XI. Comments on Proposed Alternate Decision
The alternate draft decision of Commissioner Geoffrey Brown 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. Verizon, ORA and TURN filed comments on March 9, 2004, and reply comments on March 12, 2004.
In their filed comments Verizon argues that requiring nearly ubiquitous deployment of SNIs at customer premises is inappropriate as the record support as to its practicality, expense, or likelihood of ever being achieved, is lacking. Verizon argues that some locations simply cannot support the addition of SNIs and would require an expensive and time-consuming construction effort to be approved by the landlord or residential customer.39 Further, Verizon indicates that the SNI is not necessary since a technician is not always sent to isolate inside wire trouble, disclosures are provided to customers and fault determination is not charged if no SNI has been provided.40 We agree that in either case the customer's knowledge of and access to competitive options is the same regardless of whether an SNI is installed and that the potential group of customers who could conceivably benefit from an SNI is quite small given the confluence of factors that must be met in order for the SNI to be useful. The alternate draft was revised accordingly.
In filed comments ORA and TURN argue that recategorization and an increase in ceiling rates is a violation of the "just and reasonable" standard contained in Section 451 of the Public Utilities Code because Verizon's current rates recover cost and because there is no evidence that any of the comparative states inside wire markets are competitive. We disagree. First, the Commission addressed the "just and reasonable" standard when it established the Category III condition for a service being fully competitive when granting upward and downward pricing flexibility. Verizon has met the competitive market condition. Second, pricing well above utility cost is a precedent of the Commission as reflected in the price of competitive, ancillary services, and neither the NRF rules, nor the just and reasonable standard preclude the Commission from granting a Category II rate increase application or Category III rate increase request when existing rates already exceed cost. 41 Third, in a prior decision, the Commission capped SBC's IWMP equivalent service rate at $2.99. For these and other reason's we believe it appropriate to grant Verizon's IWMP rate request. However, to moderate any increases in rates, we require IWMP rates be capped at $1.75 for one year, to be followed by a rate cap of $2.99.
