20090317order_no_30750.pdf

Office of the Secretary
Service Date
March 17 2009
BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION
IN THE MATTER OF THE PETITION OF
QWEST CORPORATION REQUESTING
AUTHORIZATION TO WITHDRAW ITS
STATEMENT OF GENERALLY
AVAILABLE TERMS AND CONDITIONS
CASE NO. QWE-08-
ORDER NO. 30750
On January 23 , 2009, Qwest filed a Motion to Bifurcate SGAT and PAP issues and
for a procedural Order in this case. The Motion requests that the Commission approve
withdrawal of Qwest's Statement of Generally Available Terms and Conditions (SGAT) and
issue a procedural order to establish a schedule to complete consideration of Qwest' s Application
to allow withdrawal of its Performance Assurance Plan (PAP). The PAP and its performance
indicator definitions (PIDs) currently are exhibits to the SGAT. Qwest's Motion asks that the
Commission separate the question of withdrawal of the SGA T from the issues surrounding the
PAP and rIDs, and "grant Qwest permission to withdraw its Idaho SGA T based on the written
record compiled in this docket." Qwest Motion, p. 5.
Qwest's Motion states that its initial Petition in this case "delineated two separate
requests of the Commission: the authority to withdraw the SGA T and, separately, permission to
withdraw the PAP and accompanying PIDs." Qwest Motion, p. 2. The two intervening parties
in this case, 360networks (USA) inc. and Integra Telecom of Idaho, Inc., filed comments arguing
against removal of both the SGAT and the PAP. Staff comments filed on July 7, 2008, focused
on removal of the PAP, and argued that the Commission should delay its decision on Qwest's
Petition regarding removal of the PAP until a multi-state review process currently under way is
completed. This review process, identified as the ROC review process, as noted in Qwest'
Motion "deals exclusively with the PAP and rIDs and is not intended to address the SGAT.
Qwest Motion, p. 3.
In a letter filed with the Commission on February 19, 2009, the Intervenors stated
they "have no objection to bifurcating the PID/P AP issues from the SGA T issues in this case.
The Commission in this Order grants Qwest's Motion to Bifurcate , and also grants the motion to
allow Qwest to withdraw the SGAT.
ORDER NO. 30750
STATUTORY AND REGULATORY BACKGROUND
Qwest correctly states in its comments that "the SGA T on the one hand, and the rIDs
and PAP, on the other, have different origins and purposes." Qwest Responsive Comments, p. 2.
This distinction is significant in considering Qwest's Motion to Bifurcate and decide the
appropriateness of withdrawal of only the SGA T on the existing record. To make the distinction
clear, Qwest committed to continuing its PAP and PID obligations if the Commission allows
withdrawal of the SGA T: "If the Commission grants Qwest's request to withdraw the SGA T
Qwest will continue to make the PAP (presently designated as SGA T Exhibit K) and the rIDs
(Exhibit B) available to CLECs on the same terms they are available today until Qwest is given
authority to withdraw, amend or substitute an altemative(s) for said PAP and PIDs." Qwest
Motion to Bifurcate, p. 5. A brief review of the legal status ofthe SGA T is necessary to evaluate
the propriety of its withdrawal.
Prior to enactment of the Telecommunications Act of 1996 (the Act),
telecommunications services were provided by companies operating in two distinct service
categories - local and long-distance - and one was prohibited from offering services in the
other s arena. 1 The Act provides the legal framework for long-distance companies to begin
providing local service and for local companies to begin providing long-distance service.
Because potential local service competitors cannot reasonably build new facilities, the Act
requires all incumbent local service companies (ILECs) to allow all competitors access and use
of the ILEC's facilities.The Act requires the largest ILECs, identified as Bell Operating
Companies (BOCs) and which includes Qwest, to prove to the Federal Communications
Commission (FCC) that their networks are available to competitors before entering the long-
distance market.
