VIII. Further UNE Reexamination Proceedings

As described at the start of this order, this proceeding is a consolidation of the 2001 and 2002 nominations by various parties to re-examine specific UNE rates that SBC-CA charges. The Commission established the annual nomination process in D.99-11-050, intending it to be a quick update to rates set in that order. Unfortunately, the dream of a quick annual re-examination process quickly gave way to the reality of modeling difficulties, protracted discovery battles, and various delays.

Given the enormous effort expended by the parties and the Commission on this 2001 and 2002 re-examination, which has now taken three years to complete, we see the need to modify the re-examination process that we had established in D.99-11-050. Rather than accept annual nominations of UNEs, we will suspend further nominations to re-examine SBC-CA UNE rates until February 2007. It is not reasonable to conduct reviews in 2005 and 2006 because of the need for wholesale pricing stability and regulatory certainty in competitive local exchange markets. Annual re-examination proceedings lead to constantly shifting rates, true-ups, and regulatory delays. The benefit of pricing and market stability outweighs the benefit of an annual wholesale pricing review and continual refinement of UNE rates. Therefore, the nomination process described in D.99-11-050 is suspended until February 2007.

We recognize that parties have already used the annual nomination procedure to submit suggestions for re-examination in 2004.⁹³ This suspension of the annual nomination process until 2007 does not prejudge that application. Rather, we will consider it on its merits in a separate order.