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Home My WebLink About20020930Illuminet - Florack Direct.pdf=?~Y1 BEFORE THE IDAHO PUBLIC UTILITIES COMMISSION IDAHO TELEPHONE ASSOCIATION CrnZENS TELECOMMUNICATIONS COMPANY OF IDAHO, CENTURY TEL OF IDAHO, CENTURY TEL OF THE GEM STATE, POTLATCH TELEPHONE COMPANY and ILLUMINET, INc. CASE NO. QWE-O2-r-.:! c::.::t " ~::: 1',, () C-J "" ! ' I '-"O'"pi' . -::;:: tn ;Co.) f11 C-)C) 0 -:J: ! U1::::) \.f? (j) c- r"o ":"i (:) - \._ J L;;.! i\\~'\.G,\I ",.=!' Complainants vs. QWEST COMMUNICATIONS, INc. Res ondent. Direct Testimony of Paul Florack on Behalf of Iliuminet, Inc. September 27,2002 ::ODMA\GRPWISE\MT.MTPO,801 MTl :414367, Q. Please state your name and business address. A. My name is Paul Florack. My business address is 7400 West 129th Street, Overland Park, KS 66213. Q. What is your current position? A. I am Vice President for Network Services in Product Management and Development at IIluminet, a VeriSign Company (hereinafter "Illuminet" Q. Please describe your qualifications A. I have over 15 years of experience in the telecommunications industry. Prior my work at IIIuminet, I held positions in Engineering, Operations, and Technical Marketing for the Frontier Corporation where my responsibilities included planning the Signaling System No.7 C'SS7") strategy for its regional telephone operations. I joined IIIuminet's Product Management and Development department in 1993. I currently am Vice President of Network Services with responsibility for all IIIuminet network service product lines, such as ISDN User Part C'ISUP") Trunk Signaling and Wireless Messaging. In addition, I am co- author of "Wireless Intelligent Networking , published by Artech House in 2001. This book discusses wireless intelligent networking using the SS7 network. I have been a speaker at several industry conferences hosted by organizations such as the Cellular Telephone Industry Association, Telestrategies, and the Association for Local Telephone Services. My educational background consists of a B.A. in Mathematics from Potsdam College, a B.S. in Electrical & Computer Engineering from Clarkson University, and an M.A. from the University of Rochester s Simon School. Q. Who is Iliuminet and what type of SS7 related services does it provide? Florack, Di lIIuminet, Inc. ::ODMA\GRPWISE\MT,MTPO, 801- MTl :414367, A. IIIuminet is a third-party non-common carrier of SS7 services for a variety of carrier/customers. IIIuminet does not serve any end-users nor does IIIuminet carry any end-user traffic of its own or of its carrier/customers. IIIuminet serves over 900 telecommunications carriers across the country and internationally. With respect to the SS7 network, IIIuminet provides SS7 connectivity to all segments of the telecommunications industry including Interexchange Carriers C'IXCs ), Local Exchange Carriers C'LECs ) (including both Incumbent Local Exchange Carriers C'ILECs ) and Competitive Local Exchange Carriers C'CLECs )), and Commercial Mobile Radio Service C'CMRS") providers. In this testimony, I refer to these entities as IIIuminet's "carrier/customers." IIIuminet provides these carrier/customers with the ability to utilize IIIuminet as their SS7 network in order for these carrier/customers to be able to deliver advanced intelligent network and database services to their end-user customers and to efficiently process end user traffic over their networks. Iliuminet also provides a billing clearinghouse service for many customers. IIIuminet deployed its network to provide a competitive alternative to the SS7 services of other providers (such as Qwest Corporation C'Qwest")), and has achieved nationwide connectivity of its SS7 services. Q. What are your current responsibilities at Iliuminet? A. My responsibilities include profit/loss responsibility for a complete line of IIIuminet's SS7 network service offerings for both wireline and wireless carriers. These product lines include SS7 Connectivity, ISUP Trunk Signaling, TCAP CLASS Messaging, and Network Reporting services for competitive local exchange, interexchange, independent telephone and wireless telecommunications carriers. In addition, I am responsible for IIIuminet's wireless network service offerings that include seamless roaming, fraud, intelligent network, text messaging, and mediation services. Florack, Di Iliuminet, Inc. ::ODMA\GRPWISE\MT,MTPO,801 MTl :414367, Q. Have you previously testified before the Idaho Public Service Commission ("Commission A. , this is my first appearance before this Commission. Q. Have you reviewed the Idaho Access Service Catalog ("Catalog ) that Qwest has filed, which is the subject of this proceeding? A. Yes. Q. Can you summarize your testimony? A. Yes. IIIuminet requests that the Commission find the Qwest SS7 revisions to the Idaho Access Service Catalog (hereinafter referred to as "SS7 Catalog Revisions unlawful and, further, have been improperly implemented because Qwest cannot demonstrate that the SS7 signaling message charges in the Catalog are only assessed on SS7 signaling messages associated with originated intrastate toll traffic and originated interMTA CMRS end-user traffic of an IIIuminet carrier/customer. Qwest requires each IIIuminet carrier/customer to provide a Letter of Agency C'LOA") to Qwest, which authorizes IIIuminet as that carrier/customer s SS7 networker provider agent. However, Qwest is charging SS7 signaling message charges from its Catalog on third party SS7 providers regardless of the existence of interconnection arrangements entered into by that third party SS7 provider s carrier/customers and is imposing such charges in a manner in which IIIuminet cannot identify or independently verify that the charges are properly assessed by Qwest, which, in turn, would allow IIIuminet the confidence that it is properly passing through such charges to its carrier/customers. Absent the relief being requested by IIIuminet and Citizens Telecommunications Company of Idaho C'CTC-I"), certain members of the Idaho Telephone Association C'ITA"), Electric Lightwave, Inc C'ELI"))(coliectively the Complainants ), the substantial benefits of economy of scale and scope, which IIIuminet provides by aggregating demand for SS7 functionality for a broad range Florack, Di Iliuminet, Inc. ::ODMA\GRPWISE\MT,MTPO,801 MTl :414367, of telecommunications carriers through its agency relationship with its carrier/customers, will be seriously impaired if not lost by improperly imposing additional and unwarranted costs upon IIIuminet (and its carrier/customers) to the detriment of developing competitive SS7 service alternatives and competitive services to end users within Idaho. In developing the SS7 Catalog Revisions, Qwest failed to properly consider the pre-existing constraints on its ability to recover certain of its SS7 signaling message costs under its Catalog. Those pre-existing constraints relate to the treatment of SS7 signaling messaging associated with (1) jurisdictionally local/Extended Area Service ("EAS") traffic, (2) jointly provided intrastate access between two or more telecommunications carriers, (3) intraMTA CMRS traffic and (4) Qwest-provided intrastate end user toll services (collectively referred to as "Non-Chargeable Usage Traffic ). This failure is evident from the tariff provisions regarding the Percent Interstate Use ("PIU") factor, which establishes the intrastate usage percent as "100% - PIU." The result is that SS7 signaling messages associated with the end user traffic types for which intrastate access charges do not apply are charged for under the SS7 Catalog Revisions. Qwest' improper billing is exacerbated by Qwest's failure to provide adequate billing detail in order for IIIuminet to verify proper billing under the SS7 Catalog Revisions. In addition to finding the SS7 Catalog Revisions unlawful, IIIuminet also requests that the Commission establish the following principle in order to provide guidance to Qwest if it chooses to refile a corrected Catalog: The assessment of SS7 signaling message charges by Qwest should be determined by applying the terms and conditions of the agreement between Qwest and the IIIuminet carrier/customer (or other third-party provider) associated with the specific type of end-user traffic (i.e., the interconnection arrangements for local service/EAS/CMRS intraMTA/meet point billing traffic or the Catalog for Interexchange toll traffic). To ensure the proper application of these arrangements, Qwest should also provide sufficient detail to permit the company receiving such charges to verify independently that such charges are assessed in Florack, Di Iliuminet, Inc. ::ODMA\GRPWISE\MT,MTPO,801- MTl :414367, compliance with the proper arrangement. Because none of these prerequisites are present in the SS7 Catalog Revisions, the Commission should grant each element of relief that the Complainants are requesting, including adjusting all Qwest intrastate message signaling charges in excess of approximately 020 000.00 as of September 7, 2002 that have been improperly assessed on Qwest invoices to IIIuminet. Q. What is Signaling System No. A. SS7 is an industry standard protocol for performing signaling that supports call- establishment, billing, routing, and information-exchange functions of the public switched telephone network C'PSTN") without relying upon the PSTN's voice paths. Signaling refers to the exchange of information required to provide and maintain end-user voice and data services. SS7 utilizes high-speed packet data and out-of-band signaling. Q. What types of functions does the SS7 network perform? A. Among other functions, the SS7 network is used for: Basic call setup, management, and tear down via ISUP messaging; Wireless services such as personal communications services (PCS), wireless roaming, and mobile subscriber authentication; Local Number Portability (LNP); . Toll-free (800/888/8XX) database services; and Enhanced call features such as Custom Local Area Signaling Services C'CLASS") which includes automatic callback, calling party name/number display and other intelligent network database services such as Line Information Database C'LIDB" Florack, Di Iliuminet, Inc. ::ODMA\GRPWISE\MT,MTPO,801 MTl :414367, Q. What type of information is exchanged over the SS7 network? A. SS7 is a means by which elements of the telephone network exchange information. Information is conveyed in the form of "signaling messages SS7 messages can convey information such as: I'm trying to set up a call on trunk 067 placed from 208-784-1234 (Kellogg) to 208-733-5678 (Twin Falls) I'm trying to make a call on trunk 67 placed from a mobile subscriber 208- 123-4567 to a Qwest wireline end user 208-123-4567 Someone just dialed 800-555-1212. Where do I route the call? The called