The network connection obligations set forth in the Act, and the associated detailed
regulations adopted by the FCC, resulted in thousands of specific interconnection obligations for
ILECs, and BOCs in particular. Sections 251 and 252 of the Act state interconnection and
pricing obligations. An ILEC's interconnection obligation is to provide interconnection with the
local exchange carrier s network "(A) for the transmission and routing of telephone exchange
service and exchange access; (B) at any technically feasible point within the carrier s network;
(C) that is at least equal in quality to that provided by the local exchange carrier to itself or to any
I The 1996 Act is an amendment to the Communications Act of 1934, and is codified in Title 47, U.S. Code.
ORDER NO. 30750
subsidiary, affiliate, or any other party to which the carrier provides interconnection; and (D) on
rates, terms, and conditions, that are just, reasonable, and non-discriminatory, in accordance with
the terms and conditions of the (interconnection) agreement and the requirements of this section
and section 252." 47 U.C. ~ 251(c)(2).
The interconnection pricing requirement, as stated in Section 252, requires state
commissions to determine "just and reasonable rates for the interconnection of facilities and
equipment for purposes of subsection (c )(2) of section 251 , and the just and reasonable rate for
network elements." 47 U.C. ~ 252(d)(1). Section 252 states that these rates must be "based on
the cost (determined without reference to a rate of return or other rate base proceeding) of
providing the interconnection or network element. . . , and (iii) non-discriminatory, and (B) may
include a reasonable profit." 47 US.C. ~ 252(d)(1)A, B. The Commission-approved
interconnection and network element rates are contained in Exhibit A to the SGAT.
Section 252 also provides the means for an interconnection agreement to be
negotiated or arbitrated and approved by a state commission, and it is in Section 252(f) that an
SGA T is discussed. If no competitor has requested an interconnection agreement, Section
252(f)(1) allows as an alternative that a BOC "may prepare and file with a state commission a
statement of the terms and conditions that such company generally offers within that state to
comply with the requirements of section 251 and the regulations thereunder and the standards
applicable under this section.Once an SGA T is filed with a state commission, the state
commission is required to review and approve it within 60 days, or permit the SGA T to take
effect at the end of that period. 47 U.C. ~ 252(f)(3).
Section 271 describes the review process and additional requirements a BOC must
meet to be granted long-distance authority. Section 271 includes a competitive checklist of
items, some of them incorporating Sections 251 and 252 obligations, a BOC must satisfy.
Section 271 also specifies that the FCC before making a determination on a BOC's Section 271
application must consult with the state commission to verify the BOC's compliance with the
competitive checklist, and thus the Section 271 proceedings commenced in state commissions.
The state proceeding initiated by Qwest was a lengthy, complicated multi-state process
ORDER NO. 30750
culminating in Commission decisions issued in March and April 2002.1 The FCC noted in its
Qwest Section 271 Order that the various state commissions, including the IPUC
, "
each devoted
a significant portion of their resources to this process over a number of years.Qwest Nine State
Order WC Docket No. 02-314, FCC Order 02-332.
Qwest filed its application for long-distance authority with the FCC on September 30
2002 after concluding the state Section 271 proceeding. The FCC issued a Memorandum
Opinion and Order on December 20 2002 , approving Qwest's Application.3 A BOC requesting
Section 271 authority must either be a party to at least one effective interconnection agreement
(Track A), or have an SGAT in place (Track B). 47 US.C. ~ 271(c)(1) and (2). The FCC
determined, as did this Commission, that Qwest met the Track A standards through existing
interconnection agreements and so gave little attention to the Track B (SGA T) standards. The
SGAT accordingly had little significance in the FCC's approval of Qwest's Section 271
application.
In summary, Qwest is required as a BOC (and incumbent local service provider) to
allow other companies to connect and use its facilities. Interconnection agreements are filed
with the Commission for approval and are made available to other carriers. In addition to ICAs
that demonstrate the opening and availability of an ILEC's facilities, a BOC may but is not
required to file an SGAT. When a BOC presents its case to the FCC for long-distance authority,
either existing ICAs or an SGA T may prove it has met its statutory and regulatory
interconnection duties. In Qwest's case, it was the existence of ICAs that demonstrated Qwest
was making its facilities available to other companies.
