20021101Comments.pdf

ORIGINAL O
Dean J. Miller (ISB No. 1968)
MCDgvTTT & MILLER LLP
420 West Bannock Street
P.O. Box 2565-83701
Boise,Idaho 83702
Tel: [phone]
Fax: [phone]
IN THE MATTER OF THE PETITION OF
POTLATCH TELEPHONE COMPANY,
CENTURYTEL OF THE GEM STATE, AND
THE IDAHO TELEPHONE ASSOCIATION
FOR A DECLARATORY ORDER
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
il[C[IYED
i'il-tD
tfil? H*ir - |
Case No. GNR-T-02-16
JOINT COMMENTS OF WORLDCOM,INC.,
TIME WARNER TELECOM OF IDAHO, LLC,
LEVEL3 COMMUNICATIONS, LLC, AND
AT&T COMMUNICATIONS OF THE
E]n
I: l+?
,i;=iilil
PH
PROHIBITING THE USE OF "VIRTUAL" NXX I vrouNr,lrN srArES, rNC.
CALLING
INTRODUCTION
COME NOW WorldCom,Inc., Time Warner Telecom of Idaho, LLC, Level3
Communications, LLC, and AT&T Communications of the Mountain States, Inc. (the Joint
CLECs) and in response to the Commission's Notice of Petition for Declaratory Order submit the
following Comments.
WorldCom, Inc., and its wholly-owned operating subsidiaries, provides competitive
interLATA and intraLATA telecommunications services in Idaho and serves both residential and
business customers.
Time Wamer Telecom Inc., headquartered in Littleton, Colorado, delivers "last-mile"
broadband data, dedicated Internet access and voice services for businesses. It is one ofthe
country's premier competitive telecom carriers and delivers fast, powerful and flexible facilities-
based metro and regional optical networks to large and medium customers.
Level 3 Communications, LLC is a telecommunications provider that offers, amongst other
products, end-to-end, dial-up solutions that support the top ten dial-up ISPs in the United States.
JOINT COMMENTS OF WORLDCOM, INC., TIME WARNER TELECOM OF IDAHO, LLC, LEVEL 3 COMMUNICATIONS, LLC, ANd
AT&TCOMMUNICATIONS OFTHE MOUNTAIN STATES, INC. .1-
services in Idaho including interexchange services.
SUMMARY OF ARGUMENT
The Petition for Declaratory Order Regarding the Use of Virtual NPA/NXX Calling
Patterns (the Petition) improperly requests an advisory ruling on a hypothetical set of
facts and should be dismissed.
If the Commission reaches the merits of Petitioners'claim, the Commission should
deny Petitioners' request for a declaration that VNXX service is not in the public
interest because:
A. VNXX service provides a legitimate competitive alternative to ILEC Foreign
Exchange, or similar, services.
B. Petitioners' fears of being subject to claims of discrimination are without merit.
C. Petitioners' claim that VNXX impairs number resources is unsubstantiated.
D. Petitioners' characterization of VNXX as "bridging" or "arbitrage" is wrong.
3. If the Commission reaches the merits of Petitioners'claims, the Commission should
deny Petitioners' request for a declaration that VNXX are subject to toll and access
charges, and should instead declare that VNXX traffic is "local" for rating purposes.
Alternatively, the Commission should defer the issue of carrier compensation to a
more appropriate proceeding.
ARGUMENT
1. The Petition for Declaratory Order Regarding the Use of Virtual NPAAIXX Calling
Patterns improperly requests an advisory ruling on a hypothetical set of facts and
should be dismissed.
The Idaho Supreme Court has ruled that Declaratory Judgment Actions are inappropriate
vehicles for rendering advisory opinions on hypothetical facts. In Harris v. Cassia County, 106
Idaho 513 (1984) the Court stated the rule this way:
A justiciable controversy is thus distinguished from a difference or dispute
of a hypothetical or abstract character; from one that is academic or moot. ...
The controversy must be definite and concrete, touching the legal relations
of parties having adverse legal interests.... It must be a real and substantial
controversy admitting of specific relief through a decree of a conclusive
character, as distinguished from an opinion advising what the law would be
upon a hypothetical state of facts. 1 06 Idaho at 5 I 6
JOINT COMMENTS OF WORLDCOM, INC., TIME WARNER TELECOM OF IDAHO, LLC, LEVEL 3 COMMUNICANONS, LLC, ANd
AT&T is a telecommunications carrier authorized to provide various telecommunications
1.
)
AT&T COMMUNICATIONS OF THE MOUNTAIN SIATES, INC.-2-
The purpose of the rule against advisory opinions is that it insures that the dispute presented is
sufficiently definite or concrete as to permit reasoned understanding and analysis of the matter in
controversy. This rationale applies with equal force to declaratory judgments by administrative
agencies.
Here, the Petition alleges only "Petitioners and/or their members are aware of situations in
other states where competitive local exchange carriers ("CLECs") are requesting to enter into
relationships under which a virtual NPAAiXX("\rNXX") would be established....." (emphasis
added)t. The Petition does not allege that any of the Petitioners have received such requests in
Idaho, much less the precise nature of the proposed service to be offered or the requested carrier
compensation. There is not, therefore, before the Commission, a specific factual dispute that
would permit meaningful evaluation of Petitioners' various claims. Instead, there are only vague
assertions of potential claims of discrimination,2 unfair avoidance of access charges,3 and
impairment of numbering resources.a These assertions are so formless, so completely unsupported
by specific facts, as to be incapable of meaningful evaluation.
In the absence of credible and specif,rc factual allegations, one can only conclude that
Petitioners are not, in fact, worried about their litany of potential horrors. Rather, Petitioners' goal
is to prohibit other carriers from using number resources in a manner of which Petitioners
disapproves (even as Petitioners themselves and other incumbent carriers may use number
resources in a similar manner). Petitioners, however, cite no statute or Commission rule that
addresses how cariers are required to use number resources or that otherwise governs the
circumstances Petitioners describe. The Petition thus seeks relief that is not available in the form
t Petition, Para 9, pg 5.
2 Petition, Para 17, pg 8,i,;;i;t;;, i,;;; i;, ffi;a Petition, Para 19, pg 8.
JOINT COMMENTS OF WORLDCOM, INC., TIME WARNER TELECOM OF IDAHO, LLC, LEVEL 3 COMMUNICATIONS, LLC, ANd
AT&T COMMUNICATIONS OF THE MOUNTAIN STATES, INC.-3-
of a declaratory order but that would be more properly requested through a complaint or other
proceeding that enables interested parties to develop an appropriate factual record. Indeed, all but
one of the orders from other state commissions that Petitioners cite (and attach) as support for
their Petition were entered in arbitration proceedings' in which the parties developed a full factual
and legal record prior to a commission decision.6
For these reasons the Petition should be dismissed and the Commission should await the
existence of a specific dispute in which parties' assertions can be evaluated in the light of real
evidence, not hyperbole.
2. If the Commission reaches the merits of Petitioners'claim, the Commission
should deny Petitioners' request for a declaration that VNXX service is not in
the public interest.
The Petition defines a "virtual NPAAIXX" ("\rNXX") as calling that occurs when
telephone numbers containing an exchange, or'NXX" codes associated with a particular
exchange are assigned to customers with no physical presence in that exchange. The result of
such assignments is that calls dialed between locations that are not within the same local calling
area are rated as local rather than toll. Consequently, the end users do not pay toll charges (either
the originating party for normal toll-dialed calls or the receiving party for 800-type calls).7
Petitioners charucterize this service as a "scam"8, "bridging"g and "arbitrage."l0 Petitioners
request that the Commission prohibit VNXXs (or authorize ILECs to impose access charges on
traffic to and from VNXX numbers). However, the Petition's implicit allegation that such
services represent an attempt to bypass switched access charges is vastly overstated, overly
s Arbitrations by definition seek to resolve disputes between two particular carriers based on a factual record
compiled by those parties and should not be used to establish industry wide policy decisions.6 The only exception is the order from the Maine Public Utilities Commission (attached to the Petition as
Exhibit 4), but that order was the result of a lengthy commission investigation, not a declaratory order
proceeding (http://www.state.me.us/mpuc ).i Perition,"P;f o, pg 6.
