2. Background

The current ICA between SBC-CA and MCIm expired on September 24, 2004. Parties agreed to extend the window for negotiation and arbitration several times. The last extension was effective May 4, 2005, and provided that: (a) negotiations were deemed to have commenced on December 17, 2004, (b) MCIm was deemed to have requested the commencement of negotiations, and (c) the window for petitioning the Commission to arbitrate unresolved issues would be from May 1, 2005 through May 26, 2005.

On May 26, 2005, SBC-CA applied for Commission arbitration of 175 issues. On June 20, 2005, MCIm responded, adding 19 issues, for a total of 194 issues.

An Initial Arbitration Meeting (IAM) was held on June 23, 2005. Parties agreed to a schedule which included SBC-CA serving limited proposed rebuttal testimony on September 2, 2005, and arbitration hearings from September 19 through September 30, 2005.

On June 30, 2005, SBC-CA filed a motion to strike one of MCIm's proposed additional issues (i.e., Pricing Schedule Issue No. 51). On July 12, 2005 MCIm filed a response in opposition to SBC-CA's motion. On August 1, 2005, SBC-CA filed a reply in support of its motion. By ruling dated August 18, 2005, SBC-CA's motion was granted.

A second IAM was held on September 6, 2005. Parties there agreed to transfer several issues from this arbitration to Application (A.) 05-07-024 (the generic Triennial Review Order (TRO) and Triennial Review Remand Order (TRRO) proceeding). Parties also agreed to a schedule with the following incremental intervals starting at the conclusion of hearing: opening briefs in 30 days, reply briefs in 14 days, a Draft Arbitrator's Report (DAR) in 60 days, comments in 10 days, reply comments in 5 days, the Final Arbitrator's Report (FAR) in 10 days, the conformed ICA in 7 days, the proposed decision in about 15 days, a shortened comment cycle, and a Commission decision in mid-March or early April 2006.

Arbitration hearings began September 19, 2005, and lasted through September 30, 2005. Testimony was given by 13 witnesses, and 44 exhibits were received as evidence. Parties agreed to transfer 31 issues to the TRO/TRRO proceeding. On September 29, 2005, MCIm moved to transfer two additional issues from this arbitration proceeding to the TRO/TRRO proceeding. SBC-CA opposed the motion. On October 6, 2005, MCIm's motion was granted by joint ruling of the Arbitrators in these two proceedings.

Parties continued to negotiate, and resolved about 78 additional issues. On October 11, 2005, parties jointly filed a revised statement of unresolved issues identifying 82 issues left for arbitration. On October 28, 2005, a motion was granted for a 4 day extension in filing opening briefs, with concurrent extension of other dates.

Opening briefs were filed on November 4, 2005. In opening briefs, parties report settlement of two more issues. Reply briefs were filed on November 18, 2005, and the proceeding was submitted for decision on that date.

On January 13, 2006, parties moved for deferral of issuance of the DAR for 60 days, with the remaining schedule similarly extended to allow for further negotiation. By ruling dated January 20, 2006, the joint motion was granted in part. The DAR was filed on January 20, 2006, and the schedule was extended as parties requested.

Parties did not report whether or not further negotiation resulted in any particular outcomes. Nonetheless, on March 30, 2006, comments on the DAR were filed by SBC-CA and MCIm. On April 4, 2006, reply comments were filed by SBC-CA, MCIm, and Joint Competitive Local Exchange Carriers (consisting of Pac-West Telecomm, Inc.; Level 3; O1 Communications, Inc.; XO Communication Services, Inc.; and Call America, Inc.).

Comments "shall focus on factual, legal or technical errors in the DAR." (Rule 3.19, Resolution ALJ-181.) Comments and replies which do so are addressed herein, and changes are made, as appropriate. Further, however, comments "which merely reargue positions taken in briefs will be accorded no weight..." (Id.) To the extent comments fail to focus on factual, legal or technical errors, or reargue positions already taken, they are accorded no weight.