ALJ/TRP/sid DRAFT Item 3

6/14/2001

Decision DRAFT DECISION OF ALJ PULSIFER (Mailed 5/15/2001)

BEFORE THE PUBLIC UTILITIES COMMISSION OF THE STATE OF CALIFORNIA

In the Matter of the Application of Verizon Select Services Inc. (U 5494 C) to Transfer California Customer Base and Withdraw the Provision of Local Bundled Service.

Application 00-12-012 (Filed December 13, 2000)

O P I N I O N

I. Introduction

Verizon Select Services, Inc. (VSSI), formerly known as GTE Communications Corporation, ¹ filed an application on December 13, 2000, pursuant to General Order (GO) 96-A for Commission authority to withdraw its provision of resold local exchange service and related bundled service offerings in California. VSSI plans to continue providing long distance service in California.

In conjunction with this decision to withdraw the provision of local residential services, VSSI also seeks Commission authority to transfer its entire customer base either to (1) the customers' local carrier of choice or, (2) if no choice is made, to the underlying incumbent local exchange carrier (ILEC), Pacific Bell Telephone Company (Pacific) or Verizon California Inc. (Verizon California). To facilitate customer transfer and facilitate its request for expedited treatment, VSSI developed a customer notification and transfer plan. VSSI asserts that the plan was intended to provide the greatest opportunity for customer awareness, the informed exercise of customer choice, and a seamless transition with no service interruption to the customers' selected carriers.

VSSI requests that its application be granted on an expedited basis in order to coordinate its efforts in California with similar requests in other jurisdictions. VSSI reports that it began customer notification and transfer in December 2000 in a number of states other than California (consistent with Commission rules in those states), and plans to complete this process as quickly as possible consistent with regulatory requirements.

VSSI was granted a Certificate of Public Convenience and Necessity (CPCN) in California by Decision (D.) 96-02-072, as modified by D.97-11-028, and is authorized to provide local exchange and interexchange services on a facilities-based and resale basis. VSSI provides local exchange service, long distance, and other add-on features² in a bundled service offering called OneSource. At the time of filing, the customer base of VSSI was approximately 200,000 business and residential customers statewide. All local exchange service is provided via resale from the underlying incumbent carrier; no facilities-based local exchange service is provided. All local service offerings are provided out of VSSI's current tariffs on file with the Commission; no services are provided via contract.

VSSI seeks to withdraw the provision of local service but to continue to offer long distance service. VSSI does not wish to modify its CPCN authority, however, as it is considering plans to re-enter the local market in the future utilizing a different platform.