20050919Brotherson rebuttal.pdf

Mary S. Hobson, ISB #2142
Stoel Rives LLP
101 S. Capitol Blvd., Suite 1900
Boise, ill 83702-5958
Telephone: [phone]
Facsimile: [phone]
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Thomas M. Dethlefs
Qwest Services Corporation
1801 California Street - 10th Floor
Denver, CO 80202-1984
Telephone: [phone]
Facsimile: [phone]
Attorneys Representing Qwest Corporation
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF LEVEL 3
COMMUNICATIONS, LLC'S PETITION FOR
ARBITRATION PURSUANT TO SECTION 252(B)
OF THE COMMUNICA-TIONS ACT OF 1934, AS
AMENDED BY THE TELECOMMUNICATIONS
ACT OF 1996, AND THE APPLICABLE STATE
LAWS FOR RATE, TERMS, AND CONDITIONS
OF INTERCONNECTION WITH QWEST
CORPORATION
CASE NO. QWE-O5-
REBUTTAL TESTIMONY OF LARRY B. BROTHERSON
ON BEHALF OF
QWEST CORPORATION
(Disputed Issue Nos. la, 3, 4, 10, 11, 12, 14, 15, 16, 19)
September 16, 2005
ABLE OF CONTENTS
IDENTIFICATION OF WITNESS... ... .................................................. 1
II. PURPOSE OF TESTIMONY..................... ...... ...... ..............................
III. DISPUTED ISSUE 16: DEFINITION OF VOIP.......................................
IV. DISPUTED ISSUE 1A: SECTION 7.1.1.1 OPERATION AUDITS...............
V. DISPUTED ISSUE 1A: SECTION 7.1.1.2 CERTIFICATION.....................
VI. DISPUTED ISSUE 3: VNXX TRAFFIC...
.......................................... ....
VII. DISPUTED ISSUE 4: COMPENSATION VOICE AND VoIP TRAFFIC........
VIII. DISPUTED ISSUE 19: ISP BOUND 3:1 RATIO, Section 7.2..................
IX. DISPUTED ISSUE 10: DEFINITION OF INTERCONNECTION................
X. DISPUTED ISSUE 11: DEFINITION OF INTEREXCHANGE CARRIER.. ..
XI. DISPUTED ISSUE 12: DEFINITION OF INTRALATA TOLL TRAFFIC.....
XII. DISPUTED ISSUE 9 AND 14: DEFINITION OF EXCHANGE ACCESS AND
EXCHANGE SERVICE......... ......
......... ... ..................... ............ ...... ...
XIII. DISPUTED ISSUE 15: DEFINITION OF TELEPHONE TOLL SERVICE.. ..
IDENTIFICATION OF WITNESS
PLEASE STATE YOUR NAME, OCCUPATION AND BUSINESS ADDRESS.
My name is Larry B. Brotherson. I am employed by Qwest Corporation (Qwest) as a
Director-Wholesale Advocacy in the Wholesale Markets organization. My business
address is 1801 California Street, 24th Floor, Denver, Colorado, 80202.
ARE YOU THE SAME LARRY B. BROTHERSON WHO FILED DIRECT
TESTIMONY IN THIS PROCEEDING?
Yes.
II.PURPOSE OF TESTIMONY
WHAT IS THE PURPOSE OF YOUR TESTIMONY?
The purpose of my testimony is to respond to the Level 3 testimony of Mr. Gates and Mr.
Ducloo. Specifically, I will discuss the Level 3 testimony as it relates to the following
disputed issues:
ISSUE 16: DEFINITION OF VoIP
ISSUE 1A: SECTION 7.1 OPERATION AUDITS
ISSUE 1A: SECTION 7.1.1.2 CERTIFICATION
ISSUE 3: VNXX TRAFFIC
ISSUE 4: COMPENSATION FOR VOICE AND VoIP TRAFFIC
ISSUE 19: ISP BOUND 3:1 RATIO, Section 7.3.
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Brotherson, L. (REB)
Qwest Corporation
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. ,
ISSUE 10: DEFINITION OF INTERCONNECTION
ISSUE 11: DEFINITION OF INTEREXCHANGE CARRIER
ISSUE 12: DEFINITION OF INTRALATA TOLL TRAFFIC
ISSUE 14: DEFINITION OF TELEPHONE EXCHANGE SERVICE
ISSUE 15: DEFINITION OF TELEPHONE TOLL SERVICE
In addition, I will respond to some of the general comments made by Level 3 regarding
competition, network efficiencies, and the Internet.
BEFORE ADDRESSING SPECIFIC ISSUES IN THE MATRIX AND SPECIFIC
LANGUAGE SECTIONS, DO YOU HAVE ANY GENERAL COMMENTS?
Yes. This has been an unusual arbitration in terms of responding to the Petition and
responding to the direct testimony. For a case whose sole purpose is to establish contract
language in a disputed interconnection agreement ("ICA") pursuant to section 252 of the
Act, Level 3 spends little time defending its own language or comparing it to Qwest'
language. Its testimony is virtually all high-level policy discussion, whose thrust is that
Level 3 should be entitled to special treatment. Furthermore, it should be noted that while
Mr. Ducloo filed 1 exhibit with 17 pages, my review of his testimony indicates that he only
refers to four of the pages (Exhibit 107 pages 1-3 and page 9) in his testimony.
Nonetheless, I have actually responded below to a few of the exhibits that he does not
mention, simply because there are serious errors in them. Qwest, of course, reserves the
right to move to strike exhibits that are not appropriately presented to the Commission.
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I direct my reply testimony to specific issue numbers, but in general all of the Level 3
direct testimony on issues for which I am responsible fall into two issues: (1) the definition
of VoIP and (2) the proper means of defining local and interexchange calls for
compensation purposes.
In light of the fact that Level 3 has chosen not to provide testimony related to specific ICA
language in its direct testimony, and given the possibility that it will raise specific issues
related to language for the first time in rebuttal testimony, Qwest reserves the right to seek
an opportunity to reply to such testimony in pre filed or live surrebuttal testimony or in
some other appropriate manner.
III.DISPUTED ISSUE 16: DEFINITION OF VoIP
WHY IS VoIP AN ISSUE IN THIS ICA?
Until now, Level 3' s business model has been primarily the offering of originating numbers
to ISPs using its status as a CLEC with single point of interconnection to provide statewide
free originating calling to ISPs. This is the VNXX issue that I address later. However
Level 3 now appears to be expanding its business model. It appears that Level 3 intends to
use its status as a CLEC able to assign local telephone numbers in distant towns as the
means to provide LATA-wide termination to VOIP providers over Qwest's network , and
to treat these calls as local as well. Because Qwest's language limits ISP terminations to
terminations within the local calling area ("LCA") in which the Enhanced Service Provider
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Qwest Corporation
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VoIP.
ESP") purchases local service, Level 3 objects to Qwest's contract language related to
PLEASE EXPLAIN THE DISPUTE RELATING TO THE DEFINITION OF VoIP?
Level 3 and Qwest disagree on a variety of issues related to the definition of V oIP. These
issues include (1) where the special equipment that converts calls to Internet Protocol
IP") must be located; (2) how the ESP exemption applies to V oIP calls under certain
circumstances; and (3) the significance of the location of the ESP point of presence
POP") as it relates to defining a call as local or toll. My rebuttal testimony addresses Mr.
Duc1oo s and Mr. Gates' testimony relating to these issues.
DID MR. DUCLOO OR MR. GATES SPECIFICALLY ADDRESS THE ICA
LANGUAGE IN DISPUTE RELATING TO THE DEFINITION OF VoIP?
No. As I noted, the Level 3 testimony is mostly high-level policy testimony. However, in
the course of delivering their high-level testimony, both Mr. Ducloo and Mr. Gates do
address some of the issues associated with the language in dispute though rarely the
language itself. Mr. Duc1oo discussed his definition of VoIP and provided Exhibit 107
page 6 as an illustration of two types of VoIP connections to the Public Switched
Telephone Network ("PSTN"
DO YOU AGREE WITH MR. DUCLOO'S DEPICTION OF A VOIP CALL IN
EXHIBIT 107 PAGE 6?
Generally yes. Exhibit 107 page 6 is an accurate depiction of two configurations I discuss
in my direct testimony. The example at the top of the page represents the type of traffic
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addressed in the AT&T case discussed in my initial testimony (TDM-IP-TDM),1 which the
FCC determined starts and ends as a TDM call and therefore has undergone no net protocol
conversion. The FCC has ruled that this type of call is not properly characterized as VoIP.
The example at the bottom of that page is an accurate depiction of a second call that does
involve a net protocol conversion. Based on this exhibit, Qwest and Level 3 appear to
agree that traffic that originates in IP on IP-compatible equipment and then is converted to
TDM for delivery to a customer on the PSTN (IP- TDM) is an Interconnected VoIP call
(hereafter VoIP), and is thus properly characterized as VoIP traffic under the ICA (in other
words, on the lower half of Exhibit page 6, traffic that moves from left (IP) to right (TDM)
is VoIP traffic).Although we agree in both the testimony and exhibits, Level 3
nevertheless seeks to strike the defining language in the ICA to that effect.
ARE THERE OTHER PARTS OF MR. DUCLOO'S EXHIBIT 107 PAGE 6 WITH
WHICH YOU DISAGEE?
Yes. Exhibit 107 page 6 appears to show VoIP calls going both ways. Qwest and Level 3
disagree on whether traffic that is originated in TDM on a PSTN phone and delivered in IP
is a VoIP call for purposes of the ICA and the ESP exemption. Calls originating in TDM
over PSTN telephones by Level 3 or its customers are not VoIP calls because, by
definition, they would fall into the TDM-IP-TDM classification that Mr. Ducloo agrees is
1 Order In the Matter of Petition for Declaratory Ruling that AT&T's Phone-to-Phone IP Telephony Services
are Exemptfrom Access Charges WC Docket No. 02-361, FCC 04-, 19 FCC Rcd 7457, ~~ 12-13 (April
, 2004) (ruling that AT&T's TDM-IP-TDM service was a telecommunications service and is subject to
access charges) AT&T Declaratory Ruling
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not an enhanced service. Mr. Ducloo s exhibit also fails to show the location of a VoIP
POP , a critical piece in the exhibit and in this case. Assuming the dashed line labeled "net
protocol conversion" is the VoIP POP, under Qwest's language (which is consistent with
FCC characterizations) two things are required in order for a call to be categorized as VoIP.
First, it must originate in IP on IP-compatible CPE and, second, it must undergo a net
protocol conversion (i., into TDM) before being delivered to a PSTN customer. Because
the second example on Exhibit 107 page 6, moving from right (TDM) to left (IP), does not
meet the first criterion, it is not a VoIP call and should not be treated as VoIP under the
ICA. It is simply a voice call, a TDM call to a location on the network of the VoIP
provider.
IS LEVEL 3'S LANGUAGE CONSISTANT WITH LEVEL 3'S POSITION THAT A
PSTN-ORIGINATED CALL IS A VoIP CALL?
No. While Level 3 discusses general theories, it makes no comment about Qwest's
language. Interestingly, Qwest has no problem with Level 3' s actual language in the ICA
on this issue. However, in light of the exhibits, there may be a misunderstanding that needs
comment for the record. Despite proposing language that states "VoIP" is "traffic that
originates in Internet Protocol using IP- Telephone handsets. . .Level 3's response to
Qwest Data Request No. 29 (attached hereto as Qwest Exhibit 306) states that Level 3
takes the position that calls that originate in TDM, but which terminate in IP, are also VoIP
calls. Level 3' s response to the data request is inconsistent with its own proposed ICA
language. But more importantly, calls that terminate in IP over broadband would not be
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delivered to Qwest under this ICA; they would route directly to the end-user customer
without ever being converted to TDM and without passing through the PSTN. Qwest
would never see the terminating end of such calls. As such, there is no need to address
them in the ICA.
WHY DOES QWEST'S ICA LANGUAGE (SECTION 7.12) MAKE THE VoIP
PROVIDER'S POP THE RELEVANT LOCATION FOR DETERMINING HOW
PROPERLY CATEGORIZE LOCALVoIPCALL
INTEREXCHANGE?
Mr. Ducloo discusses how, through the use ofIP equipment connected to the Internet via a
broadband connection, a customer can connect anywhere there is a broadband Internet
connection to make a VoIP call. (See Ducloo Direct
, p.
64.) Qwest does not dispute this
statement. Broadband IP calls originate, connect to the Internet backbone, and crisscross
the country without ever touching the PSTN. That is one of the reasons the physical
location of the VoIP provider s POP, the point at which the call is converted to TDM and
enters the PSTN, is so important. For purposes of application of the ESP exemption, the
ESP (in this case, the VoIP provider) is treated as a retail end-user customer. Given the
fact that the ESP exemption allows the ESP to connect to the network by purchasing local
services as an end-user customer, it is essential to know which LCA the VoIP POP is
located in (i., where it is buying local service). Thus, given the nature of the traffic
(assuming it is properly categorized as VoIP), and given the fact that VoIP providers desire
to take advantage of the benefits of the ESP exemption, it is essential that the physical
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location of the VoIP provider s POP be one of the relevant points for properly
characterizing the traffic (the other relevant point is the physical location of the PSTN
customer to whom the call is being terminated). The language that makes the VoIP
provider s POP one of the relevant points of measurement is contained in Qwest's updated
VoIP definition and shown on page 21 of my direct testimony Qwest's VoIP definition is
critical to the proper application of the ICA and should be adopted by the Commission.
Level 3' s attempt to strike terms central to the definition of VoIP should be disregarded.