QWEST COMMENTS ON WITHDRAWAL OF THE SGA
Qwest stated its position regarding withdrawal of its SGA T in comments filed on
September 15, 2008. Qwest notes that the 1996 Act requires Qwest as the ILEC to enter into
interconnection agreements (ICAs) with competitive local telecommunications carriers (CLECs),
and Qwest views an SGA T as merely an offer or starting place for negotiations. The Act
imposes a duty on both ILECs and CLECs to negotiate in good faith the particular terms and
conditions for an ICA. If the parties are unable to reach agreement, state commissions are
2 Commission decision on Qwest's Perfonnance Assurance Plan , issued March 7, 2002; Commission decision on
Qwest Corporation s Compliance with Section 271 Public Interest and Track A Requirements and Section 272
Standards, issued April 1 , 2002; Case No. USW-00-
3 The FCC is required to rule on a Section 271 application within 90 days of filing. 47 D.c. ~ 271(d)(3).
ORDER NO. 30750
authorized to resolve disputes through compulsory arbitration. 47 U.C. ~ 252(c)(1). Qwest
points out that this process of negotiation and arbitration if necessary takes place without
reference to any SGAT.
Qwest notes that the Section 252(f) of the Act provision for filing an SGA T
permissive rather than mandatory, thus the Act does not require that Qwest either create or
maintain an SGAT. Further, Qwest notes that an ILEC's decision to file an SGAT does not
relieve it ofthe duty to negotiate the terms and conditions of an ICA. Qwest used its SGA T as a
template ICA for a time; however, Qwest has not offered the SGA as an option for
interconnection or as a starting point for negotiations since August 2004.
Qwest argues that no section of the Act requires that an SGA T playa part in ICA
negotiations. Qwest asserts that since it removed its SGA T as an interconnection agreement
template in 2004, no CLEC has complained to the Commission that Qwest no longer offers the
SGAT as an ICA template or as a starting point for negotiations. Additionally, 34 ICAs have
been approved by the Commission since Qwest stopped offering the SGA T, and approximately
one-half of those were based on Qwest's negotiation template that replaced the SGA T. Qwest
argues this demonstrates it is meeting its interconnection obligations in Idaho, including its duty
to negotiate ICAs in good faith, even though the SGA T has not been available to CLECs since
2004.
Qwest recognizes that the SGAT was derived through a multi-party process, but this
does not demonstrate that the absence of an SGA T affects CLECs' ability to negotiate ICAs.
Qwest Responsive Comments, p. 7. In addition, Qwest argues that if the SGA T were to come
before the Commission today for approval, the Commission would be obliged to reject it under
Section 252(f)(2) as not complying with Section 251 and applicable regulations. Changes in the
law since the SGA T was submitted would require material modifications to the SGA T, which
Qwest claims would be an irrelevant and burdensome exercise. Qwest Responsive Comments
, p.
8. Qwest argues that "piecemeal and continuous updates to the SGA T to reflect changing law
and industry practices involve a sizeable commitment of resources for Qwest and the
Commission." Qwest Responsive Comments, p. 9. Qwest claims it is more efficient to consider
any CLEC objection to Qwest-proposed ICA language in arbitrations, which has the advantage
of deciding disputes in the context of an actual commercial negotiation between competitors.
Qwest argues that the fact there have been no disputes brought to arbitration in Idaho in recent
ORDER NO. 30750
years shows that the process is working efficiently, while regular SGA T updates would require a
significant investment of time and resources and provide no objective benefit. Qwest
Responsive Comments, p. 9. Whether an approved SGAT exists, Qwest asserts, has no bearing
on whether ICAs are actually reached in today s competitive environment. Qwest Responsive
Comments, p. 10.