8 Petition, Para 18, pg 8.e Petition, Para 22, pg 9.ro Petition, ParaZ2, pg 9.
JOINT COMMENTS OF WORLDCOM, INC., TIME WARNER TELECOM OF IDAHO, LLC, LEVEL 3 COMMUNICATIONS, LLC, ANd
AT&T COMMUNICATIONS OF THE MOUNTAIN STATES, INC. -4-
simplistic and inconsistent with the types of service that use VNXXs, including comparable
services provided by Petitioners and other ILECs. For the reasons discussed below this requested
relief should be denied.
A. VNXX service provides a legitimate competitive alternative to ILEC Foreign
Exchange, or similar, services.
Foreign exchange ("FX") service involves providing service to a customer physically
located outside the rate center for which his or her NPA/IrtrXX is located. Thus, FX service
enables a customer to establish a local presence where it did not have one before - the very
functionality that the Petitioners seek to have banished here as contrary to the public interest when
offered by competitive carriers. Both CLECs and ILECs have made FX service offerings
available and actively compete for customers for FX service. Of course ILECs, as the monopoly
local providers, were "first" to offer FX service. Just as with the CLECs' FX and FX-like
offerings, when the ILEC provides retail FX service, NPAAIXXs are assigned to end users located
outside the local calling area of the rate center with which the NPA/IIIXX has been associated, and
the jurisdiction (i.e.,local vs. toll) of traffrc delivered from the foreign exchange to the end user is
determined as if the end user were physically located in the foreign exchange.
LECs offer a variety of services that use VNXXs as Petitioners define that term. Qwest
Corporation ("Qwest"), for example, offers Market Expansion Line ("MEL") service, which
permits a customer to receive calls at a telephone number in one local calling area that are
automatically forwarded to a different number outside that local calling area. Attached as
Exhibit A is Qwest's service description of Market Expansion Line. MEL is described as a
service that provides a "local identity in another area by providing a local phone number...in a
new area without requiring a physical location there." Such calls would be toll calls if dialed
directly to the forwarded number, but the subscriber placing the call does not incur a toll charge.
If a carrier other than Qwest serves that calling subscriber, moreover, that carrier does not receive
JOINT COMMENTS OF WORLDCOM, INC., TIME WARNER TELECOM OF IDAHO, LLC, LEVEL 3 COMMUNICATIONS, LLC, ANd
AT&T COMMUNICATIONS OF THE MOUNTAIN STATES, INC. -5.
originating access charges from Qwest for delivering the call but actually is responsible for paying
Qwest any reciprocal compensation charges applicable to local calls. Other LECs-undoubtedly
including Petitioners----offer a similar service, usually called Foreign Exchange service, which
permits a customer to make and receive local calls tolfrom subscribers in an exchange in which the
customer is not physically located. Qwest also offers a "Wholesale Dial" service targeted
specifically at ISPs that appears to allow assignment of numbers in multiple rate centers to its ISP
customers. Attached as Exhibit B is Qwest's service description of Wholesale Dial which
includes "local access telephone numbers." Both of these services are remarkably like a VNXX
service. Wireless service providers also make significant use of VNXXs. Wireless customers
often make or receive wireless calls outside the local calling area to which the telephone number is
assigned for rating and routing purposes. Calls originated by wireless customers are local calls
when placed to anyone within the metropolitan statistical area ("MSA"), but calls from "landline"
subscribers to wireless customers are local to the calling party only within the ILEC local calling
area. Wireless customers thus may not physically be located within the local calling area to which
their telephone number is assigned, but calls they receive from landline subscribers who are
located in that areaare local calls. For that reason, wireless customers may choose telephone
numbers for their cellular, paging, or other wireless services from a local calling area that is
different than the physical location of their residences or businesses to enable their family, friends,
or customers to call them without incurring toll charges.
Other state commissions have concluded that CLECs are entitled to offer such services.
The New York Public Service Commission rejected the argument that ILECs' provisioning of
Foreign Exchange service is distinguishable from CLECs' provisioning of a comparable service
and refused to impose any requirements beyond those included in the LERG:
JOINT COMMENTS OF WORLDCOM, INC., TIME WARNER TELECOM OF IDAHO, LLC, LEVEL 3 COMMUNICATIONS, LLC ANd
AT&TCOMMUNICATIONS OFTHE MOUNTAIN SIATES, INC. -6.
The Small Companies defined foreign exchange based on
technology used to complete the call. This definition requires that the
terminating carrier have a physical presence in the exchange, and provide
"dial tone" from a switch physically located in the exchange. Small
Companies detailed technical and rate structure differences between what
the incumbent telephone industry has called foreign exchange service and
the service now offered by CLECs. However, the [Commission's prior]
Order does not so narrowly define foreign exchange service based on call
completion technology. Instead, it defines foreign exchange service
operationally, i.e. making local service possible in an exchange where the
customer has no physical presence.
We have previously recognized that the architecture of new entrant
networks will differ from that of incumbents and stated that CLECs need
not replicate the incumbent's service offerings, rate centers, or customer
mix. The Small Companies' foreign exchange definition does not take into
account that CLEC networks do not and are not expected to mirror
networks of incumbent carriers. The only standard that must be met is that
established in the LERG which requires calls to be rated based on the NPA-
NXX of the called number, not the customer's physical location. Petitioners
have not presented any error of law or fact to challenge the underlying
principle adopted by the Commission; i.e., non-discriminatory treatment of
calls from Independent customers to incumbent foreign exchange numbers
vis-a-vis calls to CLEC numbers with virtual NXXs.
Proceeding on Motion of the Commission Pursuant to Section 97(2) of the Public Service Law to lnstitute an Omnibus
Proceeding to Investigate lhe lnterconnection Arrangements Between Telephone Companies, NYPSC Case 00-C-
0789, Order Denying Petitions for Rehearing, Clarifying NXX Order, and Authorizing Permanent Rates at 4-5 (Sept.
7 , 2001) (emphasis added and footnotes omitted)(http://r.r,wrv.dps. state. rr \'. Lrs,rll leroorri doc I 04 3 0. pcit).
Other commissions have reached similar conclusions.ll To our knowledge, not a single
state commission has ruled that the service could be banned.l2
It can thus be seen that Petitioners' effort to characterize VNXX as a "scam" "arbitrage" or
"bridge" is little more than an attempt to preserve monopoly control of the FX and related
markets.
tt See In the Matter of the Application of Ameritech Michigan to revise its reciprocal compensation rates and rate
structure and to exempt foreign exchange service from payment of reciprocal compensation, Michigan PSC Case No. U-
12696, Opinion and Order at l0-l I (January 23,2001) (!ft_tn;1,/it1tt..Cit.:!it!st.!1.i.,.y.: l,S.t.:
lrin/nrpsc/vicrvorder.cqi?fl lcrranrc=inrpsclorclers/r:onrrn/2001/u- I 2696.htrn); Re; Petition of Focal Communications
Corporation of Pennsylvaniafor Arbitration Pursuant to Section 252(b) of the Telecommunications Act of 1996 to
Establish an Interconnection Agreement lltith Bell Atlantic - Pennsylvania, lnc.,Pennsylvania PUC Docket No. A-
310630F0002 (January 24,2001) (http:ir'rruc.paonlinc.cont/Pcl)ocsil6-i--i77.tloc); In the Matter of Petition of MCImetro
Access Transmission Services, LLC for Arbitration of Certain Terms and Conditions of Proposed Agreement with
BellSouth Telecommunications, Inc. Concerning Interconnection and Resale Under the Telecommunications Act of I 996,
North Carolina Utils. Comm'n Docket No. P-474 Sub 10, Recommended Arbitration Order at 66-74 (April 3,
200 I )(http:i/rvrr rr . ncuc. conr nrcrcc. state. nc. usi se I ord c11btr0.l02 ()2. pd 1);
r2 A possible exception is Maine which has adopted a unique regime for ISP-bound traffic.