MR. DUCLOO ALSO DISCUSSES IP-COMP ATIBLE CPE. IS MR DUCLOO'
DISCUSSION CONSISTENT WITH LEVEL 3'S POSITION ON WHAT DEFINES
VoIP?
Mr. Ducloo describes the specialized CPE required by VoIP: "Special phones, called "SIP"
phones ("SIP" stands for "Session Initiation Protocol" . . .) can be used for V oIP. These
phones have small computers built into them that packetize the voice data and generate SIP
I messages." (Ducloo Direct, p.49.) I agree with that statement. Converting the call to IP
protocol at the customer s premises (wherever that may be) with special equipment de
facto makes the call an IP-originated call that must travel over a broadband connection.
This is why Level 3' s attempt to strike the language that requires that the call originate in
this type of equipment on the customer s premises is surprising. If the end-user customer
does not have this equipment on the customer s premises to convert the call to IP, the call
must be originated as a traditional PSTN call in TDM and thus, when delivered to Qwest in
TDM, cannot have undergone a net protocol conversion. Qwest's proposed ICA language
for the definition of VoIP "traffic that originates in Internet Protocol at the premises of the
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September 16, 2005 Qwest Corporation
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party making the call using IP-Telephone handsets end user premises...(emphasis
added) requiring the specialized equipment that Mr. Ducloo describes is critical. The
language requiring that the IP equipment is at the customer s premises is an absolutely
necessary piece to the definition to assure that the call is an IP-originated call. Therefore
Qwest's language should be adopted.
DO MR. DUCLOO AND MR. GATES DISCUSS THE COSTS OF TERMINATING
CALLS IN THEIR TESTIMONY?
Yes. Mr. Ducloo and Mr. Gates discuss whether the costs of terminating various types of
calls (including V oIP, local calls, intrastate toll calls, and interstate toll calls) differ. My
general comments to those discussions are that through extensive cost docket proceedings
the Commission has approved rates that Qwest can charge for various types of calls. An
arbitration of contract terms for one CLEC is not the appropriate forum for changing
Commission-approved rates that apply to all IXCs, CLECs, or other carriers that use the
Qwest network. The isolated approach that Level 3 proposes would unduly distort the
market and could create unanticipated consequences or opportunities for regulatory
arbitrage.
MR. DUCLOO STATES THAT "QWEST TERMINATES VoIP CALLS TO ITS
END-USER CUSTOMERS IN THE SAME MANNER (IT) WOULD USE TO
TERMINATE REGULAR PSTN BASED LOCAL CALLS TO (ITS) END-USER
CUS TO MERS.THERE ARE NO EXTRA PROCESSES, NO ADDITIONAL
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TRANSPORT, AND NO ADDITIONAL SWITCHING.IS HIS STATEMENT
ACCURATE?
This statement is accurate only for the termination of "regular PSTN based local calls
(Ducloo Direct
, p.
54), which is the only type of calls his answer relates to. But that misses
the point. Both parties are in agreement that terminating access charges do not apply to
local calls (whether it is a PSTN-originated local call or a local call handed offby the VoIP
POP in the LCA). However, Mr. Ducloo s testimony is conspicuously silent about how
for example, VoIP calls from an ESP in Boise with Boise local exchange service will be
delivered to a Qwest PSTN customer in Twin Falls. Yet that is the central issue in dispute
with regard to VoIP in this docket. The Qwest language in section 7.12 is intended to
make clear that when a Boise Level 3 VoIP provider with a Boise local POP terminates a
call to a Boise PSTN customer, it is a local call, and will be treated that way under the ICA.
The call is measured from the VoIP POP to the Qwest PSTN customer. The contract
language should make clear that a VoIP call from the Boise-based VoIP customer to a
Qwest PSTN customer in Twin Falls is not a local call under the ICA, nor should it be.
DO YOU HAVE COMMENTS REGARDING MR. GATES' COST STATEMENTS
ON PAGE 46 OF HIS DIRECT TESTIMONY?
Yes. Level 3 moves the discussion away from Commission rules and onto costs. Mr.
Gates states that it would not be appropriate for VoIP to be subject to access charges in any
event. An example illustrates the special treatment that Level 3 seeks. First, assume that
Level 3' s VoIP provider customer and an IXC each have POPs located in Boise in
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adjoining rooms in the same building. Second assume that a VoIP call from Level 3
destined for a Qwest customer in Twin Falls is delivered to Qwest, and that Qwest
transports the call to Twin Falls and delivers it to the PSTN customer. Third, assume that a
customer of the IXC does exactly the same thing: delivers a call to Qwest at the Boise POP
and that Qwest transports the call to Twin Falls and delivers it to the customer. It is a fact
as Mr. Gates states, that precisely the same Qwest processes, transport, and switching are
necessary to deliver both calls, yet under Level 3' s proposal, Level 3 would pay Qwest
0007 per minute to terminate the VoIP call, while the IXC would pay terminating
exchange access charges to deliver the call to the same customer. For both calls, the same
processes, transport and switching are necessary, but Level 3 seeks to exempt itself from
the rules that apply to other carriers. Comparing costs does not resolve the consequences
of disparate regulatory treatment being applied to certain traffic. In the example above
there is absolutely no difference to the PSTN between the two calls: both are delivered to
Qwest in TDM, both are voice calls, and both use precisely the same processes and
facilities to terminate, and yet Level 3 proposes that completely different regulatory
treatment be given to the Level 3 VoIP call. One of the goals of the 1996 Act is to create a
competitively-neutral environment-Level 3's proposal is a major step in the wrong
direction.
MR. GATES MAKES THE COMMENT THAT; "BROADBAND VoIP SERVICES
DO NOT IMPOSE ANY ADDITIONAL COSTS ON THE ILECs OR THEIR
NETWORK EITHER." (GATES DIRECT, PAGE 48.HE ALSO IMPLIES THAT
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VoIP SHOULD BE ALLOWED TO USE THE PSTN AT RATES LOWER THAN
THE ACCESS CHARGES THAT APPLY TO OTHER CARRIERS.(GATES
DIRECT, PAGE 48.PLEASE COMMENT.
Again, Mr. Gates is really arguing that Level 3 should be exempt from the current rules and
regulations that govern the rest of the industry. Mr. Ducloo, at page 10 of his direct
testimony, says that "Level 3 is not a traditional competitive local exchange carrier
CLEC"" I agree that Level 3 does not appear to be a typical CLEC. In fact, Level 3 is
much more like an ESP seeking inter- LEC compensation. The VoIP call that is converted
to TDM, and that uses the PSTN just like other types of PSTN calls, should not be treated
in a special, discriminatory manner by virtue of the fact that the VoIP call was once in IP
protocol or that Level 3 characterizes itself as atypical.
Yet, despite these facts, Mr. Gates seeks a decision from the Commission that would
constitute a major policy shift, by permitting either a lower charge or no access charge, on
calls bound from Boise to LCAs at the other end of the state, simply because those calls
just happened to have once been VoIP calls before being converted into TDM. I can
certainly understand Level 3' s desire to reduce or eliminate intrastate access charges-
would certainly be in Level 3' s business interests, particularly if Level 3' s competitors
operated under a vastly different set of rules. But such a radical step, if undertaken at all
should be done only after the Commission has considered a broader range of interests than
are represented in a language dispute in an arbitration between two companies. Before
enacting fundamental reform as proposed by Level 3 , other local exchange carriers
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independent telephone companies, IXCs, wireless providers, and consumers who benefit
from what Level 3 refers to as "subsidy-laden" charges, should all have a place at the table
so that a reasoned decision, one that takes into account the full consequences, can be
reached. An industry forum, for example, would be a reasonable way of addressing these
issues. Such an important policy change should not be made in an arbitration proceeding
for one specialized CLEC in one agreement.
HAS THE FCC ALSO ADDRESSED THE ISSUE OF DIFFERENT CHARGES FOR
SIMILAR NETWORK FUNCTIONS?
Yes. In the FCC's Local Competition First Report and Order the FCC noted and rejected
the same points that Mr. Gates and Mr. Ducloo raise:
We recognize that transport and termination of traffic, whether it originates locally
or from a distant exchange, involves the same network functions. Ultimately, we
believe that the rates that local carriers impose for the transport and termination of
local traffic and for the transport and termination of long distance traffic should
converge. We conclude, however, as a legal matter, that transport and termination of
local traffic are different services than access service for long distance
telecommunications. Transport and termination of local traffic for purposes of
reciprocal compensation are governed by sections 251(b)(5) and 252(d)(2), while
access charges for interstate long-distance traffic are governed by sections 201 and
202 of the Act. The Act preserves the legal distinctions between charges for
transport and termination of local traffic and interstate and intrastate charges for
terminating long-distance traffic.
SHOULD ALL TDM CALLS USING THE PSTN BE TREATED THE SAME,
EVEN IF SOME WERE ORIGIN ALL VoIP CALLS?
2 First Report and Order and Notice of Proposed Rulemaking, In the Matters of Implementation of the Local
Competition Provisions in the Telecommunications Act of 1996, FCC 96-325, ~ 48 (August 8, 1996).
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Yes. On page 48 of his direct testimony, Mr. Gates correctly quotes the FCC: "Dial-up, or
narrowband Internet access utilizes the same PSTN infrastructure that telephone
subscribers use to place traditional circuit-switched voice calls." Qwest agrees with the
FCC. Mr. Gates ' ultimate proposals , however, are completely contrary to the substance of
the quoted language. Mr. Gates ends his particular answer by saying, in an incongruous
way, that "(tJhere is simply no economic justification for treating IP-Enabled services as if
they were traditional services.(Gates Direct, page 48.) To the extent that Mr. Gates
believes a call to an ESP in TDM protocol is "IP-enabled " then his conclusion makes no
sense. If dial-up access (i., in TDM format) to an ESP to make a VoIP call is identical to
a traditional voice call (and it is), then there is no rational reason that a dial-up toll call to
make a VoIP call (which is precisely what VNXX is) should not be treated like a traditional
voice toll call. A dial-up call in TDM over a modem to a VoIP ESP is indistinguishable
from the PSTN to a voice call placed over the PSTN. Thus, the reality reflected in the
quote from the FCC is that voice calls and dial-up calls to a VoIP POP are the same, and
should be treated the same.
MR. GATES STATES ON PAGE 4 OF HIS TESTIMONY THAT NEITHER
PARTY SHOULD INTERCONNECTIONABLEINSIST
ARRANGEMENTS THAT ARE COSTLY TO THE OTHER PARTY FOR NO
GOOD REASON. DO YOU AGREE WITH HIM?
I agree with the general concept that he articulates, but I disagree with the conclusions that
Mr. Gates ultimately reaches. The goal of fair and equal imposition of costs is one of the
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reasons that the FCC has, over the years, sought and received extensive comments on how
network services should be priced, and has made determinations identifying the network
elements and services for which it is appropriate to impose charges on other carriers.
Likewise, this Commission has conducted cost docket proceedings and has approved what
each party could charge for specific services under interconnection agreements. The rates
set forth in Exhibit A to the ICAs were reached only after careful consideration by the
Commission. The language that typically appears in interconnection agreements that
imposes inter-carrier charges did not simply come into being for "no good reason." This
language is the product of lengthy and often contentious proceedings. In the end, while
Qwest and other parties undoubtedly disagree with specific decisions that have been
reached, the result is an effort by the Commission to balance the interests of the parties, to
impose reasonable charges based on benefit to the parties, and to promote results that are as
competitively neutral as possible.
WHAT IS THE REAL DISPUTE WITH LEVEL 3 OVER PAYMENT OF QWEST'
CHARGES FOR CALLS FROM THE VoIP POP TO THE QWEST PSTN END-
USER CUSTOMER?
The fundamental problem with the approach taken by Level 3 is that it operates from the
premise that, as the provider of new services on a modern IP network, it is entitled to a free
pass from the obligations imposed on other carriers when it uses the PSTN, even when its
use of the PSTN is identical to the use of other carriers. I doubt very much that any carrier
(whether IXC, ILEC or CLEC) is completely happy with the intercarrier compensation
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process that currently exists. Most carriers, Qwest included, hope that the FCC will enact
changes that will make intercarrier compensation mechanisms more rational than they are
today. But, for the time being, the system is what it is, and the existing intercarrier
compensation methods achieve a form of rough justice. Level 3, while disparaging the
PSTN, has made no effort to duplicate it, and intends to utilize it in order for Level 3 and
its customers to complete calls. Qwest believes that, along with the opportunity for Level 3
to use the PSTN for its own business purposes, Level 3 has an obligation to pay its fair
share in a manner similar to the obligations of other carriers, no matter whether Level 3 is
providing the latest "state of the art" services or more traditional TD-based services. I
agree that costs should not be imposed on one party for "no good reason
" -
but that does
not mean, as Level 3 apparently believes, that one type of carrier is essentially granted a
free ride in relation to other carriers or in relation to the network upon which it seeks that
free ride.
PLEASE RESPOND TO MR. GATES' COMMENTS ON PAGE 48 OF HIS
TESTIMONY REGARDING QWEST COMMUNICATIONS CORPORATION
QCC") RETAIL VoIP SERVICES. ?
A. QCC does offer V oIP, as do many other providers. The relevant issues for this docket are
based on the fact that Level 3 , a CLEC, interconnects with Qwest and also offers local
connection to its VoIP provider customers. The fundamental issue before the Commission
is to decide how that interconnection can be provided on a fair and reasonable basis. Mr.
Gates offers no evidence, nor is there any, that Qwest provides preferential treatment to
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QCC. In fact, QCC terminates VoIP calls within the LCA using the ESP exemption, and
QCC VoIP calls terminating to a PSTN customer outside the LCA are routed to an IXC.
