16. Pricing Appendix

16.1. Pricing Appendix 2

SBC-CA proposes a clause which addresses retroactive adjustment of rates for CLECs who adopt this ICA under § 252(i) of the Act. The clause does not affect MCIm.

MCIm argues that SBC-CA's proposed clause should be omitted because it has no contractual effect with respect to MCIm, and it improperly attempts to limit the rights of adopting CLECs.

Discussion

SBC-CA's proposed clause is adopted, with the exception of the last phase (i.e., delete: "and any Adopting CLEC is foreclosed from making any such claim hereunder").

SBC-CA's proposed clause does not negatively affect MCIm, but provides reasonable clarity regarding rate adjustments for CLECs who adopt this ICA pursuant to § 252(i) of the Act. That is, the proposed clause reasonably clarifies that an Adopting CLEC may not seek rate adjustments (where they might otherwise be available) to a date before the effective date of the ICA between the Adopting CLEC and SBC-CA. This appears obvious, but SBC-CA reports that at least one CLEC has attempted to do otherwise. No reason is known why a CLEC could reasonably seek and obtain an adjustment in rates to a date before the effective date of the ICA between it and SBC-CA. Nonetheless, the language creates no known harm to MCIm or any other CLEC, and should save SBC-CA time and expense addressing this issue if otherwise unreasonably asserted by a CLEC.

MCIm contends that this clause has no effect on MCIm and is surplusage. MCIm says that a fundamental rule of contract drafting requires that surplus language be omitted in order to avoid disputes and misunderstandings about application of such language. In response, SBC-CA correctly points out that the Commission has included language in previous ICAs expressly for the purpose of addressing concerns related to Adopting CLECs. The proposed clause may be surplus language with respect to MCIm, and contrary to "normal" rules of contract formation. Nonetheless, ICAs created pursuant to § 252 of the Act are unique, and, consistent with prior Commission practice, it is reasonable to include this language here.

Another reason to include this phrase is that SBC-CA has very limited grounds to complain or seek change to an ICA adopted by a CLEC under § 252(i) of the Act. (See Resolution ALJ-181, Rule 7.2 regarding the limited basis for an ILEC to complain.) That is, an Adopting CLEC may adopt this ICA in its entirety. If the proposed clause is not included here, SBC-CA may not seek inclusion or arbitration of this clause when the ICA is adopted by an Adopting CLEC. On the other hand, if this clause is included in this ICA but opposed by a CLEC seeking to adopt this ICA, the CLEC has a remedy. The CLEC can negotiate with SBC-CA, then, if necessary, arbitrate this clause before the Commission, under § 252 of the Act. Thus, on balance, inclusion of the clause provides reasonable clarity, does no harm to MCIm or another CLEC, and provides assurance to SBC-CA, while maintaining the ability of an Adopting CLEC to challenge this clause for good cause.

The one exception is the last phrase: "and any Adopting CLEC is foreclosed from making any such claim hereunder." It is unreasonable to include a phrase here that otherwise permanently forecloses the CLEC from making a claim regarding its rights. While it is unclear under what conditions an Adopting CLEC could seek to adjust rates to a date before the effective date of its ICA with SBC-CA, the CLEC should not be prohibited from making this claim in cases where it might be reasonable. MCIm is correct that the rights of the Adopting CLEC are as determined by the Commission, and other regulatory, judicial and legislative bodies, and should not be limited by this ICA.

Thus, with the exception of the last phrase, SBC-CA's proposed clause is adopted.

16.2. Pricing Appendix 4

SBC-CA proposes clauses that address its obligations to provide a product or service when the rates, terms and conditions for the product or service are not contained in the ICA.

MCIm contends SBC-CA's language should be omitted because it addresses the same subject as, and is in conflict with, agreed-upon language in Appendix Pricing § 1.2.

Discussion

SBC-CA's proposed clauses are adopted.