JOINT COMMENTS OF WORLDCOM, INC., TIME WARNERTELECOM OF IDAHO, LLC, LEVEL 3 COMMUNICATIONS, LLC, ANd
AT&T COMMUNICATIONS OF THE MOUNTAIN STATES, INC.-7-
B. Petitioners' fears of being subject to claims of discrimination are without merit.
At paragraphs l4-17 Petitioners argue that VNXX service is more in the nature of
interexchange service and that Petitioners may thus face claims of "discrimination in rates as
between the CLEC using a VNXX and an IXC which does not."l3
As noted above, this claim is hypothetical and premature. Petitioners do not allege that any
person or carrier has in fact made such a claim or that such a claim is likely. Moreover, it is based
on an incorrect analysis of the nature of VNXX service.
The numbering administrator assigns telephone numbers, generally in blocks of 10,000
numbers (NXX blocks), for use by local exchange and wireless carriers to assign to their end user
customers when providing telephone service. Each NXX block is "homed," i.e., assigned for
rating purposes to a particular geographic area and for routing purposes to the switch location
where carriers are required to route traffic directed to these numbers pursuant to the local
exchange routing guide ("LERG"). When the NXX block is assigned to a competing local
exchange carrier ("CLEC"), all carriers are required to route traffic destined to those telephone
numbers to the CLEC. In general CLECs serve similar geographic areas as ILECs albeit with
fewer switches. Consequently for the majority of exchanges the CLEC routing point will
necessarily be outside the exchange boundary. The actual routing of calls has nothing to do with
the rating of a call. A call is rated as local when the originating NPA-NXX ("calling party") is
assigned to the same local calling area as the terminating NPA-NXX ("called party")la.
13 Petition, Para 17, pg 8.
ra Petitioners' reliance, in paragraph 15, on the FCC decision In the Matler of Implementation of the Local Competition Provisions
in the Telecommunications Act of 1996, Intercarrier Compensationfor ISP-bound Trffic, CC 96-88, 99-68, F.C.C 0l-l3l to
support Petitioners' "end-to-end" analysis is misplaced. More recently, the FCC specifically addressed the issue of VNXX traffic,
concluding that under the "current system, [...] cariers rate calls by comparing the originating and terminating NPA-NXX codes."
The FCC went on to explain in that same paragraph that "Verizon concedes that NPA-NXX rating is the established compensation
mechanism not only for itself, but industry-wide. The Parties all agree that rating calls by their geographical starting and ending
points raises billing and technical issues that have no concrete, workable solutions at this time." In the Matter of Petition of
ll/orldCom, lnc. Pursuant to Section 252(e)(5) of the Communications Act for Preemption of the Jurisdiction of the Virginia State
Corporation Commission Regarding Interconnection Disputes with Verizon Virginia Inc., andfor Expedited Arbitration, CC
DocketNo.00-2l8,FCCOrderDA02-1731,released2002,atPara30. Acopyofrelevantportionsofthisdecisionisattachedas
Exhibit C.
JOINT COMMENTS OF WORLDCOM, INC., TIME WARNER TELECOM OF IDAHO, LLC, LEVEL 3 COMMUNICATIONS, LLC, ANd
AT&T COMMUNICATIONS OF THE MOUNTAIN STATES, INC. -8.
The Petitioners fail even to attempt to explain how any of its members would be violating
anti-discrimination or undue/unreasonable preference statutes if its members route and rate traffic
pursuant to the LERG. Even assuming for the sake of argument that another carrier is somehow
acting improperly by assigning telephone numbers homed to one rate center to customers located
in another rate center, nothing in those statutes or Commission rules requires-or even
authorizes-IlECs to police other carriers' use of number resources. The Petition thus has failed
to demonstrate any uncertainty with respect to the interpretation or application of Idaho Code 6l-
315, much less the existence of an actual controversy arising out of any such uncertainty.
Petitioners do not legitimately fear that its members are in any danger of violating the
statutory provisions cited in the Petition. Rather, Petitioners' goal is to prohibit other carriers from
configuring services in a manner of which Petitioners disapprove.
C. Petitioners' claim that VNXX impairs number resources is unsubstantiated.
At paragraphs 20 and2l Petitioners vaguely assert that VNXX raises concerns about
conservation of numbering resources and preserving the 208 area code for the entire state of Idaho.
The Petitioners do not even attempt to quantify the magnitude of this concem or to provide any
facts showing a linkage between \INXX and the stated concerns.
Other Commissions have rejected similar arguments. The California Commission rejected
this claim, saying:
We disagree with Pacific's claim that the Pac-West service arrangement
should be prohibited because it contributes to the inefficient use of NXX
number resources. While we are acutely aware of the statewide numbering
crisis and are actively taking steps to address it, we do not believe that
imposing restrictions or prohibitions on ICLEC] service options is a proper
solution to promote more efficient number utilization. Under present
industry rules, a carrier seeking to provide service in a given rate center
must obtain NXX codes in blocks of numbers no smaller than 10,000. This
requirement applies whether the customer being served is an ISP or any
other customer. Moreover, there is no reason to conclude necessarily that a
carrier will use any NXX code only to provide service to ISPs which are
located outside of the assigned NXX rate center. For example, both Pac-
JOINT COMMENTS OF WORLDCOM, INC., TIME WARNER TELECOM OF IDAHO, LLC, LEVEL 3 COMMUNICANONS, LLC, ANd
AT&TCOMMUNICATIONS OFTHE MOUNTAIN STATES, INC. .9-
West and WorldCom report they are actively pursuing numerous
opportunities to provide profitable telecommunications services throughout
their service areas. Their current subscribers include paging companies that
have a significant demand for local DID numbers, which they, in turn,
assign to local end users who typically are physically located in the
assigned rate centers. Customers also include banks, retail stores, and other
businesses, both located inside and outside the assigned rate centers. Rather
than imposing policies restricting carriers' service options, we believe the
proper approach is to provide incentives for carriers to expand their service
offerings so that NXX codes will become more fully utilized. Accordingly,
we find no basis to prohibit carriers from assigning NXX prefixes rated for
one exchange to customers located in another exchange as a means of
offering a local presence where such an alrangement is technologically and
economically efftcient, and where intercarrier compensation is fairly
provided. We shall not prohibit [CLECs] from designating different rating
and routing points just because such an approach may differ from traditional
methods used by ILECs. Such a prohibition could undermine the incentives
for carriers to develop innovative service alternatives in the most
economically and technologically efficient manner.ls
Further, in Idaho, the Commission should consider the facts before accepting the
Petitioners' unsubstantiated claims about how the "sky is falling" with respect to number
resources. For example, like many other states, the Idaho Commission has addressed numbering
issues by instituting a responsible program of number pooling and reclamation, postponing the
problem of number exhaust for at least eight years.t6 Th".e is no evidence to suggest that the
offering of VNXX services would have any impact on number resource availability in Idaho as
compared to any other services offered by competitive carriers. Despite the Petitioners' claims,
\fNXX is not a threat to number conservation.
D. Petitioners' characterization of VNXX as "bridging" or (arbitrage"
is wrong.
At Paragraph22 the Petitioners rely on the Commission's prior decision in Local Exch.
