IV. Pacific's Proposal to Apply Directory Publishing Listing Rates to DA Access

In its comments filed on July 18, 2001, Pacific offered an alternative proposal for adopting final DA access rates now in this proceeding rather than further deferral of the pricing issue to the OANAD proceeding. Pacific proposed that the Commission adopt final rates for the provision of DA listing service equal to the rates found "presumptively reasonable" by the FCC for access to subscriber list information in its "Third Report and Order Regarding the Provision of Directory Listing Information" issued on September 9, 1999.¹³ "Subscriber list information" includes listed subscribers' names, addresses and telephone numbers as well as the heading under which businesses are listed in the yellow pages. In its Order, the FCC directed carriers to provide subscriber list information to requesting directory publishers at the "presumptively reasonable" rates of $0.04 per listing for base file information and $0.06 per listing for updated list information. In determining that the $0.04/$0.06 per listing rates were presumptively reasonable rates for access to subscriber list information, the FCC considered both "the directory publishers' interest in obtaining subscriber list information at prices that facilitate competition in directory publishing; and the carriers' interest in obtaining fair compensation for their subscriber list information."¹⁴

Pacific argues that there are similarities inherent in the provision of subscriber list information and DA listing information that make it appropriate for the California Commission to adopt a similar pricing schedule for each. Pacific also points to the FCC's finding that competition exists both in the provision of operator services and directory assistance as a basis to adopt market-based rates.

InfoNXX objects to Pacific's proposal to set rates for DA listings based upon the FCC rates for directory publishers, arguing that such an approach would be inconsistent with state law and policy. InfoNXX notes that the FCC's pricing determination only extends to listings used by directory publishers, but does not extend to listings for DA database access. LSSI also filed comments in opposition to the proposal of Pacific to set DA database access rates equal to the rates that the FCC found "presumptively reasonable" for accessing to listings provided to directory publishers.

We decline to adopt the recommendation of Pacific that the final rates for the provision of DA service be set at the same rates that were found "presumptively reasonable" by the FCC for access to subscriber list information in its Third Report and Order. The FCC has specifically declined to adopt the rate methodology for subscriber list information used for directory publishing as a basis for pricing DA services. The FCC concluded that the pricing structure for DA access services "should remain distinct from that of subscriber list information" developed pursuant to the rate methodology set forth in Section 222(e). ¹⁵

As the FCC stated in its DA First Report and Order:

"Essential to a competitor's ability to provide directory assistance is access to an accurate local directory assistance database. [footnote omitted] Because incumbent LECs derive their local directory assistance database through their service order processes, they continue to maintain a near total control over the vast majority of local directory listings that form a necessary input to the competitive provision of directory assistance.... The directory assistance market will not be fully competitive as long as incumbent LECs have the ability to leverage their monopoly control of their DA databases into market dominance." ¹⁶

Accordingly, in the interest of assuring that DA competitors are not disadvantaged by the ILECs' ability to charge excessive rates for DA access, we decline to apply the rate structure as proposed by Pacific.

Moreover, while it is not precedential, we note that in the Pacific/MCI Arbitration application,¹⁷ Pacific made a pricing proposal that is similar to the one it has offered in this proceeding. Yet, Pacific's proposal was rejected in the Final Arbitrator's Report in that proceeding, noting that the rates for directory publishing cannot be used to justify the rates for DA access because those services are statutorily separate and distinct. Consistent with the distinctions between directory publishing and DA provisioning as made in the FCC's DA First Report and Order, we likewise find no basis here to adopt Pacific's proposal to set DA rates equivalent to those for directory list information provided for published directory service.

The fact that the FCC has determined that DA database access is not an unbundled network element does not preclude this Commission from independently proceeding to establish cost-based rates for DA database access as a matter of state law and policy. In conjunction with its comments filed on July 18, 2001, Pacific submitted confidential cost data under seal relating to its cost of providing DA listings as a reference for evaluating its pricing proposal.¹⁸ Yet, since we have previously indicated that the costs of DA provisioning will be addressed in the OANAD proceeding, no separate phase has been designated in this proceeding as a basis to conduct a cost study of DA provisioning. Accordingly, we make no judgment concerning the reasonableness or reliability of the data presented under seal by Pacific, nor do we have any basis to rely on such data in disposing of the instant petition for modification.