subscriber for the call on trunk 11 is busy. Release the trunk and playa busy tone. The route to XXX is congested. Please don t send any messages to XXX via this route. Q. Could you explain your reference to the SS7 network utilizing high- speed packet data? A. Yes, I would be pleased to. SS7 signaling messages are exchanged between SS7 network components over 56 or 64 kilobit per second (kbps) bi-directional channel signaling links (i.e., two-way signaling links). Signaling occurs "out-of- band" on dedicated channels rather than on the voice channels (or so-called "in- band" signaling). Each signaling point in the SS7 network is uniquely identified by a numeric point code. Point codes are carried in signaling messages exchanged between signaling points to identify the source and destination of each message. Each signaling point uses a routing table to select the appropriate signaling path for each message. Q. Please describe the major components that make up the SS7 network. A. The major components are: SCP (Service Control Point) STP (Signal Transfer Point) Florack, Di IIluminet, Inc. ::ODMA\GRPWISE\MT,MTPO,801 MTl :414367, SSP (Service Switching Point) (In a CMRS network the SSP functionality is located in the Mobile Switching Center C'MSC")) An SCP is the entity that provides the interface to a network database that provides storage for call routing information (such as in the case of an 800 call) or call completion information (for example, in the case of collect calls). The SCPs generally respond to SS7 signaling message queries initiated by SSPs or a MSc. The STP's main function is to switch and address SS7 signaling messages. An STP is connected to other STPs and are interconnected via facilities known as links , which in order to ensure diverse routing, consist of at least four (4) links (two between each STP). STPs do not originate SS7 traffic other than network maintenance messages, which are not the type of SS7 signaling messages at issue in this proceeding. Finally, the SSPs are typically digital switches with SS7 messaging hardware and software that allow them to originate and terminate SS7 signaling messages for call set-up and tear down, and for accessing databases housed by an SCPo SSPs are connected to STPs via facilities known as "links , two of which, for redundancy, are required to connect the SSP with an associated STP. An SSP generates the initial SS7 signaling messages required when an end-user wants to make a call, and, on the terminating end of an end-user call , provides the SS7 signaling messages required to ensure that the voice path is available to the end-user that the customer is calling. IIIuminet does not own or operate SSPs since it is not a telecommunications carrier providing services to end-users. IIIuminet' customers are "carriers" and have established IIIuminet as their network provider agent. These carrier/customers own and operate SSPs. In addition, some of IIluminet's carrier/customers own their own STPs. I have attached a diagram which illustrates the typical SS7 network figuration. See Exhibit 401. Q. What benefits does the SS7 network provide? A. Compared to in-band signaling, out-of-band signaling provides: Florack, Di Iliuminet, Inc. ::ODMA\GRPWISE\MT,MTPO,801 MTl :414367. Faster call setup times (compared to in-band signaling using multi-frequency (MF) signaling tones) More efficient use of voice circuits; Support for Intelligent Network (IN) services which require signaling to network elements without voice trunks (~, database systems); Improved control over fraudulent network usage. Q. What benefits does Iliuminet bring to its carrier/customers? A. IIIuminet provides its carrier/customers with the economies of scale and scope of the largest independently owned SS7 network in the United States. IIIuminet is able to offer wireline and wireless telecommunications carriers diversity, reliability and redundancy, and provide a full range of services to meet their respective end user requirements as well as federal and state mandates such as number portability. In light of its commitment to provide state-of-the-art SS7 signaling service, IIIuminet is able to provide its carrier/customers an alternative to their own deployment of a separate SS7 network, which, in turn, saves financial and internal resources for them. Moreover, IIIuminet's efficiencies provide its carrier/customers the ability to enter the marketplace quickly with all its necessary SS7 functionality in place. Because IIIuminet does not compete with its carrier/customers for any end-user customers, its carrier/customers can turn to a third party provider such as IIIuminet to provide their portion of the SS7 network rather than relying solely upon a telecommunications carrier that the IIIuminet carrier/customers compete with for end-users and end-user voice and data traffic. Q. Is Iliuminet the SS7 network provider agent for its carrier/customers including the co-complainants in this proceeding? A. Yes, IIIuminet is the SS7 network provider for its carrier/customers including certain of the Co-Complainants in this proceeding. IIIuminet establishes a Florack, Di Iliuminet, Inc. ::ODMA\GRPWISE\MT.MTPO,801 MTl :414367, relationship to act on behalf of its carrier/customers for the act of ordering telecommunications services and when doing so with Qwest is required to submit a LOA reflecting that relationship. Through the LOA process, Qwest requires that IIIuminet provide to Qwest LOAs from any Iliuminet carrier/customer designating IIIuminet as its SS7 network provider agent. Examples of these LOAs are being provided by ELI and CTC-I. Moreover, Qwest has informed IIIuminet that the ordering process that an IIIuminet carrier/customer undertakes with Qwest for that carrier/customer s voice or data trunk must specifically identify the point code associated with that carrier/customer s switch and the identity of its SS7 provider. A similar Qwest policy regarding LOA's as a precondition of service is also reflected on the Qwest Website at http://www.qwest.com/whoiesale/preorder/index.htmi Q. Are there any additional operating efficiencies that an Iliuminet carrier/customer achieves by using Iliuminet? A. Yes. IIIuminet's carrier/customers have the need to provide SS7 signaling with multiple carriers, including Qwest. Our carrier/customers connect to IIIuminet so that they can take advantage of the opportunity to connect with one third party SS7 provider and, through this connection, have access to multiple LECs, CMRS providers and IXCs. This eliminates the need for such carrier/customers to establish SS7 network arrangements with other SS7 networks, thereby creating a more technically and economically efficient means for SS7 service provisioning. Moreover, by connecting to a third party SS7 network, like that operated by IIIuminet, carriers can minimize administrative costs associated with managing multiple connections to various signaling partners, as well as investment in additional hardware and facilities to support those connections. Q. Can you describe the administrative and facilities savings that you just referenced? A. When a carrier/customer connects to IIIuminet and requests service into an ILEC territory such as that served by Qwest, IIIuminet takes the lead in communicating Florack, Di Iliuminet, Inc. ::ODMA\GRPWISE\MT,MTPO,801 MTl :414367, the required information in the form of Access Service Requests C'ASR") and pursuant to the requirements of Qwest, arranging for the LOA from its carrier/customer designating IIIuminet as that carrier/customer s agent to conduct all negotiations and issue orders for ISUP signaling. IIIuminet also acts as a central point of contact with the ILECs regarding SS7 network issues for IIIuminet's carrier/customers. Likewise, third party SS7 providers also provide Transaction Capability Part TCAP") services such as LNP, 800, calling name, LIDB and CLASS in competition with the ILEc. IIIuminet's LNP data service, for example, provides carriers the ability to obtain call completion information (i.e.,location routing numbers C'LRNs )) necessary to complete calls without investing in the LNP infrastructure. The ILECs offer such a service but it is typically bound to LRN information for the specific Number Portability Administration Center C'NPAC") region in which the ILEC operates. IIIuminet provides LRN information across all seven US NPACs. Q. Does Qwest realize any benefits from the existence of third party SS7 providers such as Iliuminet? A. Definitely. The same economies of scale and scope noted above benefit not only the IIIuminet carrier/customer, but also Qwest. For example, by establishing physical interfaces to third party SS7 providers, Qwest has to deploy SS7 monitoring equipment for billing and surveillance to monitor fewer links than it would if all telecommunications carriers directly connected to Qwest. Furthermore, via port and facility connections to IIIuminet that are paid 100% IIIuminet, Qwest has immediate SS7 access to IIIuminet's carrier/customer base. These connections allow Qwest to establish the necessary SS7 signaling via IIIuminet to the IIIuminet carrier/customers necessary for end user calls to be completed. These connections also allow Qwest to access the IIluminet Florack, Di Iliuminet, Inc. ::ODMA\GRPWISE\MT,MTPO.801 MT1 :414367, carrier/customer with SS7 signaling without Qwest having to incur the expense associated with direct connections to those carriers. Q. Does Qwest pay Iliuminet for the use of Iliuminet's service? A. , even though IIIuminet incurs costs associated with the delivery and receipt of SS7 signaling messages generated by Qwest on behalf of its end-user customer traffic, Qwest pays nothing to Iliuminet. Qwest is shifting its SS7 costs to the IIIuminet carrier/customer because of Qwest's inability to properly measure identify and bill for only those intrastate SS7 signaling messages properly included under the SS7 Catalog Revisions. Further, instead of paying for termination of its end user traffic via other networks, Qwest's application of its SS7 Catalog Revisions has other network providers paying Qwest. Q. Does Iliuminet transmit any SS7 signaling messages on its own behalf that are subject to the SS7 Catalog Revisions? A. No. All of the SS7 signaling messages that traverse the IIIuminet SS7 network for which Qwest charges IIIuminet, including Qwest originated SS7 signaling messages and those SS7 signaling messages originated by IIIuminet' carrier/customers for termination on Qwest's network, are associated with an underlying voice or data message from a provider of end-user telecommunications services. In fact, Qwest requires IIIuminet to provide a LOA from each of its carrier/customers as a condition to Qwest's provision of