Cos. v. Upper Valley Communications Inc., IPUC Case No. GNR-T-94-1. This reliance is
" Ord", Instituting Rulemaking on the Commission's Own Motion Into Competitionfor Local Exchange Service, et
a/., Rulemaking No. 95-04-043,Investigation No. 95-04-044, Decision No. 99-09-029 at8 & l4 (Sept. 2, 1999) (link
not available).r6 See http://www.puc.state.id.us/intemet/press/050302 areacode.htm
JOINT COMMENTS OF WORLDCOM, INC., TIME WARNER TELECOM OF IDAHO, LLC, LEVEL 3 COMMUNICANONS, LLC, ANd
AT&T COMMUNICANONS OF THE MOUNTAIN STATES, INC.-10-
misplaced for at least two reasons. First, as was the case in Upper Valley, provisioning of MTS
service through Centron links is completely different from provisioning \/NXX service. The two
are not comparable in any respect, as a factual matter.
Second, and more significantly, Upper Valley was decided at atime when the mission of
the Commission was to shield ILECs from anything that could be construed as local competition.
As the Commission said in its Final Order:
...the Telecommunications Act does not authorize Upper Valley to provide
telecommunication service in competition with U S WEST's Title 61 EAS
services. Idoho Code $ 62-615(l) provides that U S WEST retains o'an
exclusive service area franchise for telecommunication services which
remain subject to Title 61." No telephone corporation shall provide
telecommunication services to customers or end-users located within
another telephone corporation's certificated service area, except through
interconnection arrangements consented to by the certificate holder. Id. In
this particular case, it is evident that U S WEST has not consented to
interconnection arrangements that permit Upper Valley to use U S WEST's
EAS trunks. r7
This mission changed, of course, with the passage of the federal Telecommunications Act
of 1996 which has its core provision:
In General.-No State or local statute or regulation, or other State or local
legal requirement, may prohibit or have the effect of prohibiting the ability
of any entity to provide any interstate or intrastate telecommunications
service.ls
In the post-l996 environment, if error is to be made, it should be on the side of promoting
competition, not propping up ILEC monopolies.
Similarly, in paragraph 18, the Petitioners seek a determination of whether VNXX violates
Idaho Code section 62-622(4Xc) and does not present even a colorable claim as section 622@)(c)
'' Order No. 25885, February 1995
is also worth noting that the Upper Valley case was decided after extensive discovery, pre-hearing investigation and a
two-day evidentiary hearing and, in contrast to this case, an evidentiary record from which reasoned decisions could
be made.
't Telecommunications Act of 1996, Section 253(a).
JOINT COMMENTS OF WORLDCOM, INC., TIME WARNER TELECOM OF IDAHO, LLC, LEVEL 3 COMMUNICATIONS, LLC, ANd
AT&T COMMUNICATIONS OF THE MOUNTAIN STATES, INC.-'t 1-
is applicable, by its own terms, only to re-sold services. The section provides: "Telephone
Corporations shall not resell ...a category of service to circumvent switched or special access
charges." (emphasis added).
Finally, the Petitioners' position again ignores that the functionality provided by VNXX-
based services is the sirme as would be offered through a traditional FX service. In both cases, a
customer obtains a telephone number in a location where the customer has no physical presence.
Thus, the Petitioners' condemnation of VNXX services as unlawful would apply with equal force
to the FX services that the ILECs themselves have offered for years. In the end, just as traditional
FX services are permissible and in fact serve the public interest, so too should VNXX-based
services be seen as a legitimate competitive response to customer demand for such services.
3. If the Commission reaches the merits of Petitioners'claims, the
Commission should deny Petitioners' request for a declaration that
VNXX are subject to toll and access charges, and should instead
declare that VNXX traffic is "local" for rating purposes. Alternatively,
the Commission should defer the issue of carrier compensation to a
more appropriate proceeding.
At Paragraph 23 Petitioners cite a series of decisions from other commissions, claiming
those decisions support Petitioners' claim that access charges should apply. A review of those
cases shows they are either distinguishable or do not stand for the cited proposition.
The New York case of US DataNet did not involve \/NXX at all, but the provision of long
distance and other enhanced services through an alleged Internet protocol (IP) telephony platform.
Moreover, even if one were to move beyond the fact that the New York commission was
addressing an entirely different issue from \INXX in that case, the New York commission made
clear that it was undertaking a fact-specific analysis "focused on an individual service offering"
rather than making any larger-scale policy pronouncements along the lines of that sought here by
JOINT COMMENTS OF WORLDCOM, INC., TIME WARNERTELECOM OF IDAHO, LLC, LEVEL 3 COMMUNICATIONS, LLC, and
AT&T COMMUNICATIONS OF THE MOUNTAIN STATES, INC.-12-
the Petitioners.le And, as noted above, the New
addressed the question of VNXX traffic, and has
payment of access charges.2o
York Commission has, in other cases, squarely
held that \fNXX service may be oflered without
The other cited cases, with the exception of the Maine Commission case2l were all
arbitration disputes regarding specific facts and specific service configurations. In consequence,
they do not provide meaningful guidance regarding a generalized question of carrter
compensation. The Idaho Commission, like the commissions in Georgia, Tennessee, Missouri and
South Carolina should wisely wait until the question of carrier compensation is squarely
presented.
Moreover, the Petition does not direct the Commission's attention to decisions that have
reached a different result. For example, the Connecticut Department of Public Utility Control
approached the issue somewhat differently but reached a similar result. The Department
concluded that Foreign Exchange ("FX") service was interexchange service but that traffic routed
to subscribers of this service is not entitled either to mutual compensation or to switched access
charges:
The CLECs points in this matter are well taken. While the
Department believes that it is inappropriate that calls of this nature be
subject to mutual compensation, the imposition of access charges on these
calls is similarly improper. In the opinion of the Department, imposition of
access charges on these calls would clearly not be in the public interest due
to the level of customer confusion that would most likely be generated as
well as the costs incurred by the CLECs in resolving those complaints. In
addition, if the ILECs are permitted to imposing originating access charges
for these calls, faimess would dictate that the CLECs also be permitted to
t9 Complaint of Frontier Telephone of Rochester Against IJS DataNet Corporation Concerning Alleged Refusal to Pay
Intrastate Carrier Access Charges, Case 0l-C-l I19, Order Requiring Payment of Intrastate CarrierAccess Charges
(N.Y.P.S.C. May 31,2002), at 8 ( http://rvu'n'.dps.statc.nr'.us,'fllcroorrrr'tkrcllTfg.pdt').)oProceeding oi Uoiion of th" Co**irrion Prrrurnt to Sann OZ14 oTthe Public Service Law to Institute an
Omnibus Proceeding to Investigate the Interconnection Arrangements Between Telephone Companies,NYPSC Case
00-C-0789, Order Denying Petitions for Rehearing, Clarifuing NXX Order, and Authorizing Permanent Rates at 4-7
(Sept.7,2001) (http://www.dps.state.ny p_ll!.)' Ii rrirr"ttigffi codes, Docket No. 98-758
(http:r'lwrvw. state. rn e. us/mpuc/orders/9 8/98 7-5 8orr. htm).
JOINT COMMENTS OF WORLDCOM, INC,, TIME WARNER TELECOM OF IDAHO, LLC, LEVEL 3 COMMUNICANONS, LLC, ANd
AT&T COMMUNICATIONS OF THE MOUNTAIN STATES, INC.-13-
apply terminating access charges as well. The public interest clearly would
not be served. Accordingly, the Department will deny the Telco's request
to impose FGA access charges on the carriers for these calls. DPUC
Investigation of the Payment of Mutual Compensation for Local Calls
Carried Oyer Foreign Exchange Service Facilities, Docket No. 01-01-29,
Decision at 45 (Jan. 30,2002)
(httrr:/hvrvrv.dpuc.state.ct.us/FINALDEC.NSF/Od I c l0l()26cb64d98525(r44ti00691 cler'3 12e
aafcc8e3 008785256b5200.5 9a88.5i li F I t. Fll0 I 0 I 29-0 I 3 002.doc).
