Assignment of Proceeding

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

Findings of Fact

1. Telscape was aware that the prices were interim and subject to potential true-up.

2. CLECs were aware that the FCC's rules required that loop prices were to be geographically deaveraged into at least three zones.

3. Telscape acknowledges that it has no true-up obligation even if its proposal is rejected. Instead, Telscape would be entitled to a refund from Verizon.

4. Verizon presents convincing evidence that it needed to adjust the adopted rate for tandem switching in order to true-up the rates, and no party objected to Verizon's modification of tandem switching rates.

5. No party has opposed the installment payment plan outlined by Verizon, namely the installment plan will be available to any CLEC that does not possess cash equal to or greater than 10 times its true-up obligation.

6. Verizon or any CLEC that does possess cash equal to or greater than 10 times its true-up obligation, is not entitled to installment payments.

7. There is a need for mitigation measures to ensure that smaller CLECs are able to meet their obligations to Verizon.

8. For all carriers that do not meet the cash standard, 12 months is a reasonable time period for true-up payments.

9. A 12-month payment period should mitigate competitive harm to smaller carriers by giving them time to integrate these costs into their operations.

Conclusions of Law

1. Verizon should be required, to the extent that it has not already begun doing so, to charge CLECs the UNE prices adopted in D.06-03-025, as clarified in D.07-10-033, as soon as possible, and in any event by not later than five days after the effective date of this decision.

2. The loop prices adopted by the Commission, which were deaveraged into four geographic zones, are in compliance with the FCC's rules.

3. The true-up amounts submitted by Verizon as Confidential Exhibit A of its June 27, 2006 UNE true-up proposal are reasonable and should be adopted.

4. Verizon's proposed payment process is fair and should be adopted, as described in this order.

5. Telscape's rebuttal comments filed on August 15, 2006, which reiterated Telscape's original proposal to calculate the true-up using the same geographic pricing zones that applied when the loops were leased, are still before the Commission.

6. A PD is necessary to resolve the disputed issues in this case.

7. The Commission should grant the confidentiality request relating to the individual carriers' true-up debts.

8. CALTEL's motion asking the Commission to issue a ruling directing parties to commence immediate true-up process is granted in part, and rejected in part, as described in this order.

ORDER

IT IS ORDERED that:

1. The stay ordered in Decision 06-03-025 of billing adjustments related to the adoption of permanent unbundled network element (UNE) rates for Verizon California Inc. (Verizon) is lifted and Verizon and any Competitive Local Exchange Carrier (CLEC) with average cash and/or cash equivalents over the prior 12 months at least 10 times the amount of their true-up commitment shall make immediate payment, within 10 business days of the effective date of this order.

2. Within 10 business days of the effective date of this order, a carrier who believes that its average cash and/or cash equivalents over the prior 12 months is less than 10 times the amount of its true-up amount, shall serve notice on Verizon. Such notice, which shall be served on Verizon's counsel assigned to this proceeding: Elaine M. Duncan, 711 Van Ness Avenue, Suite 300, San Francisco, CA 94102, elaine.duncan@verizon.com, shall be authenticated by an officer of the carrier and include financial statements (which need not be audited) reflecting cash and cash equivalents for the prior 12 months.

3. Pursuant to the terms of Ordering Paragraph 2 above, Verizon shall determine which carriers have met their burden within five business days of receipt of the carrier's notice. Any carrier which demonstrates average cash and/or cash equivalents over the prior 12 months less than 10 times the amount of the true-up amount, including interest to the time of the order and with no accrued reserve for this true-up liability, may elect the 12-month payment plan described in this order.

4. During the 12-month period, the unpaid balance will continue to accrue interest at the three-month commercial paper rate and carriers shall pay any late fees if they fail to make a timely installment during the 12-month deferral period.

5. If Verizon identifies a carrier whom it believes has not met its burden, that carrier shall use the dispute resolution procedures set forth in the relevant interconnection agreement if it chooses to dispute Verizon's decision.

6. The June 27, 2006 motion of Verizon to file information under seal is granted for two years from the date of this order. During that period, the information shall not be made accessible or disclosed to anyone other than the Commission staff except upon execution of an appropriate non-disclosure agreement with Verizon, or on the further order or ruling of the Commission, the assigned Commissioner, the assigned ALJ, or the ALJ then designated as Law and Motion Judge.

7. If Verizon or any of the carriers listed on Exhibit A believes that further protection of the information filed under seal is needed, they may file a motion stating the justification for further withholding of the information from public inspection, or for such other relief as the Commission rules may then provide. This motion shall be filed no later than one month before the expiration date of today's protective order.

8. The February 5, 2008 motion of California Association of Competitive Telecommunications Companies is adopted in part and rejected in part, as described in this order.

9. Within three days of the date of issuance of this order by any medium, Verizon shall serve a date-stamped copy of this decision upon each of the Competitive Local Exchange Carriers to whom or from whom a true-up obligation exists, along with an updated calculation (including interest) of the true-up amount for that carrier.

10. To the extent that it has not already begun doing so, Verizon shall charge CLECs the UNE prices adopted in D.06-03-025, as clarified in D.07-10-033, no later than five days after the effective date of this decision.

11. Verizon shall complete the retroactive rate adjustments for all CLECs for the period March 15, 2006 to March 1, 2008 by June 30, 2008.

This order is effective today.

Dated April 10, 2008, at San Francisco, California.

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