The Intervenors assert that Qwest's template proposal is not reviewed by anyone to
assure its fairness or competitive neutrality. Qwest notes that its template is offered as a baseline
agreement for negotiations, and its terms are subject to objection and negotiation by a CLEC
seeking an ICA. Qwest Responsive Comments
, p.
11. Further, Qwest notes that all ICAs are
subject to the Commission s role as arbitrator in the absence of successful negotiation, and the
Commission is required to approve all ICAs whether adopted by negotiation or arbitration.
Qwest argues that "withdrawal of the SGAT in no way impacts or diminishes this Commission
role in approving the terms and conditions of section 252 agreements.Qwest Responsive
Comments, p. 12.
INTERVENOR COMMENTS REGARDING REMOVAL OF THE SGA
In written comments filed July 7, 2008 , 360networks noted that an SGAT, although
not an absolute legal requirement to gaining Section 271 relief, once Qwest offered to make it
available and it has been relied upon, Qwest should not be allowed to unilaterally withdraw it."
360networks Comments, p. 3.360networks contends that having a Commission-approved
SGA T "eliminates significant transaction costs that are incurred in negotiating and potentially
arbitrating an ICA with Qwest and is critical to competitors both small and large." 360networks
Comments, p. 4. 360networks also contends a competitive carrier s ability to opt-in to other
interconnection agreements does not replace the importance of an SGA T. 360networks contends
that if Qwest withdraws its SGA T, Qwest would be free to change terms and conditions as it sees
fit and leave CLECS that may not desire the terms of another carrier s interconnection agreement
with a take it or leave it choice. 360networks Comments, p. 5. 360networks asserts this "would
have the undesirable consequence of handicapping CLECs during ICA negotiations and
increasing the likelihood and scale ofICA arbitrations." 360networks Comments, p. 5.
Integra also argued against withdrawal of Qwest's SGA T in comments filed July 9
2008. Integra maintains that because SGAT changes should be filed for approval with the
Commission before Qwest implements them, the SGA T provides protection against unilateral
ORDER NO. 30.750
changes in the terms and conditions of possible interconnection agreements. Integra asserts that
if the SGA T is out of date, as Qwest claims, it is only because Qwest unilaterally chose not to
update the SGAT. Integra asserts that Qwest's template negotiation agreement is not
reasonable substitute for the SGA T review change process. If Qwest's template agreement is
allowed to replace the SGAT, as Qwest intends, Integra asserts that this would allow Qwest to
unilaterally dominate carrier negotiations. Integra asserts that the unilateral decision by Qwest to
phase-out the SGA T by making it obsolete and then totally withdrawing it from CLECs as an
interconnection agreement demonstrates that competitive parity is far from achieved. Integra
argues that the "history of Qwest's unilateral conduct regarding the SGAT demonstrates the
continued need for the SGA T." Integra Comments, p. 11.
On February 19, 2009, the Intervenors filed responses to discovery requests submitted
by the staff of the Arizona Corporation Commission in a case filed before that Commission to
consider Qwest's withdrawal of its SGA T. In the letter accompanying the discovery responses
the Intervenors state that the CLEC responses to the discovery "set forth the view of those
CLECs (including CLECs participating in this matter) as to why the state commissions in all of
Qwest's states should reject Qwest's request." It is evident from the staff requests and responses
filed by the CLECs in the Arizona case, however, that the legal status of the SGA T in Arizona is
different from its status in Idaho. For example, staff request No. 1.9 states that "Qwest was
required by a prior Commission order to obtain Commission approval before it withdraws its
SGA T in Arizona.CLEC Data Responses, p. 20.In Idaho, as Qwest points out in its
responsive comments, this Commission never formally approved the SGAT, instead letting it
become effective within 60 days after it was filed by operation of Section 252(f)(3)(B) of the
Act.
This legal difference aside, the CLECs make clear in their Arizona discovery
responses that the SGA T is important to the interconnection process. The CLECs characterize
the SGA T "as a key source to help frame interconnection agreement (ICA) negotiation positions;
as a resource for attempting to resolve disputes with Qwest such as in billing, carrier relations
and change management process (CMP) contexts; and as an internal resource such as to confirm
Commission-approved terms and filed requirements (such as Commission-approved rates, which
are identified in SGAT Exhibit A, and rIDs/PAP requirements in SGAT Exhibits B and K).