CONCLUSION
Based on the reasons and authorities cited herein, it is respectfully requested that:
l. The Commission enter its order dismissing the Petition.
2. Alternatively, the Commission enter its order declaring and determining that \/NXX
service is neither illegal nor contrary to public policy in Idaho.
3. The Commission enter its order determining that the provision of VNXX service is not
subject to payment of access charges, or alternatively, reserve the question of carrier compensation
to a future appropriate proceeding.
Respectfully submitted this I't day of November,2}I2.
McDnvmr & Mu.lBn lr,p
Attorneys for WorldCom, Inc, Time Warner Telecom of
Idaho, LLC, Level 3 Communications, LLC, and AT&T
Communicotions of the Mountain States, Inc.
JOINT COMMENTS OF WORLDCOM, INC., TIME WARNER TELECOM OF IDAHO, LLC, LEVEL 3 COMMUNICATIONS, LLC, ANd
AT&T COMMUNICATIONS OF THE MOUNTAIN STATES, INC.-14-
Market Expansion Line : Small U"U.t : Voice Page 1 of2
Qwest.-<
Sptll ol S.rl
G9s
Case No. GNR.T.02.16
Joint Comments - Exhibit A
Page t of 2
m;i wrEElrsll ht;JnilEt I fows$roEx-l lgEqnctl lc- #
$mall Business
Products l:t S*:ruic*s
To order call
(8OO) 603-6000
(M-F: 8 A.M.-s P.M.)
{
Market Expansion Line
Market Expansion Lines provide a local identity in another
area by providing a local phone number and White and
Yellow Pages listing in a new area without requiring a
physical location there. Calls to your Market Expansion
Line number are automatically routed to another location
of your choice.
Benefits
Reach potential markets anywhere - without adding
an extra phone line
Move to a new location with a new phone number
and ensure your customers make the move with you
Get your new businesses up and running even if
your new office space isn't ready yet
Explore new markets before you commit to
relocating, expanding, or starting a business
Check the efficiency of your advertising without
spending a lot of time and money. You'll know what
works best by the amount of calls you receive from
each phone number.
Features
Provides a local phone number in a new area
without a physical presence
Includes a White and Yellow Pages listing in a new
area
Includes a record of calls received from customers
No cost for customers to call you
a
a
I
Policy
ffi l@ H-..o'rmrgrsrll*lEr-c-:E{rrynrr/rtri
Copyright O 2001 Qwest Communications International Inc. All Rights Reserved I Legal Notices I Privacy
http://www.qwest.com/pcat/small_business/product/1,1354,117 _3_1,00.html
o
!i ii': :
Page 2 c;f b
' :r: ,:ta' iiirf:::i'i : i :'
:i:1ii,fr: :iltf'./l,-.,'; :; :tr.r,.
1
Case No. GNR.T.02.I6
Jolnt Commenb - Exhiblt A
Page ? of 2
:':-: -
i.,:i
.r:
hup://www.qwest.com/pcat/small-business/product/1,1354,1l7-3-l,00.html
Qwest Wrolesale Dial :USINCSSt Page I of2
\v" '
/fwesL+(
Splrlt ol Se1/.
tosLl l.wlEELEg.3 I iltnEEllE? I I offirDExl feEAnctt l
$mall tsuslness
Product; tu 1ti",ice:t
For ordering information
call (8oO) 743-3793
or use our online form
More Information on...
Qwest Wholesale Dial
) FAQ
) Technical Overview
Qwest Wholesale Dial
Infrastructure you can count on
Qwesttn Wholesale Dial provides a secure, reliable, cost-
effective dial-up network infrastructure solution for
Internet Service Providers (ISPs). The service provides the
ISPs' end users with seamless dial-up functionality that
remains transparent. When end users dial an Internet
access number provided by Qwest from their computer,
special server protocols authenticate the call over the
Internet. With Qwest Wholesale Dial, the dial-up Internet
access steps are all completed behind the scenes.
Benefits
Outsource your Internet dial-up access network to Qwest
today, and your company can benefit from:
End-user traffic that rides the Qwest state-of-the-
art networks with best-in-class reliability and
security
Access to a new, robust dial platform that provides
more available capacity than competition, and with
very high call success rates
Added peace of mind through aggressive SLA's, full-
time network maintenance and monitoring, as well
as Network Management Center customer support
Easily scaleable network service to meet increases
in user demand
Cost efficiency associated with network build-out,
operations, maintenance, and monitoring
Concentrating your efforts on core competencies,
and expanding your end-user base
Retaining control of end-user authentication, sales,
marketing, customer service and billing
Cost-effective, competitive pricing, as well as your
choice of pricing options that best fits your strategic
plans
Additionally, Qwest network technicians closely monitor
your service and ensure a premium level of performance,
security and reliability, as your end-user traffic is
transmitted over the Qwest state-of-the-art networks.
hup://www.qwest.com/pcat/small business/product/l ,l 3 54 ,731 -3 -7 ,O0.html ,",r, 3litJl";,3ltl;lr1l3
Page 1 of2
Qwest Wholesale Dial Page2 oi2
Case No. GNR.T.02.16
Joint Comments - Exhibit B
Page 2 of 2
Meeting Your Needs Now and in the Future
Qwest Wholesale Dial is fully scalable to meet the needs of
your expanding business. We can help you quickly and
easily implement modifications to your Internet dial-up
access network, as they become necessary.
Features
As an ISP, you are well positioned to market and deliver
your services strategically. By providing Internet
connectivity, you are building a loyal customer community
base, generating recurring revenue, and increasing the
value of your company as your user base grows. To
protect and expand that base quickly and seamlessly, you
need an ISP dial-up network infrastructure provider with
the necessary resources and expertise. We can make it
happen for you. Qwest Wholesale Dial provides you with:
Dia I -u p network i nfrastructu re ( Network- based
modems, V.90 and ISDN protocol support)
Local access telephone numbers
Dial access to the public Internet
IP transit for Internet access with best-in-class
reliability and security
Proxy remote authentication dial-in service
(RADIUS) server for Authentication, Authorization,
and Accounting (AAA standard)
24x7 network management and customer support
from our Network Management Center
Outstanding Service Level Agreements (SLAs) for
connection success rate, packet loss, and latency
Competitive pricing, with multiple pricing options
a
a
a
fl lE[ r.Gmm-r'rwrx*llr..$ri-giff,rr*rm-#r
Copyright @ 2001 Qwest Communications International Inc. All Rights Reserved I Legal Notices I Privacy Pol
.)!,j..S: r :) .....i :. . .:.. ..t.,, ;IA r(rita: .;i';i( r1'. . . .
.1 r:,,:rlri i.ii ,1rr':r , :-,' :,,1111i'.r OiiiOll. ri)'i::l.rirrl,,: :.-,i, i..:r
)
icy
http://www.qwest.com/pcat/small_business/product/1 ,1 3 54 ,731 _3 _7 ,}0.html
Qa..ut Communicatiom Co--irriorl DA 02-1731
In the Matter of
In the Matter of Petition of WorldCom, Inc.
Pursuant to Section 252(e)(5) of the
Communications Act for Preemption ofthe
Jurisdiction of the Virginia State Corporation
Commission Regarding Interconnection
Disputes with Verizon Virginia Inc., and for
Expedited Arbitration
In the Matter of Petition of Cox Virginia
Telcom,lnc. Pursuantto Section 252(e)(5) of
the Communications Act for Preemption ofthe
Jurisdiction of the Virginia State Corporation
Commission Regarding Interconnection
Disputes with Verizon-Virginia, Inc. and for
Arbitration
In the Matter of Petition of AT&T
Communications of Virginia Inc., Pursuant to
Section 252(e)(5) of the Communications Act
for Preemption of the Jurisdiction ofthe
Virginia Corporation Commission Regarding
Interconnection Disputes With Verizon
Virginia Inc.