its SS7 connectivity for that IIIuminet carrier/customer. Q. In Iliuminet's view is SS7 signaling integral to the transmission of the underlying end user voice and data on the PSTN? A. Yes. SS7 signaling, and specifically ISUP messaging, was created and exists solely to assist in the transmission of underlying voice and data messaging from one end-user to another in order to maximize efficient and economic use of the Florack, Di IIluminet, Inc. ::ODMA\GRPWISE\MT,MTPO,801 MT1 :414367, PSTN. The SS7 signaling messages at issue here are an integral component of the end user traffic that is carried over the PSTN. Qwest recognizes this relationship by the virtue of the fact the SS7 Catalog Revisions were previously a component of the switched access charges assessed to an IXC for telephone toll traffic. Only since the inception of unbundling by Qwest of SS7 signaling, albeit improperly implemented , has Iliuminet heard suggestions from Qwest that the SS7 network is no longer an integral component of the end user traffic the SS7 network supports. From a practical perspective, however, where SS7 connections are in place between lIIuminet and its carrier/customers with Qwest the failure of those connections will result in the end user traffic not being completed over the PSTN. Q. Should the SS7 Catalog Revisions be allowed to remain in effect? A. No. The SS7 Catalog Revisions are seriously deficient and unjustifiably and unfairly impact IIIuminet and our carrier/customers. Therefore, the Commission should find the SS7 Catalog Revisions are unlawful and have been incorrectly applied by Qwest unless and until Qwest is able to bill SS7 signaling messages correctly and it makes the Catalog modifications necessary to exclude from billing SS7 signaling messages associated with Non-Chargeable Usage Traffic. Q. Is Iliuminet opposed to Qwest's unbundling of SS7 services? A. No. In fact, IIIuminet supports the concept of unbundling which is clearly demonstrated by the fact that IIIuminet developed the software (AMATl) that Qwest uses in part to bill for unbundled services. IIIuminet is opposed, however to the current improper application of such unbundling by Qwest for the reasons stated herein and those provided by Mr. Lafferty in his testimony. Q. In general, what are Iliuminet's concerns regarding the SS7 Catalog Revisions and its implementation? Florack, Di Iliuminet, Inc. ::ODMA\GRPWISE\MT,MTPO,801 MTl :414367, . A. IIIuminet believes Qwest's SS7 Catalog Revisions are deficient in several areas. The Catalog fails to disaggregate intrastate SS7 signaling messages associated with intrastate toll calls to which Qwest's Catalog applies (i.e., IXC traffic and intraLATA or interMTA toll traffic generated by the end user customer of the LEC or CMRS provider to Qwest end-users) and SS7 signaling messages associated with traffic to which Qwest's Catalog does not apply (e., local and extended local calling area service C'EAS") end user traffic, jointly provided exchange access, intraMTA CMRS traffic, and intraLATA toll traffic sent from Qwest to a LEC ( what I referred to earlier as "Non-Chargeable Usage Traffic ). In addition implementation of the SS7 Catalog Revisions has resulted in inequitable and anti- competitive impacts upon both IIIuminet and the carrier/customers it serves. IIIuminet believes that Qwest has prematurely unbundled SS7 signaling messaging from its Catalog. In discussions between Qwest and IIIuminet, Qwest has indicated that its billing system will not allow it to bill for SS7 signaling messages by the type of underlying telephone traffic i.e., Qwest is unable to disaggregate SS7 signaling messages associated with intrastate toll traffic and Non-Chargeable Usage Traffic. Rather than take the steps necessary to adjust its billing systems to bill correctly, Qwest apparently would rather attempt to convince the Commission that Qwest should bill for SS7 signaling messages associated with all calls regardless of whether such SS7 signaling messages are associated with end-user traffic that is properly subject to its Catalog. Exhibit 402 is a copy of an actual bill from Qwest that shows the lack of any billing detail to inform IIIuminet what is being billed for and to allow IIIuminet to verify such charges. See Exhibit 402. Q. Could you explain what you mean by "disaggregating SS7 signaling messages associated with Non-Chargeable Usage Traffic A. For example, under the SS7 Catalog Revisions, all messages other than those associated with interstate traffic are assessed intrastate access charges including, but not limited to, SS7 signaling messages that support "local" end- Florack, Di IIluminet, Inc. ::ODMA\GRPWISE\MT,MTPO,801 MTl :414367, user traffic, jointly provided exchange access, CMRS intraMTA traffic and Qwest' intraLATA toll end user traffic sent from Qwest to LEC or CMRS end users. See Exhibit 403, Qwest Responses to Complainants Discovery Request 004. Qwest' attempt to charge for SS7 signaling messages that are associated with these calls should not be allowed. An access charge tariff addresses the charges assessed by a telephone company to a telephone toll provider associated with that telephone toll provider s use of the telephone company s network for the origination and/or termination of that telephone toll provider s traffic Thus, the SS7 signaling messages associated with local/EAS traffic, jointly provided exchange access, CMRS intraMTA traffic and toll traffic originated by Qwest end- users and carried by Qwest and sent to an IIIuminet carrier/customer should be classified as Non-Chargeable Usage Traffic under Qwest's SS7 Catalog Revisions. Q. What provision of the Catalog supports your conclusion? A. Section 2, Page 19, Release 2, and 2.10 B.5. Jurisdictional Reports Requirements, Idaho Access Service Catalog states that the intrastate charges under this proposed tariff shall apply to all SS7 signaling messages derived by the formula "100%-PIU". The effect of this provision reflects Qwest's view that it is proper to recover all SS7 signaling message costs through the SS7 Catalog Revisions except those recovered through the interstate access tariff. The tariff states "When a customer initially orders CCSAC Service in a LATA, the customer shall state in its order a PIU factor in a whole (i.e. a number 0-100). The customer will designate the number obtained by subtracting the projected PIU factor furnished by the customer from 100 as the projected intrastate percentage of use. The projected PIU factor is used by the company to apportion the message, monthly and nonrecurring charges associated with the CCS Link, STP Port, Entrance Facility and Direct Link Transport between interstate and intrastate. " Florack, Di lIIuminet , Inc. ::ODMA\GRPWISE\MT.MTPO,801 MTl :414367, Q. What do you mean by "jointly provided exchange access" on an intrastate toll call? A. I use the term exchange access to describe the use of a telephone company local network for the origination and termination of telephone toll calls. The situation I am referencing arises when both: (1) the end user making an intrastate toll call is using an IXC as its toll provider that is neither Qwest or the IIIuminet carrier/customer; and (2) the networks of both the IIIuminet carrier/customer and Qwest are used by the IXC in originating or terminating its telephone toll traffic (such as where the Iliuminet carrier/customer operates an end office subtending a Qwest tandem and Qwest operates the tandem where the IXC's Point of Presence is located.) In this instance, the networks of both Qwest and the IIIuminet carrier/customer are providing portions of the network necessary for the IXC to originate or terminate its toll traffic, and therefore, are jointly" providing exchange access to the IXc. In this situation, the IXC is billed by Qwest and the IIIuminet carrier/customer through what is commonly referred to as a meet point billing arrangement. Q. Is this a concern under the SS7 Catalog Revisions? A. Yes. Under the existing SS7 Catalog Revisions, Qwest is billing IIIuminet SS7 signaling message charges when Qwest and IIIuminet's carrier/customers are jointly providing exchange access on an intrastate toll call. Q. Why does this situation create an issue under the SS7 Catalog Revisions? A. It is my understanding that the method by which LECs bill IXCs for "jointly provided exchange access" is described in industry guidelines and are typically set forth in the contracts between the LECs. For example, the LECs may agree to bill the IXC separately (according to each LEC's access tariff) for the IXC's use of that portion of each of the LEC's network, or the LEC may agree that one them will aggregate each LEC's tariffed access charges and bill the IXC for all the Florack, Di lIIuminet, Inc. ::ODMA\GRPWISE\MT,MTPO,801 MTl :414367, exchange access that the IXC uses related to its end user toll traffic (and to reimburse the non-billing LEC its access charges paid by the IXC). Qwest's SS7 Catalog Revisions violate either of these types of meet point billing contracts. Q. What are the anti-competitive concerns that Iliuminet has with respect to Qwest's SS7 Catalog Revisions? A. As indicated above, IIIuminet and other third party providers of SS7 services are direct competitors to Qwest in the SS7 marketplace, and many of our carrier/customers also compete for end-users with Qwest. The SS7 Catalog Revisions result in the unwarranted assessment of intrastate access charges associated with Non-Chargeable Usage Traffic, thereby exposing IIIuminet and its carrier/customers to significant increases in the cost of doing business and threatening IIIuminet and its carrier/customers continued competitive viability and market position. Moreover, IIIuminet believes that there is a potential for anti-competitive and discriminatory treatment by Qwest in the way IIIuminet and its carrier/customers are charged for SS7 signaling messages by Qwest associated with Non-Chargeable Usage Traffic, particularly local traffic, versus how Qwest may charge its own direct connect SS7 signaling customers. Qwest must convincingly prove that a direct connect customer to Qwest (i.e , the customer connects its SSP directly to a Qwest STP) would be treated in the same manner as those carriers using a third party SS7 provider. Otherwise Qwest could engage in undetected and unreasonable discrimination by marketing its services at a less costly alternative to any other SS7 provider by simply failing to apply the SS7 Catalog Revisions structure to its direct connect SS7 customers. If this were to occur, IIIuminet runs the risk of losing customers who may migrate to Qwest and/or find it extremely difficult to market its services to Qwest' existing direct connect customers who will, absent a finding of