5. Comments on Draft Decision

The draft decision of the ALJ 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. Pacific filed comments on July 16, 2001, and MCI filed reply comments on July 23, 2001.

Pacific argues that the draft decision commits legal error by failing to address two other arguments Pacific raised in opposition to MCI's petition, namely that MCI should have filed an application for rehearing, which is now legally barred, and that Civ. Code § 3289 is inapplicable to an interconnection agreement created under the Telecommunications Act of 1996. Both arguments continue to be unpersuasive. MCI's petition does not allege legal error in D.00-04-034 but rather, requests clarification of that decision. As such, it comports with Rule 47 of the Commission's Rules of Practice and Procedure. Pacific provides no citation to support its second argument, and we are unaware of any provision in federal law which either prescribes the interest rate which must apply to an interconnection agreement or prohibits the application of state law when the underlying agreement is silent.

Findings of Fact

1. Pacific paid only part of each MFS reciprocal compensation invoice dated June 20, 1996 through March 10, 2000 and placed the remainder in the escrow account on a monthly basis.

2. Pacific opened the escrow account and made the escrow deposits, voluntarily and unilaterally. The terms of the disputed co-carrier agreement do not require such an escrow deposit; the Commission did not order Pacific to open an escrow; and the San Francisco Superior Court denied Pacific's motion for express approval of the escrow.

3. Nothing in the record suggests that MFS or MCI determined to forego payment of interest at the statutory rate and accept, instead, interest at the lower rate earned by Pacific's escrow account.

Conclusions of Law

1. We should grant MCI's petition and modify Ordering Paragraph 3 of D.00-04-034 to clarify that the legal rate of interest on any reciprocal compensation withheld is 10 percent per annum until the date of payment.

2. In order to ensure expeditious compliance with the ordering paragraphs, this decision should be effective immediately.

ORDER

IT IS ORDERED that:

1. We grant the petition to modify Decision (D.) 00-04-034 filed on May 17, 2001, by MCI WorldCom Technologies, Inc. (MCI), the successor of MFS Intelnet of California, Inc. (MFS).

2. Ordering Paragraph 3 of D.00-04-034 is modified as follows:


3. Pacific Bell shall pay MCI all reciprocal compensation, withheld under Section VI.B.4.d of the co-carrier agreement, filed as Advice Letter 17879A, for termination of traffic routed to MFS/MCI customers who are internet service providers. Pacific shall also pay MCI interest on any


reciprocal compensation withheld at a rate of 10 percent per annum until the date of payment.

3. This proceeding is closed.

This order is effective today.

Dated September 20, 2001, at San Francisco, California.

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