IV. Comments on Draft Decision
The draft decision of the Administrative Law Judge in this matter was mailed to the parties in accordance with Pub. Util. Code § 311(g)(1) and Rule 77.7 of the Rules of Practice and Procedure. Comments were filed on November 19, 2001, and reply comments were filed on November 26, 2001. We have reviewed the comments, and taken them into account, as appropriate in finalizing this order.
1. FCC by its Order released on April 27, 2001 established rules under which carriers could implement a rate structure for intercarrier compensation in handling calls to ISPs.
2. The FCC declared that ISP-bound traffic constitutes "information access" and thus is not subject to the reciprocal compensation requirement of Section 251(b)(5) of the Telecommunications Act of 1996.
3. The FCC concluded that it has the authority under Section 201 of the Act to regulate ISP-bound calls and to establish inter-carrier compensation rules for such calls.
4. Before receiving the benefit of the reduced capped rates payable to CLECs for terminating ISP traffic, an electing ILEC must satisfy the condition under the FCC Order that it offers to terminate all Section 251(b)(5) traffic originated by other carriers at the same rate applicable to ISP-bound traffic.
5. Verizon sent a letter on May 15, 2001 to CLEC and CMRS providers with which Verizon has an interconnection agreement, notifying the carriers of Verizon's offer to mirror the capped rates prescribed in the FCC Order for Internet-bound traffic, and to apply them to reciprocal compensation rates for local traffic.
6. Focal exchanged correspondence with Verizon subsequent to May 15, 2001, in which Verizon ultimately clarified that it does seek to invoke the FCC rate cap plan in California.
7. The FCC Order states that reciprocal compensation provisions of existing interconnection agreements remain in effect until the expiration date of the contract, "except to the extent that parties are entitled to invoke contractual change-of-law provisions."
8. There is no need for imposing memorandum accounting requirements on carriers to track out-of-balance traffic and intercarrier compensation payments since the information needed to derive the amount of intercarrier compensation is already available to carriers.
9. Pac-West provided no specific details in its motion as to how it would propose that an expedited dispute resolution process regarding the 3:1 ratio be implemented.
1. To the extent that any carrier seeks to implement the FCC rate structure for a particular interconnection agreement before the contract expiration date (and where no change-of-law provision applies), this Commission retains jurisdiction to enforce the provisions of the existing contract, consistent with the FCC Order.
2. The question of whether a change-of-law provision exists that permits implementation of the FCC rate caps prior to expiration of the contract is a question that depends on the language in a particular interconnection agreement, and is not the proper subject of a generic rulemaking such as this.
3. Any disputes as to whether an ILEC has properly implemented the FCC capped rates consistent with FCC requirements should be addressed in the context of a specific interconnection agreement as an enforcement action, rather than by adopting additional rules in this generic proceeding.
4. Pac-West has not justified the administrative burden that would result from adopting its proposals for comprehensive submissions of detailed implementation plans and identification of California carriers with which the ILEC does not propose to implement the rate order.
5. Further study will be necessary before a final determination can be made concerning the details of any expedited process that may be appropriate to resolve disputes over the 3:1 ration presumption of traffic imbalance under the FCC Order.
6. There is no basis to delay carriers' implementation of the FCC Order merely because no specific dispute resolution process has been established to permit carriers to rebut the 3:1 presumption.
IT IS ORDERED that:
1. Pac-West Telecomm, Inc.'s (Pac-West) motion is granted in part and denied in part.
2. The motion is denied to the extent that it seeks to establish generic review and preapproval procedures as a condition of carriers' implementing the provisions of the Federal Communications Commission Order.
3. The motion is granted to the extent that it seeks confirmation that this Commission retains jurisdiction to adjudicate and enforce the terms of existing contracts relating to payment of reciprocal compensation (where change-of-law provisions do not provide for the immediate implementation of capped rates under the FCC Order).
4. Any contract amendments to an interconnection agreement to invoke the rate cap provisions of the FCC Order shall be filed by advice letter as provided for under Rule 6.2 of Resolution ALJ-181. In such advice letters, carriers shall verify compliance with the FCC Order, confirming that they have offered statewide to all carriers to exchange all traffic both originating and terminating, and including Internet-bound traffic, at the FCC's capped rates.
5. To the extent Pac-West seeks a Commission order requiring ILECs to file detailed implementation plans and identification of carriers with which it is not implementing the rate caps, and to require memorandum accounting, the motion is denied.
6. Pac-West's request for an expedited dispute resolution process for addressing challenges to the FCC's rebuttable presumption regarding the nature of any out-of-balance traffic shall be deferred for further study.
This order is effective today.
Dated November 29, 2001, at San Francisco, California.
LORETTA M. LYNCH
President
HENRY M. DUQUE
RICHARD A. BILAS
CARL W. WOOD
GEOFFREY F. BROWN
Commissioners
