Discussion

We conclude that no requirement for memorandum accounting is necessary in this instance as a basis to preserve carriers' rights in the event the FCC Order were stayed or reversed. As noted by Verizon, there is no need for imposing additional accounting requirements on carriers since the information needed to derive the amount of intercarrier compensation is already available to both the ILEC and CLEC. The payment of compensation under the price caps does not require any separate calculations to identify Internet-bound traffic, but is merely based on a rebuttable presumption that traffic exceeding a three-to-one ratio of terminating to originating traffic is Internet-bound. Accordingly, we decline to impose memorandum accounting requirements on the ILECs as proposed by Pac-West.

C. Process to Rebut the 3:1 Ration Presumption

Parties Position

In its Order on Remand, the FCC adopted a rebuttable presumption "that traffic delivered to a carrier, pursuant to a particular contract, that exceeds a 3:1 ratio of terminating to originating traffic is ISP-bound traffic subject to the compensation mechanism" set forth in the FCC Order. The FCC further ruled that an individual carrier may rebut the presumption "by demonstrating to the appropriate state commission that traffic above the 3:1 ratio is in fact local traffic delivered to non-ISP customers." For traffic below the 3:1 ratio, the originating carrier likewise can rebut the presumption that the traffic is not ISP-bound "by demonstrat[ing] to the state commission that traffic it delivers to another carrier is ISP-bound traffic, even though it does not exceed the 3:1 ratio.

In its motion, Pac-West has asked for an expedited dispute resolution process for addressing challenges to the FCC's rebuttable presumption regarding the nature of any out-of-balance traffic. Pacific argues that any such process should apply equally if an ILEC wants to challenge the FCC's rebuttable presumption that traffic below a 3:1 ratio is not Internet-bound traffic.