Scope of Issues

In my August 31, 1998 Joint Assigned Commissioner and ALJ Ruling Concerning Costing and Pricing of Collocation for Pacific and GTEC, I stated that while parties presented good reasons for using a single model, the AT&T/MCI CCM, I would not require all parties to use the same model. Following this ruling, different cost models were sponsored by both Pacific and GTEC. The Joint Submitters' sponsored the CCM. All three models were subject to lengthy discovery, followed by detailed sponsoring and opposing testimony, and extensive cross-examination during three weeks of hearing.

In a reopened proceeding, the Commission needs to develop cost-based prices, consistent with our adopted Total Element Long Run Incremental Cost (TELRIC) methodology, our Consensus Costing Principles (CCPs), and the FCC's Advanced Services First Report and Order for the following seven forms of collocation: physical, common, shared, virtual, cageless, adjacent on-site and adjacent off-site.² Based on a review of the record, I find neither the Pacific or GTEC's model covers all the forms of collocation we need to address, nor does either model, for the forms of collocation modeled, provide firm prices that are applicable to all central offices. Only the CCM is capable of meeting these objectives. Our record documents that it is a flexible model, capable of running alternative scenarios for the Commission and other parties, and it is a model that has been used and validated in other state jurisdictions. Therefore, it is the CCM model we will use in the reopened proceeding.

We need to move forward and my goal is to complete this proceeding by September 2000. To accomplish this, all parties must use the CCM and provide the Commission adequate explanation, justification, and documentation for any changed inputs (using Exhibit 107C as the base case). To allow parties to introduce new cost models would require extending the schedule for a reopened hearing well past September 2000.³

The CCM has separate versions for Pacific and GTEC. The ILECs have the opportunity to recommend proposed inputs to the CCM provided they explain and justify all changes based on TELRIC methodology, the CCPs and the Advanced Services First Report and Order and include supporting cost workpapers and model documentation. The Joint Submitters and any other interested party may also provide an update to the inputs of each version of the model. We do not want the logic of the model to be modified. If any party believes there is cause for different space preparation costs at individual central offices for a specific form of collocation, it should specify the components and amounts of these costs and identify the affected offices.

Parties are advised that the Commission, due to other high priority assignments, will assign fewer technical staff resources to this proceeding than it has in previous OANAD proceedings. Therefore, I will provide parties an early opportunity to participate in defining modeling rules, cost documentation requirements, and required summary tables for use in the reopened hearing process.

In order to meet my September 2000 decision objective, I will also limit the collocation issues transferred from the Local Competition proceeding to those immediately necessary for the Commission to meet the FCC's new minimum requirements for Pacific and GTEC. An example of specific collocation issues I am not transferring are: review of space reservation policies; adoption or modification of Commission rules for loop availability data, spectrum compatibility, removal of underutilized, unused, and obsolete equipment, affiliate collocation, space denial, and ordering, provisioning, maintenance, and support of collocation space and equipment; construction of additional facilities; and applicability of collocation rules to all California ILECs.

Parties may address terms and conditions of service by providing a witness to sponsor applicable portions of their May 21 and June 11, 1999 written comments in the Local Competition proceeding or sponsoring new and/or expanded testimony. All testimony must include specific proposed tariff language.

I am scheduling a prehearing conference (PHC) for January 28, 2000 for the assigned ALJ, technical staff, and the parties to discuss and adopt further specificity of the issues within the scope of this proceeding as well as modeling requirements, cost documentation requirements, and summary tables that reflect the price impact of all proposed adjustments to Exhibit 107C. Attached at Appendix A is an example of one type of summary table for parties to consider.

I request all parties to work in a collaborative and diligent manner to prepare and contribute to the PHC. Active parties in our earlier hearing should meet and confer as soon as possible. Parties should first focus on finding and memorializing areas where they can reach agreement and stipulations, then proceed to prioritizing a list of their issues of remaining disagreement. Next, parties should apply their technical expertise to developing procedures that will simplify the presentation of their modeling differences. Tasks parties should undertake include (1) listing the specific model variables to be litigated, (2) developing a standard for cost support documentation, (3) developing a workable discovery process for the proceeding, and (4) designing summary tables that show each party's model adjustments and the resulting cost and price effect for each form of collocation.

Finally, parties should prepare a package of the materials developed from the above process, together with a proposed PHC topic agenda. This package should be hand delivered or faxed to assigned ALJ Christine Walwyn by noon on Wenesday, January 26, 2000. If needed, parties may also serve separate PHC statements to the ALJ and each other, in the same manner and by the same date.