6. Assignment of Proceeding

Michael R. Peevey is the assigned Commissioner and Dorothy Duda is the assigned ALJ in this proceeding.

Findings of Fact

1. Delisted UNEs must be included in Appendices A and B because they are necessary for true-up purposes.

2. Delisted UNEs should be identified in Appendices A and B by a footnote.

3. Entrance facilities, transport facilities and SS7 links are not UNEs.

4. The rates to be charged for entrance facilities, transport facilities and SS7 links are the UNE rates adopted in D.06-03-025.

5. Verizon presented its switch data in the true-up phase of this proceeding on a MOU basis, and no party took exception to the structure or the rates Verizon employed.

6. Verizon's proposed per minute of use for tandem switching and interoffice switching should replace the structure for switching adopted in D.06-03-025.

7. Verizon had notice that the Commission intended to apply adopted UNE rates to reciprocal compensation.

8. When a carrier requests multiplexing from Verizon, the carrier is charged for the entire multiplexing unit.

9. Verizon bills for dark fiber on a per pair, per mile basis.

10. It would be costly and time-consuming to change the way that dark fiber is provisioned.

11. The statewide average rates shown in Appendix A are not available to competitors.

12. Only the deaveraged rates are available for purchase by competitors.

13. The HM 5.3 model uses the total count of ISDN lines to calculate the $2.54 ISDN Option rate.

14. The ISDN Option rate must be added to the deaveraged loop rates, not to the statewide average loop rate.

15. Verizon does not offer a special Coin Option loop so it is appropriate to delete that item from Appendix A.

16. Verizon does not provide ADSL on DLC Loop so that service should be deleted from Appendix A.

Conclusions of Law

1. Pursuant to Section 252(d) of the Telecommunications Act of 1996, elements used for interconnection should be priced at cost-based rates, the same as UNEs.

2. If Verizon believed that the Commission committed legal error by adopting rates for reciprocal compensation in D.06-03-025, it should have included that issue in its Application for Rehearing of the decision.

3. Appendices A and B of this decision replace Appendices A and B of D.06-03-025.

4. At the Law and Motion hearing on February 3, 2004, ALJ Duda made it clear that adopted UNEs would be used to set reciprocal compensation rates.

5. The FCC requires state commissions to adopt geographically deaveraged rates.

6. It is contrary to the FCC's rules to use the statewide average rate to price a UNE that has been geographically deaveraged, such as loops.

ORDER

Therefore, IT IS ORDERED that:

1. The Petition to Modify filed by Verizon California Inc. shall be granted, in part, as described in this order.

2. The Petition to Modify filed by Verizon California Inc. and Covad Communications Company shall be granted.

3. Appendices A and B of this decision replace Appendices A and B of Decision 06-03-025.

4. The September 1, 2006 motion of Verizon California Inc. for confidential treatment of Exhibit D (Multiplexing and Dark Fiber Rate Restructure Workpaper) is hereby granted for a period of two years, until November 1, 2009.

This order is effective today.

Dated October 18, 2007, at San Francisco, California.

APPENDIX A

Adopted UNE Rates8

Unbundled Network Elements Adopted UNE Rate

Loops

Subloops

Entrance Facilities10

Multiplexing

Switching

Interoffice Transmission Facilities

Additional Elements

UNE-Pbf $ 17.46

(END OF APPENDIX A)

APPENDIX B

Switching Rates Based on Minute of Use12

Unbundled Network Elements Adopted UNE Rate13

Switch Usage

(END OF APPENDIX B)

8 All rates include an 8.93% markup for shared and common costs.

9 Delisted UNE.

10 Delisted UNE. May be used for purposes of interconnection.

11 Dark fiber price based on Pacific Bell Telephone Company rates adopted in D.03-07-023, Appendix A, p. 4.

f UNE-P calculated based on usage assumption of 1400 voice 300 toll.

12 Based on a 70/30 split of traffic sensitive/non-traffic sensitive costs.

13 All rates include an 8.93% markup for shared and common costs.

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