Qwest requires QCC VoIP traffic to be routed in the same manner as it is asking Level 3 to
route traffic. As the prior response makes clear, Level 3 is seeking a considerably more
advantageous interconnection arrangement with Qwest than QCC receives.Qwest'
position is that VoIP providers are ESPs and should not be disadvantaged in relation to
other carriers, nor should they receive any preferential treatment beyond the advantages
already provided to them from the ESP exemption.
PLEASE RESPOND TO MR. GATES' ARGUMENT ON PAGE 52 OF HIS
TESTIMONY THAT VOIP SHOULD BE FREE FROM REGULATION.
Qwest agrees that VoIP should be free from regulation. Mr. Gates accurately quotes
Qwest's position on VoIP regulation on page 55 of his testimony. But again, Mr. Gates
misses the point. The issue before the Commission is how Level 3, in its role as a CLEC
interconnects to the PSTN and exchanges traffic with Qwest, including traffic from ESP
end users that purchase connection to the local network from Level 3. In accord with
Section 251 (c )(2) of the Act, the Qwest/Level 3 ICA presumes interconnection between
local exchange carriers ("LECs ). In reality, however, the interconnection between Qwest
and Level 3 may not be interconnection between two LECs. Level 3 does not appear to be
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a LEC, by providing telecommunications service.3 It remains only an ESP by providing
only information services.
To Mr. Gates' point on the unregulation ofVoIP , the fact is that VoIP is not subject to the
kind of regulation to which traditional telecommunications services are subjected. No one
regulates the prices of VoIP providers. Furthermore, an IP- IP VoIP call is not regulated in
any manner whatsoever. When a Level 3 customer originates a call in IP format over
3 The Act defines "telecommunications service" to mean "the offering of telecommunications for a fee
directly to the public, or to such classes of users as to be effectively available directly to the public, regardless
of the facilities used.47 D.C. ~ 153(46). In turn, the Act defines "telecommunications" as "the
transmission, between or among points specified by the user, of information of the user s choosing, without
change in the form or content of the information as sent and received.47 D.C. ~ 153(43). A
telecommunications carrier" is any provider of telecommunications service that is not an aggregator of
telecommunications services. 47 DoS.C. ~ 153(44). Finally, "information service" means "the offering of a
capability for ,generating, acquiring, storing, transforming, processing, retrieving, utilizing, or making
available information via telecommunications, and includes electronic publishing, but does not include any
use of any such capability for the management, control, or operation of a telecommunications system or the
management of a telecommunications service." 47 D.C. ~ 153(20).
47 CFR 51.701 Scope of transport and termination pricing rules. (a) The provisions of
this subpart apply to reciprocal compensation for transport and termination of
telecommunications traffic between LECs and other telecommunications carriers. (b)
Telecommunications traffic. For purposes of this subpart, telecommunications traffic
means: (1) Telecommunications traffic exchanged between a LEC and a
telecommunications carrier other than a CMRS provider, except for telecommunications
traffic that is interstate or intrastate exchange access, information access, or exchange
services for such access (see FCC 01-131 , ~~~ 34, 36, 39, 42-43);
Tel Act Section 251(g) CONTINUED ENFORCEMENT OF EXCHANGE ACCESS AND
INTERCONNECTION REQUIREMENTS. On and after the date of enactment of the
Telecommunications Act of 1996, each local exchange carrier, to the extent that
provides wireline services, shall provide exchange access, information access, and
exchange services for such access to interexchange carriers and information service
providers in accordance with the same equal access and nondiscriminatory
interconnection restrictions and obligations (including receipt of compensation) that
apply to such carrier on the date immediately preceding the date of enactment of the
Telecommunications Act of 1996 under any court order, consent decree, or regulation
order, or policy of the Commission, until such restrictions and obligations are explicitly
superseded by regulations prescribed by the Commission after such date of enactment.
During the period beginning on such date of enactment and until such restrictions and
obligations are so superseded, such restrictions and obligations shall be enforceable in the
same manner as regulations of the Commission.
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broadband, Level 3 hauls it across the country on its backbone fiber network in IP, and
terminates the call in IP format over broadband to a residence or business with a broadband
connection; there is not a single vestige of regulation for that call. Nor does the call
involve the PSTN or an interconnection with a CLEC. But, and this is the point that Mr.
Gates ignores, if a CLEC such as Level 3 wishes to interconnect and terminate traffic on
the PSTN, then the ICA and this Commission are involved.
There is a fundamental difference between regulating VoIP calls on the Internet, which
neither Qwest nor Level 3 support, and the rules governing an ICA between LECs. As a
CLEC, the arbitration of this ICA is subject to no more regulation than an agreement
between Qwest and any other LEC. But given that Level 3 is operating as a CLEC that
wants to use the portion of the PSTN owned by an ILEC, subjecting Level 3 to the rules
that govern all other carriers is completely reasonable, and subjects Level 3 to no more
regulation than other unregulated providers. If what Mr. Gates is trying to avoid under the
guise of freeing VoIP from regulation is that Level 3 not be subject to the same
interconnection and compensation requirements as other carriers, Qwest adamantly
disagrees.
IS IT THE REGULATION OF IP TRAFFIC ON THE INTERNET OR THE
REGULATION OF PSTN TRAFFIC IN TDM THAT LEVEL 3 REALLY OBJECTS
TO?
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It is the rules that govern Level 3's use of PSTN that Level 3 is really objecting to. Mr.
Gates misinterprets the issue of service regulation from the necessary demands of
appropriate intercarrier compensation when two carriers exchange traffic. In other words
Level 3' s concept of "no regulation" is that it should receive preferential treatment for its
use of the PSTN. Long distance prices have not been regulated for years, and wireless
rates have never been the subject of state service regulation. That has not meant that IXCs
and wireless providers are free from intercarrier obligations when they use the local
wireline PSTN for call origination and termination. Access charges still apply to these
unregulated" calls. In fact, Level 3' s concept of no regulation of VoIP really means that
other companies, like IXCs and wireless providers, not to mention CLECs that are
attempting to provide wireline competition to ILECs and to other CLECs, should remain
subject to intercarrier compensation obligations, while Level 3 , which markets to VoIP
providers, gets preferential treatment. That result certainly was not, and is not, Qwest's or
QCC's position. In effect, Level 3 believes it should be able to have its customers originate
calls in IP, and then, simply because Level 3 converts those calls to TDM before sending
them to the PSTN, it should have the ability to reach millions of PSTN customers in areas
from the most urban to the most rural without the necessity of meeting the same rules that
apply to other carriers interconnecting to the PSTN.
ON PAGE 5 OF HIS TESTIMONY, MR. DUCLOO SUGGESTS THAT QWEST
ADVOCATES THE IMPOSITION OF SWITCHED ACCESS CHARGES ON ALL
VoIP TRAFFIC. PLEASE COMMENT ON HIS CONCLUSION.
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As Level 3 did in its Petition, Mr. Ducloo mischaracterizes Qwest's position on this issue;
his suggestion that Qwest seeks to impose switched access charges on all VoIP (Ducloo
Direct at 5) is simply not true. Qwest does not seek to impose access charges on any traffic
that properly qualifies for the ESP exemption. In fact, Qwest's position affirms the ESP
exemption, but does so based on a proper interpretation of the exemption. To the extent
that VoIP traffic meets the ESP exemption requirements, no access charges can or should
be applied; if the traffic does not meet those requirements, neither the ESP exemption, nor
a sound "competitively neutral" policy, suggests that this type of VoIP traffic should
receive preferential treatment-it should be subject to the same rules that apply to other
similar traffic. It is this Qwest position that the same rules should apply to Level 3's traffic
as it does to other interconnectors ' traffic that Level 3 objects to.
DOES QWEST'S LANGUAGE AFFIRM THE ESP EXEMPTION, AND WHAT IS
LEVEL 3'S RESPONSE TO THAT LANGUAGE?
Yes. Qwest language in section 7.12 affirms the ESP exemption. The Qwest language
that Level 3 seeks to remove from the ICA states:
12 VoIP Traffic. VoIP traffic as defined in this agreement shall be treated as an
Information Service, and is subject to interconnection and compensation rules and
treatment accordingly under this Agreement based on treating the VoIP Provider
Point of Presence ("POP") is an end user premise for purposes of determining the end
points for a specific call.
12.1 CLEC is permitted to utilize LIS trunks to terminate VoIP traffic under this
Agreement only pursuant to the same rules that apply to traffic from all other end
users, including the requirement that the VoIP Provider POP must be in the same
Local Calling Area as the called party.
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DOES LEVEL 3 RECOGNIZE THAT THE ESP EXEMPTION REQUIRES
COMPLIANCE WITH CERTAIN REQUIREMENTS?
Yes. Mr. Ducloo states: "My understanding is that the status of traffic as ESP traffic
depends on certain technical characteristics of the entities that provide it, so that entities
that qualify as ESPs are entitled to have their traffic rated on an end-user basis, as opposed
to on a carrier basis.(Ducloo Direct at 72.) That is what Qwest states in its proposed
VoIP definition and in section 7.12. Qwest's definition ofVoIP traffic incorporates the
requirements of the ESP exemption. It treats the VoIP provider as an end-user customer as
required by the ESP exemption, and treats the VoIP provider s POP as an originating and
terminating location for purposes of rating the call and for applying the appropriate form of
intercarrier compensation.
DOES QWEST'S PROPOSED LANGUAGE ACCURATELY CAPTURE THE
TECHNICAL CHARACTERISTICS THAT MR. DUCLOO REFERS TO?
Consistent with the ESP exemption, Qwest's interpretation includes both theYes.
advantages and limitations that come with end-user customer status.The principal
advantage of the exemption is that ESPs may originate and terminate traffic within the
LCA in which its POP is located without being required to pay originating and terminating
access charges. The limitation, however, is the same limitation imposed on end-user
customers. The ESP is permitted to connect to the local network by purchasing out of the
local exchange tariffs or catalogs. An ESP cannot interconnect under a section 251 ICA.
ESPs are the customers of the ILEC or CLEC. The ESP exemption applies within the
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LCAs in which the ESP locates a POP , but (just as the rules apply to business end-user
customers) the exemption does not allow for free calling outside of those LCAs (and it
certainly does not provide for LATA-wide origination and termination of call, as Level 3
implies).
DOES LEVEL 3 AGREE THAT THE ESP EXEMPTION, AND PURCHASE FROM
THE LOCAL EXCHANGE TARIFFS/CATALOG, PERMITS ONLY LOCAL
CALLING?
Since Level 3 does not address the contract language specifically, it is not entirely clear
what is Level 3's position on the ESP exemption. To the extent that Level 3 asserts the
ESP exemption requires Qwest to terminate a call from a Level 3 ESP customer s VoIP
POP located in Boise to a Qwest Twin Falls end-user PSTN customer, without the VoIP
provider handing off the call to a PICed IXC, and the IXC paying access charges, Qwest
strongly objects to Level 3's interpretation of the ESP exemption. This would create an
inappropriate and competitively preferential result for Level 3 and its VoIP provider
customers. Just as any Boise end-user customer would be required to hand off its call to an
IXC to deliver that customer s traffic to Twin Falls, so should the ESP. Qwest's language
is consistent with this interpretation and application of the ESP exemption.
IS LEVEL 3'S CONTRACT LANGUAGE CONSISTENT WITH THE ESP
EXEMPTION?
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No. The problem with Level 3's position is that it attempts to strike language that states
the ESP's POP is an element in determining the jurisdiction of the call. Without this
language the distinction between a toll call and a local call disappears.Level 3
misinterprets the ESP exemption, apparently based on the erroneous and self-serving
conclusion that unlike end-user customers who receive only a LCA-wide exemption from
access charges, Level 3's VoIP providers are somehow entitled to LATA-wide (or perhaps
even wider) exemption from access charges because the traffic originated in IP. End-user
customers are not entitled to those benefits, and since an ESP is treated as an end-user
customer for purposes of the exemption, I am aware of nothing that would suggest that it
should be entitled to the broader treatment that Level 3 apparently advocates. In effect
Level 3 desires the exemption, which treats an ESP as an end user, to give it rights those
same end users do not have.
PLEASE COMMENT ON MR. DUCLOO'S EXHIBIT 107 PAGE 1 AND PAGE 2.
I think Mr. Ducloo s exhibits accurately show Level 3's real business. Exhibit 107 page 1
looks very similar to the networks of several long distance carriers with whom Qwest
interconnects. It is an impressive network from Boston to Boise to Los Angeles for long-
haul traffic across the nation and the world. But, the ICA being arbitrated here is between
LECs. Level 3 seeks to originate and terminate its long-haul IP traffic within Idaho as a
CLEC. Exhibit 107 page 2 is similar to Exhibit 107 page 1 in that it also depicts long-haul
IP networks. Those links, however, are not particularly useful for a discussion about local
interconnection and local service.As a provider of local service in Idaho what is
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important is the map of Level 3's Idaho local network (Level 3/107 page 3). This exhibit
depicts Level 3 with Points of Interconnection ("POI") located in Idaho, but the exhibit
does not depict that Level 3 has any substantial local network beyond those POls. For that
it must interconnect with Qwest (and other ILECs) and have specific interconnection
language providing for origination and termination of "local" calls. That is what the 1996
Act provides and what the ICA in this case is intended to accomplish.
MR. DUCLOO CHARACTERIZES THE VoIP TRAFFIC ISSUE AS "WHETHER
QWEST UTILIZIN G LOCALPROHIBITFROMMAYLEVEL
INTERCONNECTION FACILITIES TO TERMINATE INTERNET-ENABLED
TRAFFIC, SPECIFICALLY FOR VoIP TRAFFIC." (DUCLOO/43.) IS THIS AN
ACCURATE STATEMENT OF THE VoIP ISSUE IN THIS CASE?
