VI. The Parties' Positions⁴

A. AT&T

AT&T states that it meets the standards for injunctive relief because it likely to prevail on the merits. According to AT&T, its interconnection agreements with Verizon require Verizon to provide AT&T with unbundled Local Switching and Common Transport Network elements, currently provided through Verizon's circuit switch. AT&T believes that Verizon's failure to provide these elements by unilaterally discontinuing them after installing packet switches would breach these interconnection agreements, absent a valid amendment to them. According to AT&T, the hardware or technology used is irrelevant to Verizon's obligation to provide these elements, in that Verizon must do so whether Local Switching or Common Transport passes through a packet or a circuit switch.

AT&T contends that even if the Telecommunications Act of 1996 and Federal Communication Commission (FCC) decisions no longer require Verizon to provide Local Switching and Common Transport to AT&T because of Verizon's upgrades, Verizon must follow the change in law provisions under the interconnection agreement for incorporating this change. AT&T also argues that Verizon must follow the network change provisions of the interconnection agreement, which prohibit Verizon from discontinuing network elements in the manner Verizon is attempting here.

AT&T believes it will suffer irreparable injury without the restraining order because Verizon plans to switch AT&T customers to a resale platform which will disable AT&T from electronically processing resale orders. AT&T asserts that it would be unable to respond to a customer's request to make changes to an existing account, such as adding and removing features or disconnecting or adding new service. AT&T also alleges billing problems would arise if it cannot maintain the functional means to accomplish the task of Local Switching and Common Transport. AT&T states it needs to conduct a study well into 2005 to upgrade its systems to accommodate Verizon's change.

AT&T alleges that its customers would also be harmed because there is no guarantee, or suggestion, that the products, feature sets, and services available through resale are the same as those that consumers are currently receiving from AT&T through UNE-P. AT&T also states that its customers would be harmed because Verizon's action would require AT&T to raise prices to its customers in Verizon's service territory. AT&T alleges it will also suffer irreparable damage to its reputation in that AT&T's customers will blame AT&T, not Verizon, for the associated harm that they may suffer.

AT&T alleges no harm will occur to Verizon or others from the granting of this temporary restraining order because AT&T is not asking the Commission to prevent Verizon from making the network changes it wishes to make. AT&T believes that a temporary restraining order is in the public interest because it would provide the Commission with an opportunity to determine whether Verizon must continue to provide AT&T with the network elements.

B. Telescape⁵

Petitioning intervenors, collectively "Telescape", filed a concurrence in AT&T's emergency motion on September 1, 2004. Telescape's concurrence attached a complaint (also separately filed with the Commission as Case (C.) 04-09-001) to support the allegations that Telescape is threatened by the same action that prompted AT&T to file its emergency motion. As a result, Telescape alleges that it, as well as the public interest, will suffer irreparable harm.

C. Verizon

Verizon states that AT&T has not established the requisite elements for a temporary restraining order. Verizon believes that its upgrade, replacing five circuit switches with two new host packet switches, is a step in Verizon's ongoing process of building a next-generation network in California, and that federal law precludes any state law solution.

First, Verizon contends that AT&T's request must fail because AT&T waited over two months before bringing its motion. Verizon also states that federal law has never required unbundled packet switching. According to Verizon, its interconnection agreements with AT&T, adopted under and incorporating federal law, have never required unbundled packet switching, and do not require it now. Accordingly, Verizon believes that federal law preempts any contrary state Commission ruling.

Verizon also states that AT&T and its customers will not suffer irreparable injury because AT&T has hundreds of resale lines in California and has placed many orders on those lines within the past year. Verizon believes that the sole effect of its contemplated action would be a small reduction in AT&T's profit margin, which does not satisfy the irreparable harm criteria for issuing a temporary restraining order.

Verizon states that it will be irreparably harmed by any delay of its network upgrades, which would throw into chaos the complex industry-wide process of changing switch records and arranging for call rerouting through new switches. According to Verizon, call completion for thousands of its customers will be jeopardized, and its business plans for capital upgrades and entry into new service markets will be adversely affected. Verizon states that delayed deployment of the new packet switches is the outcome that will accompany a grant of AT&T's motion, since the only way Verizon will continue to provide unbundled switching at these offices is to keep the current switches in place and reevaluate deploying packet switches in California.

Verizon also believes the public interest will be adversely affected if AT&T's request is granted because California consumers will potentially lose the future efficiencies and service improvements that are the ultimate goal of any network upgrade, and that the Commission will discourage technological innovation.

Verizon opposes Telescape's request to intervene in AT&T's emergency motion, because Telescape neither sought expedited injunctive relief, nor satisfied the requirements for obtaining such relief with its conclusory allegations. However, Verizon does not oppose Telescape's motion to consolidate its own complaint case with this one.

⁴ The parties have fully briefed this motion, and both AT&T and Verizon have also submitted declarations supporting their positions. Verizon filed its response to AT&T's emergency motion on September 2, 2004, and AT&T filed its reply on September 8, 2004. Verizon also filed its response to Telescape's petition to intervene and concurrence in the emergency motion on September 9, 2004.

⁵ Telescape Communications, Inc., Wholesale Airtime, Inc., and Blue Casa Communications, Inc. filed a concurrence to AT&T's motion on September 1, 2004.