unlawfulness and/or improper implementation of the SS7 Catalog Revisions, be faced with additional charges for local SS7 signaling messages if they become customers of IIIuminet or another SS7 provider. Under Qwest's implementation of the SS7 Florack, Di Iliuminet, Inc. ::ODMA\GRPWISE\MT,MTPO,801 MTl :414367, Catalog Revisions, existing IIIuminet carrier/customers have additional Qwest charges passed on to them by IIIuminet pursuant to their arrangements with IIIuminet regardless of how, for example, their interconnection agreements ICAs ) with Qwest treat SS7 signaling message charges associated with local end-user traffic exchanged with Qwest. To the extent that such charges are not authorized under a particular ICA, the SS7 Catalog Revisions allow Qwest to unilaterally and unlawfully increase the costs of operations of the IIIuminet carrier/customer. Do you have comments and/or observations regarding Iliuminet' charges to its carrier/customers? IIIuminet's business, as shown in this testimony, is based on providing real value to the industry, including Qwest, and does not involve obtaining services for which it or its carrier/customers do not fully compensate Qwest. The service IIIuminet provides is a hubbing function that allows its carrier/customers access to Qwest's SS7 network along with access to SS7 networks throughout the country. IIIuminet bears all the costs of the signaling links and STP resources including ongoing network administration and maintenance. IIIuminet is not reselling or repackaging Qwest's SS7 signaling messages and charges for its carrier/customers, but charging only for the IIIuminet SS7 network services it provides. Q. Has Qwest provided any connectivity options to address SS7 signaling messages associated with local end-user traffic? A. Yes. In discussions between Qwest and IIIuminet, Qwest has previously suggested that IIIuminet could establish separate connections into Qwest for SS7 traffic that is local in nature. See Exhibit 403, Qwest Response to Complainants Discovery Request No. 44. Apparently, that would solve Qwest's billing problem and allow them to treat local traffic separately. Florack, Di Iliuminet, Inc. ::ODMA\GRPWISE\MT,MTPO.801 MTl :414367, Q. Has Iliuminet pursued that option? A. No. That option is neither technically nor economically feasible. It would require the STPs to route SS7 signaling message traffic based on the nature of the underlying end user traffic, which is not an available or practical feature in an STP. The only other way to separate such traffic would be for all IIIuminet carrier/customers to establish a second separate point code in their SSPs and use that point code for only local call routing. Some SSPs do not support that capability, and even if they did, it would require complete duplication of IIIuminet's and their carrier/customer s SS7 networks in order to keep the local traffic separate. Also, where IIIuminet carrier/customers interconnect their own STPs (not the central offices) with IIIuminet's STPs, such a signaling configuration is not technically feasible. Moreover, Qwest has not demonstrated that it maintains this type of separation in its own network because its connectivity with IIIuminet and the IIIuminet's carrier/customers carry both access and Non-Chargeable Usage Traffic. Further, it is completely unreasonable as a solution to Qwest's billing problem under the SS7 Catalog Revisions to impose these additional facility and operational expenses upon IIIuminet and other entities simply because Qwest has an unbundled SS7 tariff structure under which it cannot properly bill. In any event, it is not clear these arrangements would address SS7 signaling messages associated with jointly provided exchange access, nor SS7 signaling messages for Qwest's end user traffic. Q. What would Iliuminet like the Commission to do in this proceeding? A. IIIuminet would like the Commission to determine that the application of the SS7 Catalog Revisions is unlawful for the reasons stated in our complaint and supported in this testimony, and require Qwest to exchange SS7 signaling messages with the Complainants and other LECs, CMRS and IXCs, through IIIuminet if they so choose, at the rates, terms and conditions set forth in the Florack, Di lIIuminet, Inc, ::ODMA\GRPWISE\MT,MTPO,801- MTl :414367, various interconnection agreements, meet point billing arrangement and the Catalog for all end user traffic as Qwest did prior to the approval of the SS7 Catalog Revisions. In addition, the Commission should require Qwest to refund any monies paid to Qwest by complainants for the traffic that is subject to this complaint. Furthermore, Iliuminet would like the Commission to direct Qwest to refile any SS7 unbundling terms and conditions in the Catalog only when it can demonstrate that it can properly exclude from billing under any proposed Catalog all Non-Chargeable Usage Traffic. In addition, IIIuminet requests the Commission establish a fundamental principle that will govern the relationship Qwest seeks to establish with third party providers of SS7 services such as IIIuminet. Q. What is the fundamental principle you are referencing? A. It is based on common sense: The arrangement that governs the handling of the end-user traffic equally governs the treatment of the SS7 signaling messages since those SS7 signaling messages are an integral component of the end-user traffic. Thus, if SS7 signaling messages are associated with intrastate toll end- user traffic, and intrastate toll is subject to the Access Catalog, the Access Catalog applies. If SS7 signaling messages are associated with intrastate toll end user traffic and the exchange access associated with such intrastate toll is subject to some arrangement other than the Access Catalog, the terms of that arrangement should apply. Similarly, if SS7 signaling messages are associated with local end-user traffic, CMRS intraMTA traffic or jointly provided exchange access, and such traffic is subject to an ICA or other contract, the agreement or contract should apply. Q. Has Qwest been willing to recognize this principle? A. No. Qwest has not been willing to recognize that Iliuminet acts on behalf of its carrier/customers despite the fact that Qwest does treat IIIuminet this way for Florack, Di Iliuminet, Inc. ::ODMA\GRPWISE\MT,MTPO,801- MTl :414367, operational purposes (Illuminet is required to submit LOAs from our carrier/customers before Qwest will perform any network translation work). Q. If the existing SS7 Catalog Revisions are not found unlawful, what alternative relief would Iliuminet request that the Commission grant? A. Assuming, for sake of argument, that the Commission would not find the SS7 Catalog Revisions unlawful, IIIuminet requests that the Commission take the following actions. First, that the Commission direct Qwest to incorporate within its SS7 Catalog Revisions the fundamental principle noted above in an explicit and clear manner. Second, IIIuminet requests that the Commission require Qwest to refrain from billing IIIuminet and its carrier/customers for any Non- Chargeable Usage Traffic as I have defined that term from its Catalog and, in any event, the Commission should direct Qwest to refund or credit IIIuminet for Non-Chargeable SS7 messaging. Q. Can Qwest identify Iliuminet's carrier/customers for purposes of billing them for SS7 messaging in accordance with their ICAs? A. Through the LOA process Qwest is informed of each IIIuminet carrier/customer priorto the establishment of any necessary network signaling arrangements between IIIuminet and Qwest for the exchange of SS7 signaling. Accordingly, and in addition to the ordering process associated with that carrier/customer voice and data trunk requirements, all information necessary for Qwest to verify the carrier/customers of IIIuminet is in Qwest's possession. With this information, Qwest can then determine which of the IIIuminet carrier/customers have interconnection agreements with Qwest that permit SS7 signaling message charges for local traffic. Based on the volume of local messages it receives from the point codes associated with those IIIuminet carrier/customers, Qwest can then assess the necessary charges directly to the affected IIIuminet carrier/customers pursuant to the terms and conditions of the relevant ICA. Florack, Di lIIuminet, Inc. ::ODMA\GRPWISE\MT,MTPO,801- MTl :414367, the ICA between the IIIuminetcarrier/customer and Qwest allows Qwest to charge SS7 signaling for local messages that Qwest originates, then Qwest could also directly charge those SS7 signaling messages to that carrier/customer. Q. Isn t this arrangement burdensome to Qwest? A. No. Qwest has to demonstrate that it can properly implement the SS7 Catalog Revisions. Moreover, Qwest currently manages multiple interconnection agreements with various telecommunications carriers, some of which presumably have different terms and conditions. Therefore, administration of this relationship should not be any additional significant burden. If this option is chosen by the Commission, Qwest's SS7 Catalog Revisions would need to be amended to ensure that the PIU provisions also included language that exclude from the charges SS7 signaling messages associated with Non-Chargeable Usage Traffic. If Qwest is unable to accurately measure SS7 signaling messages by type of underlying telephone traffic, then IIIuminet proposes the concept of a Non-Chargeable Usage Traffic" factor, where such factor would include all SS7 signaling message types associated with Non-Chargeable Usage Traffic. Moreover, this would be a starting point for the type of revisions to the SS7 Catalog Revisions required to ensure proper billing and billing detail by Qwest. See Exhibit 404, IIIuminet's Proposed Language for the Qwest Access Catalog. Iliuminet would be open to renaming this new factor to some other term as long as the term and the Catalog are clear and unambiguous. In any event, if this is a significant burden, then Qwest should withdraw its SS7 Catalog Revisions until it can avoid this manual process and record actual SS7 signaling message usage by point code, by jurisdiction and type of SS7 signaling message. Q. In your view, does the capability exist to record the SS7 signaling message usage you have outlined? Florack, Di Iliuminet, Inc. ::ODMA\GRPWISE\MT.MTPO,801 MTl :414367, A. Yes. Qwest has purchased a data capturing system known as-AMATl from Agilent. As indicated above, IIIuminet developed the software for the AMATl system. This system provides the fundamentals to allow Qwest to capture the SS7 signaling messages on which their SS7 Catalog Revision is based. This robust system is capable of identifying not only how many SS7 signaling messages traverse a given set of A-links and B-links, but