No. This issue statement again misstates Qwest's position. Qwest has no intention of
prohibiting the termination of VoIP traffic on Qwest's network, nor does Qwest take the
position that VoIP traffic cannot be terminated on local facilities. Qwest's proposed
language clearly provides for interconnection of Qwest's network with Level 3's network
to allow for the exchange of traffic with Level 3, the CLEC. Qwest's language also
identifies how, and under what different circumstances, the traffic will be terminated. The
real issue is not whether traffic will be exchanged and terminated, but whether a VoIP
provider customer of Level 3 can obtain LATA-wide calling, or must be bound by the local
vs. toll distinctions that other end-user customers abide by.
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DOES THE QWEST LANGUAGE PERMIT LEVEL 3 TO TERMINATE VoIP
TRAFFI C WITHIN THE SAME LCA?
Yes. The VoIP provider may terminate its local traffic (traffic within the same LCA as the
VoIP POP) over Local Interconnection Services ("LIS") facilities, and is not required to
terminate its local traffic with switched access connections such as Feature Group D.
However, for traffic terminated in a LCA different than the LCA where the VoIP POP is
located (i., interexchange calls), the traffic should not be routed over local trunks (it
should be handed off to an IXC, on FGD connections, and the IXC should pay the
appropriate terminating access charges). Mr. Ducloo describes this routing on page 25 of
his direct testimony.
IS THE ESP EXEMPTION THE SAME WHETHER THE VoIP PROVIDER IS A
CUSTOMER OF LEVEL 3 OR QWEST?
Yes. Qwest's position on the proper application of the ESP exemption has nothing to do
with whether the ESP is directly connected to Qwest's network or to Level 3' s network. In
both cases, in the FCC's words, the ESP is treated as an end-user customer, and "thus may
use local business lines for access for which they pay local business rates and subscriber
line charges."4 That rule did not change with the passage of the 1996 Act, and Qwest is not
proposing a change in this case. In fact, it is Level 3 that is proposing a fundamental
change in the application of the ESP exemption. Although Level 3 acknowledges that the
historical application of the ESP exemption allowed ESPs to connect their equipment to
4 Order In the Matter of Amendments of Part 69 of the Commission s Rules Relating to Enhanced Service
Providers 3 FCC Rcd 2631 , ~ 20, n 53 (1988) ESP Exemption Order
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Qwest's network "on the same basis as any business end user " it has leapt to the
unsupported conclusion that the ESP exemption now gives it rights that business end users
do not have today and that are part of the services provided by a "local business line" (i.
LATA-wide ability to terminate calls without incurring access or toll charges). Nowhere in
its Petition or in its testimony does Level 3 provide any support for this proposition, nor
does it provide anything more than the cryptic suggestion that ESPs on Level 3' s network
are somehow invested with greater rights than business end users on the PSTN.s Mr.
Ducloo points out that the ESP can purchase the local connection from either Level 3 or
Qwest, a proposition with which Qwest agrees, but that does nothing to change the proper
application of the ESP exemption.
DO MR. DUCLOO'S EXHIBIT 107 PAGE 7 AND PAGE 8 ALSO RAISE AN ISSUE
OF HOW LEVEL 3 VIEWS THE ESP EXEMPTION?
Although Mr. Ducloo s testimony did not address specific disputed languageYes.
sections, I have attempted to respond to the statements that Level 3 did file. Exhibit 107
page 7 and page 8 depict how an ESP could purchase local connections from either Level 3
or Qwest.While these exhibits show the connections to end offices, neither of Mr.
Ducloo s exhibits make any reference to the LCAs within which those end offices are
located.As discussed in prior responses LCAs (which Level 3 euphemistically
5 Another example of the vagueness of Mr. Ducloo s testimony on this point is his statement that ESPs are
not subject to access charges though the underlying communication may well involve transport over
significant distances." (Ducloo Direct, p.47.) It is unclear whether a "significant distance" is from the north
end to the south end of the Boise EAS area, or whether he means from Boise to Twin Falls. If it is the latter
his statement is inaccurate.
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characterized as "artificial geographic designations" in its Petition) go to the very heart of
the application of the ESP exemption. The ESP connects to the PSTN as an end-user
customer; this does not entitle the ESP to LATA-wide termination at local calling "end user
rates " as the Level 3 testimony implies. Adding LCAs to the picture in Exhibit 107 page 8
would more accurately depict how the ESP exemption really works and would make clear
what Level 3 is advocating. For example, in the lower right hand corner of that exhibit
Mr. Ducloo shows an ESP connected to the Qwest network. If that ESP's POP is located
in Boise, the ESP would be able to purchase Boise local service out of Qwest's Exchange
and Network Services Catalog. If the other end offices depicted in Mr. Ducloo s exhibit
are also connected to Qwest end offices in the Boise LCA, then the ESP could terminate
traffic to each of the phones shown in the exhibit without incurring terminating access
charges. However, if the three end offices with telephones depicted on Exhibit 107 page 8
were in Twin Falls, Ketchum, and Idaho Falls, the ESP exemption would not allow the
Qwest end user ESP to terminate traffic to those other LCAs (just as a typical business end-
user customer would not be able to do). Under this example, the ESP customer of Qwest
would be required to hand off any call bound for those exchanges to an IXC. The call is
measured, for jurisdictional purposes, between the ESP's POP and the party called. It
that simple; that is what the ESP exemption requires.By not depicting the LCA
boundaries, Level 3 is masking the real issue before the Commission.
WOULD YOU PLEASE SUMMARIZE YOUR REBUTT AL COMMENTS
REGARDING VoIP TRAFFIC?
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Yes. VoIP is traffic that originates in IP and terminates on the PSTN using TDM protocol.
It originates in one protocol and is converted to TDM, thus resulting in a net protocol
conversion; this, in turn, makes it an enhanced service call entitled to the ESP exemption.
All other types of calls that Level 3 discuses, such as IP to IP, or TDM to IP, do not
terminate over the PSTN, and thus do not involve Level3's ICA with Qwest. Dial-up calls
to a VoIP provider are TDM to a VoIP provider and thus are treated as PSTN calls; the fact
that they may later be converted to IP is of no consequence. Qwest's definition and section
12 capture these necessary requirements, and Level3's attempts to strike them should
be rejected. Level 3's arguments that VoIP calls are somehow unique and thus entitled to
different treatment when terminating to distant towns should also be rej ected. These calls
are subject to the same local and long distance classifications as other PSTN calls on the
network. If an ESP, in this case a VoIP provider, purchases a local connection out of the
local tariffs or catalogs, then calls from the ESP bound for other LCAs in the state must be
routed through an IXC.
IV.DISPUTED ISSUE 1A: SECTION 7.1.1.1, OPERATION AUDITS
DOES LEVEL 3 ADDRESS SECTION 7.1.1.1 OPERATION AUDITS, IN ITS
TESTIMONY?
No. Level 3 provided no testimony regarding its dispute with the language contained in
Section 7., identified on Level 3' s Issue List as Issue 1 a. Thus, the Commission
should adopt Qwest' s proposed language on this issue.
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DISPUTED ISSUE 1A: SECTION 7.1.1.2, CERTIFICATION
DOES LEVEL 3 ADDRESS SECTION 7.1.1.2, CERTIFICATION, IN ITS
TESTIMONY?
No. Level 3 provided no testimony regarding its dispute with the language contained in
Section 7.1.1.2, identified on Level 3' s Issue List as Issue 1 a. Qwest' s proposed language
requests that Level 3 certify that the connections it sells to its customers will comply with
the ESP exemption, and comply with the terms of the ICA. Level 3, however, wants to
remove any obligation from the ICA.
DOES QWEST'LANGUAGE IN ANY WAY PROHIBIT LEVEL 3 FROM
PERMITTING ESPs TO CONNECT TO LEVEL 3'S NETWORK?
A. Absolutely not.Qwest is not attempting to prevent VoIP providers from obtaining
connection to the PSTN through local service from Level 3, or to prevent them from
receiving the benefit of the ESP exemption. But, as we have seen, and as Level 3 seems to
agree, not every call that once was in IP is entitled to the ESP exemption. And it is for this
reason that Qwest is requesting that Level 3 certify that the connections it sells to its
customers will comply with the ESP exemption, and comply with the terms of the ICA.
Level 3, however, wants to remove any obligation from the ICA by striking the
certification language. Qwest simply is requesting assurance that Level 3 will enforce the
ESP exemption for its customers on the same basis that other LECs, like Qwest, apply the
exemption to its ESP customers.The Commission should adopt Qwest's proposed
certification language.
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VI. DISPUTED ISSUE 3: VNXX TRAFFIC
PLEASE EXPLAIN THE DISPUTE RELATING TO VNXX TRAFFIC?
Level 3 and Qwest disagree on the definition of VNXX and the treatment of, and
compensation for VNXX traffic. Just as Level 3's testimony on VoIP essentially ignored
the contract language, neither Mr. Ducloo s nor Mr. Gates' testimony specifically
addresses the VNXX contract language in dispute. All they do is discuss in very broad and
general terms the issues related to VNXX traffic. Since I addressed issues related to the
specific language in my direct testimony, I will respond to those broad comments in this
testimony.
MR. DUCLOO STATES THAT THE ONLY THING THE PSTN "KNOWS"
ABOUT A CALL IS THE ORIGINATING AND TERMINATING TELEPHONE
NUMBER. (DUCLOO DIRECT PAGE 62.PLEASE COMMENT ON HIS
STATEMENT.
I discuss this issue in more detail later in connection with my testimony on Idaho and
federal law as it applies to the local/toll distinction. The fact is that historically, telephone
companies have routinely assigned telephone numbers based upon the geographic location
of the switch to which that number is connected. Thus, to imply that the PSTN knows
nothing about the physical location of the called and calling parties is simply untrue. It was
not until certain CLECs began obtaining numbers associated with LCAs that were assigned
to customers with absolutely no physical presence in that LCA that geographical
information related to calls became suspect. That is not the fault of the network, nor does it
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represent an effort by carriers or regulatory commissions to redefine local calls. It is Level
, and certain other CLECs like it, that disregard the geographical nature of calls mandated
by state law and which has been inherent in federal law for decades. As Mr. Linse points
out in his testimony, the telephone numbers that Level 3 uses in Idaho are all Geographic
NP A numbers. In other words, they are telephone numbers that should, according to the
Central Office Code Administration Guidelines ("COCAG"), correspond to discrete
geographic areas. Level 3' s numbers do not correspond to discrete geographic areas, and
Level 3 proposes that the Commission sanction this misuse of numbering resources. The
Commission should reject Level3's practice.
MR.DUCLOO PROVIDES ARGUMENT WHY,WITH NEWER
TECHNOLOGIES, THE GEOGRAPHIC LOCATION OF CUSTOMERS IS NO
LONGER RELEVANT. (DUCLOO DIRECT PAGE 64.DO YOU AGREE WITH
HIS CONCLUSIONS?
No. Perhaps technically it is possible for Level 3 to declare several states to be one LCA
but the issue here relates to the PSTN and Level 3' s use of it. There are two major
problems with Mr. Ducloo s argument. The first, of course, is that the entire PSTN and the
regulatory structure related to retail service pricing and intercarrier compensation are based
on the geographic location of the parties to a call. FCC jurisdiction over interstate calls is
determined by the NP A/NXX of the calling and called parties because those NP A/NXXs
have traditionally related to geographic areas.State telephone rates are established
recognizing both local and intrastate toll calls based on this numbering scheme. Intrastate
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access and exchanges of traffic between independent companies is based on this 100-year-
old convention. Thus, this issue has a rational historical basis and is not, as Mr. Ducloo
describes it, an "essentially arbitrary decision.(Ducloo Direct
, p.
65.His so-called
arbitrary decision" has, for good reasons that still exist today, governed the industry for
more than 100 years.
The second problem with Mr. Ducloo s testimony on this point is that, while he talks about
VoIP and soft switches, and of backbone fiber transporting IP packets around the world
the telephone numbers at issue in this case are numbers assigned on the P STN that relate to
specific circuit-based switches. The technologies that Mr. Ducloo discusses are on the
Internet side of the POI, and thus are irrelevant to this issue. PSTN numbers must relate to
the geographic locations of the end-user customers to maintain the current structure of the
PSTN, or call rating will break down entirely. Level 3 , of course, can manage its own
network in any manner it chooses. For example, Level 3 may use IP addresses, instead of
telephone numbers, to exchange traffic within its own network. But when Level 3 connects
to the PSTN, and assigns NANP A-assigned telephone numbers to its end-user customers
or delivers VoIP calls to PSTN customers, Level 3 must comply with the same rules that
apply to the hundreds of companies whose networks comprise the PSTN.
CAN YOU PROVIDE AN EXAMPLE THAT ILLUSTRATES AN UNINTENDED
CONSEQUENCE THAT COULD RESULT FROM ABANDONING CUSTOMER
LOCATION AS A RELEVANT FACTOR IN ASSIGNING NUMBERS?