CLEC Data Responses, p. 2. Although Qwest in 2006 notified CLECs in Arizona that its SGA
ORDER NO. 30750
would no longer be available, the CLECs state they "have used the collaboratively developed
SGAT as a resource in formulating negotiation positions in response to Qwest's unilaterally
developed negotiations template." CLEC Data Responses, p. 10. The CLECs argue against
allowing Qwest's template agreement to become a replacement for the SGA T. "Qwest's choice
to unilaterally declare the SGA T unavailable for opt-in despite a Commission order that it be
available for opt-, should not be rewarded by allowing Qwest's conduct to become a self-
fulfilling prophecy so that, now, the SGAT is no longer available and is replaced by Qwest'
template." CLEC Data Responses, pp. 10-11 (footnotes omitted).
COMMISSION DECISION
Because the Intervenors stated they have no objection to Qwest's Motion, the
Commission finds it reasonable and appropriate to grant Qwest's Motion to Bifurcate and
determine whether the SGA T may be withdrawn on the existing record. It is clear from their
comments that the Intervenors strongly prefer that Qwest maintain an SGA T to assist CLECs in
reaching interconnection agreements. The record is also undisputed, however, that Qwest has
not offered an SGAT in Idaho since 2004 and that no party has filed any objection to its removal
outside of the comments filed in this case. It is equally undisputed that the Act does not mandate
that an SGA T be maintained, nor has this Commission ordered Qwest to file and maintain an
SGAT. Thus, although the Intervenors discuss numerous advantages to an SGAT, they do not
identify a legal requirement in this state that an SGA T remain in effect. On this record, the
Commission grants Qwest's motion to allow it to withdraw its SGAT in Idaho.
Withdrawal of the SGA T does not affect any of the exhibits to the SGA T, including
Exhibit A (price list), Exhibit B (PIDs) and Exhibit K (PAP). We direct Qwest, consistent with
its stated commitment, to continue to abide by the terms of the SGA T exhibits until such time as
the Commission approves their removal, substitution or amendment.
Qwest requested in its Motion that the Commission, if it granted the Motion to
Bifurcate, issue a procedural order to provide a process for completing review of Qwest' s motion
to allow withdrawal of the PAP and rIDs. Specifically, Qwest asks that the Commission hold
the PAP issues in abeyance "until April 15, 2009 - a date by which, Qwest understands, the
ROC Review is scheduled to be completed." Qwest Motion, p. 6. Qwest requests that when the
docket is reactivated, the Commission schedule a prehearing conference to establish a procedural
schedule so the PAP issues can be brought before the Commission for decision. Id.
ORDER NO. 30750
The Commission grants Qwest's motion to hold the PAP issues in abeyance until
after completion of the multi-state ROC review. Qwest, Staff and the Intervenors should
thereafter provide a procedural schedule to the Commission for approval, or request a prehearing
conference if the parties are unable to agree on the appropriate schedule.
ORDER
IT IS HEREBY ORDERED that Qwest's Motion to Bifurcate is granted.
Consideration of the P AP/PID issues will be held in abeyance pending completion of the ROC
review process.
IT IS FURTHER ORDERED that Qwest's Motion to Withdraw its SGAT is granted.
Withdrawal of the SGA T shall not alter the status and effectiveness of the exhibits to the SGA
including Exhibit A (price list), Exhibit B (PIDs) and Exhibit K (PAP).
DONE by Order of the Idaho Public Utilities Commission at Boise, Idaho this 17TA.
day of March 2009.
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MACK A. REDFO
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MARSHA H. SMITH, COMMISSIONER
11 ~.JI PTO , CO MISSIONER
ATTEST:
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Je D. Jewell
Commission Secretary
bls/O:QWE-O8-ws6
ORDER NO. 30750