VIII. Coordinated Hot Cuts

A hot cut is the physical transfer of an end user's loop from SBC's switch to competitive local exchange carrier's switch. SBC currently performs two types of hot cuts: Frame Due Time (FDT) and Coordinated Hot Cut (CHC). The FDT option describes a hot cut that is scheduled to occur within a time frame specified by the competitive local exchange carrier, but with no active coordination, i.e., no communication, between the two carriers. The CHC generally requires similar activities, but SBC also actively coordinates with the competitive local exchange carrier during the performance of the work and does not complete the transfer until it receives the CLEC's verbal instruction to do so.

SBC represents that the cost of performing a Frame Due Time hot cut is covered by TELRIC-based rates as required for the provision of unbundled network elements. However, SBC maintains that coordination of hot cuts is an optional activity not required under the Telecommunications Act. SBC proposes charging for coordination of hot cut activity on the basis of the volume of lines, day of the week, and the time of day requested for the cut over. SBC clarifies that the CHC charge is entirely independent and separate from the TELRIC-based charge for providing the unbundled loop.⁴¹

Level 3 does not dispute SBC's claim that CHC is an optional service that SBC is not required to provide under the Telecommunications Act. Nevertheless, Level 3 asserts that the Commission should adopt TELRIC-based rates for CHC service.

I decline to adopt either party's proposal for CHC service pricing. SBC asserts, and Level 3 does not contest, that CHC service is not required under the Telecommunications Act. As SBC cautions in its discussion regarding transit traffic, to the extent an incumbent local exchange carrier is not required to provide a service, that service is not subject to arbitration under the Telecommunications Act.

I note that, although SBC is clear in its transit traffic discussion that optional services are not subject to arbitration, it does not raise that objection with respect to CHC service pricing. Assuming by this that SBC means to waive jurisdictional objections and voluntarily submit to the Commission on this issue, I nevertheless decline to arbitrate the matter. While Section 252(e) directs state commissions to approve or reject negotiated agreements, this is not a negotiated agreement; it is a disputed issue. In any event, the parties have not presented a standard against which to assess the relative merits of their proposals beyond Level 3's objection that SBC's proposed CHC rates are not cost-based and SBC's assertion that they need not be.

⁴¹ SBC witness Chapman explained, and Level 3 does not dispute, that the CHC option addressed here is offered on a per-line basis, and is distinct from the batch-cut offering at issue in the Triennial Review Order phase of R.95-04-043/I.95-04-044.