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Yes. On page 64 and 65 of his testimony (Ducloo Direct, pages 64-65), Mr. Ducloo
discusses the Local Exchange Routing Guide (LERG), and in particular, the routing and
delivery of interexchange calls. The LERG is a database that identifies switches and
telephone numbers associated with those switches, based on the NP AINXX codes assigned
by NANP A. Of course, the entire basis for whether to assess toll charges to a call relate to
the specific physical locations at which traffic bound for particular switches may be
delivered. To the extent that telephone numbers lose any geographic significance, then
next-door neighbors calling each other could each have telephone numbers assigned to
different LCAs, and parties on opposite ends of the state could in theory be in the same
LCA (in both circumstances, of course, the concept of a LCA becomes meaningless). The
point is that there are compelling policy reasons (completely aside from legal mandates
telephone numbering rules, or technical capabilities) to maintain the system of rating calls
based on physical location; telephone numbers must retain their geographic associations.
Finally, if a LATA boundary becomes essentially an LCA boundary, LEC rates must
change dramatically.
MR. DUCLOO TESTIFIES THAT A SWITCH REALLY CANNOT KNOW THE
GEOGRAPHIC LOCATION OF THE CUSTOMER, THAT THE SWITCH
CANNOT STORE THE ADDRESSES ASSOCIATED WITH NUMBERS, AND
THAT IN ORDER TO DEVELOP A PERIPHERAL DEVICE TO TRACK
ADDRESSES, IT WOULD BE EXPENSIVE. (DUCLOO DIRECT PAGE 67.) IS
THE DEVELOPMENT OF SUCH A SYSTEM NECESSARY?
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Absolutely not. This argument is a red herring. The solution to this issue is simple, which
is to require that companies obtaining telephone numbers on the PSTN assign the numbers
to customers in the actual LCAs where the customer is located. If that were done, as it has
been done for years, none of the tracking discussed by Mr. Ducloo of identifying the actual
physical location of the virtual numbers would be necessary. The problem is not the
existing system, but rather, the problem is companies like Level 3 that adopt a policy of
assigning telephone numbers that have no relationship to the LCAs where the numbers are
assigned. Neither Qwest, nor Level 3, should build databases to further track geographic
locations beyond the LCA.
ON PAGE 63 OF HIS TESTIMONY, MR. DUCLOO SUGGESTS THAT QWEST IS
TRYING TO "CHANGE" THE METHOD OF DETERMINING LOCAL AND
TOLL FROM TELEPHONE NUMBERS TO THE PHYSICAL LOCATIONS OF
THE PARTIES TO THE CALL. HAS HE CORRECTLY CHARACTERIZED THE
MEANS BY WHICH LOCAL AND TOLL CALLS HAVE BEEN DETERMINED IN
IDAHO?
No. Mr. Ducloo s testimony is unsound on its face and is directly contrary to Idaho
statutes, Commission rules and catalog provisions, prior Commission decisions, federal
statutes, and FCC rules.
BEFORE ADDRESSING THOSE ISSUES, PLEASE ADDRESS THE ISSUE FROM
A COMMON SENSE PERSPECTIVE.
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From a purely common sense perspective, the Level 3 argument does not make sense and
ignores a fundamental building block of telecommunications in Idaho and in every other
state (i., the concept of LCA). As I understand it, the Idaho Commission has consistently
taken an active role in the definition of LCAs, based primarily on the existence or non-
existence of a community of interest among the residents and businesses of specific
geographical locations. A good example of this was the Commission s decision in Qwest's
(then U S WEST's) 1996 case concerning the joint proposal of the company and the
Commission staff to create four extended area service (EAS) regions in Idaho.6 In that case
the Commission ordered broad expansions of EAS in many areas of the state.7 The basis
for the expansion decisions was the Commission s conclusions that community of interest
factors made such changes in the public interest. As part of that order, the Commission
cited its specific criteria for determining whether a community of interest exists:
(1) Geographic proximity (distance between exchanges); (2) the
presence of geographic or other physical barriers (mountains
rivers, valleys) between exchanges; (3) county seat relationship
(are both exchanges in the same county); (4) the relationship to
school district (do both exchanges share the same school district);
(5) proximity to medical facilities and services; and (6) the
willingness of customers to pay increased rates.
Under the Commission s standards, areas that may have been separate LCAs could be
combined into a single LCA if the Commission concluded that a community of interest
In the Matter of the Joint Proposal to Implement Extended Area Service (EAS) Regions in US WEST
Communications ' Southern Idaho Service Area Case No. USW-96-
Id. Order No. 26672
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exists that justifies classifying all calling within the geographical area as "local" and not as
long distance." Thus, geography (e., contiguity) and the location of called and calling
parties in relation to each other have been concepts inherent in the determination of LCAs
in Idaho.
The language used to distinguish among different types of calls likewise is focused on
geography. For example, the use by telephone companies and state commissions of the
word "local" is not an accident: the concept of calling within certain specified
geographical area where the residents and businesses share a geographically-based
community of interest has been plainly distinguished from calls between geographical
areas, often hundreds of miles apart, where no such community of interest exists.
Historically, the Idaho Commission has treated local calls (i., where the parties to the call
are in the same geographical area) different from toll calls.State commissions have
recognized the community of interest within certain defined rural areas or even within large
metropolitan areas, and have therefore required that telephone companies provide service
within these defined geographical areas on a flat-rated basis. These requirements have
been based on the idea that calls to and from neighbors and local businesses within an area
of community of interest should not be constrained by per-minute charges. Thus, prices for
local service in those areas have traditionally been flat-rated so that no extra charges apply,
no matter how much time a customer spends on the telephone calling others located in the
same LCA. To suggest, as Mr. Ducloo and Mr. Gates do, that the concept of local service
Id.
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and local calls is based purely on telephone numbers and not on geographical proximity is
incorrect and historically inaccurate.
DO THE RECOGNIZED DISTINCTIONS BETWEEN LOCAL AND TOLL HAVE
PRICING DIFFERENCES AS WELL?
Consistent with the underlying logic of creating geographically-based local calling areas
state commissions and telephone companies have also historically based the pricing of toll
calls on the relative lack of geographical proximity. Thus, telephone companies, regulatory
commissions, and the public refer to such calls as "long distance" calls. The phrase "long
distance" (like the word "local") has a direct geographical component inherent in its name.
Likewise, another synonym for long distance calls-interexchange calls-suggests that the
calls originate in one exchange and terminate in another distant exchange. In Idaho, the
statutes have adopted the term "message telecommunications service" or "MTS " which is
defined as communications service between local exchange calling areas for which charges
are made on a per-unit basis. Given the lack of a general community of interest that
justifies flat rate pricing, MTS or long distance calls have traditionally been priced on a
per-minute basis.
Thus, a simple analysis of the language used to describe the two types of service ("local
calls" versus "long distance calls ) demonstrates the underlying error of Level 3' s
testimony. The defining and distinguishing factor for local and toll calling has been
geographical proximity (or the lack thereof).
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IS LEVEL 3'S PROPOSAL TO DEFINE LOCAL AND TOLL BASED ON
TELEPHONE NUMBERS INSTEAD OF PHYSICAL LOCATION OF THE
PARTIES TO THE CALL CONSISTENT WITH IDAHO STATUTES?
No. For example, Idaho Code ~ 62-603(7) (a statute that preceded the 1996 Act by several
years) defines a "local exchange calling area" as "a geographic area encompassing one (1)
or more local communities as described in maps, tariffs, rate schedules, price lists, or other
descriptive material filed with the commission by a telephone corporation, within which
area basic local exchange rates rather than message telecommunication service rates
apply.The importance of this statute is that it defines local calling in terms of
geographical proximity of the parties to the call. Idaho Code ~ 62-603(1) defines "basic
local exchange service" in terms of the provision of two-way interactive communication
within a local exchange calling area." Many of the requirements of Title 62, Idaho Code
distinguish between those telephone corporations that provide "basic local exchange
service" and those that provide toll. See e.Idaho Code ~~ 62-604, 62-608 (pertaining to
companies providing basic local exchange service) and Idaho Code ~ ~ 62-606 and 62-607
(pertaining to companies providing message telecommunications service, i.e. toll).
IS QWEST'S CHARACTERIZATION OF CALLS BASED ON LOCATION
CONSISTENT WITH COMMISSION RULES?
Yes. The Commission s "Title 62 Telephone Corporation Rules" adopt definitions of the
terms "local exchange area
" "
local exchange service
" "
basic local exchange service " and
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message telecommunications service" that are consistent with the Idaho statutes cited
above and that preserve the concept of a local exchange area as a geographic area
encompassing local communities. IDAP A 31.42.01.005.
ARE QWEST'S IDAHO CATALOGS CONSISTENT WITH IDAHO STATUTES
AND COMMISSION RULES?
Yes. Section 2.19 of Qwest's Exchange and Network Services Catalog No.1 defines an
exchange" as a "geographical unit, established by the Company, for the administration of
telecommunication services in a specified area.This Catalog section defines "exchange
service as "( t Jhe service of furnishing equipment and facilities for telephone
communications within a designated area." In turn
, "
exchange service area" is defined as
( t Jhe territory served by an exchange.This same section defines "local exchange
service" as "( t Jhe furnishing of telecommunications services to the Company s customers
within an exchange for local calling. This service also provides access to and from the
telecommunication network for long distance calling." Further, this section defines "local
service area or extended local service area" as "( t Jhat area throughout which an exchange
service customer, at a given rate, may make calls without the payment of a toll charge. A
local service area may be made up of one or more exchange areas.
Section 5.1 of Qwest's Catalog No.1 under the heading "Exchange Areas , states that
(tJhe Company develops exchange service areas to establish service within a defined
Italics are used for emphasis in the selections from the Catalog section cited in this paragraph.
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geographical area.(Emphasis added.) Section 5 .1.1 lists Qwest's local calling areas by
describing the communications incorporated in them. Finally, Section 5.2 states that the
rates and charges quoted for "local exchange service
" ... "
entitle the customer to local
calls without toll charges to all local exchange access lines connected to a CO of the
exchange or to all exchange access lines served by COs of the extended local service area
where comprised of more than one exchange." (Emphasis added.
As with Idaho statutes and rules, there is nothing at all to suggest that the toll/local
distinction is governed by the telephone numbers assigned; rather, every statute, rule, and
catalog provision define local and interexchange calling strictly in terms of the
geographical location of the parties to the call.
IS QWEST'POSITION CONSISTENT WITH PREVIOUS COMMISSION
DECISIONS?
Yes. The Idaho Commission has consistently upheld the integrity of local calling areas
and has rej ected schemes that attempt to avoid the payment of appropriate access charges
by telecommunications service providers who are offering long distance service or its
equivalent. For example, in the Upper Valley EAS bridging caselO the Idaho Commission
found that EAS bridging (the practice of linking distant exchanges in different local calling
areas by terminating the calls to an exchange that has EAS with both distant exchanges
then automatically forwarding calls through that exchange to the distant calling area
10 In the Matter of the Petition of the Idaho Local Exchange Telephone Companies for a Declaratory Order
Determining that EAS Arbitrage, as Currently Offered, is Illegal Case No. GNR-94-
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thereby avoiding long distance charges) was unlawful. In its decision, the Commission
outlined the history of the local/long distance company distinction:
The divestiture of the Bell system in 1984 divided the
telecommunications industry into companies that provide local
service and those that provide long-distance service. Since
divestiture, LECs (e., GTE and U S WEST) have charged
access charges" to long-distance telephone companies (e.
AT &T or MCI) for connection to and use of LEC facilities. Long-
distance companies pay originating access charges to compensate
LECs for the cost of transporting a call from the customer
location to the long-distance company s network. Similarly, long-
distance companies (interexchange carriers) pay terminating access
charges to LECs as payment for the cost of delivering a call to the
called party over the LEC' s local exchange network. See Order
No. 28656 in Case No. U-1142-2 and Order No. 18205 in Case No.
1500-148. Accordingly, for each long-distance call between
local exchanges, the long-distance company pays originating and
terminating access charges to the respective LEC. For those toll
calls carried by the LEC itself, the law requires that access charges
be imputed into the LEC's long-distance rates.
The Commission s conclusion upheld the concept of the local exchange calling area and
the importance of equal treatment for all companies that provide interexchange services:
In summary, we conclude that Upper Valley s EAS bridging
service is either MTS or the functional equivalent ofMTS.
further find that Upper Valley s use of the EAS routes is unfair
because Upper Valley is using aLEC's EAS plant and facilities
without justly compensating the LEC for such use. Transporting
what would otherwise be an MTS call over EAS routes also
unfairly disadvantages all other interexchange carriers. Upper
Valley is not purchasing the appropriate wholesale service for
resale to its customers. Failure to compensate US WEST for its
originating and terminating access charges and use of its EAS
trunks is inappropriate; it is discriminatory to other long-distance
11 Id.Order No. 25885 (1995).
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companies that purchase and impute the correct access charges;
and it is not in the public interest.
Although this Order predated the deregulation of basic local exchange services in Idaho
the laws and policies upon which the Commission relied to reject EAS bridging have, for
the most part remained unchanged in the period since this Order was issued.
IS QWEST'S LANGUAGE CONSISTENT WITH THE DEFINITIONS IN THE
COMMUNICATIONS ACT OF 1934, AS AMENDED BY THE 1996 ACT?
Yes. The Act defines "exchange access
" "
telephone exchange service " and "telephone
toll service" as follows:
The term "exchange access" means the offering of access to telephone
exchange services or facilities for the purpose of the origination or
termination of telephone toll services.
* * *
The term "telephone exchange service" means (A) service within a
telephone exchange or within a connected system of telephone exchanges
within the same exchange area operated to furnish to subscribers
intercommunicating service of the character ordinarily furnished by a single
exchange or (B) comparable service provided through a system of switches
transmission equipment, or other facilities (or a combination thereof) by
which a subscriber can originate and terminate a telecommunications
service.
* * *
12 Id.
13 47 V.C. ~ 153(16) (emphasis added).