Before the
Federal Communications Commission
Washington, D.C. 20554
CC DocketNo. 00-218
CC DocketNo.00-249
CC DocketNo.00-251
Released: July 17,2002
MEMORANDT]M OPIMON AND ORDER
Adopted: Jaly 17,2002
By the Chief, Wiretine Competition Bureau:
TABLE OF CONTENTS
I. INTRODUCTION....
PARAGRAPH
Case No. GNR.T.02.16
Joint Comments - Exhibit C
Page 1 of 8
II. PROCEDT]RAL HISTORY
?"0"..r Com mun i cations c o or*irriol DA 02-1731
entitled to compensation, and rernoving Cox's language establishing the numbers for the actual
baseline, and subsequent growth cap, amounts.ea
285. We disagree with Verizon's criticism of Cox's language implementing the growth
cap for 2002.%s Verizon asserts that'the number of ISP-bound minutes forwhich [Cox] is
entitled to compensation in 2001 may be /ess than the 2001 cap itself."e6 While that may be
true, the calculation of minutes to which Cox was entitled to compensation in 2002 is the product
of the cap in 2001 and the l0 percent growth factor. The /,SP Intercarrier Compensation Order
established a baseline - the first quarter of 2001 - as a starting point for all subsequent
calculations. The growth cap for 2002 does not reflect a calculation independent of the first
quarter of 2001, based on actual traffrc for the whole of 2001.
2. Issue I-6 (ToIl Rating and Virtual Foreign Exchanges)
a. Introduction
286. The parties disagree over how to deterrrine whether a call passing between their
networks is subject to reciprocal compensation (traditionally referred to as "local") or access
charges (traditionally referred to as "toll"). The petitioners advocate a continuation of the
current regime, which relies on a comparison of the originating and tenninating central office
codes, or NPA-N)O(s, associated with a call. Verizon objects to the petitioners' call rating
regime because it allows them to provide a virtual foreign exchange ('Virtual FX') service that
obligates Verizon to pay reciprocal compensation, while denying it access revenues, for calls
that go between Verizon's legary rate centers. This virtual FX service also denies Verizon the
toll revenues that it would have received if it had transported these calls entirely on its own
e# Thus, we adopt AT&T's proposed section 5.7.5.2.3, but replace the second sentence with the following: "The
parties shall fust determine the total number of minutes of use of ISP-bound Traffrc, for which they were entitled to
compensation, terrrinated by one Party for the other Party for the three-month period commencing January 1, 2001
and ending March 31, 2001." We adopt WorldCom's proposed section 8.5 of Attachment I, but replace the first
sentence with the following: "For ISP-bound Traffic exchanged during the year 2001, and to the extent this
Agreement remains in effect during that year, the information access rates set out in Section 8.3.2 shall be billed by
MCIn to Verizon on ISP-bound Traffic for MOU only up to a ceiling equal to, on an annualized basis, the number
of ISP-bound Traffrc minutes, for which MCIm was entitled to compensation, thar originated on Verizon's network
and was delivered by MCIm during the first quarter of 2001, plus a ten percent growth factor." Finally, we adopt
Cox's proposed section 5.7 .7,4(a), but replace the last two sentences with the following: "The cap for total Intemet
Traffic minutes for 2001, expressed on an annualized basis, is calculated by multiplying the first quarter total by
four and increasing the result by ten percent"
%5 Accordingly, we also adopt Cox's proposed section 5,7.7.4(b), but revise it by replacing the last sentence with
the following: "The cap for total Intemet Traffic minutes for 20OZ is calculated by increasing the cap for total
lntemst Traflic minutes for 2001 by teir percent." Finally, we adopt Cox's proposed sections 5.7.7. @)-(e) without
revision.
% See Verizon IC Brief at l0 n.4.
Case No. GNR-T-02-16
Joint Comments - Exhibit C
Page 2 of 8
140
G"."t Communications Cr--isrioO DA 02-1731
network as intraLATA toll kaffrc. Verizon argues simply that *toll" rating should be
accomplished by comparing the geographical locations of the starting and ending points of a call.
287. Of particular importance to this issue is a comparison of the two sides' FX
services. When Verizon provides FX service ("traditional FX), it connects the subscribing
customer, via a dedicated private line for which the subscriber pays, to the end office swirch in
the distant rate center from which the subscriber wishes callers to be able to reach him without
incurring toll charges. Verizon then assigns the FX subscriber a ntrmber associated with the
distant switch. By contrast, when the petitioners provide their virtual FX service, they rely on
the larger serving areas of their switches to allow callers from a distant Verizon legacy rate
center to reach the virtual FX subscriber without incurring toll charges. Thus, the petitioners
simply assign the subscriber an NPA-NXX associated with the rate center the subscriber
desiguates and rely on their switches' broad coverage, rather than a dedicated private line, to
transport the calls between legacy rate centers.
288. We adopt the petitioners' proposed language for this issue. Verizon has failed to
propose a workable method for rating calls based on their geographical end points, and it has
alleged no abuse in Virginia of the process for assigning NPA-NXX codes.
b. Positions of the Parties
289. AT&T notes that Verizon itself compares originating and terminating NPA-NXXs
when it decides whether to charge reciprocal compensation for completing calls from another
carrier's customer to Verizon's FX subscribers.eaT If the two relevant NPA-N)O(s are within the
same rate center, Verizon charges reciprocal compensation for its completion ofthe call,
regardless of where a caller is actually located.%8 AT&T argues that section 25lOX5) similarly
obligates Verizon to pay reciprocal compensation for calls to AT&T's virtual FX customers
when the Verizon customer's NPA-NXX falls within the same rate center as the virtual FX
subscriber's number does.*e
290. AT&T disagrees with Verizon's argument that section 251(g) exempts virtual FX
traffic from section 251(b)(5)'s reciprocal compensation obligation.eso According to AT&T,
section 251(9) merely grandfathered pre-existing rules governing sxsfuango access and
infomration access, and there \Mere no such rules relating to the category of traffic at issue
here.'sr AT&T further asserts that virtual FX traffrc is not exchange access traffic, which
94'l
9ra
949
950
951
AT&T Brief at 88-89.
Id. at89.
Id. at92, citing 47 U.S.C. $ 25lOXs).
Id. at90-93.
Id. at92-93.
t4l
Case No. GNR-T.02.16
Joint Comments - Exhibit C
Page 3 of 8
QO"."r Communications C ommissirnO DA 02-1731
involves, by definition, the origination and termination of telephone toll calls.e52 AT&T notes
that telephone toll service is defined as "telephone service between stations in different exchange
areas for which there is made a separate charge not included in contracts with subscribers for
exchange service.'453 Because AT&T does not impose a separate charge for its virtual FX
service, AT&T argues that it is not a toll service. Accordingly, AT&T argues, it falls within the
section 25lOX5) reciprocal compensation regime rather than being subject to Verizon's access
tariffs.esa
291. AT&T also argues that its proposal does not impose any additional costs upon
Verizon, whether or not virhral FX is involved, because AT&T designates a single POI for an
NPA-NXX and Verizon's responsibility for transporting a call ends there, regardless of the
physical location of the AT&T customer.ess AT&T argues that it would be redundant and
inefficient for it to mimic Verizon's traditional FX service by purchasing a dedicated private
line, as Verizon proposes. AT&T asserts that such an arrangement would leave it at a serious
competitive disadvantage. e56
292. AT&T defends the structure of its virtual FX service, noting that Verizon does not
claim that the petitioners are receiving NPA-N)O( code assignments in exchanges where they do
not actually serve customers of their own.e57 AT&T distinguishes the Maine Commission
decision upon which Verizon relies, noting that such numbering abuse is not at issue between
AT&T and Verizon in Virginia.e5E AT&T further asserts that, under Verizon's proposal, AT&T
would have to obtain NPA-N)O( code assignments in every rate center where it has a customer,
even though customers in some rate centers may be satisfied with numbers from another Verizon
rate center.e5e AT&T argues that this itself would unnecessarily waste numbering resources.eo
Id. at93,atng47 U.S.C. $ 153(16).
