Issue 2: Commingling

The parties dispute various terms and conditions related to "commingling," which refers to XO ordering a combination of a UNE and a tariffed service. The parties dispute the UNEs that may be commingled, whether XO should have to submit a "Bona Fide Request" to commingle, and whether SBC can charge XO for time and materials for commingling.

a. What elements may XO commingle?

XO contends SBC is improperly limiting what it will commingle to "lawful UNEs," and that SBC's language allows it to reduce its unbundling obligations without going through change of law contract provisions. Further, XO contends SBC's language inserts additional commingling criteria above and beyond what the FCC has established in the TRO. SBC responds that its restrictions are common sense and allow SBC to limit commingling when doing so would impair network reliability, security or SBC's ability to manage and control its network.

I agree with XO that SBC has inserted additional criteria above and beyond what the FCC has established for commingling. While SBC contends its proposed language is common sense with regard to network reliability, SBC's proposed language appears to go beyond this. SBC has not fully justified the need for all of the conditions it proposes in its brief. I find the contract amendment should incorporate XO's proposed language in Section 3.14.1 regarding commingling.

b. BFR Process

SBC maintains commingling requests must be made using the "bona fide request" (BFR) process because SBC does not have methods or procedures in place to accept commingling orders. XO responds that commingling is not new and SBC's existing systems are fully capable of accepting and processing such orders. Commingling requests are equivalent to placing any other type of UNE or special access order and existing systems can easily accept and process these orders. XO witness Mendoza claims SBC has provisioned commingling orders using its existing processes, although apparently by mistake.

I find that SBC has justified use of the BFR process and the agreement should incorporate SBC's proposed Section 3.14.1.3. I do not agree with the other language regarding the BFR and commingling process that SBC has included in its reply brief proposals because I do not find sufficient explanation or justification for all of these proposals in SBC's filings. In addition, this language appears largely superfluous. Therefore, the agreement should not include Sections 3.14.1.3.1, 3.14.1.4 and 3.14.1.5.

c. Commingling Charges

SBC contends it should be able to recover its commingling costs through a fee imposed on XO. Further, SBC states that its proposal to charge commingling costs on a time and materials basis is consistent with charges it assesses for UNE combinations. At the arbitration hearing, SBC's witness Roman Smith discussed costs for coordination and records management within SBC's access and local service departments to process commingling arrangements and ensure proper billing and trouble reporting. (TR. at 34-35.)

XO responds that the FCC has not authorized charges for commingling fees, and SBC already recovers costs for commingling as part of existing recurring and nonrecurring charges. In XO's view, SBC's ordering and provisioning process for commingled UNEs and tariffed services are indistinguishable from processes applicable to UNEs and tariffed services alone. XO argues that SBC has failed to identify or justify any costs to accept and provision commingling orders.

I find that, similar to charges SBC may asses for UNE combinations, SBC should be allowed to assess a reasonable cost-based fee for costs it incurs to provide commingled UNEs, if those costs are not already recovered elsewhere. The agreement should include SBC's proposed Section 3.14.1.3.2.