2. Background

The current ICA between SBC-CA and MCIm expired on September 24, 2004. Pursuant to provisions of the Telecommunications Act of 1996 (Act or TA 96), parties agreed to extend the window for negotiation and arbitration several times. The last extension was effective May 4, 2005, and provided, among other things, that the window for petitioning the Commission to arbitrate unresolved issues would be from May 1, 2005 through May 26, 2005.

On May 26, 2005, SBC-CA applied for Commission arbitration of 175 issues. On June 20, 2005, MCIm responded, adding 19 issues.

An Initial Arbitration Meeting (IAM) was held on June 23, 2005. Parties agreed to a schedule which included arbitration hearings beginning on September 19, 2005.

On June 30, 2005, SBC-CA filed a motion to strike one of MCIm's proposed additional issues. On July 12, 2005, MCIm filed a response, and on August 1, 2005, SBC-CA filed a reply. By ruling dated August 18, 2005, SBC-CA's motion was granted.

A second IAM was held on September 6, 2005. Parties agreed to transfer several issues from this arbitration to Application (A.) 05-07-024 (the SBC-CA Triennial Review Order (TRO) and Triennial Review Remand Order (TRRO) consolidated arbitration proceeding). Parties also agreed to a schedule with a Commission decision in about mid-March or early April 2006.

Arbitration hearings were held from September 19, 2005, through September 30, 2005. Testimony was given by 13 witnesses, and 44 exhibits were received as evidence. Parties agreed to transfer 31 issues to the SBC-CA TRO/TRRO proceeding. On September 29, 2005, MCIm moved to transfer two additional issues from this arbitration to the TRO/TRRO proceeding. SBC-CA opposed the motion. On October 6, 2005, MCIm's motion was granted.

Parties continued to negotiate, and resolved about 78 additional issues. On October 11, 2005, parties jointly filed a revised statement of unresolved issues identifying 82 issues left for arbitration. Opening briefs were filed on November 4, 2005. In opening briefs, parties reported settlement of two more issues. Reply briefs were filed on November 18, 2005, and the proceeding was submitted for decision on 80 issues.

On January 13, 2006, parties moved for deferral of issuance of the Draft Arbitrator's Report (DAR) for 60 days, with the remaining schedule similarly extended to allow for further negotiation. By ruling dated January 20, 2006, the joint motion was granted in part. The DAR was filed on January 20, 2006, and the schedule was extended as parties requested.

On March 30, 2006, comments on the DAR were filed by SBC-CA and MCIm. On April 4, 2006, reply comments were filed by SBC-CA, MCIm, and Joint Competitive Local Exchange Carriers (Joint CLECs, consisting of Pac-West Telecomm, Inc. (Pac-West); Level 3; O1 Communications, Inc.; XO Communication Services, Inc.; and Call America, Inc.). On April 19, 2006, the FAR was filed. The FAR directed that a conformed ICA be filed by April 26, 2006.

On April 21, 2006, parties moved for an extension to May 10, 2006 for the filing of the conformed ICA. The motion was granted. On May 9, 2006, each party requested leave to file a motion for addendum to the FAR, asking for resolution of an ICA conformance issue. The requests were granted. On May 17, 2006, each party filed a motion seeking an addendum to the FAR, or other relief. Parties waived the filing of responses to the motions. On June 2, 2006, the motion of AT&T-CA was granted, and the motion of Verizon Business was denied.

On June 14, 2006, parties jointly filed a conformed ICA. Each also filed a statement (a) identifying the criteria by which the negotiated and arbitrated portions of the conformed ICA must be tested for approval or rejection, (b) explaining whether the conformed ICA passes or fails each test, and (c) stating whether or not the conformed ICA should be approved or rejected by the Commission.

On July 10, 2006, Pac-West moved to intervene.  On July 17, 2006, Pac-West's motion was denied. We affirm the July 17, 2006 Arbitrator's Ruling denying Pac-West's motion. We also note that Pac-West's motion included numerous arguments concerning the proper interpretation of federal law governing the application of access charges related to voice over internet protocol (VOIP) traffic. We clarify here that Pac-West's arguments will be fully considered in its pending dispute proceeding with AT&T involving this issue. That is, this arbitration decision, and the outcome in this proceeding, will not bind our decision in the pending Pac-West initiated dispute proceeding against AT&T in Rulemaking 95-04-043/Investigation 95-04-044.  Rather, we will fully consider the facts and law in the Pac-West/AT&T dispute on their own merits.