Id., citimg4T U.S.C. $ 153(48).
Id.
ntt Id. at 89-90.
e56 Id. at96. AT&T notes that this interoffice tansport is unnecessary according to AT&T's network architecture
of a single switch with a single POI. Id. at96 n.323, citing Tr. at 1908.
es1 Id. at93-94; id. at94 n.317, citing Tr. at 1909.
"t AT&T Repty at 49, citing AT&T Ex. 8 at 56-57. The Maine Commission revoked NPA-N)O( assignments
when it found that a competitive LEC was receiving numbering assignments for exchangss where the competitive
LEC semed no customers. See Investigation Into Use of Central Ofice Codes N)A@ by New England Fibu
Comtmtnications, Inc.,IIC Dkt No. 98-78, Maine PUC (rel. June 30, 2000). AT&T notes that, in any case, this
Maine decision was concemed with abuses related to ISP-bound traffic during the era before adoption of the
Commission's ISP Intercarrier Compensation Order. AT&T Reply at 49.
ese AT&T Brief at 94.
952
953
954
Case No. GNR-T.02.16
Joint Comments - Exhibit C
Page 4 of 8
t42
O"A".ut Communications Coo,-irriol DA 02-1731
293. AT&T firther notes that, if Verizon were to prevail in treating AT&T's virtual
FX traffic as toll traffrc, there would have to be some way to segregate the virtual FX traffrc
from section 251OX5) traffic.%' AT&T asserts that there is currently no way to accomplish this
by, as Verizon suggests, comparing the physical end points of a ca11.s2 Furthemrore, AT&T
argues that a traffic study to detemrine the relative percentages of virtual FX and section
25lOX5) traffic would be costly and overly burdensome.'*
294. WorldCom asserts that every carrier in the counby, including Verizon, rates calls
by comparing originating and temrinating NPA-N)O( codes and that no state has devised a
different method to distinguish between "local" and toll traffrc.en WorldCom asserts that the
Commission has never held that the physical locations of the calling and called parties determine
whether a call is "local"; it has left the determination of "local" calling areas to the states.e6
WorldCom also notes that Verizon's billing system cannot identify the physical location of a
calling or called party, even though Verizon proposes to base its intercarrier compensation
regime on that foundation.%6 WorldCom notes that Verizon's network is not the only one
providing transport to and from virtual NPA-N)O(s.*7 According to WorldCom, it often hauls
traffrc for much longer distances than does Verizon.ss In any case, WorldCom notes, its virtual
FX service does not change the average transport distance for Verizon because the incumbent
LEC still must transport the trafiic to WorldCom's POI.se
295. WorldCom takes issue with Verizon's assertion that it loses toll rcvenues because
ofvirtual FX service. WorldCom notes that the basic enticement of a virtual FX is that it
enables a calling parly to call a business in a distart location without incurring a toll charge.
Absent a virtual local number, WorldCom argues, the caller would typically find a similar
(Continued from previous page)w Id.
e6r Id.
Id. at95, citing Tr. at 1813, 1815, 1905.
AT&T Reply at 47, citing Verizon IC Brief at 19.
WorldCom Brief at 82.
WorldCom Reply at 76, citir;glocal Competition Order,1l FCC Rcd. at 16013-14, para. 1035.
WorldCom Brief at 84.
Id. at87.
Id. at88.
Id.
965
965
967
96E
s69
143
Case No. GNR-T-02-16
Joint Comments - Exhibit C
Page 5 of 8
Qa".ut Communications Co.-irriol DA 02-1731
vendor that has a local number.eTo Thus, according to WorldCom, without its virttral FX offering,
the call to the distant location likely would not take place at all.e7l
296. WorldCom argues that it should not be required to purchase a dedicated private
line from Verizon and provide traditional FX service. According to WorldCom, this would
eliminate competitive pressure and freeze rates at their current levels because the competitive
LEC would essentially replace all the private-line revenue that Verizon would otherwise have
lost when it lost the FX customer.eTz WorldCom argues that Verizon's proposed requirement
also would prevent WorldCom from exploiting the advantages of its unique network
architecture: Verizon's taditional FX service transports calls between two switches, while
WorldCom typically serves an equivalent area with one switch.eB
297. Cox argues that Verizon is trying to force it to match Verizon's network
architecture.eTo Cox further asserts that Verizon's end-to-end compensation regime is infeasible
and that Verizon makes no workable proposal for determining the originating and terminating
points of a call.es Cox argues that Verizon compares apples to oranges when it complains that it
receives compensation for fansporting calls to Verizon's FX customers, but not for bansporting
virtual FX calls to Cox's switch.eT6 Cox asserts that Verizon's costs for delivering traffic to Cox
have nothing to do with the nature of the underlying service, but rather with the distance to
Cox's swirch.'97 The difference in compensation, Cox notes, arises from the dedicated private
line charge that Verizon imposes on its traditional FX customers-a charge that Verizon
obviously cannot impose on Cox's customers.eT8
298, Finally, Cox notes that Verizon need not be concerned about NPA-N)O( code
assignment abuses, because state commissions have acted quickly to correct such abuses, and
e1o Id. at}9.
e?t Id.
en Id.
e73 Id.
"o Co* Brief at 35. Verizon admits, Cox notes, that requiring a competitive LEC to duplicate Verizon's network
architecture is ineffrcient and unnecessarily costly. Id. at36-37, citing Tr. at L822'23.
e1s Cox Brief at 39, citing Tr. at 1811-12;CoxReply at 27-28, citing Tr. at 1812-14.
e76 Cox Brief at 37.
er Id. at 37. Notably, Cox asserts that Verizon does not split access revenues for traditional FX calls with Cox or
other competitive LECs. Cox Reply at 26.
e1t Cox Brief at 37-38.
Case No. GNR.T.02.16
Joint Comments - Exhibit C
Page 6 of 8
144
lau.d Communications Co--;rrirrl DA 02-1731
Verizon has not shown evidence of any abuse here.eTe According to Cox, this arbitration
the appropriate forum to evaluate compliance with such regulatory requirements.eto
299. Verizon argues that the petitioners are effectively trying to thwart Verizon's
access regime by treating toll traffic as "local" traffrc.esr Verizon asserts that the ISP Intercatier
Compensation Order supports its position that a call's jurisdiction is based on its end points.ee
Accordingly, Verizon argues, there is no difference between a virtual FX call and a toll call.eE3
In contrast to virtual FX, Verizon asserts that its traditional FX service is an altemative pricing
structure for toll service, rather than a "local" service as claimed by the petitioners.es Verizon
argues that the petitioners should assume financial responsibilrty for virtual FX traffic by paying
Verizon for transport from the calling area of the Verizon caller to the petitioner's POI.eEs
300. Verizon acknowledges that virtual FX traffic cannot be distinguished from "local"
traffrc at Verizon's end oflice switches.es Verizon proposes, however, that the petitioners
conduct a traffic study or develop a factor to identifr the percentage of virtual FX traffic.es
Verizon would then exchange the identified proportion of traffic either pursuant to the governing
access tariff or on a bill and keep basis under its VGRIP proposal.est Finally, Verizon notes that
several state commissions, including Maine, Connecticut, Missouri, Texas and Georgia, have
found that virtual FX traffic is not subject to reciprocal compensation.ete
c. Discussion
301. We agree with the petitioners that Verizon has offered no viable alternative to the
current systerq under which carriers rate calls by comparing the originating and tenninating
NPA-N)O( codes. We therefore accept the petitioners' proposed language and reject Verizon's
n'n Id- at 40.
n* Id.