it can also supply more detailed information including the point codes of the switches used to process the call. This information can be used to identify the companies that are placing calls to Qwest or receiving calls from Qwest. This system can also distinguish between the types, such as TCAP and ISUP, of SS7 signaling messages that are being transmitted over a link-set. Q. Has the full AMAT7 measurement capability described above been deployed by Qwest? A. No, apparently not, based on the billing detail Iliuminet receives from Qwest and Qwest responses to discovery. See Exhibit 403, Qwest Responses to Complainants Discovery Request Nos. 41 and 42. Q. Is it proper for the Commission to require Qwest to implement auto mated mea su rementreq u i rements? A. Yes, as a matter of policy and in a manner entirely consistent with the FCC statement, Qwest, should bear the burden to demonstrate it can properly implement its tariff structure and has either the manual or automated billing capability in place prior to implementing the SS7 Catalog Revisions at issue. The underlying FCC decision upon which Qwest relies for its SS7 Catalog Revisions allowed ILECs to propose an unbundled SS7 rate structure such as that filed by Qwest in this proceeding and to "acquire the appropriate measuring equipment as needed to implement such a plan.Access Charge Reform First Report and Order, 12 FCC Rcd 15982, 16090 (para. 253) (1997). Florack, Di lIIuminet, Inc. ::ODMA\GRPWISE\MT,MTPO,801 MTl :414367, Q. Did Iliuminet oppose the FCC action? A. No. There was no reason to oppose a policy of unbundling when the FCC recognized that the proponent of such unbundling must properly implement its unbundled structure. IIIuminet is not opposed to unbundling if it is implemented properly, which is not the case in Qwest's SS7 Catalog Revisions. Moreover, the implementation of the interstate tariff structure required only the disaggregation of SS7 signaling messages between interstate telephone traffic and intrastate telephone traffic. However, while that disaggregation was difficult enough to implement, the failure of Qwest to fully implement adequate measurement capabilities in the monitoring technology it uses and provide adequate billing detail on its customer invoices are now more pronounced. Qwest's inability to implement the SS7 Catalog Revisions with the proper recognition that intrastate SS7 signaling messages must be further disaggregated based on the distinct intrastate end-user traffic types requires this Commission s scrutiny. Q. Why would the relief Iliuminet is requesting advance the public interest? A. As indicated before, the relief that IIIuminet is requesting places the . . responsibility.for the.proper implementation ofthe5S'lCatalog .Revision structure upon Qwest. Likewise, the requested relief avoids the improper billing under the Catalog of SS7 signaling messages associated with Non-Chargeable Usage Traffic. Further, the relief properly reflects the meet point billing arrangements in place between Qwest and the IIIuminet carrier/customers. The relief also avoids the anti-competitive consequences noted above resulting from Qwest's SS7 Catalog Revisions. Moreover, the relief will avoid Qwest double recovering certain of its SS7 signaling message costs through intrastate access charges for SS7 signaling messages associated with the local traffic Qwest's end- users generate and receive from other telecommunication providers. Florack, Di IIluminet, Inc. ::ODMA\GRPWISE\MT,MTPO,801 MTl :414367, Q. How could Qwest "double recover" its SS7 signaling message costs associated with that local traffic that its end-users generate and receive from other carriers? A. At least conceptually, Qwest should have apportioned its SS7 costs in some manner among all of its services, including local services that utilize Qwest's SS7 capabilities. Likewise, through its ICAs with telecommunications carriers, Qwest presumably has included recovery of the SS7 signaling messaging costs associated with the local traffic being delivered by those providers for termination to Qwest's local end-users. Accordingly, if Qwest continues to assess IIIuminet and its carrier/customers for SS7 signaling messages associated with local traffic under the SS7 Catalog Revisions, that action raises the distinct probability of double recovery by Qwest of its "local" SS7 costs (let alone shifting the recovery of those costs to its competitors). Moreover, to the extent that Qwest is terminating its end-user intrastate toll traffic to the IIIuminet carrier/customer, the charges for the SS7 signaling messages should be part of the costs recovered from the toll rates charged by Qwest to its end-users. To allow Qwest to recover these SS7 signaling message costs from the IIIuminet carrier/customer would permit Qwest to recover these costs twice-once from its toll end-user and another from the IIIuminet carrier/customer. Q. By its approach, is Iliuminet trying to avoid paying proper SS7 charges from Qwest? A. Absolutely not. While I am aware that Qwest may very well suggest this, as it has claimed in other proceedings, it is entirely false and inappropriate. Iliuminet pays Qwest for the dedicated facilities that connect Qwest's 8TPs with Iliuminet's 8TPs Le., the B-links. Likewise, where Iliuminet is providing the 887 network on behalf of one of its toll provider carrier/customers, lIIuminet and its toll provider carrier/customer fully expect that Qwest will assess its 887 signaling message charges associated with that traffic, to lIIuminet. lIIuminet, in turn , will then pass through those charges to its toll provider carrier/customer. Thus, any additional Florack, Di IIluminet, Inc. ::ODMA\GRPWISE\MT,MTPO,801- MTl :414367, -20- - - costs that Qwest bears as a result of the intrastate or interMT A toll end-user traffic generated by an Iliuminet toll provider carrier/customer would be recovered, and, most importantly, recovered from the very carrier/customer (in this case the toll provider) that has received the reduction in the intrastate access charges. It bears noting again that all of the SS7 signaling messages that traverse the lIIuminet SS7 network for which Qwest charges are associated with an underlying voice or data message from a provider of end-user telecommunications services. Q. But Iliuminet is a "customer" under the existing Qwest SS7 Catalog Revisions so why is Qwest wrong in demanding that Iliuminet pay charges for such services? A. IIIuminet has obtained B-links and port connection to Qwest's SS7 network through Qwest's Tariff F.c.c. No. 1. That connection uses the same network configuration and facilities for three distinct types of SS7 signaling messaging generated by IIIuminet's carrier/customers and similar traffic being generated by Qwest i.e., SS7 signaling messaging associated with interstate exchange access intrastate exchange access and local exchange (including EAS and CMRS intraMTA) services. As explained above, charges, terms and conditions for each type-oftraffic-are-determined-pursuant-to-the-rulesapplicable to thanypeuf-d - - - user traffic. Therefore, IIIuminet's rights to ensure that charges associated with such SS7 signaling messages are proper and are derivative of the rights of its carrier/customers. While IIIuminet is a customer of Qwest since it has ordered the necessary B-links to connect to Qwest's STPs, that structure does not permit Qwest to ignore that its SS7 Catalog Revisions assess intrastate access charges for traffic for which it has established different treatment under agreements that Qwest has with the IIIuminet carrier/customers. Again, Qwest requires that IIIuminet disclose the identity of its carrier/customers through LOAs and IIIuminet's carrier/customers order voice/data trunk groups that reflect their SS7 Florack, Di Iliuminet, Inc. ::ODMA\GRPWISE\MT,MTPO,801 MTl :414367, service provider. To suggest therefore that Qwest has no customer relationship jointly with the IIIuminet carrier/customer and IIIuminet defies the facts. Q. On what basis would Iliuminet pass through Qwest's charges under the SS7 Catalog Revisions to the Iliuminet carrier/customer? A. IIIuminet's arrangements with its carrier/customers provide that IIIuminet will flow through charges of other SS7 providers such as those SS7 signaling message charges from Qwest. Under these arrangements IIIuminet flows through such charges without markup. See Exhibit 405 Confidential and Proprietary Exhibit of Example of Contract Extract between IIIuminet and ELI. Q. Has Iliuminet explained its function as a pass-through entity to Qwest? A. Yes, many times, but Qwest apparently chooses to ignore the fact that IIIuminet's carrier/customers have been paying Qwest for the SS7 signaling messages which passes through Qwest's network. Not only are Qwest's SS7 costs not increased when a carrier connects through IIIuminet, but will often be decreased because of the economies of scale offered by IIIuminet. It is clearly incorrect for Qwest to claim that it would not be fully compensated for its SS7 costs through its switched access charges to IIIuminet's carrier/customers when applied to the appropriate switched access traffic only. Q. Have you raised your concerns with Qwest? A. Yes. IIIuminet has had a number of discussions with Qwest on this issue. Moreover, in November of 2000, IIIuminet provided to Qwest a position paper See Exhibit 406) outlining the position that IIIuminet now requests the Commission adopt here. Unfortunately, no substantive resolution of the issues raised in the position paper or the SS7 Catalog Revisions have been made. Q. Is Qwest's claim that its Catalog Revisions are revenue neutral to it a Florack, Di lIIuminet, Inc. ::ODMA\GRPWISE\MT,MTPO,801 MTl :414367, sufficient basis for Commission approval? A. No. For the reason I have stated, "revenue neutrality" to Qwest (even assuming it exists) is not a sufficient basis for the Commission to conclude that the SS7 Catalog Revision is consistent with the applicable statute and Commission Rules. While the SS7 Catalog Revisions may be revenue neutral to Qwest, by applying access charges on Non-Chargeable Usage Traffic, Qwest has enacted a tariff that is certainly not revenue neutral to IIIuminet and Iliuminet's carrier/customers but has shifted a substantial cost burden to them. Q. Does Iliuminet object to the principle that recovery of SS7 signaling costs should be related to a customer s use of SS7 signaling? A. No. As explained above, Iliuminet supports the concept of unbundling charges for SS7 signaling. Our problem is that by recovering all SS7 signaling message costs through switched access rates, Qwest is able to charge IIIuminet for SS7 signaling messages associated with traffic that is not itself subject to the Catalog and could not, therefore, be charged directly to IIIuminet's carrier/customers. As approved, the SS7 Catalog Revisions allow Qwest to circumvent existing methods of cost recovery or sharing for this Non-Chargeable Usage Traffic. For example, some Non-Chargeable Usage Traffic is subject to ICAs that provide either for Reciprocal Compensation or Bill and Keep, and therefore additional SS7 signaling message charges by Qwest should not be allowed. Similarly, where Qwest and IIIuminet's carrier/customer jointly provide access under a meet point billing arrangement, there is no basis for charging the IIIuminet carrier/customer through IIIuminet. The Commission should not, therefore, sanction the Catalog that would permit Qwest to do indirectly what it cannot do directly. Q. Does this end your testimony? A. Yes. Florack , Di Iliuminet, Inc. ::ODMA\GRPWISE\MT,MTPO.801- MTl :414367, Exhibit No. 401 Case Nos. QWE-02- P. Florack, Illuminet, Inc. BOI MT1:414387. rl ,f ; ;: . it , ;: ? ~i i g I ; , ~ f l . l i t l : : ~t , bc t ~ ' /e ' f: ~ tJ . l l l f ! i l : l l i , tl ' ! , ~ . . . t ( " . :: . f , t , ll J l l f ; ' (' ~/ ,. . % , ; . . ' . rl l l ( ) ) : l l J ~ ic r , V e r i S i g n S T P po o o - , :! ! i J Qw e s t S T P St a t e # 1 St a t e # 2 Vo i t e T r u n k Ve r i S i g n Cu s t o m e r Qw e s t Ta n d e m 1. Q w e s t E n d U s e r i n St a t e # 1 d i a l s I l l u m i n e t c a r r i e r c u s t o m e r s E n d U s e r i n S t a t e # 2 . 