III. Positions of Parties

Pacific contends there is no evidence that costs for ports other than the basic port have declined and that the Commission cannot presume, as other parties urge, that the same pressures that have driven reductions in switching rates also apply to the non-basic ports. Pacific maintains that there are physical network differences between the basic port and other port types. Specifically, Pacific describes the different hardware requirements of ports such as Centrex, ISDN, DID, and Coin, and these varying ports switch resource needs. For example, Pacific describes how ISDN ports require different line cards than the basic port, how Centrex ports require a "Common Block" to provide Centrex-like services, and how Coin ports require unique signaling equipment. Further, Pacific explains that DID ports require a trunk-side switch connection that differs from the line-side switch connection of the basic port.

Pacific asserts that application of the discount would only be justified if all the port types used the same switching equipment and consumed switching resources in the same quantities. According to Pacific, this is not the case and therefore, the 69.4% interim discount should not apply to the non-basic ports.

In contrast, Joint Applicants maintain that network facilities, both hardware and software, are the same for basic ports and all other port types, except for Centrex and ISDN ports. According to Joint Applicants, all ports except Centrex and ISDN are merely rearrangements of the same components and capabilities for which the Commission has already reduced costs in
D.02-05-042. In contrast to Pacific's argument that ports with trunk side connections should not receive the same discount as the basic port, Joint Applicants contend that the Commission has already reduced the usage rate elements that reflect the costs of equipment components beyond mere line-side ports. According to Joint Applicants, the trunk port elements are the same trunk equipment components included in end-office and tandem usage rate elements. (Joint Applicants' Reply Comments, 6/12/02, p. 3.)

For Centrex, Coin, and ISDN Ports, Joint Applicants acknowledge that these ports use some unique software, signaling equipment, and/or hardware. Nevertheless, they recommend that the Commission can reasonably infer that these unique costs have declined in a fashion similar to the cost declines found for the equipment and facilities used by the basic port. Specifically, Joint Applicants allege that Pacific has increased purchasing power since the merger of its parent company, SBC, with Ameritech, and that any unique Centrex and ISDN expenses are part of the overall reduction in switching related expenses shown in SBC's public data and referred to in D.02-05-042. (See D.02-05-042, mimeo at 14 and 46.)

ORA, TURN, Z-Tel, TMC and Call America all support application of the interim basic port discount to the other port types. ORA notes that the record shows that other SBC states do not make distinctions among various port types when pricing UNEs. ORA also states that given the true-up mechanism adopted in D.02-05-042, Pacific will not be harmed by the interim port discount. Z-Tel claims that absent application of the same discount to all port types, UNE rates will be discriminatory. Furthermore, Z-Tel argues that the Commission has no record to justify discounted analog port rates while digital port rates remain at the levels set in 1999. TMC and Call America request that the Commission apply the same rate to basic and Centrex ports, or in the alternative, the same discount. They contend that D.02-05-042 found evidence that Centrex and basic port rates were proposed at equal levels by Pacific's affiliate SBC-Ameritech in Illinois. TMC and Call America also suggest that proper application of the issue sanction adopted in D.02-05-042 requires the Commission to assume that basic and Centrex ports are equal.