III. Procedural and Operational Background

By ruling dated July 31, 2003, a phase was initiated in the Local Competition Rulemaking/Investigation (R.95-04-043/I.95-04-044) for conducting these proceedings as required by the TRO.

Pursuant to a prehearing conference on September 30, 2003, by rulings dated October 8, and October 20, 2003, the proceeding was segmented into three major components relating to (1) mass market switching deployment, (2) high-capacity loops and dedicated transport deployment, and (3) development of appropriate hot cut processes.

Pursuant to ALJ ruling, preliminary testimony by SBC and Verizon on their proposed hot cut processes was served on November 7, 2003. A hot cut collaborative workshop was held on November 17, 2003. The ILECs presented more complete hot cut proposals by testimony mailed on December 15, 2004.

SBC's December 15^th testimony on proposed California batch cut processes incorporated, to the extent deemed possible, certain CLEC industry recommendations developed in batch cut collaborative workshops in the SBC Midwest states⁸ and the SBC Southwest states.⁹

Other parties served reply testimony on the ILEC proposals on January 15, 2004. The interested parties participating in the hot cut portion of the TRO proceeding, other than SBC and Verizon, were primarily the CLECs: AT&T Communications of California, Inc. (AT&T), MCI, Covad Communications (Covad), and CalTel. The Commission's Office of Ratepayer Advocates (ORA) and The Utility Reform Network (TURN) also filed briefs, which were generally in support of the CLEC position on hot cut issues. A follow-up workshop collaborative was held on December 15, 2003 addressing line splitting arrangements. The purpose was for parties to narrow areas of dispute as to appropriate batch hot cut processes involved in UNE-P customers' migration to a UNE-L environment where both voice and data are provided on a loop by two different CLECs. A subsequent workshop on performance metrics was held on March 22, 2004. Evidentiary hearings were also conducted on hot cut-related issues.

Testimony was also served on hot cut pricing proposals, with the ILECs serving their testimony on January 7, 2004, and other parties serving reply testimony on January 28, 2004. Evidentiary hearings began on January 26, 2004 and continued through February 27, 2004. ¹⁰ Opening briefs were filed on April 12, 2004, and reply briefs were filed on May 13, 2004.

Each of the ILECs propose processes for both batch hot cuts for the embedded base of UNE-P lines and ongoing individual hot cuts for new CLEC customers prospectively, arguing that their proposals are compliant with the TRO and overcome impairment associated with the hot cut process. The CLECs claim the ILECs' proposed hot cut processes, both on a batched and individual basis, fail to meet TRO requirements and do not provide for a seamless transition from UNE-P to UNE-L. The CLECs argue that a hot cut process must be capable of handling seamless and timely migrations of high volumes of mass market customers, including all customer services, and capable of handling migrations among any carrier of the customer's choosing.

⁸ The Midwest states include Illinois, Indiana, Michigan, Ohio and Wisconsin.

⁹ The Southwest states include Arkansas, Kansas, Oklahoma, Missouri and Texas.

¹⁰ Only a portion of the hearings addressed hot-cut-issues. Additional issues covered in the hearings relating to mass-market switching and high-capacity loops/transport deployment are not addressed in the instant order.