Verizon IC Brief at 16.
Id.,citmgISPIntercarrierCompensationOrder,16FCCRcdat9159-60,9163,paras. 14,25.
Id. at 17.
Id. at 18.
VerizonlCReplyat 11.
Verizon IC Brief at 19.
'n Id. at 19.
,r, Id-
eae J4. at r9-zr.
98t
982
983
9t4
9t5
986
145
Case No. GNR.T.02.16
Joint Comments - Exhibit C
Page 7 of 8
Qa.."t Communications co-orir.io,l DA 02-U3l
language that would rate calls according to their geographical end points.so Verizon concedes
that NPA-N)O( rating is the established compensation mechanism not only for itself, but
industy-wide.e' The parties all agree that rating calls by their geographical starting and ending
points raises billing and technical issues that have no concrete, workable solutions at this time.ee
302. Verizon proposed, late in this proceeding, that the petitioners should conduct a
traffrc study to develop a factor to account for the virtual FX traffrc that appears to be "local"
traffic. However, Verizon's contract fails to lay out such a mechanism in any detail. Most
importantly, Verizon concedes that currently there is no way to detemrine the physical end
points of a communication, and offers no specific contract proposal to make that
determination.e3
303. Additionally, we note that state commissions, through their numbering authority,
can correct abuses of NPA-NXX allocations. As discussed earlier, the Maine Commission found
that a competitive LEC there was receiving NPA-N)O(s for legacy rate centers throughout the
state of Maine although it served no customers in most ofthose rate centers.es To the extent that
Verizon sees equivalent abuses in Virginia, it can petition the Virginia Commission to review a
competitive LEC's NPA-NXX allocations.
3. Issue III-5 (Tandem Switching Rate)
a. Introduction
3M. In the Locol Competition First Report and Order, the Commission found that the
costs of transport and temrination are likely to vary depending on whether traffic is routed
through a tandem switch or routed directly to an end-office switch.ss It concluded, therefore,
es Thus, we adopt WorldCom's November Proposed Agreement to VerizorU Attachment l, $ 4.2.1.2 (subject to
modifications accomplished below in connection with Issue IV-35); Cox's November Proposed Agreement to
Verizon, $$ 5.7.1 and5.7.4;andAT&T'sNovemberProposedAgreementtoVerizon, $ 1.51. Webavepreviously
rejected the proposals that Verizon offers to AT&T with respect to this issue. See supra Issues I-1 and Vtr-4
(rejecting , Verizon's November Proposed Agreement to AT&l $ 5.7.3); Issue I-5, subsection (d) (rejecting
Verizon's November Proposed Agreement to AT&T, $1.68a). We reject Verizon's November Proposed Agteement
to WorldCom, Paxt B, $ 2.81; we have previously rejected Verizon's Proposed Agreement to WorldCom, Part C,
Interconnection Attach-, $ 7.2. See supra Issue I-2. We reject the last sentence of Verizon's November Proposed
Agreement to Cox, $ 5.7.1; we have previouslyrejected Verizon's November Proposed Agreement to Cox, $ 1.60a.
See supra Issue I-5.
eer SeeTr.al 1889-1900.
* SzAT&T Brief at 95; WorldCom Brief at 84; Cox Brief at 39; Tr. at 1812-13.
'n SnTr. at 1812-13.
e% See Investigation Into Use of Central Ofice Coda (MCk) by New England Fiber Comnrunicotions, Inc., LLC
d/b/a/ Broolrs Fiber,DocketNo. 98-78, Maine PUC (rel. June 30, 2000).
ees Local Competition Fint Report and Orfur,l I FCC Rcd at l6B2,para. 1090.
Case No. GNR.T.02.16
Joint Comments - Exhibit C
Page 8 of 8
146
CERTIFICATE OF SERVICE
I hereby certify that on the I't day of November,2002, true and colrect copies of the foregoing Joint
Comments, were forwarded, via email, to the following:
Morgan W. Richards
MoT .nTT THOMAS BARTLETT ROCK & FIELDS
P.O. Box 829
Boise, Idaho 83701
mw(@moffatt.com
Gail Long
TDS Telecou
P.O. Box 1566
Oregon City, Oregon 97045-1566
gail. lon gatdstelecom. com
Ted Hankins
CBNrunv Tel
P.O. Box 4O65
Monroe, Louisiana 7 l2L l-4065
Ted. H ankin g?Dcen tu rvte l. com
Clay Sturgis
MosS ADAMS
601 Riverside, Suite 1800
Spokane, Washington 992OL-OO63
clavg?)mossadams.com
Conley Ward
GrvpNs PURSLEY
P.O. Box2720
Boise, Idaho 83702
cew(Dgivenspurslev. com
Peter Blisard
Level 3 Communications, LLC
1025 Eldorado Boulevard
Broomfield, Colorado 80021
Peter. Blisard@Leve13. com
Dean Randall
VEzuzoN Nontuwest, Iwc.
P.O. Box 11O0
Beaverton, Oregon 97075-llOO
dean. randallfDverizon. com
Kenneth C. Howell
Hawr,Bv Tnoxell ENNrs & Hawlpv
877 West Main Street, Suite 1000
Boise, Idaho 83702
kch(lhteh.com
Gene DeJordy
WestBnt WTRELESS Conponerror
3650 131"1 Avenue, Southeast, Suite 400
Bellevue, Washington 98006
gene. dei ordv@rvwireless. com
Donald L. Howell, II
IDAHo PUBLIc UTILITIES COMMISSION
472 West Washington Street
Boise, Idaho 83702
dhowell(i)puc. state. id. u s
Doug Cooley
IoRHo PueLIc UTILITIES COUUISSIOI.I
472 W est Washington Street
Boise, Idaho 83702
dcoolelfi)puc. state.id.us
Susan Travis
WoRLDCoM, INC.
7O7 17ll. Street, 36th Floor
Denver, Colorado 8O2O2
Su san. a. Travis(rr)wcom. com
Eric S. Heath
SPRINT LBoeI & ExteRNAL AF.RAIRS
100 Spear Street, Suite 930
San Francisco, California 94105
eric. s. heath(a)mail. sprint. com
Mary S. Hobson
Stoel Rives llp
101 So. Capitol Blvd., Suite 19O0
Boise, Idaho 83702
mshobson(0stoel.com
Brian Thomas
TrrraB WRnNon TsLeco[4
223 Tay\or Avenue North
Seattle, Washington 98109
Brian.ThomaqQtwtelecom. com
Terry Haynes
VBnrzoN NorrHwnsr, Inc.
P.O. Box 152092
Irving, Texas 75015
terrv. havnes(dverizon. com
Rebecca B. DeCook
AT&T Couu. oFrHE MouNrerN Srnres
1875 Lawrence Street, Suite 1401
Denver, Colorado 8O2O2
decook(ri)att.com
Cathly L. Brightwell
AT&T Couu. oF THE Mouureru S'rerss
2L2Q Caton Way, Suite B
Olympia, Washington 98502
b r i sh twe Il(:a)a tt. c o m
JOINTCOMMENTS OF WORLDCOM, INC., TIME WARNERTELECOM OF IDAHO, LLC, LEVEL 3 COMMUNICATIONS, LLC, ANd
AT&T COMMUNICATIONS OF THE MOUNTAIN STATES INC.