ALJ/JAR/tcg DRAFT Agenda ID #910
8/22/02
Decision DRAFT DECISION OF ALJ REED (Mailed 7/23/02)
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Rulemaking on the Commission's Own Motion to Govern Open Access to Bottleneck Services and Establish a Framework for Network Architecture Development of Dominant Carrier Networks. |
Rulemaking (R.) 93-04-003 (Filed April, 1993) |
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Investigation on the Commission's Own Motion into Open Access and Network Architecture Development of Dominant Carrier Networks. |
Investigation (I.) 93-04-002 (Filed April, 1993) |
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Order Instituting Rulemaking on the Commission's Own Motion Into Competition for Local Exchange Service. |
R.95-04-043 (Filed April, 1995) |
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Order Instituting Investigation on the Commission's Own Motion Into Competition for Local Exchange Service. |
I.95-04-044 (Filed April, 1995) |
DECISION GRANTING PACIFIC BELL TELEPHONE COMPANY'S
RENEWED MOTION FOR AN ORDER THAT IT HAS SUBSTANTIALLY SATISFIED THE REQUIREMENTS OF THE 14-POINT CHECKLIST IN § 271
OF THE TELECOMMUNICATIONS ACT OF 1996 AND DENYING
THAT IT HAS SATISFIED § 709.2 OF THE PUBLIC UTILITIES CODE
DECISION 2
I. Summary 2
II. Background 4
III. Pacific Compliance With §271(c)(1)(A): Presence of Facilities-Based Competition 8
IV. Pacific Compliance With § 271(c)(2)(B): The Competitive Checklist 10
A. Checklist Item 1-- Interconnection 10
1. Legal Standard 10
2. Proceeding Record 11
a) Pacific's Position 11
(1) Facilities-Based CLECs 13
(2) Collocation 13
(3) Interconnection Trunking 15
(4) Performance Data Results 16
b) Interested Parties' Positions 23
(1) Collocation 23
(2) Interconnection Trunking 25
3. Discussion 27
B. Checklist Item 2-Unbundled Network Elements 31
1. Legal Standard 32
2. Proceeding Record 36
a) Pacific's Position 36
(1) General Access to UNEs 36
(2) UNE Combinations 36
(3) Intellectual Property 37
(a) Discussion 38
(4) Nondiscriminatory Access to OSS 38
(a) OSS Test 39
(b) OSS Test Report Comments 80
(c) Local Service Center (LSC)/OSS -April 2001
Operational Hearings 101
(5) Pricing 110
C. Checklist Item 3-- Poles, Ducts, Conduits and Rights-of-Way 122
1. Legal Standard 122
2. Proceeding Record 125
D. Checklist Item 4 -- Unbundled Local Loops 127
1. Legal Standard 127
2. Proceeding Record 129
a) Facility Availability and Quality 129
(1) Pacific's Position 130
(2) Interested Parties' Positions 131
(a) Discussion 133
b) Loop Installation Issues 137
(1) Pacific's Position 137
(2) Interested Parties' Positions 138
(a) Discussion 142
c) Advanced Services 146
(1) Pacific's Position 146
(2) Interested Parties' Positions 148
(a) Discussion 150
d) Integrated Digital Loop Carrier (IDLC) 153
(1) Discussion 153
e) ANSI Standards and Spectrum Management 154
(1) Discussion 155
f) Spectral Interference 155
(1) Discussion 156
E. Checklist Item 5 -- Unbundled Local Transport 156
1. Legal Standard 156
2. Proceeding Record 157
3. Discussion 161
F. Checklist Item 6 -- Unbundled Local Switching 163
1. Legal Standard 163
2. Proceeding Record 164
3. Discussion 171
G. Checklist Item 7 -- 911, E911, Directory Assistance Services,
and Operator Call Completion Services 173
1. Legal Standard 173
a) TA96 and FCC Orders 173
(1) 911 and E911 173
(2) Directory Assistance/Operator Services 173
b) California Application of Legal Standards 175
2. Proceeding Record 176
3. Discussion 179
H. Checklist Item 8 - White Pages Directory Listings 180
1. Legal Standard 180
2. Proceeding Record 182
a) Pacific's Position 182
(1) Performance Measure Results 182
b) Interested Parties' Positions 183
c) CGE&Y Assessment 184
3. Discussion 185
I. Checklist Item 9-- Access to Telephone Numbers 187
1. Legal Standard 187
2. Proceeding Record 188
3. Discussion 189
J. Checklist Item 10 -- Access to Databases and Associated Signaling 191
1. Legal Standard 191
2. Proceeding Record 193
3. Discussion 194
K. Checklist Item 11-Number Portability 196
1. Legal Standard 196
2. Proceeding Record 198
3. Discussion 202
L. Checklist Item 12-- Local Dialing Parity 204
1. Legal Standard 204
2. Proceeding Record 205
3. Discussion 207
M. Checklist Item 13-Reciprocal Compensation 207
1. Legal Standard 208
2. Proceeding Record 210
a) Pacific's Position 210
3. Interested Parties' Positions 211
4. Discussion 211
N. Checklist 14-Resale 212
1. Legal Standard 212
2. Proceeding Record 214
3. Discussion 219
V. CPUC Performance Incentives Plan 225
A. Performance measurement and standards 226
B. Performance Assessment 229
C. Performance incentives 232
VI. California Public Utilities Code Section 709.2 236
A. Background 236
B. Summary of Positions 239
C. Open Access to Exchanges 241
1. Does the record support the determination that all competitors
have fair, nondiscriminatory, and mutually open access to
exchanges currently subject to the modified final judgment,
including fair unbundling of exchange facilities, as prescribed
in the commission's Open Access and Network Architecture Development Proceeding (I.93-04-003 and R.93-04-003)?