SBC-CA's proposal clarifies its obligations with respect to providing a product or service when the rates, terms and conditions for the product or service are not contained in the ICA. As SBC-CA points out, the proposed language also makes clear "that MCIm has various options for obtaining services not included in the ICA-including the BFR [Bona Fide Request] process, SBC-CA's tariffs, and SBC-CA's publicly available generic ICA." (SBC-CA Opening Brief, page 241.)

The disputed language was not included in the 2001 ICA, but is reasonably included here to make SBC-CA's obligations clear when parties have not negotiated rates, terms and conditions for a product or service. While SBC-CA acknowledges that certain obligations apply whether or not this language is included in the ICA, including this language is reasonable in order to minimize disputes, particularly with CLECs who adopt this ICA pursuant to § 252(i) of the Act but who are less familiar than MCIm with this situation.

MCIm objects, asserting that proposed § 1.11 covers the same subject as agreed-to language in § 1.2. This is incorrect. Section 1.2 is limited to the subject of inadvertently omitted rates. Specifically, § 1.2 covers products and services having terms and conditions in the ICA but for which "Parties have inadvertently omitted an appropriate Commission-approved rate." If there is no Commission-approved rate, § 1.2 provides how the parties shall proceed pending a Commission determination. In contrast, § 1.11 addresses the situation where MCIm would like to purchase a product or service "for which rates, terms and conditions are not contained in this Agreement." That is, § 1.11 goes beyond inadvertent omission of a rate. To be operative, § 1.11 requires that three elements be missing from the ICA: rates, terms and conditions.

MCIm also argues that § 1.11 sets up a conflict with § 1.2, and permits SBC-CA to refuse service to MCIm even if a rate were inadvertently omitted. This is incorrect. Section 1.2 applies when the terms and conditions for a product or service are addressed in the ICA, but the rate is inadvertently omitted. Section 1.11 applies when the terms and conditions for a product or service are not included in the ICA, and the rate is also not included. There is no conflict, and no ability for SBC-CA to refuse service based solely on inadvertent omission of a rate.

16.3. Pricing Appendix 7

SBC-CA proposes language it says clarifies when non-recurring charges apply.

MCIm opposes SBC-CA's proposal saying it is confusing, vague, and of questionable accuracy and application.

Discussion

MCIm's proposal is adopted (i.e., that SBC-CA's proposed language be omitted).

Parties agree there was no similar language in the 2001 ICA. No new fact or law justifies making the addition here.

SBC-CA argues that it seeks to clarify when non-recurring charges apply, thereby preventing future disputes. This is belied by the fact MCIm finds the language unclear.

No example is evident of where or how non-recurring charges referred to elsewhere in the ICA do not adequately indicate when they apply, and SBC-CA fails to show an example. No dispute is known to have occurred which this language would have prevented, and SBC-CA fails to identify one.

SBC-CA's proposed language is unreasonably vague. For example, SBC-CA proposes: "Nonrecurring Charges are applicable to all categories of rates." If nonrecurring charges are applicable, they must be stated or identified in the list of prices attached to this Appendix. If not in a rate category, saying they are applicable does not make them so.57

SBC-CA's proposed language is also unclear. For example, SBC-CA proposes:

    "3.4. For Resale, when a CLEC converts or adds new service, an End User's existing service, the normal service order charges and/or non-recurring charges associated with said additions and/or changes will apply." (Proposed § 3.4.)

It is unclear if what SBC-CA intends is the following:

    "3.4. For Resale, when a CLEC converts or adds new service to an End User's existing service, the normal service order charges and/or non-recurring charges associated with said additions and/or changes will apply."

    Alternately, SBC-CA might intend:

    "3.4. For Resale, when a CLEC converts or adds new service, each of the following apply: an End User's existing service charge plus the normal service order charges and/or non-recurring charges associated with said additions and/or changes."

Thus, MCIm's proposal is adopted, and SBC-CA's proposed language is omitted.

57 If a rate is inadvertently omitted, Pricing Appendix § 1.2 applies. If rates, terms and conditions are missing, Pricing Appendix § 1.11 applies.

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