47 V.C. ~ 153(47) (emphasis added).
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The term "telephone toll service" means telephone service between stations
in different exchange areas for which there is made a separate charge not
included in contracts with subscribers for exchange services.
Under the Act, therefore, telephone exchange service is a service provided to subscribers
that enables a particular subscriber to originate and terminate calls within a single
exchange, or within an area ordinarily served by a single exchange, or comparable service.
Telephone toll service, in contrast, applies when a customer places a call to end users
located beyond the calling area covered by Qwest's local exchange service catalog. Such
calls are normally subject to additional charges designed to compensate the toll provider or
exchange access provider for carrying calls over what could be considerable distances.
IS QWEST'S PROPOSED LANGUAGE CONSISTENT WITH FCC RULES?
The FCC recognizes and has preserved the state s role in defining LCAs. ForYes.
example, in the Local Competition Order the FCC held that except for traffic to or from a
CMRS network
, "
state commissions have the authority to determine what geographic areas
should be considered 'local areas' for the purpose of applying reciprocal compensation
obligations under section 251(b)(5), consistent with the state commissions ' historical
practice of defining local service areas for wireline LECs.Traffic originating or
terminating outside of the applicable local area would be subject to interstate and intrastate
47 D.c. 9 153(48) (emphasis added).
16 Of course, as noted in my prior testimony, and in Qwest's response to Level 3's Petition, Level 3 wants to
engraft the federal Act's "telephone toll service" definition into the interconnection agreement, then claim
that because Qwest does not impose "separate charges" for such traffic, it cannot, by definition, be toll. This
of course, ignores the fact that, as a CLEC, Level 3 has no obligation to tell Qwest in advance where calls
directed to it will terminate, thus rendering it impossible for Qwest to bill the calls as toll charges.
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access charges."17 The FCC further recognized that as a legal matter, transport and
termination of local traffic is different from exchange access service. The FCC stated that
( t Jhe Act preserves the legal distinctions between charges for transport and termination of
local traffic and interstate and intrastate charges for terminating long-distance traffic."18
LEVEL 3 CLAIMS THAT THE FCC'ISP REMAND ORDER CHANGED THIS
BODY OF LAW. DO YOU AGREE?
No. The ISP Remand Order made no change in this regime. The ISP Remand Order
addressed the proper rate and treatment of traffic bound for ISPs located in the same local
calling area as the calling party. 19 The FCC did not convert intraLA T A toll traffic into
traffic subject to reciprocal compensation, as Level 3 contends. Had the FCC intended to
take away the states' ability to define LCAs and what constitutes an intraLA T A toll call, it
would have done so explicitly. In fact, the FCC recognized that section 251(b)(5) does not
apply to intraLATA toll calls.2O Thus, this Commission s definitions of LCAs and local
exchange service continue to govern the proper definition for the parties' agreement.
17 Local Competition Order ,-r 1035 (emphasis added).
18 Id.,-r 1033.
19 This was later confIm1ed by the federal courts in Bell Atlantic Tel. Coso v. FCC 206 F.3d 1 (D.C. Cir.
2000) and WorldCom Inc. v. FCC 288 F.3d 429 (D.c. Cir. 2002).
20 ISP Remand Order at fn. 66 ("In this regard, we again conclude that it is reasonable to interpret section
251(b)(5) to exclude traffic subject to parallel intrastate access regulations, because "it would be incongruous
to conclude that Congress was concerned about the effects of potential disruption to the interstate access
charge system, but had no such concerns about the effects on analogous intrastate mechanisms ) (citing Local
Competition Order).
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AS PREVIOUSLY DISCUSSED, THE LEVEL 3 WITNESSES CLAIM THAT THE
MEANS OF DETERMINING LOCAL CALLS HAS ALWAYS BEEN BASED, NOT
ON GEOGRAPHY, BUT ON THE TELEPHONE NUMBERS ASSIGNED TO THE
CALLED AND CALLING PARTIES.PLEASE COMMENT ON THEIR
TESTIMONY.
The foregoing discussion of Idaho statutes, rules, and catalog provisions, as well as federal
statutes and FCC rules, demonstrates that Level 3' s contention is false.
These witnesses' testimony is a typical example of getting the cause and effect relationship
between two concepts backwards. The Level 3 witnesses suggest that, because telephone
numbers have been the means of rating calls as local or toll, this necessarily means that
telephone companies and state commissions had made a conscious conclusion that physical
location is not relevant to call classification, and that the assigned telephone numbers are
the only criterion. In other words, they suggest that community of interest, distance, and
the geographical location of called and calling parties are never relevant factors, and that
the only relevant factor is the relationship between the assigned telephone numbers.
As demonstrated above, this argument has no basis in law or fact in Idaho. Geographical
locations of the parties to the call have always been the prime criterion under both Idaho
and federal law.
Q. PLEASE PROVIDE EXAMPLES TO ILLUSTRATE THE FOREGOING POINT.
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It is true that historically the means by which telephone companies have been able to make
the determination of the geographical location of customers has been the telephone number
assigned to them. For example, assume I am an Idaho customer of Qwest and have been
assigned the telephone number 208-321-XXXX. Customers with a 208 area code and an
NXX of 321 are associated with the Boise LCA, which means that I am physically located
in the Boise LCA 21 and thus can call other residents of Boise (and indeed the entire Boise
LCA) on a flat-rated basis. If I decide to make a call to a friend in Twin Falls (who has a
208-734-XXXX telephone number associated with the Twin Falls exchange), I would first
need to dial 1 and then the Twin Falls number. Qwest's equipment would recognize this as
an interexchange call, route it to my toll carrier, and then deliver the call to that carrier. At
the Twin Falls end, Qwest would terminate the call (if the Twin Falls customer received
local service from Qwest), or it would be terminated by the local provider for that
customer.
In this example, the geographical location of the two parties to the call was disclosed by
their telephone numbers. However, that does not mean that Qwest or the Commission ever
concluded that telephone numbers were the end of the analysis. To the contrary, the
telephone numbers and their geographical association with specific exchanges are simply
the means to the end of rating calls based on the geographical location of the parties to the
call. F or decades, this system has worked very well because telephone numbers was a
21 FX service, of course, is one exception; however, with that service, the customer pays the full private line
rate to transport the traffic to a distant LCA.
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reliable and consistent means of determining the geographical location the parties to a call.
Thus, the Level 3 witnesses have it backwards. For purposes of distinguishing local from
toll calls, the end purpose has been to determine whether calls are within or between LCAs
and not (as Level 3 contends) to determine whether the telephone numbers of the parties to
the call are assigned to the same LCA.
GIVEN THE HISTORY AND EXAMPLES YOU HAVE DESCRIBED, WHAT HAS
CAUSED THIS TO BECOME AN ISSUE NOW?
There are two significant factors: (1) the ability of CLECs like Level 3 to obtain local
telephone numbers from NANPA (something end users like ISPs are unable to do) and (2)
the regulatory requirement that CLECs are able to interconnect, not in each LCA, but at a
single point within each LATA in an arrangement known as Single Point of
Interconnection ("SPOI"), or Single Point of Presence ("SPOP"). Thus, a company like
Level 3 is able to obtain local telephone numbers in LCAs throughout a LATA, but instead
of assigning them to customers that are physically located in the exchange associated with
the telephone numbers, they assign them to customers actually physically located
elsewhere, something that CLECs had not been doing until recently.
To illustrate this point, let me contrast two methods of operation by CLECs. Many CLECs
unlike Level 3 , actually provide local exchange service to customers in the exchanges in
which they obtain telephone numbers. Thus, for example, while such a CLEC may have a
SPOI in Boise, it may also serve local exchange customers in Twin Falls. In that case, the
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CLEC would obtain local Twin Falls numbers and assign them to real customers located in
Twin Falls. Thus, a call from a Qwest customer located in Twin Falls to a CLEC Twin
Falls customer will be routed to the CLEC POI in Boise, and the CLEC would then route it
back to its customer in Twin Falls. In that case, consistent with the traditional association
of telephone numbers with geographical location, the call would be truly local in nature
because the parties to the call would be physically located within the same LCA.
The second example-which describes Level 3' s business-'-:'illustrates the problem.
Level 3' s case, because it is a CLEC, it may also obtain local telephone numbers in Twin
Falls, but Level 3 does not (and never has purported to) provide local exchange service to
end-user customers in Twin Falls. Level 3 candidly admits that it is in the business of
serving ISPs. Thus, Level 3 will obtain local numbers associated with the Twin Falls
exchange, but will assign them to ISPs whose modems, routers, and servers are located in
Boise (or perhaps in another state altogether.) Those ISPs will market their dial-up services
to Twin Falls customers, and will provide the local numbers provided to them by Level 3 as
the local access number for the end-user customers to access the ISP, and thus the Internet.
Other than the telephone numbers, there is nothing remotely "local" about the call to the
ISP. It originates in Twin Falls, but it is answered by the ISP's modems in Boise or
elsewhere; from there, the call is then sent to websites throughout the country, or even the
world.
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Level 3's claims are: (1) despite the fact that such calls are interexchange in nature (as
defined by the physical end points of the call), they are really "local" because the telephone
numbers associated with the calls appear to be local to each other, and (2) such treatment is
sanctioned by the historical means by which Qwest has determined whether a call is local
or long distance.
The error in Level 3' s logic is its contention that telephone companIes and state
Commissions really intended that these calls be treated as local because the telephone
companies ' traditional means of categorizing a call was based on the telephone numbers.
This argument stands logic on its head. In fact, what has happened is that, by virtue of
rights given to it as a CLEC, Level 3 is able to obtain what appear to be local telephone
numbers for the purpose of making interexchange calls. Qwest certainly did not intend that
CLECs use "local telephone numbers" in a way that essentially "fools" the system into
believing that long distance calls are really local calls.Furthermore, Idaho statutes
Commission rules, and Commission and federal court decisions certainly disclose no intent
by the Commission or courts to abandon the concept of geography and the physical end
points for the proper classification of calls.
HAS A FEDERAL COURT IN QWEST'S TERRITORY RECENTLY ADDRESSED
THIS ISSUE?
Yes. The VNXX issue with regard to ISP-bound calls was recently addressed by a federal
district court in Oregon which ruled that, under the ICA at issue, Qwest was not
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responsible to pay a CLEC reciprocal compensation for ISP traffic that did not physically
originate and terminate in the same LCA. In that case Qwest Corporation v. Universal
Telecom 22 the CLEC ("Universal") adopted a business plan essentially identical to that of
the CLEC Level 3. It served only ISPs and, like Level 3 , it obtained local telephone
numbers that it gave to its ISP customers for local access, but which numbers were actually
routed to a Universal POI in another part of the state. The court noted that:
VNXX traffic involves a call that is originated in one local calling area "LCA"
and is terminated in a different "LCA" without incurring the toll charges which
would normally apply. The essence of VNXX traffic is that a LEC who does
not have a physical presence in a particular calling area may appear to be local.
The LEC gains this local appearance by holding a block of local numbers which
the end user, who is located in that LCA, may call. Upon making what appears
to be a local call the call is relayed over the lines of the local LEC (QwestJ,
passed of to the distant LEC (UniversaIJ, and terminated by that distant LEC.
Applying the terms of the ICA, which required that calls be categorized by Qwest's local
tariffs (which defined local service as service "furnished between customer s premises
located within the same local calling area ), the court found that the calls were not local
in nature and that, therefore, Qwest did not owe reciprocal compensation on non-local
ISP traffic.
Thus, Idaho statutes and rules, like the Idaho Qwest catalog provisions, and Commission
decisions, as well as the above-cited court decision, define local and toll calling based on
2004 WL 2958421 (D. Ore. 2004).
23 Id. at *9 (emphasis added).
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geographical proximity of the parties to the call (i., whether they are physically located
in the same LCA).Accordingly, the language of the ICA should reflect those
requirements. Because Qwest's proposed language is consistent with the requirements of
Idaho and federal law, it should be adopted.
MR. GATES STATES THAT BOTH CLECs AND ILECs PROVIDE LOCAL
NUMBERS TO ISPs. HE THEN SAYS ON PAGE 28 THAT THE VNXX SERVICE
OF THE CLEC SERVICE IS IDENTICAL TO FX SERVICE OFFERED
QWEST, "AT LEAST FROM AN END-USER CUSTOMER PERSPECTIVE.
YOU AGREE WITH HIS CLAIM?
No. In fact, the FX service that Qwest offers in Idaho and the VNXX service that Level 3
offers are very different. This is true from the perspective of the carriers, which Mr. Gates
appears to implicitly acknowledge and from the end-user customers' perspective as well.
From the end-user customers' perspective , the two services are completely different. If a
customer had purchased FX service from Qwest, the customer actually purchased a
connection in the geographic LCA associated with the telephone number (for which it paid
the appropriate local exchange rate), and it would have also paid for private line transport.
See Qwest Exhibit 307. When Qwest provides services to ISPs, it requires the ISPs to pick
up the calls in the LCAs where they want telephone numbers by purchasing a local
connection in that LCA, and by paying to haul it to the distant location through a dedicated
private line to their premises. The party that wants the call transported to the distant
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exchange pays the transport. With Level 3' s VNXX service, however, there is no need for
Level 3 to ask the ISP to pay for any transport from a distant exchange. This is so because
by single point of interconnection and number assignments, Level 3 represents to Qwest
that the call is a "local" call that Qwest should deliver to Level 3' s Boise POP for free.
