II. Historical Framework

This decision is the culmination of a series of steps to implement competitive pricing for DA services. SBC implemented the wholesale provisioning of DALIS through an advice letter filing in December 1996. The wholesale prices implemented in SBC's DALIS tariff were provisional, however, and subject to further review and true up. In Decision (D.) 97-01-042, issued January 23, 1997, we directed the Administrative Law Judge (ALJ) to conduct a further inquiry into the wholesale pricing and provisioning of DA listings to third party vendors.

Shortly before issuance of D.97-01-042, the Commission determined in arbitration proceedings under § 252 of the 1996 Telecommunications Act that SBC (then known as Pacific Bell) and Verizon California, Inc. (then known as GTE California, Inc.) should provide DA listings to CLECs "at the cost of the transfer media (electronic tape) plus reasonable costs for preparation and shipping of the media."² We ordered that "the determination of appropriate cost recovery for the preparation and delivery of the [DA] information . . . be addressed in the [Open Access Network Architecture and Development] OANAD proceeding.³

Following the issuance of D.97-01-042, certain parties sought to negotiate interim rates for access for SBC and Verizon's DA databases. SBC initially indicated that the rate would be $0.0059 per listing, which two DA competitors, InfoNXX,⁴ and Metro One indicated was acceptable.⁵ However, before formal agreements could be established, SBC's DALIS tariff took effect, and thereafter, Pacific only offered to furnish InfoNXX and Metro One with access to DA listings in accordance with their DALIS tariff which established pricing in excess of the rate promised to InfoNXX and Metro One.

In December 1997, by D.97-12-042, the Commission required the incumbent local exchange carriers (ILECs) to furnish independent third-party DA providers with nondiscrimatory access to DA listings. The Commission stated that "access to database listings for DA purposes should be the same for and between all competing providers, including third-party database vendors."

By D.98-01-022, the Commission permitted SBC's DALIS tariff rates to be used on an interim basis, however, subject to true-up, notwithstanding the tariff's differences from the rates that SBC was charging CLECs for access to the same data under interconnection agreements. This interim arrangement was found not to constitute undue discrimination because rates in the interconnection agreements were "part of an integral package of terms and conditions specifically negotiated by the parties," and [i]t would not be appropriate to arbitrarily single out one term of such interconnection agreements and apply that term to other competitors that were not bound by the comprehensive terms of any one interconnection contract."⁶ Moreover, the Commission concluded that while "the parties [had] raised valid questions over the reasonableness of the ILEC's directory-access rate," third-party DA service providers would not be harmed because amounts collected from them would be recorded in a memorandum account subject to a true-up, with any excess refunded with interest at the three-month commercial paper rate, once permanent rates were established.⁷

Once appropriate DALIS rates were adopted in the OANAD proceeding, the ILECs would true up the accrued revenues in the memorandum account. In the event that final adopted DALIS prices turned out to be below the provisional rates, the ILECs would be required to compute an appropriate credit to be refunded to those competitors that were previously billed using the provisional prices. If the adopted DALIS prices turned out to be higher than the provisional rates, the ILECs would be permitted to recover the difference.

The Directory Listing Order, issued by the Federal Communications Commission (FCC) on January 23, 2001,⁸ held that third-party DA service providers acting as agents or independent contractors for CLECs, or who provide call completion services, are entitled to access DA database listings under the same rates, terms, and conditions that apply to CLECs. ILECs must also file agreements establishing rates, terms, and conditions for DA data basis access pursuant to Section 252 of the 1996 Act and third-party DA service providers meeting the FCC's criteria are entitled to opt into such prices, terms, and conditions.⁹ The FCC has not yet determined whether these same rules must be extended to include DA database access afforded to third-party DA service providers who are neither carriers nor acting on behalf of carriers. Nonetheless, Petitioners argue that it is discriminatory not to require that the same rates, terms, and conditions be extended to all DA service providers.

On February 7, 2002, we issued D.02-02-025 in response to a joint party petition to modify D.98-01-022 seeking a Commission order to implement immediate reductions in DALIS prices. While not granting the immediate DALIS price reductions requested in the petition, D.02-02-025 did acknowledge that the final determination of prices for DALIS had been significantly delayed beyond the period originally anticipated in D.98-01-022. We thus made provision in D.02-02-025 for moving forward with the determination of prices for DA services by transferring the issue from OANAD to the instant docket (i.e., the "Local Competition" proceeding Rulemaking (R.) 95-04-043/Investigation (I.) 95-04-044).