TRP/tcg 4/12/2002
BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA
Order Instituting Rulemaking on the Commission's Own Motion into Competition for Local Exchange Service.
Rulemaking 95-04-043
(Filed April 26, 1995)
Order Instituting Investigation on the Commission's Own Motion into Competition for Local Exchange Service.
Investigation 95-04-044
(Filed April 26, 1995)
ASSIGNED COMMISSIONER'S RULING
REGARDING THE MOTION OF VERIZON
FOR INTERIM INTERCONNECTION AGREEMENT
Verizon California Inc. (Verizon) filed on April 3, 2002, an "Emergency Motion for an Expedited Order Establishing an Interim Interconnection Arrangement with Pac-West Telecomm, Inc. (Pac-West) Pending Adoption of a Commission-Approved Successor Agreement" (Motion). Verizon asks that the Commission rule on its Motion prior to the expiration of the existing Interconnection Agreement due to occur on April 13, 2002. Verizon indicates that there is no provision in the interconnection agreement for extension beyond April 13, 2002.
Because the time that would normally be allotted to respond to Verizon's "Emergency Motion" under Commission rules extends beyond April 13, an ALJ ruling shortened the response time to its "Emergency Motion," to April 8, 2002. Pac-West filed a reply to Verizon's motion on April 8, 2002.
Background
Verizon brings its motion for Commission resolution of a dispute between Verizon and PacWest because their Interconnection Agreement is due to expire on April 13, and parties have no successor agreement in place. Section 9.02 of the existing Interconnection Agreement provides that, in the event the Agreement is terminated and a party requests negotiation of a new agreement within 60 days of the date of the termination notice, interconnection shall continue between the parties in accordance with the provisions of the terminated Agreement for a limited period of 125 days following the termination date. Once the Interconnection Agreement has been terminated pursuant to its terms, however, it does not continue in effect indefinitely while the parties negotiate a successor agreement.
Because parties' contract makes no provision for interconnection to continue beyond the contract termination date of April 13, an interim agreement is required pending completion of a successor agreement. Verizon accordingly requests that the Commission issue an order requiring Verizon and Pac-West to enter into an interim agreement to remain in place until the parties conclude negotiations and execute a replacement agreement. Verizon claims the parties are not expected to reach a new agreement by April 13, at which point the 125-day extension period expires.
For purposes of the interim agreement, Verizon proposes that the parties enter into Verizon's current "template" agreement. Upon execution of the replacement agreement, the interim template agreement would be superceded. In the alternative, Verizon proposes that PacWest be required to opt into one of the existing interconnection agreements between Verizon and another CLEC. The adoption of such interim agreement would continue in effect until the earlier of the date the adopted terms expire or the date that the parties execute the replacement agreement.
Verizon claims that under either of its proposed options for interim agreements, the rates, terms and conditions applicable to Internet traffic would necessarily conform to the rate regime prescribed in the FCC's Order on Remand.1 Paragraph 82 of the Order on Remand provides that the FCC's interim rate regime for ISP-bound traffic "applies as carriers re-negotiate expired or expiring interconnection agreements." Once the provisions of the terminated agreement are no longer effective, Verizon claims that the FCC's interim rates for ISP-bound traffic automatically apply while the parties negotiate the terms of a replacement agreement.
Pac-West agrees that Verizon has terminated the existing agreement, and that parties have not completed negotiations on a successor agreement. Pac-West opposes Verizon's proposals for an interim agreement, however, arguing that both of Verizon's proposed forms of relief are contrary to law, unfair to Pac-West, and premised on unproven or erroneous facts.
Pac-West believes that the issues raised in Verizon's motion need not have risen to the level of an "emergency," and should have been dealt with routinely in the current negotiations, as Pac-West and other competitive local exchange carriers have often done with Pacific Bell, and Verizon itself has done with other carriers, in similar negotiations.
Pac-West objects to Verizon's "template" agreement, arguing that its terms are one-sided, favoring Verizon. Pac-West also objects to being required to opt into an existing interconnection agreement that Verizon has negotiated or arbitrated with another party.
Pac-West has presented Verizon with a redline version of the "template" proposed by Verizon, and asks the Commission to require Verizon to interconnect with Pac-West pursuant to the terms of this Pac-West version if any one-sided agreement is going to be imposed.
Pac-West also disputes Verizon's claim that the FCC's capped rates for ISP-bound traffic "automatically" apply to a new contract. Pac-West argues that this claim is based upon Verizon's erroneous legal assumption that it has, in fact, implemented the FCC's reciprocal compensation plan in California. The FCC's rates for ISP-bound traffic do not automatically apply unless Verizon has successfully demonstrated that it has offered to exchange all traffic subject to Section 251(b)(5) at the same rate (the "mirroring offer").2 In D.01-11-067, the Commission required that any carrier implementing the FCC plan, in its advice letters involved, "verify compliance with the FCC Order by confirming that it has offered to all carriers statewide to exchange all traffic both originating and terminating, and including Internet-bound traffic, at the FCC's capped rates."3 Pac-West claims that, after a diligent search, it has been unable to locate a single advice letter where Verizon has included this Commission-mandated verification.4
Pac-West thus asks that the Commission require parties to continue interconnection under the status quo, with resolution of the ultimate question of the rates and other terms and conditions applicable during this interim period to be an issue included in the arbitration conducted pursuant to Section 252(a).5 Pac-West expresses a willingness to stipulate to the entry of an appropriate accounting order until the issue is resolved. The accounting order would permit the Commission to subsequently adjust rates covering the interim period based upon the outcome of arbitration proceedings.
1 See Implementation of the Local Competition Provisions in the Telecommunications Act of 1996; Intercarrier Compensation for ISP-Bound Traffic, CC Docket Nos. 96-98, 99-68, Order on Remand and Report and Order, FCC 01-131 (rel. Apr. 27, 2001) (Order on Remand). At paragraph 82, the FCC mandated that "as of the date this Order is published in the Federal Register, carriers may no longer invoke section 252(i) to opt into an existing interconnection agreement with regard to the rates paid for the exchange of ISP-bound traffic."
2 See, Motion of Pac-West in R.00-02-005, filed June 15, 2001.
3 See e.g., Verizon Advice Letter No. 10007 dated February 7, 2002, amending the interconnection agreement with VoiceStream Wireless Corporation to implement the FCC Order on Remand.
4 FCC Order on Remand at para. 82.
5 Although it is conceivable that this might be the only issue to be arbitrated, Pac-West's current opinion is that despite continued negotiations other issues will also require arbitration and that Verizon would be unlikely to differ with this view.
