5. Motion to Issue Ruling directing Parties to Commence Immediate True-up Process

On February 5, 2008, California Association of Competitive Telecommunications Companies (CALTEL) filed a motion asking the Commission to issue a ruling directing the parties to commence immediate true-up. CALTEL points out that the Commission established permanent UNE rates for Verizon which were effective March 15, 2006. In its order, the Commission recognized that true-ups would be necessary to address the difference between the interim rates charged by Verizon and the permanent rates. In instances in which the permanent rates are lower than the interim rates, refunds are due to the CLECs that purchased UNEs. In instances in which the permanent rates are higher than the interim rates, additional payments are due to Verizon. Verizon was directed to calculate billing adjustments owed to, or by, CLECs within 90 days, though commencement of the true-up process was temporarily stayed to allow time for examination of payment options and possible mitigations to minimize financial hardship of the true-up on the CLECs.

CALTEL notes that all issues regarding the true-up process were fully briefed in the summer of 2006, yet no decision was ever issued. CALTEL submits that a Proposed Decision (PD) is not necessary. During the comment cycle, the only CLEC that filed comments requesting mitigation measures for true-up amounts owed to Verizon was Telscape. CALTEL states that it has consulted with Telscape and concludes that its concern may no longer exist. Furthermore, CALTEL asserts that the Commission can provide a mechanism for a carrier to obtain the Commission's assistance if it is unable to reach agreement on payment terms with Verizon. Given the limited scope and lack of material dispute, CALTEL states that the true-up issue can be easily addressed in an immediate procedural ruling, rather than a PD. CALTEL submits that it is unreasonable for the Commission to continue to delay thousands of dollars in refunds for numerous other CLECs on the basis of this single procedural issue.

After finalizing its calculations, Verizon concluded that "competitive carriers are, by far, net recipients of true-up recoveries not net payers." While CALTEL does not wish to minimize the financial impact of the true-up on "net payer" CLECs, the majority of current CALTEL members are owed refunds. CALTEL concludes that its members have been harmed and continue to be harmed by the inability to access funds owed to them. CALTEL asks the Commission to issue a ruling within 30 days directing parties immediately to commence the true-up process and to provide an expedited process of Commission resolution of disputes over amounts or payment terms.

AT&T filed in support of CALTEL's motion. AT&T indicates that it operates as a CLEC in Verizon's territory and in that capacity is owed a significant true-up amount by Verizon. AT&T requests that the Commission promptly issue a decision resolving any outstanding true-up issues and order Verizon to make true-up payments in a timely manner.

Verizon indicates that, by and large, it concurs in CALTEL's request for a prompt resolution of this long-pending phase of the proceeding, but takes issue with the relief requested in CALTEL's motion. Verizon notes that Telscape filed an alternative proposal for a true-up of deaveraged loop prices. Unless Telscape wishes to formally withdraw this proposal, Verizon believes that some disputed issues remain for Commission ruling, and these are better suited to resolution in a PD rather than a procedural ruling.

We concur with Verizon's statement that the Telscape proposal is still before us, and are not convinced by CALTEL's comment that it has spoken with Telscape and the reason for its concern "may no longer exist." Telscape's rebuttal comments filed on August 15, 2006, reiterated Telscape's original proposal to calculate the true-up using the same geographic pricing zones that applied when the loops were leased. Since Telscape did not file anything with the Commission to withdraw its prior proposal, its original comments stand and must be considered a valid proposal for how the true-up should be handled. That said, in light of various parties' comments on the urgency of getting this done, we have moved to get a PD out for comments within 30 days of CALTEL's request.

We agree with Verizon that a PD is necessary to resolve the disputed issues in this case. CALTEL's request for an immediate "procedural ruling" is not appropriate. CALTEL's motion to issue a ruling directing parties to commence an immediate true-up process is granted in part and rejected in part. The motion is granted, in that we are moving forward to resolve the true-up issue, but CALTEL's request that we issue a procedural ruling rather than a PD is rejected.