2. l A M m e s s a g e is F o r m u l a t e d i n Q w e s t s i g n a l i n g n e t w o r k . (C h a r g e o f $ . 00 0 8 2 9 t o V e r i S i g n ) 3. l A M m e s s a g e is T r a n s p o r t e d i n Q w e s t s i g n a l i n g n e t w o r k . (C h a r g e o f $ . 00 0 5 5 9 t o V e r i S i g n ) 4. l A M m e s s a g e is S w i t c h e d i n Q w e s t s i g n a l i n g n e t w o r k ( C h a r g e o f $ . 00 1 1 6 2 t o V e r i S i g n ) 5. l A M m e s s a g e is t h e n s e n t t o I l l u m i n e t v i a I l l u m i n e t B - Li n k f o r c o m p l e t i o n i n S t a t e # 2 of Q w e s t E n d U s e r ca l l . To t a l R a t e c h a r g e d t o I l l u m i n e t f o r c o m p l e t i o n o f Q w e s t ca l l = $ 0 . 00 2 5 5 .. . . . " "" " " " Ex h i M N o . 4 0 I '- - " " " -" - - " - - " " " - - - " - - - - - " . - - - - ' -- - - ' - " " " " "- ' - , "- ' ". . . . . . . - . . - . . . - - . . . - - . . - - . " Ca s e N o s . Q W E - :r - O2 - 11 eI l .. , -- - " " ' , - - . . - . . . . , . _ . . . . . ?; _ f. l ~ , x~ , : k , I I \ u m m e t I n c , Pa g e I iI " " " " " ' ~ " ." " ' . . _ - ' - " - - " - - - _ . " - " - " - - - ' - " '. . ' . . - - - . - . . . . - - - - - - , .., !F /" ' ! f , ~r - A\ f ' (~ : , l: ' .- , ~ " "" " ;, . - ", " . ".. . , t W , j" " " ~j 1." " ' ~' "' \ ~ ' f i / ' r " (~ " o" Y $ ' l i ' " , ); , J: " , /j i / . J o ": / , , ~: : :; ; \ . / . J . . . - -" ~ /+ L . ", , .\: , Jj . ~" , )o ~ ,! : lJ . , /: ; ; . . " )' ) ll L ' . , ; , ' ' 1 . '- ' . " ' " ' , . " ~l l l ( l i ( ~ ? f t- j ~ , (; J 8t l~ : ' fY l l 1 ( , )l . ?J : t: - ' , V e r i S i g n S T P Qw e s t S T P Vo i c e T r u n k Ve r i S i g n Cu s t o m e r Qw e s t Ta n d e m 1. Q w e s t E n d U s e r i n St a t e # 1 d i a l s I l l u m i n e t c a r r i e r c u s t o m e r s l o c a l E n d U s e r ( a l s o i n S t a t e # 1 ) . 2. J A M m e s s a g e is F o r m u l a t e d i n Q w e s t s i g n a l i n g n e t w o r k . (C h a r g e o f $ . 00 0 8 2 9 t o V e r i S i g n ) 3. J A M m e s s a g e is T r a n s p o r t e d i n Q w e s t s i g n a l i n g n e t w o r k . (C h a r g e o f $ . 00 0 5 5 9 t o V e r i S i g n ) 4. J A M m e s s a g e is S w i t c h e d i n Q w e s t s i g n a l i n g n e t w o r k ( C h a r g e o f $ . 00 1 1 6 2 t o V e r i S i g n ) 5. J A M m e s s a g e is t h e n s e n t t o I I l u m i n e t v i a I l l u m i n e t s B - Li n k f o r l o c a l c o m p l e t i o n i n S t a t e # 1 of Q w e s t E n d U s e r ca l l . To t a l R a t e c h a r g e d t o I l l u m i n e t f o r c o m p l e t i o n o f Q w e s t ca l l = $0 . 00 2 5 5 -" " " " - '.. "" " " " " " " " "" " " . . " . "" " " Ex h i b i t N o , 4 0 1 .. . J r i S i ' . Ca s e N o s . Q W E - O2 - 11 ' - " " - - - - - " - - ' - ' - - - - - - - - . ' - " - - - " - - - ' - ' . " - " ' "_ 0 . . . . . . . . . - - ,. . . . " - _ . _ - , ~ . . _ , _. . . . . , ... . . _ . . _ . . , _. . _ ,- , , _ . . _ _ . . , ~" , .f ~ . ~~ ( ; , , . . I , !ll l ! ! 1 . t l . ! ~ ! . J : I . ! . (; _ :_ - - - - - - - - , ,. . _ . _ - _ . . . " _ . . .- . - - " .. . Pa g e 2 o f 2 .. - - , . . - . - - Exhibit No. 402 Case Nos. QWE-02- P. Florack, Illuminet, Inc. (REDACTED VERSION) BOI MT1:414387. Exhibit No. 403 Case Nos. QWE-02- P. Florack, Illuminet, Inc. BOI MT1:414387. Idaho Case No. QWE-02- ITA , et al. 01-004 INTERVENOR: IDAHO TELEPHONE ASSOC , CITIZENS TELECOM CO OF 10, CENTURYTELOF 10 , CENTURYTEL OF THE GEM STATE, POTLATCH TELEPHONE CO and ILLUMINET INC. REQUEST NO:004 Assuming an incumbent or competitive LEC utilizes Illuminet as its SS? provider and further assuming that Illuminet connects its SS? network with Qwest's SS? network , identify all companies (Illuminet , originating LEC, terminating LEC , Interexchange Carrier ("IXC"), etc.) that would be billed SS? signaling charges from Qwest' s Service Catalog for the following types of end-user initiated calls. For each scenario specify the service elements and rates that would apply to each company: An EAS call originated by a LEC end user customer terminated to a Qwest end user customer; An EAS call originated by a Qwest end user customer terminated to a LEC end user customer; A local call originated by a LEC end user customer terminated to a Qwest end user customer; A local call originated by a Qwest end user customer terminated to a LEC end user customer; An intraLATA toll call originated by a LEC end user customer terminated to a Qwest end user; An intraLATA toll call originated by a Qwest end user customer terminated to a LEC end user customer; An intrastate , interLATA toll call originated by a LEC end user customer and terminated to a Qwest end user customer; An intrastate , interLATA toll call originated by an IXC's end user customer located in Qwest' s service area and terminated to a LEC end user customer , utilizing facilities provided by Qwest , the IXC, and the LEC; An intrastate, interLATA toll call originated by an IXC's end user customer located in the LEC' s service area and terminated to a Qwest end user customer, utilizing facilities provided by the LEC , the IXC and Qwest; An interstate call originated by an IXC's end user customer located in a Qwest service area and terminated to a LEC end user customer, utilizing facilities provided by Qwest, the IXC, and the LEC; An interstate call originated by an IXC's end user customer located in aLEC's service area and terminated to a Qwest end user customer Exhibit 403 Case Nos, QWE-02- P. Florack, IlIuminet, Inc. Page 1 of6 utilizing facilities provided by the LEC , the IXC , and Qwest; An intraLATA toll call originated by aLEC's end user customer (where that LEC subtends Qwest' s network) and terminated to another LEC's end user customer, utilizing facilities provided by the originating LEC Qwest and the terminating LEC; An intraLATA toll call originated by a LEC end user customer terminated to another LEC's end user (where the terminating LEC subtends Qwest' network), utilizing the facilities provided by the originating LEC Qwest and the terminating LEC; An intraLATA toll call originated by an IXC's end user customer located in LEC's service area (where that LEC subtends Qwest network) and terminated to another LEC's end user customer, utilizing the facilities provided by the first LEC , Qwest, the IXC, and the terminating LEC; An intraLATA toll call originated by an IXC's end user customer located in aLEC's service area and terminated to another LEC's end usercustomer (where that terminating LEC subtends Qwest' s network), utilizing the facilities provided by the first LEC , the IXC , Qwest, and the terminating LEC; An intrastate, interLATA toll call originated by an IXC's end user customer located in LEC's service area (where that LEC subtends Qwest network) and terminated to another LEC's end user customer, utilizing the facilities provided by the first LEC , Qwest, the IXC, and the terminating LEC; An intrastate, interLATA toll call originated by an IXC's end user customer located in aLEC's service area and terminated to another LEC s end user customer (where that terminating LEC subtends Qwest' network), utilizing the facilities provided by the first LEC , the IXC Qwest , and the terminating LEC; An interstate call originated by an IXC end user customer located in a LEC's service area (where that LEC subtends Qwest's network) and terminated to another LEC end user customer, utilizing facilities provided by the first LEC, Qwest , the IXC , and the terminating LEC; and An interstate call originated by an IXC's end user customer located in Qwest's service area and terminated to aLEC's end user customer (where the terminating LEC subtends Qwest' s network), utilizing facilities provided by the first LEC, the IXC , Qwest , and the terminating LEC. RESPONSE: A, Qwest would bill Illuminet: Signal Formulation, ISUP , per call set uprequest , $. 000829; Signal Transport, ISUP , per call set up request 000559; and Signal Switching, ISUP, per call set up request, $.001162; per the Idaho Access Service Catalog or the FCC Tariff, based on Illuminet's self reported PIU- B - See response to (A) above. C. See response to (A) above- Exhibit 403 Case Nos. QWE-02- P. Florack, llluminet, Inc, Page 2 of6 D. See response to (A) above. E. Qwest would bill Illuminet: Signal Formulation , ISUP , per call set uprequest , $. 