ALJ/DOT/tcg Mailed 7/11/2003

Decision 03-07-023 July 10, 2003

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

Joint Application of AT&T Communications of California, Inc. (U 5002 C) and WorldCom, Inc. for the Commission to Reexamine the Recurring Costs and Prices of Unbundled Switching in Its First Annual Review of Unbundled Network Element Costs Pursuant to Ordering Paragraph 11 of D.99-11-050.	Application 01-02-024 (Filed February 21, 2001)
Application of AT&T Communications of California, Inc. (U 5002 C) and WorldCom, Inc. for the Commission to Reexamine the Recurring Costs and Prices of Unbundled Loops in Its First Annual Review of Unbundled Network Element Costs Pursuant to Ordering Paragraph 11 of D.99-11-050.	Application 01-02-035 (Filed February 28, 2001)
Application of The Telephone Connection Local Services, LLC (U 5522 C) for the Commission to Reexamine the Recurring Costs and Prices of the DS-3 Entrance Facility Without Equipment in Its Second Annual Review of Unbundled Network Element Costs Pursuant to Ordering Paragraph 11 of D.99-11-050.	Application 02-02-031 (Filed February 28, 2002)

Application of AT&T Communications of California, Inc. (U 5002 C) and WorldCom, Inc. for the Commission to Reexamine the Recurring Costs and Prices of Unbundled Interoffice Transmission Facilities and Signaling Networks and Call-Related Databases in Its Second Annual Review of Unbundled Network Element Costs Pursuant to Ordering Paragraph 11 of D.99-11-050.	Application 02-02-032 (Filed February 28, 2002)
Application of Pacific Bell Telephone Company (U 1001 C) for the Commission to Reexamine the Costs and Prices of the Expanded Interconnection Service Cross-Connect Network Element in the Second Annual Review of Unbundled Network Element Costs Pursuant to Ordering Paragraph 11 of D.99-11-050.	Application 02-02-034 (Filed February 28, 2002)
Application of XO California, Inc. (U 5553 C) for the Commission to Reexamine the Recurring Costs of DS1 and DS3 Unbundled Network Element Loops in Its Second Annual Review of Unbundled Network Element Costs Pursuant to Ordering Paragraph 11 of D.99-11-050.	Application 02-03-002 (Filed March 1, 2002)

OPINION IMPLEMENTING REVISED UNBUNDLED NETWORK

ELEMENT RATES BASED ON DECISION 02-09-049

I. Summary

This decision implements the rate changes adopted by the Commission in Decision (D.) 02-09-049. In that order, the Commission made two changes to the methodology for calculating the recurring and nonrecurring unbundled network element (UNE) rates that Pacific Bell Telephone Company (Pacific, d/b/a SBC California) charges competing local telephone carriers for use of its network. First, the Commission increased the shared and common cost markup percentage, which is a component of UNE prices, from 19% to 21%. Second, the Commission ordered Pacific to remove 13% from the expense portion of its UNE monthly recurring costs.¹ The recurring and nonrecurring rate changes resulting from these two modifications were effective on the date that D.02-09-049 became effective, September 19, 2002. The Commission ordered Pacific to submit a compliance filing identifying the net effect of these two changes. Today's decision approves the undisputed rate changes identified by Pacific in its compliance filings so that the rate changes can be implemented and appropriate adjustments made for UNEs purchased as of September 19, 2002.