(§ 709.2(c)(1)) 241
2. Discussion 242
D. No Anticompetitive Behavior 243
1. Does the record support the determination that there is no anticompetitive behavior by the local exchange telephone
corporation, including unfair use of subscriber information
or unfair use of customer contacts generated by the local
exchange telephone corporation's provision of local exchange
telephone service? (§ 709.2(c)(2)) 243
2. Discussion 245
E. No improper cross subsidization 248
1. Does the record support the determination there is no
improper cross-subsidization of intrastate interexchange telecommunications service by requiring separate accounting
records to allocate costs for the provision of intrastate
interexchange telecommunications service and examining
the methodology of allocating those costs? (§ 709.2(c)(3)) 248
2. Discussion 250
F. No Substantial Possibility of Harm From Pacific's Entry 254
1. Does the Record Support the Determination that there is No
Substantial Possibility of Harm from Pacific's Entry into the
Long Distance Market? (§ 709.2(c)(4)) 254
2. Discussion 255
VII. Conclusion 262
VIII. Comments on Draft Decision 263
Findings of Fact 263
Conclusions of Law 298
ORDER 310
Appendix I - 271 Compliance Requirements Multiple Checklist Items
(Appendix B to D.98-12-069)
Appendix II - Pacific Bell Unbundled Network Element Recurring Prices
as of 7/15/02
Appendix III - California OSS Performance Measures
Appendix IV - April 2002 Performance Incentives Plan Results
Appendix V - List of Appearances
DECISION GRANTING PACIFIC BELL TELEPHONE COMPANY'S
RENEWED MOTION FOR AN ORDER THAT IT HAS SUBSTANTIALLY SATISFIED THE REQUIREMENTS OF THE 14-POINT CHECKLIST IN § 271
OF THE TELECOMMUNICATIONS ACT OF 1996 AND DENYING
THAT IT HAS SATISFIED § 709.2 OF THE PUBLIC UTILITIES CODE
I. Summary
Today, we conclude the California chapter of Pacific Bell's (Pacific) six-year journey to long distance authorization. The length of the journey has been as much about the hard work, determination and collaboration of Pacific, the competitive local exchange carriers, interested parties, our staff, and the public, as it has been about accurately assessing compliance with the 14-point checklist in Section 271 of the Telecommunications Act of 1996 in the nation's most populous state. We grant, conditioned on Pacific's compliance with the directives set forth in our Order, its renewed motion for an order that it has satisfied a substantial majority of the 14-point checklist.
We hold that Pacific has successfully passed the independent third-party test of its Operations Support System (OSS). We acknowledge the strong performance results Pacific has achieved across numerous service categories, and make slight modifications to the Performance Incentive Plan that we established. In addition, we determine that Pacific has continued to demonstrate compliance with Access to Rights of Way, Access to Telephone Numbers, Dialing Parity, and Reciprocal Compensation, the four checklist items that we held that it satisfied in Decision (D.) 98-12-069. We also determine that Pacific has satisfied eight additional checklist items as well as the technical compliance requirements set forth in our 1998 decision's Appendix B Roadmap. Those checklist items are: Interconnection, Nondiscriminatory Access to Unbundled Network Elements, Unbundled Loops, Local Transport, Unbundled Switching, Access to 911, E911, Directory Assistance and Operator Call Completion Services, White Pages, and Access to Databases.
Before we verify to the Federal Communications Commission (FCC) Pacific's compliance with Number Portability, Checklist Item 11, we direct Pacific to implement a mechanized enhancement to the Number Portability Administration Center (NPAC) check by the date opening comments are due on the draft of this decision. Mechanization of the NPAC check is crucial for competitors as well as customers: it will mechanically delay a Pacific disconnect before a New Service Provider has completed its installation work. The continuing delay of this process presents a critical barrier to entry for the competitive local exchange carriers (CLECs). We do not find that Pacific has complied with the requirements for Resale, Checklist Item 14. Instead, we find that Pacific has erected unreasonable barriers to entry in California's Digital Subscriber Line market both by not complying with its resale obligation with respect to its advanced services pursuant to § 251(c)(4)(A) and by offering restrictive conditions in the SBC Advanced Solutions Inc. (ASI)-CLEC agreements in contravention of § 251(c)(4)(B).
We also deny today Pacific's motion for an order that it has satisfied the requirements of California Public Utilities (Pub. Util.) Code § 709.2. While we make the determination that all competitors have fair, nondiscriminatory, and mutually open access to exchanges, the record does not support our making the determinations that Pacific has manifested no anticompetitive behavior, has established no improper cross-subsidization, or poses no substantial possibility of harm to the competitive intrastate interexchange telecommunications markets. We direct Pacific to submit to us a report on the feasibility of structurally separating the company into wholesale and retail entities. Further, we direct the Telecommunications Division no later than five months from the effective date of this order to submit to prepare for consideration on our meeting agenda an Order Instituting Investigation on the selection and appointment of a competitively neutral third-party Preferred Interexchange Carrier (PIC) administrator for California. Finally, we apply a narrow and focused constraint on joint marketing to inbound customer calls, and direct Pacific to include in its final joint marketing plans and/or agreements one of two specified options.
Our findings under Section 709.2 reflect the considerations that California law requires us to weigh and balance. While Pacific largely satisfies the technical requirements of Section 271, in accordance with Section 709.2 we cannot state unequivocally that we find Pacific's imminent entry into the long distance market in California will primarily enhance the public interest. Local telephone competition in California exists in the technical and quantitative data; but it has yet to find its way into the residences of the majority of California's ratepayers. This decision acknowledges the distance Pacific has traveled in order to reach its goal of long distance authorization; and concurrently, it continues to pave the way towards actual and vibrant local competition in California.
