Law Judge (ALJ) shall set an expedited schedule for review of the shared and common cost markup in A.04-03-013.
6. The motions of SBC-CA, PacWest Telecomm, Inc. and AT&T to file information under seal are granted for two years from the date of this order. During that period, the information shall not be made accessible or disclosed to anyone other than the Commission staff except upon execution of an appropriate non-disclosure agreement with SBC-CA, PacWest or AT&T, or on the further order or ruling of the Commission, the Assigned Commissioner, the Assigned ALJ, or the ALJ then designated as Law and Motion Judge.
7. If SBC-CA, PacWest or AT&T believes that further protection of the information filed under seal is needed, they may file a motion stating the justification for further withholding of the information from public inspection, or for such other relief as the Commission rules may then provide. This motion shall be filed no later than one month before the expiration date of today's protective order.
8. Applications (A.) 01-02-024, A.01-02-035, A.02-02-031, A.02-02-032, A.02-02-034, and 02-03-002 are closed.
This order is effective today.
Dated March 17, 2005, at San Francisco, California.
MICHAEL R. PEEVEY
President
SUSAN P. KENNEDY
DIAN M. GRUENEICH
Commissioners
I reserve the right to file a dissent.
/s/ GEOFFREY F. BROWN
Commissioner
APPENDIX A
ADOPTED UNE RATES
APPENDIX A
REVISED PROPOSED DECISION ADOPTED UNE RATES
APPENDIX B
SWITCHING RATES BASED ON MINUTE OF USE
D0503026 Dissent of Commissioner Brown