000829; Signal Transport, ISUP , per call set up request, 000559; and Signal Switching, ISUP , per call set up request, $.001162; per the Idaho Access Service Catalog or the FCC Tariff , based onIlluminet I s self reported PIU. Insufficient information has been provided in this request to determine any further charges. F. See response to (E) above. G. See response to (E) above. H. See response to (E) above. I. See response to (E) above. J. See response to (E) above. K. See response to (H) above. L. See response to (E) above. M. See response to (E) above. N. See response to (E) above. o. See response to (E) above. P. See response to (E) above. Q. See response to (E) above. R. See response to (E) above. S. See response to (E) above. Respondent:Don Lewis, Manager Exhibit 403 Case Nos, QWE-02- p, Florack, Illuminet, Inc. Page 3 of6 Idaho Case No, QWE-02- ITA, et al. 01-041 INTERVENOR: IDAHO TELEPHONE ASSOC, CITIZENS TELECOM CO OF ID , CENTURYTEL OF ID , CENTURYTEL OF THE GEM STATE , POTLATCH TELEPHONE CO and ILLUMINET, INC. REQUEST NO:041 Can Qwest currently separately identify, measure and document its SS7 signaling associated with local , EAS and/or CMRS traffic from SS7 signaling associated with interstate toll traffic and intrastate toll traffic? If so, will Qwest provide that detail for purposes of billing under the Service Catalog? If not , please explain why not. RESPONSE: No. Qwest cannot provide that detail for purposes of billing under the Service Catalog. It is not available. Respondent:Don Lew is , Manager Exhibit 403 Case Nos. QWE-02- P. Florack, Illuminet, Inc. Page 4 of6 Idaho Case No. QWE-02-11 ITA, et al. 01-042 INTERVENOR: IDAHO TELEPHONE ASSOC , CITIZENS TELECOM CO OF ID , CENTURYTEL OF ID , CENTURYTEL OF THE GEM STATE , POTLATCH TELEPHONE CO and ILLUMINET, INC. REQUEST NO:042 Is equipment available that would enable Qwest to measure and bill for SS? signaling services used for long distance traffic apart from local , EAS and/or CMRS intraLATA traffic? If so, please provide technical data and information regarding the equipment that provides this service. How much would it cost for Qwest to deploy such equipment in Idaho? RESPONSE: The measurement equipment purchased by Qwest from Agilent Technologies is technically capable of distinguishing between long distance traffic apart from local, EAS and/or CMRS intraLATA traffic. However, the billing methodology and system programming Qwest implemented using this equipment does not retain and process all the required fields to determine the jurisdiction of each Initial Address Message ("lAM") based on the associated call. In designing the billing methodology and system programming, this functionality could not be accommodated within a reasonable timeframe and budget. Thus , Qwest uses the PIU methodology to jurisdictionalize signaling messages instead. To redesign the billing methodology and system programming would be extensive, unduly burdensome, and prohibitively expensive. Qwest obj ects to the second part of this request in that such information is commercially available to Complainants. Notwithstanding this objection, Qwest states it does not have the information requested. Qwest also obj ects to the third part of this request inasmuch as that the requested information is irrelevant and not likely to lead to the discovery of admissible evidence. Notwithstanding this objection , Qwest states that the information requested is unknown. Respondent:Don Lewis , Manager Exhibit 403 Case Nos, QWE-02- P. Florack, I1luminet, Inc, Page 5 of6 Idaho Case No. QWE-02- ITA , et al. 01-044 INTERVENOR: IDAHO TELEPHONE ASSOC , CITIZENS TELECOM CO OF 10 , CENTURYTEL OF 10 , CENTURYTEL OF THE GEM STATE, POTLATCH TELEPHONE CO and ILLUMINET INC. REQUEST NO:044 Is it Qwest' s position that if an entity wanted to distinguish SS7 signaling associated with "local" traffic versus other intrastate traffic, that such entity would need to establish separate SS7 connections specifically for that"local traffic"? RESPONSE: If the entity desires to bifurcate its traffic into local and otherintrastate traff ic , then such entity could do so by purchasing separate SS7connections. Qwest, however , does not require such a purchase. Respondent:Don Lewis, Manager Exhibit 403 Case Nos. QWE-02- p, Florack, IlIuminet, Inc. Page 6 of6 Exhibit No. 404 Case Nos. QWE-02- P. Florack, Illuminet, Inc. BOI MT1:414387. Iliuminet Proposed Language for Qwest Access Service Catalog CCSAC Jurisdictional Reporting When a customer initially orders CCSAC Service in a LATA, the customer shall state in its order a PIU factor and a Percent Non-Chargeable Usage (which would include loca~ Extended Area Service, intra MTA wireless and meet point exchange access services) ('PNU") factor in whole numbers (i., a number of 0- 100). The Company will designate the number obtained by subtracting the projected PIU factor furnished by the customer from 100 as the projected intrastate percentage of use. The Company will designate the number obtained by subtracting the PNU from the projected intrastate percentage of use as the projected intrastate access ('PSA") percentage of use for services provided under this catalog. The projected PIU factor is used by the Company to apportion the message, monthly and non-recurring charges associated with the CCS link, STP Port, Entrance Facility and Direct Link Transport between interstate and intrastate. . The projected PNU factor is used by the Company to apportion the projected intrastate percentage of use between access services provided under this catalog and CCSAC service provided in conjunction with the PNU services provided pursuant to interconnection agreements or local service tariffs. If the customer does not provide a PIU factor, the Company will apply a default PIU factor of fifty percent (50%). For the purpose of this catalog, where the customer is a third-party provider of CCS7 services to its customers ('Third Party Customer), the customer will develop its projected PIu, PSA and PNU factors based upon a weighted average of the PIu, PSA and PNU factors of its Third Party Customers' end-user traffic. Local usage utilized in determining the PNU for the Third Party Customers will include all end-user traffic subject to interconnection agreements subject to Section 251 of the Communications Act and service provided pursuant to local service tariffs. In the event a Third Party Customer does not provide a projected PIu, PSA or PNu, a fifty percent (50%) PIU will be utilized for that Third Party Customer to determine interstate usage, and 50% of the intrastate usage will be designated as PSA. The PIU factor will be used by the Company until a revised PIU factor is reported as set forth in c., following. A LATA-level PIU factor shall be provided for CCSAC Service provided within a LATA for the revised reports. Exhibit 404 Case Nos. QWE-02- P. Floraek, IIIuminet, Ine, Page 1 of I Exhibit No. 405 Case Nos. QWE-02- P. Florack, Illuminet, Inc. (RED ACTED VERSI ON) BOI MTl :414387. Exhibit No. 406 Case Nos. QWE-02- P. Florack, Illuminet, Inc. BOI MT1:414387. I I I u m I n e t5M November 22 2000 VIA FEDERAL EXPRESS Beth Halvorson Vice President, Wholesale Major Markets Qwest 200 S. Fifth Street Minneapolis, MN 55042 Dear Ms. Halvorson: On behalf of ILLUMINET, this letter is written to request a meeting with you and the necessary legal representatives of Qwes! to discuss the outstanding issues related to the appropriateness of Qwest' charges to ILLUMINET for Signaling System No.7 (SS7) messaging. As you are aware, these issues have been the subject of on-going discussions between our two companies. and, in fact, Qwest's SS?message charges are also the subject of a continuing dispute between our companies. Moreover, asawest is also undoubtedly aware, the Qwest SS7 message charges that have been received by ILLUMINET are substantial. These charges, in turn, directly impact ILLUMINET's competitive positionas an alternative SS7 pr~)Vider in the Qwest service areas. Accordingly, in order to facilitate the requested discussions , ILLUMINET has prepared the enclosed position paper that describes the regulatory construct that ILLUMINET believes should be followed in determining when SS7 message charges should be assessed. ILLUMINET has also authorized its Washington, D.C. counsel to forward a copy of this position paper to Owest representatives also located in Washington , D. Because Qwest is well aware of the issues that need to be addressed concerning this matter ILLUMINET requests that Owest provide its response to this letter by December 1 , 2000, and that theresponse include the earliest dates possible that the necessary representatives of Owest can meetwith their ILLUMINET counterparts. Again, ILLUMI NET stresses that it fully expects Qwest's promptattention to this issue in light of our disc;:ussions and the impact that the Owest SS7 message charges has on ILLUMINET's competitive position. ILLUMINET looks forward to your response. Very truly yours ~1Y F. Terry ~mian Executive Vice President & COO cc: D. Nicol , ILLUMINET P. Florak, ILLUMINET R. Wolf, ILLUMINET D. Cosson, T, Moorman , Kraskin, Lesse & Cosson, LLP Vicki Boone, Qwest Brian Ashby, Qwest Dave Hahn , Qwest Char Kudar, Qwest Kirk Andrews, Owest Exhibit 406 Case Nos. QWE-02- p, Florack, IIIuminet, Inc. Page I of6 ...~-,~...- POLICY POSITION fAPER ON THE PROPER APPLICATION OF SS7 MESSAGE CHARGES ISSUE:What SS7 message charges are applicable to, and what information should be provided to support charges for interstate interexchange toll traffic, local, and Extended Area Service traffic that is originated by a customer/carrier of Illuminet and terminated by a Bell Operating Company, and vice versa? SUMMARY OF POSITION The fact that a provider of a competitive Signaling System No.7 ("SS7") network (such as Illwninet) has intercOlUlected its network with iliat provided by a Bell Operating Company fJOC") via that BOC's interstate access service tariff does not authorize that BOC to charge improperly for SS7 message charges that fall outside of the interstate access charge model. Rather, the assessment of SS7 message charges by the BOC or an Illuminet carrier/customer should be detennined by applying the terms and conditions of the agreement associated with the specific jurisdictional class of traffic associated with the voice and/or data traffic between the BOC and the Illuminet carrier/customer (Le., the interconnection arrangements for local service and/or "EAS" traffic or the access tariff for interexchange toll traffic). To ensure the proper application of these agreements, the entity assessing SS7 message charges should also provide sufficient detail to pennit the company receiving such charges to verify independently that such charges are assessed in compliance with the proper agreement. Moreover, to the extent that the affected carriers agree and the BOC is able to properly and accurately provide billing information relative to each Illuminet customer/carrier being billed, Illuminet would be willing to discuss clearinghouse mechanisms for the efficient exchange of payments for SS7 message charges. DISCUSSION Ilhuninet is a provider of SS7 services for a variety of customers/carriers including lnterexchange Carriers ("IXCs ), Competitive Local Exchange Carriers ("CLEC"), Incumbent Local Exchange Carriers ("ILECs ) and Commercial Mobile Radio Service providers ("CMRS Providers ). Illuminet deployed its network to provide a competitive alternative to the SS7 services of other providers, including the BOCs. Ilhuninet has achieved nationwide cOIll1ectivity of its SS7 network with other providers, including the SS7 networks of the BOCs. In order ensure proper connectivity with limited delays