Neither Level 3, nor the ISP, nor the end-user customer, is required to pay Qwest for
gathering and transporting the traffic. Instead because Level 3 uses local telephone
numbers, such calls are routed on local single-point-per LATA interconnection trunks as if
the calls were local calls terminating to a customer located in the originating LCA. In fact
not only does Level 3 want the transport for free, but Level 3 also proposes charging Qwest
a local termination rate once the call arrives at its switch as if it were a local call. Most
Level 3 VNXX traffic today is ISP calling. Despite Level 3' s request in its Petition for
0007/minute for such traffic, those calls are currently rated at $.001343 per MOU under
Idaho rules. But, if the VNXX issue is expanded to terminating calls from VoIP providers
or other originating traffic, the issue of seeking local termination of VNXX calls remains
and must be resolved in the contract language. Thus, Qwest's language in section 7.3.6.3
stating that reciprocal compensation will not be paid on VNXX traffic should be adopted.
ON EXHIBIT 107 PAGE 10, 11 AND 15, MR. DUCLOO DEPICTS LEVEL 3'
VIEW OF QWEST FX SERVICE AND LEVEL 3'S VNXX SERVICE. (SEE ALSO
GATES DIRECT PAGE 34.ARE THESE EXHIBITS ACCURATE?
No. Exhibit 107 pages 10 and 11 inaccurately depict a Qwest FX call. These exhibits
show the call path using common PSTN trunk groups and being switched by multiple end
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offices and tandem offices, in essence using the toll network. In fact, that is completely
wrong. FX service in Idaho is a simple configuration where the customer has purchased an
actual connection in the LCA where the number was assigned, like other end users in that
LCA. The traffic was then transported from that LCA, not over common trunks and
switches, but over what is essentially a private line-rated long loop. The FX customer was
connected from the actual LCA where the number was assigned directly to the distant
customer premises in the "foreign" exchange over a private line service at full retail rates.
Level 3' s Exhibit 107 page 10 depiction does not reflect that configuration. The routing on
that exhibit is the routing that would apply to a typical toll call, using the trunks connecting
the two switches following the same path as a toll call.
This point is illustrated by Exhibit 107 page 15 , Mr. Ducloo s diagram of a Level 3 VNXX
call. From this exhibit, it is clear that, unlike Qwest's FX service, Level 3 does not pick up
the call in the originating LCA, does not take it off the common trunks of the PSTN
network, and does not provide the private line circuit carrying the call to the customer
premises. Rather than the Level 3 VNXX customer paying for transport to its distant
premises, Level 3 puts the call on LIS trunks, whose purpose is to deliver local calls from
local customers to the Level 3 switch. And, while the diagram suggests that Level 3 pays
Qwest TELRIC rates to transport this call to the Level 3 POP, Level 3's position in its
Petition is that Qwest is financially responsible for all costs on its side of the POI, and that
neither Level 3 nor its customers should pay anything for the delivery. Setting that point
aside (Mf. Easton addresses this in his testimony), the point that these exhibits make clear
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is that the Qwest FX customer bears the full retail cost of transporting the call to the distant
location on its private network (i., the private line circuit that it leases from Qwest). In
Level 3' s model, however, Level 3 seeks statewide free transport, and further, wants the
call treated as local, including the billing of local termination charges, without any nexus
whatsoever to the originating LCA.
WHAT DO YOU MEAN BY NO NEXUS TO THE"LCA?
Let me give a real example. According to the LERG, Level 3 has requested and obtained
from NANP A 10 000 telephone numbers for the NXX of 806 in area code 208. These
numbers are associated with the LCA for Ketchum, whose population is approximately
003 people. Based on Level 3's own descriptions of its business model, it is highly
unlikely that Level 3 serves any actual customers who live in Ketchum. I doubt that a
Level 3 employee has ever been in Ketchum, at least on a work-related matter. Level3'
sole purpose in obtaining those numbers is clearly to assign Ketchum numbers to an ISP
customer (such as Earthlink or MSN) actually located in Boise (or even in another state).
Level 3 claims that the Qwest Ketchum customer has made a local call if the customer calls
an ISP when the call actually is delivered to the Boise POP of Level 3, and 'then delivered
to Level3's Boise ISP customer. Furthermore, Level 3 not only wants Qwest to deliver the
traffic to the POP for free, Level 3 also intends to bill reciprocal compensation to Qwest for
terminating that local call to its local "Ketchum" ISP customer. If Level 3 can pull that off
it would have a bullet-proof business plan. Qwest would gather and deliver traffic to it for
free from throughout Idaho, Level 3 would charge the ISPs for that service, and then, Level
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3 would want Qwest to actually pay it local call termination rate for the privilege of doing
all of these things for Level 3 for free. Beyond charging Qwest to deliver it traffic, as a
CLEC certified to provide local service, Level 3 has no relationship with any customer in
Ketchum, and no nexus to the Ketchum LCA.
IS THE EXISTENCE OF ILEC FX SERVICE A LEGITIMATE REASON TO
APPROVED VNXX?
No. I have already discussed why FX service is significantly different from the VNXX
arrangement that Level 3 seeks to sanction through the ICA. Even when a Boise company
wants a Ketchum number, the customer obtains dial tone in Ketchum, even though the
traffic is then transported to the Boise customer over a retail private line service (which the
customer pays for). NANP A expects that every carrier that elects to interconnect with and
become part of the network that comprises the PSTN assign telephone numbers associated
with specific geographic locations. In Idaho Qwest has 140 FX lines assigned, all in
northern Idaho, since FX was grandfathered in southern Idaho in 1979. Level 3 seeks to
use FX (which is actually very different from VNXX), as the justification to establish an
entire network based on assigning virtually all telephone numbers to customers located
outside the LCA associated with the assigned numbers. Thus, the vast majority of its
telephone numbers would bear no relationship to the actual physical location of the
customer to whom they are assigned. Other than those Level 3 ISP customers who happen
to be located within the same LCA as the Level 3 POI 100% of Level 3's traffic would
bear no relation to the LCAs with which its numbers are associated. In fact, Level 3 does
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not even deny that is has no customers physically located in those communities. Level 3 is
simply using the assigned telephone numbers to disguise calls that would otherwise be toll
calls, a fact recognized by the Oregon federal court in the Universal case, which noted that
Universal's VNXX arrangement allowed "the person making the call (to) be billed at the
local rate for a call that was really long distance."25
MR. GATES ALSO REFERS TO A SERVICE OFFERED BY QCC KNOWN AS
WHOLESALE DIAL" SERVICE.(GATES DIRECT AT /34.IS THAT
RELEVANT TO THE VNXX ISSUES IN THIS CASE?
No. Again, Level 3 first inaccurately describes the Qwest product, and then states that
Level 3 does the same thing. Mr. Gates states that Wholesale Dial provides many of the
same "benefits" as Level 3' s VNXX service. Wholesale Dial is a product that Qwest's
unregulated affiliate company, QCC, offers to ISPs. QCC is able to offer the product in
Qwest's territory because it purchases retail services from Qwest (the ILEC), and then
packages those retail services for ISPs. In particular, QCC purchases Primary Rate ISDN
PRI") services from the Qwest Catalog. This means that Wholesale Dial customers pay
standard private line transport rates to haul calls from the LCA where the dial tone is
provided to the location of the ISP. The calls are handed off within the LCA where the
local service is purchased. In other words, it bears no resemblance to VNXX.
WHAT IS WHOLESALE DIAL?
25 2004 WL 2958421, at * 9 (emphasis added).
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QCC, through its Wholesale Dial product offering, is simply aggregating traffic and
providing a service as a bundled product to ISPs. Another way of describing this product is
that a single ISP can buy PRI services out of Qwest's retail tariffs or catalogs today as any
other end-user customer can. But, if a single ISP does not have enough' customers or
volume to warrant such a purchase, then a company like QCC (or any other carrier
including Level 3) can buy the same retail services and create a product that can aggregate
traffic for multiple ISPs Gust like QCC's Wholesale Dial) and market it to ISPs. The point
is that Wholesale Dial is a bundling of retail products, and it does not do what Level 3
does, as Mr. Gates suggests. It is simply built upon existing finished retail products, and
thus is not what Level 3 is doing with its VNXX service. Wholesale Dial bears no
resemblance to VNXX, and QCC is not a CLEC in Boise assigning VNXX codes to itself
so that it may have all traffic in the state delivered to it for free. This is yet another red
herring that should be ignored in addressing the real issue.
LEVEL 3 SEEMS TO IMPLY THAT ONEFLEX OFFERED BY QWEST'
INTERNET COMPANY, IS ALSO A VNXX-TYPE PRODUCT. DO YOU AGREE?
No. Level 3's only argument for ignoring telephone numbering conventions is to claim
that everybody else does it. I have already shown that this is not the case. Level 3
inaccurately describes a Qwest product and then says "they do it, so we can do it." Qwest
admitted in response to Level 3's Request No. 1-063SI, that Qwest Communications
Corporation ("QCC") does offer OneFlexTM with virtual numbers. (See Gates Dir., at /48.
These numbers, however, honor the LCA guidelines, and calls to or from these numbers
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from outside the LCA where the VoIP POP is located are not local calls, as Level
advocates. In terms of the ESP exemption, all traffic is measured to and from the VoIP
POP, just as Qwest's language requires of Level 3 , and all calls comply with the
exemption. No VNXX calls are permitted with OneFlex TM because calls are exchanged
between the POP and the caller within the same LCA. If Level 3 assigns a Boise number
to its ESP customer in Boise, then calls from Qwest Boise customers will be delivered to it
as local. OneFlex TM does not, nor should Level 3 be permitted to assign a Twin Falls
VNXX number to a Boise ESP customer. (See Qwest exhibit/308 for a diagram of Qwest
OneFlex).
IN HIS TESTIMONY, MR. GATES STATES AT PAGE 27 THAT "ISP-BOUND
TRAFFIC AND VIRTUAL NXX ISSUES ARE VERY MUCH INTERTWINED.
DO YOU AGREE?
Yes, but that is only because certain CLECs, including Level 3, choose to intertwine them.
It is my understanding that currently all of Level 3' s assigned VNXX numbers are assigned
to ISPs. That does not necessarily mean they must be intertwined. As I stated in my direct
testimony, a VNXX call is a VNXX call whether it is to an ISP, an airline, or to a
hardware store. VNXX can be analyzed and evaluated in its own right, and the fact that an
ISP has been assigned a number is of no particular impact on the analysis, except from the
perspective that the longer holding times associated with dial-up Internet calls add greater
costs to Qwest than calls to an airline or hardware store would, and that other commissions
have excluded VNXX calls from reciprocal compensation. From a legal and policy
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perspective, however, the issues are the same. A call originating in Twin Falls and
terminating to an end user with a Twin Falls number in Boise is a VNXX call, and the type
of business of the called party does not change that fact.
MR. GATES STATES ON PAGE 30 OF HIS TESTIMONY THAT THE
LOCATION OF THE ISP EQUIPMENT HAS NO IMPACT ON THE PROPER
JURISDICTION OF THE CALL. IS HE CORRECT?
No. Remember, the ISP is the customer. To say, as Mr. Gates does, that the location of the
customer receiving the call has no impact on the jurisdictional categorization of the call
simply highlights the extreme position that Level 3 is taking in this docket. The local/toll
distinction the intrastate/interstate distinction, and the end-user customer/carrier
distinction, among other things, are all premised on a historical approach that treats the
location of customers as one of the paramount factors. The regulatory structure related to
the PSTN is based on these kinds of facts, as is the intercarrier financing structure. While
the Level 3 witnesses attempt to camouflage Level 3' s approach in overheated rhetoric, the
fact of the matter is that its intent is simply to be able to use the PSTN for free (and
incidentally, to receive reciprocal compensation at the same time).
BEGINNING ON PAGE 32 OF HIS TESTIMONY, MR. GATES LISTS WHAT HE
CONSIDERS NEGATIVE CONSEQUENCES OF TREATING VNXX CALLS AS
ANYTHIN G OTHER THAN LOCAL CALLS.PLEASE ADDRESS THE
CONSEQUENCES HE DESCRIBES.
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First, let me state that treating a call according to its actual classification is not a negative
consequence. If that were so, then every toll carrier could claim that treating its toll calls as
toll is a negative consequence as compared to the treatment accorded local calls. Treating a
call according to its actual jurisdiction is not a value judgment; it is a jurisdictional
assignment that is neither negative nor positive. It is true that different charges apply to
different classifications. Level 3's costs will undoubtedly increase if it cannot treat a call
from Twin Falls to Boise as a free local call. But that is not the issue. The real question for
the Commission is what is the proper treatment and classification of calls under existing
compensation methods.
It is also true that ISPs ' costs will likely increase if a call from Twin Falls to Boise is no
longer treated as a local call. But ISPs were paying someone to transport calls from Twin
Falls to Boise long before Level 3. They typically bought a local connection in a distant
town, and then bought transport back to their equipment from Qwest, an IXC, or a
Competitive Access Provider ("CAP") that would sell transport, or the ISP would use its
own fiber network. It was only after Level 3 began leveraging its status as a CLEC, and
began obtaining local numbers throughout the state, and began claiming that these were
local calls, that ISPs began receiving free transport. Any expense savings or efficiencies
that exist for ISPs exist only because Level 3 has inappropriately classified these calls.
Whether ISPs would need to raise their rates if forced to buy transport from Level 3
Qwest, an IXC, or a CAP from these distant towns, as Mr. Gates claims, depends on their
margins (which are unknown to Qwest). Unlike Mr. Gates, however, if that were to
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happen, it would not be an unfair negative impact, but would simply require the cost causer
(the ISP) to pay the costs, rather than impose those costs on others.
MR. GATES CLAIMS AT PAGE 33 THAT QWEST'S PROPOSAL IMPROPERLY
BENEFITS ITS OWN AFFILIATE AND REDUCES COMPETITION FOR ISP
DIAL-UP SERVICES. IS THAT TRUE?
