Issue 7: Audits

Initially, the parties disputed the terms and conditions for audits to confirm XO meets service eligibility criteria for high-capacity EELs. In briefs, XO proposes adoption of the Illinois Amendment language on these audit issues. SBC does not object to this as a starting point, but asks for several modifications.

First, Section 3.14.3.8.2 states audits shall be conducted no more than once on an annual basis. SBC proposes a modification so that the annual basis for an audit is not tied to the issuance of the auditor's report. Instead, SBC proposes that the 12-month period commence with a written Notice of Audit. I find SBC's proposal reasonable and it should be adopted.

Second, SBC proposes modification of the last sentence of Section 3.14.3.8.5 to allow it to immediately begin a new audit if an audit report finds XO is not complying with eligibility criteria. This modification is not reasonable and should not be adopted because the TRO allows only one audit per year. (TRO, para. 626.)

Finally, SBC proposes slight revisions to Sections 3.14.3.8.6 and 3.14.3.8.7 to allow recovery of only "reasonable" audit costs. XO does not oppose this modification. (1/20/05, Tr. at 35.) The language proposed by SBC for these sections is reasonable and should be adopted.