on behalf of its customer/carriers, Illwninet arranged connectivity with the BOCs via their respective interstate access service tariffed offerings, and, in fact, has arranged for connectivity with Qwest Corporation ("Qwest")(fonnerly US WEST Communications) through its F.C. Tariff No. 1. For purposes of this paper, it is assumed that facilities and port charges required to connect the BOC's SS7 network with that operated by Illuminet will continue to be assessed by Exhibit 406 Case Nos, QWE-02- P. Florack, Illuminet, Inc. . Page 2 of6 In light of recent developments in SS7 technology (primarily the ability to measure SS7 usage) and the desire to provide unbundled access, Qwest has introduced new SS7 rate elements that are billed on a per-message basis. Illuminet has been infolll1ed by various BOCs that these new charges are intended to provide recovery on a revenue-neutral basis of the costs associated with discrete SS7 functions previously bundled within the BOGs' minute-of-use charges applied to IXCs and other access customers associated with the underlying voice and/or data traffic. Since Illuminet does not carry the underlying voice or data traffic, these charges were not previously billed to or through Illuminet. Notwithstanding claimed "revenue-neutrality, Illuminet has experienced an inappropriate increase of charges from Qwest directly as a result of these new SS7 message charges, particularly given the fact that the majority ofllluminet's SS7 messaging is related to local and/or EAS traffic being generated by its CLEC, ILEC and CMRS Provider customers. . A. Record Detail is Required to Verify Accuracy of Charges Based on its review of the new SS7 rate element charges, Illuminet continues to question whether those charges have, in fact, been properly assessed. Illuminet agrees that the SS7 message charges related to interstate telephone toll service should properly follow the "access charge" model developed by the Federal Communications Commission ("Commission" or theFCC" ). Under this model, Illuminet would expect Qwest to bill SS7-related charges for the originating or tenninating functions that Qwest performs on an interstate toll call that is originated by an end user ofllluminet's !XC customer. In these instances, Illuminet is providing the various SS7 network functionalities on behalf of the !XC prior to that IXC carrying the-voice and/or data traffic of the end user at issue.2 However, because Qwest has provided insufficient information to llluminet associated with the new SS7 message charges, Illuminet is not able to verify the charges it has received from Qwest. While llluminet continues it~ investigation to ensure proper application of charges by Qwest, the accuracy of such charges cannot be determined until Qwest is able to provide disaggregated billing infonnation by point code, by jurisdiction or by any other method by which the accuracy of the billed charges can be determined. Only in this manner can illuminet or any of its carrier/customers receiving such charges be assured that the charges by Qwest are properly assessed under the applicable agreement between Qwest and the Illuminet carrier/customer. the BOC pursuant to its interstate access tariff. However, Illuminet recognizes that other types of arrangements may exist for connectivity since the passage of the 1996 revisions to the Communications Act of 1934, as amended (the "Act" Similarly, where the BOC is the intraLATA and/or interLATA toll provider for the voice and/or data traffic, Illuminet would expect that its CLEC and/or LTC customers would assess the BOC similar SS7 message charges. Exhibit 406 Case Nos. QWE-02- P. Florack, IlIuminet, Inc. Page3 of6 Because of the lack ofcamer-specific information required to verify Qwest's charges Illuminet is concerned that SS7 message charges are being assessed by Qwest pursuant to its interstate access tariff on local and/or EAS traffic where the related voice and/or data traffic is being originated by a Qwest customer as well as terminated to a Qwest customer. In these instances, the voice and/or data traffic at issue is not "telephone toll service" nor is the SS7 messaging associated with that traffic "exchange access" as those terms are used in the Act, and as applied in the interstate access charge enviromnent. Therefore, this traffic and the associated SS7 message charges are not properly subject to Qwest's interstate access tariffs. B. Additional Re~ord Detail will also Allow Proper Application of Existing Agreements Even assuming that the necessary detail is being provided for proper billing and bill verification, the question still remains regarding what charges can be assessed by Qwest to Illuminet for SS7 messages where the related voice and/or data traffic is jurisdictionally local and/or EAS; and where the voice and/or data traffic is exchanged between Qwest and an Illuminet customer/carrier Le., either the CLEC, the ILEC or the CMRS Provider. Based on its review, Illuminet believes that the only logical conclusion is that billing for SS7 message charges for local and EAS traffic is detennined by the arrangements between llluminet'customers/carriers and Qwest. Illuminet provides its SS7 services for the benefit of its customers/carriers, and has no relationship with Qwest other than that which established its connectivity for exchange access services. It is, therefore, incorrect to assume (as apparently some carriers have) that the "payor of all SS7 message charges is llluminet under the FCC's access charge model. As discussed above, the SS7 messaging associated with local and/or EAS is not "exchange access" as that term is defined under the Act. Moreover, Illuminet has not entered into any agreements with or purchased tariffed services from Qwest with respect to charges for SS7 messages associated with local and EAS traffic. Rather, the only privity of contract that exists for this type of traffic is between Qwest and the Illuminet customer/carrier. Accordingly, it is those arrangements that are the proper focus for determining whether SS7 message charges are appropriate for the exchange of local and/or EAS traffic, and, if so, how and when such charges should be assessed by either Qwest or the Illuminet customer/carrier. llluminet is aware of three billing arrangements that may have been included in the agreements that carriers have entered into with the various BOCs ~or the exchange of properly defined local traffic and/or EAS. Under the first arrangement, the carriers agree to a "Bill and Keep" arrangement for both the actual local and/or EAS voice and data traffic that is exchanged as well as the SS7 messages associated with that traffic. In these instances, Illuminet would not expect to be billed SS7 message charges ITom the BOC. Nor would Illuminet expect that its customers/carriers would bill the BOC directly or authorize Illuminet to bill the BO~ on theirbehalf. Exhibit 406 Case Nos. QWE-02- P. Florack, IlIuminet, Inc. Page 4 of6 .., The second type of arrangement is where the BOC and the I1luminet carrier/customer have entered into a "minute of use" arrangement for the underlying voice/data traffic pursuant to Section 25 1 (b)(5) of the Act, but have not stated a specific rate for the SS7 signaling associated with the exchange of the properly-defined local voice and data traffic. In these instances, Illuminet would expect that the charges associated with the SS7 messages for this traffic would be part of (Le., bundled with) the minute of use "reciprocal compensation" rate that the BOC and the Illuminet customer/carrier agreed to pursuant to Sec~ion 25 (b)(5) of the Act. Thus, I1luminet would not expect to be billed charges for SS7 messages associated with the local traffic terminated by the BOC that is delivered to it by an Illuminet customer/carrier. Likewise; Illuminet would not expect that its customers/carriers would charge the BOC separately for the SS7 messages associated with the local traffic tennmated by them. Finally, Illuminet is aware of interconnection agreements entered into pursuant to Section 251(b)(5) of the Act that have a separate, yet reciprocal, rate for SS7 signaling associated with the exchange of properly-defined local voice and data traffic. In these instances, where an Illuminet customer/carrier terminates local traffic from the BOC, the Illuminet customer/carrier would assess the proper SS7 message charges to the BOC. Illuminet would expect to receive SS7 message charges. only where the Illuminet customer/carrier has specifically authorized the BOC to pass through its SS7 message charges to Illuminet for those charges applicable to that I1luminet customer/carrier s originated local traffic to the BOC.3 In these instances, however Illuminet would be willing to enter into proper billing and collection arrangements with the applicable carriers in.an effort to cre~te a more efficient clearinghouse for the payment of - applicable SS7 message charges. CONCLUSION While other arrangements between a BOC (and other ILECs) and an illuminet customer/carrier may be in existence, Qwest should not confuse the fact that Illuminet has interconnected its competitive SS7 signaling network with Qwest via Qwest's interstate access service tariff as a vehicle to charge improperly for traffic that falls outside of the FCC's access charge model. The lack of bill detail provided by Qwest required for Illuminet to verify the Qwest SS7 message billing only serves to highlight and exacerbate the problem. To date? however, Illuminet is not aware of any such authorization being provided by an Illuminet carrier/customer to a BOC. Exhibit 406 Case Nos, QWE-02- P. Florack, IIIuminet, Inc. PageS of6 In any event, Illuminet's role, even where the access charge model applies, is as the underlying provider of the SS7 signaling network for the !XC, or a CLEC, ILEC or CMRS Provider. Thus. the assessment of the charges by Qwest are detennined by applying the tenns and conditions of underlying agreement that addresses the specific jurisdictional class of traffic associated with the voice and/or data traffic between Qwest and the Illuminet carrier/customer i.e., the interconnection arrangements or access tariff. This conclusion properly reflects the value to the entity whose end users generate the underlying voice and/or data traffic of having that traffic carried over the network in the most efficient manner. Moreover, to the extent that the affected carriers agree and Qwest is able to properly and accurately provide billing informationrelative to each llluminet customer/carrier being billed, Illuminetwould be willing to discuss clearinghouse mechanisms for the efficient exchange of payments for SS7 message charges. Exhibit 406 Case Nos. QWE-02- P. Florack, IIluminet, Inc. Page 6 of6