No. Once again, the exact opposite is true. As I explained in my direct testimony, Qwest
requires that its ISP customers pay to transport from distant LCAs to their Internet
equipment through retail private line charges. Furthermore, Qwest's offerings require the
ISP to actually pick up the traffic in the LCA that the local number is associated with. The
reality, however, is that there is no significant competition for ISP dial-up customers today
because, given a choice, an ISP would prefer free transport from companies like Level 3
rather than to pay for the costs of transporting these calls. It does not take an extremely
sophisticated analyst to figure out that free services (even though unfair to Qwest and other
customers) are more beneficial than to actually pay for services received.
ON PAGE 33 OF HIS TESTIMONY, MR. GATES ASKS THE QUESTION "ARE
THERE ANY ADDITIONAL NEGATIVE CONSEQUENCES?"WHAT ARE
THEY, AND WHAT IS YOUR RESPONSE?
Mr. Gates' fundamental argument is that Level 3 has built a multi-billion dollar, highly
efficient network, and that the efficiencies of this network would be of no use if Level 3
were burdened by the arbitrary and unwarranted requirements of interconnection rules, and
the local/toll distinction mandated by state and federal law when it uses the PSTN. This
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argument, of course, ignores the significant capital dollars that Qwest has spent in Idaho
alone to build a network to places like Ketchum and Twin Falls. It is not unreasonable for
Qwest to request compensation for the use of its network. Level 3' s argument also ignores
the billions of dollars spent by IXCs and wireless carriers, all of whom play by the same
rules that Level 3 is asking the Commission to exempt it from. Mr. Gates also states that
Level 3' s network can serve large regions of the country on an integrated basis. "It is
indifferent to ILEC legacy central office boundaries.(Gates Direct, page 33.) The local
boundaries in Idaho, however, were established for very good reasons by this Commission.
And whether it likes it or not, Level 3 , if it goes beyond those local boundaries and into the
toll business, cannot be indifferent to these boundaries simply because it happens to have
built simply an IP-based network.
MR. DUCLOO MAKES THE POINT ON PAGE 69 THAT QWEST'S TRUNKNG
TO LEVEL IS THE SAME NO MATTER WHERE THE END-USER
CUSTOMER IS LOCATED. MR. GATES MAKES A SIMILAR POINT. IS THIS
TRUE?
Yes, they made similar points when discussing why Level 3' s VoIP calls should receive
special treatment. But Mr. Ducloo misses the critical point. Consistent with regulatory
requirements, Qwest's ICAs permit CLECs to serve end-user customers in various LCAs in
the LATA from a single switch under the SPOI or SPOP arrangement. Assume that Level
3 places its POP for the Boise LATA in Boise. Under SPOP, if a Qwest customer in Twin
Falls calls a Boise number of a customer served by Level 3, and located in Boise, Qwest
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would deliver the call to the Level 3 POP in Boise. If a Twin Falls Qwest customer calls
the Twin Falls number of a customer served by Level 3 and who is physically located in
Twin Falls (which, of course, is purely hypothetical since Level 3 provides no local
exchange service), Qwest will deliver the call to the Level 3 switch in Boise. Level 3 then
would have the responsibility to deliver the call back to its Twin Falls customer. In both
instances, Qwest must transport the call to the Level 3 POP in Boise. The cost to Qwest is
the same in both situations, but the point is that the regulatory treatment of the two calls is
very different. A Twin Falls to Boise call is a toll call, and access charges apply to the IXC
responsible for the traffic (and the IXC recovers toll revenue from the caller). However
the Twin Falls end-user customer to Twin Falls end-user customer call is a local call, and
thus is treated differently under Idaho regulatory rules and ICAs. Level 3, however, wants
to ignore these rules, and thus argues that since both calls were delivered to the same POP
they are the same type of call. The issue here, however, is not call routing on one side of
the POI-the issue here is the proper categorization of the call, and the application of the
appropriate intercarrier compensation mechanism.
DOES YOUR PREVIOUS RESPONSE REFLECT LEVEL 3'S ACTUAL METHOD
OF OPERATION?
No. In the previous question, I used the example of a Level 3 Twin Falls customer whose
telephone number accurately reflected its physical location. In reality, however, Level 3 is
assigning local numbers from LCAs throughout Idaho to customers with no physical
presence in those LCAs. These calls all appear as local calls because the switch operates
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on the premise that Level 3 has followed industry rules and actually have customers located
in those towns; nothing could be further from the truth, however. The calls at issue in this
case are, for example, where a Qwest customer in Twin Falls calls a Twin Falls number of
an ISP customer served by Level 3 , but the customer is actually located in Boise. Under
those circumstances, Qwest delivers the call to the Level 3 POP in Boise. But, unlike the
prior example, Level 3 wants to treat the call as local when it is really interexchange in
nature.
PLEASE SUMMARIZE YOUR CONCLUSIONS ON VNXX.
My summary is very simple. Qwest's language is consistent with Idaho statutes, rules
catalog provisions and Commission decisions. It is also consistent with NANP A rules and
court decisions in other jurisdictions. It is likewise consistent with federal statutes and
rules. Qwest's language bases the categorization of calls on the location of the calling and
called parties, an approach that is mandated by Idaho law.
Level 3 , on the other hand, proposes a sweeping change in categorizing calls, all for the
purpose of avoiding inter-carrier compensation mechanisms that govern others in the
industry. Its purpose is quite obvious. By pretending that interexchange traffic is local
(which is the essence of VNXX), Level 3 wants to be able to originate traffic for its ISPs
and terminate traffic for its VoIP customers throughout Idaho, and force Qwest to transport
this traffic for free.In an effort to justify its proposals, Level 3 uses red herrings like FX
service (which is not the same as VNXX), and its claim that, because it has built a modern
IP-based network, it should not be required to play by the same rules that govern the
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industry. The latter argument misses a critical point: the special rules that Level 3 seeks
relate to its use of the PSTN, not its IP network.
Qwest, like most others in the industry, has suggested that the FCC reform intercarrier
compensation. But it must be done on a comprehensive and rational basis that takes into
account the consequences on the public interest and individual participants in
telecommunications markets.Level 3' s approach, which in effect would reform
compensation methods to its benefit, but which would require the rest of the industry to
play by existing rules, would not only benefit Level 3 financially, but it would also create a
result that is directly contrary to the goal of competitive neutrality. Level 3' s self-serving
approach should be rejected by the Commission.
VII.DISPUTED ISSUE 4: COMPENSATION FOR VOICE AND VOIP TRAFFIC
DID LEVEL 3 ADDRESS THE CONTRACT LANGUAGE FOR COMPENSATION
FOR VOICE AND VOIP TRAFFIC IN ITS TESTIMONY?
No. Level 3 provided no testimony regarding the specific contract language in dispute for
the compensation for voice and VoIP traffic. Level 3 did provide general testimony
relating to these issues, which I have addressed in the VoIP and VNXX sections of my
rebuttal testimony.
VIII. DISPUTED ISSUE 19: ISP-BOUND 3:1 RATIO, SECTION 7.
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DID LEVEL 3 ADDRESS THE CONTRACT LANGUAGE FOR ISSUE 19?
No. Level 3 provided no testimony regarding the language in dispute for Issue 19. As
discussed in my direct testimony, Qwest has not yet brought this matter before the
Commission, and the Commission has not yet ruled on Qwest's method of identifying ISP
traffic.
IX. DISPUTED ISSUE 10: DEFINITION OF INTERCONNECTION
DID LEVEL 3 ADDRESS THE DEFINITION OF INTERCONNECTION IN ITS
TESTIMONY?
No. Level 3 provided no testimony regarding the language in dispute for the definition of
interconnection. Mr. Gates did mention interconnection on page 11 of his testimony, but
he simply said that the FCC rules refer to "interconnection" as the linking of two networks.
There is no testimony explaining why Qwest's definition should not be accepted. Thus
Qwest's language should be adopted.
X. DISPUTED ISSUE 11: DEFINITION OF INTEREXCHANGE CARRIER
DID LEVEL 3 ADDRESS THE DEFINITION OF INTEREXCHANGE CARRIER
IN ITS TESTIMONY?
No. Level 3 provided no testimony to support its position regarding the definition of
interexchange carrier in its testimony. Thus, Qwest's language should be adopted.
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XI. DISPUTED ISSUE 12: DEFINITION OF INTRALATA TOLL TRAFFIC
DID LEVEL 3 ADDRESS THE DEFINITION OF INTRALATA TOLL TRAFFIC
IN ITS TESTIMONY?
No. Level 3 provided no testimony to support its position regarding the definition of
intraLATA toll traffic. Thus, Qwest's language should be adopted.
XII. DISPUTED ISSUE 9 AND 14: DEFINITION OF TELEPHONE EXCHANGE
SERVICE
DOES LEVEL 3 ADDRESS THE DEFINITION OF TELEPHONE EXCHANGE
SERVICE IN ITS TESTIMONY?
No. Level 3 provided no testimony to support its position regarding the definition of
telephone exchange service.As previously discussed, several definitions and other
provisions of Qwest's Idaho catalogs demonstrate that the Commission views the
local/long distance distinction from a geographical perspective, and among the relevant
definitions are " local exchange calling area" and "basic local exchange service." Qwest'
definition of telephone exchange service should be adopted.
XIII. DISPUTED ISSUE 15: DEFINITION OF TELEPHONE TOLL SERVICE
DID LEVEL 3 ADDRESS THE DEFINITION OF TELEPHONE TOLL SERVICE
IN ITS TESTIMONY?
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No. Level 3 provided no testimony to support its position regarding the definition of
telephone toll service. Thus, Qwest's language should be adopted.
DOES THIS CONCLUDE YOUR TESTIMONY?
Yes it does.
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CERTIFICATE OF SERVICE
I hereby certify that on this 16th day of September, 2005, I served the foregoing
REBUTTAL TESTIMONY OF LARRY B. BROTHERSON upon all parties of record in this
matter as follows:
Jean D. Jewell
Idaho Public Utilities Commission
472 West Washington Street
O. Box 83720
Boise, ID 83702
Telephone [phone]
Facsimile: [phone]
11 ewel1~~'puc.state.id. us
Weldon Stutzman
Idaho Public Utilities Commission
472 West Washington Street
O. Box 83720
Boise, ID 83702
Telephone [phone]
Facsimile: [phone]
weldon. stutzman~puc .idaho. gov
John Antonuk
Liberty Consulting Group
65 Main Street
O. Box 1237
Quentin, PA 17083-1237
Telephone: [phone]
Facsimile: [phone]
antonuk~libertyconsul tinggro up. con1
Erik Cecil
Level 3 Communications LLC
1025 Eldorado Boulevard
Broomfield, CO 80021
Telephone: [phone]
Facsimile: [phone]
erik. cecil~leveI3. com
Boise-187669.1 0061273-00018
Hand Delivery
U. S. Mail
Overnight Delivery
Facsimile
Email
Hand Delivery
U. S. Mail
Overnight Delivery
Facsimile
Email
Hand Delivery
U. S. Mail
Overnight Delivery
Facsimile
Email
Hand Delivery
U. S. Mail
Overnight Delivery
Facsimile
Email
Hand Delivery
U. S. Mail
Overnight Delivery
Facsimile
Email
Henry T. Kelly
Joseph E. Donovan
Scott A. Kassman
Kelley Drye & Warren LLP
333 West Wacker Drive
Chicago, IL 60606
Telephone: [phone]
Facsimile: [phone]
hkell y~kelleydrye. com
Hand Delivery
U. S. Mail
Overnight Delivery
Facsimile
Email
Dean J. Miller (ISB #1968)
McDevitt & Miller LLP
420 West Bannock Street
O. Box 2564
Boise, ID 83701
Telephone: [phone]
Facsimile: [phone]
oe~mcdevi tt miller. com
Attorneys for Level Communications
tZ1tdI randi L. Gearhart, PLS
Legal Assistant to Mary S. Hobson
Stoel Rives LLP
Boise-187669.1 0061273-00018
INDEX TO EXHIBITS
DESCRIPTION Exhibit
Level 3 Response to Data Request No. 28.......
.................................................. .
Qwest/3 06
Diagram of Qwest FX Service. .... ... ...
............ ........ ...... .... ... ... ..... ... ... ..
Qwest/307
Diagram of Qwest OneFlex Service......................................................Qwest/308
Exhibit No. 306
QWE - T - 05 - 11
L, Brotherson, Qwest
DATA REQUEST NO. 29:
Does Level 3 consider a call that originates in TDM and terminates with a VolP called party in
Internet Protocol (conunonly referred to as a TDM-IP call) a VoIP call for purposes ofthe
interconnection agreement in this case?
OBJECTION TO DATA REOUEST NO. 29:
Level 3 objects to this request on the basis that it is vague, ambiguous, overly broad, unduly
burdensome, and imprecise, and utilizes terms that are subject to multiple interpretations but are
not properly defined or explained. Level 3 further objects to this data request in so far as the
request lacks certain information required in order for Level 3 to provide an adequate response.
Level 3 further objects to the request in so far as it does not seek facts and instead calls for a
legal conclusion or Level3's opinion, and is therefore not reasonably calculated to lead to the
discovery of admissible evidence and is not relevant to the subject matter of this action. Subject
to and without waiving these objections, Level 3 will respond to this request.
LEVEL 3'S RESPONSE TO REQUEST QWEST 29.
Yes.
RESPONSES OF LEVEL 3 COMMUNICATIONS, LLC TO QWEST CORP'S FIRST SET OF INTERROGATORlES--37
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