IV. CONCLUSION

GNAPs has failed to demonstrate that the Commission's decision is legally erroneous. Accordingly, its application is denied.

Therefore, IT IS ORDERED that D.02-06-076 is modified as follows:

1. On page 13, second full paragraph, delete the second sentence, which reads: "In the following section, we provided broad policy guidance on
the issues discussed."

2. On page 33, Finding of Fact 11 is modified to read:

VNXX traffic is "hybrid" in nature: part "local" and part interexchange. To the extent it is local traffic, it is subject to reciprocal compensation. VNXX traffic is also, however, in part, interexchange in nature.

3. GNAPs' application for rehearing of D.02-06-076, as modified by this order, is denied.

4. This proceeding is closed.

This order is effective today.

Dated July 10, 2003, at San Francisco, California.

MICHAEL R. PEEVEY

President

CARL W. WOOD

LORETTA M. LYNCH

GEOFFREY F. BROWN

SUSAN P. KENNEDY

Commissioners